Airtel and Sunil Bharti Mittal – Untold Story
Sunil Bharti Mittal must be a happy man by now. Hailing from a small town in Punjab, Ludhiana, he has achieved in life what some people dream of. He was a push button telephone manufacturer until recently. It was the winds of change in the telecom sector, which really propelled him in the national limelight. However, Airtel has its own share of bloopers, which are clearly not in the public domain. I shall try and lay out a case as to why their practices are not in the national interest.
There was a cover page in Business World magazine recently whose title said “The man who gave up his network away”. It was clearly unprecedented step in the telecom sector anywhere in the world. Network is one thing that is sacrosanct to any owner. However, in a smart and clever move he did that which could fetch him a lot of savings. I am not going in the details of the dealings or the pros and cons. This is clearly a business move, which he knows best. My only concern is the overwhelming presence of the multinational corporations in the sector and such crucial as this one.
There are two main issues here. In my earlier post here, I had mentioned as to why FDI has not really changed the telecom scenario. More money for expansion invariably comes at the cost of risk to other operators. I shall go in that detail a little later. The overriding concern is the technology that would be used for the switches and telecom equipment. I read in Rediff article recently that low cost equipment is feasible as of now. If we talk of partnership between the academia and the industry, then this would have been a golden opportunity to reclaim our investments in IITs across the country. I am sure that spurred on by the demand they would have come out with some solution. Thus, save the precious foreign exchange. It is clear that overwhelming presence of the MNCs in the sector would clearly benefit their host nations. A poorly thought of strategy indeed, to increase the FDI.
The second crucial aspect is the security. I have a reason to believe that Singapore based companies are actually a front for the Chinese government. Thus, surreptitiously they are entering this sector. Why the mandarins sitting high up haven’t really thought of this at all? This is beyond any logical conclusion. I have opposed FDI on this very ground because these are ill prescribed prescriptions of the donor agencies. The so-called security measures announced were good enough to keep the Left shut up their mouths. Not that these people are not nationalists. The very idea or the foundation of their beliefs is flawed and outdated.
However, the biggest beneficiary has been Airtel after the increase in the FDI. They have realized, although belatedly, that value added services is the way to go. There was one major flaw in the roll out of the subscribers. To ramp up the numbers they concentrated mainly on the prepaid subscribers. The health of any telecom network is determined by the number of post-paid subscribers it has. To correct this they have started resorting to monopolistic tactics. The GPRS subscribers on the prepaid networks can only access the Airtel Live portal. In case they wish to download anything, a hefty charge of Rs 10 is charged per request. This is clearly anti competitive and goes against the established logic. Of course, a better way could have been to introduce a recharge voucher for a fixed monthly fee in case one wishes to access the GPRS and thence Internet. This forces the people to shift to post paid segment where the ownership costs are much higher.
Airtel has invested heavily in building up its brand. However, despite the greatest cricketer of our times, their advertising pitch does not enamor me. I believe that Airtel had consistently fallen behind the TRAI’s parameters in terms of quality of offerings barring a few circles. Hence, the newer ad pitches of “stronger and clearer” network.
The fixed line business is imperative for growth. As I had mentioned, increased funding would now mean that it needs to acquire operators with fixed line business. One that comes to my mind is Connect from HFCL in Punjab. After a relative lull in the roll out of services, it has suddenly woke up to ramp up subscribers. I was surprised to see their advertisement banners recently. Perhaps it could be because of entry of TATA in the Punjab circle. I have a feeling that HFCL wants to ramp up numbers and sell out. As it is, they have a lousy service and customer support in the after sales services. Airtel would want to pick up this stake for good because it does not make any business sense to duplicate the entire infrastructure. In any case, there is not room enough for another fixed line operator given the fact that Punjab has BSNL and Connect offering their services.
It is interesting to note the recent news that was reported in the media. On the announcement of the unified licensing regime, any operator who wanted to have a fixed line license was allowed to pay the migration fee. Airtel slapped a notice on the government asking it refund the same after the second round of policy changes were announced. It was clearly pointed out that fixed line license was voluntary. Airtel could have waited for the same or forego this amount. Is Mr. Bharti keeping his idle legal department busy? I am looking forward for the judgment.
Before I end this post, as the events have unfolded I have a hunch that Mr. Bharti would want to sell out his stake in Airtel. That explains his recent diversification in selling vegetables. It is clearly an untapped market and would go a long way to improve the best agricultural practices. I wish him all the best. The main reason is that despite all his ills, his was the first network that got the mobile network in India. How he pulled it off is another story.
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It is really sad that Airtel has sacked many employees and I am one of them. This is my question to whosoever is in Airtel u haved sacked manyemployees, have they ever thought of what will happen to them. How will they survive? If there is one person working in the house how will he sufferHave you ever thought to talk with them? Have you ever gone to their home? Have u ever tried to talk with them on home. For the last four months I amwithout job trying my best to get a job but without any success? What will happen to me and my family consisting of five members. How will they surviveif I do not get job for one or two more months. To sack employees is very easy. Your work is not satisfactory you are not required any more you take leavevery often so on and so forth. Nobody in private job takes leave to make merry sometimes there are things which no one can control old age of father, mother and things like that. After all they are only one who brought us, and we also owe to them a lot. This is my direct question to Mr Mittal Chairman of Airtel. Kindlylook into it think over it with ur heart, sympethetically and try to recall the employees or try to make them work in some other software company because thecompany has written many adverse things for many employees that till date they have not got the job.Thanks.Jiten.
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