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BW Real 500: Riding North
The 59-year-old Mittal was ranked as the second richest Indian in BW Businessworld’s Super Rich issue. World’s third largest mobile operator Bharti Airtel is the top telecom company on BW 500
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Uunil mittal loves a no holds barred battle. He confronted Mukesh Ambani in 2003 and refused to blink. He is all set for a rematch as the 4G wars hot up. Bharti Airtel continues to be the only telecom service provider to figure among the top 10 companies in the BW Real 500 ranking. It has improved its position by five places compared to the last two consecutive BW Real 500 ranking of no. 10. On a consolidated level, it witnessed a 15.39 per cent growth in its total assets to Rs 2,31,442.50 crore, while its operating profit recorded a growth of around 6 per cent in FY16 compared to last financial year. For the year ended 31 March, 2016, the company reported consolidated net profit of Rs 5,430.50 crore. Its consolidated revenue for the period stood at Rs 96,619.20 crore, registering growth of 4.87 per cent yoy. In October 2015, Airtel launched high speed 4G services commercially in 334 towns across India and concluded the sale of about 9,000 telecom towers in eight African countries. Total proceeds from all the concluded transactions stood at over $1.8 billion.
Mittal, founder and chairman of Bharti Airtel, notes in the annual report for 2015-16: “Early on during the year, Airtel moved past a key milestone, when it became the world’s third largest mobile operator (by subscribers)...It became the first company in India to receive a payments bank licence. I strongly believe with our deep-distribution network touching remote corners of the country, Airtel Payments Bank is uniquely placed to deliver a differentiated banking experience to our customers.”
The 59-year-old Mittal was ranked as the second richest Indian in BW Businessworld’s Super Rich issue.
According to Mittal, in FY16 the company’s philanthropic arm, Bharti Foundation, expanded the ambit of its initiatives considerably. “Satya Bharti Abhiyan, the rural sanitation initiative, has already constructed and delivered over 12,700 household toilets benefiting over 63,000 users in 559 villages in Punjab’s Ludhiana district,” Mittal informed the shareholders.
The stellar performance of the company was also rewarding for its chairman. Mittal took home a total package of Rs 27.8 crore, which includes Rs 24.6 crore in salary and Rs 1.17 crore in perquisites, for 2015-16. In the company’s annual general meeting held on 19 August 2016, Mittal, was re-appointed as chairman of the company for another five years and he will get a fixed pay of Rs 21 crore per annum. The performance-linked variable pay has been kept at Rs 9 crore.
Going forward, the entire telecom sector is facing a combined challenge from the entry of Reliance Jio, the 4G LTE services launched by Reliance Industries on 5 September, 2016. In fact, the announcement of free voice calls, zero roaming charges, simple tariff plans and a host of attractive offerings on Reliance Jio has forced rivals to come up with counter offers of free data and voice plans. Jio’s launch and the subsequent extension of its free plans till 31 March, 2017 has forced rivals like Bharti Airtel to engage in price wars. Bharti Airtel has announced that it would offer free data to woo new and existing 4G customers, intensifying a price war in the sector. The result: share prices of telecom operators are tumbling. It will be interesting to analyse the full effect of Jio’s entry on the financial health of the entire telecom sector sometime next year.