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INTRODUCTION (Company overview)
Bharti Airtel Ltd was incorporated on the 7th of July, 1995 as a Public Limited Company & one of the first companies to enter the Telecom Services business in India. As on date, Airtel provides mobile services in all the 22 telecom circles in India, Sri Lanka and Bangladesh. It was the first private operator to have an all India presence. Airtel provides Telemedia services (fixed line and broadband services through DSL) in 89 cities in India, DTH and IPTV services also. Sunil Bharti Mittal, the founder-chairman of Airtel, began his journey manufacturing spare parts for bicycles in the late 1970s. His strong entrepreneurial instincts gave him a unique flair for sensing new business opportunities. In the early years, Bharti Airtel Ltd established itself as a supplier of basic telecom equipment. Mr. Sunil Mittal jumped at the opportunity provided when the government opened up the sector and allowed private players to provide telecom services. Bharti Airtel Ltd accepted every opportunity provided by this new policy to evolve into India's largest telecommunications company and one of India's most respected brands. Airtel was launched in 1995 in Delhi and is today present in all of India’s 22 telecom circles. Airtel had gross revenues of Rs. 396,150 million1 (for year ended March 31, 2010-Audited) & a customer base of 131 Millon2 customers as of 31st March 2010. OUR BRAND Airtel was born free, a force unleashed into the market with a relentless and unwavering determination to succeed. A spirit charged with energy, creativity and a team driven “to seize the day” with an ambition to become the most admired telecom service provider globally. Airtel, in just ten years of operations, rose to the pinnacle of achievement and continues to lead. As India's leading telecommunications company, Airtel brand has played the role of a major catalyst in India's reforms, contributing to its economic resurgence. Today we touch people's lives with our Mobile services, Telemedia services, to connecting India's leading 1000+ corporates. We also connect Indians living in USA, UK and Canada with our callhome service.
VISION AND PROMISE By 2015 Airtel will be the most loved brand, enriching the lives of millions. " Enriching lives means putting the customer at the heart of everything we do. We will meet their needs based on our deep understanding of their ambitions, wherever they are. By having this focus we will enrich our own lives and those of our other key stakeholders. Only then will we be thought of as exciting, innovation, on their side and a truly world class company." Airtel is a fully integrated telecom player offering end to end solutions: • Wireless Services o 2G/3G o Rural Market o Sri Lanka o Bangladesh • Telemedia Services o Fixed Line o Broadband o IPTV • DTH (Direct-To-Home) Media • Enterprise Services o Carriers o Corporate • Passive Infrastructure Services
MARKETING STRATERGY ASSESMENT
BAL focused on expanding its network coverage all over the country before other players could expand on a big scale. In February 2008, it announced an annual investment plan of US $ 2 billion to expand its network over the next 3 years. This was substantially higher than its average annual investment plans of US$ 1.5 billion. BAL planned to add an additional 30,000 base stations to its existing 40,000 base stations for the fiscal year 2007 and thereby cover 70% of the country. Nearly 50 to 60% of the future expansion was to be in the rural areas. BAL also planned to cover 97% of the country by 2010.
In July 2007, BAL entered into a memorandum of understanding (MOU) with leading telecommunications solutions company Nokia Siemens Networks (NSN) for an end-to-end network expansion across all of BAL’s mobile, fixed, and intelligent network platforms. As part of the MOU, which was worth US$ 900 million, NSN was to expand BAL’s GSM network in 8 circles under a two-year project. It was one of the largest GSM expansion deals in India. BAL’s main aim of expanding its GSM network under the MOU with NSN was to increase its footprint in rural areas and increase its overall network capacity to face competition from the new players. Commenting on this major expansion deal, Kohli said, “The expansion and integration exercise across mobile and fixed networks will help us in augmenting our service delivery capacity.” As part of the deal, NSN was to also deploy 1.8 million ‘next generation network’ ports across BAL’s national long distance and international long distance networks. Targeting All Segments On the value added services (VAS) front, BAL planned to launch new cutting edge VAS such as Mobile Payment Services and Mobile Money Transfer Services. BAL also planned to roll out complete mobile commerce (mcommerce) services which would facilitate services like online purchases with handsets. BAL entered into a tie-up with Nokia in 2007 to offer entry-level handsets to its customers. BAL was to offer Nokia handsets bundled with its connections at subsidized prices. This tie-up was aimed at countering the selfbranded handsets offered by Bharti Airtel such as Vodafone and Tata and also to facilitate its expansion in the rural areas. As part of the tie-up, the two companies were also to combine their advertising and marketing initiatives to tap the lower segments of the market. BAL also did away with the practice of using a single marketing strategy to target all the customers. It categorized the customers based on ARPU and adaptability to new VAS and technologies. High-end customers were segmented into a separate category called ‘funsters.’ Industry experts said that as the mobile telecom market matured in India, the days of using a single marketing strategy for the whole mobile market were over and proper segmentation of the market would be the key for better targeting. BAL planned to focus its marketing efforts on these tech savvy heavy VAS users who were generally in the age group of 18-35 years. To improve its revenues and deal with the steadily falling ARPUs, BAL decided to get into tie-ups with leading manufacturers of high-end hand-held devices such as High Tech Computer 12
Corporation (HTC) and Research in Motion Ltd (RIM). Through these tie-ups, it offered products like the ‘HTC Touch’ and the ‘BlackBerry’, which provided features such as push email, document support, and touch screen interface. These products were aimed at high-end corporate users whose ARPUs were high. BAL hoped to increase its falling ARPUs through a slew of such high-end offers. BAL also reduced its overall tariffs to woo its low-end users. On January 15, 2008, BAL reduced its tariffs to Re. 1 (around 2 cents) for its lifetime prepaid users -- a reduction of 50% when compared to the previous rate of Rs. 2 per minute. It even reduced the fixed charges for lifetime validity for prepaid subscribers to Rs. 495 from Rs. 999. BAL also introduced a number of postpaid plans like the ‘Airtel Supersaver-399’ which provided users with free talk time equal to the value of monthly rental paid by them. This brought the effective recurring monthly rental charges to zero. BAL aimed at removing the entry barriers and reducing the recurring maintenance charges for consumers so as to create a whole new customer base to feed its growth. The reduction in the tariffs and the lowering of the fixed and recurring charges were intended to increase the user base by further expanding the market. Analysts said that reduction in the entry as well as monthly recurring charges was the key to expanding in the rural markets. BAL also started new advertising campaigns to reposition the ‘Airtel’ brand. Wooing the Rural Masses Analysts felt that increasing rural penetration was a very challenging task. Not only did the telecom companies have to contend with low ARPUs as most of the people living in rural areas had low incomes, but they also had to face other challenges like getting power connections and supply and having to build more and higher towers as population density in rural areas was low. This only added to the costs. India being a diverse country, there were various languages and dialects with some even not having alphabets and this made targeting the groups speaking these languages or dialects and providing mobile services to them that much tougher. In what analysts saw as another innovative approach to rural markets, BAL started to tie up with shop owners in remote areas of India and bundled information on issues important to the rural population (such as weather, crop yield, fertilizers, etc.) with the mobile phone. It also began providing economical plans (with handset bundling) to rural people to increase uptake. “Our next 50 million will largely come from rural India as our plan is to reach 5,200 census towns and over five lakh (500,000) villages, covering 96 per cent of the Indian population, “said Kohli.
IFFCO Kisan Sanchar Limited (IKSL) with Indian Farmers Fertilizer Cooperative Ltd (IFFCO) to provide VAS and voice services to farmers throughout India. etc.In 2008. rural health initiatives. The VAS platform was to broadcast 5 free voice messages daily on mandi prices.50 per minute between IFFCO members. diary farming. BAL launched a joint venture company. weather forecasts. fertilizers.0. In addition to the low tariff of Rs. it planned to offer economical handsets bundled with the mobile connection. animal husbandry. The farmers would also have access to a dedicated helpline manned by experts in various fields to answer 13 . farming techniques.
BAL’s operating expenses as a share of revenue had declined 8% annually since 2003. Campaigns such as ‘Express Yourself’ launched in 2003 went a long way in making Airtel a big brand in India. especially for its erstwhile prepaid mobile services brand ‘Magic. the company had gone on to become one of the biggest advertisers in India. IT services (to IBM). By the mid-2000s. Building a Strong Brand Right from its early days. distribution. this helped the company save on capital expenditures and lower its operational expenses. and customer service. It initially used Indian cricket star Sachin Tendulkar to promote its services. Differentiation strategy BAL had focused on differentiating itself in the Indian telecom market by ensuring customer delight and a cost-effective business model – a business model of being profitable despite having the lowest tariff in the world. It also made Hindi film actors Shahrukh Khan and Kareena Kapoor its brand ambassadors to promote its products and services. BAL adopted some innovative promotional strategies for its products.55 billion (Rs. and advertising of Rs.28 Analysts felt that this had helped BAL in offering customers its services at low cost and also to focus on its core business while handling any changes in consumer demand in a flexible way. According to analysts. marketing.their queries. it became important for the company to control costs if it wanted to invest in building a sustainable business. “We were seeing people laugh at us. saying ‘how can you give away your lifeline to vendors?’… We were very clear that the technology was not something we need to focus on.02 billion on advertising alone) in 2006-07. .4. It also got noted Indian music director AR Rahman to compose special ring tones for its ‘Airtel’ brand. Business model innovation BAL also focused on remaining a lean organization. It enrolled celebrities as its brand ambassadors to take mobile services to the masses. According to management consulting firm Oliver Wyman. BAL said that the initiative would help in the development of the community as well as the rural economy. It was one of the first telecom companies to outsource its network deployment (to Ericsson and Nokia). the company focused on building a strong brand through innovation in sales.’ BAL later used Shahrukh Khan in its ads for the launch of many of its other services. 12. With the price of calls per minute becoming lower by the day. and customer contact centers (to IBM Daksh / HTMT). The promotion of BAL’s services by Shahrukh Khan proved very successful. with total expenditure on marketing. It utilized different payment models from revenue per share to cost per all. depending on what worked for the parties involved.
This was a first in the Indian telecom market. very sustainable.Technology is something we buy to sell to the customers. and IBM do technology for a living.14 . Nokia. After entering the mobile phone market. It has made the business model of Bharti very. so let’s give it to them because they know best. analysts felt that the company had negotiated the challenges posed by new entrants into the mobile phone market rather deftly. “said Mittal. Ericsson. BSNL also made use of its then strong fixed line user base -. BSNL introduced free incoming calls for its mobile phone users. Competing with BSNL in the early 2000s was particularly tough. In addition to this.
When one of the boys starts playing with a football it falls on the other side of the fence. But BAL later lobbied heavily through the COAI to get the GoI to reduce the interconnection charges and made the incoming calls free across all Bharti Airtel and the services offered. never to return. BAL launched another major advertising campaign in December 2007 called ‘Barriers break when people talk.incoming calls made to its mobile phone users from its fixed line users were free. Not being purely emotional like its earlier ‘Express Yourself’ campaign.’ The theme of the new advertisement was that communication dissolved boundaries and barriers broke down when people started communicating. BAL also started a new advertising campaign to reposition the Airtel brand. New advertising strategy Since branding played an important role in telecom. Eventually. Marketing experts said that the main aim of this new advertisement campaign was to bring iconic status to its Airtel brand. the two boys crawl under the fence and start playing football with each other. From early 2007. No celebrities were used in the film and the two protagonists in the advertisement were picked up from the streets of Morocco. the ad . the new advertisement campaign highlighted the capabilities of BAL’s mobile telecom network. This new advertising campaign from BAL was considered one of the most creative advertising campaigns in the Indian telecom sector. on the other hand. The advertisement was shot in Morocco and the characters in it spoke a French dialect. The advertisement featured a divided family reuniting after a gap of 22 years. who comes to his ancestral village to meet his grandparents for the first time. it began to roll out some new promotional campaigns. As BAL was expanding into foreign telecom markets. The ad depicted a young man. Hearing the sound. one of the important ones being the ‘Kuch Bandhan atoot hote hain…’ *Some bonds are unbreakable+ campaign launched in March 2007. the boy on the other side of the fence comes out of his house. His father had left the village 22 years ago apparently due to some differences with his father. The campaign stressed the wide coverage that the nationwide mobile network of BAL provided. Private players like BAL. could not afford to provide free incoming calls to customers as they had to pay interconnection charges. The first boy persuades him to kick the ball over the border fence. The ad was based upon the story of two boys separated by border fencing. The grandfather refuses to talk to the boy first but relents later after speaking to his son on the mobile phone with BAL’s network.
businessworld.” www.‘MIS Asia IT Excellence Award for Best Change Management’ in 2005. in 2006 and 2007. the highest honor in the global telecom sector. In 2005 and 2006. For instance. it was recognized as the ‘Best Indian Emerging Market Carrier’ in the prestigious Telecom Asia Awards 2007. ahead of many illustrious infotech firms. They felt . 2008. while its CMD. Airtel’s marketing strategy and its business model attracted the admiration of many industry experts. In 2006. In 2005 and 2006 too.campaign also aimed at projecting Airtel as a global brand. and the ‘MIS Asia IT Excellence Award for Best Knowledge Management’ in 2006. this model received three awards from Asia’s leading IT management magazine MIS Asia . won the ‘CEO of the Year’ award. BAL bagged the awards for ‘Wireless Service Provider’ and the ‘Competitive Service Provider of the Year’. In 2006. and technology (CMT) company for five years (2001-2005). in the Frost and Sullivan Asia Pacific ICT 2006 awards. it received awards such as the ‘Best Indian Carrier’ at the Telecom Asia Awards 2006 and the ‘2005 Indian Mobile Operator of the Year’ by Asian MobileNews. “The Great War. The need to project Airtel as a global brand was felt more urgently as it had to face competition from global brands such as Vodafone. Its business model too attracted the attention of industry experts and competitors. they said. In addition to fuelling high growth. the ‘MIS Asia IT Excellence Award for Best Bottom Line IT’ in 2006. Besides. 16 For his contribution to the development of the Indian telecom sector. Top Mobile Telecom Bharti Airtel in India from M Rajendran. a leading business magazine Business Week ranked BAL third in their ranking of infotech companies in terms of shareholder return. BAL’s various initiatives helped it attain a dominant position in the market (Refer to Table below for the top mobile telecom Bharti Airtel in India as on 31st Jan 2008). Mittal was awarded the GSM Association Chairman’s Award 2008. Analysts felt that he had built up BAL from scratch with a business model that had become the benchmark for emerging markets. BAL had been the best performing communications. in terms of Shareholder Performance Index. In 2007.com. February 15. media. According to a report published by management consulting firm Oliver Wyman. BAL had been ranked among the top innovative infotech companies by BusinessWeek magazine since 2004. In 2007. it also received the Nasscom IT Innovation Award for the Business Model Innovation. The campaign aimed to achieve this by making the advertisement in a foreign land. Mittal. it was ranked 10th and 14th respectively in the list of top 100 infotech companies.
Mittal • Massive Economies of scale from large subscriber base OPPORTUNITIES Tele-Density – 30.N.Commerce facilities Efficient Customer Care Services Economic Cost of calls Being Driven Down Worldwide Recession. particularly the Indian ones. PEST ANALYSIS.6% Low among Developing Countries Low Broadband Penetration • Falling ARPU THREATS • Intense Competition From Nearest Competitor • Shortage of Bandwidth • New Players Entering Indian telecom sector • Uncertain Economic Condition Untapped Rural Market Bharti Infratel – Cutting Down cost in Rural area Growing Globally First Indian Sponsor to signed Manchester United .EXTERNAL ANALYSIS Political Regulations Political Opposition to participation by the private players Govt support to promote FDI in Telecom sector Banning of Phone Use in Certain Circumstances Technology Equipped with New Technology Rapid Industrial growth rate induced by emerging technologies. Strong Fibre Optic Network Utiilization of E.Both Boon & Bane Middle class consumer base growing due to accelerated economic growth Untapped markets in emerging Economies New Opportunity Socio-Cultural High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture. there is need to remain connected Tech Savvy Generation AIRTEL Strength & Weakness STRENGTHS WEAKNESSES • Outsourcing of Core Systems • Lagging behind in Exploring market Investment opportunity INTERNAL EXTERNAL • Valuable Business Partners – Techno & Financial •Strong Brand Image • First Mover Advantage • Single Private Leading Indian Telecom Company • Enthusiastic & Innovative Business Development team •Marketing Driven Low Cost Model • Blessed with Directional Visionary .that the BAL business model had generated a lot of interest among competitors and MNCs venturing into the emerging markets had a lot to learn from it. Some of its competitors. had even started imitating this model.S.
00% 35.90% 26.10% 7.60% 26.00% Bharti Rcom IDEA MTNL OP Margin Net Margin Sep-072 Sep-083 Best OP Margins & Net Profit Margins among Peers Company Sep-07 Sep-08 Bharti Rcom IDEA MTNL 43.00% 20.00% 5.00% 37.30% 13.40% 23.80% 23.90% 32.00% 15.00% 10.20% 6.Competitor Analysis Competitor Analysis 40.50% 6.00% 31.90% 14.70% 38.00% 0.60% 22.00% 30.80% Source: CMIE November 2008 .00% 19.00% 25.
Data released by sector regulator TRAI reveal that regions where Bharti has bagged 3G spectrum contributes about 70% of its revenues.290 crores.” Bharti Airtel participated in the 3G spectrum action announced by the GoI in May 2010 and won the highest no. The thirteen 3G licenses bagged by Bharti Airtel cover 59% of India's cellular subscribers and 61% of revenues — this is the maximum 3G coverage any telecom operator has managed. of circles won by any single operator – thirteen. The cost was however a stupendous Rs. Bharti has defended its most lucrative markets. 12. . It also planned to start the next generation 3G mobile services as and when GoI declared its policy and allotted the spectrum. Analysts said that 3G could help BAL to increase its revenues in view of its steadily falling ARPU and that 3G could also be a new growth engine in saturated circles like the big metros.Competitor Market Share – Threat HIGH LATEST MOVES FORAY INTO NEW TECHNOLOGY The next generation 3G services were another area on which BAL decided to focus so as to retain its dominant position in the Indian mobile telecom services market. Put simply. In other words. Mittal said. Here’s another way to look at how well Bharti has defended its fortress — in the nine circles where Bharti has lost the license. “Bharti wants to be an early player in 3G and as and when the auction for spectrum is announced. its average revenue per user (ARPU) is 15-20% lower than the national ARPU. Bharti will participate in the process. Bharti Airtel has protected a big chunk of its 2G footprint.
“In metro markets. Moreover. its total bid amount is only 12% of its current market cap. easily the least amongst all listed telecom companies who were successful in the auctions. BAL needs to work with the other ecosystem players to ensure that the total cost of ownership is as low as possible and that the relevant content is available to attract users 19 . This will allow for a quick build-up of traffic on its 3G network and allow Bharti to extract the cost efficiencies of a 3G network. about 10% subscribers account for about 35-40% of revenues. What strategy can Bharti Airtel take to break-even on 3G? Bharti Airtel needs to be very careful in the selection of its strategy options as the stakes are very high now. A large number of them would already have 3Genabled handsets that will enable incumbents such as Bharti to quickly transition these subscribers to its 3G network. That position may now erode as customers may switch to rivals who have won 3G spectrum in these circles. Industry watchers say its 3G bid is equivalent to six months of its revenues in these 13 zones — the lowest in the industry. Bharti executives point out that large parts of its networks are already 3G-ready as the telco had begun upgrading its networks over the last 24-months — a step that will enable it to deploy 3G speedily and with minimum capex.” research analysts Srinivas Rao and Amyn Pirami at Deutsche Bank said in a note on Wednesday.But there’s one glitch — in these nine circles (where Bharti has lost the license). Bharti is still among the top three.
to 3G. However. Even in 3G. They have considered their business as a “Minute Factory” where minutes are sold at a certain price and there is a cost to the minutes. 4. As long as the realized rate per minute is higher than cost per minute by 30-35%. Indirect bundling of handsets/ Upgrade schemes with handset vendors: Handset bundling in India is not very strong as the ARPU levels are low which means that the handsets costs cannot be recovered even in two years time. They should be willing to offer network minutes for free in return for tie-ups with handsets companies. the users tend to experiment more with mobile services resulting in higher ARPU. Ensure fair Revenue share: For the success of 3G. 2. they are okay. Fair revenue share would ensure higher developer interest in developing new . In the coming years. Their entire effort has been to bring down the cost of minutes and have looked at network outsourcing. Bharti Airtel should now decide to focus on music & videos and other VAS and the handset capability needs to be changed accordingly. However. this action is likely to result in lower ARPU which would in turn mean higher 3G users required to break-even. Replicate Minute Factory Model: The Bharti Airtel have been innovative in bringing the costs down in 2G by changing the measurement metrics from ARPU to margins per minute. Here are some of the actions that can be taken by Bharti Airtel to breakeven faster than what most of the analysts think: 1. Handset vendors should also work with BAL to keep the aspiration levels high as well as keep the 3G handset prices low. net books and other devices needing connectivity. eBook readers and handheld tablets is bound to increase and hence the need for connectivity. this should not prevent them from looking at innovative ways of indirect handset bundling. The ecosystem would be more vibrant if all the players get a fair revenue share. lower tariffs among host of other things. BAL should tie up with handset vendors to upgrade the handsets of its subscribers who are on the verge of replacing their handsets by proactively targeting subscribers with over 18 month’s old handsets. 3. the popularity of net-books. Focus on Non Voice Devices: Bharti Airtel should aggressively focus on non voice devices like data cards. Studies have shown that after upgrading their handsets. This would ensure higher revenues and faster break-even. BAL has focused on keeping the costs low and hence has not indulged in any kind of handset subsidy. Indian Bharti Airtel would need to follow the same “Minute Factory Model” in their efforts to attract higher number of 3G users. it is important to have the right content and Value Added Services (VAS) / applications for the users. Also.
290 crores & for Broadband Wireless Access (BWA) Spectrum auction is Rs. additionally the debt on the books of BAL ending March is over Rs 1. both the rating agencies maintain a stable outlook on the company from market position perspective. the 2G network would get decongested and Bharti Airtel would be able to offer GPRS/EDGE plans on 2G network to their subscribers. However. GPRS can be a good stepping stone to complete 3G transition. funding required for 3G auction is Rs 12. S&P lowered Bharti's long-term corporate credit rating to 'BB+' from 'BBB-' but said the outlook is stable. It is therefore important for the Bharti Airtel to continue to focus on increasing GPRS penetration. in view of its concerns regarding Zain deal. Though in the long run.14 billion.applications. What has got both the rating agencies worried? One look at the debt burden on the company and the reason for the concern is clear. the company`s ability to successfully implement its low cost business model in these markets would be critical for its future profitability. the revenue share in India is heavily skewed in favor of telcos. Add to that. Unlike the other markets. Subscribers should first experience internet and then would demand better speeds. rating agency Standard & Poor's lowered Bharti Airtel's credit rating. which is difficult to offer now due to network clogging. The debt funding for Zain is around $9 billion or Rs 42. While the acquisition would enable Bharti Airtel to benefit by way of diversification into under-penetrated African markets which present scope for future growth. 3. 20 PRESENT OUTLOOK On 9th June. 3G spectrum and BWA spectrum funding. Once the users begin to shift to 3G.200 crore. ICRA has also assigned a negative outlook to the long term ratings on 24th June. which needs to change for quality content to be developed and mobilized. 3G and BWA licenses would aid to enhance the data revenues of the company and provide it with a differentiating tool for retaining and acquiring high average revenue per user (ARPU) customers however in the short to medium term it would further impact the financial profile of the company. Hence.95 billion and BWA licenses in 4 circles for Rs 33. ICRA is also concerned with the heightened competitive environment in the domestic telecom business at a time when company`s funding requirements for acquiring third generation (3G) and broadband wireless access (BWA) spectrum and related capital expenditure are expected to remain high. The company has acquired 3G licenses in 13 circles for Rs 122.314 crores. Bharti Airtel is committed to deleverage its balance sheet and is planning to raise around Rs 90 .000 crores at current exchange rates.
The other rating sensitivity factors are ability of the management to integrate Zain`s operations with the Indian entity. pan-India network presence. Under the agreement. ICRA would closely monitor this development. its strong free cash flow from operations and Singapore Telecommunication’s 30. Bharti Airtel. market leadership position in the domestic mobile services market. The mobile telecommunications operator currently has over 40 million . will outsource core customer service functions like call centres and back office as it prepares for significant growth in the region. Nigeria on Monday. Tech Mahindra and Spanco as partners to drive world class customer service across 16 African countries. the owners and current operators of Zain mobile phone services announced her strategic partners in Lagos. Through the African Business Process Outsourcing (BPO) sector which promises to deliver economic growth to many countries across the continent. An agreement is expected to be finalized soon. Bharti Airtel selected IBM (NYSE:IBM). initiatives to build up significant 3G subscriber base in Indian entity and augment its data and value added services revenues. Bharti Airtel.in the next two quarters. all of which speak highly about the company. Notwithstanding the business challenges and increased leverage. the ratings derive comfort from Bharti Airtel`s integrated telecommunications operations.billion in its infrastructure subsidiary . BHARTI AIRTEL’S INTERNATIONAL BUSINESS EXPANSION STRATERGY Bharti Airtel's Strategy – Africa Bharti Airtel announces strategic partnership to drive world class customer service across Africa THE East African region is set to benefit from a major partnership aimed at driving world class customer service across the African continent. steps taken by the management to augment Zain`s profitability and rationalize its capital expenditure.Indus Towers .5% effective ownership in the company.
“Our partnership with IBM. Tech Mahindra and Spanco is aimed at redefining and providing a world class and seamless customer experience in all 16 countries. He said further that. The widespread adoption of the BPO model by Bharti Airtel across its operations will also have tangible benefits for development of the sector in each country. finance. This is the second major partnership announcement from Bharti Airtel on the African subcontinent. capabilities and resources The outsourcing of customer service operations will play a key role in making Bharti Airtel competitive in Africa as it focuses on making mobile communications affordable and available to everyone across its 16 markets of operation.” Manoj Kohli. Tech Mahindra and Spanco will enable Bharti Airtel’s mobile customers to enjoy world class customer service with the partners introducing quality best practices based on their experiences of working with international organisations in the telecommunications. Bharti Airtel. In September this year. The partners will provide services in each market which will sustain and build skills.customers across its African operations and is targeting to achieve 100 million by 2013. create additional job opportunities and develop local talent. the BPO model has significant benefits for Bharti Airtel’s customers in the countries of operation and their economies.” he added. Bharti .” “These partnerships will offer career enhancement opportunities to our team in this specialist field as they will now get exposure to global best practices and the latest technologies. said during the ceremony. The selection of world class partners like IBM. insurance and retail sectors. banking. “Partnering with world class organisations on such a massive scale therefore. CEO (International) and Joint Managing Director. will galvanise the BPO sector in Africa and be a catalyst for growth in the sector.
" said John Lutz. and each market will benefit from talent training and development. Tech Mahindra. Bharti Airtel is effectively kick-starting the onshore business process outsourcing sector across Africa. "IBM's strategic relationship with Bharti Airtel illustrates its focus on emerging markets like Africa. Spanco. multi-lingual fluency especially in English and . the mobile communications industry association. said: “Practically. customers will receive first class service to global standards. It can scale quickly to manage its expected growth. "IBM's business process outsourcing unit helps clients manage functions like customer care so that they are able to channel critical resources to essential growth activities such as product design and marketing. Kapil Puri. However. The experience and success that it achieved created a whole new sector in the country that is now regarded as the global centre of excellence for outsourcing. less than 40 percent of Africans has access to a mobile phone. not only for the benefit of its customers. “By seeding the African BPO market with these three world class partnerships. but also to create an entire industry in Africa as a centre of BPO excellence. Chairman & Managing Director. said: “Bharti Airtel was the pioneer of adopting the BPO model across all its areas of operations in India. Vice Chairman." According to a Deloitte report for the GSMA.000 people for providing BPO services in more than 100 countries. With its advantages of time zone location. and a 10 percent rise in mobile penetration could increase gross domestic product by 1.” The three partners collectively employ over 90. general manager. demand is growing at an average rate of 25 percent annually.selected IBM to build and manage IT systems to power the mobile communications network across 16 African countries. Vineet Nayyar. “Bharti’s vision is to replicate that success in Africa.2 percent in developing markets. IBM Managed Business Process Services. there are three major benefits to Bharti Airtel from outsourcing its customer service functions.
. Sierra Leone.French. high speed broadband. Malawi. Chad. IPTV. Bharti Airtel has been ranked among the six best performing technology companies in the world by BusinessWeek. Mahindra Satyam. transport and telecom.1 billion Mahindra Group. Africa can grow as a world class off-shoring destination for global organisations. Nigeria. is a public listed company and certified to ISO 9001:2008 and CMMI level 3. The company offers mobile voice & data services. turnkey telecom solutions for enterprises and national & international long distance services to carriers. Democratic Republic of Congo. Tech Mahindra is part of the US $7. Tech Mahindra is a leading global systems integrator and business transformation consulting organization. Madagascar.” Currently over 4. Kenya. Ghana. fixed line. Spanco is in the business of creating technology infrastructure to help drive governance efficiency across key sectors like government. Going forward the number of people employed in managing Bharti Airtel’s customer service functions will increase as Bharti Airtel expands its network and customer base.000 people are employed in Africa supporting Bharti Airtel’s customer service operations. Gabon. in partnership with British Telecommunications plc (BT). Focused primarily on the telecommunications industry. Middle East and African Markets. the world’s leading communications service provider. Congo Brazzaville. Spanco Ltd. Tanzania. Spanco has a formidable presence in the BPO space spread over four continents catering to India. US/Europe. Bharti Airtel Limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. Bharti Airtel had over 188million customers across its operations at the end of August 2010. operational cost and robust network infrastructure. Bharti Airtel has operations in Burkina Faso. DTH. Niger. Uganda and Zambia. power. The company recently expanded its IT portfolio by acquiring the leading global business and information technology services company. Seychelles.
The company has operations in more than 60 countries. which will be exclusively dedicated to Airtel across the continent with its existing network of offices.8 billion. Mr. IBM is a world leader in research and development and number of corporate patents received annually. delivering integrated marketing services – advertising. the world leader in marketing communications services. and record net income of $13. down from $103. market research and public relations. Team Airtel will also include The Brand Union who will be responsible for brand migration. The appointment continues and extends Ogilvy Africa’s existing relationship with the network. part of WPP. said “We are delighted . has set up a specialist Pan-African business unit. CEO of Bharti Airtel International. IBM reported revenues of $95. Hill & Knowlton & Ogilvy PR for all public relations across all markets. storage devices and microchips. Team Airtel. It is a leader in developing computer servers. It has a major presence in New York with headquarters in Armonk. Manoj Kholi.IBM is the world's largest information technology company. research facility in Yorktown Heights. media buying. software.6 billion the previous year.4 billion. It also fields a large business consulting division. This follows the completion of Airtel’s acquisition of Zain Group’s mobile operations in 15 countries across Africa on 8th June 2010. Millward Brown for market research. In 2009. Ogilvy Africa BV creates ‘Team Airtel’ to provide integrated marketing solutions for Airtel across Africa Bharti Airtel Limited (“Airtel”) today announced that it has appointed Ogilvy Africa BV (“Ogilvy Africa”) as its marketing services partner for Africa. which has previously been responsible for planning and media buying for Zain across Africa. Ogilvy Africa will partner with Airtel to guide its long-term brand building across the continent and will provide overall creative direction and media planning and buying for Airtel’s African businesses and executing campaigns in each of its markets on the continent. and a massive chip-making facility in Fishkill. Ogilvy Africa.
"We see Africa as a growing developing continent and opportunities really do exist in Africa. "The Brand Union. "The continent has become of strategic importance to us because of the growth that we see and Tech Mahindra wants to be part of the continent's development process. Sabharwal added that the decision to expand operations in Africa was taken after the company had partnered leading telecom operators including MTN and Multilinks in Nigeria over a two-year period. “It is a huge honour for us to support Airtel with its ambitious growth plans for Africa." Tech Mahindra partners Airtel in seven African countries Tech Mahindra. global CEO. Ogilvy Group. Tech Mahindra's vice president for Africa said in Accra.” Miles Young. using its network across Africa. global CEO. we believe we have the right partner to successfully take forward our brand strategy. a leading Indian IT outsourcing company with global footprints. and we have brought together a very strong integrated marketing team which is dedicated to this task. Given their breadth and depth to support Airtel right across the African continent. Team Airtel’s role will be to bring the Airtel brand to life in every one of its African markets. . Through the acquisition of Zain’s assets in Africa. The Brand Union said. This deal represents a further significant step forward for Ogilvy and Scangroup in Africa. Airtel has a very strong platform on which to build.” Simon Bolton. India and London are proud to have played a significant role in 'Team Airtel' and now look forward to the opportunity to work with Airtel to create what will undoubtedly become one of the World's leading brands in the industry.to be partnering Ogilvy Africa in our endeavour to take the Airtel brand deep into the heart of every market we operate in." Rahul Sabharwal. said. has started customer care services in seven African countries as a partner of telecom giant Bharti Airtel." he said.
Tech Mahindra's country head." Pushkar Gokhale. Malawi and Nigeria. Tech Mahindra is committed to offering the best in the industry services to telecom operators leading to enhanced experience for the end consumers in Nigeria and the Africa continent as whole. the company had been operating a contact centre and a back office for Airtel in Ghana. "Tech Mahindra's entry into the country is likely to put a lot of focus on Ghana and this would lead to generating more employment for the people. in a statement to mark the company's two years of operations in Nigeria. Democratic Republic of Congo. "With its telecom domain expertise and global experience over two decades. Sujit Baksi." he added. said that Tech Mahindra has recruited over 1. but after six months we have increased the number to 300." said Krishna Gopal. Ghana.000 local employees in Nigeria." he said.The countries in which Tech Mahindra will provide customer care services for Bharti Airtel. Earlier this year. president for corporate affairs and business service group. Since February. includes the Republic of Congo. "It is our strategy to nurture local talent for effectively executing our BPO operations. told IANS. vice president. sales and global alliances. "We started with 100 people when we opened. the telecom giant with operations in 16 African countries. Gabon. He said the company had also put into operation a programme to reduce its expatriate headcount over a period of two years in Nigeria in order to develop the workforce locally to run the operations. Airtel operates in the following countries: Country Site Remarks .
000 customers representing 50% market share.com/gabon Ghana africa.com/ghana .airtel. Airtel Chad is the no.airtel.com Airtel Bangladesh had about 5.airtel. Airtel Ghana had about 1.433.1 million customers at the end of June 2011.com/chad Democratic Republic of the Congo africa. Burkina Faso africa.airtel. Airtel Gabon has 829. Airtel Burkina Faso is the dominant player with 1.000 customers and its market share stood at 61%.airtel.airtel. Airtel is the market leader with almost 5 million customers at the end of 2010.com/drc Gabon africa.Bangladesh bd.76 million customers at the end of 2010.com/burkina Chad africa. 1 operator with 69% market share.
com . Malawi africa. Kenya africa. has a africa.airtel.airtel. Airtel Niger is the market leader with a 68% market share.com/kenya Madagascar Airtel holds second place in the mobile telecom market in Madagascar.airtel.4 million customers.com/niger Nigeria ng.com/malawi Niger africa.5 million customers at the end of 2010.com/madagascar 39% market share and over 1.airtel.India airtel. Airtel Kenya is the second largest operator and has 4 million customers.in Airtel is the market leader with almost 152. Airtel Malawi is the market leader with a market share of 72%.airtel.
com/congob Airtel Congo is the market leader with a 55% market share.lk .Republic of the Congo africa. On 8 September 2011.airtel.com/sierra Airtel Lanka commenced operations on 12 January 2009. It had about 1. Rwanda Seychelles Airtel is the leading comprehensive telecommunications services providers africa.airtel. africa.com/seychelles with over 55% market share of mobile market in Seychelles.airtel. Airtel announced that it had been awarded a licence by the Rwanda Utilities Regulatory Agency to operate 2G and 3G GSM mobile services in Rwanda.8 million mobile customers at the Sierra Leone Sri Lanka airtel.
However.com/zambia Airtel operates in the Channel Islands under the brand name AirtelVodafone through an agreement with Vodafone. while THE ECONOMIST .airtel. Tanzania africa.airtel. The FINANCIAL TIMES reported that Bharti was considering offering US$45 billion for a 100% stake in MTN.end of 2010. which would be the largest overseas acquisition ever by an Indian firm. Channel Islands : and Guernsey† Jersey airtel-vodafone. both sides emphasize the tentative nature of the talks. Airtel Uganda stands as the no.com/uganda Zambia africa.je ECONOMICS ANALYSIS ACQUISITION AND MERGERS MTN In May 2008. 2 operator with a market share of 38%.airtel. a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East.com/tanzania Uganda africa. it emerged that Bharti Airtel was exploring the possibility of buying the MTN GROUP. Airtel Tanzania is the market leader with a 38% market share.
higher revenues and broader geographic coverage. The US$34 million SEAS project is aimed at . Bharti Airtel said in a statement "Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group". Talks eventually ended without agreement. Telecom Seychelles On August 11. newly acquired Zain Africa division contributed US$911 million to the total. Telecom Seychelles began operations in 1998 and operates 3G. among value added services like VSAT and Gateways for International Traffic across the Seychelles under the Airtel brand. The company has over 57% share of the mobile market of Seychelles. net profits dropped by 41% from US$470 million last year to US$291 million this year due to a US$188 million increase in radio spectrum charges in India and an increase of US$106 million in debt interest. "If anything. ship to shore services satellite telephony." as MTN has more subscribers. Airtel announced plans to invest US$10 million in its fixed and mobile telecoms network in the Seychelles over three years . In May 2009. making the firm the world's No. Bharti would be marrying . Fixed Line. Bharti Airtel announced that it would acquire 100% stake in Telecom Seychelles for US$62 million taking its global presence to 19 countries. 2010.However.magazine noted. Bharti Airtel completed its $9 billion acquisition of African operations from Kuwait's Zain. However. due to the South African government opposition.Airtel has reported that its revenues for the fourth quarter of 2010 grew by 53% to US$3. the talks fell apart as MTN group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company. 5 wireless carrier by subscribers. Zain In March 2010.2 billion compared to the previous year. Bharti Airtel again confirmed that it is in Talks with MTN and companies have now agreed discuss the potential transaction exclusively by 31 July 2009. whilst also participating in the Seychelles East Africa submarine cable (SEAS) project. Bharti struck a deal to buy the Kuwait firm's mobile operations in 15 African countries. in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus in 2007.
74 Million Users 16.000 km undersea high speed link to Dar es Salaam in Tanzania.01.396 & has a Total of 2.8 Million Users Aircel has Added 1.2 Million Users & has a Total of 48.improving the Seychelles’ global connectivity by building a 2. BSNL Added 3.0 Million Users & has a Total of 78.110 & has a Total of 5.74 BSNL vodafone Idea AIRCEL loop Mtnl 78.06 3 78.09 Million Users S Tel Added 2.19 5.1 48.1 Million Users Vodafone Added 3.09 2.12 Million Users & has a Total of 121.12 Million Users & has a Total of 6.16 S Tel Unisor Videocon Sales .0 Million Users MTNL Added 37.7 Million Users Loop Added 19.16 Million Users IDEA Added 2.8 Million Users & has a Total of 78.8 121.06 Million Users Uninor Added 2.44 Million Users Total of 16.250 & has a Total of 3.7 6.19 Million Users Videocon Added 1.
OVERALL RANKING FOR AIRTEL ? RANK 1 2 3 4 5 Retailers 2 12 16 6 4 overall ranking of Aircel 4 15% 5 10% 1 5% 2 30% 1 2 3 4 5 3 40% Interpretation.This data shows that the overall performance of AIRCEL in retailers is good with 40% respondent .
Escotel. Tata Teleservices.) • Foreign invested companies (Hutchison-Essar. Idea Cellular. BPL Mobile. Spice Communications) MERGERS & ACQUISITIONS .COMPETITION OVERVIEW Major Players There are three types of players in telecom services: • State owned companies (BSNL and MTNL) • Private Indian owned companies (Reliance Infocomm. Bharti Tele-Ventures.
For this purpose. The mobile sector alone has been growing rapidly and has emerged as the fastest growing market in the whole worlds. once the spectrum issues are sorted out. further consolidation is a reality and this will lead to the survival of more profitable players in this segment In order to further promote the use of Internet in the country the government is taking proactive steps to develop this sector with the help of the various players in this segment.. the use of broadband technology is being mooted and this will go a long way in improving the productivity of the Indian economy as well as turn out to be the next big opportunity for telecom companies after the mobile communications segment Non-voice services and VAS are the gold mines. The big takeoff is expected with the rollout of 3G services in early 2007. Operators can plan better expansion plan now Increased viability for the operators to expand to semi-urban and rural markets. this sector is expected to reach a size of nearly 200 million subscribers by financial year 2008.1 Opportunities The telecom sector has been one of the fastest growing sectors in the Indian economy in past 4 years. This has been witnessed due to strong competition that has brought down tariffs as well as simplification of policy environment that has promoted healthy competition among various players. accelerate growth further . Local language and content required for further growth Infrastructure equipment cost is down to a fraction of what prevailed just a few years ago. Also as the sector is moving closer to maturity. This has led to a slew of mergers and acquisitions in the recent past.CHALLENGES AND OPPORTUNITIES 4. Currently of a size nearing 70 million (GSM and CDMA). hence. The government has eased the rules regarding inter circle and intra circle mergers. Internet users base fast reaching near the English speaking population base.
. Type of the sample is the Random sample is taken for the collection of the primary data . represents an attractive and lucrative destinations for investment. which has been a non-starter for close to a year now. the GSM mobile operator’s subscriber base has now crossed 50 million subscribers Aircel added 1.7 Millio Research objective-: To analyze the AIRCEL market in gzd & collecting retailers feedback on AIRCEL.2 million subscribers in November 2010 and its Total subscriber base at the end of November 2010 was 48. Research design-: The method of data collection is doing survey from telecom retailers of Noida by a questionnaire It is a statistical study required for quick results. At a time when global telecom majors are struggling to cope with their losses and the rollout of 3G networks. The research environment was the field setting as the method of study was analyzing the data collected by conducting a survey Sampling process-: Target market-: The target population was the telecom retailers of Noida region which is choose sectorwise .It’s not without reason that India is tipped to be the world’s third-larges economy by 2050! No wonder if it happens much earlier Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates. QAM Aircel. India. with its telecom success story.
Secondry data-: Through Net Through magazines Data is collected through survey of retail stores of telecom by filling a Through news paper.000 will be able to survive in the market. as the company treads into new telecom circles and plans to double its subscriber base to 30 million by end of this year.000 within the next two years. No player with less than 60. Ashwani Mishra Chennai-based mobile services provider Aircel is eagerly awaiting the start of the second season of the Indian Premier League (IPL) which begins this April.” Cellular service provider aircel is betting big on its information technology.Sampling procedure-: Sample size.40 Instrumental used.: Collection of database-: Primary data-: questionnaire.” He added. Not only because it is the lead sponsor for the Chennai Super Kings but also because it would be the time when the telecom provider would start opera Questionaire 1) How would you rate following operator in network? a) Aircel 1______2 ______3______4______5______ . we are looking at a portfolio of over 60. “You need such numbers to cover about 70% of the country's geographical area.
b) Airtel 1______2_______3______4______5______ c) Vodafone 1______2_______3______4______5______ d) Reliance 1______2_______3______4______5_______ d) Idea 1______2______3_______4______5______ 2) How would you rate following operator in trade communication (dealer scheme etc)? a) Aircel 1______2 ______3______4______5______ b) Airtel 1______2_______3______4______5______ c) Vodafone 1______2_______3______4______5______ d) Reliance 1______2_______3______4______5_______ d) Idea 1______2______3_______4______5______ 3) How many customer queries you get on daily basis for Aircel? a) 1-5 b) 5-10 c) 10-15 d) 15-20 e) more than 20 4) How would you rate following operator in claim settlement? .
a) Aircel 1______2 ______3______4______5______ b) Airtel 1______2_______3______4______5______ c) Vodafone 1______2_______3______4______5______ d) Reliance 1______2_______3______4______5_______ d) Idea 1______2______3_______4______5______ 5) How would you rate Aircel in distribution service (FOS visit etc) a) 1 b) 2 c) 3 d) 4 e) 5 6) How would you rate following operator for customers/dealers problem resolution? a) Aircel 1______2 ______3______4______5______ b) Airtel 1______2_______3______4______5______ c) Vodafone 1______2_______3______4______5______ d) Reliance 1______2_______3______4______5______ d) Idea 1______2______3_______4______5_____ .
Airtel d. Vodafone c.5 .1 b).4 e).3 d). Aircel __________ b.2 c). Idea __________ __________ __________ __________ 9) Any suggestion you would like to give for Aircel? ______________________________________________________________________________ __________________________________________________________________ 10) Give overall ranking for Aircel? a).7) No. Reliance e. of sim connection sold last one month? a) Aircel b) Vodafone c) Airtel d) Reliance e) Idea __________ __________ __________ __________ __________ 8) What is the average activation time taken by distributor to activate a new customer? a.
79 on the rating scale of 5.93 on the rating scale of 5. . and Aircel has got the 4 position with a rating of 3.IN RANKING_ _ _ _ _ _ 1 For ______ Poor 2 For ______ Average 3 For ______ Good 4 For______ Very good 5 For ______ Excellent NETWORK Sample size -: 40 retailers Interpretation-: This data shows that Airtel is having first rank in network as it has rating of 4.
The reason being that its about to install 1200 tower in Delhi & NCR within 3 months.81 3.16 2 1. As compared to its competitors aircel stand’s 4th in the network (airtel.79 4. .e. 1 network in Delhi & NCR i.5 1 0. The tower are been installed at a rapid speed.5 0 AIRCEL VODA AIRTEL REL IDEA As it’s a new company so network has been a big problem but still the company is trying its best to solve the problem.5 3.93 3. Its not going to take long when the network of aircel limited will be giving the competition to the No.71 4. reliance gsm).5 3 2. airtel. idea.5 4. voda.5 4 3.
61 3.6 3.61 on the rating scale of 5.8 3.7 3. .5 3.8 3.4 AIRCEL VODA AIRTEL REL IDEA TRADE COMMUNICATION Sample size -: 40 retailers Interpretation-: This data shows that Reliance GSM is having first rank in trade communication as it has rating of 3.67 3.9 3. and Aircel has got the 5 position with a rating of 3.98 4 3.72 3.How would you rate following operator in trade communication (dealer scheme etc)? 3.98 on the rating scale of 5.
Airtel If some good scheme provided to them they can give good business No. of sim connection sold last one month? AIRCEL VODAFONE AIRTEL RELIANCE IDEA 314 439 586 502 251 Sim sold in last month idea 12% reliance 24% aircel 15% aircel vodafone vodafone 21% airtel 28% airtel reliance idea . Retailers schemes are not lucrative from new brand prospective Retailers want some more claim schemes like Reliance GSM.
should be provided to those selling Aircel sim. Sign board of Aircel should be distributed to each retailers 6. Respondents feel that the areas where Aircel should improve are Network and claim settlement. 4. Margin to dealer should be increased in comparison to other telecom operator 9.. SIM activation time should be reduced 10. Aircel. Salesmen should be trained regarding offers & scheme 8. E-TOP UP no . There lies a good opportunity to work with retailers or a mediator between Aircel & retailers and find the retailers thinking about these operator 2.RECOMMENDATIONS 1. retailers who are interesting to 11. 5. Airtel is the market leader in telecom sector and Aircel is having 4th these operator. Aircel should improve its network as network coverage has emerged as the prime problem after data analysis . FOS visit should be on daily basis 7. Company should also order the distributors to keep a check that the posters are properly distributed in the market because it is seen that pop are not distributed properly even though the company is providing distributors with enough pop. the GSM mobile operator’s subscriber base has now crossed 50 million subscribers . position in 3. As per the data analysis the glow sign board are not properly distributed. It’s very important for any company to do its branding properly because it might just make the retailers totally not interested in selling the product.
Aircel added 1.2 million subscribers in November 2010 and its Total subscriber base at the end of November 2010 was 48.7 Millio .
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