The 45 year-old head of Rs 2,050-crore Bharti Group, Sunil Bharti Mittal—SBM, as he’s referred to by his colleagues—is rightly described as the man who changed the face of Indian telecom. This exclusive interview throws light on this great achiever’s thought process, his philosophy about work and life, and his future plans...

If you were to put your finger on one thing as the turning point for Indian telecom, what would that be?
I would say that there were two real milestones. One was right in the beginning, in 1985–86, when the government, for the first time, allowed private sector enter telecom. Until then, only ITI and some government-owned companies were involved in the manufacturing of telecom equipment. And the second was in 1994 when mobile license was granted. And for the first time, the government identified that telecom services in the private sector were no more a security issue.

When I go and ask for 74 percent of equity, it is not to sell my company. Those who have to sell out, sell it even at 49 percent Sunil B Mittal, CMDa, Bharti Group

What do you think the next big thing would be?
The government, with the National Telecom Policy of 1999, has really played the role. Now the regulator really needs to know that interconnect obligations in this country can’t be held back. I think that the issue needs to be resolved expeditiously.

As far as the technology is concerned, to my mind, it’s just an input for service providers. We keep on buying the best and the most-advanced technologies, which are cost efficient, spectrum and bandwidth efficient, and completely beneficial to our users.

You once said that your getting into telecom was incidental. Now, you have great belief in telecom, and high hopes too...
First, we know that the industry is growing at a fast pace. Bharti is still growing at 100 percent. There would be a handful of companies in the world which would be growing at 10–20 percent. This industry will grow 100 percent this year and even next year. There are not many industries which will come close to that. The hope for telecom is quite evident. Time, Newsweek, and Businessweek are identifying India as the only country where you will have 100 percent growth. So in telecom, there is going to be a phenomenal growth for 7 to 8 years. I think within that Bharti has taken a serious position.

Some say you are fighting a war on too many fronts. There were areas in which you were there and you got out. Telecom ducts, pager manufacturing, ISP, and VSATs for instance. Do you like to experiment and what is next?
We are certainly risk takers. I think as we have grown we have managed the risk and you need to manage your risk because you cannot be reckless if you are a large organization, where thousands of people are dependent on how you perform, and billions of dollars are riding on it. I would say we take our chances. But I think from outside it may appear that we experiment a lot. But we are very calculative. We decided that we would exit our joint ventures where we would have no control, where we have no clear direction to grow. Casio (for pagers) was one area where we had no control, so we took a decision and walk out of this venture. That company is gone and Casio took over 100 percent stake and could never manage that. In Siemens telecom, we bought Siemens out and we have flourished. In Dura-Line, we invested Rs 2 crore and got nearly Rs 40 crore back from the sale of equity in two years time. We had played our role, everything was working fine. We had nothing more to contribute. But there are areas where we have gone ahead and scaled back. Internet is one such area. We spent a lot of money on Mantraonline during the dot-com days. We have not grown there. We are not growing this business till the interconnect regime changes or the per hour rate changes for using Internet.

What about Internet with Touchtel, your basic service?
No, with Touchtel we want to expand with Internet as much as we can. There, a revenue of Rs 24 per hour is coming from the dial-up end. The problem is from the pure ISP front. You get zero from dial-up because MTNL and BSNL do not share. We get Rs 6 an hour, which does not make sense. But that division has about Rs 150–200 crore from the sales of corporate Internet and VPNs. They are doing it through broadband Internet terminals using the fiber.

Are you also venturing into the call center business?
We are building a call center and that is being used by Amex now. We are setting up high-quality building for call centers and software houses with bandwidth provided from Bharti and that is becoming a specialized business. We have put up a very nice facility in Gurgaon. We moved everybody from Okhla. We took a new building. That building has gone to Agilent now, which has taken it for a time period of 10 years, and they are paying us a nice facility charge, which makes a good economic sense. All this gives us the wherewithal to experiment.

How much of your success would you attribute to your influencing telecom policies? How much of the battlefronts are in the corridors of power now. Reliance is also building up a lot of pressure on CDMA or limited mobility front.

I would say that in all the policy-making decisions I have been fairly active but have never stretched beyond a point. We always believed that if the sector is good, we would make it ourselves. Currently, the battles on the regulatory front remain are very few. Interconnect is a big issue and that problem is with MTNL and BSNL rather than the government. Regulator to my mind will have to wake up and start performing. It is not really doing very much. The policy provides for a regulatory framework but the regulator is not waking up to the reality. I think the battle is going to be tough, and three or four companies are likely to survive. But I strongly believe that we will be one of the survivors.

Today you have a vast pool of managers and CEOs, but Bharti externally is identified with Sunil Mittal...
I would say what I used to say seven years ago: we would build an icon for the external world. We believe it helps. It also helps internally to have a cohesion in the organization and I think that works very well. Two years ago, I said that the only area that would suffer is new projects. Today, I can say nothing of that sort. That is the way we have designed the company. If you look at the operations now, every CEO (we call them chief minister) is extremely powerful and there are only a few things he should not do.

He should not change the brand, should not go for collaboration, should not sell the company, or surrender the license. Then we have the presidents whose offices have become very big and provide all the support. Knowledge sharing, centralizing IT, centralizing technology is done from there. And then comes the corporate office, which is more for supervision, raising of finance, vendor relationship, new projects, and new geographies. Those are some of the things that are left to us.

You recently had a CEO conference in Agra, and the only subject discussed there was Reliance. Is that the biggest cause of concern now?
In every conference we have one or two major points around which I make presentations. This time a major issue was the emerging competition. Reliance is going to be a big competitor. Therefore, we need to look at our strategy and the weak links.

We have come through a huge wave of project build-up and when you build projects not many people realize the kind of rollouts we have done in the last nine months, unprecedented anywhere in the world. We tried to become more lean and shed fat.

Does this mean that we will see some layoffs? Bharti is known to be very soft as far as its employees are concerned?
We had Mckinsey study our company, and in its report it brought out some key points. In five areas we were industry benchmark, and in three we were at par with the best in the world. In two areas we were found to be weak, and one was performance management. We do not fire people who don’t perform and that is a problem. I started as an entrepreneur and not as a B-school professional. I feel I really owe to the old people who have not grown with the organization. You are in business but you have to be sensitive to people. They have given their life to this company and they have not been able to come to the level where the company is today. We give them smaller job and they are still there. People feel good about our organization and they love to work here. But no large-scale retrenchment is being planned.

You have known to have pan-India vision for Bharti. In an industry where often it is the Rule of Three, how would you differentiate between BSNL, Reliance, or Hutch?
No, I think other than BSNL we are the most experienced. Everybody else has significantly less experience. We started this in 1982-83 and have been learning telecom ever since. Muscle, I think we have lot of it. Rs 9,000 crore have been invested in telecom business. Tatas have invested Rs 3,000–4,000 crore. Reliance has invested up to Rs 5,000 crore. We have a national footprint covering 56 percent of India’s geography and 94 percent of the mobile market in the area. We have put in 24,000 km of fiber, which covers 80-85 percent of India’s traffic. We don’t need to do 60,000 km. I think you need to have a smart-enough strategy with limited capital and limited resources. We have used them very efficiently and effectively.

All those things that you mentioned are very attractive for acquisition. So will Bharti be acquired?
In this business you can never say no. But I personally believe that there was a time when one could have put a question, "Will they sell out?", "Will they be there?" I think we have put all those questions behind. My feeling is that we will be one of those three or four companies that will succeed. We are now growing at quarter million customers a month, and in 3 to 4 years we will be one of the largest telcos having 15–20 million customers.

You are an active proponent of getting 74 percent of FDI. All this perhaps adds to the belief that you are building all this to be acquired...
Today Ambanis have less equity in their company than I have in my company. Lots of other people, such as Nandas in Escorts or the Mahindras, have less stake than I have in my company. When I go and ask for 74 percent of equity, it is not to sell.

Those who have to sell out, sell it even at 49 percent. Hutchison controls the entire Essar company. If you want to sell your company, there are many ways to do it. We actually are the only telecom company (other than Reliance) which fully controls its own fortune. We have no plans for selling. There would be more divestment as we go along, which will take our stake to a minimum of 26 percent if not 30 percent. That is pretty high for a multi-billion company.

I don’t think that I’ll build a new business after this business. Having built this business from scratch to this point, starting all over again is not going to be very exciting. The only way out is that carry on the way you are which I, very honestly, will hate to do for the rest of my life. So would I move on? I would like to be in some form of public life. I don’t know in what shape and size...

Could it mean politics?
Not necessarily. I think the distinction must be made. There are people who are in public life and not in politics. We are programming Bharti Foundation to take up that big role. It is in early days. The Bharti School of Telecom Technology in IIT is up and running now. A number of schools running in Madhya Pradesh are being helped. One school is coming up in Ludhiana. Child education and higher education is one of the missions of Bharti Foundation, and that could be one vehicle in which we can express our new interest when I am 50. I am closely looking at the Ford and Rockfellar foundation model. It could be education, health, etc. Other things that could excite us could be building a new airport. If this airport privatization which is lingering now takes shape in five years, we might take this up and create a world-class airport in this country. Anything that has high impact on society, be it an infrastructure project, we would like to do. Services are what we like to do.

There are a lot of people in India who would like to be Sunil Mittal. Do you have an ideal, if not a role model, among entrepreneurs, politicians, etc?
I have been deeply touched by the leadership model in Singapore where whether it is the Prime Minister, or younger ministers, or the Singapore companies, want to build something for the country, and want to build the country into something different.

That’s one thing that really drives me.

Prasanto K Roy, and Ibrahim Ahmad