The leading mobile service provider in the country, Bharti Airtel is far from being complacent. If anything, it has stepped up its growth momentum. In an innovative step, the Bharti management has tied up with other telecom companies to improve its services and cut costs.
The company recently signed a partnership agreement with PCCW Global, a subsidiary of the Hong Kong-based telecom service provider PCCW, with the aim of targeting its enterprise segment. Under the agreement, Bharti will connect its MPLS IP-VPN (multi protocol label switching internet protocol-virtual private network) in India with PCCW Global’s MPLS IP-VPN. This will enable both companies to offer their enterprise customers greater coverage, a seamless user experience and enhanced end-to-end global solutions.
“Our partnership with PCCW is in line with our strategy to extend the global reach of our customers and provide them a secure, consistent and reliable connection.We will be able to save customers the effort of working with multiple carriers or accumulating extra equipment, thus simplifying decision-making and implementation,” explains David Nishball, president, Enterprise Services, Bharti Airtel.
The tie-up makes business sense for both sides. While Bharti has the necessary regional expertise, PCCW Global has international experience and capability.Together, they will be able to meet their objective of providing high quality, integrated global communications solutions to their customers.
Such joint ventures have proved to be immensely lucrative for Bharti. Hence, after shaking hands on a five-year managed services deal with Nortel Networks in early 2006, it has forged yet another agreement with the company. This time it is to target the small and medium business (SMB) segment in India.
As part of the agreement, Bharti Airtel and the Canadabased telecom equipment manufacturer will provide SMBs with telecom products and services including wireline, wireless and broadband solutions as well as converged voice, data and security features.
The partnership is likely to benefit both companies substantially. There are an estimated 7 million SMBs in India who spend a combined $15 billion on their IT and telecom requirements. The tie-up will enable both companies to tap into this market by leveraging each other’s national distribution networks and distribution channels.
According to Manoj Kohli, CEO and president of Bharti Airtel, “In the next three to five years we are planning to focus on SMB customers in other countries. It may generate up to 20 per cent of the company’s revenues.
Industry sources predict that the two companies will continue to strengthen their relationship as they add more services to their portfolios. For instance, Bharti is expected to launch internet protocol television (IP-TV) and directto-home (DTH) services during 2007.These would come under Nortel’s managed services agreement.
Meanwhile, the partnership between Vodafone and Bharti is coming to an end.After having acquired a controlling stake in Hutchison Essar, the UK-based telecom service provider will sell its 5.6 per cent stake in Bharti Airtel back to the Bharti Group for $1.6 billion by November 2008.
The shares will be transferred in two tranches. While the first will be completed by March 2008, the second will be completed by November 2008. On conclusion of the sale, Vodafone will hold an indirect 4.39 per cent stake in Bharti Airtel.
Meanwhile, Bharti seems ready to move on to new ventures. Forging fresh ties is clearly the way forward for it.
