The country?s largest telecom operator Bharti Airtel?s acquisition of Zain Africa is much more than the record event of an Indian brand venturing beyond domestic frontiers for the first time in India?s history. It re-starts the India-Africa story, the age-old ties which were overtaken by China with the passage of time. Once again, India has been bestowed the opportunity to reinvigorate the relationship. While China pours in billions of dollars to expand its footprint in Africa, the Indian government just needs to facilitate the entry of the private sector there.
In an interview with FE the day the company closed its $10.7-billion transaction with Zain, chairman and managing director Sunil Mittal said: ?The government just needs to improve air connectivity with Africa, even if that means giving money to Air India. At least connect Nairobi directly with India and the returns would be for all of us to see. People would pay for the tickets and the industry would flock to Africa and we would guide other industrial houses to that place.? Currently, there are few direct flights to Africa from India, making travel cumbersome.
?We are not asking for any other help from the government. During our talks with Zain, we got excellent support from our embassies, which have done a great job. All that we ask from the government now is to improve connectivity,? Mittal elaborated.
He said Africa is topical now and everybody is talking about it. There are opportunities there, like India 10-15 years ago. He has a point. When Bharti late last year entered Bangladesh by acquiring Warid Telecom, various other companies in different sectors followed it. Mittal gave a peek about the kind of opportunities that lie for certain sectors with the Bharti-Zain deal. Investments in sectors like generators, towers, shelters and value-added services to name a few would start flowing into Africa.
In India, Bharti is not only the largest operator but also an innovator?it was the first to start outsourcing network and IT to specialists like Ericsson, Nokia Siemens and IBM, which later became the industry norm.
What game changer would the company bring into the overseas market now? Mittal is quick to answer: ?Tariffs. Tariffs in African and European countries are extremely high, around 20 cents per minute compared to a cent in India. Second, the networks are not deep and wide there, which we would bring about. And of course one cannot rule out new, innovative services which would be unveiled. Affordability with wide, deep coverage would be our hallmark.?
And what would the company bring back home with the Zain experience? ?Mobile money transfer, an area where we are much behind Africa and which has huge potential in India,? Mittal said. Around Rs 25,000 crore just gets dealt on Airtel?s network in a year by way of recharge vouchers et al; so the potential is huge. There?s no need to have any tie-ups with banks or the company to become a bank. A customer just needs to pay the amount at a mobile company?s distribution point and send an SMS to the recipient anywhere in the country and the latter takes cash from the distribution point at the receiving end.
?The government is working on mobile money transfer and hopefully it should happen fast…we would have a competitive edge here,? Mittal said.
What would Bharti change at Zain? Mittal said that the Indian and African markets are culturally aligned. Zain has good talent and Africa has a happy and hard-working culture. ?However, decision-making process there is slow because of low empowerment. We will change this,? Mittal said.
