Vodafone Share News (VOD)

* World's No.3 operator explores merger, tower assets sale

* Eyes float of minority stake in African unit

* Deals come amid tough competition, industry consolidation

* To commit $3-$4 bln to annual capex as 5G looms

By Douglas Busvine

BARCELONA, Feb 28 (Reuters) - India's Bharti Airtelis exploring merger and sale options for its mobiletowers businesses as Chairman Sunil Bharti Mittal seeks to getout of the infrastructure game and focus on connectivity.

Airtel, the world's No.3 mobile operator by subscribers,also wants to float a minority stake in its African operationsand sees the London Stock Exchange as a potentially attractivevenue.

Mittal, briefing reporters at the Mobile World Congress inBarcelona on Wednesday, backed the lead set by telcos in theUnited States, now being followed in Europe, for specialists toroll up and run mobile tower assets.

"Our position is very clear: towers are steel and concrete.They are not the domain of mobile companies," said the60-year-old Mittal, whose family fortune Forbes Magazine puts at$8.8 billion.

His move to shed non-core assets follows the blockbusterentry into the Indian market by Mukesh Ambani's Reliance Jiothat has forced rivals to merge, creating a three big players inthe country of 1.3 billion people.

Indian operators, despite their strapped finances, will needto prepare for the launch of fifth-generation services, andMittal said he expected Bharti Airtel to continue to commit$3-$4 billion a year to capex.

India will roll out 5G "in step" with other parts of theworld, he said, with first use cases likely to be industryapplications, and in fixed-line and machine-to-machinecommunication.

IF YOU WANT TO SELL

Bharti Airtel controls Bharti Infratel Ltd, andalso owns 42 percent stake in Indus Towers Ltd, India's largestmobile infrastructure company with nearly 123,000 towers.

Bharti Infratel said last October it was considering buyingthe rest of Indus that is owned by competitors Vodafone Indiaand Idea Cellular, which are in the processof merging.

Mittal said he had a flexible approach to exiting the towersbusiness, and had also received board approval to pursue thealternative of reducing Bharti's stake in Infratel to belowmajority control.

"We have gone down from 100 percent to 53 percent. And ourboard has decided: if you want to go and sell, then sell," saidMittal, who also chairs the GSMA industry group that hosts theannual Barcelona gathering.

COMMITTED TO AFRICA

Bharti Airtel, present in 20 countries, said in mid-Februarythat it was exploring an initial public offering for BhartiAirtel International (Netherlands) B.V. (BAIN), the holdingcompany that owns its African interests.

A listing, if it does happen, would only be of a minoritystake, said Mittal: "It will remain a Bharti subsidiary. Thatmeans we are staying (in Africa)."

Vice-Chairman Akhil Gupta said London was a potentially goodvenue but that Bharti would rely on the advice of investmentbankers, yet to be appointed for the deal, before making up itsmind.

Bank of America Merrill Lynch has said BAIN could be valuedat an enterprise value of $6.6 billion, or six times earningsbefore interest, tax, depreciation and amortisation (EBITDA).Gupta said he was looking for a higher price.

"I think we should be much more, because we should be at$1.2 billion of EBITDA by the time (of the float)," he said."But the markets will decide all this."(Reporting by Douglas Busvine. Editing by Jane Merriman)