The Leading Lights of Telecoms - Bharti
Bharti (www.bharti.com) has today assets worth US$1 billion and annual turnover exceeding US$276 million. The group is well-entrenched in basic, cellular, Internet, VSAT services as well as in the field of telecoms equipment manufacturing. Bharti group’s founder, chairman and MD, Sunil Bharti Mittal, shares his thoughts on recent developments.
Which areas of your business require greater attention next year?
We want to be a pan-India telecoms service provider, a one-stop shop, a one-stop solution provider for all our customers. Providing the business segment and the consumer market with the finest benefits from the world’s best technology. Our focus however will clearly be on becoming a leading pan-India mobile service provider.
Who are your technology partners?
We have chosen Ericsson, Siemens, and Motorola to partner Bharti. They will provide us with complete end-to-end infrastructure, intelligent network architecture, base stations and GPRS-ready networks. Siemens is the chosen vendor for basic services, [while] Nortel and Siemens supply transmission equipment, and Alcatel for ATMs and submarine landing stations.
Can you give us an indication of the Asia-Pacific telecom scene in the year 2002. What do you expect it to be like?
The Asian business landscape in telecoms is poised for exponential growth. This is largely due to significantly lower penetration levels in many parts of Asia. This is particularly true for a country like India, which has a large population and where the telecoms penetration is still less than 4%. The same holds true for certain other countries of Asia.
On a broad stroke basis, the Asia-Pacific markets will see a greater emphasis towards data. Data will evolve as a significant contributor to overall revenues. Overall mobility or wireless services will continue to dominate growth levels in the region.
You have delegated powers to professionals in several Bharti group companies. Is this delegation of powers real or apparent?
People are the real engine of growth of an enterprise. Recognising the need for change, Bharti undertook a major restructuring exercise late last fiscal year. The restructuring was designed to ensure that identical businesses are run along similar lines and we can tap our best resources in any functional field to serve the best interests of the entire group.
Bharti today has an apex team of corporate directors which has supervisory and strategic responsibilities for functional areas across business lines. These directors oversee eight functional areas, including projects and capital expenditure, human resource, marketing and corporate communication, technology, finance, legal, regulatory, and corporate affairs.
A president heads each business line to whom all CEOs of the service companies reports. The CEOs in turn are fully empowered to lead and manage their respective companies and are responsible for business operations.
With convergence becoming the buzzword, do you think it is economical to operate different services under separate companies as Bharti practises now? How do you manage competition among them for attention and funds of holding companies? Bharti’s Internet, VSAT services and broadband services companies merged in 1H’01 with the holding company to create one entity—Bharti Broadband Network. The merger follows Bharti’s strategic decision to develop a common platform for developing integrated business solutions for Bharti’s customers in different market segments in the areas of Internet and broadband services.
We recognise that convergence is a reality and we will, as and when required, evolve to a structure best suited to serve our customers. Hence, there is no conflict or competition given the structure of the organisation.
In spite of its impressive growth, Bharti has not been able to retain foreign partners in several joint ventures for more than five years. Why is this?
We have had the good fortune of partnering some of the biggest names in the telecoms sector globally, including British Telecoms (BT), SingTel, and Intel. We have always shared excellent relations with our partners. For example, BT started with Bharti in one venture and extended itself across three ventures.
Today, BT is exiting from Bharti because it is strategically looking to exit Asia. In fact, BT’s Richard Slogrove, Vivendi’s Michel Villaneau, MSI’s Mohamed Ibrahim, and Emtel’s Bashir Currimjee are still on various boards of the group.
Even after the exit of certain partners, Bharti continues to enjoy an excellent relationship with each one of them. All partners who have exited have done it either for a strategic reason or for to realise ROI as a part of their financial strategy.
Frost & Sullivan’s take on: Bharti
The New Delhi-based unlisted Bharti Enterprises is the holding company of Bharti Cellular, which operates a mobile telephony network in the capital. Its operations include mobile and fixed-line telephony, telephone handset manufacturing, Internet access and VSAT (very small aperture terminal) networks. Recognising that convergence will be the next area of growth, Bharti undertook a major restructuring—to merge four companies into one corporate entity, called Bharti Broadband Networks, in late last fiscal year.
Bharti has several joint-ventures with foreign partners in the past few years including British Telecom (BT), SingTel, and Intel. In spite of its impressive growth, Bharti has not been able to retain some of these alliances for various reasons. BT, for instance, has opted out because it is strategically exiting from Asia.
India’s first private submarine cable developer—Network i2i, a 50:50 deal between SingTel and Bharti Enterprises, is a 11,800-km ring network, which links Singapore, Chennai, and Mumbai. This partnership will benefit both companies, as they collectively leverage on each other’s strengths. Bharti has begun expanding its operation into other parts of Asia.
Bharti is still financially strong having recorded a positive EBITDA for all five cellular services. The company also doubled its cellular subscriber base between Jun 2000 (350,000 subscribers) and Jun 2001 (704,000 subscribers). In the pipeline is an IPO to raise an additional US$200 million in the near future.
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