The Hindu Business Line : It's not all in the head

Indian telecom companies are finding CEOs hard to come by. Will the sector evolve a new way of business where the company functions effectively, sans the top guy?

FINDING a Chief Executive Officer has become a difficult exercise for Indian telecom companies. And the larger they are, the more difficult it appears to be.

Is it by design or by default? The industry, itself, is not very sure.

Some of the largest Indian telecom operators are headless bodies. Take, for instance, Tata Teleservices, with a pan-India presence and over 4 million customers across almost all the telecom circles in the country barring Jammu & Kashmir and a few circles in the North-East. The company has not had a chief executive officer/managing director for months now, ever since its chief, S Ramakrishnan, left last year.

Its subsidiary, Tata Teleservices (Maharashtra) Ltd, however, got itself a managing director in Charles Anthony late last year after a spell of no one at the helm since the quitting of Ramakrishnan, who was also managing director of this company.

The other telecom outfit of the Tata group, Videsh Sanchar Nigam Ltd, does not have an executive chief either, technically speaking, although N. Srinath, Director (Operations), does the work of one (according to a senior official with the Tata group).

Reliance Infocomm, with over 10 million customers, and operational in all the telecom circles of the country, has been CEO-less — technically speaking — ever since its inception.

The current senior-most executive there, Kamal Nanavaty, does not have a designation that precisely sets him apart as chief executive. He is referred to as Chief Operating Officer, Wireless Business, in the company's statements, but is understood to be the head of operations for the company nation-wide.

He reports directly to the Chairman of the group, Mukesh Ambani.

Of course, Reliance Infocomm can be said to be in a fluid state, managerially speaking, on account of the promoter brothers still in the process of settling their differences. Nevertheless, the fact is that there has been no chief executive in charge of the entire company and all its operations and functions, even before the days of the controversy, say sources close to the group.

The other operators with a large presence in the country, such as the Bharti group and Hutch, especially the latter, have had rather more durable chiefs running the show.

Bharti is headed by Chairman and Group Managing Director, Sunil Bharti Mittal. There are two Joint Managing Directors, Akhil Gupta and Rajan Bharti Mittal. Then there are two presidents, one for Mobile Services and the other for Bharti Infotel (fixed line, data and other services).

The presidents report to the Group Chairman and Managing Director. The head of units and SBUs report to the respective business's President.

An apex team of Corporate Directors has been constituted. The corporate directors have supervisory and strategic responsibilities for functional areas across business lines. The structure also defines the role of the Head of the units who are totally empowered to manage their respective companies and are fully responsible for business operations to build world-class organisations with a high degree of customer focus, says the Web site of the company.

At Hutch, earlier Executive Director Sandip Das is now Deputy Managing Director, the second in line after Asim Ghosh, Managing Director, Hutchison Essar group, India. Ghosh has been with the company for several years now.

With both Bharti and Hutch, the individual circles have their heads (some of whom manage more than one circle).

The other two players in the large league, IDEA Cellular and the BPL mobile group, did see some personnel reshuffling in between. Before its current CEO, Vikram Mehmi (earlier Chief Financial Officer of the company) was appointed last year, IDEA did not have an executive head for months after expatriate CEO Graham Burke's departure.

At BPL, Sandip Basu, who was earlier Chief Financial Officer, was moved up after the departure of the earlier CEO.

Of course, these two companies have been in a state of flux too, IDEA in the process of getting new shareholders, and BPL constantly in M&A (merger and acquisition) talks with other telecom companies.

Can such large companies be chief executive-less for such long periods of time?

At Tata Teleservices and Reliance Infocomm, the official response is that work is not suffering for lack of a person technically holding the position of CEO.

Reliance Infocomm has several Presidents in charge of various functions.

They do not seem to be unhappy with that, notes a telecom industry analyst. In fact, according to him, Reliance Infocomm is the most innovative telecom operator in the country.

Also, perhaps this works well for them because the Reliance group promoter-directors and their close associates have a very hands-on approach, which a CEO may resent, he says.

Tata Teleservices has a managing committee which has members in charge of marketing operations, customer service and so on, and they report to the Chairman, F Vandrawala, says a source close to the group.

VSNL has a committee as well, with persons in charge of broadband, international, enterprise and wholesale businesses, and they report to Srinath who is Director, operations.

Privately, several of the companies, though they hold that nothing is lacking for want of a CEO, admit that they are on the lookout for CEOs.

"It is getting tougher, especially for CDMA where experienced people are fewer in number," says a senior official with Tata Teleservices. "TTSL and Reliance, the Indian CDMA companies, are very large outfits with heavyweight promoters. It is not easy to find a CEO acceptable to them."

Headhunters also agree that it is becoming difficult to find telecom executives.

Not for lack of talent, but because talent is now increasingly being snatched away by the new sunrise industries, mainly retail and aviation, which are also service outfits, according to a director of an executive search company.

Earlier it was telecom snatching talent from FMCG and other companies, but telecom is second-rung to retail and aviation, she says.

In particular, say industry professionals and headhunters, it is becoming very difficult for telecom operators to find circle heads, especially circle heads for the less high-profile States.

Often the CEO of the nearest high-profile circle is given additional charge of the less glamorous ones.

It is not only the operating companies that have an executive problem on their hands.

Telecom vendor outfits such as Nokia, Samsung, Alcatel and the like are also finding it difficult to obtain talent.

The big constraint for them is that telecom operators are their customers and they cannot feed on those pastures lest they should antagonise them and end up losing business.

Often expatriates, preferably Indian expatriates, are then called upon to take charge.

Otherwise, executives who were earlier with defence communication units, the public sector companies and people with overseas telecom experience are in great demand, says a headhunter.

For all you know, the Indian telecom sector could even evolve a paradigm where it can function without distinctive heads, he says.

Picture by Bijoy Ghosh

kripram@thehindu.co.in

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