What must Bharti do well to succeed in the Indian mobile phone market? (1)

y Obtaining mobile licenses in India s all 23 mobile

operating circles & obtaining fixed line licenses as well by studying the potential market (2001-02: 15/23, 6/23) y Similar to Bharti-SingTel deal launch more national and international long distance service (e.g. AirtelZain telecom - Africa) y Sustain economies of scale (to tackle competition) by using their large N/W

Wi-Max. social media marketing y Corporate Fixed line services. mobile internet services. ring tones and ring-back tones. SMS.5G and 3G licenses offer Value added services data transmission. broadband. y Online recharge (prepaid). post-paid connections.What must Bharti do well to succeed in the Indian mobile phone market? (2) y Prepare for obtaining 2. payment (post-paid) services . happy hours etc. group calling facilities. leaseline. fax. Games. N/w games.

What must Bharti do well to succeed in the Indian mobile phone market? (3) y Focus on ARPU (Avg monthly revenue per customer y y y y unit) Value added services Focus on regional mobile services (Spice. iPhone-Airtel) . BPL) Acquisitions Increasing customer base (market share) Offering new (innovated) products (billing plans) and services Tie-ups (Blackberry-Airtel.

What must Bharti do well to succeed in the Indian mobile phone market? (4) y Long term relationship with vendors reduced cost. better service y Efficient capacity utilization of available telecom setup (managing Erlangs measure of telecom traffic) y Use better traffic estimation models to predict capacity of different n/w configurations y Effective process of planning-tendering-financingpurchasing-installing in order to reduce time-tomarket .

What must Bharti do well to succeed in the Indian mobile phone market? (5) y Acquire and retain the best and the brightest human resources y Outsource IT and Telecom technology to the best vendors and focus on core competency .

Bharti Airtel Core competencies y Operations y Sustainable competitive advantage y Focus on revenue fetching services y Continuous improvement and innovation y Healthy vendor relationship y Encourage use of excellent technologies vendors y Distribution network management and complexities related to call management y Efficient management of network instruments .

Q.Do you think Bharati should enter the outsourcing agreement outlined by Gupta? What do you see as advantages and disadvantages of such agreement? How do the different outsourcing agreements work towards building these core competencies? y Ans: y y Yes Bharati should enter the Outsourcing Agreement. .

Advantages y High bargaining power for Bharati.(by implementing pay for use) Lower Human resources cost due to their transfer to vendor companies. y More the outsourcing core business more the dependency on vendors. Disadvantages of outsourcing: y Inertia from existing employees to transfers. Avoid excess capacity wastage. y Transfer of network assets built by Bharti. y Limitation of Bharti to use creative new application IBM deal would limit them to their applications. due to high competition between y y y y service providers.(decision making has to be apt) Transferring equipment investment risk to vendor. . Uncertainties in capital expenditures kept low.

Bharti should go for outsourcing for following reasons: y Proper governing mechanism. y Rapidly changing trends in telecom industry leads to equipments purchased to be out of use. y Keep the IT applications that are used to tackle competition in-house. y Risk diversified by involving three vendors instead on one. y Huge capital expenditure help growing customer base. .

Nokia or Siemens? .Question 3 If you were Bharti. what major concerns would you have about entering an outsourcing agreement with IBM? With Ericsson.

Bharti s concerns Assuming Bharti s role:  Managing different vendors  Risk of exposing business processes  Synergies between vendors Might lead to vendor consolidation  Protecting IP. Copyright Focus should be on deriving values from IBM's expertise to Airtel AND NOT from Airtel's expertise to IBM and in turn to other IBM customers .

Bharti s concerns continued.. Payment milestones.  Limitation to use creative new application  Issues related to asset ownership & maintenance  Payment terms. SLA parameters  Inertia of existing employees  Resource absorbing by vendors leading to employee unrest More the business outsourcing more the dependency on vendors ..

check alignment of process matrix. Report to the higher management Monitoring design of overall architecture.How would you structure the agreements to address your concerns and capture any advantages you have identified? What governance mechanisms would you design for the agreements? Governance Mechanism Senior management will take care of the financial approval and strategy formulation and appointing the leadership committee Tracking of progress . monitoring the different processes Senior Management Internal team Internal team Leadership Committee Architecture committee IT Relationship Managers Process Team along with IT team Ericsson . Maintaining relations with different vendors. Nokia . Siemens /IBM .

how to gain advantage ? y Hand over network management & operations in phases and under y y y y y y constant monitoring of internal team Software & hardware apps not supported by IBM to be available even if IBM gets the contract IBM to co-operate with other vendors Give large fundamental innovation to IBM but keep quick shots in house to reduce time to market of new IT based services Recruitment of new staff members to be taken care by the vendor and vendor to absorb the new staff members Transfer equipment investment risk to the vendor Revenue sharing agreement with the vendor .Agreement design.

Major concerns y IBM first time sharing revenue model of payment y Return on Investment subject to company s performance y Dynamic environment of telecom y High demands placed on IT y Working closely with vendors and Bharti .

the agreement should cover minimum costs involved and a component of fixed return y Quality of IT services should be well defined in SLA y Mutual agreement on quality of applications and services quality y Flexible terms of contract as it is covering period of ten years in a very dynamic environment y IBM to safeguard itself can take some decisions provided the terms promised to Bharti remain the same y Value delivery based model instead of time or resources based y Innovation and best practices .Agreement y As the revenue is shared .

Customer satisfaction y Strategic Alignment.SLA and Quality y Value Delivery.Long term and skills based y Performance Management.Excellence and best practices .Governance mechanism y Risk Assessment-Periodic and clause based y Resource Management.

Governance mechanism Account Manager Delivery Head GPM PM Bharti .

Thank you !! .