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New CEO Kohli says strategy will be offensive, not defensive

New CEO Kohli says strategy will be offensive, not defensive
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First Published: Wed, Mar 21 2007. 09 38 AM IST
Updated: Wed, Mar 21 2007. 09 38 AM IST
By A Staff Writer
New Delhi: Bharti Airtel, India’s biggest mobile phone services firm, has appointed Manoj Kohli as its chief executive officer in place of founder Sunil Bharti Mittal, who led the company from a small maker of fixed line phones to the third-most valuable stock market-listed company in the country.
The 48-year-old new chief executive will report to Mittal, who moves to leading Bharti Enterprises, a holding company that spearheads the Delhi-based business group’s drive into businesses in retail, insurance, agriculture, software and telecom manufacturing. Bharti Airtel’s managing director Akhil Gupta will also give up his daily operational role.
Kohli will lead the challenge of maintaining Airtel’s leadership—it has a near-31% share among India’s GSM cellular operators and about 23% in the total market, including CDMA phones—at a time when Vodafone Group, the world’s largest mobile-phone services firm by revenues, enters India.
The Newbury, England-headquartered company is buying a 67% stake in Hutchison Essar, India’s fourth-biggest cellular operator, for $11.1 billion (Rs49,000 crore). The suitor’s CEO Arun Sarin intends to make Vodafone India’s No. 1 mobile phone company and will have a 20-25% share by 2012.
Kohli, in a short interview, said Bharti Airtel will not react to moves made by Vodafone when it starts operations in India later this summer, but will continue to lead the market. Following are excerpts from his conversation with Mint:
Do the challenges of the new role seem overwhelming?
The last decade has been a glorious one for Bharti and my responsibility is to build another glorious decade of sustainable success, building an organization that is customer centric.
What will be the top elements of your market-protection strategy now that Vodafone is here?
We are not in a safeguard mode. Let me clarify that. We, as a brand, will be on the front foot. We will lead market growth, we will lead rural penetration in India, and we will ensure orderly growth of the market as a leader. It is not a safeguard issue; it’s an issue of building the market before others and picking a bigger share of the market.
Any targets?
Sunil has talked about having 125 million customers out of 500 million—about 25% of the market (by 2010).
What are the biggest risks in getting there?
There are really no big risks on the horizon but there’s one big constraint: that of spectrum. Wireless spectrum is a raw material that the industry needs to not only sustain its current customers but to also grow in future.
Any other constraints?
We need to ensure that the organization remains agile, swift, small... so that we retain the Bharti DNA of entrepreneurship, passion and speed. We need to have a model of sustainable success. In global scale, we’re still a small telecom company; in our mindset, we’d like to remain that: small, swift, slim, lean and efficient rather than be bureaucratic and hierarchic.
As you expand, your costs will go up and your revenues per user will drop...
The business model we have is sound for the strata we operate. Our financials will remain healthy despite falling ARPUs (average revenue per user). The issue is not really one of costs; it’s an issue of efficiency and productivity. We will become more efficient, more productive—the cost per minute we sell will fall. Our motto is very clear: growth with productivity.
As you take over the reins of the company, does it worry you that Mittal will be watching over your shoulder?
(Laughs) We have a very collegial way of working. Sunil has this positive energy, Akhil is an ideas man. I constantly use these two leaders as a sounding board where I utilize them to get ideas and validate my ideas. It is more an enabling process.
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First Published: Wed, Mar 21 2007. 09 38 AM IST
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