Sunil Mittal

His dad was an MP (member of parliament) from Ludhiana.

A first generation entrepreneur, Mittal started his first business in April 1976 at the age of 18, with a capital investment of Rs 20,000 (U$500) borrowed from his father. His first business was to make crankshafts for local bicycle manufacturers.

In 1980 he sold his bicycle parts and yarn factories and moved to Mumbai.

In 1981, he purchased importing licences from exporting companies in Punjab. He then imported thousands of Suzuki Motors's portable electric-power generators from Japan. The importing of generators was suddenly banned by the then Indian Government and just two licences to manufacture generators in India were issued to two companies.

In 1984, he started assembling push-button phones in India replacing the old fashioned, bulky rotary phones that were in use in the country then. Bharti Telecom Limited (BTL) was incorporated and entered into a technical tie up with Siemens AG of Germany for manufacture of electronic push button phones. By the early 1990s, Mittal was making fax machines, cordless phones and other telecom gear. Mittal says, "In 1983, the government imposed a ban on the import of gensets. I was out of business overnight. Everything I was doing came to a screeching halt. I was in trouble. The question then was: what should I do next? Then, opportunity came calling. While in Taiwan, I noticed the popularity of the push-button phone -- something which India hadn't seen then. We were still using those rotary dials with no speed dials or redials. I sensed my chance and embraced the telecom business. I started marketing telephones, answering/fax machines under the brand name Beetel and the company picked up really fast."

In 1992, he successfully bid for one of the four mobile phone network licences auctioned in India. One of the conditions for the Delhi cellular license was that the bidder have some experience as a telecom operator. So, Mittal clinched a deal with the French telecom group Vivendi.

He was one of the first Indian entrepreneurs to identify the mobile telecom business as a major growth area. His plans were finally approved by the Government in 1994 and he launched services in Delhi in 1995, when Bharti Cellular Limited (BCL) was formed to offer cellular services under the brand name AirTel

* His getting the Delhi cellular licence seems to be the real turning point

* People forget now that when the Government of India first opened up the telecom sector, nearly every global telecom player made a beeline for India. Among these experienced multinational players, the Mittals seemed like ignorant pygmies. But Sunil was sure that he could put together a consortium with many of the foreign players and still make a valid bid.

The problem was that he didn’t have much money and he certainly didn’t have much in the way of reputation.What he did have, however, was his personal charisma. He has a unique ability to win people over in one-on-one encounters and if you push him, he will admit that his speciality consists of persuading people to go further than they had originally planned through the sheer force of his personality.

For instance, he pushed Vivendi into going with him after a single meeting. Later, after the deal had been signed, the company sent a team to India to check out exactly who the Mittals were. The team reported back that they were small-timers and likely to remain so. Vivendi pulled the plug days before the bid was to be submitted.

It was time for Sunil to work the phone. He called the company in Paris. ‘ Look,’ he said, ‘ when you agreed to go with me, you sensed something. You saw something in me. Remember that something. Go with your instincts. Forget what your team has told you.’

Against the odds, Vivendi stuck with him.

When the bids were opened, Airtel had won all four circles. The government promptly declared that it had a new rule: one company, one circle. So, Sunil was left with one of the two Delhi licences.

In retrospect, he says, it was just as well that they started with a single circle. He had clearly underestimated the work required in setting up a mobile phone business. And Delhi, in itself, was more than he could handle.

In 1999, the mobile telephone industry was in bad shape. The operators could not pay the huge licence fees they had promised the government. Eventually, a new formula was worked out. The industry would migrate to a revenue-sharing model. But before this could happen, the government asked operators to clear all existing dues.

Sunil had guessed that this was coming. Airtel had talked to its bankers and gathered a substantial war-chest. When many operators could not clear their dues, Sunil swooped down and bought up their licences. At a stroke, he acquired Andhra, Karnataka, Chennai and Punjab. Later, he bought out the Modis from Kolkata. In the process, he had nearly every major city in India except for Mumbai.

That was rectified when the government announced bids for a fourth licence. Airtel won eight new circles: Gujarat, MP, Tamil Nadu, Kerala, Maharashtra, Western UP and Mumbai. In five years, Sunil had gone from being the man who had lost out to HFCL to becoming the Mobile King of India.

But, the genset experience was about to repeat itself: the Big Boys wanted their share of the market.

When the Ambanis announced that they were entering the mobile telephone sector with CDMA technology (as distinct from Sunil’s GSM phones), the general view was that Airtel was in trouble. The Ambanis were big. They were smart. They had never failed at anything they had tried. And they had the Government of India wrapped up no matter which party was in power.

As though the mere entry of Reliance wasn’t enough of a threat, government policies were amended to favour CDMA operators who had much lower entry costs (and were therefore to claim that CDMA was a cheaper technology) and then, BSNL announced that it would set up its own low-price network.

The general view was that the mobile telephony market would now be transformed. Till then, mobile phones had been a rich man’s tool. Now, between the Ambanis and BSNL, they would undercut the expensive GSM operators and win over their customers with lower rates.

Everybody I know bought the logic and within Airtel, the mood was gloomy. Each year, the company holds a conclave of its senior managers to plan strategy. In 2002, this conclave was held at the Mughal Sheraton in Agra and it was something of a crisis session. ‘We knew that we were fighting for our survival,’ Sunil remembers. ‘ The company was polarized between two points of view. Some people said that we should go out and fight. I had an opposite view because I knew what we were up against. My strategy was to lie low and conserve our energies. Wait till the storm passes and see what the situation is like then. In the interim, we would do our best to get close to the customer.’

The bad phase lasted a year and he says now that it was one of the most difficult periods in his life. ‘ Because morale was so low, I went around meeting our people and giving them hope. I began to watch movies in which the underdog won, the sort of story where guerillas defeated a big army. Everywhere I went, I told my people that I knew that we were not expected to win. But, I would tell them, if we can win against the odds, then we make history.’

It was a story with a happy ending. The Reliance venture is not a failure by any standards. It has around 10-12 million subscribers against Airtel’s 14 million. But it has made no dent in the business of the big GSM operators. Instead, two distinct markets have developed. The top end is dominated by Airtel. The cheap telephony market is Reliance’s own. And of course, the big profits lie in the top end.

"Here's my big confession: life's big secret is how you position yourself to get lucky. Sitting at home, luck wasn't going to knock at my door. You have to be at the right place, at the right time..."

References
1. http://www.merinews.com/article/connecting-with-sunil-bharti-mittal/130238.shtml
2. http://www.virsanghvi.com/interview-detail.aspx?ID=10

Highlights

* His dad was an MP (member of parliament) from Ludhiana.
* While in Taiwan, he noticed the popularity of the push-button phone -- something which India hadn't seen then. He sensed his chance and embraced the telecom business.
* In 1992, he successfully bid for one of the four mobile phone network licences auctioned in India. One of the conditions for the Delhi cellular license was that the bidder have some experience as a telecom operator. So, Mittal clinched a deal with the French telecom group Vivendi.
* In 1999, the mobile telephone industry was in bad shape. The operators could not pay the huge licence fees they had promised the government. The government asked operators to clear all existing dues. Sunil had guessed that this was coming. Airtel had talked to its bankers and gathered a substantial war-chest. When many operators could not clear their dues, Sunil swooped down and bought up their licences.

==OBSERVING UNIQUE / INNOVATIVE OPPORTUNITIES==
==FORMING JOINT VENTURES / TECH PARTNERSHIPS==
==SEEING WHAT DISCONTINUITIES / CRISES COULD COME IN FUTURE AND ACTING QUICKLY TO BENEFIT FROM THEM==