Bharti Airtel in Africa
In June 2010, Bharti Airtel, India's largest mobile services operator, acquired the African assets of Bahrain-based Zain Telecom for $10.7 billion -- the largest ever cross border deal in emerging markets. Bharti's executives envisioned that they would replicate the highly successful high-volume, low-cost telecom model that they had pioneered for the Indian masses, in Africa. But when the began to integrate the companies, Bharti's executives discovered a slew of unexpected challenges, including cultural differences between their Indian and African employees; poorer infrastructure than they had expected, higher-than-anticipated costs; a monopolistic distribution network; strong competitors; a weak partner ecosystem; and a market that was unresponsive to tariff cuts. In early 2012, a year and a half later, the company has outsourced it Networks, IT and customer service operations like it did in India; launched a unified brand across the continent, and culturally integrated with its new environment. Key business metrics, including profit margins and market share, are showing early signs of improvement. But questions remain about whether the company will be able to overtake MTN, Africa's leading player, by lowering tariffs like it did in India, and what its strategy should be, going forward.