Agreed that India’s best managed telco Bharti Airtel has posted its tenth quarterly profit decline in a row partly due to the ultra-competitive state of industry affairs, but there also is room for measures to be taken at the company level. Here are five key immediate or mid-term steps that could be of benefit:

Reduce emphasis on licensed spectrum: Mobile services have played a dominant role in Airtel’s growth so far and that makes good sense when it comes to voice. However, as low 3G adoption experience already has shown, the returns are too low for investments made in existing data networks. A fraction of the money that went into buying 3G spectrum, if spent on building alternative networks, could yield better returns. I would even go to the extent of saying that it would be better to avoid participating in an upcoming spectrum bid if the prices don’t appear to make sense.

Build strengths in IT adjacencies faster: For the last several years, Airtel has made valiant efforts to clock growth in the business/enterprise segment but again, the results have been far from appreciable. A key reason behind this less-than-desirable growth has been an over-emphasis on the networks [again]. It’s important to always remember that networks, owing to their high degree of exposure to regulations and commoditization, are subject to severe pricing pressures. On the other hand, the IT services in the adjacencies are relatively insulated. Telcos that have been able to build strong IT capabilities internally, like Telstra in Australia, have been able to see much healthier growths in the enterprise segments.

Transition to an ecosystem-oriented operational style: With traditional modes of communication being complemented and supplemented, if not replaced, by newer forms and modes, the ecosystem is becoming increasingly complex. The potential partners and channels come from unthought-of corners and the relationships with them are no more unidirectional. Understanding and working with this ecosystem is the key to future success and growth. While channel partners that have traditionally sold connectivity services and bandwidth capacities to customers would continue to play an important role, Airtel will need to better leverage partners such as system integrators and app developers as channels for delivery of newer services. When going to the customer with such partners, a solutions-oriented approach rather than a product-driven one would be required, given the nature of the relationships that these partners are likely to have with customers. Understanding and working with this ecosystem is the key to future  success and growth.

Develop new channels for new products and services: Carriers today can either chose to be content with being network and related VAS providers or seize upon the opportunity to discover ever new revenue streams, and build those. To make this happen, the newer streams of channel partners would often need to be educated on the values of new propositions. Joint sales and marketing strategies will need to be charted out and streamlined with an eye on reducing time to market, for instance.

Invest in sustainable technologies: Telecom companies are considered to be among those with high incidence of carbon footprints, largely due to use of diesel gensets for powering the cell sites. While that leads to lower scores on a sustainability scale, it also translates into higher operational expenses. Use of green technologies to power these cell sites and also use of alternative network technologies and architecture could help reduce expenses  in the long run. While it’s understandable that immediate implementation of green energy techs wouldn’t be financially viable, there needs to be a clear policy and migration roadmap in place. 

(The article was first published in Lightreading India at
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