This week, Singtel revealed that it has divested a fractional stake of 0.8% in Bharti Airtel, the second largest mobile operator in India, to GQG Partners for a sum approximately totalling $711 million. This disposal represents the most recent in a series of divestments by Singtel in Bharti Airtel as it transitions from telecommunication operations to technology-based operations, a strategic move originally launched in 2021.
Previously, in 2022, Singtel cut loose a comparatively more significant 3.3% stake in Bharti Airtel. This transaction accounted for a hefty $1.89 billion. Backtracking to the reasons for such moves, Singtel embarked on this strategic overhaul with the intention to amass sufficient capital to advance its transformation from a traditional telecom operator, i.e., “telco,” to a fully digital technology company, or “techco.”
The divestment strategy embodies Singtel’s objective to bolster businesses related to data centre services and IT. As technology continues to evolve at an unprecedented pace, companies like Singtel are modifying their business models and capital strategies to adapt.
Arthur Lang, Singtel’s finance head, stated, “The group is now in an even stronger position to execute our disciplined capital approach of balancing investing for greater growth and delivering strong, sustainable returns.” He added that divesting from the telecom business in India allowed the firm to balance its investment patterns – crucial for attaining more pronounced growth.
Such transitions reflect the evolving landscape of the international telecommunications industry, a transformation marked by a shift in focus from conventional models to more technology-oriented operations. This is a testament to the evolving technological landscape and how companies are restructuring to keep pace with the changes.
