We’ll outsource only if it adds value to ops: Airtel
INDIA’s largest mobile firm, Bharti Airtel, which enjoys a 32% revenue market share in the telecom space, is steadily moving to new spheres beyond providing mere communication services as it seeks to double its customer base to 200 million. Bharti’s deputy CEO, Sanjay Kapoor, in his first media interview after moving to the new role, tells ET of his vision for the company. Mr Kapoor firmly believes that going forward, Bharti Airtel will be a major player in services and lifestyle businesses space. Excerpts: What will be the key changes in the Bharti as you try to increase customer base from 100 million to 200 million. We will continue to concentrate on our core competencies which is the brand, customer offerings and people capabilities. At Bharti, we are working at creating scalability of systems and processes as we move to 200 million customers. But the most important factor is that we are moving away from share of telecom to share of the customer’s wallet. We will do so by being in a position to offer a wide array of services. From music to entertainment to lifestyle products to banking to commerce and money transfers, we want to participate in all these spaces and will be in the lifestyle business rather then being just a telecom company. We are also aware of the changing profiles of customers. Today, the youth constitute about 560 million of the country’s population. This has multiple implications for us from brand to customer interface to empowerment to self service. Airtel will change accordingly to meet our customers’ needs. Which are the areas where Bharti sees new growth ? We are already the largest music company in the country. We sell more music than any other music company - both in revenues and volumes, we are the largest. At Bharti, we see a big opportunity in banking as about 85% of the country’s population is unbanked. International money transfer is another space that we are working on. The Indian Diaspora is 22-million strong and sends about $42 billion back home. Our recently launched Direct-to-Home (DTH) and Internet Protocol TV (IPTV) makes us a player in the entertainment space. Last week, you had announced an outsourcing JV with Alcatel-Lucent. What is next for Bharti in the outsourcing space? Your networks are outsourced, so is your IT and BPO requirements. Will you follow this up by outsourcing your DTH operations? We will continue to look at areas where we can make significant gains by outsourcing. Is there anything in the immediate pipeline, the answer is ‘no’. I wish to clarify that we are not looking at outsourcing to reduce manpower, but only if it can add value to our operations. Even small areas such as bill printing are now centralised in two locations. Similarly, for our collection centres, the operations are now limited to three centres. So, many of our existing practices can be centralised, made more efficient and even outsourced. Bharti took a bold approach of not giving away free minutes to its customers and also refused to join a tariff war despite other new entrants resorting to these strategies to lure customers. Do you think that Bharti’s latest quarterly results have justified your stance? There is more to telecom services than just tariffs as the customer considers the brand, nature of services, network reach and several other parameters before choosing an operator. Price therefore is no longer the sole factor that drives new users to take up one’s service. The difference of a few paise here and there does not matter to the user as much as quality of services does. We have always maintained that free offerings as a business model is not tenable anymore. At Bharti, our philosophy is very clear that we will not offer unviable business propositions. We understand that Bharti has created a new division for its calling card business. Is this correct? Calling cards - both domestic and international has been made into a new division and its CEO will be Rakesh Vaidya. This division will now report to mobility. We are already present in US and some other countries and will be extending our offerings to a few more countries this year. Any change in strategy as Bharti expands its presence in rural India? Currently, about 57% of our new additions are already coming from rural India. A bulk of our next 100 million customers will be from rural India, and to address this segment, we are setting up the Rural Airtel Service Centre in all villages across the country. These agents sell and exchange SIMs, (subscriber identification module cards in phones), they are empowered to activate, reactivate and recharge mobile connections and sell value-added services amongst other things
Sahara buys 11.7% in Chennai co S Tel
THE Sahara Group has picked up a 11.7% stake in S Tel, a Chennai-based telecom company that has licences to operate in several northern and eastern states, according to a report submitted by telecom regulator Trai to the government. The regulator had prepared a report on the ownership of all companies who were given telecom licenses last year following reports of stake sales by the promoters The deal can be worth around Rs 250 crore, if S Tel’s stake sale to Bahrain Telecommunications earlier this year is taken as the benchmark. A Sahara executive who did not wish to be named confirmed that a group company by the name of Sahara India Investment Corp Ltd had picked up stake in S Tel and said that it was only a ‘financial investment’. This executive, however, refused to divulge the deal size. The Sahara group spokesperson did not comment. Earlier this year, Batelco Millennium India, a consortium formed by Bahrain Telecommunications and Dubai-based Millennium Private Equity had picked up a 49% stake in the company for about $225 million, which valued the company at about $450 million (Rs 2,250 crore). So far, private equity firms Skycity Foundations and Telecom Investments (Mauritius) were believed to be holding the remaining 51% stake in the company. The S Tel website lists these two PE firms as “copromoters” but does not divulge any additional details on them. S Tel has Unified Access Services Licences — government parlance for telecom licences that allow wireline as well as wireless services in a service area — and start-up spectrum in Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, the North East and Assam. It also holds a Category A Internet Service Provider (ISP) licence that allows it to provide broadband services across the country. Last year, S-Tel attracted attention when it offered to pay Rs 13,752 crore to the government for a pan-India spectrum. Earlier in 2008, it was reported to have doubled the offer of revenue to the government for licences in all 22 circles for which it had applied for. Recent news reports has also linked the telco with maverick investor C Sivasankaran who is reportedly looking to pick up a stake in the company. Mr Sivasankaran, a serial entrepreneur who sold his cellular services firm Aircel for $1.08 billion to Maxis Telecom at the end of 2005, was barred from buying more than 10% stake in any Indian telecom company as part of a non-compete agreement he had signed with the Malaysian company. But, this agreement ended at the end of March this year, enabling him to re-enter the sector. STAKE CALL Sahara deal could be valued around Rs 250 cr, if S Tel’s stake sale to Bahrain Telecom earlier this year is taken as the benchmark Last year, S Tel attracted attention when it offered to pay Rs 13,752 cr to govt for pan-India spectrum Chennai-based telecom firm S Tel has licences to operate in several northern and eastern states
Wipro lands Unitech telco’s mega IT deal
WIPRO Infotech, the India and Middle-East business arm of Wipro, said it has bagged a nine-year IT outsourcing contract from Unitech Wireless, the telecom arm of real estate firm Unitech. ET had reported the development on May 1. While the companies did not share any financial details, people familiar with the deal said the contract is estimated to be worth Rs 2,500-2,800 crore. One of the new entrants, Unitech Wireless needed to outsource its IT needs to focus on its core business. This is the second big contract won by Wipro in the country during the past three months, after the company signed a six-year, Rs 1,182-crore deal with the Employees’ State Insurance Corporation (ESIC) two months ago. According to a person familiar with the bidding, Unitech Wireless had shortlisted IBM, Tech Mahindra and TCS for the contract, apart from Wipro. Norwegian telecom group Telenor holds 67% stake in Unitech Wireless. Wipro will deploy component-based service delivery platform for Unitech Wireless to deliver a wide range of services, including multi-channel access, real-time information delivery, multimedia content and VAS. This will help Unitech compete with established rivals such as Bharti Airtel and RCom. “Unitech Wireless has a customer-centred approach and the business-technology alignment will ensure subscribers get latest services,” said Wipro joint CEO (IT business) Suresh Vaswani.
Middle East telcos plan IT outsourcing
TELECOM companies from Middle-East—Telecom Egypt, Saudi Telecom Company (STC) and Zain Telecom—plan to emulate the outsourcing model created by Indian telco Bharti Airtel, and are in the process of fleshing out multi-year outsourcing contracts worth Rs 1,500-2,000 crore each. A total outsourcing of IT systems, application development, maintenance and other back- office work will help these telcos become leaner and manage exponential growth in their business more effectively. According to a senior executive at one of these firms, internal discussions for total outsourcing of IT and back-office work has already started. “Many of these telcos have been enjoying high average revenue per user of over $30, and with that coming down, they are seeking ways to become more efficient,” the executive added. Managing growth and ensuring better focus on core, telecom business are among triggers for outsourcing by these telcos. IBM, Wipro, Logica and Tech Mahindra are currently exploring these outsourcing contracts. However, these vendors declined to comment on any contract from the region. “Telcos in the region have started talking about total outsourcing,” said Krishna Gopal, business head, Middle East and Africa, Tech Mahindra. “However, total outsourcing in the region will have to involve local Arabic speaking resources, apart from near shore delivery centres in places such as Egypt,” he added.
INDIA’s largest mobile firm, Bharti Airtel, which enjoys a 32% revenue market share in the telecom space, is steadily moving to new spheres beyond providing mere communication services as it seeks to double its customer base to 200 million. Bharti’s deputy CEO, Sanjay Kapoor, in his first media interview after moving to the new role, tells ET of his vision for the company. Mr Kapoor firmly believes that going forward, Bharti Airtel will be a major player in services and lifestyle businesses space. Excerpts: What will be the key changes in the Bharti as you try to increase customer base from 100 million to 200 million. We will continue to concentrate on our core competencies which is the brand, customer offerings and people capabilities. At Bharti, we are working at creating scalability of systems and processes as we move to 200 million customers. But the most important factor is that we are moving away from share of telecom to share of the customer’s wallet. We will do so by being in a position to offer a wide array of services. From music to entertainment to lifestyle products to banking to commerce and money transfers, we want to participate in all these spaces and will be in the lifestyle business rather then being just a telecom company. We are also aware of the changing profiles of customers. Today, the youth constitute about 560 million of the country’s population. This has multiple implications for us from brand to customer interface to empowerment to self service. Airtel will change accordingly to meet our customers’ needs. Which are the areas where Bharti sees new growth ? We are already the largest music company in the country. We sell more music than any other music company - both in revenues and volumes, we are the largest. At Bharti, we see a big opportunity in banking as about 85% of the country’s population is unbanked. International money transfer is another space that we are working on. The Indian Diaspora is 22-million strong and sends about $42 billion back home. Our recently launched Direct-to-Home (DTH) and Internet Protocol TV (IPTV) makes us a player in the entertainment space. Last week, you had announced an outsourcing JV with Alcatel-Lucent. What is next for Bharti in the outsourcing space? Your networks are outsourced, so is your IT and BPO requirements. Will you follow this up by outsourcing your DTH operations? We will continue to look at areas where we can make significant gains by outsourcing. Is there anything in the immediate pipeline, the answer is ‘no’. I wish to clarify that we are not looking at outsourcing to reduce manpower, but only if it can add value to our operations. Even small areas such as bill printing are now centralised in two locations. Similarly, for our collection centres, the operations are now limited to three centres. So, many of our existing practices can be centralised, made more efficient and even outsourced. Bharti took a bold approach of not giving away free minutes to its customers and also refused to join a tariff war despite other new entrants resorting to these strategies to lure customers. Do you think that Bharti’s latest quarterly results have justified your stance? There is more to telecom services than just tariffs as the customer considers the brand, nature of services, network reach and several other parameters before choosing an operator. Price therefore is no longer the sole factor that drives new users to take up one’s service. The difference of a few paise here and there does not matter to the user as much as quality of services does. We have always maintained that free offerings as a business model is not tenable anymore. At Bharti, our philosophy is very clear that we will not offer unviable business propositions. We understand that Bharti has created a new division for its calling card business. Is this correct? Calling cards - both domestic and international has been made into a new division and its CEO will be Rakesh Vaidya. This division will now report to mobility. We are already present in US and some other countries and will be extending our offerings to a few more countries this year. Any change in strategy as Bharti expands its presence in rural India? Currently, about 57% of our new additions are already coming from rural India. A bulk of our next 100 million customers will be from rural India, and to address this segment, we are setting up the Rural Airtel Service Centre in all villages across the country. These agents sell and exchange SIMs, (subscriber identification module cards in phones), they are empowered to activate, reactivate and recharge mobile connections and sell value-added services amongst other things
Sahara buys 11.7% in Chennai co S Tel
THE Sahara Group has picked up a 11.7% stake in S Tel, a Chennai-based telecom company that has licences to operate in several northern and eastern states, according to a report submitted by telecom regulator Trai to the government. The regulator had prepared a report on the ownership of all companies who were given telecom licenses last year following reports of stake sales by the promoters The deal can be worth around Rs 250 crore, if S Tel’s stake sale to Bahrain Telecommunications earlier this year is taken as the benchmark. A Sahara executive who did not wish to be named confirmed that a group company by the name of Sahara India Investment Corp Ltd had picked up stake in S Tel and said that it was only a ‘financial investment’. This executive, however, refused to divulge the deal size. The Sahara group spokesperson did not comment. Earlier this year, Batelco Millennium India, a consortium formed by Bahrain Telecommunications and Dubai-based Millennium Private Equity had picked up a 49% stake in the company for about $225 million, which valued the company at about $450 million (Rs 2,250 crore). So far, private equity firms Skycity Foundations and Telecom Investments (Mauritius) were believed to be holding the remaining 51% stake in the company. The S Tel website lists these two PE firms as “copromoters” but does not divulge any additional details on them. S Tel has Unified Access Services Licences — government parlance for telecom licences that allow wireline as well as wireless services in a service area — and start-up spectrum in Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, the North East and Assam. It also holds a Category A Internet Service Provider (ISP) licence that allows it to provide broadband services across the country. Last year, S-Tel attracted attention when it offered to pay Rs 13,752 crore to the government for a pan-India spectrum. Earlier in 2008, it was reported to have doubled the offer of revenue to the government for licences in all 22 circles for which it had applied for. Recent news reports has also linked the telco with maverick investor C Sivasankaran who is reportedly looking to pick up a stake in the company. Mr Sivasankaran, a serial entrepreneur who sold his cellular services firm Aircel for $1.08 billion to Maxis Telecom at the end of 2005, was barred from buying more than 10% stake in any Indian telecom company as part of a non-compete agreement he had signed with the Malaysian company. But, this agreement ended at the end of March this year, enabling him to re-enter the sector. STAKE CALL Sahara deal could be valued around Rs 250 cr, if S Tel’s stake sale to Bahrain Telecom earlier this year is taken as the benchmark Last year, S Tel attracted attention when it offered to pay Rs 13,752 cr to govt for pan-India spectrum Chennai-based telecom firm S Tel has licences to operate in several northern and eastern states
Wipro lands Unitech telco’s mega IT deal
WIPRO Infotech, the India and Middle-East business arm of Wipro, said it has bagged a nine-year IT outsourcing contract from Unitech Wireless, the telecom arm of real estate firm Unitech. ET had reported the development on May 1. While the companies did not share any financial details, people familiar with the deal said the contract is estimated to be worth Rs 2,500-2,800 crore. One of the new entrants, Unitech Wireless needed to outsource its IT needs to focus on its core business. This is the second big contract won by Wipro in the country during the past three months, after the company signed a six-year, Rs 1,182-crore deal with the Employees’ State Insurance Corporation (ESIC) two months ago. According to a person familiar with the bidding, Unitech Wireless had shortlisted IBM, Tech Mahindra and TCS for the contract, apart from Wipro. Norwegian telecom group Telenor holds 67% stake in Unitech Wireless. Wipro will deploy component-based service delivery platform for Unitech Wireless to deliver a wide range of services, including multi-channel access, real-time information delivery, multimedia content and VAS. This will help Unitech compete with established rivals such as Bharti Airtel and RCom. “Unitech Wireless has a customer-centred approach and the business-technology alignment will ensure subscribers get latest services,” said Wipro joint CEO (IT business) Suresh Vaswani.
Middle East telcos plan IT outsourcing
TELECOM companies from Middle-East—Telecom Egypt, Saudi Telecom Company (STC) and Zain Telecom—plan to emulate the outsourcing model created by Indian telco Bharti Airtel, and are in the process of fleshing out multi-year outsourcing contracts worth Rs 1,500-2,000 crore each. A total outsourcing of IT systems, application development, maintenance and other back- office work will help these telcos become leaner and manage exponential growth in their business more effectively. According to a senior executive at one of these firms, internal discussions for total outsourcing of IT and back-office work has already started. “Many of these telcos have been enjoying high average revenue per user of over $30, and with that coming down, they are seeking ways to become more efficient,” the executive added. Managing growth and ensuring better focus on core, telecom business are among triggers for outsourcing by these telcos. IBM, Wipro, Logica and Tech Mahindra are currently exploring these outsourcing contracts. However, these vendors declined to comment on any contract from the region. “Telcos in the region have started talking about total outsourcing,” said Krishna Gopal, business head, Middle East and Africa, Tech Mahindra. “However, total outsourcing in the region will have to involve local Arabic speaking resources, apart from near shore delivery centres in places such as Egypt,” he added.
dear good efforts
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