‘Airtel Belongs to the People who Work there’: Sunil Bharati Mittal on Airtel, Diversification, and More
Sunil Bharti Mittal, Founder and Chairman of Bharti Enterprises, talks about Airtel, lessons from diversification, and more
For Sunil Bharati Mittal, 66, a crisis is nothing new and it brings out the best in him. The winner of the Business Icon of the Year award, he has built a telecom business that is among the best in the world. With a subscriber base of just under 400 million, there is a lot to be happy about. In an interaction with Business Today, the Founder and Chairman of Bharti Enterprises reveals the reason for his success, among other things. Edited excerpts:
It has been a long journey for you in telecom. What are the key things you got right?
One is our absolute focus on the customer… what the customer needs, and I think that has served us well when there was [a] very serious upheaval in the industry. We had a massive following of customers even when we were not anywhere close to the pricing of [the] competition. When the service was being offered free, our customers still stayed with us and that says a lot [about how] close we are to them. Be it in 2002-03 (when Reliance Communications was launched) or in 2008 when 10-12 licences were given away in each circle or again in 2016, when [Reliance] Jio entered the market.
Then there is our strength in investing in [the] network beyond our capabilities… The [telecom] business… is only about three things… network, network, network. If your network is doing well, the pressure on customer care goes down with limited churn and higher loyalty. Conversely, if you don’t have a good network, you will just not succeed… [so] we invested heavily in [our] network. In 2012, we put [out] our first 4G network and that was four years before Jio. People told us we were too early and that a lot of money was being spent. A lot of people within the company were unhappy with that… History has now shown we made the right decision. Had we not put in that money in 4G, we could have been completely trampled over. The same is the case with 5G, where we had to be out in the market for our customers.
The third most important pillar is people. This is a company that belongs to the people who work here—not to me, nor our shareholders… our customers and employees are really the focal point of this organisation. When they [employees] come to work, they feel they’re coming to work for their own company.
When I ask people who have moved on what they miss the most about working for Bharti Airtel, it comes down to one word, and that is empowerment. It is unparalleled anywhere in the world and I am talking about people who come from the US, the UK, Singapore or anywhere [else]. There is no other company where people can take decisions freely and fearlessly—and I am speaking of big decisions.
You did an interesting thing on seeking talent by reaching out to the FMCG sector…
That was actually a learning from my JV partners. We had partnerships with AT&T [and] Siemens, to name a few. When I visited their headquarters, I used to be amazed at how nobody knew each other. There were thousands of people, and the senior management were in hundreds. It was an indication of how empowered [they were], and these are not family-led companies. I always had a fascination to create a western model-based company in India. Once that was clear, talented professionals took precedence.
The thinking was that telecom companies need an engineering mindset and only technical people can run it. The truth is you need marketers and people who understand brand, customers, and distribution. We changed the game and looked at FMCG and now it has become a lexicon with everyone doing it. We brought people from Hindustan Unilever and told them Airtel was like an MNC
—much more empowering and less bureaucratic than Unilever. Today, we have people who spent time in HUL, Airtel and [were] poached by industry. The CEO of Domino’s [India] is from Airtel, and so are the CTOs of Jio and Vodafone Idea. We became a combination of Unilever [and] Bharti, where you get the experience of working for an MNC and [also at] an entrepreneurial [company].
You did move into other businesses as well…
I would say the idea at that point in time (about 14-15 years ago) was for Bharti to be one of the most transformational conglomerates creating a positive impact. There was a JV with AXA for life and general insurance, with Del Monte for a food and beverage business, fruits and vegetables with the Rothschilds [with ElRo Holdings, an investment arm of the family], plus a real estate business. But the fact is we were almost always caught up with a lot of storms in our core business and that did not allow us enough time and attention for other things. The businesses did make some money but could not scale up to the level that we’ve been able to do with telecom. Unlike many other companies, we don’t do everything from Airtel and that includes insurance, food, and real estate. They were separate verticals within the Bharti ecosystem. But I would say, they didn’t go to plan and there are no regrets.
Tell us about the Africa experience…
It really comes down to being a restless organisation and people wanting to do more. We were debt-free in 2009-10 and making enough returns on capital. The question was, ‘Where do you go from there?’ Our shareholders were always saying, ‘grow, grow, grow’ and probably you could have grown a little bit faster in India, especially with more fibre or more fixed lines. But everybody felt that we should look at opportunities in the mobility space, where the future lay.
We looked at the US and Europe, but we then said that we are good with these emerging markets where ARPUs [average revenue per user] are low… Africa became the [opportunity] and we tried [with] MTN twice before we got the opportunity with Zain, who were ready to sell out. We went into difficulties immediately after buying it because for the first two years we mindlessly built the network like in India, thinking customers will come. That didn’t happen and the market was not as elastic as we thought [it is] in India. I would say [the first] four to five years were very tough and there was a feeling of regret that we rushed into it too fast. It was going across a continent into 16 countries (at that time) in one go. MNCs become what they are over a 100 years, and here we just woke up to 16 new markets—so probably we had some indigestion.
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