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.