Airtel's rushed Africa entry was a mistake that took many years to fix, admits Sunil Mittal

NEW DELHI: Bharti Airtel chairman Sunil Mittal admitted that his move to invest in Africa in 2010 may have been ‘a bit rushed’, and that took several years to fix, time and energy that could have been spent fortifying the No 1 carrier’s in its home market where it faces intense competition.

“We all must have made lots of mistakes. Lots of decision when you look back, say I wish they were better thought through. If you pin me down to one, I would say in 2010 our decision to go to Africa was a bit rushed and that has taken 6-7-8 years and lot of resources and my personal time to fix that,” Mittal said in response to a question on the one business decision that he regrets the most.

Mittal was speaking at the TiEcon Delhi event among a gathering of entrepreneurs, where he also gave advice based on his life’s lessons, including always having control on one’s financial situation, building credibility with partners for the long term – for instance Warburg Pincus which reinvested in Airtel’s DTH arm after nearly two decades - and not taking short cuts.

Bharti Airtel had bought Kuwait-based Zain Telecom's African assets for $10.7 billion in 2010, after which the carrier had operations in 17 African countries. At present, the number has come down to 15. In a recent interview with ET, Mittal said that the company would look at consolidation in countries like Kenya, Rwanda and Tanzania, through mergers, acquisitions or both, even as the overall Africa business was turning a corner.

“In Africa, thankfully, it is much better place today. It is free cash flow positive but when I look I think if I would have conserved that energy, capital and energy, probably we would have been better place today in our home market. Every entrepreneur comes to a point where you make some mistake and the only thing is that you should recognise it and try to fix it as fast as you can,” Mittal said.

In the quarter ended September, Airtel Africa reported a 2.8% increase in revenue to $782 million, where the operating profit margins improved by 9% on-year for the quarter. The region reported a profit of $48 million as opposed to a loss of $91 million in the same quarter a year before. At the end of September, it had total debt of Rs 91,480 crore.

“It has taken 6-7 years, I wish you know, if had to look back we should have not taken that decision but having taken that decision, you need to back it, you need to fix it. It's my job, it's my team’s job to fix it,” the doyen of the telecom industry said at the event on Friday.

When asked about keeping pace with competition, Mittal said that one not only has to compete in the market to win, but also to remain relevant. The company competes with deep-pocketed and nimble footed players like Vodafone India, Idea Cellular and Reliance Jio in the Indian market, amid lowest tariffs offering free voice and very low cost data services.

In response to query on performance of insurance business, Mittal said that Bharti Axa has recently got new team and fresh investments and insurance business has its own gestation period.

“In 5-7 years we will be very happy if we are in top 10 in both life and general (insurance),” Mittal said.

On the Airtel Payments Bank, Mittal said that bank was meant for financial inclusion, especially for those who have not used banking services in the past, and that opportunity to scale it in India was very big.

“It is a frugal bank where you go in rural-suburban people to include those who have never been in to bank branch or don't have bank account,” he said. Mittal added that the bank was opening 80,000-100,000 thousand accounts daily and that the move was a ‘big and good opportunity’ going in to future.