Bharti Airtel hopeful of return of glory days
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The new Bharti Airtel building in Gurgaon.
The facade of the Gurgaon headquarters of Bharti Airtel grabs the attention of night commuters on the Delhi-Jaipur highway that runs in front of the building. Some would call the red and white horizontal stripes across the building, when lit, bright. Others would say they are garish. But step into the concourse and you have the stunning sight of a fivefloor, 60-ft high mural of a wellgrown tree on a bright yellow and orange background. At night, its design - by artist Manav Gupta - is meant to contrast with the rest of the building of mostly open space offices, stark in its plain glass windows and white lighting.
Such a contrast, curiously, is playing out in the lifecycle of Airtel, as the largest telecom company in India is commonly known. It has had a brilliant history racing to the No. 1 spot by telecom revenues and customers in India , after shedding a legacy of small-time trading and manufacturing. A history of bold moves that redefined the industry with an extreme outsourcing business model, a consumer goods-like penetration in distribution and never-before low user tariffs. All of which built a business that was at its peak ranked shoulder-to-shoulder with India's most valuable firms, Reliance Industries and Oil and Natural Gas Corporation, giving it muscle that it flexed in taking an audacious leap into Africa, arguably the next big and last emerging market.
Today, though, things are dark for Airtel. From March 2010, its profits have nearly halved. In the April-June quarter just gone by, the company's profits after tax have shrunk 28 per cent to Rs 1,215 crore from a year ago. This was a result of competitors pulling down user tariffs to as little as 30 paise a minute and interest costs mounting on its $10.7 billion acquisition of networks in 16 African countries from Zain, a Bahrain-headquartered company.
Sanjay Kapoor, CEO for Bharti Airtel's India operations, thinks he knows how to return Airtel to its glory days: a reorganisation of the company that all but upturns the structure it has created in its 17-year history as a mobile phone services firm. This reflects the change in business strategy from being a voice-centric company to one that is in "life enrichment and data services", says Kapoor. "A transformation of this scale by putting all businesses together and giving them a customer perspective is probably the biggest change we have carried out in the past decade."