A Case Study on

Bharti Airtel Ltd.

 Overview
• Sunil Mittal & Bharti Airtel
• Vision & Mission Statements
• Objectives/Core Values
• Telecom Revolution in India
• Financial Snapshots
• Airtel’s Core Competency
• SWOT Analysis
• Competitor’s Analysis
• Some Models
• Achievements
• Alliances
• Challenges
THE STORY OF A BOY WITH AN
UNDAUNTED SPIRIT WHICH LED
HIM TO SUCCESS
Vision & Mission Statements
:
Bharti Airtel Ltd.
VISION STATEMENT– “ To be
globally admired for telecom
services that delight
customers.”

MISSION STATEMENT – “ We will

meet global standards for telecom
services that delight customers
through customer service focus,
empowered employees ,
innovative services and cost
efficiency. ”
 Objectives/Goals of Airtel
• To undertake transformational projects
that have a positive impact on the society
and contribute to the nation building
process.
• To Diversify into new businesses in
agriculture, financial services and retail
business with world-class partners
• To lay the foundation for building a
“conglomerate” of future
 Core Values of Airtel
• Empowering People - to do their best
• Being Flexible - to adapt to the changing
environment and evolving customer needs
• Making it Happen - by striving to change the
status quo, innovate and energize new ideas with a
strong passion and entrepreneurial spirit
• Openness and transparency - with an innate
desire to do good
• Creating Positive Impact – with a desire to
create a meaningful difference in society.
 Integrated Telecom
Company(SBUs)
 Wireless Services  Enterprise Services
– 2G/3G – Carrier
– Rural Market – Corporate

Telemedia  Passive
Services Infrastructure
– Fixed Line – Bharti Infratel
– Broadband – Indus Tower
– DTH
 India is the second fastest growing mobile
market in the world and fifth largest market
in the world for mobile telephony services.
 The cellular phone industry is one of India’s
rapidly growing industries.
 The industry came into being in the mid
1990s, its average per annum growth has
been a phenomenal 85%.
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

ILD – International Long Distance

Financials Snapshots
* EBITDA means Earnings Before Interest, Taxes, Depreciation and
Amortization.
 Financial Snapshot - Ratios
Key Ratios - Airtel Mar- Mar-07 Mar-06 Mar-05 Mar-04
08
Debt-Equity Ratio 0.38 0.54 0.83 0.6 0.07
Long Term Debt-Equity Ratio 0.35 0.5 0.76 0.5 0.03
Return On Capital Employed (%) 34.88 34.07 22.55 23.96 0.16
Return On Net Worth (%) 39.53 43.04 31.82 23.88 -0.27
 http://www.capitaline.com

Key Ratios - Industry 2007 2006 2005 2004 2003

Debt-Equity Ratio 0.35 0.21 0.27 0.34 0.36
Long Term Debt-Equity Ratio 0.3 0.19 0.24 0.29 0.33
Return On Capital Employed (%) 9.72 10.28 8.25 8.43 3.07
Return On Net Worth (%) 10.11 10.62 10.87 6.76 0.18
 http://www.capitaline.com
Market share
Mind share
Competitor Analysis

  OP Margin Net Margin

Compan Sep-07 Sep-08 Sep- Sep-
Best OP Margins
y 072 083
& Net Profit Bharti 43.00% 38.00% 26.40% 19.30%
Margins among
Rcom 37.90% 31.60% 23.90% 13.20%
Peers
IDEA 32.80% 26.60% 14.10% 6.50%
MTNL 23.70% 22.90% 7.00% 6.80%

Source: CMIE November 2008

 SWOT Analysis
STRENGTHS WEAKNESSES
• India’s largest service provider
• stakeholders include Sony-
ericsion, • Outsourcing of Core Systems
Nokia ,Singtel • Lack of emerging market
• Large and rising customer base investment opportunity
• 65million customers (july 2008)
• Strong HR –PRACTICES

THREATS
OPPORTUNITIES

Bharti Infratel – Cutting Down cost • India centric – Major

in Rural area revenues from India
• Match Box Strategy – Scale of • Falling ARPU & AMOU
Penetration • Intense Competition &
• Current Tele-Density – 30.6 is still Shortage of Bandwidth
low among developing countries
• Low Broadband Penetration, Rural
Telephony
 Business Strengths

 Brand image
 Brand equity
 Production capacity
 Corporate image
 Profit margins relative to
competitors
Current market share
 R & D performance
 Managerial personal
 Promotional effectiveness
Positioning
PORTER’S 5 FORCES MODEL
Porter’s Generic Strategy
 BCG Matrix for Bharti Airtel
HIGH

Mobile Services
DTH & IPTV

Broad Band
LOW

HIGH LOW
GROUP 7
 GE Matrix
High Business Strengths Low

High Attractive 5.00

Market Attractiveness

Airtel Enterpri
Mobil se
e
3.67

Moderate
TeleMed
ia Attractive
2.33

Unattractive

Low
26
5.00 3.67 2.33 1.00
Growth Factors
 Airtel – Strategy
MANTRA : Focus on Core
Competencies and Outsource the
rest!
 Alliances

• Singtel
• Strategic alliance(Vodafone)
• Walmart (retail industry)
• Apple (iphone) etc…….
 ACHIEVEMENTS
• Leader in telecom market
• Breaking the Monopoly
• Leadership in concept of Customers Delight
• Advertisements through exclusive symphonies
• Value added services : roaming/mobile banking,
MMS/SMS(directory), Voice mail/fax/WAP/EDGE,
Dual SIM card, etc. . . . .
 Challenges

• Increasing number of players

• Pricing
• Improvement in technology
• Establishment of distribution channels
• Untapped rural market
• www.wikepedia.org
• www.airtel.in
• www.ask.com
• www.trai.gov.in
• www.investmentz.com
• Case study material