airtel ppt report_on_strategy

Institute of Management Technology, Ghaziabad


REPORT ON

Submitted By:

PGDM P/T [08-11], TermDEEPANKER AGRAWAL

PRABHJYOT SINGH BHA

SUSHAN RUNGTA

PARIKSHIT JAIN

RAUNAQ SINGH

NILESH BAID

Submitted By:

11], Term- V, Group 8 DEEPANKER AGRAWAL – 08EM-014

PRABHJYOT SINGH BHATTI – 08EM-030

SUSHAN RUNGTA – 08EM-048

PARIKSHIT JAIN – 08EM-028

RAUNAQ SINGH – 08EM-034

NILESH BAID – 08EM-024


Institute Of Management Technology

Ghaziabad

1. Introduction

2. Company History

3. Strategic Intent

4. Industry Analysis

a. External Analysis

i. Industry Analysis

ii. PESTEL

iii. PORTER MODEL

iv. Opportunities

v. Threat

b. Internal Analysis

i. Strengths

ii. Weaknesses

iii. Financials

5. Recommendations


Institute Of Management Technology

External Analysis

Industry Analysis

PORTER MODEL

Opportunities

Internal Analysis

Strengths

Weaknesses

Financials


INTRODUCTION

Bharti Enterprises is one of India’s leading business groups with interests in

telecom, agri business, financial services, retail and manufacturing.

Bharti Airtel, a group company, is one of Asia’s leading providers of

telecommunications services with operations in India and Sri Lanka, spanning

mobile services, telemedia services and enterprise services. Bharti Airtel has

always been at the forefront o

with its world-class services built on leading edge technologies.

In the area of financial services, Bharti has been

offer life insurance, general insurance and asset manag

Bharti Retail, a wholly owned subsidiary of Bharti Enterprises operates multiple

format consumer friendly stores, while Bharti Walmart is a B2B joint venture with

Walmart, for wholesale cash and carry and back

operations.

Other businesses in the group are Beetel for communication and media devices,

and FieldFresh Foods Private Limited, a joint venture with Del Monte Pacific

Limited to offer fresh fruits and vegetables, and processed food in India as well as

international markets.

BHATI AIRTEL

Airtel is India’s largest integrated and the first private telecom services provider

with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has

been at the forefront of technology and has steered

sector in the country with its world class products and services.

The businesses at Bharti Airtel hav

business units (SBU’s) - Mobile Services, Airtel Telemedia

Services, Digital TV Services

• Mobile business provides mobile & fixed wireless services using GSM

technology across 23 telecom circles.

• Airtel Telemedia Services business offers broadband & telephone services

in 94 cities.


INTRODUCTION


telecom, agri business, financial services, retail and manufacturing.




always been at the forefront of the telecom revolution, transforming the sector

class services built on leading edge technologies.

n the area of financial services, Bharti has been partnering with AXA of France to

offer life insurance, general insurance and asset management services.

Bharti Retail, a wholly owned subsidiary of Bharti Enterprises operates multiple


Walmart, for wholesale cash and carry and back-end supply chain management




India’s largest integrated and the first private telecom services provider


been at the forefront of technology and has steered the course of the telecom

sector in the country with its world class products and services.

The businesses at Bharti Airtel have been structured into Four individual strategic

Mobile Services, Airtel Telemedia Services &

obile business provides mobile & fixed wireless services using GSM

technology across 23 telecom circles.

Airtel Telemedia Services business offers broadband & telephone services





f the telecom revolution, transforming the sector

partnering with AXA of France to

ement services.

Bharti Retail, a wholly owned subsidiary of Bharti Enterprises operates multiple-


end supply chain management




India’s largest integrated and the first private telecom services provider


the course of the telecom

individual strategic

Services & Enterprise

obile business provides mobile & fixed wireless services using GSM

Airtel Telemedia Services business offers broadband & telephone services


• Enterprise services provide end

customers and national & international long distance services to carriers.

• Digital TV services provides Direct To Home Television Services

All these services are provided under the Airtel brand.

study we will concentrate on the Mobile Business

With 10-crore subscribers in May 2009

country mobile services operator in the world and sixth largest integrated

telecom company globally. After hav

Ventures, the company crossed the 7.5

5-crore mark in October 2007, making it one of the fastest growing telecom

company in the world. The first 2.5

Targeting 20-crore subscribers in the next 2

series of network augmentation and customer service initiatives. “We will roll

over one-lakh base station sites by this year

network coverage across the country and establish a state

service management centre, besides setting up one

rural areas by March 2010,” he said.

Airtel at present has 25 per cent subscriber sha

terms of revenue. It is only behind

Airtel has set a very ambitious target of doubling the subscriber base in the next

2-3 Years.


provide end-to-end telecom solutions to corporate


Digital TV services provides Direct To Home Television Services

All these services are provided under the Airtel brand. For the p

study we will concentrate on the Mobile Business

in May 2009, Airtel has become the third largest single


telecom company globally. After having started its service in 1995 as Bharti Tele

Ventures, the company crossed the 7.5-crore customer mark in August 2008 and

crore mark in October 2007, making it one of the fastest growing telecom

company in the world. The first 2.5-crore subscribers were achieved in July 2006.

crore subscribers in the next 2-3 years, Airtel will be undertaking a

series of network augmentation and customer service initiatives. “We will roll

lakh base station sites by this year-end to set up wider

network coverage across the country and establish a state-of-the

service management centre, besides setting up one-lakh Airtel service centres in

rural areas by March 2010,” he said.

Airtel at present has 25 per cent subscriber share and 30 per cent market share in

terms of revenue. It is only behind China Mobile and China Unicom.


end telecom solutions to corporate


Digital TV services provides Direct To Home Television Services

For the purpose of the

, Airtel has become the third largest single


ing started its service in 1995 as Bharti Tele-

crore customer mark in August 2008 and

crore mark in October 2007, making it one of the fastest growing telecom

e achieved in July 2006.

3 years, Airtel will be undertaking a

series of network augmentation and customer service initiatives. “We will roll-out

end to set up wider and deeper

the-art customer

lakh Airtel service centres in

re and 30 per cent market share in



Company History

2009

• Becomes third largest

subscriber base of 10 Crore.

• 70% stake in the Bangladesh business of Abu Dhabi based Warid Telcom

2006-2008

• Profit crosses US $ 1 Bn

• Receiver licenses for providing 2G & 3G mobile services in Sri Lanka

• Launch of Airtel Call Home Services a calling card services for countries

aimed at the Indian diaspora

• Strategic Partnership with Google for search through Mobile

2005-2006

• All-India Footprint with the launch of mobile services in Assam

• Vodafone acquires 10

• Becomes India’s Largest integrated private operator based on the total

customer base

2004

• Airtel announced the launch of a BlackBerry Wireless Solution in India

2001-2003

• Joins the US $ 1 Bn revenue Club

• Strategic Partnership with IBM and Ericsson for outsourcing of the

Company core IT network activities

• First private operator to launch mobile services in J&K

2001-2002

• IndiaOne, India’s first private sector national and international long

distance service launched

• Eastern foray through acquisition and new licenses for eight new circles

across India

• India’s first private submarine Cable Landing station in JV with Singtel

• IPO through India;s first 100% book building issue

• First Provate operator to offer Landline services in

Nadu and Karnataka

1999-2000

• The largest Private sector operator in India after acquiring JT Mobile for

Providing Cellular Services in Punjab, Karnataka and Andhra Pradesh


Company History

Becomes third largest single country mobile service provider by crossing a

subscriber base of 10 Crore.

70% stake in the Bangladesh business of Abu Dhabi based Warid Telcom

Profit crosses US $ 1 Bn

Receiver licenses for providing 2G & 3G mobile services in Sri Lanka

aunch of Airtel Call Home Services a calling card services for countries

aimed at the Indian diaspora

Strategic Partnership with Google for search through Mobile

India Footprint with the launch of mobile services in Assam

Vodafone acquires 10 % economic interest in the Company

Becomes India’s Largest integrated private operator based on the total

Airtel announced the launch of a BlackBerry Wireless Solution in India

Joins the US $ 1 Bn revenue Club

rship with IBM and Ericsson for outsourcing of the

Company core IT network activities

First private operator to launch mobile services in J&K

IndiaOne, India’s first private sector national and international long

distance service launched

foray through acquisition and new licenses for eight new circles

India’s first private submarine Cable Landing station in JV with Singtel

IPO through India;s first 100% book building issue

First Provate operator to offer Landline services in Haryana, Delhi, Tamil

The largest Private sector operator in India after acquiring JT Mobile for


single country mobile service provider by crossing a

70% stake in the Bangladesh business of Abu Dhabi based Warid Telcom

Receiver licenses for providing 2G & 3G mobile services in Sri Lanka

aunch of Airtel Call Home Services a calling card services for countries

India Footprint with the launch of mobile services in Assam

Becomes India’s Largest integrated private operator based on the total

Airtel announced the launch of a BlackBerry Wireless Solution in India

rship with IBM and Ericsson for outsourcing of the

IndiaOne, India’s first private sector national and international long

foray through acquisition and new licenses for eight new circles

India’s first private submarine Cable Landing station in JV with Singtel

Haryana, Delhi, Tamil

The largest Private sector operator in India after acquiring JT Mobile for



• Acquired Skycell, Chennai and expands South Indian Footprint

• Singtel acquires stake in Company

1997-98

• The first Private telecom service provider to obtain a license for landline

telephony in Madhya Pradesh

• Incorporation of Bharti BT VSAT Ltd. for providing VSAT solutions across

India and Bharti BT Internet Ltd.

1995-96

• Mobile Services under the brand name ‘Airtel’ launched for the forst time

in Delhi and Himachal Pradesh

• British Telecom Plc (BT) acquires stake in Company


Acquired Skycell, Chennai and expands South Indian Footprint

Singtel acquires stake in Company

The first Private telecom service provider to obtain a license for landline

telephony in Madhya Pradesh

Incorporation of Bharti BT VSAT Ltd. for providing VSAT solutions across

India and Bharti BT Internet Ltd.

Mobile Services under the brand name ‘Airtel’ launched for the forst time

in Delhi and Himachal Pradesh

British Telecom Plc (BT) acquires stake in Company

Acquired Skycell, Chennai and expands South Indian Footprint

The first Private telecom service provider to obtain a license for landline

Incorporation of Bharti BT VSAT Ltd. for providing VSAT solutions across

Mobile Services under the brand name ‘Airtel’ launched for the forst time


Strategic Intent

Promise:

We at Airtel always think in fresh and

customers and how we want them to feel. We deliver what we promise and go

out of our way to delight the customer with a little bit more

Objectives of the Study

Airtel has set an ambitious target of doubling the sub

years. Through this study we will understand the strategic position, Strength,

Weaknesses, Opportunities and threats that will play a role in achieving Airtel’s

target.


trategic Intent

We at Airtel always think in fresh and innovative ways about the needs of our


out of our way to delight the customer with a little bit more

Objectives of the Study

Airtel has set an ambitious target of doubling the subscriber base in next 2

. Through this study we will understand the strategic position, Strength,


trategic Intent

innovative ways about the needs of our


scriber base in next 2-3

. Through this study we will understand the strategic position, Strength,



External Analysis

Indian Telecom Sector AnalysisThe Indian telecom Sector has seen

to 525 Million telecom customer

largest market, second to only

lowest in the world.

The India population stands close to

relatively large young population, which is a major driver for telecom sector. The

current Telecom penetration

is one of the lowest in the world.

well as increased penetration, giving dual advantage.

Broadband subscribers also as the

again the lowest in the wor

broadband subscribers by 2010.


External Analysis

Analysis r has seen a phenomenal growth and currently has close

to 525 Million telecom customers. Indian telecom market is World’s

, second to only China. However the penetration is one of the

stands close to 1.2 billion with increasing urbanization


Telecom penetration stands at 44.87% ie 525.65 mn telecom subs

of the lowest in the world. The growth will come from expanding market as

well as increased penetration, giving dual advantage. Growth is expected in

subscribers also as the penetration is just 0.63% 7.40 mn

t in the world. Government has set a target to reach 20 mn

broadband subscribers by 2010.

a phenomenal growth and currently has close

World’s second

China. However the penetration is one of the

increasing urbanization and


525.65 mn telecom subs which

The growth will come from expanding market as

Growth is expected in

0.63% 7.40 mn, which is

has set a target to reach 20 mn


India’s Competitive Advantage in Mobile SectorThe Porters Diamond Model below shows the Competitive Advantage of Indian

Mobile Sector. All Five factors namely Government; Firms Strategy, Structure and

Rivalry; Factor Conditions; Related and Supporting Industries and Demand

Conditions are Favorable


India’s Competitive Advantage in Mobile Sector The Porters Diamond Model below shows the Competitive Advantage of Indian

All Five factors namely Government; Firms Strategy, Structure and


The Porters Diamond Model below shows the Competitive Advantage of Indian

All Five factors namely Government; Firms Strategy, Structure and



PESTEL Analysis

Political and Regulatory Issues

Political factors are how and

economy. The unprecedented growth of the Indian telecom industry has been

well supported by the policy reforms

January 2010

• Proposal to Waiver of License fees in Rural Areas

2009

• Regulatory on Quality of Services for Telecom Sector

• Interconnection Regulation for Broadcasting Sector

• Interconnection Usage Charge Regime

• Resale of International Private Leased Circuit (IPLC)

• GoM has been constitutes to decide the pricing of 3G Spectrum

2008

• Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid.

• DoT issues 121 Letters of Intent (LoIs) for UAS licences

• Guidelines for Mobile Number Portability Services

• DoT allows active infrastructure sharing

2007

• Dual Technology Allowed

2006

• Number portability proposed

2005

• An attempt to boost rural telephony was made

• FDI limit was raised from 49 to 74 per cent

2004

• Intra-circle merger guidelines were established

• Broadband Policy 2004 was formulated to target 20 million internet users

by 2010

2003

• Calling Party Pays (CPP) implemented

• Unified Access Licensing (UAL) regime established

• Reference interconnect order issued

2002


Political and Regulatory Issues

factors are how and to what degree a government intervenes in the

The unprecedented growth of the Indian telecom industry has been

upported by the policy reforms. Some of the key Highlights are given below

Proposal to Waiver of License fees in Rural Areas

Regulatory on Quality of Services for Telecom Sector

Interconnection Regulation for Broadcasting Sector

Interconnection Usage Charge Regime- Charges have been rationalized

Resale of International Private Leased Circuit (IPLC)

GoM has been constitutes to decide the pricing of 3G Spectrum

Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid.

DoT issues 121 Letters of Intent (LoIs) for UAS licences

bile Number Portability Services

DoT allows active infrastructure sharing

Dual Technology Allowed

ability proposed

An attempt to boost rural telephony was made

FDI limit was raised from 49 to 74 per cent

circle merger guidelines were established

Broadband Policy 2004 was formulated to target 20 million internet users

Calling Party Pays (CPP) implemented

Unified Access Licensing (UAL) regime established

Reference interconnect order issued

intervenes in the

The unprecedented growth of the Indian telecom industry has been

re given below:

Charges have been rationalized

GoM has been constitutes to decide the pricing of 3G Spectrum

Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid.

Broadband Policy 2004 was formulated to target 20 million internet users


• ILD services unlocked to competition

• Go-ahead to CDMA technology

• Initiation of internet telephony in India

• Reduction of license fees

2001

• Additional licenses in basic and cellular services

• Reduction of license fee

• Limited launch of CDMA WLL (M)

• Reduction of GSM cellular tariff

• Widening of service coverage by the then players

• Initiation of 3rd and 4th GSM operator networks

.

The above table from TRAI shows the impact of various regulations

services and hence on the subscriber base between 1998 and 2007.

charges in India are amongst the lowest in the World due to gradual reduction in

the licensing fees. clearly, the above regulations have helped the Sector to grow,

develop and provide quality service a


ILD services unlocked to competition

ahead to CDMA technology

Initiation of internet telephony in India

Reduction of license fees

Additional licenses in basic and cellular services

Reduction of license fee

Limited launch of CDMA WLL (M)

Reduction of GSM cellular tariff

Widening of service coverage by the then players

Initiation of 3rd and 4th GSM operator networks

The above table from TRAI shows the impact of various regulations

the subscriber base between 1998 and 2007.


, the above regulations have helped the Sector to grow,

develop and provide quality service at affordable prices.

on the cost of

the subscriber base between 1998 and 2007. The Mobile


, the above regulations have helped the Sector to grow,


ECONOMIC

Economic factors include economic growth

the inflation rate. These factors have major impacts on how businesses operate

and make decisions. It is undisputed that

decent levels of Inflation and GDP

which is fuelled by the growth in the services and manufacturing sectors. The

telecom is said to contribute to the growth of Economy. And in India’s case the

telecom will continue to play an important role

Economic factors in India like Growing GDP and disposable income will help in

Growth of the Mobile industry.

SOCIAL

Social factors include the cultural aspects, population growth rate, age

distribution, career attitudes etc.. Trends in social factors affect the demand for a

product or a service. Firstly, India has favorable

lowest mobile penetration in the second most populous country in the world.

Secondly, 35 % population is below 14 yrs of age which is a huge future customer

base. Thirdly, Urbanization is increasing leading to an increased demand for

connectivity. This also hints that growth i

impetus for Growth.

Clearly the Social Scenario is also in


economic growth, interest rates, exchange rates

. These factors have major impacts on how businesses operate

It is undisputed that India is a long term growth Story

decent levels of Inflation and GDP. India is still posting a robust growth of 8 % GDP



telecom will continue to play an important role. Hence we foresee

ndia like Growing GDP and disposable income will help in

industry.

factors include the cultural aspects, population growth rate, age


product or a service. Firstly, India has favorable Social factors with one of the

tion in the second most populous country in the world.

35 % population is below 14 yrs of age which is a huge future customer

rbanization is increasing leading to an increased demand for

This also hints that growth in the rural industry can be a good

Scenario is also in favor of the industry.

exchange rates and

. These factors have major impacts on how businesses operate

India is a long term growth Story with

India is still posting a robust growth of 8 % GDP



foresee that the

ndia like Growing GDP and disposable income will help in

factors include the cultural aspects, population growth rate, age


factors with one of the

tion in the second most populous country in the world.

35 % population is below 14 yrs of age which is a huge future customer

rbanization is increasing leading to an increased demand for

n the rural industry can be a good


TECHNOLOGICAL

Technological factors include

as R&D activity, automation

change. They can determine

and influence outsourcing decisions. Furthermore, technological shifts can affect

costs, quality, and lead to innovation

The Indian telecom sector offers unprecedente

companies in various areas, such

distance calls, value added services, etc.

The above diagram shows various Technologies that

in the Mobile Industry.

• 3G Services – The New Buzz Word

In the conducive business environment, India Inc. awaits the rollout of 3G

services. The global revenue for 3G is 60 per cent higher than that of other

services. India expects to replicate its 2G growth in 3G servi

market is well poised to leverage the 3G service

categories such as sports, games and

• Worldwide Interoperability for Microwave Access (WiMAX)

Digital Divide


factors include technological and environmental aspects, such

automation, technology incentives and the rate of

. They can determine barriers to entry, minimum efficient production level

decisions. Furthermore, technological shifts can affect

innovation.

The Indian telecom sector offers unprecedented opportunities for foreign

companies in various areas, such as 3G, virtual private network, international long

calls, value added services, etc.

shows various Technologies that will provide Growth Avenues

The New Buzz Word


The global revenue for 3G is 60 per cent higher than that of other

India expects to replicate its 2G growth in 3G services

market is well poised to leverage the 3G service offerings in content

categories such as sports, games and music.

Worldwide Interoperability for Microwave Access (WiMAX)

ological and environmental aspects, such

, technology incentives and the rate of technological

, minimum efficient production level

decisions. Furthermore, technological shifts can affect

opportunities for foreign

as 3G, virtual private network, international long

provide Growth Avenues


The global revenue for 3G is 60 per cent higher than that of other

ces. The Indian

offerings in content

Worldwide Interoperability for Microwave Access (WiMAX) – Bridge the


• Infrastructure Sharing

Optimizing Costs In the midst of the telecom boom, common infrastructure

will improve coverage and quality of calls and

Active Infrastructure sharing has started in 2008 which enables sharing of

Antenna systems, Cables and transmission systems

infrastructure with switches and

• Value Added Service (VAS)

Rolling out of advanced VAS has been possible due to Technological

advancement and hence creating higher value for

Porters Five Forces Model"Porter's five forces" is a framework for the industry analysis and business

strategy development developed by

School in 1979. It uses concepts developing

economics to derive five forces that determine the competitive intensity and

therefore attractiveness of a market. Attractiveness in this context refers to the

overall industry profitability. An "unattractive" industry is one where the

combination of forces acts to drive down overall profitability. A very unattractive

industry would be one approaching "pure competition".


Infrastructure Sharing

the midst of the telecom boom, common infrastructure

will improve coverage and quality of calls and reduce costs.

ive Infrastructure sharing has started in 2008 which enables sharing of

Cables and transmission systems, Backhaul (core

nfrastructure with switches and networking).

Value Added Service (VAS)


advancement and hence creating higher value for Buyers and Sellers

Porters Five Forces Model is a framework for the industry analysis and business

strategy development developed by Michael E. Porter of Harvard Business

. It uses concepts developing Industrial Organization (IO)

to derive five forces that determine the competitive intensity and


ry profitability. An "unattractive" industry is one where the


industry would be one approaching "pure competition".

the midst of the telecom boom, common infrastructure

ive Infrastructure sharing has started in 2008 which enables sharing of

Backhaul (core


Buyers and Sellers.

is a framework for the industry analysis and business

Harvard Business

Industrial Organization (IO)

to derive five forces that determine the competitive intensity and


ry profitability. An "unattractive" industry is one where the



We will study the Above 5 Force

Competitive Rivalry

The Competitive Rivalry in India is high and will continue to increase as new

players enter the industry.

• The Competition is price and quality based. The entry of every new

customer brings with

competition.

Here we shall discuss two large

1. Bharat Sanchar Nigam Ltd.

the seventh-largest telecommunication comp

wide range of services in India, such as wireline, CDMA mobile, GSM

mobile, internet, broadband, carrier, MPLS

BSNL is the largest operator in basic services in India with its cellular

services helping it to establish its presence as the largest operator in rural

areas.

Rural Penetration

BSNL is playing a leadership role in developing the telecom infrastructure in

rural areas. It has been successful in increasing its cellular subscriber base

by pioneering its services in the rural terrain. Its services cover the whole of

India, except Delhi and Mumbai, which are covered by MTNL, the other

state-owned player.

Low Cost Strategy

BSNL is a low-cost service provider of many services. This strategy has

helped BSNL in penetrating the market.

2. Reliance Communications

Reliance Communications, previously known as Reliance Infocom, brought

about a digital revolution in the Indian telecom industry by providing India’s

vast population with affordable means of

Reliance Infocom, with the aim of making mobile calls cheaper than

postcards, built a 60,000

the entire country. Reliance currently offers its services in 340 towns with

its eight circle footprints; it also initiated mobile data services through its R

world mobile portal. This portal leverages the data capability of the CDMA

1X network.

Integrated Service


We will study the Above 5 Forces model for Mobile Sector in the India


The Competition is price and quality based. The entry of every new

customer brings with it a new set of price cut and hence intensifies

Here we shall discuss two large Competitors of Airtel and their Strategies:

Bharat Sanchar Nigam Ltd. BSNL, a state-owned service provider in India, is

largest telecommunication company in the world. It offers a


mobile, internet, broadband, carrier, MPLS-VPN, VSAT, VoIP, IN, etc.


g it to establish its presence as the largest operator in rural



ing its services in the rural terrain. Its services cover the whole of


cost service provider of many services. This strategy has

BSNL in penetrating the market.

Reliance Communications



vast population with affordable means of information and communication.


postcards, built a 60,000-kilometre-long fibre optic backbone, crisscrossing


eight circle footprints; it also initiated mobile data services through its R


India.


The Competition is price and quality based. The entry of every new

it a new set of price cut and hence intensifies

rtel and their Strategies:

owned service provider in India, is

any in the world. It offers a


VPN, VSAT, VoIP, IN, etc.


g it to establish its presence as the largest operator in rural



ing its services in the rural terrain. Its services cover the whole of


cost service provider of many services. This strategy has



information and communication.


long fibre optic backbone, crisscrossing


eight circle footprints; it also initiated mobile data services through its R-



From the beginning, Reliance believed in providing

communication services to its customers. The

greater number of handsets

Nokia.

Large Distribution Network

Reliance has created the largest chain of digital

communication stores

expanding its reach aggressively through retail outlets, sales agents and

electronic recharge outlets.

Other Competitors being Idea, MTNL, Vodafone, Telenor, Spice, Orange

Competitive Rivalry is high in the Mobile Sector


From the beginning, Reliance believed in providing

ion services to its customers. The company claims that it sells a

greater number of handsets compared to those sold by the market leader,

Large Distribution Network

Reliance has created the largest chain of digital entertainment and

ores – Reliance Web World. The company is also

aggressively through retail outlets, sales agents and

electronic recharge outlets.


in the Mobile Sector

From the beginning, Reliance believed in providing integrated

company claims that it sells a

compared to those sold by the market leader,

entertainment and

Web World. The company is also

aggressively through retail outlets, sales agents and



Supplier Power

The supplies in Mobile sectors primarily comprise of Switch Suppliers, Tower

Service providers and the Handset providers.

Network Equipments: There

Nokia Siemens, Ericsson, Huawei

suppliers the power of these suppliers are high and may impact the growth plan

of the operators if supplies are not smooth.

Tower Providers: Though the new shar

Towers but still the coverage remains a problem due to few Tower provider

bargaining power of Tower providers if High.

Handset Suppliers: Nokia, Samsung, LG, Sony, iPhone and numerous other

players. The bargaining power of Handset Suppliers is less as they are also

competing amongst themselves

Overall we can make out that the key supplies powers are high for Mobile

Industry

Buyer Power

• Switching cost is low. Government is also introducing Number portability

which will lead to further switching between the operators if the prices and

services are not met.

• The Voice and message based services are moving toward a commodity as

the competition now depends mostly on the prices as the services are

similar across the operators.

• The customers are demanding more value for money which has lead ti

introduction of pay per second plans.

• Buyers are wanting more and more value added service at cheaper prices

Hence the companies have to now focus

Satisfaction.



Service providers and the Handset providers.

There are limited Network Equipment providers like

Nokia Siemens, Ericsson, Huawei. Due to the increase in demand and limited


of the operators if supplies are not smooth.

Though the new sharing technology has helped in utilizing the

Towers but still the coverage remains a problem due to few Tower provider

bargaining power of Tower providers if High.

Nokia, Samsung, LG, Sony, iPhone and numerous other

ining power of Handset Suppliers is less as they are also

competing amongst themselves


Switching cost is low. Government is also introducing Number portability


The Voice and message based services are moving toward a commodity as


e operators.

The customers are demanding more value for money which has lead ti

introduction of pay per second plans.

Buyers are wanting more and more value added service at cheaper prices

Hence the companies have to now focus on Customer Delight and not


providers like ZTE

. Due to the increase in demand and limited


ing technology has helped in utilizing the

Towers but still the coverage remains a problem due to few Tower provider The

Nokia, Samsung, LG, Sony, iPhone and numerous other

ining power of Handset Suppliers is less as they are also


Switching cost is low. Government is also introducing Number portability


The Voice and message based services are moving toward a commodity as


The customers are demanding more value for money which has lead ti

Buyers are wanting more and more value added service at cheaper prices

on Customer Delight and not Customer


Threat of Substitutes

• The VOIP is getting popular for Eg. Skype, Vonage etc.

• Video Conferencing is also getting popular

• CDMA is another threat to GSM players

The threat of substitutes is high as the

similar quality and service

Potential for New Entrants

• The government is also issuing new licenses in the current circles.

• Many mobile players are also entering the enterprise business by launching

NLD/ILD operations.

• The sharing business has reduced the capital requirement and thus bringing

down the capital requirement for new player.

The potential for new entrant is also high.

The above External and Macro

Opportunities and Threats faced by Airtel which can be summarized as below:

Opportunities:

• Exponentially Growing Market both in size and usage

• The Rural Landscape: The Regulators have proposed the waiver of license

fees in rural areas. Clubbing the regulators policy with

which is just 15 % provides immense opportunity to Airtel. Rural area

provides a massive opportunity for Airtel to expand its customer base.

Rural Household comprise of 70 % of India’s Population. The growth in

Rural segment is currently 8

• New Technologies and Paradigms: As growth in data traffic accelerates with

the proliferation and adoption of web services the telecom operators will

evolve their infrastructure through their access transmission infrastructure

from the base stations to the core switching network. 3 G and BWA

auctions is due which provides a big opportunity to the company.

Convergence will be vital phenomenon to support all network and IT

services, using IP as the strategi


The VOIP is getting popular for Eg. Skype, Vonage etc.

Video Conferencing is also getting popular

CDMA is another threat to GSM players

The threat of substitutes is high as the alternate modes are much cheaper with

The government is also issuing new licenses in the current circles.

Many mobile players are also entering the enterprise business by launching

The sharing business has reduced the capital requirement and thus bringing

down the capital requirement for new player.

The potential for new entrant is also high.

The above External and Macro-Environment Analysis provides us the

Threats faced by Airtel which can be summarized as below:

Exponentially Growing Market both in size and usage

The Rural Landscape: The Regulators have proposed the waiver of license

fees in rural areas. Clubbing the regulators policy with low teledensity




ral segment is currently 8-10 % per month

New Technologies and Paradigms: As growth in data traffic accelerates with



tations to the core switching network. 3 G and BWA



services, using IP as the strategic technology

alternate modes are much cheaper with

The government is also issuing new licenses in the current circles.

Many mobile players are also entering the enterprise business by launching

The sharing business has reduced the capital requirement and thus bringing

Environment Analysis provides us the

Threats faced by Airtel which can be summarized as below:

The Rural Landscape: The Regulators have proposed the waiver of license

low teledensity




New Technologies and Paradigms: As growth in data traffic accelerates with



tations to the core switching network. 3 G and BWA




• Strong Strategic Partnersh

with Singtel, which has helped in providing quality services to the customer

due to technology transfer

and technology partners who also drive development an

solutions.

• Value Added Services: These services bring both Value to customers and

operators. Airtel has special services and the opportunity can still be

exploited further for better profitability.

Threat

• Increased Competition may reduce mar

wireless market in the year 2008

players in to newer circles along with operators migrating to GSM from

CDMA technology. The market also saw entry of international and

national long distance

pressure of marketing expenditure in the coming year.

• Substitutes like VOIP for eg Skype, Vonage etc. these services are a big

threat to international long distance calls.


Strong Strategic Partnerships for Technology: Airtel has strategic alliance


due to technology transfer. AIrtel also has strong alliances with equipment

and technology partners who also drive development an

Value Added Services: These services bring both Value to customers and


exploited further for better profitability.

Increased Competition may reduce market share and /or Revenue:

wireless market in the year 2008-09 saw the entry of many existing



national long distance operators. This has lead to tariff erosion and

pressure of marketing expenditure in the coming year.

Substitutes like VOIP for eg Skype, Vonage etc. these services are a big

threat to international long distance calls.

: Airtel has strategic alliance


. AIrtel also has strong alliances with equipment

and technology partners who also drive development and innovative

Value Added Services: These services bring both Value to customers and


ket share and /or Revenue: The

09 saw the entry of many existing



operators. This has lead to tariff erosion and

Substitutes like VOIP for eg Skype, Vonage etc. these services are a big


Internal Analysis

Asia’s leading providers of telecommunication

licensed jurisdictions (also known as Telecom Circles) in India, and in Srilanka.

Served an aggregate of 113,439,670 customers as of

whom 110,511,416 subscribe to GSM services and 2,928,254 use Telemedia

Services either for voice and/or broadband access delivered through

DSL. The largest wireless service provider in the

customers as of September 30, 2009.

solutions to our enterprise customers, in addition to

connectivity both nationally and

All these services are rendered under a unified brand “Airtel”.

The company also deploys, owns and manages passive

to telecom operations under its

owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are

top providers of passive infrastructure services in

Strength:

• 3rd

Largest Wireless operator in the world

• Largest private integrated telecom company in India

• 6th

Largest integrated telecom operator in the world

• Largest wireless operator in India

• Largest private fixed line

• Largest telecom company listed on Indian Stock Exchanges

Weakness:

• An often cited original weakness is that when the business was started by

Sunil Bharti Mittal over 15 years ago, the business has little knowledge and

experience of how a

start-up business had to outsource to industry experts in the field.

• Until recently Airtel did not own its own towers, which was a particular

strength of some of its competitors such as Hutchison Essar. To

important if your company wishes to provide wide coverage nationally.

• The fact that the Airtel has not pulled off a deal with South Africa's MTN

could signal the lack of any real emerging market investment opportunity


Internal Analysis

Asia’s leading providers of telecommunication services with presence in all the 22

(also known as Telecom Circles) in India, and in Srilanka.

erved an aggregate of 113,439,670 customers as of September 30, 2009; of

subscribe to GSM services and 2,928,254 use Telemedia

either for voice and/or broadband access delivered through

he largest wireless service provider in the country, based on the number of

September 30, 2009. Offer an integrated suite of telecom

solutions to our enterprise customers, in addition to providing long distance

connectivity both nationally and internationally. Also offer DTH and IPTV Services.

these services are rendered under a unified brand “Airtel”.

any also deploys, owns and manages passive infrastructure pertaining

to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel

Indus Towers Limited. Bharti Infratel and Indus Towers are

infrastructure services in India.

Largest Wireless operator in the world

Largest private integrated telecom company in India

Largest integrated telecom operator in the world

Largest wireless operator in India

Largest private fixed line operator in India

Largest telecom company listed on Indian Stock Exchanges

An often cited original weakness is that when the business was started by


experience of how a cellular telephone system actually worked. So the

up business had to outsource to industry experts in the field.

Until recently Airtel did not own its own towers, which was a particular

strength of some of its competitors such as Hutchison Essar. To


The fact that the Airtel has not pulled off a deal with South Africa's MTN


services with presence in all the 22

(also known as Telecom Circles) in India, and in Srilanka.

September 30, 2009; of

subscribe to GSM services and 2,928,254 use Telemedia

either for voice and/or broadband access delivered through

country, based on the number of

ated suite of telecom

providing long distance

lso offer DTH and IPTV Services.

infrastructure pertaining

subsidiary Bharti Infratel Limited. Bharti Infratel

Indus Towers Limited. Bharti Infratel and Indus Towers are the two

An often cited original weakness is that when the business was started by


cellular telephone system actually worked. So the

up business had to outsource to industry experts in the field.

Until recently Airtel did not own its own towers, which was a particular

strength of some of its competitors such as Hutchison Essar. Towers are


The fact that the Airtel has not pulled off a deal with South Africa's MTN



for the business once the Ind

Business Units

1. Mobile/Wireless Services:

India and Sri Lanka. We are the largest wireless service provider in India, based

on the number of customers. We had 110,511,416 mobile customers as on

September 30,2009 and customer market share of 23.5% of

as on September 30, 2009.We offer post

added services through our extensive sales and distribution channel covering

1,362,464 outlets. Our network is present in 5,072 census towns and 429,723

non-census towns and villages in India, thus covering

the country’s population.

launches in the world with a base of over 1 million customers within six

months of launch. Airtel already has presence

Sri Lanka. The company has

created a wide distribution network comprising of 23 distributors and

retailers across the country.

Product Portfolio


for the business once the Indian market has become mature.

Services: We offer mobile services using GSM technology in



September 30,2009 and customer market share of 23.5% of wireless market,

as on September 30, 2009.We offer post-paid, pre-paid, roaming and value


network is present in 5,072 census towns and 429,723

owns and villages in India, thus covering approximately 83% of

the country’s population. Airtel Sri Lanka is amongst the fastest growing

the world with a base of over 1 million customers within six

months of launch. Airtel already has presence in 16 administrative districts of

Sri Lanka. The company has launched 3.5G services in the major towns and has

a wide distribution network comprising of 23 distributors and

retailers across the country.

We offer mobile services using GSM technology in



wireless market,

paid, roaming and value


network is present in 5,072 census towns and 429,723

approximately 83% of

Airtel Sri Lanka is amongst the fastest growing

the world with a base of over 1 million customers within six

administrative districts of

launched 3.5G services in the major towns and has

a wide distribution network comprising of 23 distributors and 15,000


2. Telemedia Services: We provide broadband (DSL), data and telephone services

(fixed line) in 95 cities with growing focus on the various data solutions for the

SMB segment. We had 2,928,254 customers as on September 30, 2009 of

which 40.5% were subscribing to broadband/ internet

offerings in this segment include installation of fixed

local, national and international long distance voice connectivity and

Broadband Internet access thr


We provide broadband (DSL), data and telephone services



which 40.5% were subscribing to broadband/ internet services?

offerings in this segment include installation of fixed-line telephones providing


Internet access through DSL.

We provide broadband (DSL), data and telephone services



services? Our product

line telephones providing



Product Portfolio

Strategies



3. Enterprise Services: Enterprise Services is India’s leading

communications services to large Enterprise and

We provide long distance wholesale voice and data services

customers. We own a state of the art

network infrastructure enabling us to provide connectivity services both within

India and connecting India to the world. Our national long distance

infrastructure comprises of 113,326 Rkms of optical fibre, over

and SDH POPs and over 1,500 POIs with the

India reach in 301 LDCA’s

Our international infrastructure includes ownership of the i2i

system connecting Chennai to Singapore,

submarine cable system

Singapore, and investment in a number of diverse submarine cable

across transatlantic and transpacific routes.

systems such as Asia America

Europe (IMEWE), Unity North, EIG (Europe India Gateway) and East

Submarine System (EASSy) will expand our global

We have also built terrestrial

such as Nepal and Bhutan.

large corporates. We serve as the single point of contact for all

telecommunication needs for corporate cu

suite of communication services across data,

managed services. We specialize in providing customized solutions to address

unique requirements of different industry verticals; BFSI, IT,

Manufacturing and Distribution, Media, Education,

PSUs and Retail among others.

International MPLS Services, Internet Services, Remote Access VPN Services,

Domestic and International Private Lea

Audio and Video conferencing, Datacenter

Professional Services, Managed Network Services, Terrestrial and Wireless

Access Services, Fixed Line and Converged Voice Services, Contact

solutions, Domestic and International Toll free services

enablement solutions.


Enterprise Services is India’s leading

communications services to large Enterprise and Carrier customers.

We provide long distance wholesale voice and data services to over 400

customers. We own a state of the art national and international long distance

enabling us to provide connectivity services both within

and connecting India to the world. Our national long distance

ses of 113,326 Rkms of optical fibre, over

and SDH POPs and over 1,500 POIs with the local exchanges, providing a pan

India reach in 301 LDCA’s and 1275 SDCA’s.

Our international infrastructure includes ownership of the i2i submarine cable

m connecting Chennai to Singapore, consortium ownership of the SMW4

submarine cable system connecting Chennai and Mumbai to Europe and

and investment in a number of diverse submarine cable

across transatlantic and transpacific routes. Our investments in new cable

systems such as Asia America Gateway (AAG), India Middle East and Western

(IMEWE), Unity North, EIG (Europe India Gateway) and East

Submarine System (EASSy) will expand our global network across 5 Continents.

ave also built terrestrial express connectivity to neighboring countries

and Bhutan. We deliver end to end telecom solutions to India’s

corporates. We serve as the single point of contact for all

telecommunication needs for corporate customers in India by providing a full

suite of communication services across data, voice, network integration, and

We specialize in providing customized solutions to address

unique requirements of different industry verticals; BFSI, IT,

Manufacturing and Distribution, Media, Education, Telecom, Government,

PSUs and Retail among others. These services include; Domestic and

Services, Internet Services, Remote Access VPN Services,

Domestic and International Private Leased Circuits, Satellite services (VSAT),

Audio and Video conferencing, Datacenter Services, Network Integration and

Managed Network Services, Terrestrial and Wireless

Services, Fixed Line and Converged Voice Services, Contact

solutions, Domestic and International Toll free services and Mobile enterprise

Enterprise Services is India’s leading provider of

Carrier customers.

to over 400 carrier

national and international long distance

enabling us to provide connectivity services both within

and connecting India to the world. Our national long distance

ses of 113,326 Rkms of optical fibre, over 1,500 MPLS

local exchanges, providing a pan

submarine cable

consortium ownership of the SMW4

connecting Chennai and Mumbai to Europe and

and investment in a number of diverse submarine cable systems

investments in new cable

Gateway (AAG), India Middle East and Western

(IMEWE), Unity North, EIG (Europe India Gateway) and East Africa

network across 5 Continents.

express connectivity to neighboring countries

We deliver end to end telecom solutions to India’s

corporates. We serve as the single point of contact for all

providing a full

voice, network integration, and

We specialize in providing customized solutions to address

unique requirements of different industry verticals; BFSI, IT, ITeS,

Telecom, Government,

These services include; Domestic and

Services, Internet Services, Remote Access VPN Services,

services (VSAT),

Services, Network Integration and

Managed Network Services, Terrestrial and Wireless

Services, Fixed Line and Converged Voice Services, Contact centre

and Mobile enterprise


4. Digital TV Services: Airtel Digital TV, with a base of over 1.3

is available through more than 54,000 retail

Centres in over 5,000 towns


Airtel Digital TV, with a base of over 1.3 million customers,

is available through more than 54,000 retail points and Airtel Relationship

Centres in over 5,000 towns and thousands of villages across the country.

million customers,

Airtel Relationship

and thousands of villages across the country.


5. Passive Infrastructure Services:

services on a non-discriminatory basis to all telecom operators in India.

Infratel deploys, owns and manages passive infrastructure in 11 circles of

India. Infratel also holds 42% share in Indus Towers (a Joint Venture between

Bharti Infratel, Vodafone and Idea Cellular). Indus operates in 16 circles (4

circles common with Infratel, 12 circles on exclusive basis). Bharti Infratel has

29,112 towers in 11 circles, excluding the 35,066 towers in 12 circles for which

the right of use has been assigned to Indus with effect from January 1, 2009.

Indus Towers has a portfolio of 1

right of use.


Services: Bharti Infratel provides passive infrastructure

discriminatory basis to all telecom operators in India.




h Infratel, 12 circles on exclusive basis). Bharti Infratel has



Indus Towers has a portfolio of 100,728 towers including the towers under

Bharti Infratel provides passive infrastructure

discriminatory basis to all telecom operators in India. Bharti




h Infratel, 12 circles on exclusive basis). Bharti Infratel has



00,728 towers including the towers under


Financials

• The consolidated Total Revenues for the half year ended September 30,

2009 of Rs.19,787 crore grew by 13% and EBITDA of Rs. 8,293 crore grew by

15% on a year on year basis.

• EBITDA margins improved to 41.9% from 41.3% in the corresponding period

of the previous year.

• The Net Income for the half year ended September 30, 2009 was Rs.4,838

crore, a growth of 19% over last year.

• The strong Free Cash Flow of Rs. 2,617 crore resulted in the reduction of

Net Debt to Rs.4,211 crore, with the Net Debt to Equity ratio reaching an

all-time low of 0.12.

• The consolidated Total Revenues for the quarter ended September 30,

2009 of Rs. 9,846 crore grew by 9%.

• The Company continued to leverage its scale and vendor partnerships to

secure cost efficiencies, leading to improved margins.

• EBITDA at Rs. 4,142 cror

margins improved to 42.1% from 41.0% in the corresponding period of the

previous year.

• Bharti had 113.4 mn customers, as on September 30, 2009, an increase in

the total customer base of 42% over the correspondi

maintained its leadership position through market share of all India

wireless subscribers at 23.5%, as on September 30, 2009.

Highlights for the Half Year ended September 30, 2009

• Total Revenues of Rs. 19,787 crore (up 13% Y

• EBITDA of Rs.8,293 crore (up 15% Y

• EBITDA margin at 41.9% (prior year: 41.3%)

• Cash Profit of Rs. 8,511 crore (up 32% Y

• Net Income of Rs. 4,838 crore (up 19% Y

Highlights for the Second Quarter ended September 30, 2009

• Overall customer ba

• Net addition of 82.44 lakh customers in a single quarter.

• Market leader with a customer market share of all India wireless

subscribers at 23.5%.

• Total Revenues of Rs. 9,846 crore (up 9% Y


The consolidated Total Revenues for the half year ended September 30,


15% on a year on year basis.

gins improved to 41.9% from 41.3% in the corresponding period

of the previous year.

The Net Income for the half year ended September 30, 2009 was Rs.4,838

crore, a growth of 19% over last year.

The strong Free Cash Flow of Rs. 2,617 crore resulted in the reduction of


The consolidated Total Revenues for the quarter ended September 30,

2009 of Rs. 9,846 crore grew by 9%.

The Company continued to leverage its scale and vendor partnerships to

secure cost efficiencies, leading to improved margins.

EBITDA at Rs. 4,142 crore grew by 12% on a year on year basis. EBITDA


Bharti had 113.4 mn customers, as on September 30, 2009, an increase in

the total customer base of 42% over the corresponding period last year and


wireless subscribers at 23.5%, as on September 30, 2009.

Highlights for the Half Year ended September 30, 2009

Total Revenues of Rs. 19,787 crore (up 13% Y-o-Y).

EBITDA of Rs.8,293 crore (up 15% Y-o-Y).

EBITDA margin at 41.9% (prior year: 41.3%)

Cash Profit of Rs. 8,511 crore (up 32% Y-o-Y).

Net Income of Rs. 4,838 crore (up 19% Y-o-Y).

Highlights for the Second Quarter ended September 30, 2009

Overall customer base at 11.34 crore

Net addition of 82.44 lakh customers in a single quarter.

Market leader with a customer market share of all India wireless

subscribers at 23.5%.

Total Revenues of Rs. 9,846 crore (up 9% Y-o-Y).

The consolidated Total Revenues for the half year ended September 30,


gins improved to 41.9% from 41.3% in the corresponding period

The Net Income for the half year ended September 30, 2009 was Rs.4,838

The strong Free Cash Flow of Rs. 2,617 crore resulted in the reduction of


The consolidated Total Revenues for the quarter ended September 30,

The Company continued to leverage its scale and vendor partnerships to

e grew by 12% on a year on year basis. EBITDA


Bharti had 113.4 mn customers, as on September 30, 2009, an increase in

ng period last year and


Market leader with a customer market share of all India wireless


• EBITDA of Rs. 4,142 crore (up 12% Y

• EBITDA margin at 42.1% (prior year: 41.0%)

• Cash Profit of Rs. 4,099 crore (up 31% Y

• Net Income of Rs. 2,321 crore (up 13% Y


EBITDA of Rs. 4,142 crore (up 12% Y-o-Y).

EBITDA margin at 42.1% (prior year: 41.0%)

Cash Profit of Rs. 4,099 crore (up 31% Y-o-Y).

Net Income of Rs. 2,321 crore (up 13% Y-o-Y).


RECOMMENDATIONS

After the complete analysis of entire STUDY we put forward a set of

recommendations which are

PRICING

Depending on the market conditions / competition from cellular

service providers and also to suit local conditions, there

mechanism (either at central or local level).

IMPROVEMENT IN TECHNOLO

Airtel should immediately shift to

switches. This will improve

simultaneous integration with the nationwide network. The special distribution of

the transmission towers should be increased to avoid “no signal pockets”

ESTABLISHMENT OF DISTRIBUTION CHANNELS

Airtel should establish widespread and conspicuous distribution to match that of

the competitors. The distribution network shall make the product

available at convenient locations

UNTAPPED RURAL MARKET

Large part of Indian rural market is still

bring that area under mobility.


RECOMMENDATIONS


recommendations which are as follows:

Depending on the market conditions / competition from cellular or WLL

service providers and also to suit local conditions, there should be flexible pricing

mechanism (either at central or local level).

IMPROVEMENT IN TECHNOLOGY

Airtel should immediately shift to third generation switches by replacing its c

switches. This will improve the quality of service to desired level and provide

with the nationwide network. The special distribution of

towers should be increased to avoid “no signal pockets”

ESTABLISHMENT OF DISTRIBUTION CHANNELS

should establish widespread and conspicuous distribution to match that of

the competitors. The distribution network shall make the product

available at convenient locations

UNTAPPED RURAL MARKET

Large part of Indian rural market is still untapped therefore Airtel is required to

bring that area under mobility.


or WLL-mobile

should be flexible pricing

third generation switches by replacing its c-dot

the quality of service to desired level and provide

with the nationwide network. The special distribution of

towers should be increased to avoid “no signal pockets”

should establish widespread and conspicuous distribution to match that of

the competitors. The distribution network shall make the product visible and

untapped therefore Airtel is required to