Question
What has been the most significant aspect of this climb for you personally? The market looks at different metrics. For you, what is the metric that you use to measure your own success?
Answer:
It’s about my people. I mean, if you really look at it, if I have to sum it up in one thing, it’s about my people. How have they seen me through their eyes—people who have worked with me and stayed the course? How have they measured me? That has been an important part of my life.And therefore, for me to feel that they are bigger owners of this company than even me makes it very joyful and easy. And it’s something that I believe in. Without my team, my people across the entire world now wherever they operate, it would not have been possible.Because one can always say that you drove it, you sort of provided the leadership. The fact is, if you didn’t have that passion amongst all the people, this was a tough, very tough journey.One thing I can say with a great deal of satisfaction is that I could, very earlier on, realize that if I have to be reasonably big-sized, I need to have a very distributed, empowered leadership. That became the norm.
Question
I want to talk about financial services. We’ve just seen Airtel Money IPO on the London Stock Exchange—the biggest IPO that the LSE has seen since, I think, 2021, if I’m correct. What has that unlocked for you, not just as far as the Africa business is concerned, but also given you ideas on what you could potentially do here in India? Because in many ways, Airtel Payments Bank is actually quite a sleeping giant.
Answer:
It is a sleeping giant. With nearly 100 million customers who are using the services of Airtel Payment Bank, and now coming closer to ₹4,000 crores in revenue, that’s a bank which is shaping up and providing financial inclusion, which was the original objective of that bank.And can we get to ₹10,000 crore revenue, ₹1,000 crore profit, with a ₹10,000 crore deposit? I think it’s a possibility in the next few years. And that’s the time when this giant will hopefully get showcased into the market.
Question
So, an IPO what, 3, 5 years on?
Answer:
We have a window to do it in the next 3 to 4 years. But we will need RBI’s indulgence because the statutory period is expiring in a year, year-and-a-half time. But we will need 3 to 4 years to get to the target that we’re having. So let us say 2030, we should be ₹10,000 crores in deposit, ₹10,000 crores in revenue, and ₹1,000 crore in profit. Then it becomes a meaningful size. For Bharti Enterprises today to have a listed company which is a few thousand crores of valuation just doesn’t sit well.
Question
So have conversations begun with the regulator?
Answer:
Oh, yes, indeed.
Question
And what’s the sense that you get at this point in time?
Answer:
We’re just now in conversation.
Question
I will talk about the leadership style that you’ve sort of institutionalised as far as Bharti is concerned—it’s a very interesting mix of ownership and management. But I’ll get to that in just a second. You talked about how tough the journey has been, and you started off at 18, a first-generation entrepreneur. You wanted to “break free,” in your words, from Ludhiana; you decided to move to Mumbai. And through the course of your journey, it’s really been the stroke-of-pen risk that has hounded you, hasn’t it? As you look back today, in your own words, you’ve described many periods in the journey as your own versions of the Mahabharat: 2002, 2009, 2016. As you look at where the group finds itself today, how would you describe where you’re placed?
Answer:
It feels like we have come out of the big storm and into a much more peaceful environment, in a sense. You have a country that is growing at a rapid clip, a lot of activity is happening, a lot of entrepreneurship is all around you. Millions of people are adding to the consuming class every year. You’ve got a market of one-and-a-half billion people; strap on another billion in Africa now. So it seems that we have come through this very difficult phase—a very resilient, strong enterprise which should now start to capitalise on all the strength that we have developed, our muscles we have developed during this journey. While the world is changing rapidly—AI, space—we are trying to sort of grapple with what and how they will impact your own enterprise. But the opportunity is now. The balance sheet is strong; money is not a problem. Just a few years back, it looked like a very difficult situation. Debt-to-equity had become worrisome. Akhil coming to me and telling me, “Sunil, time to do something.” And we went and raised money. All that, with the cash flows, with the performance—you saw the last quarter’s results—the resilience in the team, the continued sort of growth in Africa, which was earlier a difficult proposition. So all things are sort of coming together very well. And Gopal’s move into a significantly senior position looking at the whole group has also released some time for me to look at some of these new bets.
Question
You talk about opportunities, you talk about the balance sheet strength that you currently enjoy, which gives you the ability to perhaps take bigger, bolder risks. How much appetite do you have? I know you’ve always been a believer in the fact that entrepreneurs must not be risk-averse; they must take risk, but they must also know how to manage risk. What are the bold bets that you’re now willing to make?
Answer:
I think two or three we have already made within the country, which hopefully once we succeed here, we take it to our African countries as well. Financial services—I think both me and Gopal are very excited about it. It looks like the next big bet. Market is not seeing it the way we are seeing it.The amount of data that we have, the attributes of the customers that we have, makes us a very important gate to lend consumer loans to the market of 400 million people here. Airtel Money’s success in Africa is also giving us that confidence to move forward with that.Then I would say sovereign cloud. That is becoming a big deal, and we already have now about 50 customers, big customers, and we will add many more. So that’s another area where a lot of investment is required.Strap on with AI data center (AIDC), we’re building one big one in Vizag for Google, and they have more coming up in Bombay, in Pune, other places—even in Hyderabad and Calcutta. So, I would say AI data center (AIDC), sovereign cloud, and financial services and on the core, if you look at the possibility for Airtel, it could be—it has the potential to be the world’s first telecom company to have a billion customers. We have 400 million here, nearly 200 million in Africa, so there’s another 400 million to go. I think of which about 150–200 will come here in India, another 100 in Africa. The last 100–150 have to come from somewhere.
Question
Where are the last 100–150 going to come from?
Answer:
In places which have $25–$30 ARPU, not $3.
Question
So, you’re looking at not the so-called emerging markets, but developed markets?
Answer:
I mean, I would say if 800–850 million are in the $3 category, if you can get 100–150 at $20–$25, that’s almost the same level.
Question
So, have you identified where you intend to move?
Answer:
I think we have a broad perspective, but not zeroed down on targets. And I have personally looked at two or three. One we came very close to, we backed off because it didn’t make sense.
Question
Which would this be?
Answer:
In Europe. But that target felt too rich to acquire. We are opportunistic. There’s a lot of stress in the world today; we have a strong balance sheet. It will be foolish for us to go and splurge on buying something very expensive. Africa at that time, in 2010, was 10 multiple, 10x.
Question
I remember that! I mean, we did many conversations, and there was a lot of concern, a lot of apprehensions in the minds of investors on whether you were going far too ahead of what you would be able to afford.
Answer:
We did, probably. 15 countries, you wake up one morning, you have strapped on to one country, and a place which was rather difficult to operate, and we paid top dollars. So that is not going to be repeated, because I don’t have the another 10-year energy to go and follow it up! A good-priced asset where we believe we can go and fine-tune it. Growth is limited in Europe, as you know, but opportunity to take cost out.
Question
So, this is inorganic, then?
Answer:
Has to be, organic is impossible. What our friends in India, our competitors have done from the ground up is a once-in-a-lifetime story. It has never happened before, and I don’t think it’ll ever happen anywhere in the world again.
Question
You don’t think so?
Answer:
Oh, no. To build a ground-up network in telecom and come from behind is an impossibility, which has been achieved by one.
Question
You talk about the impossibility of what Jio has been able to do. And now, as you look at your global plans and your global aspirations, what is the war chest that you’re likely to use to be able to take your global aspiration forward?
Answer:
I think look at the company. We are now, on a consolidated basis, nearly ₹35,000 crores of EBITDA. That’s ₹1,30,000–₹1,40,000 crore, which is growing. Our debt will be, by next year, zero as far as market is concerned—zero debt in the company globally across the entire balance sheet, other than AGR and our spectrum liabilities. Which is a benign government long-term 20-year payments to be made. Some years have gone, so 10 to 15 years spread to be made. There is no telecom company in the world which does not have a debt of 2x. Many of my friends in the world have 4x. Take Liberty Global, they enjoy 4x. Patrick Drahi, who sold us BT, had 4x; he always used to say anything lower than 4x is a wrong metric, we need a lot of debt. We are the company with a lot of cash flow, with zero debt in next two years, should have the ambition to do something big.
Question
How soon do you believe you’re going to be able to take this global aspiration in telecom forward? When can we expect you to ink these deals? How far out are you on perhaps even closing one?
Answer:
We are not anywhere close. BT, as we already done 25% in our personal capacity. If we could have had a stake which would allow consolidation into Airtel, we would have made a move. That is not on the horizon at the moment. There are other countries in Europe, and there’s separate one, two of assets in Portugal, in Netherlands, in Switzerland. So, bankers keep on coming to us; we’ll keep spotting at them. And wherever it makes sense, we will make a move. But it’ll be very measured. It will not be on top of our balance sheet that you strap on 15 countries, a big $10 billion bet on a company which was very small at that time. Today, for a large company, small tuck-ins from time to time—add more revenues, add more EBITDA, add more opportunities for our talent across the globe, bring some best practices back home. So those kinds.
Question
Let us now talk about the data center play as well, because you talked about Vizag. What’s the kind of capex that you envisage over the next few years on the data center business? And do you believe that potentially in 5 years, this pivot that you make from a telecom company to now sovereign cloud, data center, fintech—how would you like this group to be positioned?
Answer:
One is connectivity. We should always be a leader in connectivity, whether it’s on terrestrial radios, fibre, or coming from space. This is one area which is what we do for a living. I mean, this is an area we must be very strong at. Then, on top of that, many of my customers, especially enterprise customers, are looking for compute, looking for data centers, or looking for sovereign cloud. Those things we have to strap on for enterprise customers, rather than going outside. We need to provide to them these services. Now the next question is: we sell GBs. We used to sell minutes, we moved to selling GBs. Now, as Kavin, my son, talks about, the time is going to come to start selling tokens. So that’s where the world is going to move. And for preparing ourselves for that, we will need our own data centres, we will need our own cloud. How much GPUs we add going forward to provide for that is small experiments which have already started in Airtel.We are always very vigilant. We don’t go too ahead of time to put billions of dollars in future bets where we don’t know how it’s going to shape up. But we are very fast followers. We are tracking the whole world now. Gopal has just been re-elected as the Chairman of GSMA, so from that vantage point, he sees a lot of things. And we discuss all the time where the bet should go. But specifically to your point, I think we would like to get to a gigawatt of data center capacity by 2030. We are at about 250–260. That will consume a few billion dollars. We got another round of funding from Carlyle and Anchorage and Alphabet—a billion dollars. But we probably will need to inject more money going forward into it.
Question
And where is that money going to come from?
Answer:
Airtel will try to keep its majority stake, and then our existing shareholders or new—I mean, we keep on getting knocked at our doors all the time.
Question
You talked about being fast followers. As you see what’s happening in the AI world today—I mean, the massive trillion dollars going in as far as capex is concerned, questions on whether this is a bubble, that we’re going to see a big correction coming in, and of course, the recent events of the last 48 hours has given an entirely different spin to the AI story—what are you picking up in terms of signals on what the AI market is telling you?
Answer:
Well, one thing is very clear: intelligence is here for good. So that is without a doubt. I mean, it’s the same 2001–2002 dot-com bubble. Internet was there to stay; internet was not going anywhere. But the companies started to pack up. I think you will see a similar position in AI. There will be a lot of companies which have come on the froth or the big tide of AI—intermediary companies, the cloud computing companies, and all that, the neo-clouds as they are called. I think many of them will not exist in a 24-to-36-months scenario, maybe even shorter, depending on if the interest rates go up, if the stock market tide sort of goes down. You will see them falling very quickly. The big boys, however, who have large balance sheets, who have their own hundreds of billions of dollars of cash flow—Meta, Google, Microsoft, Oracle—they are not going to go anywhere in AI.
Question
You believe that the technology is here to stay and that there’s going to be no reversal on that front. But do you see this as being, in the next 5 to 10 years—what percentage of your portfolio is likely to be driven by this?
Answer:
I would say nearly half will be all these new bets, and half will be our core connectivity business, which is a big shift. It is a big shift. From 80%, 85%, 90% to go to 50%, and that is also going to grow at 8%–10%. So which means this really has to run up.
Question
So this is going to look like a very different entity, isn’t it, over the next 10 years?
Answer:
Five years.
Question
Give me what is likely to change the most from an investor’s point of view. You know, people who are looking at what this could do in terms of margins, what this could do in terms of just the size and scale of the business.
Answer:
First of all, see us now as a company which is a global company, which in itself is a very rare phenomenon in India—that you have a multinational which is homegrown. Very few handful of companies which carry their brand proudly into the world market. We will be more global than what we are today. Where do we add those businesses, we’ll see, but definitely more global. We will have a lot of data centers built out. We’ll be one of the major providers of sovereign cloud, and we will have hundreds of millions of customers borrowing from us, our platform. If you put all this together, it’s going to be a very different company.
Question
Are you ready internally to make this big pivot and make this big shift? I mean, it is in a way—it is Day Zero in many ways, isn’t it?
Answer:
It is, but this is what we have always done. You build a plan, you have a dream, you have a vision, and then you start filling it up. That’s exactly what we are doing now. So are we getting new talent to start to look at these areas? The answer is yes.
Question
Global talent?
Answer:
Global talent as well. We are all over the world. We will probably have our outfit in San Francisco. We have small offices around the globe for our connectivity business. But this new business that I’m talking about, especially in the AI and sovereign cloud and compute selling and all, we will need global talent.
Question
Satcom! I mean, we have all heard what Elon Musk has had to say as far as the satcom story in India is concerned, and you hit back saying that, “Look, you have been in the queue waiting far longer than he has for your application to go through.” What is the aspiration? I mean, forget Musk. What’s the aspiration on the satcom side?
Answer:
Look, I have to, first of all, acknowledge: what Elon Musk has done is mind-boggling. His compute or his connectivity capacity in the space has gone manyfold, and it’s happened in the last 4 or 5 years under our watch. The last launch that he made on Starship, the satellites he put up—the V3—they have a capacity of as much as the entire OneWeb capacity. So 1 Tbps capacity in a single launch means he’s started to now push, if not break, through the laws of physics. Which means a lot of connectivity is going to come from space, and the terrestrial industry needs to be prepared for that.
Question
What will it mean for the terrestrial industry? Because so far, the assumption or the expectation is, at these prices – there’s likely to be very marginal disruption on the terrestrial side. Are you preparing for a different eventuality?
Answer:
The globe is going to see something very different coming. India, Africa will not be impacted—at least we will get to see this movie long before and be able to adjust ourselves, because at $3, satellite doesn’t make sense. But at $30, $40, in the US $60, a home connectivity or mobile phones, it starts to make sense.
Question
So, in India, you believe it’s likely to continue to be an enterprise game for the foreseeable future?
Answer:
And some places where you can’t have connectivity—a farmhouse of some rich person who wants a Starlink or a OneWeb or Amazon Leo connectivity, yes. But it’s on the margins. And on the phones, I mean, the coverage that we provide in India for the $3 ARPU is breathtaking. Nowhere in the world you can see this coverage. You can go to any remote part of India, you will get a signal. That means you don’t need it. I mean, I don’t have a fiber everywhere, but I do have a radio signal of 5G. So why do you need satellite? So in direct-to-device, which is the big bet the satcom providers are taking—AST or Starlink and Amazon Leo —is that you will not get a radio signal and therefore we will come and serve you. We will have that provision through our network. We’ve tied up with Starlink, we are talking to others, we have a deal with OneWeb. But would you really need it? My answer is no.
Question
So then what’s the bet here then?
Answer:
The bet here is that $60 customer can be taken. He can be fully connected on Starlink.
Question
Outside of India?
Answer:
Outside of India. America. India is not a problem. India will be a very small enterprise and government market, and then of course the defense needs. The entire defense has now moved on to very different kind of modernised equipment—drones, space—and that requires satcom connectivity.
Question
So the satcom story then, as far as Bharti OneWeb is concerned, is going to be global, not so much India?
Answer:
OneWeb is global. India has a small footprint of OneWeb capacity, which we are waiting for the permissions. We’re ready for the last couple of years now; the day they tell us go, we’ll do it. Occasionally we provide services to the military and armed forces, or for disaster recovery. The government taps on us for Myanmar—there’s been an earthquake or there’s a tsunami, we send our systems, they work. Sanjeev Sanyal—he took a boat to Oman to recreate the journey of olden years in a wooden boat. He had a OneWeb terminal there, and he kept on sending streaming videos from there.
Question
Have you heard from the government on when your application is likely to be cleared?
Answer:
No. I think it’ll get cleared once they are clear about Starlink as well.
Question
Were you surprised, though, by what Musk had to say and the manner in which that played out?
Answer:
But that’s classic Musk! and that’s how he comes across. The day he gets mad, he gets mad. He doesn’t care what he’s saying, and that’s what happened. To my mind, they are frustrated because they’ve put up ground network, and they are much less patient than we are.
Question
You talked about the biggest battle at this point in time. We are now down to a three-horse race—two and a half getting to three as Vodafone Idea sort of gets its act together. For the foreseeable future, do you believe that India will remain a three-horse story in the telecom market?
Answer:
If you really look at it, I put Vodafone, BSNL because both are now government-owned, 49% or 100%. Three operators, just like China, just like US, is the right mix or the right number of players in the market. Telecom industry, by its nature, is very capital-intensive. You have to spend hundreds of billions of dollars on a continuous basis: fiber, terrestrial radios, home broadband, space connectivity. Technologies are shifting so rapidly. Now we’re already talking about 6G before we have even monetised our 5G. It’s a very capital-intensive industry, therefore it needs a lot of cash flow to continuously keep building it. India must ensure that the telecom companies, which are the spine of digital India, remain strong and is nourished well. By creating more players, fragmenting spectrum, we will not be served well. So I think you must probably see three telecom companies, and then spattering of space companies coming from, Starlink, Amazon Leo, OneWeb from time to time, taking some part of the revenue.
Question
You talk about playing an important role for the India story as well. As you look ahead, how do you believe you’re likely to intertwine your purpose and your objectives with what you believe is necessary and needed for the India of tomorrow?
Answer:
I think India of tomorrow needs a lot more technology prowess. It needs to do a lot of innovation and research in the area of technology. What China did from 2005, 2008 onwards, we need to now accelerate that. A lot of stuff is happening, a lot of discussions are going on, government is putting up a lot of money at work to energize this area. But as we all know, we are behind in this space. And India has the brains, India has the minds, they are sitting all over the world. How do we assemble those minds together to create an Indian ecosystem-based technology platform? I think that’s what excites me. How Bharti Airtel can play its role in that. Nobody, no one individual or enterprise can do the entire job. Along with the Government of India, how can we put in our own contribution towards that is something that I would want to do.
Question
What could that potentially mean when you say that with the Government of India you can play your part? Is there anything formal that you’re looking at at this point in time to spur the R&D ecosystem?
Answer:
I am just having conversations with the government: how do we energise this area? Lots of discussions are going on, lots of ideas and thoughts are there, and the government is seized of this, that we need to start building. I mean, today you I saw one of the newspapers saying India must start to mandate using domestic AI for many of the critical jobs that India needs to be doing. So these are the areas where conversations need to happen. Policies, government support in monetary terms, and making research and development and innovation as an integral part of corporate India is very important.