Sunil Mittal Talk at IBM

Irving Wladawsky-Berger writes about a talk given by Bharti’s Sunil Mittal at an IBM Business Leadership Forum:

Sunil Mittal, Bharti’s Chairman and Group Managing Director talked about the major challenges Bharti has faced over the last few years as India navigates some turbulent waters. He explained that, with India’s annual per capita income only a bit over $600, cellular phone service has to be provided for the Indian market at a very low price, around 2 cents a minute or less. The only way to provide telecom services so inexpensively and run a profitable business is to take advantage of Indias large population and economic growth, scaling up the business rapidly by adding many new customers every month.

To do this, Sunil Mittal had to develop a radically innovative business model: focus only on the customers and outsource just about everything else. In other words, put all the energy of the business into attracting, supporting and retaining customers and accept the fact that pretty much everything else has been commoditized and should be outsourced, including managing all the IT equipment and the network. He said there was a lot of resistance to this strategy. People were calling him from around the world saying that IT and the network were the heart of a telecom company. You cannot give your heart away and then run a business, they said to him.

Mittal begged to differ, saying the customer, not the technology, was at the heart of his business and then proceeded to implement the strategy. He further confounded everyone by not picking Indian companies as his outsourcing partners, choosing instead IBM to run IT and Nokia and Ericsson to run the network, because he wanted highly experienced, international companies that could keep up with the torrid pace of Bhartis growth. Today, Bharti is one of the top five companies in India, and Mittals vision for it is to be Indias most admired brand by 2010.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.