Even as the country?s biggest telco by revenues and subscribers, Bharti Airtel, works at firming its global footprint with the ongoing talk to acquire African operations of Kuwait?s Zain Telecom in a deal valued over $10 billion, its new CEO for India and South Asia, Sanjay Kapoor, is confident that the domestic growth story remains intact for the company and the sector, notwithstanding the poor revenue and profit growth figures posted by most telecom operators of late.
In an interview with FE??his first after taking over as CEO early this month??Kapoor said: ?We are sure our successes of the past would continue, but going forward, we would recast our business strategy, which would require two-to-three measures which can act as a game changer for the industry. The management and board would identify these game-changers.?
Though he refused to spell out the specifics here, he did share as much that ?Our aim is to turn Bharti Airtel into a lifestyle company.?
Focus on rural areas?where less than one in five people own a mobile phone?pushing data services that fetch better revenues and margins, renewed focus on a huge demographic segment like the youth, and becoming the ?wireless platform of choice? not just for telephony but a host of other activities from accessing entertainment content, financial transactions, healthcare and education, will continue to be the growth drivers for Airtel, Kapoor said.
Fortunately, the industry too seems to be waking up to the folly of a barebone tariff war??unleashed by new entrants with incumbents willy-nilly joining in??and that may help restore the financial health of the sector, Kapoor felt. With the crowded telecom market waiting for a shakeout, as and when government policy relaxes the stringent mergers & acquisition rules in the sector, consolidation will work to big players? strength. Even the upcoming auction of third generation spectrum will separate the long-term players from also-rans.
Kapoor, a veteran of Bharti for over a decade now, is well aware of the challenges that lie ahead as he works to steer the company back to the glory days of strong double-digit growth. ?Uptill now, the challenge was to manage scale, now that we have crossed 125 million subscribers that challenge is over and the next challenge is going to be managing complexities.? According to Kapoor, the ?game-changers? would define the next paradigm, on which the telecom operators would have to compete and would take Bharti to its next level of growth. With its integrated services ranging from mobile services to broadband and fixed lines to DTH and entertainment services, Kapoor believes Bharti is best poised to take the country?s telecom story to the next level of growth.
The need to identify new ?game-changers? at this point of time is a necessity also for Airtel, as it battles stagnant top line and bottom line. In the October-December 2009 quarter, Bharti?s growth slowed considerably, with revenue and profits growing at 1% and 2%, respectively, its slowest in over five years.
On a more sober note, Kapoor said industry players need to become more mature and responsible in terms of their business models and profitability. ?Going forward, telecom operators would have to work with a host of other segments like banking, media, healthcare, education, etc so the industry would continue to make investments, and for that companies would have to focus on profitability?they just cannot go on losing money,? he said.
