The Fighter

Sunil Mittal has fought many a battle, and emerged on top every time. He’s now readying for the biggest scrap of them all.

- Manu Kaushik

Life comes full circle. Nearly 40 years after starting his entrepreneurial journey, Sunil Bharti Mittal, Chairman of the $14.3-billion Bharti Airtel, is standing at the crossroads. The business that he has built from the ground up is under attack from Reliance Jio, the $20-billion venture of Reliance Industries. For Airtel, the most unsettling aspect of Jio’s launch in September is the free voice calls that the start-up is offering to its customers for a lifetime. Other major telecom companies, such as Airtel, Vodafone India and Idea Cellular, derive nearly 70 per cent of revenues from voice.

Airtel’s revenues from non-voice segments – data and value-added services – have grown recently, rising from 27.4 per cent in the September 2015 quarter to 30 per cent in the September 2016 quarter. But the dominance of voice revenues is still overwhelming. Any dent to voice revenues will have a big impact on overall earnings. IDFC Securities, for instance, expects Airtel’s net sales to fall by 0.4 per cent and EBITDA (earnings before interest, taxes, depreciation and amortisation) to slide by 5.2 per cent in 2017/18.

Over the past 22 years, Mittal has fought his way through to become market leader with a subscriber base of 262.67 million (as on October 31, 2016). Every few years, he has to chalk out a new strategy to take on aggressive newcomers. For instance, in 2003, Reliance Infocomm, controlled by brothers Mukesh Ambani and Anil Ambani, forged a war against Mittal by offering handsets and services at a discounted price of ₹500 per month. Mittal patiently allowed the buzz created by Infocomm to die down.