Bharti Airtel Ltd - Wireless Wonder

In the 1980s, Sunil Mittal was a small trader importing portable generators. When the government banned their import, Mittal moved into push-button telephones. No planner, nor even Mittal himself, could have foreseen his meteoric rise to India's top cellphone magnate. His company, Bharti Airtel, is now worth $40 billion, and it's going global. Just follow his footsteps

Launch strategy and marketing

A niche in the telecom sector

An affinity for foreign allies is consistent with Mittal's formative experiences as a first-generation entrepreneur in the heyday of what was known as the "license raj." The era was so named for the government's policy of closing India's economy to foreign competition while doling out exclusive rights to produce essential goods and services to politically powerful industrial dynasties like the Tatas and Birlas.

Unlike the scions of those great families, Mittal wasn't born to wealth. He was raised in Ludhiana, a manufacturing hub in Punjab, as the middle son of a Congress Party politician. He founded Bharti in 1976 at the age of 18, after graduating from Punjab University, with $1,500 borrowed from his father. At first he made crankshafts for local bicycle manufacturers. Within three years he had set up two more plants, one that turned out yarn and the other stainless-steel sheets used for surgical utensils.

Despite his success, it was clear to Mittal that these ventures would never match the size of his ambitions. So in 1980 he sold the bicycle-parts and yarn factories and decamped to Mumbai, where he reinvented himself as a trader, crisscrossing the nation by train in search of customers for imported stainless steel, brass, plastics and zip fasteners. Business was good, but Mittal's first real break came in 1982 when he parlayed a chance encounter with a salesman from Suzuki Motors into a role as the exclusive India agent for the Japanese manufacturer's electric-power generators.

In Suzuki's home market, generators were a sideline, used mainly to power ice cream vans. But Mittal knew that in Indian cities like Ludhiana, where power outages were part of daily life, generators would be snapped up by ordinary households. Sales boomed. Within two years Mittal had established a national distribution network with offices in four cities.

But then the big boys muscled in. In 1984, with no warning, bureaucrats in New Delhi announced they had awarded licenses to manufacture generators to Sriram and Birla, two of India's largest industrial groups. Never mind that licensee factories wouldn't be up and running for several years. The import of foreign generators was immediately banned. "It was all gone, just like that," recalls Mittal, snapping his fingers.

Desperate for another breakthrough, Mittal scoured markets in Japan and South Korea, eventually landing at a trade fair in Taiwan, where he discovered an extraordinary device: the touch-tone phone. In those days Indians were forced to make do with clunky rotary phones, if they were lucky enough to own a phone at all. One look at the push-button version, says Mittal, and "I knew instantly this was the big one." Within days he had signed a contract with a Taiwanese supplier.

Months later he was selling the gadgets to customers in India under the German-sounding brand name Mittbrau (short for Mittal brothers). But the process took some fancy footwork. Touch-tone phones weren't on the government's list of products approved for import. So Mittal disassembled the phones in Taiwan, shipped the components through Kolkata, Delhi and Mumbai, and reassembled them in Ludhiana.Since winning a licence for Delhi, he has signed up 5,15,842 subscribers there, supplying much of the cash used to buy new mobile and fixed licences.Bharti won mobile permits for eight new regions, including Mumbai city and the States of Haryana, Kerala, Madhya Pradesh, Tamil Nadu, Maharashtra, Gujarat and the western half of Uttar Pradesh. It also added four new fixed licences.

The Company was Incorporated on 29th July, 1985 at New Delhi. The Company was promoted by Rakesh B. Mittal and managed by a board of professionals. The company products were manufactured and marketed under the brand name `BEETEL' for electronic push button telephone instruments.The Company entered into a technical collaboration agreement with companies like Siemens A. G., West Germany, Takachiho Corporation of Japan for supply of technology in terms of complete technical know-how and documentation for the manufacture of State-of-art a range of electronic push button telephone instruments,microprocessor based telephone answering machines and also help in selection/installation of plant and machinery.

In 1990, the Company undertook to set up a plant at Delhi for the manufacture of fax machines in technical collaboration with a Japanese Company and a series of other telecom products. Under this project, two new units were being set up, one for domestic sales at the site of existing plant in Ludhiana and the other for exports at Gurgaon near Delhi.It has a joint 49:51 joint venture with Siemens of Germany - called Siemens Telecom Ltd - which markets both Siemens and Beetel instruments.The Company maintained its position as the leading manufacturer of telephones both in private and public sector and promoted Bharti Televentures Ltd. as a subsidiary of the Company for the purpose of promoting a variety of telecom service projects in India.

Bharti Enterprises acquired 100 per cent equity in SpiceCell. Bharti's acquisition of SpiceCell was part of its plans to seek a nationwide presence in the telecom segment, according to Mr Sunil Bharti Mittal, Chairman & Group Managing Director of Bharti Enterprises. Bharti Enterprises has finalised an agreement with three leading telecommunication equipment providers - Ericsson, Siemens and Motorola. According to an official statement from the company, the `big three' have bagged the orders for building Bharti's cellular infrastructure in the recently acquired eight circles, as well as upgradation of its existing operations.The exact timing of the listing will only be decided after the company gets the nod from Sebi, according to company sources. Meanwhile, ahead of the IPO, Bharti has decided to issue bonus shares to the company stakeholders. Bharti Enterprises, which had acquired the city-based cellular service provider SpiceCell in kolkata, launched its own brand AirTel in 2001 and also introduced poll update service.

Growth strategy

India has about four phones for every 100 people compared with a world average of 15, and 5.7 million Indians use mobile phones against China's 140 million.

Mr Mittal's growth strategy since the Government first allowed private competition in the industry in 1992 has been to find the most powerful partners and snare the most attractive licences.

Singapore Telecommunications Ltd invested $400 million in Tele-Ventures and its holding company Bharti Telecom Ltd in 2000. A year later it put in another $200 million in Tele-Ventures. SingTel holds a 16 per cent stake in Tele-Ventures after the share sale.

Dealmaker

Mr Mittal's ability to strike a deal, with partners including companies such as Telecom Italia SpA, Telia AB, British Telecommunications Plc, Intel Corp and Warburg Pincus may come from his father, a Congress party activist.

Rivals as role models

Even so, Mr Mittal said his role models were his biggest rivals like Reliance and TATAS, etc.

Present Scenario:

Telecom giant Bharti Airtel : It is the flagship company of Bharti Enterprises.Bharti Enterprises is one of India’s leading business groups having a diverse business portfolio and has created global brands with interests in telecom, agri business, insurance and retail and entertaiment. Bharti has been a pioneering force in the telecom sector and today enjoys a strong nationwide presence.

Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand.

Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management.

Recently, Airtel launched its digital TV ie, Direct to Home (DTH) service under Bharti Telemedia Limited, a subsidiary of Bharti Airtel Limited. Direct to Home (DTH) enables viewers to receive broadcast signals into their home via a satellite dish.With DVD quality picture and sound, viewers TV viewing experience will change forever with Airtel digital TV. Now witness the magic of television with best and widest variety of channels and programmes ranging from Sports, Music and General entertainment to best on-demand content on Airtel Live.Now viewers can choose from the best movies of Bollywood and the world, listen to radio, play games, along with a host of other interactive features and change the way you watch television.

What are the Critical Success Factors of your Business?

In the late 1990s, a large number of Internet entrepreneurs emerged in India, spurred no doubt, by the successful acquisition of Indiaworld by Sify. All of these young entrepreneurs were convinced that they had the makings of the next Yahoo or Amazon (Google wasn’t that big then!). With very impressive looking web-sites the only thing missing for success, in their minds, was the money. Almost everyone who started an online business in that period believed that THE critical factor for business success was in building a really good web-site which would generate traffic (eyeballs) which in turn would lead to advertising revenues and then the magical acquisition!

But hardly anyone survived that era. And the very few that did, are doing rather well. All those who’re still around and flourishing realized early on that having a good looking web-site wasn’t the most critical factor for the business since the reality in India was rather different. PC and Internet penetration was very low and broadband was unheard of; fulfillment of online transactions had to be managed through a complex network of vendor and supplier relationships, online advertising revenues were mythical and internet payments weren’t going to happen because apart credit card penetration was abysmal and the infrastructure to process payments online wasn’t up to the mark. Therefore they figured out two things - an alternative mechanism for generating revenues and the need to also have an offline or physical world presence. Building a web-site was the easy part, ensuring reliable service and fulfilling customer needs was a very different kettle of fish indeed.

Fast forward to 2008. There still are a lot of consumer internet sites that haven’t internalized the lessons of ten years ago. A lot of startups are also chasing the same dreams in the Mobile Value-Added Services (MVAS) area.

Lets take another example from the last 12 months. Realising that travel was going to be a hot sector, this company invested heavily in acquiring state of the art vehicles. They then launched a web-site and unleashed a marketing blitz that included very attractive prices and options. Sales started booming and the vehicles were on the road all the time. The vehicles started developing small problems which then became big problems. The company had not invested in creating an auto workshop to cater to matters of minor repairs and overhauling. Every time a problem arose, the vehicles had to be sent to the manufacturer for checks and repairs, replacing parts, tuning and the like. Naturally these resulted in delays leading to vehicles being off the roads and very high costs. The company now realizes that having its own workshop, mechanics and spares leads to far lower costs and much faster vehicle turn-around times.

A fast food company decided to be different from the competition by focusing on the guaranteed delivery of its food within a certain number of minutes of an order being placed. Else, the customer received the food free. They then advertised this heavily and soon enough orders started pouring in. The company poured its energy and resources in meeting its promise of guaranteed delivery within the promised time. Given the conditions in India, the costs of ensuring this started mounting. The company invested more in planning its delivery routes, restaurant locations and in technology. It was able to, in general, honour its time commitment. But then sales started slowing down. Upon researching the reason, they found that most customers didn’t like their fast food anymore. The company had focused so much on its logistics that it had ignored the fundamental reason for its existence, namely quality and tasty food! In addition, those who were ordering the food were those customers who weren’t very profitable to the company since they ordered low margin items.

It is important in each business therefore to understand what the critical factors for success really are. Many times, the reasons that appear to be attractive are just mirages while the “unglamorous” activities of the business are the most critical. It is important therefore to really understand this and spend time and energy in ensuring that these activities of the business are built on a solid foundation.

What do you think?

Succeed with & through other successful people ...

Whatever your idea of success, conduct a sanity check throughout the process of reaching your goal.

This should be done with someone you trust and who is themselves successful. Ask them to provide honest feedback about your success and as you move through different milestones, bounce concerns or new ideas off them to help keep you on the right track.

Find a successful mentor

If you have a goal of being a best-selling author, find friends and mentors who either have achieved that same goal or are also pursuing a successful writing career.

• It is important to surround yourself with people that can associate with your goal and passion, people who understand the burning desire to succeed and can encourage when you meet with disappointments.

• Understanding that others have also met with difficulties and overcome obstacles in their path to success, and still managed to reach their success dream, will inspire and motivate you to do the same.

• When you need to call upon the successes and inspiration of others, remember the life of Ludwig van Beethoven. When he was 30 years of age, he was forced to acknowledge that he had an incurable hearing condition which ultimately resulted in total deafness.

• At one point he was so deep in despair, that he wrote a suicide note that he never sent.

Through perseverance, dedication and commitment to what he believed in, he continued to write music for another 28 years until his death in 1856.

The importance of success networking

More than likely, you will reach various times when you do not have the appropriate expertise to accomplish something. This is the time collaboration and/or networking is valuable. These relationships can help you answer questions, provide guidance, and provide the ongoing support and encouragement you will need.

To succeed, you need to learn how to listen first. Pay attention to other people who have enjoyed successes in their life, attend seminars given by people that can motivate and encourage, or be open to hearing that a particular idea is not a good one.

Good listening takes time to learn but in the end, it will be your greatest tool.

Some Outlandish Rules for Making Money

Edward W. Scripps built a media empire that includes daily newspapers in 20 markets stretching from Washington to Florida, Scripps Howard News Service, United Media, and the worldwide licensing and syndication home of PEANUTS and DILBERT.

He started the business in 1878, borrowing $10,000 to launch a newspaper in Cleveland called "The Penny Press." It was aimed at an unserved market of urban workers, and quickly became the model for the nation's first mass medium. He found a successful formula, and started to build the first chain of newspapers under common ownership.

Today, the E.W. Scripps Company is "a diversified media concern with interests in newspapers, broadcast television stations, cable television networks and other media-related enterprises."

Ethics was important to Scripps, and he strived to keep his money, business, and life in proper perspective. Learn the 23 code of conduct that E.W. Scripps used in both his life and his business in excerpts from his essay "Some Outlandish Rules for Making Money."

1. Never spend as much money as you earn. The smaller your expenditures are in proportion to your earnings the sooner you will become rich.

2. It is more blessed to pay wages than to accept them. At least, it is more profitable.

3. Never do anything yourself that you can get someone else to do for you. The more things that someone else does for you the more time and energy you have to do those things which no one else can do for you.

4. Never do anything today that you can put off till tomorrow. There is always so much to do today that you should not waste your time and energy in doing anything today that can be put off till tomorrow. Most things that you do not have to do today are not worth doing at all.

5. Always buy, never sell. If you've got enough horse sense to become rich you know that it is better to run only one risk than two risks. You also know that just as likely as not the other fellow is smarter than you are and that whether you buy or sell, in each case you run the risk of getting the worst of the bargain. By adopting my rule you will diminish by one-half your chances of loss.

6. Never do anything, if you can help it that someone else is doing. Why compete with one person or many other persons in any occupation or line of business so long as it is possible for you to have a monopoly in some other field?

7. If circumstances compel you to pursue some occupation or to follow some line of business which is being pursued by some other person, then you do your work in some other way than that in which it is done by the other. There is always a good, better and best way. If you take the best way then the other fellow has no chance of competing with you.

8. Whatever you do once, whatever way you undertake to do a thing, don't do the same thing again or don't do the thing in the same way. If you know one way to do a thing you must know there is a better way to do the same thing.

9. If you're succeeding in anything you are doing, don't let anyone else know of your success, because if you do some other person will try to do the same thing and be your competitor.

10. When you become rich, as you will become rich if you follow my advice, don't let anyone know it. General knowledge of your wealth will only attract the tax gatherer, and other hungry people will try to get away from you something they want and some-thing you want to keep.

11. One of the greatest assets any man can secure is a reputation for eccentricity. If you have a reputation of this kind you can do a lot of things. You can even do the things you want to do without attaching to yourself the enmity of others. Many an act which, if performed by an ordinary person, would arouse indignation, animosity and antagonism, can be per-formed by a man with a reputation for eccentricity with no other result than that of exciting mirth and perhaps pity. It is better to have the good will than the bad will, even of a dog.

12. Never hate anybody. Hatred is a useless expenditure of mental and nervous energy. Revenge costs much of energy and gains nothing.

13. When you find many people applauding you for what you do, and a few condemning, you can be certain that you are on the wrong course because you're doing the things that fools approve of. When the crowd ridicules and scorns you, you can at least know one thing that it is at least possible that you are acting wisely. It is one of the instincts of men to covet applause. The wise man regulates his conduct rather by reason than by instinct.

14. It is far more important to learn what not to do than what to do. You can learn this invaluable lesson in two ways, the first of which and most inspired is by your own mistakes. The second is by observing the mistakes of others. Any man that learns all the things that he ought not to do cannot help doing the things he ought to do.

15. Posterity can never do anything for you. Therefore, you should invest nothing in posterity. Of course your heirs will quarrel over your estate, but that will be after you're dead and why should you trouble your mind over things which you will never know anything about?

16. A man can do anything he wants to do in this world, at least if he wants to do it badly enough. Therefore, I say that any of you who want to become rich can become rich if you live long enough.

17. After what I have said it goes without further saying that you should save money. But no man can save himself rich. He can only make himself rich. Savings are capital. It is only by doing things that one learns how to do things. It is only the capitalist who handles capital that learns how to handle capital profitably. The more capital you have the more skillful you become as a capitalist.

18. Fools say that money makes money. I say that money does not make money. It is only men who make money.

19. There are two cardinal sins in the economic world: one is giving something for nothing, and the other is getting something for nothing. And the greater sin of these is getting something for nothing, or trying to do so. I really doubt if anyone ever does get some-thing for nothing. (Don't marry a rich wife. Women are what they are. At best they are hard enough to get along with. They are always trying to make a man do something that he doesn't want to do, and generally succeeding. When a woman is conscious of the fact that she has furnished all or any part of your capital, her influence over you will be so great as to be the worst handicap you can carry.)

20. If you're a prospective heir of your father or some other relative, you should also consider that a handicap. I would advise you to refuse to be an heir.

21. Despise not the day of small things, but rather respect the small things. It is far easier to make a profit on a very small capital invested in any business than it is to make the same proportion of profit off of a large capital. It is true that after you have learned how to make a profit on a business that shows small capital, successively, as your capital grows, you learn how to handle it profitably. Then the time will come when the greater your capital becomes in this way the greater your pro-portion of profits on it should be. And, for an added reason, as your wealth and skill grow rapidly, your so-called necessary expenses grow much more slowly and in time cease to grow at all, so that beyond a certain limit all your income and added income becomes a surplus, constantly to be added to your capital.

22. It is far easier to make money than to spend it. As it becomes more and more difficult to spend money, you will spend less and less of it, and hence there will be more money to accumulate.

23. The hardest labor of all labor performed by man is that of thinking. If you have become rich, train your mind to hard thinking and hold it well in leash so that your thinking will all be with but one object in view, that of accumulating more wealth.