Founded in 1976, Bharti Enterprises has grown from being a bicycle manufacturer to becoming one of the largest Indian conglomerates. Still very much led by its founder Sunil Bharti Mittal, the group now covers retail, real estate, insurance, and food distribution but is best known internationally for its telecommunications and IT businesses. Across all the companies in the Bharti group highly effective partnerships is probably the most visible common thread. In order to gain further insight into Bharti’s growth success and strategy Growth Champions has looked in detail at its largest company – Bharti Airtel.
Bharti Airtel is India’s leading telecommunications company and the largest telecoms operator in the world with over 210 million subscribers. As well as providing mobile services across 19 countries in South Asia and Africa, it offers land-line telephone services and broadband internet access in nearly 100 Indian cities and also has a satellite TV business. Launched in Delhi and Himachal Pradesh in 1995 Bharti Airtel has expanded at a breathless pace in the 16 years of its existence and analysts see that it has displayed remarkable capacity to scale up year on year and to execute its plans with high energy.
For the first few years, Bharti Airtel followed a very similar growth strategy to other mobile operators around the world – buying licenses, building networks, growing support activities such as customer care, billing and network operation, building its brand, offering competitive tariffs and the latest phones, and so steadily gaining more customers. This served the company well, but did not significantly differentiate it in the market or give it any major competitive advantage over its peers.
Facing the challenge of how to deliver telecoms at affordable (very low) prices to Indian customers in an industry that requires high capital investment, the breakthrough came at the end of 2002, when the management team recognised that to sell at the lowest prices in the world requires the lowest costs in the world. To achieve this required a new business model under which Bharti took the hitherto unprecedented step in the telecoms services industry of just focusing on the things it does best – customer, brand and people management – and leaving everything else to people who can do it better.
By outsourcing the majority of its activities – networks, IT, call centres, towers, distribution to global specialist firms in long-term partnership arrangements – Bharti are now able to operate a low-cost business model that supports the company’s belief that it can ‘bring the benefits of mobile telephony to millions and millions of lower middle class and poor consumers around the world.’ And this focus on doing what it does best has allowed Bharti Airtel’s entrepreneurial culture and customer-centricity to combine to create an organizational culture that is consistently opportunity minded.
Having honed its business model in India, over the past couple of years Bharti Airtel has been on a spending spree -– adding operations in what it sees as other high-growth markets and its ambition is high as demonstrated by its belief that ‘By 2015, Airtel will be the most loved brand in the daily lives of the African people.’