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