A tale of two transformations

In the next few months, I will complete 41 years of my professional life. It feels like yesterday that I joined the Sugar Division of DCM/Shriram group in 1979. The journey from sugar to Softbank has been extremely gratifying!

My first 16 years were primarily focused on various manufacturing plants of the Shriram group, followed by 20 years in the telecom sector and the last five years in renewable energy sector. I will share some highlights of creating the telecom and renewable energy businesses in India as well as in many international markets.

Supporting the scale-up of Airtel from two million to 300 million customers was not only exciting but also a fulfilling journey. It involved multifarious challenges of tough regulations (which continue even today), new brand, marketing and deep distribution, shift from 2G to 4G networks along with the latest IT inductions, building a globally unique business model, and most importantly, an open and agile work culture.

In addition, the societal transformation from around 15 million landlines in 1995 to over one billion mobile phones in 2019 enacted the biggest transformation in the life of an Indian in the last century. Also, the international expansion into Bangladesh, Sri Lanka, and 17 countries in Africa was a major step for a small new Indian company from Delhi.

Plus, the formation of the world’s largest tower company to optimize the fixed infrastructure costs across the industry was an unprecedented initiative, later followed by many telcos across the world.

Moving to the renewable energy JV, SB Energy formed by Softbank and Bharti in 2015 was not only timely but also a prerequisite for energy transition from fossil-based power to renewable energy from solar and wind. The natural resources of sunshine and wind in coastal regions are turning out to be the most affordable power sources for the masses of India. The solar and wind tariffs are already under Rs three whereas the national average power purchase cost is Rs 3.60.

SB Energy has completed its first phase of laying the foundation of around 4GW capacity in the pipeline. The target set by Masayoshi Son is 20GW, which will need faster capacity rollout in the coming years to support the Prime Minister’s national target of 175GW by 2022. This company is not only setting the standards of world-class design and quality of the plants but also the speed of execution.

The mobile Internet transformation was the biggest global transformation in the last two decades globally. And, the largest global transformation in the next two decades will be the energy transition from fossil to renewable energy, driven by the fresh energy requirements from the transport sector transiting from IC engine to EVs. I have been blessed to participate in both these global transformations which are positively enhancing the lives of billions of people globally.

Let me now share five major learning from these two rich experiences in the last 25 years.

Technology leap: These new businesses are led by technology leaps which are difficult to appreciate initially but are welcome later when they become affordable and easy to adopt. When mobile services got affordable it was accepted happily by even the villagers in lakhs of villages across Asia and Africa.

Similarly, when solar and wind energy got affordable due to new technologies and scale, it is now so well accepted across the world.

New business models: Such new businesses cannot follow the traditional business models and the old ways of working. It has to be a newly invented viable business model which may not be initially well understood but once it starts working on the ground, it will be far superior to the old ways. Exactly this happened to us in Airtel when the initial resistance transformed into a Harvard case study.

Similarly, our model of renewable energy is a unique one vis-à-vis the major energy utilities across the world.

Mitigating regulatory risks: This is the most important priority for the management of such new infrastructure companies. Initially, the regulation has to be guided, based on global benchmarks and best practices. Later these companies have to work closely with the governments and regulators to upgrade the public policies which need to keep pace with the new technologies as well as advancements.

Brand and marketing shifts: New brands will be created which will finally become bigger than the established brands, just like it happened with Airtel. Similarly, new e-commerce brands are rapidly overtaking many existing brands in India.

While SB Energy is a B2B brand, it is steadily gaining ground through its good reputation in the market. The marketing and distribution needs new way of handling as customers’ propensity for online business is growing swiftly.

Professional courage: Building a new infrastructure business is tough but most gratifying. It is like changing the entire existing industry framework with a new highly efficient network that is far superior to the existing infrastructure. Hence, professionals should embrace this positive experience and participate in the open cultures being built rather than getting scared of and sticking to the maintenance mode assignments.

In sum, this 25-year experience has been intense and sometimes challenging. It requires the leaders to be courageous yet calm to successfully overcome many storms that hit the business hard from time to time. I believe that the confidence in oneself and in the team’s ability always generates new creative solutions to the problems that regularly confront businesses in India.

- Manoj Kohli

-- The author is Country Head, SoftBank India.