Former British telecoms giant BT is bringing in a major new investor today as the telecoms giant seeks a stronger foothold in the fast-changing technology and telecoms market. Indian tech and telecom giant Bharti, which owns Airtel, said it will buy the 24.5% stake currently held by Altice.
The stake is valued at around $4 billion, based on BT's market capitalisation of around £13 billion ($16 billion) at the time of the deal.
Bharti said in a statement that it would buy 9.99% immediately and acquire the remainder after receiving regulatory approvals.
Altice is in a precarious position due to debt-driven takeovers and corporate scandals, as detailed in this article, in late 2023. Altice, which owns stakes in other technology and telecom companies, bought BT in several rounds, first in 2021 and later in May 2023.
Since then, BT's share price has fallen, partly due to the overall decline in technology and telecom stocks. Altice now appears to be in a selling mode. The deal comes less than two weeks after it sold media platform Teads to web recommendation platform Outbrain for around $1 billion.
5G and AI are two of the biggest existential milestones for telecoms today. Depending on how telcos play their cards, they can be threats or opportunities. Bharti cited both as the rationale for the deal, most likely to improve economies of scale in terms of sourcing, development and strategy as tech giants increasingly compete to further encroach on telecom with new modes of communication that bypass telecom infrastructure.
“Bharti hopes that this investment will help generate new synergies in the telecom sector between the two countries in areas such as AI and 5G R&D and core engineering, and offers great potential for collaboration on industry best practices and emerging technologies,” the company said in a statement. The overseas investment will also help Bharti diversify further, as its mobile operator Airtel faces stiff competition from India’s Reliance’s Jio, which many see as a duopoly.
What's interesting is that BT, which was a well-established player in the UK, was once in charge of the investment. BT held a 21% stake in Bharti from 1997 to 2001.
“Bharti and British Telecom (BT) have enjoyed a relationship that goes back more than two decades, with BT owning a 21 per cent stake and two board seats in Bharti Airtel Limited from 1997 to 2001,” Bharti founder and chairman Sunil Bharti Mittal said in a statement. “Today marks a significant milestone in the history of the Bharti Group as we invest in BT, an iconic British business.”
BT was relatively verbose in its announcement of the deal.
“We welcome investors who recognise the long-term value of our business and an investment of this scale from Bharti Global is a huge vote of confidence in the future of the BT Group and our strategy,” BT’s chief technology officer, Alison Kirkby, said in a statement, the company’s only comment on the deal. “BT has a long-standing relationship with Bharti Enterprises and we are delighted that they share our ambition and vision for the future of our business. They have a strong track record of success in this space and I look forward to a continued positive relationship with them in the months and years ahead.”
Additional reporting by Manish Singh
