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On a visit to Bengaluru in 1997, then UK Prime Minister John Major hailed BT’s acquisition of a 21 per cent stake in a telephone operator owned by Sunil Bharti Mittal as “an indication of the strength of our economy”.
Now Indian politicians are celebrating a dramatic turnaround after Mittal’s Bharti Enterprises struck a deal to become Britain’s telecoms monopoly. The largest investoragreeing to buy a 24.5 percent stake, worth about $4 billion, in debt-laden Altice from French-Israeli billionaire Patrick Drahi.
Bharti Airtel, the flagship company of the 66-year-old Mittal conglomerate, has flourished since its founding in 1995 to become one of the world’s largest network providers, now eclipsing BT.
With 550 million customers in 17 countries in South Asia and Africa, the company has a market value of $100 billion, more than five times that of the British group, which has lost assets abroad in recent years.
MittalThe purchase was greeted with joy at home, where it has been hailed as a symbol of India’s growing economic power and part of a trend by national champions of acquiring iconic assets from their former colonial master.
Commerce Minister Piyush Goyal echoed Prime Minister Narendra Modi’s instructions a decade ago: “I want Indian companies to become multinationals.”
Mittal, a cross-border operator who moves easily in international political corridors, has been happy to oblige, with a series of international deals in the works even before Modi came to power, including Bharti Airtel’s $10.7 billion deal in 2010 to take control of the African network owned by Kuwait’s Zain.
Modi “wants certain companies to come out of India and represent him,” said a person close to the billionaire. Bharti is “one of those companies.”
Mittal hails from the industrial city of Ludhiana in northern India, home to a wealth of small businesses that have left a lasting mark. His late father was a member of parliament for the Indian National Congress, the party that dominated politics for decades after independence.
“Their parents have been very influential,” said Neil Shah, a partner at technology consultancy Counterpoint Research. “They are very well connected.”
Mittal’s father was interested in setting up a large family businesssupporting his teenage son’s first foray into bicycle parts manufacturing. During the socialist restrictions of India’s “Licence Raj” that kept entrepreneurial ambition in check, young Mittal became adept at finding loopholes in the labyrinthine regulations.
He won over indifferent bank managers, even playing ping-pong with one of them to cash cheques, but his power generator business was crippled by a sudden import ban in the 1980s.
Mittal found his calling in replacing the old rotary phones that were prevalent in India, importing components for push-button phones after finding them during a trip to Taiwan. As India’s economy opened up during the reformist 1990s, Mittal put in a bid for a private company. telecommunications license, launching a technological transformation at the national level.
But as his telecom business boomed, many of his conglomerate’s initiatives in other areas, such as food and retail, failed. Bharti’s efforts to bring Walmart to India, a country where retail remains dominated by small, mom-and-pop shops, sparked protests in 2007 in which executives from the two companies were burned in effigies. The partnership ended six years later, when New Delhi investigated the American group for possible violations of foreign ownership rules. Those struggles partly explain why he remains loyal to the industry he knows best.
Mittal’s biggest rival remains Asia’s richest man, Mukesh Ambani, with whom he began feuding in the early 2000s.
“Am I scared? No. Am I worried? Yes,” Mittal said in 2016 when Ambani’s new airline, Jio, sparked a wave of protests. price war which reduced the dozen operators that existed in India.
According to Shah, Bharti Airtel’s size helped it weather the storm, establishing itself as India’s second-largest network and establishing a near-duopoly with its archrival. A banker whose firm has worked with Bharti said Mittal “has to live in the shadow of Jio and Ambani.”
The urban billionaire’s family background has given him an interest in international politics. He was previously a trustee of the Carnegie Endowment for International Peace and sits on advisory boards of the Council on Foreign Relations and Hakluyt, a London-based consultancy founded by former MI6 intelligence officers.
In Britain, where two of his three children live, Mittal was given an honorary knighthood this year and has been pushing for a trade deal being negotiated between London and New Delhi.
But beyond his sentimentality towards the UK (where his investments include Scotland’s exclusive Gleneagles resort, The Hoxton hotel chain and satellite company OneWeb), the strategic motivation behind the BT deal remains unclear.
Mittal, who has said he has no intention of taking control of the company and has not negotiated board seats, has been coy about the ultimate ambitions behind his most high-profile stint in Britain. Analysts have speculated he could strike a deal with OneWeb, which has raced ahead in the satellite Internet race in India.
The billionaire says he is investing in BT for the long term, backing chief executive Allison Kirkby’s strategy of cutting costs and spending on fibre networks, while praising the UK’s investment climate.
“There aren’t many opportunities like this where you can get a block of shares in an iconic company,” says the person close to the tycoon. Bharti’s “home base” has given Mittal “the strength to make these moves abroad.”