Bharti Airtel change in strategy

Wake up: It’s time to change Strategy!

A few weeks ago, I travelled to Chennai, India and I promise readers that this is the last reference I will make to a trip that was filled with myriads of experiences to write about. [Alright I lie, whenever I have to meet my editor’s deadline, the India trip provides the fastest copy to churn out – so bear with me for the next few weeks!] Exhausted after a long day, I called room service to order in some dinner. “Yes Sir,” said the eager beaver who answered the phone. “Umm, actually I am a lady,” I politely pointed out. “OK, very good sir,” said eager beaver. I was too hungry to argue pointlessly so I just gave up on my strategy to entrench the Queen’s English and ordered my food. I was reminded about this change of strategy episode when I read an article featured in the Daily Nation of February 29th 2011 titled “Airtel could drop low cost strategy”.

The writer, Paul Wafula, was reporting from the sidelines of the Mobile World Congress 2012 in Barcelona, Spain where Bharti Airtel’s Founder, Chairman and CEO Sunil Mittal told participants that the firm was surprised at the response to its low cost model in Africa. Apparently the African market did not increase its talk time which was critical to supporting its low cost model. Quoting Mittal, the writer states, “Unlike India, we were surprised that in Africa, lower tariffs could not increase volumes. In Africa subscribers use the money saved on lower calling rates to buy food and not to talk more. This means that we have to think of a new model that works there.” First of all, these are extremely brave and honest words by any corporate leader: Our strategy is wrong, and we’ve realized what’s good for the goose is not necessarily good for the gander. How many leaders will stand up before their peers and admit that? Yes, I thought so. None that you know! Secondly, the competition in the African markets that Airtel operates in must have rubbed their hands in collective glee, saliva dribbling off the sides of their mouths as they spluttered “I told you so” a thousand times. The Kenyan market’s calling habits in particular were referred to as “peculiar” by former Safaricom CEO Michael Joseph after realizing that Kenyans clearly do not follow the mold as seen in other markets. Safaricom thereafter has succeeded in capturing the hearts and minds of Kenyans by thinking, breathing and strategizing Kenyan. Enough said. So what does this mean for Bharti Airtel? Africa first and foremost cannot be broadly paint brushed as one homogenous market. It must be a huge challenge converting the success from one market in India across 16 diverse countries in East, Central and West Africa each with very unique characteristics, culture and economic drivers. [Oh and by the way, to the marketing team at Airtel, the average Kenyan can tell that the black face on your advertising billboards is not Kenyan, or even East African for that matter.]

Having said that, the consumer has benefitted from the low cost model. The consumer has had their budget freed up to purchase that extra packet of milk, loaf of bread, ugali or yam foo foo while still managing to keep in touch with friends, family and business associates. To that, consumers will remain eternally grateful for as long as the tariffs remain low while shareholders amongst the telecoms players remain increasingly belligerent as dividend yields decrease due to lower EBITDAs. But what Airtel have done is provide a classic business school case study on when should strategy change. The gauntlet has been thrown by Sunil Mittal: we overestimated our markets and we’re going back to the drawing board. Meanwhile, the rest of us wait with bated breath: we saw the same from Vivendi, Celtel and Zain. Drumming the tin cans of change with a toothpick is stuff we’ve heard before. Understanding the Kenyan and African consumer clearly takes more than historical successes in other markets. It will take rolling up of sleeves, slipping on some good old gumboots and walking in the trenches of urban and rural towns to understand how the consumer moves from the moment he wakes up to the moment he sleeps. It cannot be done from a glass and steel encased central head office. It has to be done on the ground. We wish Bharti Airtel all the best.

In other news, am I the only one who finds a complete lack of seriousness in the security searches in malls and office buildings in Nairobi? The last I checked, the Kenyan Defence Forces were still fighting in Somalia and the Al Shabaab chaps were still posting all manner of fire and brimstone messages on their Twitter accounts. So if this is the case, then why would security guards completely relax after 5 p.m. and all day Sunday waving everyone through (Yaya Centre mall) or check only the boot of cars and not the main interior of the car (All office buildings!) or only run the security mirror on the right side of the car and not the left side (Junction Mall)? In my humble opinion, the parties so named have figured that the terrorists operate from Monday to Saturday, put explosive materials only in the boot of the car and not under the bonnet or under the chairs of motor vehicles and that terrorists tend to be more right handed than left, placing bombs only on the right side of motor vehicles. I get it now. It is with a wing and a prayer that we Kenyans go about our daily business, trusting that a higher power will protect us from those keen on destroying the relatively peaceful state of existence that we enjoy. Certainly there is no protection from the super heroes that guard the entry to public places or their wildly clever employers who give them inane instructions. God help us all!
Twitter: @carolmusyoka