Fundamentals of Bharti D Final Projct

A PROJECT REPORT on
FUNDAMENTALS OF BHARTI AITREL
Submitted by
DHAVAL SHAH
in partial fulfillment for the award of the degree
of
POST GRADUATE DIPLOMA IN MANAGEMENT
Under the guidance of
PROF.ADITI MAHAJAN
THAKUR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH
KANDIVALI EAST
MUMBAI
Thakur Institute of Management Studies and Research Page 1

ACKNOWLE
DGEMENT
In this project I have made an honest and dedicated attempt to make the research material as
authentic as it could. And I earnestly hope that it provides useful and workable information and
knowledge to any person reading it.
During this small time frame of two months in which the project reached its completion, there were a
few people whom I would like to make a mention of and without whose help the project would have
never seen the light of the day..
I would like to thank my external guide Mr. Amit Kadam and Mr Chandrakant Purab who gave me
a free hand as far as going about the project work was concerned.
Dhaval. B. Shah
PGDM (Finance)
2009 - 2011

EXECUTIVE SUMMARY
I did my summer project form Sykes & Ray Equities (I) Ltd. An attempt was to study the telecom sector
and select a company which was one of the best among the sector on the basis of subscribers base and
revenues and based on the fundamentals. In this two months summer training i got a lot of experience
about the fundamental research of an equity and also as to how a script reacts to the news in the market.
After the summer project I feel very energetic and enthusiastic as every part of it is filled with experience
and learning. My summer internship project has increased my confidence level and made me understood
how professional life has to be maintained. Punctuality, sincerity and commitment towards work can
bring u success is among the important aspects is what all I have learned in these two months about my
work.

TABLE OF CONTENTS
TOPIC PAGE NO
Introduction about Sykes & Rays (I) Ltd 6
Indian telecom Sector 7
TRAI 11
Present scenario of telecom Operators 12
Financials and share price data of telecom 13

companies
Future prospects of telecom industry in 14
India
Graphical representation of share prices 15
Wide look on India’s 3G auctions 17
Telecom Sector and Union Budget 18
Porters five forces model on Indian Telecom 19

Sector
SWOT analysis of Telecom Sector 23
Introduction to Bharti Airtel 24
Telecom Statistics, April, 2010 26
Key positives and risk associated 28
Basic financials of Bharti Airtel 29

Share price data of Bharti Airtel 31
Mobile Number Portability 32
Bharti Airtel as investment with Mutual 32

Funds
SWOT analysis of Bharti Airtel 33
Porters five forces model on Bharti Airtel 35
Future prospects/Strategies 37
Conclusion 38
References 39

INTRODUCTION ABOUT SYKES & RAY EQUITIES (I) Ltd
Sykes & Ray Equities (I) Ltd
Sykes & Ray Equities promoted by Mr. Yogesh R Gupta and Mr. Anup R Gupta who are the current
Chairman and Managing Director. Sykes and Ray Equities (I) Ltd. (SRE).
SRE has evolved over a period of time. Its emergence has happened due to the values of dedication,
integrity, client commitment and the values which it uphold and a culture which has been inculcated into
it by the inspiring and dynamic leadership of Mr. Yogesh R Gupta and Mr. Anup R Gupta.
When the broking fraternity limited its retail activity, Sykes & Ray Equities (SRE) went all out reaching
out to people, to win their confidence, install hope in the market and expanded the company into a
sizeable retail network
Since 1990 SRE has undergone a metamorphosis from being a traditional proprietary concern to a
professionally managed company hiring and retaining thorough professionals and market experienced
personnel. So much so that the group has expanded from a handful of dedicated employees in the early
90's to over 150 to date.
SRE today is one of the foremost retail stock broking service entities on the country's two major
exchanges, with a combined turnover of more than Rs 45,000 crores. It has presence in over 100 major
centers of India through a network of business associates and branches. In continuation to the company’s
endeavor to provide complete investment services, we have successfully launched an NRI Desk.
SRE has always maintained a Chinese wall between proprietary and client trading. Our endeavor has been
to provide a transparent and systematic front office as well as back office operation
The SRE Research desk is one of the most talked about research. Investors are provided with extensive
information on markets and company through reviews, market commentary and recommendation. This
enables the investor to make informed decisions on the market. The company firmly believes the
substantial value addition can be made in its services by providing continuous and accurate decision
making tools to the investors.
The thrust towards Information Technology has made the company among the chosen few to have
acquired a trading software through its own network, which assists in clients gaining live access to the
two popular exchanges of BSE & NSE and also allow Order/Trade execution.
There has been an expansion, a widening of its scope, its branches. With Mutual Funds and derivatives
coming of age, SRE has plans to provide retail investors an alternative investment opportunity through
our existing distribution network.

INDIAN TELECOM SECTOR
The Indian telecommunication industry, with 621 million telephone(landline and mobile) subscribers and
584 million mobile phone connections as of March 2010 is the second largest telecommunication network
in the world and the second largest in terms of number of wireless connections in the world.
Telecommunication sector in India is primarily subdivided into two segments, which are :-
Fixed Service Provider (FSPs)
Cellular Services.
Telecom industry in India constitutes some essential telecom services like telephone, radio, television and
Internet. Telecom industry in India is specifically emphasizing on latest technologies like GSM (Global
System for Mobile Communications), CDMA(Code Division Multiple Access), Fixed Line and
WLL(Wireless Local Loop ). India has a prospering market specifically in GSM mobile service and the
number of subscribers is growing very fast.
1. Fixed Service Provider (FSPs)

Landline service in India is primarily run by BSNL/MTNL and Reliance Infocomm though there are
several other private players too, such asTouchtel and Tata Teleservices. Landlines are facing stiff
competition from mobile telephones. The competition has forced the landline services to become more
efficient. The landline network quality has improved and landline connections are now usually available
on demand, even in high density urban areas.
On landlines, intra circle calls are considered local calls while inter circle are considered long
distance calls. Currently Government is working to integrate the whole country in one telecom circle. For
long distance calls, you dial the area code prefixed with a zero (e.g. For calling Delhi, you would dial
011-XXXX XXXX). For international calls, you would dial "00" and the country code+area
code+number. The country code for India is 91.
2. Cellular services.
The Mobile telecommunications system in India is the second largest in the world and it was thrown open
to private players in the 1990s. The country is divided into multiple zones, called circles (roughly along
state boundaries). Government and several private players run local and long distance telephone services.
Competition has caused prices to drop and calls across India are one of the cheapest in the world. The
rates are supposed to go down further with new measures to be taken by the Information Ministry. The
mobile service has seen phenomenal growth since 2000. In September 2004, the number of mobile phone
connections have crossed fixed-line connections. India primarily follows the GSM mobile system, in the
900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players
are Airtel, Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller

players, with operations in only a few states. International roaming agreements exist between most
operators and many foreign carriers.
Operator Subscriber base The
BSNL 28,446,969
MTNL 3,514,454
Bharti Airtel 2,928,254(7.85%)
Reliance Communications 1,152,237
Tata Teleservices 1,003,261
HFCL Infotel 165,978
Teleservices Ltd 95,181
All India 37,306,334
.
breakup of wireline subscriber base in India as of September 2009 is given below

Operator Subscriber base
Bharti Airtel 118,864,031
Reliance Communications 93,795,613
Vodafone Essar 91,401,959
BSNL 62,861,214
Idea Cellular 57,611,872
Tata Teleservices 57,329,449
Aircel 31,023,997
MTNL 4,875,913
MTS India 3,042,741

The breakup of
wireless subscriber
Loop Mobile India 2,649,730 base in India as of
December 2009 is
given below
Uninor 1,208,130
HFCL Infotel 341,862
Stel 141,411
All India 525,147,922

‘’TRAI’’
The Telecom Regulatory Authority of India (Hindi: भारतीय दूरसंचार िविनमयक पािधकरण) or
TRAI (established 1997) is the independent regulator established by the Government of India to regulate
the telecommunications business in India.
The mission of Telecom Regulatory Authority of India (TRAI) is to ensure that the interests of
consumers are protected and at the same time to nurture conditions for growth of
telecommunications, broadcasting and cable services in a manner and at a pace which will enable
India to play a leading role in the emerging global information society.
Notwithstanding anything contained in the Indian Telegraph Act, 1885, few of the important functions of
the Authority shall be to:
i. need and timing for introduction of new service provider;

ii. terms and conditions of license to a service provider;
iii. revocation of license for non-compliance for terms and conditions of license:
iv. measures to facilitate competition and promote efficiency in the operation of
telecommunication services so as to facilitate growth in such services.
v. technological improvements in the services provided by the service providers.
vi. measures for the development of telecommunication technology and any other matter
relatable to telecommunication industry in general;
vii. efficient management of available spectrum;
viii. ensure compliance of terms and conditions of license;
ix. ensure technical compatibility and effective inter-connection between different service
providers.
x. regulate arrangement amongst service providers of sharing their revenue derived from
providing telecommunication services.
xi. lay down the standards of quality of service to be provided by the service providers and
ensure the quality of service and conduct the periodical survey of such service provided by the
service providers so as to protect interest of the consumers of telecommunication services;
xii. levy fees and other charges at such rates and in respect of such services as may be
determined by regulations.
xiii. Perform other such functions as may be entrusted by the Central Govt.

PRESENT SCENARIO OF CELLULAR OPERATORS
The major players in the market are :-
1. Bharti Airtel
2. AIRCEL
3. Vodafone Essar
4. BSNL
5. Idea Cellular
Let us have a look at the share of all the GSM operators wit compared to the total subscribers base of
india.
Below are the major 10 market players which constitute the indian GSM cellular service market….
GSM Opertaor wise % market share – April, 2010.
GSM Operator Total Subscriber base % Market Share % Growth Over previous month
Bharti Airtel 130619487 30.16% 2.35%
Vodafone 103755978 23.96% 2.87%
Idea Cellular 65288248 15.08% 2.29%
BSNL 64744985 14.94% 1.98%
Aircel 38469541 8.88% 4.36%
Reliance Telecom 16311206 3.77% NA
(RTL)*
MTNL 4817670 1.11% 0.69%
Uninor 5021651 1.16% 17.77%
Loop Mobile 2894511 0.67% 1.76%
Stel 112391 0.26% 10.48%
All India 433040658 100% 2.65%
* Reliance Telecom Ltd (RTL) figures will not be included from the month of April’2010 as the same is
not being reported

Bharti Airtel leads the sector in terms of number of subscribers and also in market capitalization. The
company also has an average growth rate of 2.5% monthly increase in the subscribers base
FINANCIALS
Bharti Airtel Vodafone Idea Cellular BSNL Aircel

(2008)
EPS 40.45 12.56 3.23 1.15 29.28
RONW 32.35 3.22 11.36 0.71 44.87
ROCE 33.17 4.23 12.64 1.89 43.69
D: E 0.30 0.27 0.95 0.04 0.32
subscribers addition in 14.77% 17.87% 8.28% 13.26% 9.85%
march ’10
Total market share 30.16% 23.96% 15.08% 14.94% 8.88%
(2009)
SHARE PRICE DATA OF THE ABOVE COMPANIES
BHARTI AIRTEL RCOMM IDEA TATA

COMM
CURRENT 265 147.70 52 241
MKT PRICE (25/05/10)
52 WEEK 467 359 91.70 602

HIGH (01/10/03) (11/06/09) (11/06/09) (25/05/09)
52 WEEK 229.50 131.80 47.05 237.60

LOW (27/11/09) (21/05/10) (27/11/09) (21/05/10)
ALL TIME 574.50 844 161 1083.32

HIGH (10/10/07) (10/01/08) (18/10/07) (11/02/00)
ALL TIME 10.33 131.35 34.05 NA

LOW (10/01/03) 09/03/09) (27/10/08) 17/02/97
BETA (last 1 0.6201 1.3041 1.0121 0.7051

yr.)

Future prospects of telecom industry in India :
1. Worlds largest democracy.
2. Independent judiciary.
3. Skilled and competitve labour force.
4. Second largest telecommunication network in the world and the second largest interms of
number of wireless connections in the world.
5. On an average, about 5 – 6 million users added per month, making india the worlds fastest
growing wireless service market.
6. FDI limit increased from 49% to 74%
7. The rural telecom equipment market is also open to large investments.
India among the countries offering highest return on investments.
8. Launch of 3G spectrum in india which filled in governments pockets by USD 3.6 billion
which will help govt deal with the rising deficit
9. 3G to roll out the number of subscribers reaching around 850-900 millionby 2014 -2015
increasing by around 12% to 14%
10. According to CRISIL Research head Manoj Mohta, the operators which have the existing
2G spectrum, and also have won bid for 3G, would see a gradual improvement in their
profitability margin also.

A graphical representation of Share Prices of few telecom companies in India
Share price of Bharti Airtel since 25/05/09 to 25/05/10
Share price of Idea Celular since 25/05/09 to 25/05/10

Share price of Reliance Communications since 25/05/09 to 25/05/10
Share price of Tata Communications since 25/05/09 to 25/05/10

A WIDE LOOK ON INDIA’S 3G AUCTIONS :
India’s auction for 3G GSM Service licence ended today with bids for pan-India licence touching Rs
16,751 crore which ensures the Government of India a revenue of Rs 67,719 crore.
The 3G auction had commenced on 9 April, 2010 and there were nine bidders in the fray for the slots of
3G spectrum on the block. The government auctioned three slots in 17 telecom service areas and four
slots in the remaining five states of Punjab, Bihar, Orissa, Jammu and Kashmir and Himachal Pradesh.
No single bidder bid for a pan-India 3G license so state operator BSNL would be remain the biggest 3G
operator in India. Delhi circle emerged the most valuable circle at Rs.3317 crore, followed by Mumbai at
Rs.3247 crore. Among the major bidders, Idea cellular paid nearly Rs.5765 cr for 11 telecom circles,
while India’s largest 2G Mobile service operator Bharti Airtel paid Rs.12290 cr for 13 telecom circles,
Vodafone Essar will paid Rs. 11617 crore for 9 telecom circle while Reliance Commmunication paid Rs
8583 crore for 13 telecom circles.
The List of 3G Winners (Private Operators ) :
• Delhi & NCR: Vodafone, Bharti, Reliance Communications at Rs 3316.93 cr

• Mumbai: Reliance, Vodafone, Bharti Airtel at Rs.3247.07 cr
• Maharashtra & Goa: Tata Com, Idea cellular, Vodafone at Rs.1257.82 cr
• Gujarat: Tata Com, Vodafone, Idea at Rs.1076.06 cr
• Andhra Pradesh: Bharti Airtel, Idea, Aircel at Rs.1373.14 cr
• Karnataka: Tata Telecommunication, Aircel, Bharti at Rs.1579.91 cr
• Tamil Nadu: Bharti, Vodafone, Aircel at Rs.1464.94 cr
• Kolkata: Vodafone, Aircel, Reliance Communications at Rs.544.26 cr
• Kerela: Idea cellular, Tata Telecommunications, Aircel at Rs.312.48 cr
• Punjab: Idea Cellular, Reliance Communications, Tata Telecommunications, Aircel at

Rs.322.01cr
• Haryana: Idea Cellular, Tata Telecommunications, Vodafone at Rs. 222.58 cr
• Madhya Pradesh & Chattishgarh: Idea Cellular, Reliance Communications, Tata
Telecommunications at Rs.258.4 cr
• Rajasthan: Reliance Communications, Bharti, Tata Telecommunications at Rs.321 cr
• U.P. (West): Bharti, Idea Cellular, Tata Telecommunications at Rs. 514 cr
• U.P (East): Aircel, Idea Cellular, Vodafone at Rs.364.6 cr
• West Bengal:Bharti,Reliance Telecom,Vodafone, Aircel at Rs.123.36 cr
• Himachal Pradesh :Bharti, Stel, Idea cellular, Reliance at Rs.37.23 cr.
• Bihar & Jharkhand : Stel, Bharti, Reliance, Aircel at Rs.203.46 cr
• Orissa : Stel, Aircel,Reliance at Rs.96.98 cr
• Assam: Reliance, Bharti, Aircel at Rs.41.48 cr
• North East: Aircel, Bharti, Reliance at Rs.42.30 cr
• Jammu & Kashmir : Idea, Aircel, Bharti, Reliance at Rs.30.30 cr

State telecom operator BSNL and MTNL already received 3G spectrum outside the auction process, and
launched 3G mobile services in more than 430 cities across India,but the bidding price would be
determined by the auction price.
Telecom Sector and Union Budget 2010:
The union Budget 2010-11 neglected the telecom industry's special demands. Telcos were looking at a
rationalisation of tax and levies, uniform license fee of one per cent of the AGR. Telcos wanted a re-look
at direct tax, tax holidays and section 81 (A), a re-look at licenses and indirect taxes
As far as the telecom sector is concerned, Dua said that while the reduction in Corporate Surcharge would
provide a minor relief, but at the same time the increase in MAT from 15% to 18% is a major are of
concern. He further added that the increase in Central excise duty from 8% to 10% is another area of
concern and will lead to an increase in cost of service. The continuation of exemption from basic, CVD
and special additional duties (SAD) granted to their parts, components and accessories of mobile phones
is a welcome step and would help towards penetration of affordable mobile service especially to rural
areas. COAI welcomed the impetus given by the Finance Minister to the use of clean/ alternate energy.
PORTERS FIVE FORCES MODEL ON TELECOM SECTOR IN INDIA

Porter’s five forces model uses concepts developed by Industrial Organisation economics to derive
five forces that determine the competitive intensity and therefore attractiveness of a market.
1. COMPETITIVE RIVALRY WITHIN AN THE INDUSTRY
This describes the intensity of competition between existing firms in an industry. Highly
cCOMompetitive industries generally earn low returns because the cost of competition is high. A
highly competitive market might result from:
i) Many players of about the same size; there is no dominant firm

ii) Little differentiation between competitors products and services
iii) A mature industry with very little growth; companies can only grow by stealing
customers away from competitors

There are majorly 3 types of players in the industry…
i) State owned players. (BSNL and MTNL)
ii) Private Indian players. (Reliance comm, Tata comm, Bharti Airtel)
iii) Foreign invested companies. (vodafone, Idea cellular)
There has been a stiff competition in the telecom market market over a period of time. Let us talk
about the current scenario.
At present has a subscribers base of above 6,47,44,985 with a market share of aprox. 15%. BSNL has an
edge over private players as it has already started with 3G specturm services across India. BSNL is BSNL
dedicatedly performing its work as it drives India into the next league of telecom supremacy by providing
technologically advanced services to its discerning customers at an affordable cost
On the private side, there has been a tough competition between Bharti airtel and Vodafone each having a
market share of 30 % and 24% respectively.
Even the growth rate of both the companies for the month of April when compared with March is around
+/- 2.5% .
Both are again in the race to start with the 3G services and cater it all across India and give a tough
competition to BSNL who is already in the market.
Idea cellular, Reliance comm and Aircel are also in the race as they lack in the infrastructure when
compared with Vodafone and Bharti Airtel
1. BARGAINING POWER OF CUSTOMERS.
This is how much pressure customers can place on a business. If one customer has a large enough
impact to affect a company's margins and volumes, then the customer hold substantial power.
Here are a few reasons that customers might have power:
i) Small number of buyers

ii) Purchases large volumes
iii) Customers are price sensitive.

Indian telecom industry is one of the fastest growing or second largest in the world. In this industry,
service providers are the major drivers. The major booster is the wireless mobile subscribers which have
crossed 433 million. There has been a major increase in subscribers in the month of April,2010 by a
whooping 11 mn. It is expected to grow more after the 3G sevices starting of from sep1,2010,
2. BARGAINING POWER OF SUPPLIERS
This is how much pressure suppliers can place on a business. If one supplier has a large enough
impact to affect a company's margins and volumes, then it holds substantial power. Here are a
few reasons that suppliers might have power:
i) There are very few suppliers of a particular product

a. There are no substitutes
ii) Switching to another (competitive) product is very costly
iii) The product is extremely important to buyers - can't do without it
iv) The supplying industry has a higher profitability than the buying industry
As far as telecom industry is concerned there are very few suppliers in the market. So the role of
suppliers is almost negligible in the industry. We are trying to analyze that minor role.
1. Mobile handset suppliers : There are many handset suppliers in the market, some of them
are Nokia, Samsung,Motorola, Sony Ericsson, Reliance Classic, Tata Indicom, etc. Few of the
new entrants are Spice, Micromax, Karbon, etc.
2. Some other suppliers in the industry are the suppliers of Optical fibre and Aluminium.
Other important parameter in this can be the software assistance, where suppliers can have edge over. The
major software providers are TCS, Infosys, Wipro, Satyam etc. Again one thing is noticable that big
giants like Reliance and Tata have their own software solution departments
3. THREAT TO NEW ENTRANTS.
The easier it is for new companies to enter the industry, the more cutthroat competition there
will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some
examples include:
i) Existing loyalty to major brands

ii) High fixed costs
iii) Scarcity of resources

iv) High costs of switching companies
v) Government restrictions or legislation
The Indian telecom sector offers unprecedented oppurtunities for foreign companies in various areas such
as 3G, Virtual Private Network, international long distance calls, value added services, etc. The market is
witnessing M&A like the Bharti – Zain, which are leading to consolidations in the industry. This sector
also attracts FDI which has made it the third largest sector attracting FDI in the post liberalization era.
4. SUBSTITUTE TO PRODUCT
What is the likelihood that someone will switch to a competitive product or service? If the cost of
switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of
substitutes:
I) The main issue is the similarity of substitutes. For example, if the price of coffee rises
substantially, a coffee drinker may switch over to a beverage like tea.
II) If substitutes are similar, it can be viewed in the same light as a new entrant.
There is a cut throat competition and a price war for the tariffs of the service provider. Today the
difference in the price of the of two products is marginal. Also with the availaibility of additional services
like GPRS, internet, video conferencing etc, the option of substitutes for the consumer is never ending. In
todays scenario, there are consumers who are ready to change their service providers for a reduction in
the tariffs, which poses a major threat to the companies..
SWOT ANALSIS OF TELECOM SECTOR.

STRENGTHS :
Strong mobile subscribers growth is continuing, with the market benefiting from healthy degree of
competition.

The mobile market plays host to a large number of strateic investors including Singapore’s SingTel,
Vodafone from U.K, Telecom Malaysia, Etisalat from UAE, Japan’s NTT DoCoMo and Russia’s
Sistema.
Demand for mobile Value Added Services is strong and expected to grow.
WEAKNESS :
Mobile market is stil inclined towards prepaid users.
The dominance of prepaid services has contributed to declining mobile average revenue per user (ARPU)
levels.
Disagreement between the regulator TRAI and government ministries has led to delayed policy
implementation in a number of areas, most notably 3G licensing.
OPPURTUNITIES :
The government is currently considering recommendations made by TRAI to allow the operations of
MVNO’s (Mobile Vitual Network Operator) in the mobile market.
The government wil cut license fees upto 33% for those operators whose service covers 95% of the
residential area in a calling circle.
There is an oppurtunity to cover the vast untapped rural market.
THREATS :
Government plans to increase spectrum usage charges for telecom companies.
Network capacity, particularly in the mobile market, couldstruggle to keep up with demand.
Stiff competition in the market will make service providers difficult to retain customers.
FUNDAMENTALS OF BHARTI AIRTEL
Introduction to Bharti Airtel

The name of the company is Bharti Airtel
It belongs to the Telecommunications industry

The company was founded on July 07, 1995 by Sunil Bharti Mittal
The headquarters of the company are located in New Delhi, India
Key people of the company are : Sunil Mittal (Chairman & MD)
Sanjay Kapoor (CEO)
Vision of Bharti Airtel is : To be the most admired brand in india
Loved by more customers
Targeted by top talent
Benchmarked by more business
THE KEY PRODUCTS ARE :-

1. TELE SERVICES
2. WIRELESS INTERNET
3. DTH SERVICES
4. ENTERPRISE SERVICES
1. TELE SERVICES :

Bharti Airtel provides Prepaid and postpaid services for both mobile phones and fixed land lines
users
The company charges Nominal tariff rates to its users in all the circles where it provides service
Bharti Airtel also provides gprs services to the gprs unabled handsets
Airtel also provides Wireless solution in blackberry and iphone
As far as advertising is concerned, the company has Shah rukh khan the brand ambassador
2. WIRELESS INTERNET :
Bharti Airtel has an easy to access Airtel usb modem for an instant internet connection
It provides with a wide range of prepaid and postpaid plans available as per customer needs
The company has most widespread network in the country
Data card is available from Rs.49 to Rs.999/month (installation cost Rs.2999)
3. DTH SERVICES :
Airtel digital TV is a satellite television service
It offers additional benefit like TV recorder
Tariffs from Rs.145 to Rs.345/month (Installation Rs.1490 – Rs.4290)
Kareena Kapoor and Saif Ali Khan are the brand ambassadors which has helped a lot to the
company to generate sales and have a competitive stand in the DTH market

4. ENTERPRISE SERVICES :
1st ISP (Internet service provider) in India
It provides end to end telecom solutions to corporate customers
National and international long distance services to ‘’carriers’’
(A company authorized by regulatory agencies to operate a telecommunication system)
TELECOM STATISTICS APRIL, 2010
Indian Telecom Sector Statistics
Total telephone subscriber base 638.05
Tele-density 54.10%
Fixed-line user base 36.83 mn
Wireless User base (GSM+CDMA+WLL(F) 601.22 mn
Monthly additions (Wireline) 16.64
Monthly additions (Wireless) 9.00
The total density of Indian Telecom sector is still around 54%+ which is far below an average
density of a developed country which still gives a scope for many players to enter the market and
also gives a chance to all the existing players to expand their market share

Bharti Airtel is worlds 3rd largest , single country mobile operator and sixth largest integrated
telecom operator
The below data is as on April, 2010
GSM Total Subscriber base % Market Share % Growth

Operator Over previous month
Bharti Airtel 130619487 30.16% 2.35%
Vodafone 103755978 23.96% 2.87%
Idea Cellular 65288248 15.08% 2.29%
BSNL 64744985 14.94% 1.98%
Aircel 38469541 8.88% 4.36%
Reliance 16311206 3.77% NA

Telecom
(RTL)*
MTNL 4817670 1.11% 0.69%
Uninor 5021651 1.16% 17.77%
Loop Mobile 2894511 0.67% 1.76%
Stel 112391 0.26% 10.48%
All India 433040658 100% 2.65%
Bharti Airtel has a market share of around 7.85% (29,28,254 subscribers) in wire line services
Bharti Airtel has a market share of around 30.16% (13,06,19,487 subscribers) in GSM cellular
service market

There has been a growth of 2.35% in the month of march ’10 adding 3mn subscribers
KEY POSITIVES:
Bharti Airtel is presently the no.1 telecom operator in India
It holds the largest market share of 30%+ being a market leader
The network is spread across all 19 telecom circles and 4 metro cities which gives it a PAN
(Presence Across Nation) India presence
Bharti – Zain acquisition would add access to 15 more countries in Africa adding 40.1mn
subscribers to its present data base
Bharti has paid Rs. 12295 crore for the license of 3G spectrum which will help the company to
cover Mumbai, Delhi, AP, Karnataka, Rajasthan, TN, UP, WB, HP, Bihar and Jammu & Kashmir
Acquiring 70% stake in Warid telecom of Bangladesh
RISK ASSOCIATED:

There will be a significant deterioration in company’s cash flow protection measure as due to a
high amount of debt raised for obtaining 3G license and acquiring Zain Africa.
There is a high amount of business risk involved due to the macroeconomic and political risk
associated as well as lower profitability of Zain’s Africa operations
Share price currently trading at 9 months low
Bharti Airtel is India centric. It has of lately started to spread its wings in thee international
market
BASIC FINANCIALS OF BHARTI AIRTEL

MAR 03 MAR 04 MAR 05 MAR 06 MAR 07 MAR 08 MAR09
DEBT : 0.01 0.07 0.60 O.83 0.54 0.38 0.30

EQUITY
ROCE (%) 0.17 0.16 23.96 22.55 34.07 34.83 33.17
PAT
(Rs. IN Cr) 0.22 0.37 1210.67 2012.08 4033.23 6244.19 7743.84
RONW (%) 0.47 0.27 23.88 31.82 43.04 39.46 32.35
INCREASE IN
MAR 09 MAR 10 PERCENTAGE
(%)
SALES (Rs. IN Cr) 7744 9426 4.69%
NET PROFIT (Rs. IN Cr) 34014 35610 21.72%
AVERAGE REVENUE PER USER (ARPU)
QUARTER ended 2009 ARPU

Q1 278
Q2 252
Q3 230
Q4 220

ARPU facts of Bharti Airtel
Average APRU for FY 2010 is Rs.245
ARPU of Bharti Airtel for Mar 2010 was Rs.220
ARPU of Telecom Sector for Mar 2010 was Rs. 124
The ARPU of Zain in Africa is Rs. 360 to Rs.450
The estimated ARPU after the launch of 3G is to be estimated at Rs.350
ARPU = Average minutes of use per user * Average rate per minute
Average minute of use per user of Bharti Airtel grew from 446 minutes to 468 minutes as compared with
last Quarter
Average rate per minute declined from Rs.0.52 to Rs.0.47 as compared with last Quarter
The below table shows the ARPU per subscriber and the number of 3G subscribers required to have a
BEP
The above table states that if Bharti Airtel wants an ARPU of Rs. 200 per subscriber, than they will have
to add on 90mn 3G subscribers to Break Even the cost incurred for the licensing of 3G spectrum.

SHARE PRICE DATA
BHARTI AIRTEL RELIANCE COMM IDEA TATA COMM
CURRENT 265 147.70 52 241

MARKET PRICE (25/05/10) (25/05/10) (25/05/10) (25/05/10)
52 WEEK HIGH 467 359 91.70 602

(01/10/03) (11/06/09) (11/06/09) (25/05/09)
52 WEEK LOW 229.50 131.80 47.05 237.60

(27/11/09) (21/05/10) (27/11/09) (21/05/10)
ALL TIME HIGH 574.50 844 161 1083.32

(10/10/07) (10/01/08) (18/10/07) (11/02/00)
ALL TIME LOW 10.33 131.35 34.05 NA

(10/01/03) 09/03/09) (27/10/08) 17/02/97
BETA 0.6201 1.3041 1.0121 0.7051
The share price of Bharti Airtel from 21/05/09 to 21/05/10
MOBILE NUMBER PORTABILITY

It is a service that allows customers to change their service providers without changing their mobile
numbers
MNP has been delayed till 30th June, 2010
Telecos has predicted that around 0.5% – 20% of mobile subscribers will use MNP service
Initial expenditure for the companies would be Rs.1065 crores and annual operational expenditure would
be Rs.184.75 crores
CHARGES OF MNP
Per Port Transaction Charge :
It is a processing charge paid by the recipient operator (the operator to which subscriber shifts loyalty) to
MNP service provided.
Charges shall be Rs. 19
Porting Charges :
It is a charge paid by the subscriber for porting his number to the recipient operator
Charges shall be Rs.20
Bharti Airtel as investments with Mutual Funds

JM Telecom Sector Fund as on 30/04/10
EQUITY VALUE QUANTITY %

(IN Cr.)
Bharti Airtel 4.50 150727 55.32

Idea Cellular 0.77 125448 9.44
Tulip Telecom 068 8121 8.40
Reliance Comm. 1.17 7152 14.40
The highest holdings of Bharti Airtel in MF’s (%)

 JM Telecom Sector Fund = 55.32%,
 Franklin (I) Flexi Cap = 9%
 Franklin (I) Flexi Cap (G) = 10%
The highest holdings of Bharti Airtel in terms of Asset Value
 HDFC Equity Fund (G) = 6187 crores
 HDFC MIP - LTP (G) = 5925 crores
 SBI Magnum Tax Gain (G)= 5525 crores
SWOT ANALYSIS OF BHARTI AIRTEL

STRENGTHS
More than 130mn customers base
Business has access to knowledge and technology as it holds strategic alliance with Sony-Ericsson,
Nokia and Sing Tel
Pan India presence
Strong financials with increase in NP by 22%+ and Sales by 4.5%+ for FY Mar, 2010
WEAKNESS
Outsourcing of telecom and IT networks, IT infrastructure, lastmile connectivity of broadband operations,

BPO services, Inter – city optic fibre cables
Risk associated with Zain acquisition like lower profitability, political and regulatory risks
OPPURTUNITIES
Bharti infratel can cut down cost in vast untapped rural and semi urban areas
Current tele - density is 52%, still low as compared to developed economies
Increase in subscribers base and global wide spread with Bharti – Zain acquisition

THREATS
Bharti Airtel is India – centric
Intense competition among Indian markets
Changing pace of global telecommunication industry which impacted the decision of purchase of MTN
indirectly opening doors for the rivals (Reliance comm.)

PORTERS FIVE FORCES MODEL
COMPETITIVE RIVALRY WITHIN THE INDUSTRY
Many players of the same size
Little differentiation between competitors products and services
Company can only grow by diminishing cut throat competition and stealing away the customers

Result : High
BARGAINING POWER OF SUPPLIER
Improved competitive scenario and commoditisation of telecom services has led to reduced
bargaining power for services providers.
There are very less substitutes
Large number of equipment makers(fibre optic cables, billing software) to dilute bargaining
power
Result : Low
BARGAINING POWER OF CUSTOMERS
A wide variety of choices available to customers both in fixed as well as mobile telephony has
resulted in increased bargaining power for the customers.
Buyer’s power varies between market segments
Customers are price sensitive

Result : High
THREAT TO NEW ENTRANTS
High fixed costs and difficult access to finance
Scarcity of resources
Switching costs is relatively low
Government restrictions or legislation
Result : High
FUTURE PROSPECTS/STRATEGIES
To translate its expertise of Indian market to other emerging economies (Zain acq.)
Purchase of Zain for $10.7bn which will increase its network to 15 more countries resulting in an
increase in 40.1mn subscribers

To continue and upgrade the unmatched service provided to the customers
Also to acquire 70% stake in Warid telecom, Bangladesh
To increase customer base by the support of 3G spectrum as it is not feasible for new entrants to take part
at such high bid price
Future roadmap
3G WiMax VPN & VOIP
CONCLUSION :
All the above factors including the highest subscriber’s base and largest market capitalization
along with the EPS of Rs.40.45, share price data trading at 52 weeks low and the Bharti
acquiring 3G license with the highest fee payment along with the Bharti- Zain acquisition

allowing Bharti to add 40 mn subscribers and access to more than 14 countries adds up to a
conclusion for Bharti Airtel as VALUE BUY investment.
REFERENCES:
 ‘’Capitaline’’ software

 http://trak.in/tags/business/2010/04/27/telecom-subscriber-growth-vodafone-top/
 http://www.moneycontrol.com/news/result-analysis/bharti-airtel-q4-net-falls-8_454275.html
 http://www.coai.co.in
 http://trak.in/tags/business/2010/05/21/airtel-mobile-subscriber-addition-april/
 en.wikipedia.org/wiki/TRAI
 http://www.articlesbase.com/business-opportunities-articles/the-indian-telecom-sector-moving-
into-2010-1819701.html
 http://en.wikipedia.org/wiki/Communications_in_India
 http://indiafocus.indiainfo.com/industryandbusiness/telecom/mobile/
 http://www.nseindia.com/
 http://telecomtalk.info/indias-3g-auction-ends-no-single-bidder-bid-for-a-pan-india-3g-
license/28033/
 http://www.topnews.in/coai-report-gsm-operators-sign-1118-mln-users-april-2262392
 http://economictimes.indiatimes.com/Telecom/Telecom-sector-may-see-salary-hikes-of-up-to-
30/articleshow/5496113.cms
 http://voicendata.ciol.com/content/news1/110022607.asp
 http://www.investopedia.com/features/industryhandbook/porter.asp
 http://www.indiabroadband.net/airtel-broadband/2511-airtel-enterprise-internet.html
 http://www.moneylife.in/article/8/3782.html
 http://www.slideshare.net/amit_kumar1/airtel-ppt-presentation


Fundamentals of Bharti D Final Projct

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A PROJECT REPORT on

FUNDAMENTALS OF BHARTI AITREL

in partial fulfillment for the award of the degree

POST GRADUATE DIPLOMA IN MANAGEMENT

Under the guidance of

THAKUR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

Thakur Institute of Management Studies and Research Page 1

Thakur Institute of Management Studies and Research Page 2

Thakur Institute of Management Studies and Research Page 3

Introduction about Sykes & Rays (I) Ltd 6

Indian telecom Sector 7

Present scenario of telecom Operators 12

Financials and share price data of telecom 13

Wide look on India’s 3G auctions 17

Telecom Sector and Union Budget 18

Porters five forces model on Indian Telecom 19

Introduction to Bharti Airtel 24

Telecom Statistics, April, 2010 26

Key positives and risk associated 28

Basic financials of Bharti Airtel 29

Thakur Institute of Management Studies and Research Page 4

Mobile Number Portability 32

Bharti Airtel as investment with Mutual 32

Porters five forces model on Bharti Airtel 35

Thakur Institute of Management Studies and Research Page 5

Thakur Institute of Management Studies and Research Page 6

1. Fixed Service Provider (FSPs)

Thakur Institute of Management Studies and Research Page 7

Operator Subscriber base The

Bharti Airtel 2,928,254(7.85%)

Reliance Communications 1,152,237

Tata Teleservices 1,003,261

HFCL Infotel 165,978

Teleservices Ltd 95,181

All India 37,306,334

Thakur Institute of Management Studies and Research Page 8

Bharti Airtel 118,864,031

Reliance Communications 93,795,613

Vodafone Essar 91,401,959

Idea Cellular 57,611,872

Tata Teleservices 57,329,449

MTS India 3,042,741

HFCL Infotel 341,862

All India 525,147,922

i. need and timing for introduction of new service provider;

Thakur Institute of Management Studies and Research Page 10

GSM Opertaor wise % market share – April, 2010.

Thakur Institute of Management Studies and Research Page 11

Bharti Airtel Vodafone Idea Cellular BSNL Aircel

SHARE PRICE DATA OF THE ABOVE COMPANIES

BHARTI AIRTEL RCOMM IDEA TATA

52 WEEK 467 359 91.70 602

52 WEEK 229.50 131.80 47.05 237.60

ALL TIME 574.50 844 161 1083.32

ALL TIME 10.33 131.35 34.05 NA

BETA (last 1 0.6201 1.3041 1.0121 0.7051

Thakur Institute of Management Studies and Research Page 12

1. Worlds largest democracy.

3. Skilled and competitve labour force.

6. FDI limit increased from 49% to 74%

7. The rural telecom equipment market is also open to large investments.

India among the countries offering highest return on investments.