 "Industry needs long overdue support to maintain 3+1 structure: Sunil Mittal")
Bharti Airtel Chairman Sunil Mittal has expressed hope that the government and regulators will step in to ensure the sector remains a viable place for continued investments and asserted that the industry requires "long overdue" support to maintain its current 3+1 structure.
In the latest annual report of Airtel, Mittal said as the sector's role in the economy becomes more pervasive, its challenges loom larger.
Issues such as unsustainable pricing and low returns in a highly capital-intensive environment, coupled with legacy legal issues, "have extracted their toll", Mittal observed.
"The industry requires long overdue support to maintain its current 3+1 industry structure and allow players to earn a respectable return on their investments," Mittal said in Airtel's annual report for 2020-21.
The telecom czar was alluding to the current telecom industry construct that has three private players and one state-owned operator.
Mittal's comments assume significance in the backdrop of Vodafone Idea's desperate struggle to stay afloat. Billionaire Kumar Mangalam Birla recently stepped down as chairman of Vodafone Idea Ltd, within two months of offering to hand over the Aditya Birla Group's stake in the debt-laden telco to the government, in a bid to avert an existential crisis for the telecom firm.
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Vodafone Idea (VIL) had an AGR liability of Rs 58,254 crore, of which it has paid Rs 7,854.3 crore and Rs 50,399.6 crore is outstanding. VIL's gross debt, excluding lease liabilities, stood at Rs 1,80,310 crore as of March 31, 2021.
The amount included deferred spectrum payment obligations of Rs 96,270 crore and a debt of Rs 23,080 crore from banks and financial institutions, apart from the AGR liability.
Mittal -- in Chairman's note contained in Airtel's latest annual report -- hoped the government and the regulators will step in to ensure there is adequate balance in the industry and it remains a viable place for continued investments.
India continues to be a "promising destination" for long-term investors, Mittal pointed out.
"We have the opportunity to transform India into a global leader in the digital economy. We must continue to evolve our policies to realise these opportunities while encouraging investments, entrepreneurship and innovation through collaboration," Mittal said, adding that Airtel is ready to play its part.
The telecom sector has been a chief catalyst in the transformation of India and its economy over the last 25 years and played a seminal role during the pandemic by keeping a nation connected, Mittal said terming it as an "outstanding feat".
Mittal - whose remuneration in Airtel for 2020-21 stood at nearly Rs 16 crore as per the annual report - said that even amid the pandemic and industry challenges, Airtel had demonstrated "remarkable resilience" and, in fact, emerged "much stronger" during the last financial year.
He said that given its large investments over the past years, Airtel has built a formidable integrated product portfolio, which would allow the company to tap emerging opportunities and deliver services at scale.
"As the Indian economy digitises further, there are large opportunities ahead in areas such as data centres, submarine cable deployment, cloud services and cybersecurity. We will look to scale up our investments in these areas in the coming fiscal," Mittal noted.
A strong foundation is in place for making Airtel a 'truly digital-first company' to serve Digital India, he said, adding that the company can develop world-class platforms and digital solutions on the back of in-house engineering talent and strong partnerships with players, including Amazon, Google, Verizon, Ericsson, Nokia, Qualcomm, Intel, IBM, Cisco and Apollo Hospitals.
Elaborating on the remuneration of the top honcho, the annual report noted that there was an adjustment in the existing remuneration of Mittal (Chairman) by 50 per cent, that is, from Rs 30 crore to Rs 15 crore with effect from April 1, 2020.
"The Board of Directors had approved the above on account of the enhanced role and split duties of Sunil Bharti Mittal towards overseas operations/subsidiaries of the company. The total remuneration fixed, including from subsidiaries, remains unchanged from last year," the report said.
Airtel will seek shareholders' nod for the re-appointment of Sunil Bharti Mittal as chairman of the company, at its ensuing annual general meeting scheduled to be held on August 31, 2021, the company said in a regulatory filing.
"...pursuant to the recommendations of HR and Nomination Committee and the Board of Directors of the Company and subject to such other approvals as may be required in this regard, approval of the members of the company be and is hereby accorded for re-appointment of Sunil Bharti Mittal as Chairman (in executive capacity) of the company for a further period of five years with effect from October 1, 2021, or such other shorter period as may be permitted under Regulation 17(1B) or other applicable provisions, if any, of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015," it said.
Earlier on May 17, the Board of Directors had approved the re-appointment of Sunil Bharti Mittal as Chairman in an executive capacity for a further period of five years that is from October 1, 2021, including terms of his remuneration.
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