The Year that Was: In Business There Are No Foes, Only Friends

Sunil Mittal doesn’t show it. But there’s a very good chance that deep inside, he is feeling excited again, after a long time.

There’s nothing like the anticipation of snagging a deal that he almost lost. For the 52-year-old chairman and group CEO of Bharti Enterprises, this is that moment. One year after being spurned by the African telcom giant MTN, he is now busy sewing up the deal. The likely merger will create a $23-billion emerging market giant that will straddle India, the Gulf and Africa.

What does MTN mean to you and Bharti?
Now, India is done. I am not saying it’s all over. Our networks cover 82 percent of the population. We’ll get to 90 percent. We need to expand our horizons and go out of India. With one of the lowest tariffs in the world, we have an EBITDA of 40 percent. This model can work only in developing markets. The focus has to be on Africa, the Middle East, and some other developing markets. Given that, there are very few pieces to partner with.

MTN is a fine example. Its revenues are bigger than ours; they’re present in 21 countries and have over 100 million customers. If we put these two companies together, we have the third largest telecom company in the world.

There is a school of thought which believes MTN has now come to the table in a weaker position…
The whole world has weakened. We are weaker, they are weaker. At the management level over the last one year, we have had very warm relationships. Bharti’s philosophy is that in business there are no foes, only friends. We got Vodafone into the country. When they wanted to go out and buy Hutch, we could have blocked it.

What similarities do you see between MTN and Bharti?
I don’t understand Africa or the Middle East as well as they do. But I understand telecom. So I can add value to the business. The outsourcing model we developed at Bharti, it can be deployed into MTN’s markets where they’re already doing well.

Coming to India, you have brought new leaders from the outside…
We were an entrepreneur-led, entrepreneur-promoted company. In some companies, this phase lasts forever. But in my view, if you do that, you remain small. Over the last four years, we’ve moved to professional-managed and entrepreneur-supported. And that’s where we want it.

How do you retain professionals?
People who come in from the outside… We ask them to tell us what’s good, what’s bad about us. They tell it like it is. In turn we tell them, here’s the canvas, go fix it.

The real issue is always with the war veterans. How do you handle that?
Four years ago at a conclave, I let go. I told the veterans you’ve done a fantastic job of building the company. But unfortunately, some of you haven’t kept pace. So, I said, walk out now, with your medals and feathers intact.

What next?
We entrepreneurs are like junkies looking for the next big fix. The question is, where will it come from. Business-wise, we will create some successes. But during my lifetime I don’t think we will be able to claim anything as successful as Airtel.

- This article was earlier published in Forbes India magazine dated July 31, 2009.

WHY DID WE DO THE STORY
Sunil Mittal, the king of Indian telecom, was making his next big move. Through an audacious bid for the African giant MTN that would have marked the biggest ever overseas acquisition by an Indian company, he was taking a major step towards making Bharti Airtel global. For a first generation entrepreneur who had tasted both wealth and success in a short span, Africa was the next frontier. What made Mittal tick in India? And what will it take for him to make it on the world map?

Our story initially intended to look at the business empire that Mittal was carving out spanning retail, insurance, telecom and agri-products. But with the MTN bid making headlines and a candid interview allowing us to understand how Mittal the entrepreneur plans his move, we decided to go the whole way whole hog with the interview.

WHERE DOES THE STORY STAND
Mittal’s MTN deal did not come through. The deal faced political, diplomatic and nationalistic challenges. African pride came in the way. This was a big setback for Mittal who had personally put a lot at stake to see the deal through. While the MTN deal fell through, Mittal is well on track to realise his African dreams with the announcement of Zain Telecom acquisition. The framework of Bharti’s globalisation that he explained to us in the interview remains intact and has indeed found expression through Zain. Will Mittal be able to handle the African business as successfully as in India? For the “junkie” looking for his next fix, this should be sufficient opportunity.