From a near collapse to Jio's entry in the telecom space, Bharti Airtel – the second-largest mobile operator in India -- has had several near-death experiences over the past few years. However, it has emerged into a 'very healthy shape' today, said Sunil Bharti Mittal, Founder and Chairman of Bharti Enterprises said, recounting the telecom major's challenges over the years.
Speaking at Amazon's Smbhav Summit on April 15, Mittal said that Airtel's first near-death experience came in 2003 when the operator was on the verge of a collapse after having expanded at break-neck speed.
"Everything was happening at the same time. We were hiring more people without too much of induction or training and putting them out in the field. And all this was creating a massive crisis," Mittal recounted.
However, Airtel needed capital, vendor support and more customers, all of which came together at the time. "We demonstrated that Airtel is a company that will thrive, even in a crisis that playbook has helped us several times since 2003-04," he added.
Airtel's next crisis came when 12 telecom licenses were given out in 2008-10, which he said caused disruption in the marketplace. The most recent crisis, however, was the entry of Reliance Jio in 2016, as the 'most powerful competitor in Indian space', offering free services for a year and then subsidised service for another year, followed by "predatory pricing", Mittal said.
"No surprise, nine of those 12 operators backed out, went bankrupt, merged with us or and each other. And today we are down to three private sector operators in which very clearly one operator is becoming increasingly a question mark," Mittal highlighted, hinting at Vi.
However, Airtel passed this test yet again very well, increasing its market share, brand loyalty, brand index and has been adding more customers than competition over the last nine months, he added.
Bharti Airtel has 340 million plus subscribers in India and has added new lines of business such as fibre-to-home, DTH, data centres, enterprise businesses and Airtel Payments Bank.
"All in all, I would say, we have now arrived today, after three or four big crises into a very healthy shape," the founder of Airtel said.
Importance of financial discipline
At the event, Mittal also had some advice for budding entrepreneurs. He said that while it is important to be ambitious, one shouldn't have ambitions higher than their resources and must ensure that financial discipline is maintained at all times. He said that it is important that one makes all payments on time and build credibility for a company, which goes a long way.
Recounting his learning about financial discipline when he was a supplier to Hero Cycles in 1977 and Brijmohan Munjal was one of his customers, Mittal said, "He
Lastly, Mittal said that today is like no other time where access to capital is easy, technology is on one's fingertips, the country is large and there is the big market out there for all.
"You put all this together and you have an opportunity like we never had. This will help build businesses which are going to be strong, resilient and some of you will break through and make bigger businesses -- even in the near term -- and established companies," Mittal added.
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(Edited by : Jerome)
First Published: IST