By 2020, We will make Bharti the finest Indian conglomerate – Bharti
Bharti (Airtel) has unveiled a new logo and vision to make the next big leap. It is targeting $10bn revenue by 2010.Â Bharti also want to grow its non-telecom business from 15% to 50% in the next 5 years. That would make its telecom business to 50% which is at 85% now.
Simply put, Bharti wants to be the next big conglomerate and join the elite club of Tata and Reliance.
Bharti is looking for both organic and non-organic growth. Just a few months ago it looked for South Africa’s MTN which would have made it the top 10 telecom company in the world. We already know that it just entered top 25 club of global telecom companies. One of its non-telecom interests are in Insurance, where Bharti has a joint venture with France’s AXA.
Wal-mart’s joint venture for retail operations with Bharti are all set to rock India in March 2009. Bharti has just entered into a young and growing DTH space. But, until now telecom was their forte. They want to change that going forward.India already has 300 million mobile subscribers. Target for 2010 is 500 million subscribers. That is a good 200 million left on the table. But, there are too many players on the line. The recent license allocation to players and to Reliance had kicked of the second round of telecom revolution. Unlike the first round, Bharti (airtel) will not have a first mover advantage and find it tough to gain a significant share in the next 200 million. May be this is the reason for Bharti’s change in direction.
It is not just Bharti which is obsessed with conglomeration. Every company once successful in their chosen business looks to explore other options. The IT companies after successful operations have either started or acquired BPO operations. Mobile operations and value added services are the other area which IT companies look at. Same is the case with energy companies.
GMR industries is one such company which has interests in several businesses. Don’t even get me started with Future Group. They need a serious brand consolidation and new identity.
Airtel is one of the better brands in India. Not as many people relate with Bharti as much as they do with Airtel. There can be a brand confusion for Airtel (oops Bharti). That is because its brand Airtel is so successful. I just hope that Bharti does not become like Future Group with too many brands.
Is conglomeration the only way to remain profitable in India?