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January 16, 2013

Management Shake-up at Bharti Airtel

Sanjay Kapoor, the chief executive officer for India and South Asia at Airtel, has quit the company following a series of resignations by key executives.

However, Sanjay Kapoor, a 15-year veteran of the company, will continue in his current role as Bharti Airtel’s India chief executive officer until February 28, 2013. He will also be available to assist on key ongoing matters to ease out the transition process. He will eventually be replaced by group director of special projects, Gopal Vittal, as chief executive officer of India operations from March 1, who will report directly to Sunil Mittal, the group chairman.

This move is in a bid to reverse the trend of declining profits.

Sanjay Kapoor will also serve on the board of Indus Towers Ltd and Bharti Global Ltd. His replacement, Gopal Vittal, was previously associated with Singtel, Softbank and Silicon Valley Bank, which should help in directing the company’s focus on data based services, applications and content. Gopal Vittal, who rejoined Bharti last year after a stint with India's largest consumer goods maker Hindustan Unilever Ltd, will focus on increasing market share and margins, while also working on growing alternate revenue streams such as 3G data and mobile money.

"Until now it has only been about voice. Now it will be about data, video calling, so many other applications pertaining to data," said a Mumbai-based telecoms analyst who declined to be named. Vittal, with his consumer goods background, is well-placed to drive the change, the analyst added.

Bharti and its rivals in India launched high-speed 3G mobile data services in early 2011, after spending billions of dollars to buy airwaves. The premium services, however, have achieved slower than expected growth.

Apart from India, Bharti operates in Sri Lanka and Bangladesh in South Asia and 17 countries in Africa. The company's Bangladesh and Sri Lanka operations will become part of Bharti's international unit, currently headed by Manoj Kohli.

In October last year, Airtel said it was considering merging its domestic and loss-making Africa business operations into a single business entity under a global chief executive officer by the middle of 2013.

Kapoor, was not immediately available for comment. Bharti Airtel shares jumped in afternoon trade ahead of the news, with traders attributing the surge to a likely sector-wide increase in voice call tariffs. The stock closed five percent higher, while rival Idea Cellular climbed 8.4 percent.

Bharti Airtel will publish its quarterly results on February 1, 2013.

Edited by Brooke Neuman

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