New corporate strategy credit neutral for Airtel: Ind-Ra

New Delhi: Bharti Airtel’s and its subsidiaries strong operational and strategic linkages and the new corporate strategy is credit neutral for the company, India Ratings and Research (Ind-Ra) said.

Ind-Ra said that the linkages will remain strong even under the new corporate structure.

“While BAL has a strong track record of building the businesses and monetising the same, Ind-Ra will access the evolution of digital business and any monetisation of the same on case-by-case basis,” the ratings firm said in a note.

Bharti Airtel on Wednesday had unveiled a new corporate structure that would see the listed parent house the digital and infrastructure assets, while moving the telecom businesses to a newly created arm, Airtel Ltd. The reorganisation is likely to sharpen the Mittal-led entity’s focus on digital operations with an aim to monetise them in future.

Ind-Ra believes that segregation of licensed and un-licensed revenue streams would provide better clarity on regulatory liabilities, thereby reducing regulatory risks.

Ind-Ra rates BAL’s debt at ‘IND A1+’, Bharti Hexacom’s debt at ‘IND A1+’, and Bharti Telemedia’s debt at ‘IND A1+’.

The agency that the Indian telecom sector is headed for a second round of consolidation which will bring a structural shift in the business model of telcos from being a provider of voice only services to a complete digital solution provider.

“The offerings such as (a) broadband services, (b) cable TV services (direct -to-home), (c) enterprise solutions (B2B), (d) e-payment wallets/ platforms, (e) music applications and (f) over the top transmission platform, will now become the core offerings in the medium term unlike before, to ensure customer acquisition, customer stickiness and to strengthen the market footprint,” it said.