India (32 page)

I had one last question for Ghandy about Maoism, the same question I had asked Madhu in the forest in Andhra Pradesh years before—how could he follow Mao after everything that had happened in China, with its political system that had killed tens of millions of people? His answer was that there may have been mistakes but the philosophy was right, and I thought at that moment how overrated conviction was as a way of facing the world. When taken to an extreme, idealism is little more than a form of prejudice.

Before we left, Geelani had to hand over the food. In a corner of the area by a grille, each roti was checked before being passed through, each dish was stirred once more. However unappetizing the food looked, it was better than what was inside. Through the bars I could see Kobad Ghandy, hunched forward, waiting to return to his cell. Afzal was still up by the window, and he beckoned me over in his manic, smiling way. He did a mime, imitating the guards who were searching the food. I asked what he missed most. “Roast chicken,” he mouthed at the dead glass. “I miss roast chicken.”
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Then the guards ordered everybody out.

I
N THE LAST CENTURY
, the world’s personal wealth was held in American, European, Arab and occasionally East Asian hands. Something changed—by 2008, four of the eight richest people alive were Indian. Alongside them in the
Forbes
Top 10 were a German, a Russian, a Swede, two Americans (Bill Gates and Warren Buffett) and the Mexican tycoon Carlos Slim Hélu, whose father was a Maronite Christian from Lebanon who had, in the son’s words, “escaped the yoke of the Ottoman empire” at the age of fourteen by moving to Mexico.
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Sunil Bharti Mittal’s net worth was estimated at $8bn. Unlike many other successful Indian business people, who had developed existing operations or used their talents to flourish in a foreign market, he was wholly self-made and had created his fortune on Indian soil. Now he was expanding. When I met him in 2010, Mittal’s company, Bharti Airtel, had just taken over the telecom operator Zain in fifteen African countries. Like other aggressive entrepreneurs, Mittal saw undeveloped territories as the future; the purchase of Zain for $10.7bn was the largest ever cross-border deal in an emerging market.
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His intention was to grow in Africa as rapidly as he had in India. It was not unlike the rough capitalism in the U.S. in the nineteenth century, when men like Cornelius Vanderbilt and John D. Rockefeller made sudden, inconceivable fortunes. While Russian oligarchs had bought up
state assets at knockdown prices, Indian entrepreneurs were able to take advantage of sudden advances in technology, or to corner a particular market when the economy expanded in the wake of globalization. Sunil Mittal had placed himself in exactly the right position to take advantage of a moment in his nation’s history when a great fortune could be made.

At the Bharti Airtel offices in Mayfair, the brass Zain Services plaque was still in place beside the front door. Mittal was on a flying visit to Europe, zipping between countries and spending just over a day in England. Except for a receptionist or secretary and a tank of fat goldfish, the office was empty: the new dispensation had yet to put its people in place. While I waited for Sunil Mittal, a member of the old regime arrived. This man was tall, white, stooping, grey-haired, distinguished, and he peered at me over the top of his half-moon spectacles as he sat down at a desk. He tapped listlessly at a computer keyboard. The secretary walked over to him, and they had a little exchange.

“I didn’t have time to do your refund for the hotel bill. I’ve been doing things for Bharti,” she said. Ignored, she went on: “I’ll do my best to do it this afternoon.”

He stared straight ahead and said in an acidulous upper-class English accent, in which the emotion conveyed the opposite implication to the words: “You’re very kind.”

Next, an executive of the Bharti empire knocked on a glass-panelled door. She was stuck on the wrong side of it. The secretary rushed to open it and wedged the door ajar. “How am I meant to get in if you are not here?” asked the Bharti executive. “Mrs. Mittal will be here in ten minutes. Have you met Mrs. Mittal before? You might want to go down and meet her.” She was tense, serious. The keycode for the door was produced.

Sunil Mittal appeared out of the elevator. He had come from a meeting in another part of London. In his early fifties, he wore a suit with a blue shirt and tie, and red strings from the temple were wound around his right wrist. He had no entourage with him. Bypassing both the old and new guard, we went to a meeting room. His manner was direct, unpretentious. I asked him how he had started out. When asked this question, many people in India will give a disquisition on the achievements of their forebears. Mittal did not do this. Instead, he said how much he had hated studying at college.

“I preferred rifle shooting, playing cricket and table-tennis, flying gliders. My father said I had to graduate, and then I could quit. With a friend—or a
colleague—from college, I started making bicycle parts. I had a tiny amount of family capital, about $1,500.”

Sunil Mittal was born in Ludhiana in Punjab, a city known for manufacturing knitwear, hosiery and motor parts. He graduated in 1976, at the time of the Emergency. His home life was unusual, in that he was not part of a joint household.

“We were more like a Western nuclear family. My parents were both Punjabis, but my mother was from a Kshatriya family and my father was a Bania.” Punjabi Banias were mostly shrewd traders, shopkeepers and small industrialists. So the bride was considered a bad match, who would bring no dowry. “My father was a student politician and my mother was in the audience when he was giving a speech. They had a love marriage. My father’s family were not happy and they almost disowned him. I never knew my uncles or my cousins. My father would have been cashed in at a higher level. In his time, it was important you came from the right family background.” His father, Sat Paul Mittal, later became a Congress MP in the Rajya Sabha and a prominent parliamentarian who campaigned internationally on matters such as apartheid, population growth and social development. “When he did well as a politician, some of his family came to meet him again.”

Although Sunil Mittal’s father was in politics rather than in business, many of the people in the family’s social group were involved in trading or manufacturing. Ludhiana was one of the busiest commercial centres in Punjab, a place where it was usual to be trying to set up one thing or another. At the fledgling bicycle parts factory in his early twenties, Mittal “dreamed of owning a large-sized business entity,” and knew it was not the ideal industry for him. “I saw it as a means to an end, and knew it would not be enough. We manufactured special high-tensile-strength crankshafts for export to Germany. I did a few other things in my twenties—trading in copper, zinc, zip fasteners. I wanted to be important in my sphere. Even though I was not even a speck in the copper market, I wanted to be in a position to decide the market price one day.” He dreamed in numbers and in big ideas.

“I have always been a capitalist in my mind, but misery and poverty were at our doors—you could hardly not see them—and my father was a politician during a socialist time. So we were socially connected. I was uncomfortable with the control or permit raj, being told what you can and can’t do. When I was starting out, all the prospects were with a handful of business families. People would say to me: ‘Take an agency for gas or cars. Do
some work for Birla or Tata. Your father’s a politician, you’ll have a comfortable living.’ I didn’t want to do that, I wanted more, and I thought that if you look to the U.S. or to Europe, in each decade there is a business idea that breaks the mould.”

I began to import portable generators from Suzuki in Japan—the sort that in another country might be used for a picnic or a party or an ice cream stand. In India I thought we would need them in homes when the mains electricity failed, which happened all the time in those days. It was hard work and pain from 1976 to 1982, but it was the first time I tasted success. You could put that on my tombstone. I was able to buy a good car and an apartment. I had revenues of $100,000 a year, which at that time was really a lot of money. In 1983, generators were banned. It was decided by the government they should be manufactured in India, because of the import substitution policy. Birla and Shriram [two large, established and politically well-connected business houses] got letters of intent [from the bureaucracy in New Delhi] and the ban on imports was immediate, even though they hadn’t started to manufacture any generators.”

Sunil Mittal laughed, as if he still could not believe it, and hunched forward in his chair. His hair was closely cropped, black flecked with grey. “So I picked up my bag and went to Japan. God has guided my life. I looked at the street markets, seeing what was there. Some of the time I took an interpreter with me, other times I got by using English. I considered importing VCRs. I went to Korea, went to Taiwan. I looked at Teflon-coated products, at sports shoes, even at plastic tents. In Taipei at a trade fair, I saw push-button phones. I went to visit the factory of a man named Richard Wu and signed an MOU with him immediately to import the parts and assemble them in India. Only rotary phones existed at that time, and I knew these would be popular. We called the company ‘Mitbrau,’ which sounded German—foreign products sold better—but it stood for Mittal Brothers as I was working with my brothers by then. We sold about 10,000 phones a year, with a 300 or 400 percent margin. I realized I loved telecom. We started to make answering machines, did a tie-up with Siemens and imported cordless phones and fax machines from Korea. Then the mobile phone market opened up, and we bid as the outsiders. We had to go through courts, litigation, challenges—I’m compressing a lot of things here—but we ended up winning the Delhi licence and launched Bharti Airtel in 1995. The rest is history.”

Three years before the telecom sector opened up, Sunil Mittal had asked a consulting company to do a report on the market potential for mobile
phones. Getting a landline connection in India was a long, tedious and corrupt process, and it was apparent the new technology might enable people to bypass the obstructions. “They said we could sell 50,000 phones over the next ten years. I thought the number was closer to half a million, so I threw away that report. I can’t truthfully say I saw the full market potential in 1995. By 2000 or 2001, we knew the future was going to be huge. I was convinced India would have more phones than it had vehicles. Today there are 20 million cell phones in Delhi. We have 135 million subscribers in India.”

The invention and spread of mobile telephony had a significant impact on Indian society. The mobile phone spread faster than in countries with a more efficient landline system. It had become an Indian object—a status symbol and a commonplace tool. The phrase or word “missedcall” had passed into Hindi and other languages. When foreign publications illustrated stories about contemporary India with inevitable photographs of a sadhu or a sari-clad woman clutching a mobile phone—as if this were the most outlandish juxtaposition, an Easterner holding a Western product—they were missing just how mainstream and indigenous the technology had become. Bharti Airtel’s own revolution had been ignited further east, when its founder visited Taiwan in the early 1980s and was captivated by the idea of a push-button phone.

When his commercial idea exploded, Mittal made a decision which went against accepted business thinking. He was under threat from other Indian companies that were moving into the telecom market, like Reliance, which had more capital to spare. So rather than finding new employees, Mittal did something unexpected—he “reverse outsourced,” giving his work to foreign companies like IBM, Ericsson and Nokia, who opened up larger operations of their own in India. So instead of an Indian company “taking” jobs from richer nations, he was creating business for them. The strategy worked: even while Bharti Airtel was hiring fewer people, it became India’s largest telecom provider a little over a decade after its foundation.

“I looked at the size and infrastructure of telecom companies around the world,” he said. “I looked at Verizon, British Telecom, France Telecom, AT&T—and I thought there’s no way I could build that infrastructure in twenty-four months. It’s not going to happen. So I let other companies do the IT and call centres while we focused on markets, customers and innovations.” Bharti Airtel no longer obtained and maintained their own equipment. Their network operations were run by Ericsson, the management of their transmission towers was outsourced and most of their IT staff moved to IBM, with protected salaries and the right to return within two years.
“None of them came back!” Even the computer on Mittal’s own desk at his head office was maintained by IBM. “When I decided on this strategy, one of the big European companies called me to say I was making a fatal mistake, and that I was taking away the heart of our business. I told them telecom companies are not technology companies. We’re not the ones who understand how wireless technology works. If something goes wrong with a switch and the network goes down—nobody in our office can fix it. I’ve sat all night watching engineers trying to get the Airtel system running. The heart of our business is not technology, it’s the customers. I prefer speed to perfection.”

Although Mittal was still a small player at the time, he had three meetings with Sam Palmisano, the chairman and CEO of IBM, who realized his own company needed to evolve fast if it were not to have its business eaten up by the nimble new IT companies in India. With the exponential growth of Bharti Airtel’s subscriber base, IBM had every reason not to exploit the contract by ratcheting up costs.
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“Sam told me he would personally keep a watch on this project. I told him, if this fails, IBM will fail, and the world’s telecom companies will open to you if it succeeds. He kept his promise. Soon I was talking at IBM conferences, celebrating our partnership on stage. Once that happened, I knew we were in a good place and it would hold together.”