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Action Plan for Africa - Bharti outlines road map for new operations

July 15, 2010
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The deal between Bharti Airtel and Kuwait's Zain has finally been completed following a series of fund-raising exercises and after having obtained regulatory clearances from the governments of 15 African countries. The company is now drawing up a road map for the actual rollout of operations and chalking out the strategy to be adopted in Africa.Bharti has set itself an ambitious target of 100 million customers, $5 billion revenues and $2 billion earnings before interest, taxes, depreciation and amortisation from its African operations by March 2013.

Strategies and investments
The company has devised individual business and investment strategies for the 15 African countries. It has embarked on aggressive expansion in Nigeria where it plans to invest $600 million over the next three years. With a population of 150 million people and just 50 minutes of usage per month per user (compared to 450 in India), Nigeria offers a huge growth opportunity.

In the West African country of Niger, the company plans to invest $100 million to improve the reach and quality of its network by the end of 2012. Telecom penetration in Niger, a poor desert nation currently in the grip of a food crisis, is among the lowest in the world at 10-11 per cent.

Bharti intends to invest another $150 million in Kenya, where Zain has had a 10 per cent market share, and $100 million in Gabon.

In Zambia, the plan is to invest $150 million over the next two to three years.Most of this sum will be invested in network expansion to rural areas of the country. Bharti owns 80 per cent of Zain Zambia, a Lusaka Stock Exchange-listed company with over 3 million subscribers in a country of about 12 million people.

For Uganda, the company has drawn up an investment plan of $100 million over the next two to three years. The funds will be directed towards network expansion, distribution, infrastructure and broadband extension. Currently, the rate of mobile penetration in Uganda stands at 30 per cent due to high communication costs; Bharti plans to take it to 60 per cent over the next three years.

Bharti has also announced a $100 million investment in Malawi over the next three years. It plans to increase the number of subscribers in Malawi from the current 2.5 million to 7 million, although no date has been given by the company for achieving this target.

Over the course of the next one month, Bharti will be announcing its plans for the remaining 12 countries as well.

As far as strategy goes, the company is set to replicate its Indian model of outsourcing network management and IT operations. For towers, it will form separate tower companies in each of the African countries where it has a presence, marking the commencement of efforts to collaborate with other mobile firms to share costs and save money. The 15 independent tower entities will be similar to Indus Towers, a tower company partly owned by Bharti in India, and African mobile companies will be invited to be a part of its new planned ventures. The company is also planning to share infrastructure like optic fibre.

As far as network rollout, upgradation and outsourcing are concerned, Bharti has already received several requests for proposal (RfPs) from existing network partners in India such as Nokia Siemens Networks, Ericsson, Alcatel-Lucent and IBM, as well as from new participants like business process outsourcing (BPO) partners, Huawei, ZTE, HP, etc. The evaluation of these RfPs will be completed in the next few months.

Bharti's African operations will be headquartered in Nairobi. The company is looking to employ 100 executives for its headquarters. About 25 of them will be from India, 45 have been hired from Zain in Kuwait, and 15 African nationals will have top management roles.

Bharti has decided to structure its acquired operations in Africa into three separate divisions, each of which will be headed by a chief executive officer (CEO).
These divisions are Bharti Anglophone (comprising the English-speaking countries Ghana, Kenya, Malawi, Sierra Leonne, Tanzania, Uganda and Zambia), Bharti Francophone (comprising the French-speaking countries Burkina Faso, Democratic Republic of Congo, Chad, Congo B, Madagascar, Niger and Gabon), and Nigeria (the continent's largest telecom market).

To head the Anglophone division, Bharti has brought in Essar Telecom's CEO Jayant Khosla, who is currently based in Kenya. For the Francophone countries, Zain's existing chief operating officer (COO) Tiemoko Coulibaly has been appointed the CEO. Bharti's executive director for enterprise services, Rajan Swaroop, will be taking over as CEO and managing director of its Nigeria operations, while the current CEO for West Bengal and Orissa, Deepak Srivastava, will be the COO and executive director in Nigeria. Bharti has also appointed Sunil Colaso, CEO of the Ruias-owned Warid Telecom, to head the distribution and marketing divisions across all the 15 geographies in Africa. Yves Mayilamene, who was heading the HR division of Zain Africa's Francophone operations, will now head the HR division for all 15 countries. Caba Pinter, who currently heads the finance function for Zain in that region, will be the deputy chief financial officer of Airtel Africa.

Bhaskar Chakraborty, who is largely credited with building the supply chain capabilities for Airtel in India, has been asked to replicate the model in Africa.
Another senior Bharti official, N. Arjun, has been assigned the responsibility to integrate all the Africa operations into a common entity. Rahul Gupta, currently chief customer service officer for its mobility business in India, will now head customer services for Africa, while Rupinder Goel, who led the technology services vertical across businesses for Airtel in India, has been made chief information officer for Airtel Africa.

To sum up, Bharti's three-year search for a foothold in the African continent has finally become a reality and the company is doing all it takes to make a success of it.

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