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Published on: April 19, 2021, 2:42 a.m.
Airtel on a strong wicket
  • Mittal: We continued to drive deep collaborations to enable a world-class experience for our customers

By Ritwik Sinha. Consulting Editor, Business India

It is no secret that, when the Adjusted Gross Revenue (AGR) bomb exploded early last year, with an apex court bench ruling out any leniency to leading telcos, this had catastrophic implications for the leading telcos – especially Bharti Airtel and Vodafone. Reliance, with a late entrant tag, had a minuscule burden on this front, which others had accumulated over more than one decade. 

The ruling was issued on 13 February, after telcos failed to meet the 23 January deadline. Comments from Kumar Mangalam Birla (who controls Vodafone Idea) prior to the apex court judgement, that an unfavourable ruling might force it to shut shop permanently, only added fuel to the speculative fire. But even in that hour of crisis, nobody was saying it posed survival threats to the Sunil Bharti Mittal-led Airtel. At worst, it was expected to further add to its liquidity pile-up, affecting its performance in the near to medium run.

Cut to the present day. Since early last year, a huge volume of data has flown through the Indian telecom ecosystem, with Corona-led, unprecedented disruptions also contributing to a new churning witnessed in the telecom business. And amidst this rapidly changing scene, Airtel, as an entity, seems to have engineered a major turnaround, putting itself on a stronger wicket. This doesn’t seem to have stemmed from introducing a new fire-fighting strategy, which then worked more effectively than imagined. The answer probably lies in trying hard to sustain operations in a glitch-free style in a difficult hour for its consumers and then upping the ante on some of the critical pieces (including digital) when their greater adoption began thanks to the Corona-led confinement. 

Marketmen will vouch for the fact that Vodafone’s growing weakness in terms of loss of subscribers may also have played a role in Airtel’s growing strength. In the eye of the consumer, both of them have traditionally been put on the same pedestal on the services and brand positioning fronts. However, Reliance, in its two avatars in the past two decades (with CDMA in 2003 and now Reliance Jio since 2016), has happily positioned itself as the brand for the masses, willing to go to that extra mile for them. 

Now, in its 26th year (it was among the first movers when cellular licences were opened, rolling out its service on 12 September 1995), Airtel has undoubtedly been an exceptional story in the topsy-turvy telecom business (from the peak of 15-20 private players, only three entities now exist, apart from a couple of government-backed telcos). It was created by an exceptional first-generation entrepreneur, who graduated from manufacturing cycle parts in Ludhiana to making India’s first push button phone sets and then jumping on to the cellular services bandwagon at an early stage. 

Old-timers will vouch that, in the initial phase, Airtel’s long-term sustainability in the game, where stakes increasingly hit an unimaginable stratosphere, was doubted. “It was widely believed then that they would create a company and then sell it for a premium given the growing crowd of deep pocketed entities in a business which held a plethora of promises,” recalls a veteran of the industry. But Mittal proved most of his critics wrong, making Airtel a formidable name in its own right. Tiding over all kinds of challenges (including the Reliance wave) Airtel has not only spread within India but also carved out a distinctive international footing.

Market positioning

Today, the company is ranked at number two globally in terms of subscribers’ volume in a cumulative sense (India plus 15-odd other countries, mostly in Africa) and has a market cap of close to $40 billion. Nothing surprising; having created an expansive telecom business of this scale has made Mittal one of the most admired and respected post-liberalisation faces of India Inc (he was the recipient of our Businessman of the Year Award in 2002).

“In the past two-and-a-half decades, he has created and spearheaded a company which has grown at a hefty 10-12 per cent CAGR and within the new age major enterprises bracket, it has a similar reputation in the marketplace as an Infosys in the IT sector,” observes BK Syngal, former chairman, VSNL, often referred to as father of the internet and data services in India and a pioneering figure in the Indian telecom space. Interestingly, this company, now in its post silver-jubilee phase, seems all set to give a tweak (from a medium- to long-term perspective) to its orientation and focus on developing a larger platform of defining digital services placed comfortably on its wide-based telecom edifice.

Some recent trends may only have buoyed its conviction to make expeditious moves in this direction. With the number of players reduced to a handful, telecom is now certainly a saner place to be in, commanded by market-driven factors. “Airtel is at a classic inflection point,” observes Sudershan Banerjee, former CEO, Hutchison Essar Telecom (acquired by Vodafone in 2007). “It is well-placed to raise the customer service bar, make it clear to its consumers that it is a premium brand and add killer apps and content.”

A turnaround year 

Will 2020, a year that began on a dismal note, actually end up as a major turnaround year for Airtel? That is the big question today. And, even as senior officials of Airtel, including its chairman Mittal and MD & CEO Gopal Vittal, who is in command of operations, did not respond to our query, scores of research reports furnished after its sterling Q3, 2020-21 performance and formal investors’ calls statements clearly underline the turnaround theory in no uncertain terms.

A senior official of Airtel (on assurance of anonymity) also reconfirmed the theory that the top brass is fairly convinced the company has emerged considerably stronger in the past one year. Or, probably, it is on its strongest wicket after the Reliance Jio-led price war forced many companies to shut shop. 

An analysis of its key performance parameters between 2016 to 2020 makes it clear that, in a cumulative sense, while the number of users of its services both within India and outside went up – from 357 million to about 423 million – that did not exactly lead to revenue augmentation in the same proportion (see graph: Performance highlights). In fact, its revenue dropped from a high of Rs96,000 crore to Rs80,000 crore in 2019, before showing some recovery in 2020.

And much of this is due to the impact of the price war in the larger domestic market, which lowered the ‘average revenue per user’ (ARPU). But when the final revenue number of 2020-21 is announced next month, there is a strong possibility that the company will cross the Rs1 lakh crore mark this fiscal. 

However, the financial numbers between Q1, 2019-20 and Q3, 2020-21 reflect a modest to sharp uptick on several key parameters. According to a study by Motilal Oswal analysing the Q3, 2020-21 performance of Bharti Airtel, the most significant gain has been in ARPU, which has shot up from Rs129 at the beginning of 2019-20 to Rs166 at the end of the third quarter in 2020-21. There has been a similar sharp jump in total subscribers and data subscribers and a similar trend is visible in Airtel’s Africa business, which accounts for 25 per cent of the company’s business today.

“Bharti’s superior execution quality is reflected in its strong performance over the past three quarters, with 8 per cent ARPU growth without a tariff hike, leading to resounding EBIDTA growth of 27 per cent in Mobile India. It has certainly surprised, with market share gains and quality customer acquisitions – 29 million 4G subscriber additions (in nine months, 2020-21) – which have supported the ARPU growth,” the report maintained. In fact, in Q3, Airtel had made a net profit after a gap of six straight quarters and added over 14 million customers during the three-month period.

“Despite the unprecedented volatility that has confronted us this year, we delivered another strong performance. More important, this consistency in performance is across every part of our portfolio. As a result, we have grown revenue market share in each of our businesses,” Vittal had emphasised in a conference call with investors. Analysts point to a host of factors which have contributed to the great performance of Airtel in the recent past.

“With working from home and online classes becoming a necessity, the conversion to 4G from 2G has been quite rapid. And, there has been the sharpest increase in data consumption. The leading players have made the most of this opportunity,” says Aliasgar Shakir, Senior VP, lead, telecom, Motilal Oswal. “The percentage volume jump of data subscribers has risen sharply, from 47 per cent in March 2019 to 63 per cent in December 2020. And this tells the story,” says Prashant Tarwadi, director, India Ratings, pointing out the trend in specific terms. 

Another popular theory doing the rounds in the marketplace is Airtel benefiting the most from a situation where a struggling Vodafone has lost a considerable number of subscribers (estimated at 8,000,000 in the second quarter of the last fiscal). Both these operators have traditionally been viewed as having similar attributes. When Reliance Jio, with its price war strategy, backed by its unmatched fibre cable network, appeared and shook the scene in the mid-2010s, it evolved as a strong, solitary player with different branding and appeal.

This theory is strongly refuted by an Airtel official, who calls it an unfair assessment. Having a more robust and attractive portfolio of offerings is the major draw, he asserts. Sudershan Banerjee, however, strongly emphasises that getting customers from Vodafone would be a major growth window for Airtel in the near run. “Their best strategy would be to work on continuous differentiation vis-à-vis Jio, with superior content and customer services, which would stop migration to Jio and acquire users from Vodafone Idea,” he said.

Adding new pillars

A key point emphasised by the senior Airtel official we talked to is that the recent windfall, if that term can be used, has not simply stemmed from the company showing survival resilience of the highest order and benefitting immensely by just being there (with only a handful of players now being on the stage) when the cycle turned in favour of data-driven services.

According to him, the company has seriously worked on a broader strategy, wherein, even while being embroiled in a price war in the pre-Corona years, it decided to offer quality as its USP. It also deliberately allowed nearly 40 million subscribers to go out of its loop since 2018. These were the customers who were not paying much to the company’s kitty and were keeping its critical ARPU level under pressure.

“Emphasis on quality services has been a major part of Airtel’s direct communication with consumers at large in recent years. It used to rely on celebrities for its ad campaigns especially in the 2000s. In recent years, its aggressive campaigns of superior services in connectivity and in responding to customers’ grievances has been carried out by a relatively unknown model bearing a ‘girl next door’ image. And it has worked at a time when Reliance Jio is relying on star power in the old traditional style,” says a senior advertising executive. The company’s internet speed has also proven to be faster than much of the competition.

At the same time, the company has been gradually broadening its non-mobility services, adding new ones, especially on the digital platform. And many of these services are more prominent than ever before with data becoming the driving element of the business. Take the case of Airtel Xstream launched in 2019. A key offering from the company offering both DTH connectivity (its DTH service is number two in the country) as well as the fast-growing OTT content on broadband. “For leading telcos, the target today is not to hand you a mobile connection.

Their singular focus is to garner a larger share of your wallet and for this they have a full range of services – home broadband, digital enterprise solutions, DTH, e-payment, cloud, etc. Most of these segments are slated to grow very big in the coming years,” points out Tarwadi of India Ratings. According to Ankit Jain, a telecom analyst with ICRA: “Consumers were not willing to pay for many of these digital services in the past even as they liked them to be offered as a freebie or as a complementary service. The critical difference now is that they are showing an inclination to pay. And this is going to change the game for telcos.”

Airtel today has a well-developed portfolio of these services and most of them are readily available in a stand-alone or bundled package. “Five years ago, our mobility business accounted for 82-83 per cent of our business. Today, it is down to 75 per cent. We have managed to grow our enterprise and home business rapidly. The former has been a jewel in our crown. We now have Rs20,000 crore business coming from the enterprise. It includes our international business – like submarine cable and data which we sell to international carriers and OTT companies across the world. Our home business is broadband and DTH. We have reconfigured our go-to-market strategy,” says the company official.

In the previous fiscal’s (2019-20) annual report, Vittal had specified the platformization of key pillars – data and distribution (280 million mobile customers, over 18 million homes, 2,000 large corporates and over a million small businesses). With such a connectivity ecosystem in place, the company had claimed that 15 crore of its existing customers through the usual platforms now also engaged digitally to its Wynk, Thanks and Xstream apps. And considering the major uptick in digital services after the Corona-led lockdown last year, these numbers for Airtel are expected to shoot up significantly when the 2020-21 numbers are made public in the next couple of months. 

Collaboration route

The Airtel Payment Bank (estimated to have a monthly throughput of Rs10,000 crore) is projected to grow manifold considering the growing numbers on the non-cash payment side. “Airtel Payments Bank so far hasn’t appeared to be aggressive. But it has put together an experienced team and has a robust strategy. It may be ready to be part of the digital growth wave,” says Mihir Gandhi, partner (payments transformation), PwC India.

Furthermore, the company may not exactly be offering opportunities to global and domestic IT and digital services giants to join hands as small equity partners and be part of its future journey. But functional collaboration, in a typical ‘win, win’ style, to expand their respective reach and give an edge to the product offering is more of a norm than an exception.

“We continued to drive deep collaborations to enable a world-class experience for our customers – be it Amazon, Netflix, Zee, Star, Eros, HDFC, Bharti AXA, Apollo Hospitals and a wide number of start-ups in the retail segment, as also the likes of Cisco, Zoom, Google, Microsoft and AWS in the enterprise segment,” Mittal had maintained in his note to shareholders last year.

International footprint 

Back in 1998, when its Indian business had just started converting into a bigger dot, Airtel had stumped many by its international foray into the Seychelles. But that small debut has now expanded into a footprint of 18 countries in Africa and also South Asia, becoming a key feather in Airtel’s cap. Contributing nearly 25 per cent of the company’s revenue today, its international strength has certainly added in positioning Airtel in the league of leading telcos. 

It turned out to be a big stake game, when Airtel acquired the number two player Zain in the continent in 2010 in an expensive deal of over $8 billion; nevertheless, the move has now started paying off in a major way. This was followed by a spate of smaller acquisitions – Warid Telecom in Uganda and Congo; YuMobile in Kenya; and Millicom International Cellular and Tigo in Rwanda. In between, it had started its innings much closer to home in the Sri Lankan market in 2009 and Bangladesh in 2010. 

The big bet it had taken on its African operations in particular, has paid off as it has now become a robust business. In the nine-month period in 2020-21, its African subsidiary has reported an increase in revenue of 13.8 per cent to $2,870 million. Underlying the EBIDTA for the nine months was $1,297 million – up 16 per cent in reported currency, while constant currency underlying EBIDTA growth was 22.5 per cent.

As of September 2020, the company had reported 116.4 million customers. “The last quarter witnessed good growth in our revenue to $1.03 billion, with year-on-year constant currency growth of almost 22.8 per cent. With continued improvement in our operating efficiency, this has led to an even stronger growth of 28.3 per cent EBIDTA margin to $485 million,” Airtel Africa CEO Raghunath Mandava had earlier commented. 

According to a former official of the company, after the multi-billion-dollar deal in 2010, it had taken more time for the African unit to begin delivering desired results than was expected by the top brass. But, around the middle of the last decade, things began to fall in place. Incidentally, it was around this time that Reliance Jio had turned up the heat in the domestic market with its price war strategy.

Airtel’s international business, meanwhile, has seen many feathers added to its cap in recent times, including the successful enlisting of Airtel Africa on the London Stock Exchange and the Nigerian Stock Exchange in 2019, helping the company raise $650 million. Incidentally, Robi Axiata, the private telecom major in Bangladesh (a joint venture between Malaysia’s Axiata group and Bharti Airtel), also went through a successful IPO late last year at the Dhaka Stock Exchange, raising $62 million.

Airtel Africa seems to have become as happening a turf as India in terms of possible future developments. It has announced signing an agreement with Mastercard, which has agreed to invest $100 million in Airtel Mobile Commerce, a wholly-owned subsidiary of Airtel Africa. In another significant development, the company has announced selling its telecom tower companies in Madagascar and Malawi (over 1,200 towers in these markets) to Helios Towers, which is a leading independent telecom infrastructure company in Africa. The aggregate gross consideration for the transactions is expected to be about $108 million.

“With these latest tower transactions, we continue to demonstrate strong execution of our asset monetisation programme,” observes Mandava. “These transactions will also help to improve the mix of our debt and increase its tenure through long term leases, which are largely payable in local currency by our operating entities, while reducing the foreign currency debt of the group.”

Does the kind of success Airtel has notched, particularly in Africa, entail the company to move to newer geographies in the medium-to-long run? The senior Airtel official felt that the company’s interest was more in consolidation in the medium term in the locations where it has carved a toehold.

Beyond telecom

There is an interesting element about Airtel’s positioning. In terms of subscribers’ volume, it is number two in India. But, when you add its international subscribers to Indian customers (about 458 million), it becomes number two globally, next only to China Mobile, which has 940 million users. And, for the kind of leap it has taken, observers cite consistent innovation and new product offering (not necessarily mouth-watering pricing deals for consumers, where neither Airtel nor Vodafone are considered to be initiators) as a key attribute.

On this front, there is a big list of firsts which the company can boast of. Just to cite a few, it came up with India’s first pre-paid card with lifetime validity (2005); it offered the country’s first mobile banking platform ‘Airtel Money’ (2011); it became the first telecom operator to launch an over-the-top mobile network application with Wynk Music (2014); its Airtel Payments Bank became the first in the country to go live (2017); it launched a converged digital entertainment play, Airtel Xstreme (2019); etc.

It has also effectively used the appeal of noted figures from Indian cricket and Bollywood (Sachin Tendulkar and Shah Rukh Khan) to engage its customers in the past. And, its signature tune, which music maestro AR Rehman composed for it in 2002, became the world’s most downloaded mobile music ringtone. 

For Airtel, past 25 years of journey has undoubtedly been quite eventful which also included extreme pressure moments in no small measures. “Airtel weathered three-four big crises, including disruption caused by launch of Jio in 2016, and has emerged out of market adversities in a healthy shape,” Mittal said at the Amazon Sambhav event held last week.

So, while the past 25 years of its journey have been quite eventful, the coming years or decades probably promise to be more exciting, with the telecom plus digital equation now gaining prominence. Market observers underline that both Reliance Jio and Airtel are well-prepared with diversified and converged digital architecture, with the former having as one of its major targets the strengthening of its gigantic retail business and the latter focussing more on providing a holistic set of services to its customers across the board.

The company official we spoke to did not hazard a guess as to what could be the possible contribution of digital or non-mobile services to its revenue kitty five years down the line, but agreed that it was bound to go up. In a marketplace like India, with over a billion subscribers, the general perception is that the market is close to saturation point as far as new subscriptions are concerned.

The Airtel official also says the company is particularly keen to give a hard push to its ‘business & home’ segment, which will unlock new opportunities for the company, as he considers them to be worth Rs40,000 crore and quite fast-multiplying businesses, waiting to be harnessed mostly through bundled offerings. However, even as analysts are pointing at DTH services becoming unpopular and loss-making worldwide,

Airtel still sees a future in them. “I think the structure of the DTH industry is such that it is still attractive in the medium to long term. The price structure in India on the linear television side is low, compared to most other markets. While in a market like the Philippines, an average consumer may end up paying $15 per month for 15-20 channels, in India, he can get about 200 channels for $4-5 per month. So, the cost of actually having linear entertainment in the home is pretty cheap in India,” Vittal had reasoned, while dealing with analysts after the third quarter. 

Meanwhile, to put its home services in top gear and spread them to 1,000 cities in India (now available in 120 cities), it decided to take the LCO route (making local cable operators partners for last mile connectivity). 

Meanwhile, Airtel recently announced a new structure for the group which, among other things, also strongly signals its intent to harness its digital assets to the hilt. Its digital assets, spanning Wynk Music, Airtel X stream, Airtel Thanks, the Mitra Payments platform (used by a million retailers), Airtel Ads, Airtel IQ, Airtel Secure, Airtel Cloud and all future digital products and services will be controlled by the listed entity Bharti Airtel. Its telecom businesses will be controlled by a newly created entity, Airtel Limited – a wholly owned subsidiary of Bharti Airtel. Airtel Payments Bank will remain a separate entity under Bharti Airtel.

The company’s infrastructure businesses such as Nxtra and Indus Towers and existing international subsidiaries will continue to operate as separate entities. “The new structure sets an exciting future course for Bharti Airtel and provides focus on the four distinct businesses – Digital, India, International and Infrastructure, each, in a razor sharp way. We believe this will provide agility, expertise and operational rigour to serve our customers brilliantly while providing flexibility to unlock value for our shareholders,” Sunil Mittal commented.

By making these changes, Airtel has probably taken the Reliance Jio route of creating an integrated digital platform now, something that many believe should have been done earlier. This had enabled Jio to get the backing of the likes of Microsoft, Google, Facebook and others, and its valuation around the middle of the last year was quoted at a staggering $70 billion. Airtel with somewhat similar digital portfolio and intent would have been an equally attractive proposition for global tech giants. “This has intrigued  me as well. Probably,  prominent shareholders on the board in the past may not have agreed fearing dilution of their stakes. This window, however, remains open,” Syngal said. 

Chinks in its financial armour

Airtel’s liquidity stress, however, has been considered a point of concern by most research firms. According to a research paper, while Airtel’s operating profit has grown by a meagre 2.33 per cent over the last five years, its average return on capital employed has stayed at 6.37 per cent and its debt-equity ratio, at 2.69 times. Its valuation has been expensive and its scrip has been under-performing the market in the last one year – all visible chinks in its financial armour. “Return on capital is low for the entire industry. Our net debt to EBIDTA ratio is coming down every quarter. It is not a serious concern right now,” said a company official when the pressures on the balance sheet were pointed out to him.

Incidentally, last year, chairman Mittal in his note to shareholders had strongly emphasised the company’s financial position being in fine fettle. “The year has witnessed massive fund-raising initiatives by your company, totalling over $8 billion, including rights issue ($3.6 billion), Airtel Africa IPO ($674 million), perpetual bonds ($1 billion), QIP ($2 billion) and FCCB ($1 billion). Now, with a strong balance sheet, accompanied by a best-in-class network and a robust spectrum portfolio, Airtel is well-positioned to capitalise on future opportunities.”

Meanwhile, while preparing for its journey ahead, Airtel seems to have also taken the new route of opting for asset light models of operation, where possible. “Mobile towers and fibre networks traditionally used to be on the balance sheet of the leading telecom companies globally,” points out Tarwadi of India Ratings. “But, now, many companies are spinning them off as separate SPVs to monetise these investments.”

And this is exactly what Airtel recently did in the Indian market, when it agreed to the merger of its tower business Bharti Infratel with Indus Towers. With this, its tower business has been taken off its balance sheet, and the deal paves the way for the creation of one of the largest mobile telecom tower companies in the world, with an estimated 169,000 towers.

The most speculated issue, however, in which Airtel also has to play a decisive role, pertains to the next tariff hike. The last hike (15-40 per cent) by the big three in December 2019 has already shown results in terms of appreciation of ARPU across the board (larger conversion to 4G being a major contributing factor) with Airtel being the biggest beneficiary. So, are the telcos talking to each other to strike again?

Though the company official refused to answer, an analyst with a brokerage firm says Airtel may not fire the first salvo as, even without a further hike, its revenue has consistently gone up for the last five quarters; it has also garnered more post-paid and 4G customers. Probably, in this game of intense rivalry, the company has once again got back some ‘advantage Airtel’ levers.

5G and new telecom order

For the Indian telecom business, the next big frontier, of course, is the roll-out of 5G services, which is expected to be the leading development over the next decade. And the big two – Reliance Jio and Bharti Airtel (see graph: Bouquet of services offered by Telcos) – have been sending signals on their preparation vis-à-vis trial runs for the big-ticket development even as spectrum allocation from the government is expected to unfold over the next one year. Reliance Jio, meanwhile, has committed to launch an indigenously-built 5G network in the second half of the year.

And, early this year, Airtel announced becoming the country’s first telco to successfully demonstrate and orchestrate ‘Live 5G service’ over a commercial network in Hyderabad. Even Vodafone has said it will get ready for the next gen service after spectrum allocation. 

Though there is no doubt that 5G will turn the tide of the telecom business over the next 10 years, determining the new telecom order, analysts point out a host of issues it faces before becoming a practical wave. While the entire 5G infrastructure network is estimated to cost a gigantic $30 billion and will significantly up the ante in the capital-intensive game that telecom is, the larger issue is whether India will have enough consumers to pay for such services in the coming years.

“You can’t imagine providing viable 5G services at an ARPU of $2-3. It must begin at the range of $8-10, given the experience of other operators globally. 5G will, therefore, see a lot of concentration on the b2b used case for generating traction,” Sanjay Kapoor, former CEO, Bharti Airtel, points out, while adding that unlike in previous generation technology where operators were creating the network first and then scouting for customers, the order will now be reversed.

Considering the capital-intensive nature of 5G technology adoption, a popular theory doing the rounds is that with limited players on the stage, the arch rivals of yesteryear will probably collaborate and share networks and assets. “It may happen,” BK Syngal says succinctly. Incidentally, the big two of the game, Bharti Airtel and Reliance Jio, showed surprising camaraderie early this month when Airtel announced an agreement with Reliance Jio to transfer the ‘Right to Use’ of Airtel’s 800 MHz spectrum in Andhra Pradesh (3.75 MHz), Delhi (1.25 MHz) and Mumbai (2.50 MHz) to Jio.

Airtel is expected to receive around Rs1,500 crore from this deal. Is this indicative of more co-operation ensuing between the two leading telcos, which control nearly 70 per cent of the Indian telecom business in value terms? “Don’t read too much into it,” advises a telecom sector head of a leading research firm. “It’s a ‘win, win’ deal, wherein Airtel is selling the unutilised spectrum, and Jio is buying something that will fit in its network.” 

A bigger question, however, is: as the new order defined by the 5G roll-out in the not-so-distant future sets new dimensions in the business, will the main players be Jio and Airtel? In terms of market share in revenue generated in the market (see graph: Revenue market share trend), both Vodafone and the government-backed BSNL (the traditional telecom giant considered unbeatable in the hinterland reach till recently) have received a serious drubbing in recent years. BSNL, in fact, has been reduced to a peripheral player.

“Government-backed entities like BSNL and MTNL are in a disadvantageous position. They still don’t participate in the mobile broadband space, due to their absence from 4G services and have high operating costs, which render them uncompetitive. I am doubtful about their relevance in the emerging telecom order,” responds Kapoor.

Syngal feels no differently. “I would not like to mince words here – BSNL and MTNL have been deliberately destroyed. But I am hopeful that, at some stage, the Birlas will infuse serious capital into Vodafone to turn it into a vibrant entity again. Given the fact that the suicidal price war regime is over and there is projected uptick in revenue, with consumers graduating to next generation technology applications, there seems to be no case to leave the fray. Why are they otherwise running the show even now?” asks he.

Controlling from sky

Those who have been associated with Sunil Bharti Mittal or have observed him from close quarters may narrate this common point while explaining his key attributes – a natural knack to spot the technological trends or ideas that are going to define the future. And, if convinced with any new proposition, he is unlikely to hold himself from backing it business-wise. “With professional managers taking care of day-to-day operations for a long time, he is more devoted to keep an eye on the big catalysts for the future,” says a senior representative of a leading industry association.

Mittal’s decision to become the anchor investor of the financially stressed   OneWeb (London headquartered satellite communication firm) by picking up 45 per cent of its stake last year is being viewed as yet another example of following his instinct. Together with the British government, which has interest in the project because of strategic reasons, Mittal has invested $1 billion and given a new lease of life to the company, which was close to being declared bankrupt. 

Though the concept of broadband internet services being driven by Low Earth Orbit (LEO) satellites is not new and has been toyed with for more than 20 years now (it was started by a satellite telephone company, Iridium, which later went bust; and then, a similar attempt by Google also did not meet with desired results), its large scale commercial utility is yet to fall in place.

The advantage of the satellite-driven telecom network, however, is that it can result in expeditious expansion of network area, including coverage of difficult stretches like deserts and hills, where laying optical fibre or putting up telecom towers is difficult. For a company like Airtel, it can make a world of difference in terms of establishing connectivity (5G network too) with more customers in countries on their operational map.

Several reports suggest that experts in the domain are working to do away with the operational glitches faced in the past (primarily in seamless switch over of airwave connectivity between the moving satellites) and its not only Mittal (his second fling with the platform after a short-lived association in 2015) but even Elon Musk is gung-ho about it. Starlink-SpaceX, a similar venture commanded by him, has already received nod from the Australian government for large-scale operations. 

Meanwhile, some major action is also expected from OneWeb soon, as it raised another $400 million from SoftBank and Hughes Network early this year. As chairman of OneWeb, Mittal is yet again bonding with the best in the world, trying to milk an idea whose time seems to have come.

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Indian Oil has a social initiative for a clean and green world

Published on Nov. 25, 2020, 2:53 a.m.

The public sector company is planting a tree for every retail customer visit during its TreeCheers campaign period

Climate Change

Entrepreneursip

Two Indian organisations win UNDP prize

Published on July 21, 2021, 2:55 p.m.

The Equator Prize recognises local and indigenous communities from around the world

Environment

Largest man-made forest to come up in Chhattisgarh

Published on July 21, 2021, 12:35 p.m.

In one of the country's largest ecological restorations, 2,500 acres of barren land will be converted into a natural habitat

Entrepreneursip

Veerappa Moily’s son to launch ClimateTech VC fund

Published on July 21, 2021, 12:09 p.m.

The fund will concentrate on four sectors: green buildings, energy storage, sustainable agriculture, and alternative energy

Environment

One-fifth of forests at risk due to climate change: government

Published on July 21, 2021, 10:40 a.m.

The dominant tree species in central Indian forests, Teak and Sal are expected to be sensitive to change in temperature than rainfall

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