And Bharti Comes to Town

First it was speculations, then formal declaration of ‘exclusive talks’ that opened on Monday, February 8, 2010; then it inched into waiting time. But when finally Bharti Airtel, the Indian telecommunications company and Zain, the  Kuwaiti operator, agreed, on June 8, 2010, for the former to take over the latter’s African operations in an acquisition deal to the tune of $10.7 billion – the largest ever telecom take-over by an Indian firm – Bharti did not waste time in moving into Nigeria to see for itself where its biggest revenue could be coming from – and no doubt also where the greatest requirement for capital outlay will need to be made. In its first press conference in Nigeria, Bharti laid the cards squarely on the table: we are here for long term partnership. Three principal characters played key roles during the press conference, held July 6, 2010, just a couple of days to one month of the deal competition:

‘Our best is yet to come’

His full names are AYOOLA OBAFOLUKE OTUDEKO; but this industrialist is simply known and called OBA OTUDEKO. It could well be said that for Zain Nigeria, which name will change to Bharti Airtel Nigeria, it is like the closing of a circle that began in the year 2001 when the then Econet Wireless Nigeria won the Digital Mobile Licence to offer mobile phone services in Nigeria. OBA OTUDEKO was Chairman of the company. Now, however in its new colour, which it will formally don on October 1, 2010, AYOOLA OBAFOLUKE OTUDEKO returns again, as Chairman. He is also Chairman of First Bank of Nigeria Plc, and is called in many circles, chairman of chairmen.

Otudeko’s return to chair the company Zain/Bharti Nigeria has not come without some hard boardroom fighting and some litigation. But that is a story for another day.

In Bharti’s first press conference held at Eko Hotel, Lagos, on July 6, 2010, to formally announce its entry into Nigeria, however, it was its Chairman, Otudeko, who set the ball rolling with these remarks:

I am delighted to be at this event today in company of our colleagues from Bharti Group.  This media conference is significant in many respects. Firstly, it is the first one-on-one interaction between Bharti and the Nigerian Media. Secondly, it marks my return as Chairman of this great company. Thirdly, it provides the first platform for Bharti to share with Nigerians, through the media, its vision and intentions for Africa and Nigeria, in particular. Finally, it gives the media an excellent opportunity to clarify any issues regarding Bharti’s acquisition of Zain’s operations in Africa.

Gentlemen of the media, you do not require any education on the history of our company through all the twists and turns over the years. One thing I must say, however, is that our resilience and the Grace of God have left us stronger and more resolved to serve you better. Indeed, we have come a long way and achieved a number of remarkable milestones as reflected in the number of firsts that we have recorded in the Nigerian telecom industry as well as the awards that we have won. On behalf of the Board and Management, I want to assure Nigerians that our best is yet to come.

Lastly, I want to specifically thank our customers for their loyalty to and affinity for our company over the years. We will not take for granted the unflinching support of the media for our organisations, and I really want to express my profound gratitude and that of the management and staff of the company.  We shall continue to deepen our mutually beneficial relationship with the media and indeed other stakeholders.

Ladies and gentlemen, let me thank you for honouring our invitation and wish you a most fruitful interaction with us  

Bharti in Africa for the Long Haul - Kohli

Even as Nigerians were getting weary of its frequent name and ownership change, a situation that has dogged this company since it began operations in Nigeria, the new owners of Zain Nigeria, Bharti of India, have come with a firm promise: “we will be in Nigeria forever”, was the avowal specifically made by Bharti’s Chief Executive Officer (International) and Joint Managing Director at the company’s first press conference in Nigeria.

Set against the backdrop of Bharti having acquired Zain’s Africa operations, and the Nigerian operations being perhaps the most critical in terms of subscriber numbers, and by extension, investment outlay as well as revenue stream, Bharti’s decision to reassure the Nigerian market and the government soon after the deal with Zain was consummated was a perfectly timed strategy.

While thanking the government for the “strong support and encouragement” for the company and its interest in Nigeria, Bharti promised the people affordable services which it believes will fuel and enhance telecom penetration in the country. Specifically, Bharti has a plan to drive rural network coverage in Nigeria.

Bharti Airtel is one of the leading telecom operators in emerging markets, with headquarters in India, its home base.

Exuding confidence and a rare show of happiness in the entry of his company into Nigeria, Manoj Kohli told the media that “Bharti has had a very good relationship with the media and press since the last 15 years,” adding that the media has been supportive of Bharti “because we are very open people, we are transparent people and we are honest people and that’s why we are very friendly with the media, I’m sure our journey of relationship with the media in Nigeria will also be on the same basis.”

Delving into the background of Bharti Airtel, he spoke of the founder of the company, Sunil Mittal, whom Kohli described as “one of the best entrepreneurs in the world.” Bharti, he said, was founded in November 1995 by Mittal which he launched “with very, very few thousand dollars in his pocket and he started in the capital city of India which is New Delhi as a very small company that did not have technology, did not have brand, did not have any capital; but there are two very important things; one, that Sunil has a very entrepreneurial spirit, spirit to build businesses; the second powerful thing on our side, was enthusiasm and passion  of our employees. And employees have made this company, and Nigerian employees will make this company now.”

He spoke further:

“From ground zero in 1995, we have built this company to 180 million customers today. We are the fifth largest telecom operator in the world, and we will become the third largest telecom operator in the next 12 months and I’m confident Nigeria will do very well for Bharti Airtel. Two years back, we decided to grow outside India after achieving leadership of one-third of the Indian market despite 12 operators’ competition in India and we started the journey in Sri Lanka and then went to Bangladesh and we are now in Africa with Zain acquisition.

“We are delighted; we are glad and really happy that the acquisition has been completed. The timing is right. We believe one billion population of Africa deserves high quality mobile services to connect with each other and to connect with the world and we also believe that the teledensity is only 20 per cent or maybe less as in some countries I’ve seen it’s 10 per cent. So for Bharti, this is the right time to enter Africa because we believe we will encourage teledensity to go to 50, 60, and 80 per cent in the next five, six years. We will lead the growth in this continent and we believe Africa is the continent of the next decade from 2010 to 2020.

“If any company in the world has to grow, it has to be in Africa. The biggest market of Africa is in Nigeria, very good growth, lots of raw materials, oil and a strong government and let me start by thanking the government of Nigeria; we are very grateful. Myself with my Chairman met with senior government officials yesterday, ministers, NCC officials and many others. We were encouraged by the various government officials; they were delighted with what we are bringing to the Nigerian market and that I think is a very good start for Bharti Airtel because government and Bharti agenda are the same.

“And just to share with you that the government agenda and the Bharti agenda is same: to serve the people of Nigeria with best quality, to serve the rural people, the poor people with affordability. That’s the agenda of the government and that’s the agenda of Bharti also. Let me now share with you some specific plans and specific strategies that Bharti Airtel has for Nigeria. First and foremost, we will like to be known as an open company but we would like to be a rural company of Nigeria. We will take our networks into small towns so that the farmers of Nigeria can get the benefits of mobile connectivity.

“Why should the rural people and the farmers of Nigeria not be given full opportunity to be connected with the world? And this is an opportunity the government of Nigeria is supporting, so we will not only be an urban brand, we will be a rural brand also.

“The second thing is to bring quality to Nigeria; high quality with affordability. We’ve seen in Nigeria many people struggling with quality, networks don’t work; service quality not very strong and many, many Nigerians buy three phones; that means they spend so much money to buy three phones; not a good idea, Bharti Airtel will encourage quality as the first objective. Not only network quality, but also distribution quality, service quality and also new product quality, we will give to each Nigerian. And along with that we will have affordability, which means a poor Nigerian will also be able to afford the usage of a mobile phone.

“I am amazed that in Nigeria, minutes of usage of each Nigerian are only 50 to 60 minutes (per month) which is one of the lowest in the world. This clearly means that Nigerians are not getting the freedom and opportunity to talk. In India just as an example, an average user uses nearly 500 minutes (per month). I can’t understand, because I meet Nigerians and they speak as much as Indians speak; why should we not give the opportunity to Nigerians (to speak)? And that is what we will do and give more opportunities to Nigerians to talk and to express themselves and I’m sure these 50 minutes will go beyond a hundred minutes very soon.

“The next objective is the issue of employment. It’s very important for Nigeria because employment is important for economic growth. So we will encourage our partners, and many other IT partners to come here with us and set up their offices so that Nigerians can have employment. We also will encourage our small partners like dealers, distributors, showrooms to have job opportunities for young Nigerians who may not be engineers, who may not be chattered accountants.

“We are also planning to put up a BPO (business process outsourcing), large BPO, call centre through our global partner with 1,000 seats; now this will take 12 months to form, we will take a decision on where it will be located, this will start a journey of employment in Nigeria.
 
“We also are committed to corporate social responsibility and we’ve decided we will focus upon education of under privileged children, poor children. Back in India, we have 250 schools. All the schools are in villages, all the schools have poor children whose parents cannot afford to educate them; so we give free education and free books and that is what we are thinking of in Nigeria and we will decide which villages we will start with pick up five villages in each place, do a good job and then expand.

“We are looking at how to make sure that these young Nigerians, well, poor Nigerians living in villages should become very educated citizens of Nigeria in future.

“We also are planning to bring in Airtel brand into Nigeria and we are planning that it should be when Nigerians are celebrating their 50th anniversary in the month of October. I am happy to share with you that our brand launch will coincide with the 50th anniversary celebration of Nigeria and I think that is a very lucky coincidence for us and I’m sure it will make Airtel very, very strong and powerful in Nigeria.

“And then, I just want to share that we believe that all these will need investment, financial investment and we have decided that we will invest $600 million in Nigeria in the next two years for making all these possible. We will be able to spend 50 per cent of this or more than 50 per cent, $300 million of this in the first year itself because we are to grow our network, make it high quality and do a great job in each town and village which we are present.

And then I just want to close by saying that customers of Nigeria deserve quality. Customers in Nigeria deserve freedom, customers in Nigeria deserve affordability. We believe and we have discussed with government that new schemes like infrastructure sharing, new schemes like number portability should be implemented in Nigeria  as early as possible so that customers get freedom, customers get better quality and they get better affordability to use not 50 minutes, but many, many more minutes every month and every day. And then, I just want to wish you good luck and I am very happy and grateful to you that you could leave your time to meet Bharti Airtel today. Thank you.”

Responding specifically to one of the questions from the media, on whether Bharti Airtel has set a target date when it might “offload” the Nigerian and/or Africa operations it was just acquiring, given that this happens to have become a regular feature especially in the Nigerian company, Kohli answered:

“I don’t understand this question about offloading because in India we marry forever; there’s no concept of divorce, there’s no concept of that in India. We are here for good; Bharti in the last 15 years has added properties, has added assets and we continue to add assets in Africa too.”

Chairman of the company, Oba Otudeko was also quick to add his voice on the issue of whether Bharti was just taking over the Nigerian company only to “offload” (sell off) at a no distant future. His words:

“Ladies and gentlemen, when I listened to the questions that are coming, I see a very strong connection of both the past to lay a foundation of expectation of the future and I’m not surprised having regards to the intelligence of the people who are intervening. Nigerians are very, very bright people and my friend who is talking about offloading knows what he is talking about. I want to say as an investor myself, you all know me, it took quite a lot of consideration on my part and deep reflection including due diligence that will be required for this position and I want to assure us, that we have found in Bharti Airtel, a partner that is committed to decent standards, building values and indeed long term growth. This I think I should share with us.

“There’s also a connection with Africa that is emotional and I think it’s important for me to share it. When I met the Chairman of the company and the founder, Sunil Mittal, for the first time, I did my home-work on him after our meeting and I confirmed that his father was a politician who played a leading role in the emancipation of India and worked very, very closely with Nelson Mandela at a period; that gave a very strong emotional commitment to Africa and when we met in Kampala, it was so emotional when he was discussing Africa. Yes, business and sentiments don’t mix very easily; but I want to assure you that what I found in Bharti Airtel is a very serious company that is very much committed to stay in Nigeria and in Africa for good; to build value and in the process of building value, to also pass value by way of good services to the Nigerian consumers.”

We can only do better - Rajan

RAJAN SWAROOP is Bharti Airtel’s CEO for Nigeria, taking over from the company’s name as Zain Nigeria to when it will formally change to Bharti Airtel on October 1, 2010. At the press conference, he lent his voice of gratitude and support, also of what to expect from his team as they set to work:

“Let me re-affirm our commitment as a business to continue to go the extra mile to meet and exceed the expectations of our customers. With Bharti Airtel, we can only do better. Our true differentiation in the Nigeria market will be the quality of our service, in terms of network resilience as well as customer experience. We have already embarked on several initiatives to significantly take our network to world class standards. Mid-last year, we commissioned our new state-of-the-art multi-million dollar network operating centre (NOC) as part of our efforts to increase the resilience and robustness of our network.

“We also outsource the management of our network to Ericsson, a world-class leader in telecommunications equipment manufacturing and maintenance. That has been a part of our commitment to provide our customers in Nigeria with a world class quality of service. It is also noteworthy that we have expanded and completed our fibre optic transmission backbone and have set up a highly digitised call centre in Abuja, the nation’s capital.

“Without any doubt our company has achieved several milestones in Nigeria. Today, I am particularly excited, because with Bharti Airtel we will now build on the momentum of activities to ensure that we provide nothing less but world class telecommunications services to all Nigerians irrespective of their economic power and social status.”