When it comes to the big guns of India Inc, the focus for a while has been squarely on the two As — Ambanis and Adanis, with legacy conglomerates like Tatas and Birlas also added onto the mix. But another A — Airtel, has largely stayed under the radar, even while carrying on with its quiet expansions.
Which is quite a miss when it comes to market watchers and analysts, for Bharti Airtel, the parent company, today has reached a position that makes it hard to ignore. It is now India’s third most valuable company by market capitalisation, behind only Ambani’s Reliance and HDFC Bank (HDFC was merged into the banking arm to create the giant two years ago). Piping past Tata Consultancy Services (TCS) to the No.3 spot a few days ago, the telecom major’s position has been reinforced since then with TCS’s layoff and AI travails leading to an erosion in its value. At markets close on Monday, Bharti Airtel was valued at 11.47 lakh crore, a cool 35,000 crore rupees more than the ITeS giant.
With the way the company has been pivoting, the latest being today’s announcement to get into cloud services for businesses, it could well be unrecognisable from how the company started out.
When the three sons of Punjab politician and parliamentarian (three-time Raja Sabha member) Sat Pal Mittal launched Bharti, today’s rarefied world of bytes and billions was not even in their dreams. The boys, curiously led by the one in the middle, Sunil Bharti Mittal, started off hawking push-button telephones in the license raj era India where ordinary denizens only knew the old, clunky (and today: nostalgic!) rotary dial phones. And no, redial or answering machine facilities did not exist then.
Birth of Airtel
Bharti’s Beetel phones simply became a premium ‘must-have’ in offices and posh residences, mainly because there were hardly any worthwhile alternatives to those brought in by rich relatives from Dubai or London. The Mittals soon branched out into related paraphernalia, like fax machines and cordless phones. But their big breakthrough was in the early 90s when the Indian government, fresh on liberalisation, decided to launch cellular telephony in the country. Mittal won the Delhi circle for Bharti, launching their billion-dollar brand ‘Airtel’ for the service.
It was going to be a recurring theme throughout the journey of Bharti Airtel — launch something the market has not seen, and then make it world-class so that the competition simply cannot stand up to you.
Over the years, Bharti Airtel went on a pretty chequered journey — while it soon gained market leadership in the Delhi mobile circle (while its rival kept changing branding and ownership, from Essar Cellphone to Hutch to Vodafone and now, Vi), the rest of the country was another story altogether. India’s archaic bureaucracy had ensured that one player could only initially bid for only one circle, leading to a fractured market where consolidation was essential, considering the massive requirement for capital and scale. This was achieved, piece by jigsaw puzzle piece, through acquisitions and bidding for new licences as and when.
While bureaucracy was a nightmare, the competition was not just cut-throat, but T-Rex level, considering the interest big guns Ambanis soon took in the burgeoning field. First, it was the turn of Anil Ambani, who launched CDMA phones, which were promised as the cheaper alternative to Airtel’s GSM technology. While the initial bout saw incoming calls getting free, the resultant expansion of the market base saved Airtel just about.
Yet through it all, Mittals never lost sight of what was soon to become a pattern — sewing up shrewd deals, be it for technology, funding (like the symbiotic partnership with SingTel of Singapore) or even cell tower outsourcing (Airtel’s pioneer use of third party cell towers — by Indus Towers, is today virtually an industry standard). The company ventured forth daringly into Africa, and is today present in 14 countries in Africa, as well as two in India’s neighbourhood (Sri Lanka and Bangladesh), serving a total of 21 crore customers.
Airtel's strategic resilience
The second Ambani onslaught was even more life-threatening, with big brother Mukesh launching Jio as a cheap-data GSM service in the mid-2010s. Jio came out of nowhere and took the lead in the market thanks to the Ambani muscle power, but Sunil Mittal proved that brains can be more useful than brawn when he shrewdly restructured the way the company operated to optimise cost, even while doubling down on more tie-ups for investment as well as technology. The result — the initial glory days of Jio may have hurt Airtel, but not only did it survive, it fought back with its focus on high-value customers (read: businesses) and improving efficiencies. The result? Jio may have more numbers, but Airtel tops the only metric that matters in the mobile telephony world — ARPU, or average revenue per user.
While it would be easy to rest on your laurels, Bharti Airtel Q1 results are set to be announced on August 5. The one thing consistent with the company and its founders has been their lookout for new products and services that markets have not even seen yet, and then make them so competitive to come out on top.
Today’s announcement of offering telecom-grade cloud services for businesses, Indian and globally, is one such. While Cloud is not exactly new with entrenched global biggies like Amazon and Microsoft holding an indefatigable sway, the way Bharti Airtel MD and vice chairman Gopal Vittal has positioned it, it is unique in itself — a sovereign, telco-grade cloud platform ‘Airtel Cloud’ via subsidiary Xtelify.
“It is a very pivotal moment in our history as we take our world-class home-grown platforms of Airtel Cloud and software solutions to businesses in India and telcos all over the world,” said Vittal.
The aim is clear — to move beyond the bread-and-butter of telecom services and focus on getting more value out of the digital world we are moving into. And suddenly, many of the announcements the company has made over the years and in the recent weeks suddenly make sense — from the fact that it has its own financial services wing, a broadcast service (Airtel DTH), many apps that go beyond the telecom service to offer anything from music (Wynk belongs to them) to entertainment and payment gateway (Mitra, a payment platform used by retail merchants). Last fortnight, Bharti Airtel partnered with the AI search engine Perplexity, offering the AI-powered search engine’s Pro version for free to its 36 crore mobile customers across India.
The Mittals and Bharti’s staying ahead of the curve will next take them, as per the pattern, to another service India has not seen so far — internet from space. The company’s ambitious OneWeb partnership with British Telecom is set to launch broadband internet from its constellation of 600-plus satellites pretty soon. It won’t be easy, notwithstanding the fact that Sunil Mittal’s competition this time is even bigger than Ambani — the likes of Elon Musk as well as Amazon. But then Mittal and Bharti Airtel probably wouldn’t have it any other way.
