Bharti: Spawning a telecom empire

Balaka Baruah Aggarwal

NEW DELHI: Perhaps the most high-profile telecommunications company in the country today, Bharti Telecom has been one of the most active telcos in the country. In recent months, there has not been another telco making so much news as Bharti Tele Ventures--from announcing rate cuts in domestic long distance, its IPO and the launch of its basic services in Delhi and Haryana, the company has constantly been hitting headlines. Other than the sale of VSNL to the Tata, telecom reporting in the media has largely been dominated by the activities of the Bharti Group.

Bharti's telecom business is divided into services and manufacturing. All its service activities are segmented into different business units under the holding company Bharti Tele Ventures. Bharti Cellular offers cellular services; Bharti Telenet is in the business of providing access; Bharti Telesonic provides long distance service; Bharti Broadband Networks provides broadband solutions (includes Internet business and corporate services). The company has invested a total of Rs 1,885 crore till November 30, 2001 and intends to invest a total of Rs 3,450 crore by March 31 2002 in its telecom business.

The company's positioning is to provide end-to-end telecom solutions to customers. Therefore, its presence is across every service segment in the sector: cellular, basic, domestic long distance, international long distance and broadband services including Internet and VSAT services. But the key thrust of the company's services would be cellular. Speaking about the company's thrust Sunil Bharti Mittal, Chairman and group Managing Director, said, "We seek to capitalize on the growth opportunities in the Indian telecom market ... with a focus on providing cellular services. Cellular services would constitute the largest portion of the business in terms of the total revenues and this is expected to continue in the foreseeable future."

Cellular services:

Bharti Cellular offers GSM-based cellular services under the brand AirTel in the six circles of Delhi, Karnataka, Andhra Pradesh, Himachal Pradesh, Chennai, Kolkata with a subscriber base of 1,048,000 customers as on November 30, 2001. According to COAI this is 20 percent of the cellular base in the country.

Bharti Cellular holds the license in another nine circles in which services are expected to be launched by the middle of this year. With the addition of the new licenses, the company would now be offering services in all the four metros. An estimated 92 percent of the country's cellular base resides in the 15 circles that the company has signed license. Bharti Cellular currently has a total of 11 main switching centers, 19 base station controllers and approximately 855 base stations in the six existing cellular networks. The company is firm about not providing CDMA-based limited mobility services.

Basic services:

Bharti Telenet was the first to break the government monopoly in basic telephony by launching services in Madhya Pradesh in 1998. Now it also provides services in the states of Haryana and Delhi and plans to launch services in Karnataka and Tamil Nadu soon. The basic services are provided under the Touchtel brand comprising more than 140,000 customers. The company has laid about 3,600 Km of fiber across the MP circle and in Haryana it has laid 100-Km fiber and 420 Km copper. The company has invested a total of Rs 272 crore till the end of November,2001 and is looking at an additional investment of Rs 207 crore in basic services by the end of this fiscal.

Long distance:

Bharti Telesonic, under the brand IndiaOne, was the first to break the government monopoly in domestic long distance sector in December 2001. It created history by announcing a revenue sharing arrangement with cellular operators in the 40:40:20 ratio where the originator would get 40 percent, the carrier would get 40 and the terminator would get 20 percent. It is a different matter that BSNL retaliated with an overall cut of 60 percent in its long distance and Bharti's proposed revenue sharing proposal had been deferred by TRAI.

Bharti Telesonic recently unveiled its new brand and logo for its data carrier services called Hi Bandwidth Answers which is distinct from its voice carrier. The company has deployed more than 12,000 Km of optic fiber covering 50 cities and plans to lay another 14,000 Km in the next one and a half-year. The company has invested Rs 410 crore till November, 2001 and expects to invest a total of Rs 873 crore by the end of this fiscal. Nine switches are operational at Delhi, Mumbai, Chennai, Bangalore, Hyderabad, Jaipur, Ahmedabad, Chandigarh and Bhopal. In the second phase the company plans to install nine more switches in Kolkata, Nagpur, Ernakulam, Jallandhur, Patna, Lucknow, Guwahati, Bhubaneshwar and Kolhapur.

International long distance:

Bharti has already signed LoI for setting up international gateways for voice transmission and is expected to be one of the strong contenders when the sector opens up in April this year. In 2001, Bharti had formed a joint venture with SingTel called Bharti Acquanet to set up a fiber-optic submarine cable from Singapore to Chennai. The project with an estimated investment of $650 million was supposed to be complete by the end of 2001. The cable capacity was in the range of 8.4 TBPS.

VSAT, Internet services:

Bharti Broadband provides VSAT-based data services to approximately 60 corporate. The company also provides Internet services under the brand Mantra Online. It has 157,000 dial-up customers and 205 corporate customers.

Bharti has been successful in building a strong brand recall in telecommunications with its aggressive promotions in the print and particularly electronic media. In a market where volumes are going to matter, brand recall will help the group have that extra edge over its competitors.