TOP GROUPS: True Child of De-regulation

T here is surely a lot about Bharti that makes it the face of India´s
telecom revolution, post deregulation. In many ways the success of India´s
only truly telecom focused group reflects the success and the failures of
telecom deregulation.

Certainly a lot of the credit for Bharti´s success goes to Sunil Bharti
Mittal. His focused strategy, improved execution, and partnership with global
leaders has helped the group reach its current position. Today, Bharti is number
one in cellular services with about 22 percent market share, in revenue terms.
The group has been aggressively pursuing its fixed voice access business where
it has emerged as the largest private operator. It has also built some lead in
the nascent broadband market.

Bharti continued its penchant for becoming first in new things. This time
around, it became the first private telecom company in the country to own an
undersea cable. The 3,200–km i2i cable network freed India from bandwidth
dependency on foreign firms. In its second cable venture, Bharti will invest $40
million in the $500 million SEA-ME-WE-4 project, to be completed by 2005. Bharti
has been giving VSNL, which had a monopoly in international gateway and
bandwidth, a run for its money with its cable plans. The group also scored
another first this financial year when Bharti Tele-Ventures became the first
Indian telecom company to issue foreign currency convertible bonds $100 million
with an option to retain over-subscription to the extent of 15 percent.

The group also has a significant presence in telecom manufacturing. Group
company Bharti Teletech hit a new high with almost 50 percent share of the
Indian fixed handsets market in FY 2003–04. The company exported five lakh
units and has set the target at one million phones for the current financial
year. This year, the manufacturing arm entered the modem market. The company has
tied up with Korea Telecom Networks to make DSL modems. Though the 17,000 modems
were made in Korea and imported primarily for Bharti Infotel, the company has
plans of a manufacturing setup in India. Also, despite a slowdown in fixed phone
subscribers, Bharti is banking on a booming retail market for phones. It tied up
with Atlinks to make phones at its Ludhiana plant. The company will also have
marketing rights for GE phones in India and nearby countries.

The company also plans to buy out other mobile operators to increase its
network footprint. It has also applied for additional telecom licenses. This
year, the company also unveiled its strategy to outsource network and IT
management to third-party vendors like IBM, Ericsson, and Nokia. The outsourcing
will allow Bharti to concentrate on its core areas of operations and services.

With its mobile business in Seychelles facing no major competition and the
software business under Bharti Telesoft concentrating on telecom software for
developing countries, the group´s focus has been completely on Bharti
Tele-Ventures in India.

Bharti knows that the path ahead is not easy. Already, BSNL and MTNL are
planning for a comeback in GSM and CDMA. Hutch is breathing down its neck. On
the broadband front, Bharti will have to move beyond enterprises to make its
presence felt. Bharti has rolled out GPRS and EDGE on its networks, but lack of
content has kept customer interest cold. Bharti is known for its lobbying and so
are its competitors. So, do not be surprised if the fight for telecom-market
share intensifies in the coming days.