What is the biggest challenge for Bharti Airtel today?
Like every other business, we are faced with several external and internal challenges. The external challenges include regulation, competition, technological developments, etc. The internal challenges are managing such high growth and scaling up the business. These would include issues of institutionalising processes for orderly growth while still maintaining the soul of an entrepreneurial organisation for speedy decisions and actions. The internal challenges are more critical in our case.
What is the next step for the company?
Bharti Airtel has had the privilege of contributing to the growth of telecom services in India and while doing so, it has managed to create a strong foothold for itself. At current penetration levels, there is clearly a massive opportunity for the company to grow further in telecom services in India, particularly mobile services. In addition, we are working towards launching DTH services in India and mobile services in Sri Lanka by the end of this fiscal year. We are certain that these businesses provide opportunity for growth, given the prevalent industry scenario.
How do you view Vodafone’s entry into Inida’s as a competitor?
Vodafone is a very respected name internationally and has replaced a very worthy competitor (Hutch). We welcome its entry into the Indian market.
What is Bharti’s future thrust area?
Expanding wireless coverage, building further on the value-added services product portfolio, providing better service and value for money to customers and thereby strengthening the Airtel brand are the key areas we would be focusing on.
What are your global investment plans?
Currently, we are working on our Sri Lanka initiative. We are also studying other growth markets that could offer us potential opportunity to invest in offering telecom services abroad. While there is no firm plan as of today, we are hopeful that sooner or later we will be in a position to replicate our Indian business model abroad.
Do you see more consolidation or acquisition possibilities for the company?
In a business environment such as ours, it is difficult to have static views on such subjects. We are growing rapidly organically, as we have the right combination of management depth, first-mover advantage and, of course, our unique business model to help us penetrate further in the Indian market. However, we are always open to any good opportunity.
It is believed that Bharti Airtel has done very well in voice, but it has not managed to replicate the same in data services…
I would categorically like to refute this belief. Our non-voice revenue both in mobile and non-mobile has been growing at a rapid pace, as would be apparent from our financial results that are declared every quarter.
What is your outlook on the industry’s wireline business?
Wireline is always a more difficult business in terms of rollout. There are two problems ?? it is physically more difficult and second, it is expensive. Therefore, you can only roll out wireline if the ARPU is high. ARPU has no meaning in the mobile business. The reason is that in mobile, capital expenditure is according to usage, and if usage is less, capex is less.In fixed line on the other hand, the capex is high irrespective of usage.Wireline would have a good future because of broadband. Our country will have a high demand for broadband internet and thus for wireline. It will also depend on how IPTV comes about. If you have multiple streams of revenue coming from copper wires, that will help boost the wireline business.
What are the driving factors for further telecom growth?
Affordability is a big factor. The affordability factor comes in three forms. One is income ?? as incomes increase, affordability increases. The second is tariffs and minimum spends required.Tariffs in India are the lowest in the world which helps to a great extent.Lifetime prepaid and similar products are very suitable for small customers because they do not have to commit anything on a monthly basis. Once the user pays the upfront amount of Rs 495, no recharge is required. That is a big factor driving affordability. The third factor is handsets. As you are aware, handsetprices are dropping very rapidly.Fortunately, on all these factors, the industry is in good shape and thus poised for rapid growth.
What challenges do you face as you reach out to the smaller towns and rural areas?
Infrastructure is certainly a problem.In the rural areas, electricity is still a serious concern. However, I guess if one can get telecommunications in these areas, other factors will improve.
Prosperity will follow as people will have higher incomes. For example, for the farming community, wherever telecommunications has reached, the ease for farmers has increased. The middleman has either been eliminated or reined in. That is the power of information. As infrastructure such as telecommunications reaches semiurban and rural areas, prosperity will follow.
When do you expect the spectrum issue to be resolved?
The minister has stated that a comprehensive spectrum policy will be laid down before the end of the year. We await the same.
Once the decision is made, how quickly will 3G services be rolled out?
We expect to roll out 3G services very quickly once the licence and spectrum are granted. The basic infrastructure is ready and it is only a matter of loading it with electronics. I think it should be fairly quick.
What impact will this have on the market and on different operators?
As far as 2G is concerned, there is a clear need for more spectrum as there are more customers to accommodate.The world is now going towards 3G.More and more applications on the data side are coming up and even the current applications that run on 2G will run significantly better on 3G. 3G will also enable the existing operators to enhance the capacities for voice, which is happening the world over.
