India?s leading telecom operator Bharti Airtel, which has a subscriber base of over 182 million, has been going through a rough patch financially, like many of its peers. It recently posted a 72 per cent decline in net profits for the quarter ended December 2012 ? the twelfth consecutive quarterly decline in profits. Challenging market conditions, the prevailing regulatory uncertainty, hypercompetition and the company?s bleeding African operations have adversely impacted the operator?s business.
In order to improve its performance, Bharti Airtel has undertaken a major revamping exercise and reshuffled its senior management ? its third major organisational change in three years. It recently appointed Gopal Vittal as joint managing director (MD) and chief executive officer (CEO) of its core Indian operations. He will take over from Sanjay Kapoor in end-February 2013.
The company has outlined a new hub design for its Indian operations. Instead of the current three regional hubs, the organisation will now be divided into eight hub operations, which will come under the director, market operations, a newly created position. Circle CEOs who report to a hub CEO will continue to operate with the same level of independence. The hub CEO will provide overall guidance to the circles under him.
Ajai Puri, operations director, north and east, has been appointed director, market operations, and will report to Vittal. Raghunath Mandava, currently operations director, west and distribution, has been appointed director, customer experience, while Najib Khan, chief marketing officer, Airtel business, has been appointed CEO, homes and office. In this role, Khan will be responsible for Airtel?s Telemedia business, the SMB vertical, LTE and Wi-Fi.
K. Srinivas will take over as director, special projects, and will be responsible for evaluating potential investment opportunities as well as developing business cases across the operator?s verticals. He will report to the chairman, Bharti Airtel.
As part of the restructuring, Manoj Kohli will now be CEO of Bharti?s international operations as well as joint MD. According to a notice sent to the country?s stock exchanges, Sunil Mittal, the company?s founder, has been appointed executive chairman.
The new organisation structure for its Indian operations will be effective from March 1, 2013. According to Bharti, this reshuffling will support the company?s initiatives to build a more connected organisation that is closer to the marketplace and can deliver a world-class experience to customers.
On the operations side, Bharti has announced a new business model whereby it will manage its own fixed line and broadband network. (The company currently provides fixed line and broadband services in 87 cities across the country. It has a customer base of 3.3 million, of which 1.4 million are broadband/internet subscribers.) Under the new business model, Airtel intends to buy out Alcatel-Lucent?s stake in Alcatel-Lucent Managed Network Service India ? a joint venture between Bharti and Alcatel-Lucent formed to manage and deploy the former?s fixed line and broadband networks across the country. Alcatel-Lucent has a 74 per cent stake in the venture while the rest is owned by Bharti Airtel. The JV terminates in 2014.
In the long run, the managed services company will operate independently of Airtel. It will function on the lines of Indus Towers and will invite equity participation from other operators and manage their broadband and fixed line networks. This initiative will be led by Shishir Kumar, CEO, Upper North, Bharti Airtel.
?This new model, along with our recently launched Network Experience Center, will provide us greater control over the delivery of a world-class data experience to customers across our portfolio of networks,? noted Kapoor in a statement.
According to industry analysts, this is a significant step for the operator and marks a shift from the outsourcing model the company pioneered many years ago.
