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Bharti Airtel Ltd and Indian

Telecom Sector
Ashish M. Deshmukh
Henal Mehta
Pravin Sharma
Saurabh Jain
EMERGING MARKET
CHAMPION
Ø Feb 13,2008 Bharti Airtel Limited (BAL), a leading telecom
company in India crossed 60 million customer mark.
Ø Tenth largest telecom company in the world in terms of
subscriber base.
Ø Wireless segment constitutes 96% of BAL’s total customer base.
Ø Market share – 31.8% and its valuation stood at US $ 40 Billion
(Feb 2008)
Ø BAL’s growth matched the growth in Indian Telecom Sector,
which was fastest in the world.
Ø Emerged as undisputed leader in Indian mobile market.
Ø Faced new challenges to its leadership position with the entry of
strong international telecom companies.
MOBILE TELEPHONY IN
INDIA
Ø Started when government decided to allow private sector participation.
Ø In initial days, mobiles were out of reach of most Indians.
Ø Subscriber number increased with a fall in tariff.
Ø Legal conflict between fixed service operators and cellular operators.
Ø Introduction of Universal service telecom license.
Ø small players and foreign players exited from the sector.
Ø Mobile subscriber- 86% of telecom subscribers in India.
Ø GSM operators – 74% of mobile phone users and rest CDMA.
Ø ARPU per month for GSM operators- Rs. 275 while for CDMA
operators – Rs. 173
Ø Changes in market may be witnessed due to introduction of new
technologies, etc.
Bharti Airtel Ltd
• Bicycle parts Business (1976-1980).
• Bharti Telecom Ltd (1985).
• Conglomerate with Siemens AG (1985).
• Bharti Tele Venture
– Bharti Cellular Ltd (1995)
– Touchtel (2001)
– IndiaOne
– Mantra
• Discontinuation of Multi Branding
strategy(2004). Telecom services under
‘Airtel’.
• BTV renamed to BAL(2006).
THE CZAR OF INDIAN
TELCOM
• Building a Strong Brand
• Various Brand Ambassador(SRK, Sachin, A R
Rahman)
• Largest advertiser in India
Business Model Innovation
§ Lean organization
§ Outsourcing Network Deployment- Nokia
and Ericsson
§ IT services – IBM
§ Customer Contact Centers – Nortel
§ Different Payment Model from revenue
per share to cost per all.
§ Free incoming calls to its mobile phone
user.
ACCOLADES
• Best CMT company for 5 years (2001-05)
in terms of Shareholder Performance
Index.
• ‘MIS Asia IT Excellence Award for best
Change in Management’
• ‘2005 Indian Mobile Operator of the Year’.
• ‘Competitive Service Provider of the
Year’.(2006)
• CEO of the Year – Sunil Mittal(2006).
BAL COMPETITIORS
VODAFONE ->

RELIANCE
COMMUNICATION
(ADAG)->
TATA INDICOM->

BSNL->
NEW CHALLENGES FOR
BAL
• Vodafone’s entry in Indian telecom market posed 1st real threat to
BAL’s supremacy.
• Vodafone planned to invest $ 2 billion to establish and introduce new
3G technologies.
• Vodafone’s application of allocation of spectrum to expand from 16 to
23 telecom circles.
• Vodafone entry increased competition and better services to customer.
RELIANCE AND TATA
• GoI’s approval to companies to provide both GSM & CDMA.
• Entry of new players like Reliance and Tata in GSM.
• New player expected to break oligopoly on market.
• Due to competition slashing down of tariff rates which were already lowest in
world.
• BAL did not have plans to start CDMA.
• GoI plan to allow more players to enter to reduce rates.
• BSNL, Reliance, Tata are players in both GSM & CDMA.
• Steady fall in BAL’s ARPU.
COUNTERING THE
THREATS
• NETWORK EXPANSION.

• TARGETTING ALL SEGMENTS.

• WOOING THE RURAL AREAS.


COUNTERING THE
THREATS
• NEW ADVERTISING STRATEGY.

- ‘Kuch Bandhan atoot hote hain


…’
- ‘Barriers break when people talk’
talk

• NEW TECHNOLOGY.
TAPPING UNTAPPED
MARKET
Ø International presence in
Seychelles through its subsidiary Telecom
Seychelles Limited.
Europe (Channel Islands) through its
subsidiaries Jersey Airtel Limited (JAL) and
Guernsey Airtel Limited (GAL).
Ø In 2006, Airtel became the first Indian telecom
operator to launch 3G services in Seychelles
Ø In May 2007, JAL and GAL entered into a
partnership with Vodafone to launch mobile
services in Channel Islands under the Vodafone-
Airtel brand.
A $23 BIILION DEAL
Ø India’s largest telco Bharti Airtel on Monday is set
to acquire a 49% stake in Africa’s largest telco MTN
to create a entity stretching from the Cape of Good
Hope across the African continent, West Asia and
the Indian Subcontinent with revenues of about $20
billion and over 200 million subscribers. The
combined entity will be amongst the top five
operators globally.
Ø The South African telco will get a 36% economic
interest in Bharti Airtel in return for offloading the
minority stake. The deal size is estimated to be
worth over $23 billion. (taken from Economic
Times)
CONCLUSION
Ø Airtel faced some challenges to its
leadership position in the Indian
telecom market.
Ø Industry experts said that the key to
future growth lay in making the
Airtel brand attractive to both the
tech-savvy urban population and the
rural masses where the bulk of the
future growth is expected.
Ø Finding alternate revenue streams in
view of the rapidly falling ARPUs is
one more significant challenge that
lay before Airtel in terms of future
growth.

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