Presented By:

Naveen pathak
Telecom Industry
• India: 2nd largest telecom market after China

• Revenue: 3rd quarter, FY-09/10, US$ 8.56 billion

• India’s Rural mobile phone user: 100 million

• Subscriber base: Sept. 2009- 509 million

• Wireless subscriber: 471.7 million, Wire line: 37.3 million

• Tele-density: Jun 2010- 47.89 per hundred

Evolution of Telecom In India
Department of Telecommunication (DoT) is the main body
formulating laws and various regulations for the Indian telecom
industry.

ILD services was

BSNL was Number portability
Independent opened to Intra-circle
established was proposed
Private regulator, competition merger
by DoT Calling Party (pending)
players were TRAI, was guidelines were
Attempted
Pays (CPP) was
allowed in established Go-ahead to established to boost
implemented
Value Added the CDMA Rural
Services technology telephony
1994 1999 2007
INDIA

2002 2003 2004 2005

1992 2000 Internet Unified 2006

1997
telephony Access
initiated Licensing Broadband
(UASL) policy 2004
National Decision on 3G
NTP-99 led to Reduction regime was was
Telecom FDI limit was services
migration from of licence Reference
introduced formulated—
Policy (NTP) increased (awaited)
high-cost fixed fees Interconnec targeting 20
was from 49 to 74
license fee to low- t order was million
formulated percent
cost revenue issued subscribers
sharing regime by 2010
Bharti Airtel
• Largest Private Integrated Telecom Company in India

• 3rd Largest Wireless Operator in the World

• Largest & Fastest Growing Wireless Operator in India

• Largest Telecom Company listed on Indian Stock Exchange

• Bharti Airtel – Operates its GSM mobile services in 23 telecom circles

and provides broadband and telephone services in 90 cities

• Airtel was the only corporate brand to be awarded the AAA rating
Market Share
Major Players Market Share
Bharti Airtel 22%
Reliance 17%
Vodaphone 15%
BSNL 18%
TTSL 9%
Idea 9%
Aircel 5%
MTNL 1%
Spice 1%
Others 3%

Value
Herfindahl index 0.1623
Concentration Ratio 0.1425
GROUP 7
Operator’s Market Ratio
 While the tariffs have
decreased, the subscriber base
has exploded

7
Total Customer Base
Profit & Profit Margin
Total Revenue of Telecom
Industry
Fast Grower
Product Life Cycle - Maturity
Porter’s 5 Forces
Threat of New Entrants: (Low)
• High Fixed costs
• Scarcity of resources
• High cost of switching companies
• Huge License Fees to be paid upfront and high
gestation period
• Entry of MVNOs and WiMAX operators
• Spectrum Availability and Regulatory issues
• Infrastructure setup cost –high
• Rapidly changing technology
Rivalry Among Existing Competitors: (High)
– There are three types of major players in telecom services:
• State owned companies (BSNL and MTNL).
• Private Indian owned companies (Reliance Infocomm,
TataTeleservices.
• Foreign invested companies (Vodafone, Bharti Tele-Ventures,
Idea
Cellular, Spice Communications).
Bargaining Power of Suppliers:
(Low)
• Service Industry – less suppliers / role
of suppliers are almost negligible
Bargaining Power of Buyer: (High)
• Lack of differentiation among service
providers
• Cut throat competition
• Low switching costs
• Number portability will have negative
impact
Threat of Substitutes: (High)
• Broadband Services
 SWOT Analysis
Strengths Weakness
• Largest Telecom Player in India • Decreasing ARPU
• Strategic Alliance with other stake
• Relatively weak
holders in Bharti Airtel include Sony-
Ericsson, Nokia - and Sing Tel corporate house
• Pan India Presence

• Strong brand value

SWOT Analysis
Opportunities Threats

• Expanding international • Increasing competition

presence • Regulations

• Low penetration rates • Mobile Number

• New services Portability by Jan 2011

– impact on margins
Financial Snapshot - Ratios
• Liquidity Ratio
Ratio 2006 2007 2008 2009 2010

Quick Ratio 0.30 0.27 0.39 0.41 0.31

Current Ratio 0.37 0.34 0.54 0.67 0.68

21
• Efficiency Ratio
Ratio 2006 2007 2008 2009 2010

Debtors Turnover 12.57 14.31 12.28 12.78 15.30

Ratio

Fixed Asset Turnover 0.72 0.75 1.03 1 0.88

Ratio

Total Assets Turnover 1.15 1.27 1.09 1.06 0.93

Ratio
• Leverage Ratio
Ratio 2006 2007 2008 2009 2010

Debt to Equity Ratio 0.65 0.46 0.32 0.28 0.14

• Coverage Ratio
Ratio 2006 2007 2008 2009 2010

Interest Coverage 12.8 23.25 34.4 39.53 100.47

Ratio
• Profitability Ratio
Ratio 2006 2007 2008 2009 2010

Operating Margin 39.08 38.74 41.37 40.65 35.86

Ratio

Net Profit Margin 26.36 22.58 23.99 22.46 17.8

Ratio

Return on Assets 10.36 14.51 106.35 145.01 96.24

Ratio
Recommendation
• Daily Moving Average – 306
• EPS – 24.83
• 3G services to be started before 31th Dec
• Project partner with IBM in South Africa
for development network
• Won bid for3g spectrum and huwai is
their partner

GROUP 7 28
THANK YOU !!