Sunil Bharti Mittal is exuberant as the company announces its first dividend since it started the business
Sunil Bharti Mittal, Chairman, Bharti Group discusses the company’s future plans in an exclusive interaction with Surbhi Chawla of B&E:
B&E: On the occasion of Bharti achieving a 100 million subscriber base, we would like to ask you – what are the offerings in store for the shareholders of the company?
SM: We are currently in the 15th year of operations and celebrating 100 million subscribers. Airtel has managed to be profitable but we are still to be cash flow positive. Only a few weeks back, we announced the maiden dividend of this company after 15 years. People were actually looking at waiting for one more year that is when we would have turned cash flow positive, before we could give the dividend to our stakeholders. However, on the basis of the demerger of our private company, we had the headroom this year and hence were able to give some dividend. The fact is that Airtel has invested Rs.70,000 crore in setting up hard infrastructure. There are a very few industries wherein companies have to invest such huge sum of money. Even the maintenance cost of the infrastructure sums up to about Rs.20,000 crore per year. So, it is a milestone for us to be able to become cash flow positive. One should remember that this is a tough industry and one need to keep on investing; so the profitability should be measured along with the investments that are required.
B&E: When you started operations in 1995, at that time there were spectrum wars and this still continues to be an important issue. In the times to come, how do you see the spectrum being allocated? Will it be subscriber lead as was the norm or are you in favour of auctioning of the spectrum? SM: I must say that spectrum is an issue that concerns all mobile operators in the country. It is the lifeline and the oxygen on which we breathe and live. All of us in the telecom industry want a single regime under which the spectrum is allocated to those who need it and we are absolutely aligned to the government process, in the form of auctioning of the license. We have no difficulty in whatever the process be. But at the end of the day, we want a stable regime and it should be only one process that is being followed. Earlier, the department felt that we needed to have spectrum on the basis of number of subscribers and this practice is not followed anywhere else in the world, but it was fine then and now there are talks about auctioning, we are ok with that too as long as it is a stable regime that is universally applicable to all the players. We already have the lowest spectrum as compared to anyone else in the world and packing more and more customers is becoming increasingly difficult; we have two of the largest companies in the world with us here and they would endorse this point that as we go further, it would be essential to have more spectrum.
Sunil Bharti Mittal, Chairman, Bharti Group discusses the company’s future plans in an exclusive interaction with Surbhi Chawla of B&E:
B&E: On the occasion of Bharti achieving a 100 million subscriber base, we would like to ask you – what are the offerings in store for the shareholders of the company?
SM: We are currently in the 15th year of operations and celebrating 100 million subscribers. Airtel has managed to be profitable but we are still to be cash flow positive. Only a few weeks back, we announced the maiden dividend of this company after 15 years. People were actually looking at waiting for one more year that is when we would have turned cash flow positive, before we could give the dividend to our stakeholders. However, on the basis of the demerger of our private company, we had the headroom this year and hence were able to give some dividend. The fact is that Airtel has invested Rs.70,000 crore in setting up hard infrastructure. There are a very few industries wherein companies have to invest such huge sum of money. Even the maintenance cost of the infrastructure sums up to about Rs.20,000 crore per year. So, it is a milestone for us to be able to become cash flow positive. One should remember that this is a tough industry and one need to keep on investing; so the profitability should be measured along with the investments that are required.
B&E: When you started operations in 1995, at that time there were spectrum wars and this still continues to be an important issue. In the times to come, how do you see the spectrum being allocated? Will it be subscriber lead as was the norm or are you in favour of auctioning of the spectrum? SM: I must say that spectrum is an issue that concerns all mobile operators in the country. It is the lifeline and the oxygen on which we breathe and live. All of us in the telecom industry want a single regime under which the spectrum is allocated to those who need it and we are absolutely aligned to the government process, in the form of auctioning of the license. We have no difficulty in whatever the process be. But at the end of the day, we want a stable regime and it should be only one process that is being followed. Earlier, the department felt that we needed to have spectrum on the basis of number of subscribers and this practice is not followed anywhere else in the world, but it was fine then and now there are talks about auctioning, we are ok with that too as long as it is a stable regime that is universally applicable to all the players. We already have the lowest spectrum as compared to anyone else in the world and packing more and more customers is becoming increasingly difficult; we have two of the largest companies in the world with us here and they would endorse this point that as we go further, it would be essential to have more spectrum.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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