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Bharti Airtel to buy out Alcatel-Lucent's stake in India JV

Indian telco will acquire the 74 percent stake it does not own in the joint venture, which manages its fixed-line and broadband network.
Written by Jamie Yap, Contributor

Indian telco Bharti Airtel said it will buy out Alcatel-Lucent's entire stake in the joint venture, Alcatel Lucent Managed Network Service India, which managed Bharti's fixed line and broadband networks in the country.

Alcatel Lucent Managed Network Service India was formed in 2009, with Bharti owning 26 percent and Alcatel-Lucent's Indian unit owning 74 percent, the Wall Street Journal reported Tuesday. Financial details were not disclosed.

The five-year network contract for the joint venture, which was worth about US$500 million, ends in April 2014, the report added.

Bharti Airtel and Alcatel-Lucent's Indian unit formed a joint venture called Alcatel Lucent Managed Network Service India back in 2009 to manage Bharti's fixed line and broadband networks.

After the buyout, the entity will "operate independent of Bharti and going forward, will invite other operators to join in with equity participation and bring the management of their broadband and fixed-line networks under its fold," both Bharti and Alcatel-Lucent said in a joint statement.

Shishir Kumar, currently Bharti Airtel's CEO for the upper north region, has also been appointed as the CEO of the entity, the report said.

The Times of India reported on Tuesday that Bharti decided on the buy out because it wanted to introduce a new business model to manage its fixed line and broadband networks, which would be along the lines of Indus Towers. Indus Towers is a joint venture founded in 2007 offering infrastructure services to telcos, and is independently managed.

"The operations of the entity will be strengthened by the transition of proven tools, processes and all manpower and skilled resources from the existing joint venture," Bharti said in the statement.

Bharti Airtel CEO for India and South Asia, Sanjay Kapoor, added: "With this innovative model, we are breaking new ground in an industry which is on the cusp of a massive data growth."

Alcatel Lucent India president and managing director Munish Seth also said: The formation of this new model is a step in that direction and will leverage the core competencies that Alcatel Lucent Managed Network Service India has built over time.

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