In a bid to expand and scale beyond its voice telephony business, Bharti Airtel will restructure its businesses into nine verticals under different CEOs. Some of these new verticals are mobile commerce, entertainment, media, internet, enterprise services and small & medium businesses. Clearly Airtel is placing its bets completely on digtial media and not venturing out with its $22 billion power to any traditional business.
According to the ET report the reorganisation is to provide opportunities to its existing leadership pool of mid-level managers and to ensure these executives are not lured by rivals, said a person familiar with the development, requesting anonymity. On the other hand one can even consider it strategic growth initiative after having consolidated its position as India’s leading mobile service provider.
The move certainly isn’t path breaking, however it does setup the company nicely for innovation. After years of low margin moves probably Airtel is considering to consolidate and improve its margin efficiency. And even though the news is essentially internal, it can have its broadbased industry impact at a later stage. The leadership strucuture is changed to bring in innovation in the scope verticals. This would mean a lot of other people will get interested in these niches while at the same time the quality brought in purely by the financial might of a player like Airtel into say a field like M-commerce can kill a lot of nascent players in the segment. They can also set themselves up for acquisition perhaps paving way for an exit for a lot of mobile startups.
After the rejig, mobility will have three new business verticals after the reorganisation, telemedia will have two and enterprise four. Besides the DTH division of Airtel will get spun off.
