How a Ludhiana bicycle parts maker became India's lord of the rings

Sunil Bharti Mittal, the chairman of Bharti Enterprises, is completing 50 years as an entrepreneur, having started out in 1976 with a modest bicycle-parts business in Ludhiana. His journey from a small manufacturing unit took him to the chairman's office of one of India's largest business groups and also India's lord of the 'rings' as Bharti Airtel remained India's largest mobile operator by subscriber base for nearly a decade, from 2009 until the Vodafone-Idea merger in 2018.

Mittal's entrepreneurial journey has been anything but linear. He tried manufacturing, trading and importing before finding his calling in telecommunications. By the time Reliance Jio arrived in 2016, Mittal had built Airtel into India's dominant private telecom operator. Now, as the industry prepares for another technological shift, his sights are on the satellite communication business.

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Sunil Mittal's Ludhiana years

The story began when Mittal was barely 18. With Rs 20,000 borrowed from his father, he set up a small venture manufacturing bicycle components in Ludhiana in 1976. It was hardly the beginning of a glamorous business empire. The work involved dealing with customers, managing cash and understanding the economics of manufacturing. He also learnt an early lesson about the limitations of operating in a relatively small industrial market.

The business eventually took him beyond bicycle components. He manufactured crankshafts for bicycle makers and traded in products such as hosiery yarn. These were not businesses that offered the prospect of spectacular growth. But they gave him an understanding of manufacturing margins, distribution and the importance of identifying markets larger than the one immediately around him.

In 1979, he left Ludhiana and moved to Mumbai. This move marked a shift from being a small-town manufacturer to an entrepreneur looking for opportunities in a much bigger market.

His next bet was importing portable electric generators from Japan. He saw an opportunity in India's shortage of reliable electricity and the demand for backup power. But the government subsequently restricted generator imports, disrupting the business. It was another setback, though it also pushed him towards a different opportunity.

From generators to telephones

Mittal's entry into telecommunications came through an unlikely route. During his travels, he had encountered push-button telephones, which were considerably more convenient than the rotary-dial instruments then common in India. He recognised that the product could find a market at home.

He entered into a technical collaboration with Siemens and began manufacturing push-button telephones. The business was called Bharti Telecom. This was a turning point because it brought him closer to the industry that would eventually make his fortune.

The opportunity was larger than selling telephone instruments. India's telecom infrastructure was underdeveloped and telephone connections were difficult to obtain. The government's monopoly over telecommunications had left enormous unmet demand. Mittal understood that the real opportunity would come when the sector opened up to private investment.

His ambition was no longer confined to manufacturing equipment as he wanted to operate a telecom network.

Airtel and the making of a telecom giant

The opening came with the telecom reforms of the 1990s. Mittal secured a cellular licence in Delhi and launched Airtel in 1995. This was a very different business from the manufacturing and trading ventures he had pursued until then. It required enormous capital, regulatory clearances and the ability to build a network in a market where mobile telephony was still an expensive proposition.

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The early years were difficult because mobile tariffs were high and the subscriber base was small. But Mittal backed the long-term potential of mobile communication. Rather than treating it as a luxury service for the wealthy, he believed it could eventually become a mass-market business.

The growth of Bharti Airtel was helped by an unconventional operating model. Instead of owning and operating every part of the network infrastructure, the company increasingly outsourced activities such as network management and tower operations. This helped reduce capital requirements and allowed it to expand faster.

The model was particularly important in a market where tariffs were falling and subscriber growth depended on making mobile services affordable. Bharti's strategy was to build scale and make money through volumes rather than rely on high margins from a small customer base.

By 2009, Airtel had crossed 100 million subscribers and emerged as India's largest mobile operator. Mittal had also built a formidable management team, with Akhil Gupta playing a crucial role in translating his ambitions into a workable corporate strategy.

The battles that nearly changed everything

The rise was not without existential threats. One of the most difficult periods came with Reliance's entry into mobile telephony. Its aggressive pricing and ambitions threatened to upset the economics of the entire industry. Mittal even considered quitting the telecom business at one point.

The fact that he decided to stay on proved crucial. The subsequent expansion of Airtel strengthened its position and turned it into an international operator. The acquisition of Zain's African operations in 2010 was a particularly bold move. It gave Bharti access to several African markets and transformed the company into a global telecom player.

The deal also demonstrated that Mittal's ambitions had moved well beyond India. The entrepreneur who had started with a small bicycle-parts business was now negotiating a multibillion-dollar international acquisition. But his biggest domestic challenge was still to come.

Navigating the Jio challenge

For nearly two decades, Airtel had been the benchmark for private mobile telephony in India. The arrival of Reliance Jio in 2016 changed the industry's economics. Free voice calls, sharply reduced data tariffs and an aggressive customer-acquisition strategy triggered a price war.

The resulting consolidation wiped out several operators and forced the survivors to rethink their business models. Airtel had to defend its subscriber base while dealing with falling revenues per user and mounting financial pressure. The company that had once set the pace in Indian telecom was now responding to a competitor with deeper pockets.

Still, Airtel survived the disruption. It adapted its business around data consumption and subsequently benefited from the industry's consolidation. The competitive landscape that emerged was very different from the one in which Mittal had launched his first mobile service.

Mittal looks at his next frontier

Fifty years after starting out in Ludhiana, Mittal is looking at another frontier. Bharti's investment in Eutelsat OneWeb gives it a foothold in satellite communications, a business that could become important in connecting remote locations where conventional telecom networks are difficult to deploy.

In a conversation with ET, Mittal said the Bharti Group was open to increasing its stake in Eutelsat OneWeb to around 30%, matching the holding of the French government. The interest is significant because satellite connectivity could complement terrestrial telecom networks, particularly in underserved regions.

For Mittal, this is another opportunity to position Bharti ahead of a technological shift. His first big bet was on telephone instruments. The second was on mobile networks. Satellite communications could be the next chapter.

The bicycle-parts maker from Ludhiana has spent five decades moving from one business opportunity to another, often after an earlier venture ran into trouble. His most enduring strength has been the ability to recognise when an industry is changing and move before the opportunity becomes obvious to everyone else.