Word: bharti
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...Today, Bharti controls 54% of the Delhi market, India's largest. One former Essar executive said Bharti's secret was focus. While management at Essar, a conglomerate in numerous businesses, didn't have their eye full-time on the telecom market, Mittal "was never distracted by anything else," the executive says...
...also caught some breaks. In the mid-1990s, Bharti was unable to expand out of Delhi because the company lost bids for licenses in other markets. "People thought we would be a bit player," Mittal says. That proved to be a blessing in disguise. His competitors miscalculated. In a country where per capita income is only about $450, a mobile phone is beyond the reach of most of the population. After bidding high sums to get the licenses, carriers found they were unable to meet overly optimistic revenue projections. They couldn't pay their license fees to the government...
...Mittal took full advantage. Preying on financially-strapped companies, he acquired control of operators in the huge southern Indian city of Madras and two other rich southern states. In one case, Mittal bought out a rival over a weekend. One Friday night in 2001, Bharti was contacted by an investment banker representing Spice, a cellular carrier with a franchise in Calcutta, the capital of West Bengal state, and asked if they were interested in a deal. At the time, Bharti was considering an independent bid for a license to serve the area. The deadline was the following Monday...
...Bharti may be India's No. 1 cellular company today, but Mittal's challenges are far from over. The company's Bombay-listed shares are down nearly 50% from their February debut, reflecting investment uncertainty as much as general telecom jitters. Bharti is taking on well-entrenched competitors in mobile, fixed-line and long-distance services all at once. The regulatory environment, though improved, is still a minefield. The industry is facing a period of ferocious infighting for market share. Call rates?already the lowest in the world at under 3 a minute?are expected to keep falling, jeopardizing profitability...
...making the country Asia's third-largest market after Japan and China. Consolidation is inevitable?Mittal says he expects the mobile phone industry to whittle down to three or four major players from more than a dozen?and the advantage will belong to entrenched incumbents with deep pockets. Will Bharti stay on top? "It seems to be beyond doubt," responds Mittal, quickly...