Question

Bharti Airtel started in India as a cell phone provider. Should Bharti proceed into Africa as originally planned, investing in the rural areas and dropping tariffs to stimulate demand?

Answer 1

Ans -

From the humble beginnings in the Indian telecom industry in 1986; Airtel has its roots in Bharti Telecom Limited. Founded in 1986 by Sunil Bharti Mittal, the company was the first in India to offer push button telephones, when the rest of the country was still using rotary phones.

The first partnership they had was with Siemens AG of Germany, and they started making push-button landlines in India rather than importing it from Taiwan, as it used to be before.

The company then went on to launch various telecom technologies to the Indian market and had innovation at its heart. Going on to acquire license to build a cellular network in Delhi, Bharti Telecom Limited laid the ground work for the mobile operations of the company in the year 1992. It began operations in Delhi in the year 1995 as Bharti Tele-Ventures. The service was extended to various other states by various acquisitions and partnerships.

In 1984 Sunil Mittal started assembling push-button phones in India,

which he earlier used to import from a Taiwan company, Kingtel, replacing the old fashioned, bulky rotary phones that were in use in the country then. Bharti Telecom Limited (BTL) was incorporated and entered into a technical tie up with Siemens AG of Germany for manufacture of electronic push button phones. By the early 1990s, Bharti was making fax machines, cordless phones and other telecom gear.

He named his first push-button phones as 'Mitbrau'.

In 1992, he successfully bid for one of the four mobile phone network licences auctioned in India.

One of the conditions for the Delhi cellular license was that the bidder have some experience as a telecom operator. So, Mittal clinched a deal with the French telecom group Vivendi. He was one of the first Indian entrepreneurs to identify the mobile telecom business as a major growth area. His plans were finally approved by the Government in 1994

and he launched services in Delhi in 1995, when Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name AirTel. Within a few years Bharti became the first telecom company to cross the 2 million mobile subscriber mark. Bharti also brought down the STD/ISD cellular rates in India under brand name 'Indiaone'.

In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were re-branded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice services all across India.

Airtel launched "Hello Tunes", a caller ring back tone service (CRBT), in July 2004 becoming to the first operator in India to do so. The Airtel theme song, composed by A.R. Rahman, was the most popular tune in that year.

In May 2008, it emerged that Airtel was exploring the possibility of buying the MTN Group, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The Financial Timesreported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasise the tentative nature of the talks, while The Economist magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers, higher revenues and broader geographic coverage.

However, the talks fell apart as MTN Group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company.

In May 2009, Bharti Airtel again confirmed that it was in talks with MTN and the companies agreed to discuss the potential transaction exclusively by 31 July 2009. Talks eventually ended without agreement, some sources stating that this was due to opposition from the South African government.

In 2009, Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for the fixed line business. Later, Bharti Airtel awarded the three-year contract to Alcatel-Lucent for setting up an Internet Protocol access network across the country. This would help consumers access internet at faster speed and high quality internet browsing on mobile handsets.

In 2009, Airtel launched its first international mobile network in Sri Lanka.

In June 2010, Bhartil acquired the African business of Zain Telecom for $10.7 billion making it the largest ever acquisition by an Indian telecom firm.

In 2012, Bharti tied up with Wal-Mart, the US retail giant, to start a number of retail stores across India.

In 2014, Bharti planned to acquire Loop Mobile for ₹7 billion (US$110 million), but the deal was called off later.

Bharti Airtel Limited ("Airtel"), the world's third largest mobile operator with operations in 20 countries across Asia and Africa, said that its Treasury division has been adjudged as a highly commended winner of the Top Treasury Team (Asia) Awards at the Adam Smith Asia Awards 2015.