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Airtel pioneered the model to provide service at a low cost

Airtel pioneered the model to provide service at a low cost

Airtel pioneered a model that helped it to significantly lower down the cost of providing service.

Migration in India,sociologists posit, has ratcheted up in the second decade of reforms. Is itjust the roaring economy that is behind it? The pop anthropologist thinks thereis another reason too: an estimated half a billion mobile phone users in India. In 2001,the total number of phones was just 45 million. For the migrant, distance isdead, truly; everybody is just a phone call away. It helps that even afive-minute call will not cost more than the cheapest filter cigarette of theland. Who got it there?

A company called Bharti Airtel, India'sNo.1 phone firm today and the world's sixth by customers. Airtel shredded eachpaisa of cost when it was faced with a grow or perish future in the mid-2000s.This included outsourcing everything that was not core: phone and computernetworks, billing and customer service. Indians revelled in the low cost ofservice, global peers copied the model, and Airtel made enough cash to fund a$10-billion buyout in Africa.

By Anusha Subramanian, Anand Adhikari, K.R. Balasubramanyam, Rajiv Bhuva, Josey Puliyenthuruthel,G. Seetharaman and Sunny Sen

Published on: Dec 20, 2011, 12:00 AM IST
Posted by: Surajit Dasgupta, Dec 20, 2011, 12:00 AM IST