Sunil Mittal, the chairman of Bharti Airtel, has a bit of the evangelist in him. Little wonder then that India’s most powerful industry lobby picked him to be its face last year. For a few years, Mittal has been voluble about Bharti’s unique business model and how this can be taken overseas. Now that India’s biggest telco has said that it is in talks with one of Africa’s biggest telcos, a closer look at this is called for.
Bharti operates in a market where average tariffs per minute on mobile phone calls are less than Re1, but still makes a lot of money. This is because the firm has cut costs by outsourcing network construction and management in a model that is close to pay-per-use. It has also outsourced IT, a move considered radical by even US and European telcos.
India’s IT firms built their business by convincing customers elsewhere that their work could get done at lower cost here. Bharti operates on a low-cost model and is convinced the model can work in other parts of the world— or at least in Africa.