This shouldn’t be happening.

We shouldn’t be here at the Bharti headquarters in New Delhi’s lush Vasant Kunj area, discussing telecommunications with Sunil Bharti Mittal. Not in 2010.

For, if he had stuck to his original plan—and he is a big one for planning ahead—Mittal should have retired from telecom.

Instead, Mittal, 52-going-on-53 (but a very fit one at that; he runs, he says, and watches what he eats), is in the fight of his life, although you won’t hear him say it.

Bharti Airtel Ltd, the telecom company that is part of the conglomerate he heads, has just completed an expensive African acquisition, paid a further 15,609.82 crore in fees to the Union government in return for radio waves that will allow it to offer third generation telecom and broadband wireless services, and seen a rival with tremendous money and lobbying power, Reliance Industries Ltd (RIL), make a re-entry into the telecom space.

At the helm: (clockwise from top left) Mittal in the cockpit of a Royal Air Force Red Arrows Hawk in November 2007 in Delhi. Vipin Kumar / Hindustan Times; the telecom czar and his wife Nyna keep their private lives strictly private. Rajesh Kashyap / Hindustan Times; and colleagues say Mittal’s vision of planning ahead is at the heart of his success. Sanjit Das / Bloomberg

Mittal’s full-stop-at-50 plan was public knowledge. It was never clear what he would do, but it was evident that it would be in the public policy space. Even an entry into politics couldn’t be ruled out. His father, the late Satpal Mittal, was a Congress party loyalist who gave his sons the middle name Bharti (from Bharat, the Hindi name for India) to indicate their Indianness.

Few people doubted Mittal’s resolve because his ability to plan ahead and his certitude about the next step are well known.

As far back as 2004-05, he was talking about an African acquisition. It took him till 2010 to make one, but not for want of trying.

Manoj Kohli, the head of Bharti Airtel’s international operations, has known Mittal since 1995 and worked for him since 2002 and he says this vision thing, the ability to plan ahead—audaciously ahead—and follow through is at the core of Mittal’s personality.

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It’s also one of the constants about the man.

There are others as well.

Rain or shine, Mittal’s disposition is always sunny.

He is always immaculately turned out; he is usually dressed in sharp suits, sharper shoes, crisp (so crisp they sometimes crackle) shirts, and contrasting ties.

He never speaks about his personal life (and wife Nyna, while no recluse, keeps a much lower profile than other CEO Wags).

He never talks the competition down. Or up.

He rarely forgets people. In the 1990s, he used to visit Delhi’s Sanchar Bhavan where the department of telecommunications is located. This is what any telecom entrepreneur who wanted to get things done did. But Mittal still remembers and is remembered by the then-mid-level, now senior-level bureaucrats at the department.

So, if almost three years after his original deadline, Mittal is still running the business, coping with unfriendly competition, unsympathetic regulations, a lot of debt, and a worthy rival, there is at least one person who doesn’t think there’s anything unusual about this.

Clear vision

The way Mittal sees it, he doesn’t really run the company.

Sanjay Kapoor runs local operations and Kohli, international operations. And finance, an important function in telcos, is headed by long-time confidant Akhil Gupta. “The line of escalation is very clear," says Mittal, explaining that there are very few things on which he is required to weigh in.

“Very few things go to him," echoes Kohli, who spoke to this writer over phone from Ouagadougou, the capital of Burkina Faso, and a stop on his second whirlwind tour of the 15 African countries where Bharti now has a footprint.

Kohli, who ran all mobile operations of Airtel until recently—the company didn’t have much of a global footprint till it took over the African operations of the Zain group—joined Bharti in 2002, but has known Mittal since 1995. When he joined Bharti, the company had around two million mobile subscribers. At the end of June, it had 137 million.

Much of that growth, he adds, wouldn’t have been possible if only a few people had been making decisions. Only critical issues related to strategy, regulation or the company’s reputation go all the way up to Mittal, says Kohli.

Still, Mittal does admit that he is more in the “business and commercial" than in the “public policy" space. He attributes this to the absence of something really attractive to do in the public policy space. “You must do what is available to you," he says.

And he also attributes this to the business challenges Bharti faces, in telecommunications and other businesses in which the group has interests.

One such challenge is the amount of debt on Bharti’s books, around $12.5 billion (around 57,800 crore).

On a safari

Mittal is not worried by the debt he has taken on to expand his business. The way he sees it, the company’s interest payout on the $7.5 billion debt it has taken to fund the acquisition of Zain’s African operation is a mere $200 million a year. From his point of view, “for $200 million we have Africa", and not just any presence in Africa but a “big start". Spread across 15 countries, Zain’s African operations serve 42 million customers and ended last year with $4 billion in revenue.

The Indian debt, taken on to fund the acquisition of spectrum for third generation and wireless broadband services, is also small compared with the company’s operating profit, says Mittal. Bharti ended 2009-10 with Rs9,981 crore in operating profit. Bharti says that his debt burden is thus around 2.75-2.8 times his annual operating profit. He contends that is not outrageously high “because there are many companies in India who have a ratio of 4:1". Although he concedes that the analysts initially disagreed with his assessment, he says most of them have since come around to his point of view.

Mittal says that’s because Bharti had very little debt (also known as leverage) on its books before its Zain acquisition. Analysts typically look at the debt on a company’s books in relation to its shareholders’ funds to gauge whether the debt taken is within reasonable limits. This is called the debt-equity ratio. “Bharti before Zain was absolutely deleveraged. A net debt to equity of 2.5 is comfortable. Anything above this is uncomfortable. With 2.8, they are just above—on the edge. We don’t like companies that have a debt-equity ratio of 3 or more," says Rajiv Sharma, analyst with HSBC Securities and Capital Markets (India) Pvt. Ltd.

Some of the worries about Bharti are reflected in the market’s treatment of Bharti’s stock. At the Rs320 levels at which it was trading in July, the stock is well off its 52-week high of Rs467, although it has recovered from its November lows of Rs229.

Still, Mittal isn’t worried about this simply because it is a place in which he and Bharti have found themselves before. In the early 2000s, soon after his company made an initial share sale, the stock dropped from the issue price of Rs45 to the low 20s.

The market value of the company isn’t something that senior executives at Bharti worry about, says Mittal.

As for regulations and RIL’s entry, Mittal says there is little he can do about it.

“There were 14 players; now there will be 15," he says of the latter.

Whispers in Delhi would suggest that Mittal himself is no slouch when it comes to lobbying, but the last favourable policy decision that went Bharti Airtel’s way was in 1999, 12 years ago, when India allowed telecom companies to move from a fixed-fee regime to a revenue-sharing one—a move that, in hindsight, may have marked the beginning of the country’s famed telecom boom.

This seemingly philosophical acceptance of things as they are may actually originate from Bharti’s enduring success.

Of the eight companies originally given mobile telephony licences in the country (RPG Enterprises, SkyCell Digital, Max Telecom, BPL Telecom, Bharti, Sterling Communications, Usha Martin and Modi Telstra), Bharti is the only one whose ownership hasn’t changed.

And when Bharti entered the business, Mittal was a nobody, competing with the likes of the Ruias, Goenkas and Modis.

Bharti is expected to end 2010-11 with consolidated revenue (including those of the Zain operations) of Rs55,800 crore.

The story of how a one-time bicycle parts and gelatin capsule manufacturer entered the business of telephones (an encounter with the then-novel-in-India push button phones while on a foreign trip), and subsequently the business of mobile telephony is well chronicled.

What hasn’t been written about though is the story of how Mittal did this—a journey that illustrates just what makes him one of the country’s most successful businessmen.

For much of its early and growth years, Bharti was run by a small group of individuals. It wasn’t till the early 2000s that Mittal really started speaking about building an organization. Through those years, Mittal kept the start-up team together.

Convinced that he and his managers knew nothing about telecom, Mittal partnered with some of the world’s best firms. Telecom Italia, BT and SingTel, have all been, or continue to be, partners.

And he and Gupta managed to raise money at the most effective rates, helping it roll out its operations at a reasonably low cost.

In the 2000s, after the company listed on the stock exchanges, he realized that he had an opportunity to become what he once described to this writer as a “once-in-a-generation" company. Mittal’s logic was that once in a while, a company would emerge on the Indian landscape that would change things. In the 1980s, it was Reliance. In the 1990s, Infosys. And in the 2000s, he wanted Bharti to be it.

But he didn’t stop at building an organization. Much like Reliance changed the face of refining through backward and forward integration (the famous field-to-pump strategy) and Infosys with its global delivery model (where engineers in India worked on projects elsewhere), Bharti outsourced its IT as well as the creation and management of its telecom networks, in deals that are still considered revolutionary in the global telecommunications industry. Bharti effectively became a financing and marketing company.

Not all of this was done without help, from partners such as BT and Telecom Italia, financers such as Warburg Pincus, and strategic investors such as SingTel.

Warburg’s investment in Bharti—a little short of $300 million over two years starting 1999—was done at the behest of Pulak Prasad, one of the private equity firm’s fund managers. By 2005, the firm had exited the investment. Its total profit—$1.3 billion. It was one of the earliest success stories in the private equity business in India and made Prasad an urban legend.

Rajeev Chandrasekhar, now a member of Parliament, was Mittal’s peer then and the two were considered Indian telecom’s Gemini twins, and once even appeared on the cover of a business magazine in dark suits and dark glasses, much like MIB. Since then, Chandrashekar has changed orbit; he has sold his telecom business, gotten elected to the Upper House of Parliament, and become an urban activist back home in Bangalore.

For some time in 2007, it looked like Mittal would follow a similar route.

To-do list

That year, Mittal became head of the most powerful Indian business lobby, the Confederation of Indian Industry, travelled around the world, and was one of the moving forces behind India@60, an effort to showcase India to the US. Nandan Nilekani, one of the co-founders of Infosys and now the head of the Unique Identification Authority of India, was also involved in organizing the event. Since then, Nilekani has written a book, entered the domain of public policy, and gotten involved with the government.

Mittal, inexplicably, has gone back to business.

Only, if you listen to him, it wasn’t all that inexplicable because there were several loose ends.

Some of those loose ends, or new ones that have made an appearance since, are still around.

Mittal rattles them off; clearly, they would seem to be part of some mental to-do list in which he has to check the boxes before moving on: the African acquisition, which will need a few years to stabilize; and new businesses where the company has to decide whether it wants to stay invested, or exit.

The new businesses include financial services (and Mittal is categorical that Bharti will not apply for a banking licence though the synergies between telecom and banking are well known), retail, food, software and realty.

Three of these, finance, food, and retail, are businesses Bharti Enterprises, the holding company, entered with the “serious intent of creating large businesses", says Mittal.

The finance business, a partnership with AXA, is doing well but can move faster, he adds, but the other two, the foods one, which is a partnership with Del Monte, and retail (a partnership with Wal-Mart) are “work in progress".

There’s also the Bharti Foundation, which builds schools, and provides uniforms, books, and food to students. It currently covers 30,000 children across 236 schools and Mittal wants to increase that number to 100,000 students.

Still, despite his obvious passion about the foundation’s work, Mittal may not be happy looking at just that. He doesn’t rule out an entry in the public policy area, but is also honest enough to admit that three years from now, he may have found a new business to get obsessive about. It is true, he admits, that between 2007 and now, he is back “more in the commercial space and the foundation space rather than the public policy space" and that this is “clearly by design".

Mittal pauses as if to think, his eyes looking out through the plate-glass windows of the ground floor meeting room in the Bharti HQ. It is July, the sky is grey, and it’s probably wet and muggy outside although it is cool and nice in the meeting room. Mittal shifts to get into a slightly more comfortable position on the sofa and breaks his reverie.

“People like us can never relax."

Shauvik Ghosh contributed to this story.