Sunil Bharti Mittal Curated
Founder of Bharti Enterprises
CURATED BY :
Are you concerned by the fact that you are now edged out by JIO?
Can the telecom sector suddenly increase their prices?
We are just a few step away for the 5G revolution. How much difference shall be made to that?
When can I expect to have 5G on my phone?
Are you satisfied with the present economic condition and the Governmental policies of the country?
As a top corporate, how important is political stability to you?
You met business leaders globally; how do they perceive India’s story?
Why have you done this?
Why did you start a new company?
Why have you become a signatory of the Digital Declaration, and why do you believe this is such an important initiative?
What action have you taken within your own organisation to promote the values & goals of the Digital Declaration?
Tell us how you started? What were the initial influences on you when you started at 18?
When you started out in 1994-95, did you expect the mobile market to become so big? It was clear then everyone had overbid and the industry looked like it would not survive.
When we started, we knew mobile telephony had great potential in India. But no one had imagined the kind of growth, scale and the transformational impact that mobile services would have on the Indian telecom landscape. The first major inflection point was the introduction of the revenue share regime under NTP-99. It came at a crucial point, as the industry was fighting for survival. It was a bold and progressive policy decision by the government and when one looks back, it really set the industry on its growth trajectory.
But in India, business is rarely straight forward?
The regulatory environment has been a challenge. The other challenge was to get more spectrum. How have you tackled these?
Regulation has been a mixed bag for the industry. We have learned to live with it and grow despite the challenges.... The quantum of spectrum made available to operators here is way below the global average. It is amazing how despite this challenge, operators provide world-class services to the second largest number of mobile subscribers in the world.
Tell us something about how did you acquire the mobile license.
What was the number of subscribers during the 90’s?
The sector in recent years has gone through excessive competition, scams and financial pressure. How do you see the future?
The industry is recovering from one of its worst phases, where hyper-competition and regulatory uncertainty battered the balance sheets of operators and hence, the overall expansion of telecom services. Telecom is a very capital-intensive business and the financial health of the industry is paramount for it to be able to continue investing in networks. As a consequence, the rates, in particular, the realized rates, have to move upwards to allow the industry to get back on its feet.
Do you see the market shifting to data quickly, despite the fact that most companies have not made money after spending a lot on 3G spectrum?
Clearly, the momentum has shifted towards data, led by 3G and 4G services, though voice will continue to grow in under-penetrated areas in rural India. Mobile devices will become much more powerful tools and high-speed mobile internet will be a lifestyle enabler, delivering services from banking and commerce to education and health care. Just as mobiles took voice telephony to the masses much faster than landlines managed to, 3G/4G networks will accelerate India's journey towards becoming a digitally integrated economy. What we have is another massive revolution in the making. In India, 3G adoption has followed the global trend, which saw a gradual uptake. We are headed in the right direction and as smartphones become more affordable, the uptake of data services will increase. For Airtel, data services are growing at over 100 percent every year and we expect the trend to sustain.
What made you so successful today?
When I think of Sunil, I think of Chief Brand Officer as well. Tell me about how you think about your brand?
You started to look at other things, outside India in the early part of the new millennium.
Tell us about your business in Africa which was a huge challenge.
What about Retail, Agriculture, holdings? What about them?
Around 15 months after Reliance Jio, how is the telecom sector looking to you?
The market has consolidated to a level which was an aspiration but never thought would be a possibility. Now we’re looking at 3-4 players. No 2 Vodafone and No 3 Idea being put together, is unprecedented… you never see two strong companies merging… this is just because the market structure has got completely damaged. My estimate is that about $40-50 billion have been written off by various companies, a large part of them are international investors. Vodafone is over $13-14 billion in 2-3 tranches. Then there’s Telenor and Etisalat. Reliance Communications has announced closure by the month-end, Tata and Telenor are merging with us.
Would you say that this write-off has primarily happened due to Jio’s entry?
It is largely due to Jio, the pricing. Having such a long, free promotional period and in some sense, decided by laws of the land in their favour, is unheard of. In my opinion, in Europe or US, this would have been stopped. It would have been seen as predatory. Airtel has been a beneficiary of this consolidation. Revenue market share is increasing, albeit on a revenue pie which has shrunk. Vodafone and Idea together will be settling at about 40%. By the time the merger happens, we will be around 37%-38% with Tata and Telenor. I would say by March FY19, we should be back at No 1.
Airtel seems to be the natural suitor for Aircel…
I think for them (Aircel), it's only for Vodafone-Idea combination or us. Whenever there will be a possibility of a conversation, I have no doubt, we will be a part of that conversation… conversations have taken place in the past.
Jio reported on their numbers for the first time. Your views?
I think we’ll have to see those numbers in the in the next few quarters because as per analyst reports, there seems to be some grossing up of previous quarters, carry forward numbers and Jio has itself described some of the accounting policies it has adopted as being different from those in the industry, in terms of amortization of spectrum, depreciation...
In your view, is the most aggressive phase of Jio’s entry over?
A) I really feel that this is going to carry on for some more time until they (Jio) get it to a point where they have an economic case. In our industry, coming from behind is never easy. Anywhere in the world, getting into the first 10%, 11% or 12% is easy. Sometimes, the early flush gives you the confidence that things are moving in the right direction. Then you kind of start to slow down and even in Jio’s case, we have seen this slowdown in the last few months. The function of the freebies, which keep on coming, suggests that when the momentum is lost they come back onto the table, then when customers come, they begin to withdraw the freebies and increase (tariffs), it’s a cycle, it will slowly and slowly get to the point where they are comfortable.
So the hope that pricing stability is returning to the sector , is still some time away?
Yes. But if there are only three people serving a billion people, cut it whichever way you want, it (telecom sector) is a strong play.
When so much is happening, why is your stock risen to the level that it has?
Precisely for this reason, that there is hope that every customer will have to make a choice between three players. What you will start seeing is multiple SIMs dropping dramatically, because you can't have two bundles. Singular offers (will go), the time has come to even start pulling it out.
When do we see the next pieces of the Tata buy, In terms of DTH, fibre, etc?
Let’s see. We’ve focused on Tata Tele. We’ve had lots of conversations with them around many other pieces, but finally given our state and their state, we decided to focus on the first deal.
Should the next logical step be phone bundling as well?
There we have a problem of adjusted gross revenue unless that resolution happens from the Supreme Court. Because today, if you sell a phone, you have to pay spectrum usage charge and licence fee on that, it makes no sense. But once that is resolved, then yes, that will be the last piece to follow.
There have also been talks about merging with Tata Sky…
After Dish and Videocon merged, you have seen one big champion emerge, that calls for an introspection to ask if there should be some more activity in that area. And, in our minds, that conversation is happening. But we haven’t come to the point of engaging counterparties or bankers so far.
What are your views on the Trai suggestions for relaxing spectrum cap rules?
Moving 25% to 35% is very good given there are only four operators left. But in every band, there should have been a 50% cap. This whole thing is designed to allow more than 10 MHz in 850 MHz. Because 900 MHz is already done, and in 700 MHz, nobody can afford to have more than 10%. So, logically, it is only for 850 MHz, but it’s all right. We accept it.
Do you think the IMG recommendations are adequate?
16 years (to pay for auctioned airwaves) without reduction of interest is not giving any benefit. It’s absolutely inadequate. By setting up the IMG, the government recognised the crisis in the industry of billions of dollars being written off, companies closing down, employees losing jobs in very large numbers, and surviving companies being weakened by the loss of revenue and margins. On top of that, the government was alarmed at the loss of revenue that it was receiving from the industry. But one operator opposed any relief package for the industry, which is rare. I think the outcome of the IMG recommendations, therefore, was weakened from the objectives it started with. We still have hope that there will be a review and consideration, for example, of lowering interest rate on auction-related payments, license fee and spectrum usage charge.
The industry has always said that the spectrum prices have been very high…
It’s not so much the government but the competition among telcos and the auction model which are to blame. But I don’t think the government will be able to receive such high prices for spectrum in future auctions. Because most of the spectrum in M&A and trading have been sold well below the last auction prices. As (Idea MD) Himanshu Kapania said, from a spectrum-starved nation, we have gone to a spectrum-surplus nation. And you will see that the bids which the RCom spectrum receives, will show that they will be significantly lower than the last auction prices.
Any updates on the Infratel stake sale?
Lots of conversations are going on. We should be able to report back to you by the next quarter results.
Africa seems to be turning around…is the plan still on for consolidation in markets where you are not that strong?
$3 billion in sales, a billion dollar in Ebitda. It’s looking healthy now. Rwanda and Kenya are two other places where we are in the negative. We need to get out of these. So there could be an intra-country sale, purchase, merger… we are holding active discussions. Tanzania — we are Ebitda positive there, but the pricing is very low, there are too many players in that market, and something needs to be done there. And of course, Nigeria. Etisalat is up for sale. We have shown our interest.
What are the key things that the government should look at in the new telecom policy?
Telecom policies have always had one element — revenue maximisation will not be at the core of the policy. But the outcome has always been absolutely on the other side, whether it’s license fees, SUC, USOF or auction reserve pricing. I hope this time around, it gets enshrined in the core of the policy…if there are auctions, why should there be a license fee and SUC. The right of Way should become a law. All these will spawn the success of visions like Digital India. Issues on net neutrality, cybersecurity and privacy laws should also be clearly defined.
You have recently turned 60. So what, if any, are the succession plans?
If you look at our structure, Gopal Vittal is the CEO of the company, I am not. If something were to happen to me, the company would run very well. There is a solid and a very diverse board. It’s not a friend and family board. All our companies have CEOs. There is nothing to be done in terms of succession in our system. Children are doing their own things. They don’t want to come into the business, at least not as yet. We don’t even have our children on our Board.
The government has been insisting that telcos pass on the input tax credit benefit to subscribers. Your thoughts?
We are already heavily taxed. This industry is gasping for margins, it’s not profiteering. The government is right in its views that people shouldn’t line up their pockets to make money. But it’s not applicable here.
As digitization is going higher, do you think that the role of the telecom sector would be more volume based market?
Where is the telecom sector right now in the cycle of evolution of the sector?
Are you indicting that we are somewhere around the bottom in terms of tariff structure?
How has it been fighting the competition in a dynamic market?
Do you think it is fair hypothesis once the cycle of start moving up and profitability becomes high with only three companies remaining in the market and exploding in terms of volume?
The telecom secretary has said India can do with five telecom opertors. You have called for consolidation that may reduce the number of players to four…
When we went from 2 to 4 players or 4 to 5, it was okay, but going all the way to 12 operators has led to $20-25 billion being written off. You could have built roads, bridges and God knows what all with that amount of money. We just let it go up in smoke. If you take BSNL out, it is four operators, which is clearly us, Vodafone-Idea combined and Jio with one more, which could be RCOM, Aircel, Tatas. If all three of them come together, then there may be a case for a fourth operator. But just between the two of them, they are sub-10% market share and declining very fast because you need serious investments not only to cover up 3G networks, you now need a rollout of 4G networks. So my own view is that there is a question mark whether that entity will come into some shape form with three of them coming together. My own view is that you could be down to three operators.
Are prepared you for the 5G network?
How important is the role of the telecom sector in India?
You have grown phenomenally well in the last 15 years ago. Were you more anxious then or now?
You have seen a fair amount of turbulence in the last 20 years. Would you agree to that in the next 2 years would be more turbulent?
However, the scale and audacity that Reliance Jio has launched surprised you then? Do you feel that it has been made as disruptive as it is made to be?
Is the era of voice calls is over by Mukesh Ambani. Is it?
For companies like Jio bringing voice calls for free, how disruptive would it be for companies like Bharti where revenues from voice calls are high?
What about your 2G spectrum? Will you leave the death of 2G spectrum or will you wait to see if your challenger can change the customer behaviour?
Will that allow competition in the market?
The competition now lies in the space which is increasingly outside our control. People are using us just as a journey to get to the destination whether it is Facebook or Whatsapp. So most of the battle is being fought there. Over here, you are looking at of 1 GB a day. The paradigm has shifted. You are not talking about 1 GB a month. You are talking about 1GB a day by giving 303 rupees plus eight or nine rupees a month for the next 12 months. That kind of amount if it carries on, or even half of this after the promotional offer, it’s very inexpensive compared to any part of the world including Africa, Bangladesh. Finally, you can always have the power to intervene. Just because you want to control tariffs, you can’t have an unviable market structure.
Do you see forced consolidation happening?
It´s already happening. Economics are dictating it, not the regulator. This industry is not like you put up a fertiliser plant or a refinery or a steel mill that keeps on producing with some repairs and maintenance. You need to invest a lot of money every year. So if you don’t have the balance sheet to do it and if Airtel is in a single digit ROCE (return on capital employed), you can imagine where Voda and Idea are and Jio will of course will be some time away. You can’t have an impaired industry if the dream is to have a Digital India.
What can the government or regulator do to stop this bleeding?
It is self-inflicted. There is a new operator in town and everybody is trying to hold on to their market share. So there is pressure on tariffs. What can the regulator do - encourage consolidation which it appears they are very clear about and I would say clearances for mergers should come expeditiously. The second part is spectrum pricing which in India has gone really really out of control. Whatever has been paid in the last few auctions is not sustainable to give the low-value proposition to the customer. And finally, telecom has to be a means to an end and it can’t be an end in itself. If just want to pick up a lot of money upfront, then you are compromising your rollouts and investments in networks.
Can spectrum prices be cut when agencies such as CAG, CVC or CBI could question the same?
They will reduce it because every time they will come out now, it will be unsold because you see what happened in the last auction? Who is going to buy an expensive spectrum? There’s no capacity to buy expensive spectrum… Don’t forget in the earlier auctions, both 800 and 1800 MHZ were lowered down. So there is a precedent which nobody has challenged or objected to. It should be a fair, open auction. We are not saying go back to the days of giving out spectrum — India can’t do what China has done (give spectrum free). That’s the most ideal situation but India can’t do that because we have a Supreme Court ruling now, so they will have to go through the auction. All I am saying is if the auctions don’t yield results, you have lower pricing.
Would you like to see another auction this year?
It won’t happen. There is enough spectrum that has been tanked up by us, at least. Vodafone-Idea merger will yield a lot of spectrum for them. I would say Jio has picked up the spectrum they have wanted. They may want a little bit here and there, I don’t know. So who is the buyer? We have moved to a spectrum surplus situation for the moment. Eventually, when the data consumption goes up, you will need spectrum. My prediction is that there can’t be an auction in 2017-18. Can you imagine there was a time when you were clamouring for more spectrum? But now, with our Telenor acquisition and all the spectrum that we bought from Videocon, Aircel, Qualcomm, we are done with auctions, more or less.
Do you think that 2G, 3G and 4G can co-exist simultaneously or you might have to reform some of the program?
Do you foresee a scenario where voice revenue shrinks and data are used to not offset that loss?
How much scope is there for data tariffs to come down?
When do we see Airtel react immediately in tweaking your existing plan? When do we see Airtel moving in that direction?
How price elastic is the data service?
How much time do you think it will take for the consumers to switch from 3G devices to 4G devices?
We haven’t seen a situation of divide between brands of existing operators. What good is it? Will it ease the path that we’re seeing in the sector right now or with the nature of nature of personality? What good is it?
How would you respond to the comment made by Mr Ambani on incumbents misusing the dominant position & creating entry barriers?
Are you paying by the kind of charges about how th discourse has been lowered over the last couple of months?
Would you be open in sorting out these issues and other issues like number portability and all that? Would you be open to that?
The other issue is raised on the number portability as there are perceptions that has been created that one party is blocking subscribers to port form their network to another network?
How will you resolve some of these structural issues? Will dialogues between operators resolve?
Do you feel that the regulator is not creating a level of playing field, that it is being distorted to benefit the new operator?
About the spectrum topic. What is it going to be? How significant is it going to be which is going to be a big thing for you? Are you going to be aggressive?
For example 700 MHz, which is looked as a lucrative sort of spectrum is very aggressively pressed. Would you agree to that?
If I read you correct, for Bharti I hope it’s not a make or break option for Airtel as it may be for some other operator?
Six months from now, do you think that Bharti, Vodafone, Idea or Jio would happily coexist?
Do you have such levers or would it be fair to say that in the next couple of years the industrial, the whole revenue and margins will be under pressure?
You said Bharti will continue to lead and grow even in terms of revenue. But what about the margin? Would it be broadly stable plus or minus, here or there?
Jio has said they are going to charge for services from April 1. How would this impact operators like you and when do you see the situation easing?
It will ease once Reliance probably gets some scale. Their whole need is to get scale, customers, revenues. The good news is they have announced they are going to charge from April. But, we think it is unsustainable for the industry to give 1GB day for that price. It is pretty low.
Will it hurt revenues and profits?
It´s better than zero. We have been living with zero for the last six months. Eventually, this industry needs to have return on capital or else investments in future networks will slow down.
Are you disappointed at the lack of action to rein in the industry´s bleeding and the regulator´s role?
This time, we went straight to the various authorities (over Jio´s promotional offers). We went to TRAI, they came back with a message that they believe it´s fine. The next forum is to go to TDSAT. That’s where we are currently. But I was kind of happy to see that the Telecom Commission has also taken note of the revenue impact for the government --- at the end of the day, every 100 rupees the industry gets on the top line, nearly Rs 40 belongs to the government.
Your last quarter earnings were dented thanks to Jio. How long do you think this will go on?
Watch out for March 2018, when the dust will settle down. They (Jio) are going to charge from April 1, so by 31 of March you will start to see a new order emerging from this industry. I am hopeful it will be better. The tariffs they have announced are still very aggressive. Which means you have to got to respond. You have go to do more packages, throw in more data. All those things need to be done.
With these pressures, is the option to exit Africa on the table?
No. You must understand our Africa operations are not a load on India. Africa currently has about $3.4 billion dollar in revenue and around $ 800 million-plus in EBITDA. Its spends about $600 million in capex. Overall Africa is taking care of itself so its not a load on India. But would we want to see superior returns, healthier EBITDA.
Are you looking at consolidation in Africa too?
We will look at a few countries where we feel that market restructuring is important like India, and we will be looking at a few countries where we should acquire or merge to change the market dynamics. It is hard for me to put out countries. But wherever we are not in the top two, which is not too many countries, we would like to step up. We acquired Warid in Kenya and Uganda. Uganda has become very strong for us and we acquired Congo-Brasville. Kenya was Essar. We keep on doing this. Recently we acquired the cable network of Orascom. We have to get the structure of the industry right.
Would you say the new tariffs of Jio would be the new normal?
Well, if people can pay 311 Rs a month for 1 GB and that becomes a norm, it's twice the current ARPU (average revenue per user).
But it’s also many times the data that industry is giving right now…
I know. The costs of the network are not linear. If you go to ZTE or Huawei and ask them to demonstrate massive Mimo, you can quadruple or probably go eight times your capacity with the same spectrum. Nice good innovation is happening on the network side where you can generate a lot more capacity than in the past. So technology is also coming to help. It's not that if I have 2000 terrabits capacity today, I have to get to 5000 and double my investments. It´s probably just 20% more.
Wouldn’t that be more difficult for incumbent operators like you with legacy networks?
There's no such thing as a legacy network. It's just like phones. It´s like saying ´Do you have a legacy phone?´ Every two to three years, you change. These networks have been constantly getting changed… there are no networks we have which are pure 2G networks. They are all common strands, common cabinets — 2G, 3G, 4G — I mean it's software upgrades Few cards change.
Are you saying the cost is the same for everyone?
Yes, but you have to keep on adding more. We still spend $2 billion a year. It doesn't mean the same network will produce more, but I am saying it´s not that it becomes $5 billion a year. I was spending $2 billion in 2G, I spent $2 billion on 3G and I will still be spending 2 billion in 4G with these massive capacities.
There is talk that sellers are settling for lower valuations…
That's obviously the case. It goes without saying. there's less people buying spectrum, the spectrum prices go down. The less buyers for exiting telecom companies… and it's the same case everywhere. If I had to sell my Africa assets five years back, I would have got a lot more money than if I do it today. We sold Sierra leone and Burkina Faso to orange. If I would have sold two years back there would have been more money to be made. It is a function of an industry which is in decline.
Are you disappointed by the way the telecom sector has moved in the last two years? There are operators now with no option but to sell off. What is the policy prescription?
Going to 12 operators was a wrong decision. It´s not just India, but the world over. Look at Africa. There are still some countries I go and meet regulators… they want to dangle one more licence. I met an African minister now who´s persuading me to come and get a fourth licence. I said you should merge your third with your second because your country is small, you can't even have three operators. So the policy prescription has gone wrong everywhere. The good news is I think that governments are realising the need to consolidate.
What do you make of the fact that Jio has 100 million subscribers, but incumbents like you haven´t lost as many users?
That's simple. It's dual sim. Almost anybody with a Reliance sim has another sim, so you are right. We have not lost customers, we have gained customers. But they also have 100 million, so the math doesn't add up. The answer Is double sim. The usage moves.
Reliance Jio is investing in content. Is there a plan to acquire content?
No, our philosophy remains different. We would like to collaborate with content providers. Thats been our stated position from day one. We will collaborate with all of you for our news, so become the platform of choice and so we would like to be neutral on content rather produce curated own content.
What´s your take on 5G in India?
Well some experiments have started. Before u take a breather from the 3G and 4G launch, I was thinking that 5G will come in 2021, but now it looks like it may be 2019, when you will start seeing some early networks and handset availability. But in India, my view is that 5G applications are more in IOT (Internet of Things) and that needs to develop much more in India. Today, all electricity meters should be read by IOT. Why should anybody go for meter readings, I can't imagine. We should be able to just have an embedded chip meter that would pay for itself as well. An Airtel money account or another wallet reads the meter and pays for itself. These things are going to happen but I think India is slightly lagging behind.
You have set up a group in the GSMA to figure out how to do network sharing so that everyone is not building Highways of their own.
It´s silly but I think large parts are settled. Passive sharing is settled but active isn't, and there are challenges. You like a particular band of spectrum to run your network, I like a different spectrum, you have to put the spectrum together and if you are a strong operator, you want 50000 base stations. I can't afford to build another 50000 I want 25000. These are the kind of things where discussions fail, and inevitably have failed. And the other part is suddenly when you do these things some m and a happens, and that creates difficulties. So these are some difficulties that we are trying to overcome. One option is to go for a netco.. Like Independent tower companies, can there be an independent network company that produces the mbs and minutes. Now that's a futuristic idea. My view is one day, that's going to happen. But that will happen when you have in a country three strong operators like America, two strong operators in a European small country or three in a large country, four in India. Today, between us, Idea and Vodafone (let's leave Jio for a moment) more or less, there's a 10% difference in networks that are available, sometimes someone Is higher. But in the last two three years, we took the leap because we really went absolutely gang bust with the network deployment. But in the end, it's a 10-15% margin. If you are at that kind of margin and replicating full costs of 100%, then you will start coming to your senses and say, let's come together. But when you have a difference of 40% to 50% then it won't happen.
Post the Telenor deal, Moody’s has retained its credit positive rating on Airtel, contingent upon your deleveraging plans to slash debt?
We are not overtly focused on that. Whenever we can sell something, we will, but this is a company which has solid free cash flow. Out of our large debt that is being talked about, you have to focus on one thing. There's no bank that chases us, we have no overhang of bank debts coming on our heads, we have a 12-year plan to pay the DoT and there are no covenants on that. It's got higher interest rates of 9.5 or 9.25 per cent for the new auctions, we will like that to be lower. That´s about $6 billion. Another $5.75 billion is our bonds in Swiss francs, dollars and euros. By the time they mature, we can repay them by issuing fresh bonds. So nearly $12 billion is in these two buckets. Today, banks keep coming to us to lend more money, but we don´t take it. So it's not an issue. The market is overtly focused on this. We are very conservative in our debt situation, we like to be at 2.5 debt to EBITDA ratio, we are probably just under 3 now. It´s always nice to have some headroom, but do keep in mind that all other operators in India are at 5 or 6. So we are in very good shape.
In a couple of markets, you have over 50% share with Telenor. Is that a concern?
I don't know, I just ot a message saying it's only Bihar and by 2% or 3%. By the time the merger goes through, that won't be there anyway. You must understand the day Jio starts to charge, that first quarter itself, even just if you mathematically say they are 10%, everybody's share comes down by 10 per cent, because it's a mathematical calculation. Today we are 33% of the pie ex-Jio, when Jio pie gets distributed it resets the table, so it's a very small breach of 2 or 3 per cent which will disappear anyway.
What’s the progress on (hiving off) Bharti Infra?
We have set up a committee (but) after this Vodafone-Idea merger, we have seen the stock yo-yoing, so we will probably take some decision in the coming weeks. Hopefully, before the next board meeting in April. Also, we have not taken a decision on whether it will be a majority or minority, all these decisions are up in the air.
Do you believe that once Jio starts charging, its user base will come down from 100 million?
Usage will come down. Subscribers, I don't think so. People have to use two sims out of four operators, chances are two of the leading operators are in every handset. So I don't think the number of customers will drop that much but the shift of usage to their side that was free, will start to get moderated.
What is the status of the point of interconnect issue?
I don't hear a cry, except one or two circles. You don't hear a lot of that noise anymore.
TRAI has come out with a paper on predatory pricing. Is it too little too late?
You said it, I am not going to say it. My view on that is that the regulator needs to have a long term vision for the sector. You cannot be doing things in fits and starts. I think too much of activity is happening in a reactive manner. I am therefore, glad that the TRAI has called upon group of experts where they include industry to look at the long term roadmap for the industry that will talk of interconnect, issues of tariffs, predatory pricing or closed user network issues. All these issues need to be dealt with in longer term. This industry deserves, to my mind, much better, because if the Prime Ministers vision of a Digital india has to be realised to its fullest extent, telecom has to be there at the centrestage at the core of that vision. I think it´s the responsibility of the regulator TRAI to ensure there is an amicable co-existence of operators. There's less noise and more work in the system and some stuff is being done by TRAI but all I would say is don't do it in fits and starts, have a comprehensive view of this industry. TRAI is coming alive to some of these (long pending) issues. I only hope when these recommendations come from TRAI, they don’t land us in further litigation, but are futuristic, visionary and takes care of all stakeholders.
You said that the telecom industry´s global reputation is just slightly better than tobacco…
Yes, it´s terrible. We did a survey. It has improved by 1% last year, but that´s nothing. People remember us only when there are call drops or a data session is going slow and you keep watching the windmill going around. If you have no problems with downloads or calls, you are not going to remember me, because that´s a given. The problem is that no one sees the hard work needed in this industry, digging up streets, dealing with RWAs, government and all the technological shifts. Electricity is needed 24-7. All this is not seen by the customer. That´s human nature. When we don’t perform, we get seen as that’s the time you think about us and then don´t rank us highly. Of the four or five issues we picked up, the biggest one is international roaming and we have woken up to that. I have taken the lead as the GSMA chairman on that and I must say that most of the other big operators, I met nine out of the global ten… some murmuring was there, because there´s a large roaming revenue pool of about $50 billion. It does two things — it reduces your local rates, because it offsets as you make more money here. The ROCE is still 12% for the global industry. It´s not that we are having ROCE of 32%. It´s 12% because of the roaming, now if the roaming drops, this pool drops and if that happens, local tariffs may go up. My view is that if the local tariff goes up by a few paise, its alright. Don’t have those roaming shocks that keep on coming across the globe. Other fear was Romania has much lower tariffs. If that sim starts coming to Germany and they start living there, then you have destroyed the local market. Like we have a fair usage policy, we will create a fair roaming policy so you can´t just take a sim and stay somewhere else for two months. Human nature is such that if the price of Germany is higher than Romania, sims will get smuggled there. So we will put some boundaries around it. Currently, if you don’t take a roaming pack, it would be Rs 65000 bill instead of Rs 6,500. That will be history from April 1, we have said. I have heard from about ten operators and they are going to follow. In this one year, my personal delivery to this industry is that this international roaming should go away and bring 5% to 7% up our reputation index.
On fibre installations, Bharatnet is coming up while private players as well as BSNL is setting up capacities.
This is a wasteful expenditure. Like tower companies, why can´t there be a Fibre Company that everyone can use. Unlike radio spectrum, where technology keeps moving, nothing changes much here except the electronics. You can have your own electronics on both sides, but the fibre, the digging of streets should be a Fibre Co. IF there are five fibres running in parallel, which are using a fraction of the capacity, it´s a national waste.
You have become the secretary of the union, Would you like to share that story with us?
At the age of 18, you started your own business venture, and now you are one of India’s top 10 business magnates. How did you make it all happen?
Why is it Bharti as your middle name? Is it that reason that the name has given you name, fame and success to what you are today?
What are the principles of your success?
Your father was also in the bureaucracy and was a close associate to the prime minister at that time. Was there a sign of any sort of advantage for you in there also to success?
You have created a huge traffic in radio signal to your network. How have you earned so many subscribers?
But during your times, there was a lot of politics happening for acquiring the license of telecommunication. How would you like to share that experience with us?
However with new reforms and policy. You must have been benefitted from the policy also?
If the government’s policy is against your decision then how did you achieve to be one of world’s best telecom service provider?