Excellent article by Sunil Mittal

ALL THINGS MUST PASS AROUND

As the pilot taxied at Heathrow on a flight to Barcelona, I looked out at the busy airport from the tiny window and thought, “Well, we will have spanking new airports in India in the next few years”. In particular, the mess of Delhi and the greater embarrassment in Mumbai would be behind us.

Who are at the forefront of this much awaited change? GMR and GVK. India’s most important infrastructure model will rest on the shoulders of these two rookies. Who are they? GVK has sales of Rs 350 crore; GMR, while having a sale of over Rs 2,000 crore, has it all in brick and mortar business of construction. Will they be able to handle the multimillion dollar projects? Will they manage to gauge customer (passenger) needs, the complications of air regulation and the pressures of running a mission-critical business? How could newcomers upstage the big boys?

Whenever new opportunities are thrown open by the government, a new set of entrepreneurs emerge on the national scene, who then go on to become powerhouses in their own right. Bharti Airtel is a case in point. When the government opened up the telecom sector, four rookies took the grandstand along with the big boys. Bharti, Siva, Max and BPL took the key Delhi and Mumbai mobile licences while competing with the who’s who of Indian industry. The Tatas lost out, as did many other established business houses. Modi & Usha got Kolkata, Thapars and RPG got Chennai. The rookies pushed hard. The rest is history.

Bharti Airtel is today India’s largest telecom company. Yet, it did not go on to win the airport deal in Delhi. Changi pulled out at the eleventh hour. Yes, Bharti-Changi would have scored the highest in technical parameters, but this would be too simplistic a conclusion. Bharti would not have won against the rookies.

What makes these new kids succeed where established players fail — or in many cases, wake up to the potential when the train has left the station? There are some exceptions. Reliance stood in front of a running train and, as we all know, managed to jump on to it. However, the rookies could not be hurled out of the moving train. They are the leaders.

India’s corporate history has several examples of the new kids taking over the block. Reliance came from nowhere when the government opened up the petrochem sector to become a formidable player. Subhash Chandra sneaked into the media world with Zee even before the ground rules were laid out. IT threw up Infosys, Wipro, HCL and Satyam. TCS is also a formidable player, but that does not take away from the glorious rise of the ‘new’ IT boys.

Then there’s Naresh Goyal. Jet Airways is the most admired airlines of the world — yup, the world. Anil Agarwal picked up the important metal companies divested by the government through stiff competition from the established houses.

I will use my own loss of airport opportunity to proffer my own reasoning. Bharti went into the opportunity of developing the airport ahead of others. The company started work on the airports even before the government woke up to this possibility. Large established players are required to think ahead of time and shape the economic agenda of a nation. We tied up with the best operator in the world, Changi. All stakeholders, including the government, gave this potent combination a thumbs up to win the Delhi airport.

The nation needs to celebrate the victory of GVK and GMR. It reinforces the fact that Indian economy and politics have matured to allow new players to partake the new opportunities being thrown up in India. The rise of the rookies will inspire thousands more. Today the economy is bringing forth a hundred new faces. In a few years, GVK and GMR will run dozens of airports and will be household names and in the round beyond, they will also sit and wonder how they lost to the new kids on the block.

(The writer is Chairman & Managing Director, Bharti Enterprises)
Hindustan Times, Feb 16, 2006