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4Ps
JUST ONE STEP FOR BHARTI; A GIANT LEAP FOR THE MITTAL BROTHERS!
4Ps
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 Rakesh Bharti Mittal, VC, Bharti Enterprises
“Indian retail has emerged...”
4Ps B&M: Bharti joined hands with Del Monte four years back. Why did it take so long to launch the Del Monte range of processed food?
RBM: When we tied up with Del Monte, the aim was to take Indian fresh fruits and vegetables to the international market and make India a global food hub. While we’ve managed to achieve that, we thought this was the right time to introduce our own range of processed food. The Indian organised retail has really emerged and the Indian economy too is on an upward swing. Our range of processed food will cater to the increasing consumer needs.
4Ps B&M: You are importing products and not manufacturing them in India. Won’t it add to cost pressures?
RBM: We’ve a manufacturing facility in Bangalore from where we are sourcing processed mango and guava. We’re also setting up a plant in Hosur in Tamil Nadu and plan to start production from there 2010 onwards. I don’t think there will be any cost pressure as we’ve good relations with our suppliers and moreover we will be providing international quality to our consumers.
4Ps B&M: What’s your vision for this range?
RBM: We’re already the largest exporter of fresh baby corn in India. I see ourselves as one of the top 10 players in the next five-six years.
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 Beyond the 100 million...
May 15, 2009. Sunil Bharti Mittal , Chairman, Bharti Enterprises., addressing the gathering of Bharti’s business partners and media fraternity at the Ball Room of Delhi’s Oberoi hotel, announced Airtel’s achievement of garnering a mind-boggling 100 million subscriber base. Speaking on the occasion, Mittal said, “My role in Airtel from now on would be to get the next 100 million subscribers from the overseas market.” Well, certainly Mittal did not utter these words in a fit of excitement as the future plan of action was very clear in Mittal’s mind. Soon after this ambitious announcement, news splashed across all national dailies that Bharti had revived merger talks with its old love interest, MTN. Having operations in Africa and Middle East, MTN has a total subscriber base of 98.2 million. According to the proposed merger deal, Airtel is looking at getting its hands on 49% stake in MTN and in turn, MTN and its shareholders will acquire 36% stake in Bharti, of which 25% will be held by MTN and the remainder directly by MTN’s shareholders. The current offer made by Bharti Airtel to MTN is different from what it had offered to it last year when Bharti had envisaged a full take over of the MTN Group. However, this time around, the deal has been structured in a way that both entities stand to gain some stake in each other with their eventual target being consolidation of MTN Group’s accounts with those of Bharti, thus indicating the latter’s preference towards gaining control of the South African telecom major. The deal is very critical for Airtel as if the merger talks take off, Bharti will have instant access to over 100 million additional MTN subscribers spread over 21 countries. It will also save a great deal on bulk sourcing of handsets for the combined entity. It is expected that the total subscriber strength of the combined entity by 2010 would be 237.6 million and generate revenues to the tunes of $13.01 million. Besides the heavy revenue stream, there also exist tremendous synergies between the two behemoths. While Airtel will benefit from MTN’s experience in 3G and number portability (which is expected to be soon introduced in India); MTN will benefit from Bharti’s experience of growing market share and maintaining operating margins in a highly competitive environment. In the past one year, Airtel has been aggressively trying to spread its wings in the international markets (by organically entering Sri Lanka and now looking at merger with MTN). But, it will continue its focus on the Indian market. Hinterlands still remain a potential market for Airtel as metros and circle A have attained near saturation. The strategy seems to be paying off well as Airtel continues to add about 2.7-2.8 million new subscribers per month, of which 40% are coming from the B and C telecom circles.
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