Uncertainty over India’s telecom regulations is having a greater impact on Bharti Airtel’s credit rating than a plan to buy Qualcomm’s local 4G assets.
Agency Fitch Ratings notes there is no impact on Indian operator Bharti’s BBB- long-term foreign-currency issuer default rating from its plan to acquire a 49% stake in Qualcomm India. Instead the credit firm notes its negative outlook on the cellco is due to uncertainty over regulation in the firm’s domestic market.
However, Nitin Soni, associate director of Fitch’s Asia Pacific telecom, media and technology team, predicts the rating will be affected by Bharti’s eventual plan to acquire full control of Qualcomm’s Indian broadband wireless access (BWA) operation by end-2014. “Only when Bharti increases its ownership…will it then have full responsibility to service the entities’ outstanding debt,” Soni notes.
Bharti bought the 49% stake in Qualcomm’s BWA business for $165 million (€131 million) last week.