I will produce the minutes;

you supply me with the machines for doing that; but Ill only pay you if I sell the minutes.

AIRTEL has to pay huge amount as license fee and in addition to Investments Thus Airtel has to cut operating expenses in order to grow.

Firstly management starting focusing on gross-revenue and profits . To reduce cost , they outsource all non-core operations. That is ,Airtel outsourced all their IT support to IBM in 2004. Airtel decided to focused only on business development. They choose to pay its telecom network equipment vendors, Ericson and Nokia; as pay-per-use model. Thus converted fixed costs and capital expenditures into variable operating expenses, greatly reducing its dependency on expenses. Airtel didnt have time to create their own channels. It decided to piggyback on distributors for consumer product companies like Godrej and Uniliver. This is when we started seeing the Airtel services being distributed by Kirana shops. In 2007 Airtel, Vodofone and Idea had struck a deal to set up Indus tower This structure allows the three companies to share the cost of setting up passive infrastructure and reduces the investments
Thus, Airtel reduces the cost per call to around 50 paise, which is lowest in the world!

Low ARPU Rural Penetration Saturation of west market (70% in US & 100% in some European market)

Introduction of new technology and mobile number portability.

Since 2007,threats to its leadership position. From established companies such as Reliance,Tata teleservices & BSNL. Invested heavily to cover all segments of population to grow on technology,marketing & network. Targetd on youths who are eagerly to use VAS with low cost offering. Main challenge was to reach to 100 million consumer base by 2010.

Unique business model Price war among telecom players(Global and Indian companies) Heavy investment in infrastructure Long run chase for maximum number of subscribers