INTRODUCTION “Refine your processes, strive for dominance and build a brand” |
Sunil Bharti Mittal, founder Chairman and Managing Director of Bharti Group is a pioneer, a dreamer, and an achiever, Ranked 125"’ in tfie Forbes list, he is not a man to rest on his laurels. On 16" December’09, this year he was conferred with Lai Bahadur Shastri National Awardfor his achievements in Management. |
In 2008, Bharti Airtel (Bharti Group Telecom Brand) was voted as India’s most innovative company in a survey conducted by the leading business magazine The Wall Street Journal. |
When Bharti was negotiating its merger with MTN In 2008, a global newspaper cheekily added that India’s largest telecom company could well be marrying up. It wasn’t far from the truth. MTN actually has more subscribers, higher revenues, bigger profits and a broader reach than Bharti. But, in September 2009, the deal failed and the hopes of creating world’s third largest telecom company also got dumped due to this. |
On 16th December2009, Mittal eyes were on Bangladesh Telecom Company Warid Telecom for further adding feather into his Bharti Group. During quarter ending Dec 09, the market capitalization of the Bharti Enterprises was aroundRs. 1237 billion. (Refer Exhibit-1 for an overview of the companies under Bharti Group.) |
Top BACKGROUND Sunil Bharti Mittal was bom on 23 October, 1957 in the Industrial city of Punjab; Ludhiana (India).He graduated in 1979 from Punjab University majoring in Economics and Political Science. His father was a former Member of Parliament from Punjab. He borrowed (Rs. 20,000) money from his father at the age of 18, and started his first business of bicycle parts especially Crank shafts & hot forgings in Ludhiana, as a first generation entrepreneur. Ludhiana is an industrial city where everybody is an entrepreneur of one or the other kind. He was friendly but focused, smiling easily and answering fast to the opportunities around him. |
Later, he found that as a supplier of bicycle parts he only gets a modest success in this business. A manufacturer of just a shaft wouldn’t make him a player of any industry or seeker of size or scale. Inspite of his desperate attempts he failed to get a Maruti Suzuki dealership in Ludhiana. |
With various ambitious business plans in his mind, Mittal moved to Bombay in 1980. He tried various businesses of brass, plastics, zip fasteners. Finally, Mittal entered in portable generator business in collaboration with Suzuki Motors co. After, spending two-three years in Japan and learning their techniques and practices, he internationalized his concepts which gave him an opportunity to make good amount of money and involvement in the activities such as marketing and advertising.. He was the first one who started this business in India by importing the generators from Japan. Mittal’s attitude towards doing things independently and his experience of doing many businesses, creating markets for the products, creating brands and also international trade proved fruitful to carry out other ventures. |
In 83-84 he set up his first company Bharti Healthcare in Delhi manufacturing and marketing empty hard gelatine Capsules. |
Later, Mittal started operating from Delhi and Mumbai, mainly importing and distributing telecom products. He believed in tie-up with large entities, which were much larger than him. His partnerships with big names like Suzuki, AT&T, Siemens, Lucky Gold Star (now LG), British Telecom and British Italia, proved his greed for establishing businesses in different countries, to make Bharti a Global Brand through venturing into international companies by the process of internationalization, mergers and acquisitions, bidding, etc. |
Although it was difficult to enter into partnerships with foreign multinational companies, Mittal did persuade the big companies with high governance structure, giving them the comfort to join hands to exploit the opportunity to explore the Indian market together. He understood that these ventures are necessary for any company to go global. The Indian Government began removing restrictions only in the early 1990’s, and since then India has boomed, transforming quickly into an economic powerhouse with a trillion- dollar economy. And even in deep world wide recession, Indian companies have started looking beyond the subcontinent, acquiring companies in both emerging and more developed markets. |
The Opportunity Bharti Airtel was the outcome of the government ban on import of generators in India. He again went back to Japan, Korea and Taiwan for looking into the new areas for a new product. The breakthrough happened when Mittal visited a trade fair in Taiwan where he got an opportunity to see push-button telephones. He identified this as an opportunity to enter in the new era telephone sector which did not require much investment. In 1982, Mittal introduced new generation push button telephones in India, replacing old-fashioned, bulky rotary phones that were in use in the country at that point of time. This was the first experience for Indian consumers with modem age telephone. In 1985, he formed Bharti Telecom Limited (BTL) for manufacturing push buttons telephones. At this time, BTL entered in technical tie-up with Siemens AG a German company for the supply of technology in terms of completed technical know-how and documentation for a range of electronic push button telephone instruments. As per the tie-up, Siemens AG was involved in the installation of plant and machinery. The company was promoted by Rakesh Bharti Mittal (Younger brother and the Vice Chairman of Bharti Enterprises) and company’s products were marketed under the Brand name ‘BEETEL’. In 2005, Capsugel (a division of world’s largest drug maker Pfizer) acquired a Bharti Healthcare from Bharti Enterprises. The total enterprise deal of the Bharti Healthcare was approximately Rs. 88.1 crore. Capsugel acquired 92.8% stake from Bharti at Rs. 71 per share. “The decision to exit this venture is in keeping with our functional and operational specialization and with a view to focus on businesses that are customerfacing as well as scaleable. Capsugel, the new owners of our healthcare business is a world leader in their segment and is committed to ensuring continuity of business and to provide its customers the best in class products. ” said, Rakesh Bharti Mittal, Vice Chairman of Bharti Enterprises. Bharti Group decided to leave the business so as to focus on the telecom business where they were leaders and saw more growth potential for future. Bharti Phone Business In 1986 Bharti entered into a technical collaboration agreement with Takachiho Corporation of Japan for the manufacture of State-of art microprocessor based telephone answering machines. In 1988, additional orders for 60,000 telephones were received from MTNL and DOT. The Plan 103 System based on Siemens design was launched and it met with good response. In 1989, the company also tied up with Hartron to manufacture certain telecom transmission products based on C-Dot Technology. An agreement was signed with Premier Telecom Inc, U.S.A. a wholly owned subsidiary of United Telecom, to manufacture and export 6,00,000 telephones to U.S.A. By the early 1990’s Mittal was manfacturing FAX machines, Cordless phones and other telecom gear. In 1991, when Government opened the mobile telephony for the private sector in India Mittal tied up with Daewoo Corporation of South Korea to import and distribute fax machines under the brand name ‘BEETEL’. Mittal telephone business generation came to a turning point in 1992 when Indian government deregulated licenses for mobile phone services for the first time. One of the conditions specified by Department of telecommunication, Government of India for the Delhi circle license was that the bidder should have some experience as a telecom operator. Seeing the golden opportunity, Mittal clinched a deal with the French telecom group Vivendi. Two years later, Sunil secured rights to serve New Delhi. In 1995, Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name AirTel. In 1995, he incorporated the cellular operations as Bharti Tele-Ventures and launched the service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. The company was also instrumental in bringing down the high STD/ISD cellular rates in the country by rolling out country’s first private national as well as international long-distance service provider under the brand name India One. In 2000, Bharti acquired control of Sky Cell communications in Chennai and in 2001, Spice Cell in Calcutta. In 2001, the company also entered into a joint venture with Singapore Telecom International for a $650-million submarine cable project, the country’s first ever undersea cable link connecting Chennai in India and Singapore. In November 2001, Bharti Enterprises unveiled TouchTel, the telephone services and solutions brand. TouchTel focused to bring to its customers a wide range of customized and comprehensive telecom solutions. The launch of TouchTel follows the impressive success of Airtel, India’s finest mobile services brand, which has won the Techies Award for the best cellular service for four consecutive years. Bharti Enterprises went public in 2002, and the company was listed on BSE and NSE of India. In 2003, the cellular phone operations were rebranded under the single AirTel brand. In 2004, Bharti enterprises acquired control of Hexacom and entered in Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar islands and became a total national player. At present, the Airtel is the largest cellular service provider in India. As a growing entrepreneur, Mittal always focused on the growing markets through a series of customerfacing businesses through acquisitions and bids. The various businesses like partnership with the US retail giant Wal-Mart to open multibrand stores, teaming up with AXA life insurance and asset management and with Del Monte in agriculture. Top BHART & WAL-MART-_ A new venture setup August 6, 2007 was a historic day for Bharti enterprises. On that day, Wal-Mart stores Inc, signed a deal with Bharti Enterprises to establish Bharti Wal- Mart Private Ltd. a joint venture for wholesale cash- and carry and back end Supply Chain management operations in India. |
Wal-Mart’s global expertise in supply chain and logistics would bring enhanced efficiencies across the retail ecosystem. This venture promises to bring great value to millions of farmers, artisans, small manufacturers and retailers across India. |
The focus of Bharti Wal-Mart business-to-business (B2B) wholesale cash-and-carry joint venture was to serve kirana stores, fruit and vegetable resellers, restaurants and other business owners. It also served as a facilitator to other retailers such as Bharti Retail, to a chain of stores in India which are owned and operated by Bharti. Wholesale cash-and-carry operations provide small retailers and business owners a wide range of quality products at competitive wholesale prices that help them to enhance their businesses and profitability. |
In November, 2008, Bharti Wal-Mart signed Memorandum of Understanding (MoU) with the Government of Punjab to launch Training Institute for imparting special skills among the candidates enrolled for the training program. The objective of the training was to increase the supply of skilled workers for cash and carry business and also to organize the retail formats in the non-metropolitan cities. The institute under Public Private Partnership (PPP) was opened in Amritsar, Punjab apd named as ‘Bharti Wal-Mart Training Centre’. The various short-term vocational certification courses offered were to become Popular with Sales Assistants and Supervisors through a special curriculum developed by Wal-Mart. Along with Bharti learning systems. The centre was expected to train approximately 125 candidates every month. |
“Specialised operations like cash-and-carry and other organized retail formats promise good growth and job prospects, but they require a customer service mindset and skills for today’s markets. The Government of Punjab is very progressive in its outlook and is firmly committed to providing an environment that promotes both employment and employability. We look forward to partnering them in this joint effort to bridge the skills gap and enhance employability. At a later stage when our Skill Centre capacity is fully utilized, we will explore the possibility of using classrooms at other ITIs/Polytechnics across Punjab to increase coverage.” |
Mr Raj Jain, Managing Director and CEO, Bharti Wal-Mart Pvt. Ltd. Over the next seven years, the venture is expected to open 10 to 15 wholesale cash-and-carry facilities and employ approximately 5,000 employees. A typical retail store will stand between 50,000 and 100,000 square feet and sell a wide range of fruits and vegetables, groceries and staples, stationery, footwear, clothing, consumer durables and other general merchandise items. In addition, Bharti Enterprises, 100% subsidiary of Bharti Retail, that owns and manages the retail stores, has entered into a franchise agreement with Wal-Mart to provide technical support to Bharti Retail. Bharti Retail stores source local products from local suppliers that appeal to local tastes, needs and fashions. As a wholesale cash-and-carry business, their endeavor was to work with and develop local suppliers and create local beneficiaries along the supply chain. They look for big and small retailers and businesses to become their customers, which give an advantage of the efficiencies that provides and derives significant benefits. Top BHARTI & DEL MONTE In September, 2007, Bharti Enterprises announced a Joint venture deal to expand retail business with its strategic partner Del Monte Pacific Ltd. of Philippines to sell agricultural goods, Bharti acquired Del Monte’s manufacturing facilities in India, making a strategic shift from retailing fresh farm produce to making processed goods. In this, Del Monte share was 40 percent as Bharti holds 50 percent and investment from EL Rothschild was 10 percent.This step showed a significant investment by the company to enter into processed food and beverage segment. |
The Other Side Mr. Sunil Bharti Mittal of Bharti Enterprises was chosen ‘Ernst & Young Entrepreneur of the Year 2004’ and in 2007-2008, Bharti Airtel won “Business Leadership Award “from NDTV Profit. He is a pioneer, a dreamer and an achiever. Ranked 125th in the Forbes list, Sunil Bharti Mittal was not a man to rest on his laurels. Whenever the next big revolution is happening, he was there busy being a part of it. “What inspires and drives this trailblazer? ” On 16th Decemebr’2009, Mittal was awarded by the President of India, Smt. Pratibha Patil 10th Lai Bahadur Shastri National Award. This is conferred on an individual for his / her invaluable contribution in the fields of Public Administration, Academics and Management by the Lai Bahadur Shastri Institute of Management, Delhi (LBSIM). The award was presented to Mittal at a function organized at the Rashtrapati Bhawan. In a recent television interview, Mittal was asked whether he will be vegetarian or Non- vegetarian in 2010. The interviewer put across this question because when he stops taking non-vegetarian food, something big occurs in his business. Mittal also set up the Bharti Foundation for carrying out the social obligations. In Madhya Pradesh, India he funded around 50-odd schools. Also, gave Rs.200 million to IIT Delhi for building a Bharti School of Technology and Management. A family man, Mittal lJves in Delhi with his wife (Naina), daughter and two sons. He wishes he could find more time to spend with the family. “This is the problem with first generation entrepreneurs," Mittal said. In his 30-years journey from a scrap dealer to India’s largest telecom player, he has built and rebuilt businesses many times over- at times pushed by fatal policies and sometimes nudged by his surging dreams. But he always came back with a bigger dream and a bigger plan. He did it when he was small and a virtual nobody. Sunil Mittal is the men behind an unparallel success story in telecom industry in India. He is a man who exports India to the world and imports the world to India. He only worked to get his stakes higher and building a worldwide telecom giant or helping transform the Indian countryside. For the past few years, Mittal tried his hands in retail, insurance and agriculture other than telecom. He picked the best companies in the world-Wal-Mart, Axa and Rothschild (Rothschild was later replaced by Del Monte) to partner him. In coming 10 years from now Bharti Group is expected to become a successful conglomerate. Sunil Bharti Mittal is an entrepreneur grown from Indian soil to be a true Indian and represents India and himself at the global level. Top QUESTIONS FOR DISCUSSIONS Q1. Starting as a small business of bicycle parts with a capital of Rs. 20,000 in 1975, Mittal developed Bharti Enterprises into a Rs. 1200 Billion Company in 2009. Discuss the leadership style and entrepreneurial qualities of Mittal which enabled him to achieve such heights. |
Q2. Many studies have revealed that successful entrepreneurs are well educated & practical people who work hard to achieve their goals? Does Mittal have all the qualities that make a successful entrepreneur? What were the most crucial attributes that account for Mittal’s unparalleled success as a telecom tiger? |
Top Table | : Exhibit-1 an overview of companies under Bharti Group
| | S.no. | Name of the Company | Overview | | 01 | Bharti Airtel ltd | Bharti Airtel Ltd is one of Asia’s leading telecommunications service provider. The Company is India’s largest integrated telecom company in terms of customer base and offers Mobile Services, Fixed Line services, Broadband & IPTV, DTH, Long Distance and Enterprise services. Airtel also offers mobile services in Sri Lanka on a state-of-the art 3.5 G network. | | 02 | Bharti TeleTech Ltd | Bharti Teleteeh is India’s leading telecom & allied products company. It is one of the largest manufacturers of landlinc telephones in the world. With a strong distribution network across the country, the company is also the primary distributor of IT and Telecom products from intemtional brands such as Motorola, Blackberry, Thomson, Polycom, Transcend, and Logitech. | | 03 | Telecom Seychelles Ltd | A subsidiary of Bharti, Telecom Seychelles Ltd provides comprehensive telecom services including 3G mobile services in Seychelles, under the ‘Airtel’ brand. | | 04 | Comviva Technologies Ltd | Comviva is the leading provider of integrated VAS solutions for mobile operators in emerging markets. Among the top 3 global providers of integrated VAS solutions in rapidly growing markets, Comviva has deployed solutions for over 100 mobile operator customers in over 80 countries worldwide. | | 05 | FieldFresh Foods Pvt Ltd. | FieldFresh Foods Pvt. Ltd., is a venture between Bharti Enterprises and Del Monte Pacific Limited, to offer fresh and processed fruits and vegetables in the domestic as well as international markets, including Europe and the Middle East. | | 06 | Bharti Retail Pvt Ltd | Bharti Retail is a wholly owned subsidiary of Bharti Enterprises. Bharti Retail operates a chain of multiple format stores that offer consumers affordable prices, great quality and wider choice. The company’s neighbourhood format stores operate under the “Easyday" brand and the compact hypermarket format under the “Easyday market” brand. | | 07 | Bharti AXA General Insurance Company | Bharti AXA General Insurance is a joint venture between Bharti Enterprises and AXA, world leader in financial protection and wealth management. The company was incorporated in July 2007 and offers a full suite of general insurance solutions to meet the needs of businesses and individuals alike. | | 08 | Bharti AXA Life Insurance Company | Bharti AXA Life Insurance Company Ltd is a joint venture between Bharti Enterprises and AXA, world leader in financial protection and wealth management. The company offers a range of life insurance and wealth management products with an endeavour to help customers lead a confident life. | | 09 | Bharti AXA Investment Managers Pvt. Ltd. | Bharti AXA Investment Managers Pvt. Ltd., an asset management company in India, is a joint venture between Bharti Enterprises, AXA Investment Managers (AXA IM) and AXA Asia Pacific Holdings (AXA APH). | | 10 | Centum Learning Limited | Centum Learning Limited provides end-to-end learning and skill-building solutions to several large corporates. It provides solutions that impact business performance through enhanced employee productivity, customer profitability and effective talent transformation. | | 11 | Jersey Airtel Ltd | Jersey Airtel, a subsidiary of Bharti, offers world-class mobile services in Jersey (Channel Islands) over its full 2G, 3G and HSDPA enhanced network. The Company brings market-leading products and services to its customers under Airtel-Vodafone brand. | | 12 | Bharti Foundation | Bharti Foundation was set up in 2000, with the vision,“To help underprivileged children and young people of our country realize their potential”. It aims to create and support programs that bring about sustainable changes through education and the use of technology and information. | | 13 | Bharti Realty | Bharti Realty Limited is a young, vibrant and dynamic realty company with expanding interests in commercial, retail and residential real estate. Bharti Realty aims to be amongst the most admired real estate players in India and aspires to attain highest degree of customer trust through superior product design and maintaining an uncompromising stand towards environmental responsibility, ethics and safety | | 14 | Bharti Infratel | Bharti Infratel, a wholly owned subsidiary of Bharti Airtel, provides passive infrastructure services on a non-discriminatory basis to all telecom operators in India. Bharti Infratel also holds approximately 42% stake in Indus Towers, a joint venture between Bharti, Vodafone and Idea to offer passive infrastructure services. |
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