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[Music] this podcast is brought to you by Indian knowledge at Warton please visit
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knowledge. won. up.edu India for more [Music] information inclusive growth infrastructure development and
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collaboration in science and technology were the major themes discussed at the recent Global partnership Summit
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organized in Washington DC by the US India Business Council business and political leaders from both both
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countries participated in the event which also marked the US ibc's 33rd anniversary Indian knowledge at Wharton
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spoke with Business Leaders at the event about the challenges they face doing business in a rapidly globalizing
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economy Our Guest today is Sunil parti Mel chairman and managing director of the bti group Mr ml thank you so much
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for joining us today it's my pleasure you started in business in 1976 at age
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18 with $1,500 that you borrowed from your father I believe your first business was
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making bicycle crankshafts could you tell us about your earliest entrepreneurial experiences and what you
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learned from them well as you know I I grew up or I was raised in Ludhiana a very industrious town where almost
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everybody is an entrepreneur of some sort of some kind and it is the Bedrock of small scale industry and the
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principal industry being Cycles or cycle parts hosery or yarn to make uh nare and light engineering items and U coming
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out of college with that small amount of Capital One could only do what was allowed in the ecosystem there and I
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decided to manufacture bicycle parts in particular crankshaft it was a hot forging unit that I put up and that's
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where I cut my teeth into business you moved to Bombay in 1980 at that time your business plans
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were a little more ambitious could you tell us a little bit more about your business ventures at that time
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well I realized that uh one could probably make some mod success out of what I started to do in bicycle parts
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but there was a limitation at the end of the day the manufacturers of bicycles decided how much at what price you could
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Supply to them and just making shafts wouldn't have made you a player of any
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size or scale so I was very clear that I had to get out of Ludhiana into much uh
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bigger play in Delhi or Mumbai Bombay at that time and I spent about 2 three years in Bombay importing a variety of
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products steel brass zinc uh ZIP Fasteners Plastics and eventually brought India's first portable generator
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and that was the first turning point was that the Venture with Suzuki it was with
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Suzuki and that's how I got in touch with the Japanese spent two to three years with them learning their
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techniques practices internationalized my Concepts learned the art of diplomacy in international trade so I would say
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that was the period uh which which gave me opportunities to on one hand earn some uh significantly higher amounts of
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money than I could have done in cycle trade and more importantly gave me that Independence and experience of marketing
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Brands international trade and that that help me in good step later on what were
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the main lessons you learned at that point of your career I think two or three things I realized very earlier on
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that you need to tie up with some large entities much much larger than yourself and if you see from there on the string
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of Partnerships are all with very large companies multi-billion dollar corporations so Suzuki AT&T seens Lucky
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Gold Star at that time now LG and uh Suzuki motor company was there of course British Telecom Telecom Italia so that
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is what I followed tie up with large companies and it's easy to say but large
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companies intuitively don't uh you know Ally with small companies or entrepreneurs so one had to persuade
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these large companies show them the Indian market your high governance structure despite being a small company
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and give them the Comfort to join hands with you to exploit and uh come into the
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Indian market together how did you enter the phone business well that U I would say was a happy stance um in fact you
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can call it an accident because the government banned the import of generators and uh one fine day there was
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no business all the business that I developed was gone and my beat was Japan Korea Taiwan I went back into those
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areas looking for a new product and one of the uh theories that are built around my
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entrepreneurship was do things that have not been done before because if you're
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competing with the big boys in areas where they are strong there was no chance for us to succeed and in my quest
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to Now look for the next big breakthrough product which also didn't need too much Capital was uh met in
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Taiwan in a in a trade fair when I saw push button telephones and I brought India's first
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telephone Set uh replacing the rotary phones and that became a huge success and my romance with teleph
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started thereafter so it went on to cordless phones answering machines fax machines and then India's first mobile
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phone India in those days was such a highly regulated market and an especially challenging environment for
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somebody who wanted to be Innovative how did you navigate your way around those currents tough but as an entrepreneur
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you get trained on everything you you understand import policy you know Customs book you know excise laws uh you
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practically learned to do everything yourself and you hit roadblocks you have difficulties but I had opened my own
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LC's cleared my own Consignments taken the material on trucks myself to the market so an entrepreneur gets a huge
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amount of experience and then you also know how to deal and move uh into that system and the good news is that my
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accidency in the entrepreneurial area truly started happening alongside the breaking down of these
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barriers uh more the barriers dropped the more uh we surged so so 92 in that sense was the turning point when uh the
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Nimar government along with the now prime minister Manon Singh then Finance Minister decided to open up about 10 20
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of us young entrepreneurs really moved in and uh each one of us have created a fantastic business out of that so in
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concrete terms how did the business environment change so that it allowed this entrepreneurial surge to happen
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telephone manufacturing completely regulated what you could import what you could not import how much you could
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manufacture I got my first industrial license to make cutless telephones it had a limit
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of 2 CRS of sales I mean it's ridiculous when you go back half a million dollars
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today you could not man manufacture more than 2 crores of sales now if you see that number what does it mean subscale
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operations small tiny Factory and uh you don't manufacture Telecom products like
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that it's not a small scale uh Factory that you can put up and suddenly one day
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the government said no license is required from controlling what you could do it is gone one day you know and that
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to my mind was uh the first time when the entrepreneurial energies were released into more constructive Arena of
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marketing branding you know doing the right things in just about 10 years you have built bharti into India's largest
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mobile operator how did that come about and what are some of the main lessons you learned from your experience that
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could be helpful to other entrepreneurs well I think very clearly we could have never claimed that we had more capital
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or better Technologies because everybody was buying the same technology it's GSM
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it's a set standard uh we couldn't claim that we had a massive brand or distribution strength in the market the
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only thing that we needed on our side was speed and we used that to great effect we were in the market ahead of
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competition we brought new products in the market ahead of competition we rolled out our networks we begged
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borrowed stole put things out and while they were never near perfect um they were there first and that gave us to my
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mind a lot of Advantage so our theory was if you're caught between speed and
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Perfection always choose speed and Perfection will follow because we never waited for a perfect positioning because
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in business you don't have the time especially if you're small you can't do
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it and the large companies took their own time they were months behind us and that made us uh pick up a market Niche
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for ourselves which in turn made us big how did you position yourself against your competitors was was your strategy
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based entirely on speed or did you also have other tactics no I think one thing was we were very very passionate about
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our business this was the only business we were doing and other competitors had other businesses and this was one of the
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new businesses they were starting and uh speed um new products into the market close to the customer knowing what the
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customer wants I think we lived that whole uh space ourselves day and uh day out and that made all the difference how
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how do you see bti's future in the mobile industry I know you tried recently to merge with MTN in South
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Africa but that merger didn't work out what were your strategic goals for that
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merger and what else might you be considering for the future well we believe that while India is not done in
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as far as rolling out networks the process is done uh we'll keep on adding 2 and a half 3 million customers a month
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until we get to a point where India has 7 800 million customers management teams
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are in place brand is very strong distribution is in place company has no debt so India is done now what does the
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senior management team do you have to create new opportunities of growth and they lie in other Emerging Markets there
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for Africa Middle East and we have today a business model which is uh the best business model in the world lowest cost
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with the highest quality and I think that model is ready to go out so we would like to whenever we get an
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opportunity like MTN to seriously attempt for putting some assets together would you look for partners in other
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parts of the world well we we keep on uh getting shown opportunities around the globe and we remain open let's turn now
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to the retail industry where you have a partnership with Walmart help me understand how you evaluated the retail
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opportunity and what your thought process was in making the decisions you did well we wanted to do something more
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in India as we grow Telecom outside India I think there are other opportunities in India and one of them
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we felt was in the area of retail and India's retail needs to get organized and it will one day it may take its own
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time and everything in India does take time but we will organize the retail to a point where over100 billion will come
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to organize retail stores and we had opportunities to tie up with carfor tesos and Walmart and in fact we were
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almost on the signing stage of Tesco when the Walmart meetings started to happen and we like Le SCS model we like
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the same lowcost delivery mechanism values of Sam Balton so I would say that we are very very uh pleased to have
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entered this area it has its own issues like Telecom this has the resistances built in there are barriers there are
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issues and we enjoy probably dealing with these issues speed was the Hallmark of your experience in the mobile
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industry but of course the retail Market is very very different how do you deal with those
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challenges it's frustrating I think I'm must confess that it's going much slower
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than what we originally thought speed is still what we like but uh this is an now
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a large company we have tie up with a large company they believe that you need to tie up a lot of lends before you
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launch yourself and the first three stores that have opened up in assistance with Walmart demonstrate that planning
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does uh make a difference so we are spending a lot of time planning is not wasted time the supply chain is being
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built first Distribution Center has come up the three stores are having infill rates of 95% and are having sales per
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square foot of 30 40% higher than the other top two or three other operators in the country so start is good it is
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surely slow but I think you'll start seeing some action fairly soon are any political changes needed to make that
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happen well FDI must be allowed we would rather have Walmart right in there with
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Equity ra than providing franchise support from outside yes we would like the FDI to open up you have been quoted
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as saying that India needs a football revolution so how exactly would that come about well I mean it's a it's a
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shame and you know in some sense saddens my heart that a country like India does
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not have any representation in the world soccer and it's a sport which is watched
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by largest amount of people in the world we talk about hundreds of millions of people topping over a billion people who
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watch uh soccer did you play soccer growing up no we played everything as as kids in in the middle class families do
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but I would't say football was my main sport but it is of one of my sons both
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my sons play my nephews play and my son plays fairly comparative football I enjoy watching it with them and uh it's
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also to my mind a sport which can create a revolution of sorts in a country like
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India very soon one ball One open field few kits and it starts off you know there are no kit expensive kits or
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equipment required to support this uh game you know and uh I also believe that India had uh football uh base earlier on
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in 1950 they were in the World Cup they could not play it because they didn't
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have shoes and they refused to wear shoes and they couldn't play and and that was the last time India ever
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reached that point and I see no harm in giving it one serious shot of getting an
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Indian team into 2018 I personally believe we'll get there 10 years is a good time for us to plan Cricket has
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received quite a shot in the arm with the formation of the Indian professional league is that in the cards for football
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yeah India is a cricketing nation it is a cricket mad nation and I think we need
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an alterate sport we need something else outside cricket and will football have his own Premier Leagues it will
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certainly have in fact the IPL is a copy of English Premier League and that's the
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fundamental basis of football and yes we will see something on those lines it'll
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take a long time for people to switch from cricket to football but younger people are watching a lot of
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international soccer uh there is going to be the European Cup in Austria in a few days from now and you can see
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already some fever building up in India timing is right in all the years that youve been an entrepreneur what is the
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single biggest leadership challenge that you have faced how did you deal with it
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and what did you learn from it well it's hard to you know put down it to a single event in life that what
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will be the hardest decision but I would say bidding for a mobile license Against
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All Odds in 1992 when I was a rank Outsider there was I think the total sales was about $5 million in all and
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going and bidding for a mobile license was tough but we persevered we went into it
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against the mights of the biggest of the biggest in the country and the world and
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we ended up getting a license and more importantly not only a license we rolled out India's first Network and have now
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become the largest so that starting point of having the in a sense defines of the logic of uh you know this is only
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for the big boys this need Deep Pockets don't even look at this that Defiance of
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the conventional wisdom to my mind was very important and in your mind uh being determined to challenge that thought
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that you can't do it as a young entrepreneur Mr M thank you so much for joining us thank
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