Airtel plans to spend $1bn in Myanmar

Bharti Group chairman Sunil Bharti Mittal has been in the middle of controversies and his flagship company, Bharti Airtel, has reported three straight years of lower profit. The telecom billionaire has kept away from the media in recent months. In Myanmar, where he has bid for a telecom licence, Mittal spoke to TOI on the sidelines of the World Economic Forum conference. Excerpts:

What's the feedback on your Myanmar bid?

There are 82 players who had applied for two licences and now there are 11. It is very much the toss of a coin that will decide the winners. The good news is that they will decide very soon and we have to roll out in nine months. Myanmar is only one of the two countries, the other being Ethiopia, where private players are not allowed. For us it makes a lot of sense since it is a large country next to India. It is very much a natural fit and we know what needs to be done, something that a European player may find difficult. We are hoping that in three years, the whole country will be covered but probably we will be ahead of our commitment. Unlike India, it has a very large rural population and we will have to rely on solar power or diesel to connect some of the areas given that electricity is in short supply. We may spend around $1 billion on rollout.

How will you fund it?

That is not difficult for us given that we have large revenue flows. We can access debt. We have $4.5 billion of debt and we have good revenues coming. On the Indian side, we don't have too much debt. We have $2 billion debt and $4 billion EBIDTA (earnings before interest, depreciation, taxes and amortisation). From our point of view we are 2.5-3.6 debt to EBIDTA ratio. the desirable level may be around 2 but there are many companies, which have a much higher ratio, which is 3-3.5. Markets feel more pressure than we do. Qatar Foundation has invested so that money will come in, the cash flow will help. A little bit increase in EBIDTA and little bit decrease in debt will take us to a lower ratio.

One of the concerns in the market is that the results from the African acquisition have been slower than what you expected. Is it a big worry?

It's going to be three years and the good news is that operations are stable and it's generating great revenue. I think last quarter it was $1.1 billion revenue, which means we are generating around $4 billion in the full year. The EBIDTA was in the region of $300 million. It may have been $5 billion, we will get there in a year, year and half. May be we are one year late but in a large acquisition these things happen. But fundamentally the operations have stabilized.

There are concerns over the regulatory structure in India, which started with 2G controversy and now there are problems on 3G roaming and other things. How do you view them?

The government is resolving a lot of pending issues. At the end of the day, we are in a regulated industry so we have to deal with them.

Is there a decision on a partnership with Walmart on multi-brand retail?

As and when Walmart is ready we will go with them. We are watching the developments.