Airtel/ Sunil Bharti Mittal
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Contents |
History
Shweta Punj , Upwardly Mobile “India Today” 21/8/2017
Sunil Bharti Mittal, the founder of Bharti Airtel, started with manufacturing bicycle parts when he was just 18. He graduated to importing electric power generators from Suzuki Motors. Later, in 1984, Mittal started manufacturing push-button phones. In early 1992, he bid for one of the four mobile phone network licences auctioned in India. To meet the condition for experience, Mittal entered into an agreement with French telecom group Vivendi. After getting clearance from the government in 1994, Mittal launched services in Delhi under Bharti Cellular in 1995.
Airtel has transformed the way Indians keep in touch, from the year-long wait for a landline connection to mobile phones that could be used anywhere and were available to everyone. In many ways, Bharti Airtel was a great leveller, it brought the luxury of communication to all irrespective of social stature and economic means. This ease of communication opened up opportunities for millions of Indians across the country, encouraging entrepreneurship. It also connected India with the rest of the world. From the days of booking a trunk call and waiting endlessly to making a call to an international number from one's mobile phone was a transformative experience. Now, Bharti Airtel is at the forefront of the digital revolution sweeping India.
THE TRENDSETTER
It is the largest mobile operator in India, the second largest in Asia Pacific and fourth largest in the world, with 248 million subscribers as on February 2016.
It ushered in a telecom revolution with competitive tariffs and aggressive expansion, connecting millions.
It is one of the key drivers of data revolution and the first to scrap roaming charges on calls, text and data.
Dialling the future
The company is committed to spending Rs 19,300 crore in capital expenditure. It is also betting big on 4G business and has acquired Telenor India and entered into an agreement with Tikona Digital Networks. It is investing Rs 2,000 crore in the 'Project Next' programme to improve customer experience across its services and has also launched Airtel Payments Bank as well as online wallet Airtel Money.
A profile
Airtel is the largest mobile phone operator in India, with 213 million subscribers and a 28.18 per cent share in the mobile telephony space.
He is the only Indian mobile provider with an international presence and acquired 2.7 million subscribers of the Kenyan telecom firm YuMobile in September, despite a net debt of Rs.60,000 crore in 2013-14.
He comes from a political family and has a keen interest in politics. Survived the first Ambani onslaught on his sector by Reliance and is now bracing for Mukesh Ambani's 4G launch.
Political animal
"The PM may not wear a skull cap, but that was done for 67 years and where are we?"
Swachh Bharti
He has pledged $16 million to building toilets in his home state, Punjab.
Airtel
2010’s $11Bn Foray into Africa ‘Was A Bit Rushed’
Pankaj Doval, ‘Entry into Africa one of my biggest regrets’, December 16, 2017: The Times of India
Our 2010 Decision To Make $11Bn Foray Was A Bit Rushed: Bharti Airtel Chairman Mittal
Bharti Airtel’s entry into the African market in 2010 — through a nearly $11-billion acquisition — was perhaps not correct and is one of “my biggest regrets”, says chairman Sunil Mittal, who has battled many a challenges in the highly competitive telecom business over two decades.
When Asked what is the one decision that he regrets the most in his professional life, the Bharti chief on Friday said, “If I had to look back, we should not have taken that decision.” He was responding to a query at the TiEcon Delhi event.
Airtel had ventured into the African market in 2010 with an ambitious and expensive purchase of Kuwait-based Zain Telecom’s assets there. But, it has still not managed to make the business profitable.
“We all must have made lots of mistakes. Lots of decisions, when you look back, I wish they were better thought through. But If you pin me down to one, I would say in 2010 our decision to go to Africa was a bit rushed and that has taken six-seven-eight years and lot of resources and my personal time to fix that.”
Mittal said the constant challenges in Africa, and efforts to turn around the business, have impacted the energy and cash flow of Airtel. “…I think if I would have conserved that capital and energy, (then) probably we would have been better-placed today in our home market.” Airtel currently runs a cumulative debt of over Rs 90,000 crore, a large part of which is due to the African purchase. However, Mittal said that things have been turning around. “In Africa, thankfully, it is a much better place today. It is cash-flow positive.”
He said work is constantly on to address African business. “Every entrepreneur comes to a point where you make some mistakes and the only thing is that you should recognise it, and try to fix it as fast as you can… having taken that decision, you need to back it, you need to fix it. It’s my job, it’s my team’s job to fix it.”
Profits
2017, 2018: sharp drop in profits
From: Pankaj Doval, Airtel’s India biz slips into loss on onslaught by Jio, April 25, 2018: The Times of India
Hit by steep competition after the launch of Reliance Jio, Bharti Airtel on Tuesday reported a loss of Rs 652 crore in its India business in the fourth quarter ending March 31, 2018. Profit from Africa operations (Rs 699 crore) came as a rescue and enabled Airtel to report Rs 83 crore profit on a consolidated basis. This, however, is the lowest profit for the company in around 14 years (it had a profit of Rs 31 crore in one of the quarters of 2004-05). South Asian operations also chipped in with some profit.
Bharti Airtel recorded a profit of Rs 1,461 crore in July-September 2016-17. The company’s numbers have been slipping consistently since Jio’s launch in September 2016 and coming times appear to be worse for Airtel as Jio has shown no signs of easing its tariff aggression. Revenue has also been going down and stood at Rs 19,634 crore in Q4, showing a fall of 10% over Rs 21,935 crore in Q4 of 2016-17.
Airtel’s problems are compounded by the fact that its voice and data usages have been growing exponentially at a time when realisations have been crashing. Data usage per customer for Airtel is up nearly 400% at 6.5 GB in Q4 of 2017-18 against 1.3 GB in the same quarter of 2016-17.
“The telecom industry continues to witness below cost, artificially suppressed pricing. Industry revenue was further adversely impacted this quarter due to reduction in international termination rates,” Gopal Vittal, MD and CEO of Airtel’s India & South Asia business, said.
Analysts say that the going may not be easy for the company.
