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Airtel Strategic Management

Airtel Strategic Management

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Published by Sandeep George

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Categories:Types, Research
Published by: Sandeep George on Sep 08, 2010
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11/24/2014

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ST. JOSEPH’S COLLEGE OF BUSINESS ADMINISTRATION
AIRTEL
Corporate Strategy Review
8/17/2010
Submitted By
 Das Anthony Jeanne Lai Ainee Natasha Gopinath Sandeep GeorgeVinay Prakadan
 
Strategic Management 
AIRTEL
COMPANY VISION & PROMISE
By 2010 Airtel will be the most admired brand in India:
Loved by more customers
Targeted by top talent
Benchmarked by more businesses“We at Airtel always think in fresh and innovative ways about the needs of our customers andhow we want them to feel. We deliver what we promise and go out of our way to delight thecustomer with a little bit more”
INDUSTRY PROFILE
TheIndiantelecommunication industry is one of the world's fastest growing industries; with653.92 million telephone (landlines and mobile) subscribers and 617.53 million mobile phoneconnections as of May 2010 .It is the second largest telecommunication network in the worldin terms of number of wireless connections after China. The telecom industry in India isregulated by 'Telecom Regulatory Authority of India' (TRAI).The key players in this industrymay be broadly classified into,
State owned companies like - BSNL and MTNL.
Private Indian owned companies like – Reliance Communications
Foreign invested companies like - Vodafone-Essar, Bharti Airtel, Idea Cellular, AirceletcTelecom companies predominantly divide their business into 4 major sub-segments i.e.Mobile, Fixed Line, Internet and Enterprise. Described below is a brief overview of thesources of revenues as well as costs for a telecom company:
REVENUE ANALYSISI. Mobile/Cellular services
Cellular mobile service providers (CMSP) derive revenues by way of tariff charges for outgoing calls made by subscribers on its network. So basically, the revenue for a CMSP issimply a multiple of average revenue per subscriber per month (ARPU) and number of subscribers.
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Strategic Management 
AIRTEL
Subscribers
: Growth in a CMSP's subscriber base is dependent on several factors,the key amongst them being:
Economic growth
: With growth in the economy, and the consequent increasein activity, it requires people to be in constant touch. Thus, with thetremendous growth in economic activity in India there are more and more people subscribing to telecom services, thus leading to growth in subscriber  base for CMSPs.
Rising income level
: As the real income levels in a society rise, more andmore people are able to afford usage of cellular phone and so the consumer does not feel the pinch of rising telephone bill, thus having the propensity totalk more, thus leading to higher MOUs for telecom services providers.
Affordability
: The affordability is interplay of lower tariff charges andavailability of cheaper handsets. While lower handset costs make mobile moreaffordable at the entry level thus allowing more people to be a part of themobile community, lower tariffs allow for an increased usage of telecomservices, while not having such an overbearing impact on telephone bills.II
. Fixed line services
The fixed (wire line) services are dominantly provided for BSNL and MTNL. Although thishad been a dominant mode of telecommunication in the past, it is fast being replaced withmobile telephony, which has the advantage of connectivity on the move. The fundamental business of a fixed line operator is almost similar to that of a CMSP, in terms of ARPU andSubscriber base.III.
Internet/Broadband
The Internet services are provided either by telecom service providers or independent Internetservice providers (ISP) who deal exclusively in providing this service. There are two forms of Internet that are currently popular - the dial-up connections and the broadband connections.Apart from the usual - economic growth and rising income levels - the growth of the Internet business is dependent upon:
PC penetration
: Internet penetration in India is currently at very low levels, ascompared to its developing peers. This is set to take off with the rise in PC penetration, which will again be a consequence of affordability in terms of lower PCcosts and reduced cost of data transfer..
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