Hutchinson Essar to follow Bharti Business Model.
Bharti Televentures’ business model was applauded by IBM CEO Sam Palmisano during IBM business leadership forum in China where top CEOs from the western world participated. In Feb-2004, Sunil Mittal, CEO of Bharti took a bold step in outsourcing its cellular network operations to its equipment vendors – Nokia, Ericsson and Siemens. Sunil’s views were he could focus more on better customer service. This rocked the IBM forum as this was a bold and unique move by any large telco/cellco in the world.
After 2 years, Hutchinson-Essar a joint venture between Hutchinson Whampoa and Essar group is following similar model by outsourcing their network operations to Nokia. As C.K.Prahlad predicted that their is a lot for the Western CEOs to learn from the East, this proven business model is something which AT&T – Cingular and Sprint can’t afford to miss who are known for their poor customer service.
Convergence.In Broadband.Out
Why SingTel wants to exit Bharti ?
Warburg Pincus one of the most successfull VCs that backed Bharti Telcom since the beginning was consistently selling its stake and completely exited with it’s last 4.4% stakesale to Vodafone in Q4-2005. Now it is reliably learnt that SingTel has hired a merchant banker to value its whopping 31% stake in Bharti Televentures.
Vodafone doesn’t really invest for financial gains. It holds 45% in American telco, Verizon and has a substantial say in the company. If Vodafone has ambitions in India, then SingTel could unload its 31% stake in favor of Vodafone making it the second largest shareholder after Mittal family who still hold 46% in Bharti. SingTel’s total investment in Bharti is around $650 million which is now valued at $4.5 Billion.
However, it is not very clear on why SingTel wants to exit India. At one point(2003 and 04) it had lobbied in Delhi to raise the FDI cap in telecom.
Convergence.In Broadband.Out
Maxis eyeing Spice ?
Earlier I reported that Maxis Telecom promoted by Malaysian billionaire Anand Krishnan had bought a majority stake in Aircel. Maxis having entered India through Tamilnadu now wants to consolidate further in Karnataka and Punjab by buying out B.K.Modis out of Spice Telecom. Modis hold 51% stake in Spice.
Maxis is also the largest Telecom player in Malaysia and with further consolidation in India it might well be leading in the Asian corridor dream of Telcos.
Convergence.In Broadband.Out
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