Bharti Airtel Ltd and Indian Telecom

Sector
Ashish M. Deshmukh
Henal Mehta
Pravin Sharma
Saurabh Jain
Sohom Dhol
EMERGING MARKET CHAMPION
 Feb 13,2008 Bharti Airtel Limited (BAL), a leading telecom
company in India crossed 60 million customer mark.
 Tenth largest telecom company in the world in terms of
subscriber base.
 Wireless segment constitutes 96% of BAL’s total customer base.
 Market share – 31.8% and its valuation stood at US $ 40 Billion
(Feb 2008)
 BAL’s growth matched the growth in Indian Telecom Sector,
which was fastest in the world.
 Emerged as undisputed leader in Indian mobile market.
 Faced new challenges to its leadership position with the entry of
strong international telecom companies.
 MOBILE TELEPHONY IN INDIA
 Started when government decided to allow private sector participation.
 In initial days, mobiles were out of reach of most Indians.
 Subscriber number increased with a fall in tariff.
 Legal conflict between fixed service operators and cellular operators.
 Introduction of Universal service telecom license.
 small players and foreign players exited from the sector.
 Mobile subscriber- 86% of telecom subscribers in India.
 GSM operators – 74% of mobile phone users and rest CDMA.
 ARPU per month for GSM operators- Rs. 275 while for CDMA
operators – Rs. 173
 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
TAPPING UNTAPPED MARKET
 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).
 In 2006, Airtel became the first Indian telecom operator to
launch 3G services in Seychelles
 In May 2007, JAL and GAL entered into a partnership with
Vodafone to launch mobile services in Channel Islands under
the Vodafone-Airtel brand.
 Airtel started in operations in Srilanka in 2008
A $23 BIILION DEAL
 CONCLUSION
 Airtel faced some challenges to its leadership
position in the Indian telecom market.
 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.
 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.