'We are looking at revenues of $10 bn by 2010'

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Sunil Bharti Mittal, group chairman, Bharti Group, has been awarded the VOICE&DATA Telecom Man of the Year 2006. Mittal was presented the award in recognition of his leadership, vision, and entrepreneurial skills with which he made Bharti AirTel, the country's top mobile services company.

Graduating from Punjab University, he founded Bharti in 1985. Today, Bharti AirTel has a market capitalization of over $15 bn and a headcount of over 14,300. Under his leadership, Bharti has grown successfully and achieved revenues of Rs 11,663 crore in FY 2005-06, and is the number one private operator in the country. In an exclusive interview to VOICE&DATA, Mittal spoke about the telecom journey, partners and partnerships, people and teams, missing links, and the role of telecom infrastructure. Excerpts:

The telecom journey for Sunil Bharti Mittal started with push button telephones (PBT) in 1982 and is flourishing in the mobile market. How has been the journey in the last 24 years?
It has been a great journey, and from nowhere we have been able to create the fifth largest enterprise in the country. The last 24 years have been enriching and rewarding, as I had the benefit of having varied experiences. We have been stepping up and building new products and services and improving on earlier experiences. Bharti AirTel is a classic case of creating a company from nothing.

-Sunil Bharti Mittal, group chairman, Bharti Group

We started telecom in 1982 with PBT and are still continuing with it. Later, we added fax and answering machines. Mobile started in 1992 and we jumped into it in 1995 with the Delhi circle, later it was Himachal Pradesh and the network spread across the country. So, last 11 years have been the most exciting period where we build business, an admirable brand, and an organization with high-quality professionals with integrity of character and a customer-centric approach.

Bharti AirTel has been the number one operator in the private operator space for a long time. And credit goes to you because the majority of the people do not have an IIT or IIM background. For example, in the core team of 27, only five are from IIT and seven from IIM. Your comments?
Badri Aggarwal and Akhil Gupta are not from IIT and IIM, but they are very good people. Initially, it was hard to get people but we have attracted the best talent even when we were small. There is no correlation between talent versus an IIT and IIM background. Bharti's success can be attributed to small, mediocre, passionate, and high-quality leaders who have taken charge and moved ahead.

Bharti's punch line is: delivering growth through innovation and affordability. Till date, the company has provided coverage to 46% of India but the next 54% is crucial. And for this, Bharti has to be more innovative and needs to focus on affordability. What are Bharti's plans for connecting next 54% of India?
For the next 54%, the focus is more on affordability and not on innovation. On the affordability part, we are putting models in lower levels. By March 2006, we are planning to reach towns and cities with a 5,000 people population. For innovation, we are looking at the upper end of the market. And here, the focus is on future factory, mobile factory, 3G, mobile commerce, and mobile e-mail. Rollout is a challenge in rural areas and innovation will help us in seeing that the sites are up and running using DG sets and solar sets. Infrastructure problem is a tough part but we are presently running networks in Leh, Andaman, and the North East.

The key reason for Bharti's success is its partners and partnerships. Kudos to Bharti, the company has not only managed one but two or three big partners at the same time. What's the key for building successful partnerships?
Initially, when we were small we partnered with companies like Siemens, Lucky Goldstar, and Suzuki. At that time, I was fascinated by large companies and wanted to build Bharti on the lines of these companies. We have a transparent relationship with our partners, and on a scale of 10 we are at 10. We are transparent and honest in our dealings. When AT&T and Vodafone left India, it was not because they were not happy with Bharti, but they had their own reasons. We had good relationships with BT, Telecom Italia, Millicom Bellsouth, Telia, Jasmine, Telstra, and others. And all these relationships were stronger and were there for a long time. Each one of these companies was surprised with governance, as there were no special benefits for Indian shareholders. We give good news as well as bad news to our partners. All this has made us happy as no partner has ever lost money. So, if each one of these companies plans to come back to India, we will be the first point of call. Lots of Indian companies do not understand image credibility.

Bharti is missing on the global front vis-à-vis its competitors: Tata and Reliance. How do you plan to make up for these in the future and remain number one as Reliance is at a whistling distance with revenues of Rs 11,288 crore vis-à-vis Bharti's Rs 11,663 crore?
We have never chased top line but have been serving customers always. The top lines are reasonable but margins are non-existent.

Teleglobe, Tyco, and Flag have been serving worldwide customers whereas we serve Indian customers through our robust international network of i2i and SMW-4. We are not leading in comparison to Tata and Reliance, but we have got this at a fraction of the cost. Today, we have a node in the US, UK, and Singapore and we are picking 2 bn international minutes. On a balance we are doing what is required to serve India and the Indian diaspora. On the global front: we are actively looking at opportunity in Jersey, a small island in British Isles, planned to be operational in October.
We need big opportunities and as something emerges, we will make up for both financial and managerial resources. We are quite open and plan to be successful in any part of the world in the mobile GSM space.

Bharti Airtel is planning to be the most admired brand by 2010; loved by more customers, targeted by clients, and benchmarked by more processes. How do you foresee Bharti in terms of turnover, investment, and employee base in 2010?
It is difficult to say how other businesses will shape up in 2010. We are looking at a 30% market share in telecom subscribers, and that is our legitimate aspiration. We should have 100 mn customers by 2010. In revenue terms, we are looking at $10 bn of which AirTel will contribute a large portion of around $7-8 bn.

The future will be driven by software applications and the Tata Group stands to benefit with TCS under its fold. How do you plan to nullify TCS' effect in the future for the telecom domain?
On the software front, we have a strong relationship with IBM. And IBM is a true partner for our IT needs. Even Bharti Telesoft is there on the product side and is a force to reckon in the VAS space. Telesoft has been servicing specialist product requirements for Orange, Vodafone, and SingTel. The company is small as compared to large software companies.

On the IT part, we are managing players like IBM, Wipro, and TCS. We are not wedded to one player but sign up with different players depending upon customer requirements.

How are you progressing on the non-telecom front, as this will contribute around 30% of Bharti's revenues by 2010?
On the insurance front, we have tied up with AXA, the second largest insurance firm. We have a strong outlook and are looking at $100 mn in 2-3 years. On agriculture, we are exporting vegetables. This is high on investment as well as high on effort. Retail will be finalized by the end of September. Bharti Teletech is selling the Motorola brand and it will grow with Motorola kits, PBTs, and set-top boxes. For the Bharti Foundation, Badri Agarwal is in the governing board and there's a vision in place to focus on primary schools, computer centers, library programs, scholarship schemes, and mid-day meal in rural areas.

How do you visualize telecom vis-à-vis other infrastructure in the country?
Telecom infrastructure is an important piece of infrastructure. It helps in changing society and provides fillip to everybody's efficiency. Telecom penetration is also directly related to the GDP. India being a knowledge-based society, telecom will play an important role. However, for telecom to contribute 10% of GDP, we have a long way to go.

Pravin Prashant

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