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Can grow in tough market: Airtel

Airtel says the company can continue to grow market share and is not worried by new entrants.

Written by Reuters | Barcelona | Published: February 18, 2009 10:06 am

Bharti Airtel Ltd,India’s top mobile operator,says competition in the world’s biggest democracy is intense but the company can continue to grow revenue market share and is not worried by new entrants.

In an interview at the Mobile World Congress trade fair,President and Chief Executive Manoj Kohli said consolidation would come to the Indian market within three years and said Airtel saw no strategic reason yet to acquire domestic rivals.

He said the group was also looking at possible deals in other emerging markets in Africa,Asia Pacific or the Middle East but said it was in no hurry.

“We’re looking at various markets,” he said. “We’re looking at all opportunities but we’re not in a hurry. We definitely don’t want to pay more than the asset deserves to be paid,so maybe when that opportunity comes in one year or two years we’ll look.

“The values (of emerging market assets) are definitely better but the seller also has to be at the table.”

Mobile operators in the world’s fastest-growing wireless market have been adding more than 10 million new users a month,even as a slowdown hits much of the country.

But an increasingly crowded market — there are 12 mobile firms and at least four more are set to launch operations this year — has prompted cut-throat competition among operators,with rivals launching low tariff plans.

Kohli said he was not seeing demand for lower tariffs from his customers,more a request for quality,and said he thought new entrants to the Indian market would struggle for years to come.

Norway’s Telenor ASA has said it plans to launch mobile services in India in the third quarter and invest 22 billion crowns ($3.98 billion) in the venture until its expected breakeven in five years.

Asked about new entrants,Kohli replied: “We feel these operators that come in do not have a viable business model and they will see a struggle in India for many,many years to come.

“They will not find it easy to build a critical mass to garner enough economies of scale.”

Kohli also said he was not concerned by the delay to the auction for third-generation spectrum,saying Airtel was in a strong financial position and a couple of months delay would not matter.

He said the government had not decided whether to hold the auction before or after its general election expected by May,and that the auction could run as late as August or September.

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