Apr 24, 2010, 12.35 PM | Source: Forbes India
Bharti Airtel changed the Indian mobile scene with its prepaid minutes model. It faces a tough challenge as it tries to take it to Africa through Zain
My history is that I’ve been constantly proving people wrong. I did that in 1995, 2000 and 2005. It’ll be the same in 2010 too.” Sunil Bharti Mittal, chairman and managing director of the Bharti Group, has been telling his senior managers and partners in recent meetings.
Meanwhile, his top lieutenants Manoj Kohli, CEO (International) & joint MD, Bharti Airtel, and Akhil Gupta, deputy group CEO and managing director of Bharti Enterprises, are busy zipping across Africa, to ensure their boss’ naysayers are proven wrong this time too.
Bharti Airtel brings to Zain Africa a strong balance sheet, marketing savvy, and managerial talent. All of these attributes will come into play only if Kohli and Gupta can ship to Africa Bharti’s treasure chest: The Minutes Factory.
Totally homegrown and yet in tune with the latest management theories, the Minutes Factory enabled Bharti to change the telecom business. And all eyes are on how it teleports this model to Africa.
What is the Minutes Factory? First, here is what it is not. It is not a “subscriber-led” model. The description comes from richer economies of the developed world that were the first to launch mobile phone services, Europe in particular. Since it was a new technology, the cost of setting up a network was high. In the 1990s, most mobile operators wanted well-heeled customers who would be willing to pay $1 a minute. They were also very selective in rolling out the network. “Even today in many cities in Europe you may not get a mobile signal if you are in a slightly less frequented part of the city,” says Arvind Mahajan, executive director, KPMG. Mobile companies then spent a lot of money attracting high-paying customer.
For almost seven years, the Indian market and mobile operators used the same “subscriber-led” model and nobody could make money. While the cost of setting up the network remained high, very few subscribers signed up because the cost of making or receiving a call remained very high: About eight rupees a minute.