Business Strategy

Submitted By: (GROUP-2) Abhinav Kanagat - 10BSPHH010010 Adhiraj Sood - 10BSPHH010030 Aditi Kulkarni – 10BSPHH010032 Anindya Bhaduri - 10BSPHH010089 Ankit Wadhawan - 10BSPHH010106 Anurag Singh - 10BSPHH010139 Aradhna Wadhwa - 10BSPHH010149 Rajat Monga - 10BSPHH010595

INDIAN TELECOM INDUSTRY – An Introduction ....................................................................................... 3 MACRO ENVIRONMENTAL INFLUENCES – THE PESTEL ANALYSIS.............................................................. 4 POLITICAL FACTORS ............................................................................................................................. 4 ECONOMIC FACTORS ........................................................................................................................... 5 SOCIOCULTURAL FACTORS................................................................................................................... 7 ENVIRONMENTAL FACTORS ............................................................................................................... 10 TECHNOLOGICAL FACTORS ................................................................................................................ 10 LEGAL FACTORS ................................................................................................................................. 12 PORTER’S FIVE FORCES ANALYSIS .......................................................................................................... 13 THREAT OF ENTRY ............................................................................................................................. 13 THREAT OF SUBSTITUTES ................................................................................................................... 14 BARGAINING POWER OF SUPPLIERS .................................................................................................. 15 BARGAINING POWER OF BUYERS....................................................................................................... 16 COMPETITIVE RIVALRY....................................................................................................................... 16 INDIAN TELECOM INDUSTRY – ROAD AHEAD ......................................................................................... 17 BHARTI AIRTEL LIMITED - INTRODUCTION ............................................................................................. 19 SWOT GRID ........................................................................................................................................... 20 BECG MATRIX.......................................................................................................................................... 21 COMPETITOR ANALYSIS ......................................................................................................................... 23 SERVICE GAP ANALYSIS.......................................................................................................................... 27 TOWS MATRIX ANALYSIS ....................................................................................................................... 35 BUSINESS STRATEGIES ........................................................................................................................... 36 1. LEVERAGING UNIQUE BUSINESS MODEL & EXPERIENCE OF MARKET DEVELOPMENT IN AFRICA 37 FINANCIAL FORECASTS FOR THE COMPANY IN AFRICA ................................................................... 38 EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS................................................... 39 2. VALUE BASED PRODUCT FOR RURAL MARKET ............................................................................ 39 FINANCIAL IMPLICATIONS .............................................................................................................. 41 EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS................................................... 42 CONCLUSION......................................................................................................................................... 43

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Over 800 million, that’s the number of mobile phone subscribers India has as of today. It’s about one for every two people, including babies. Cell phone ownership has become near ubiquitous in India, with wireless subscriptions in 2014 expected to amount to more than 97 percent of the country’s population of 1.26 billion. The growth has been phenomenal. It took 180 months for Indian companies to add first 500 million subscribers yet the next 500 million will take less than 36 months. The Indian telecom industry can be broadly divided into two segments: 1. Wireless Services: It comprises of mobile, wireless: fixed (WLL(F)) and wireless: mobile (WLL(M)) 2. Wireline Services: It includes fixed line telephony. On the whole, the industry has made significant progress; however the source of emergence has been led by wireless services especially mobile. From a mobile tele-density (number of phones per 100 people) of less than 5% in 2001 it has reached 67.67% in January 2011 with the urban tele-density at 150.67% and the rural at 32.11%. Backed by a growing economy and favorable government policy the industry has been growing at a CAGR of 17.46% in the last 5 years making it a US$10 billion industry.

FIG. 1: India Mobile Market: Subscribers and Growth Rates

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The industry is seen it as vital to the nation’s development: a way of bypassing obstructive bureaucrats and bringing services to the masses, from mobile banking to accurate crop prices. Despite this tremendous growth and promise the Indian telecom industry is still in the nascent stages and faces a lot of challenges. India has more sixteen operators in most of its 22 geographical license areas. Most countries have only three to six. The resulting price–wars have kept the ARPU (Average Revenue per user) on the lowest in the world and apart from top 3 players no company has been able to cover their costs in the last 2 years.

Source : extracted on 14th Aug 2012 , Tuesday at 1200 Hrs

POLITICAL FACTORS Political environment is one of the most important macro factors affecting a business. The various components of the political environment have been discussed below. 1. Government Stability:  India is the world’s largest democracy and has the perils associated with any democratically elected government. The scenario is dominated by small regional parties who had been brought together into two major coalitions led by Congress (UPA) and BJP (NDA).  The first decade of the century has seen a fairly stable government under Congress as compared to the 1990s which saw general elections in quick succession. The risk of instability is high due to the varied political ideologues of parties in the coalitions. 2. Taxation Policy:  The Tax Policy of India has evolved over the last two decades yet it is one of the most complicated. The Center and State Taxes with different structures makes it extremely difficult for companies to operate.  The implementation of GST Act by next year will go in a long way to simplify things.

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Contribution to GDP:  According to the UNCTAD. Interest rates. Money Supply. Government Interference:  There is minimal government interference in the working of businesses although the industries are well regulated by autonomous bodies like SEBI and TRAI.3. there is a direct correlation between the growth in mobile tele-density and the growth in GDP per capita in developing countries.  A spate of anti-graft regulations and growing accountability is expected to reduce the corruption over the next few years. The total FDI equity inflows in telecom sector have been US$2223 million during April-November 2009-2010. 5|P a ge . Economic Benefits of Telecom Industry:   Direct Benefits: Increase GDP. GDP/GNP trends. Foreign Trade Regulation:  The Indian economy was opened-up in 1991 and since then the successive governments have encouraged foreign investments in India. Government revenues and Employment in the Country. Unemployment and Disposable Income. ECONOMIC FACTORS The Economic Factors that influences the industry on a whole include the Business cycles. Indirect Benefits: Lower Transaction Costs. 2. Increases Productivity of Business through voice and data services. 4. Inflation. Better access to Information. Some of the above factors which affect the Telecom Industry have been discussed below: 1. which tend to have a high percentage of rural population. Healthcare and Educational Services. Corruption:  India is one of the most corrupt countries in the world with money and political influences playing an important aspect of getting approvals and starting a business.  These bodies will continue to ensure the right mix of freedom and regulation 5.

 The share of the telecom services industry in the total GDP has been rising over the past few years. Source: http://articles. Sunday at 1100 hrs. the need for higher FDI is felt across sectors in the Indian economy. 6|P a ge .  The ratio of number of subscribers to employees.6% of total GDP in FY10. Saturday at 1400 hrs. Foreign Direct Investment (FDI): Foreign direct investment has been one of the major contributors in the growth of the Indian economy. The liberalization policies of 1991 and the consequent influx of private players have led the industry on a high growth trajectory and have increased the level of competition Post -liberalization.  Investments: The telecom sector requires huge investments for its expansion as it is capital-intensive and FDI plays a vital role in meeting the fund requirements for expansion of the telecom sector. accounting for nearly 3. and therefore.indiatimes. the telecom industry has received more investments and has implemented higher technology. is much higher for private companies than for government companies. 3. The share of telecommunication services in India’s GDP is expected to increase to 15% by extracted on 1st Sept 2012. an indication of efficiency and profitability. 4. 5. Employment: The Indian telecommunication industry is forecasted 28 lakhs direct jobs and around 70 lakhs indirect jobs {the study commissioned by the Cellular Operators Association of India (COAI)}.wordpress. Source: extracted on 26th Aug 2012. Liberalization:  The relaxation of telecom regulations has played a major role in the development of the Indian telecom industry.

which ultimately led to the outsourcing revolution in India. Further. Financial Services:  Banking in India has become service-oriented. After the introduction of IP telephony.7 billion which is down by 35% as compared to previous year i. India has become an important outsourcing destination for the world and the boom in this sector also has transformed India’s economic dynamics. 7|P a ge .J u l y 2 0 1 1 ) of the total FDI inflows in the country and has been the second-largest sector to attract FDI in India in the post.6 billion for 2010. 6.  The telecom sector has been instrumental in creating jobs for a vast pool of talented and knowledgeable professionals in the IT and ITeS-BPO industry. $2. As per DIPP figures. which thrives on reliable telecommunication infrastructure. 7.liberalization era.e. this disintermediation in the business has led banks to be extremely prudent in terms of their internal operations and has led them to adopt newer products and delivery channels. with introduction of internet & mobile banking the long queues at the banks are slowly becoming a thing of the past. IT-ITeS Sector:  The NTP-99 was particularly helpful for the ITeS-BPO industry as it ended the government monopoly in international calling by introducing IP telephony. there was rapid growth in the number of data processing centers and inbound/outbound call centers. and has matured greatly from the days of walk-in customers to the present situation when banks have migrated to a 24-hour banking platform to attract customers. FDI Inflow: Telecom accounts for 8. however.53% ( A p r 2 0 0 0 . the cumulative FDI inflow for 2011 is $1.

the falling handset prices and the add-on features have triggered growth of the Indian telecom industry.9% in rural areas and 14. The worrisome feature of inequality is that it has increased significantly during the last decade (12. Further.  Increasing Affordability of Handsets: The phenomenal growth in the Indian telecom industry was predominantly aided by the meteoric rise in wireless subscribers. Now even entry-level handsets come with features like colored display and FM radio. Further. the vast rural market holds a huge potential to drive the future growth of the telecom companies. the top 20% households are seen gaining the most.9% in urban areas).priced handsets with add-on facilities to cater to the increasing number of subscribers from different strata of the society. from 37% share in total income in 1993-94 to 58% in 2014-15.75% during 2010-15. The evidence from the NSHIE on poverty and inequality however shows that one of the important reasons for the deceleration of the rate of poverty decline appears to be the existence of a high level of inequality. Income Distribution: One of the striking findings of the paper is the increase in inequality in both rural as well as urban India. Thus. Taking NNP growth at 8. Thursday at 1900 Hrs. which encouraged mobile handset manufacturers to enter the market and to cater to the growing demand.indiatelecomonline. which reflects the extent of u n t a p p e d opportunity.  Rural Telephony – Connecting the Real India : With the urban markets fast reaching their saturation points for telecom services. Penetration in rural areas will not only support the growth of telecom service providers but also boost demand for equipment and telecom infrastructure. The last decade was one of high economic growth that is expected to Continue. which will certainly bring further structural changes in the economy. th Source: http://www.SOCIO CULTURAL FACTORS 1. In fact. especially the voice telephony services. the government initiatives for increasing telecom connectivity in rural areas are also likely to aid the telecom service providers to extend their services in the unconnected rural areas. the manufacturers introduced lower. which is comparable to the inequality levels prevalent in the developed countries.11%. 8|P a ge .com/tele-density-in-india-reaches-67-67extracted on 30 August 2012. Initiatives such as USO Fund and infrastructure sharing would be instrumental in increasing the coverage of telecom services in the far-flung areas. the teledensity in rural areas is 32.

a burgeoning middle class with growing disposable income. These new features have multiplied the need to be connected always and to own a wireless phone and therefore. urbanization. in present times mobiles are perceived as a utility rather than a luxury.2. Changing Demographic Profile The changing demographic profile of India has also played an important role in subscriber growth. The changed profile is characterized by a large young population. increasing literacy levels and higher adaptability to technology. RISING INCOME LEVEL Indian Population Breakup on the basis of Age Group 7% 35% 58% INCREASING CONSUMERISM INCREASING CONSUMER SPEND 16-60 yrs 0-14 yrs >60 yrs GROWING AVAILABILITY OF RETAIL CREDIT 9|P a ge .

It mainly deals with:    Weather Climate Climate Change Environmental issues in Telecom Industry:    Laying of communication lines. Setting up of towers and usage of wireless technology in environmentally affected areas where environments vary drastically. Environmental analysis involves aggregating and analyzing weather patterns and climate cycles. both creating new markets and diminishing or destroying existing ones. TECHNOLOGICAL FACTORS The level of technological advancement in a region can positively or negatively affect the opportunities available for a business. Furthermore. wireless internet. deserts. like the tsunami in South East Asia or the Haitian Earthquake. In different areas of the globe depending on the biome or ecosystem of the region the effects and issues differ drastically and every time may lead to finding of new solution. While not a comprehensive list. internet access and transportation networks all influence t he ease of doing business. forests.ENVIRONMENTAL FACTORS In the wake of the heated discussion about global warming. earthquake prone areas and wetlands. some examples are tundra. environmental analysis has been brought to the forefront of the media. access to electricity. and insurance more than an industry like telecommunication. farming. 10 | P a g e . growing awareness of the potential impacts of climate change is affecting how telecommunication industry operates and the products they offer. It affects industries such as tourism. The proliferation of mobile technology. grasslands. a place it usually only occupies in times of disaster.

and interestingly where required. Now.5G).A region with a strong technological foundation enables companies to leverage multiple tools like mobile technology and Enterprise methodologies to streamline operations. 3G systems will allow the end user flexibility in the traffic channel. has been uniquely designed to carry packet data. The 2. which will enable the data to be carried much more easily at higher rates (typically between 28. as packets rather than circuit switched. though higher rates are possible). With the 11 | P a g e . eliminate bottlenecks and provide their workforce with collaborative knowledge management systems. delivering multiple services with differing bandwidth requirements. In order to learn more about the technological environment of an area and a region’s propensity to adopt new technologies. the next generation of cellular telephony (3G) known globally as IMT 2000 and in Europe as UMT. and simultaneously if needed. the end user device is no longer just a mobile phone). Speech is simply treated as a particular data application.8kbps and 64kbps. Data rates of up to several hundred kbps will be readily available to the terminal (with so much being done. Enhancements have been made to the existing 2nd generation systems (so called 2.5G developments are expected to be available in the short term. Bluetooth will support enhanced 2nd generation as well as 3G systems in the delivery of a wide range of services. Reduced Communication Costs Rate of Technological Change R&D Activity (SEZs) Technology Incentives Technology Transfer The purpose of the Telecommunication today are primarily intended for the purposes of speech and are therefore not particularly renowned for its ability to deliver data. and certainly within the same period that Bluetooth will make its entrance. one may look to a bass diffusion model which uses historical consumer purchase data in order to find the rate of product adoption among potential consumers. In telecommunication industry technology is defined by the following:        Degree of Automation Emerging Technologies Impact of Internet.

4. employment law. recommendatory and tariff setting in the telecom sector. NTP-99 clearly lay down that all the segments of the telecom sector would be eligible for private sector participation. service and regulation of telecommunications sector 20 telecommunication circles for the basic telephony and 18 circles for mobile telephony 2. Telecom Regulatory Authority of India (TRAI) acts as a regulator for the Telecom Sector.     Competition law Liberalization began with the New Economic Policy in July 1991 Value added services were declared open to the private sector in 1992 National Telecommunications Policy (NTP) in 1994 brought changes in ownership. The licensee for ILD is issued for a period of 20 years with an automatic extension of 5 years.development of such broad capabilities. LEGAL FACTORS The legal environment takes into consideration factors that include discrimination law. and health and safety laws. 5. 1999 (NTP-99): The Policy became effective from 1st April 1999.5 and 3G systems to support every new application and even some of the old ones too. it will be rather tempting to make use of the 2. Regulatory Framework: Set up in March 1997. Following are some points worth mentioning 1. The TRAI’s functions are regulatory. 3. The New Telecom Policy. Considering the Telecom Industry. Open competition was effective from April 2001. The legal aspect of PESTEL analysis is of great importance as it affects the company in terms of operating costs and demand for its products. International Long Distance: Under this scheme there is no limit on the number of service providers in this sector. Tariff Changes: There are major changes in the tariff structure with the reduction in the tariffs for International Long distance and mobile tariff for local calls with effect from 1st October 2008. 12 | P a g e .

3. high speed broadband. so it was a threat to the new entrant but now after the service of MNP – Mobile Number Portability i. it is no more a problem since a customer can retain the same no. Customer or Supplier Loyalty: High for the existing Brands   Existing loyalty to the brands like Airtel which is an India Connect and Vodafone with a strong communication it gets difficult to find a space in mind of the customer. BSNL.e.  With a customer base of 200 million. IPTV. a large segment of rural market is still untapped. because of its reach is able to make its presence and connect with the rural segment. you can change your telecom operator without changing the number. 13 | P a g e . turnkey telecom solutions for enterprises and national & international long distance services to carriers. 4.PORTER’S FIVE FORCES ANALYSIS THREAT OF ENTRY 1. Switching Cost: Now not a problem  Initially it took a lot of consideration before changing or switching the telecom operator as the number is to be updated with all your contacts. Companies like RIM which are catering to both CDMA and GSM markets hold good EOS for at least their communication and branding part. Capital Requirement of Entry: HIGH   Identified as the biggest threat in the industry because this is a capital intensive business and also it involves high fixed costs. Economies of Scale: Difficult to achieve in short term  Companies like Airtel and BSNL which are the market leaders enjoy the Economies of Scale in terms of mobile voice & data services. DTH. fixed line. Licensing also requires a huge amount of investment which requires a long run business plan to recover otherwise there is a need of enormous finance support as in the case of Reliance India Mobile backed by Reliance Group. 2. Although.

   Non. 6. Experience: The Business models through which market leader evolved shows a clear sign of experience and expertise in technology which these existing companies hold in this domain. Some of them are:    E-mail: Digital messages can be exchanged between the parties in a very easy and effective manner. 7. Legislation or government Action (High): Licensing is a big problem in establishing a new setup in telecom industry.traditional telecom industries pose a threat Satellite operators now rely on satellite links to substitute for high speed business networking needs Internet becomes an attractive option and can be a substitute for cut-rate voice calls. Where as an industry where there is lack of close substitutes become less competitive and give immense scope for profit for the firms in the industry. Various new modes of communication have come which are cheap. Considering the Telecom industry. easy and convenient to access and gives more flexibility to the customers. THREAT OF SUBSTITUTES Porter clearly defines substitute as a product from another industry that the consumer can purchase instead of the product from that industry which we are trying to analyze. video calls and chats over the internet. 14 | P a g e . It enables the user to make voice. An industry becomes more competitive if there are close substitutes thereby decreasing the profit potential for the firms in the industry. It is very inexpensive mode of communication Skype: is an expensive tool in the form of software application. Following are some points worth mentioning. Online chat: It is a mode of communication that provides instantaneous transmission of text-based messages. Differentiation – Very Low  The product is not at all differentiated so again it becomes a problem for a new entrant to come up with a product differentiation already a price differentiation war a going on between telecom operators.5. Substitutes basically shape the competitive structure of the industry.

Here some bargaining power can be exercised since Vodafone cannot approach Tata for. labor. places companies in a weak position in terms of hiring and salaries. India houses many IT giants that provide the related software/solutions to them.Taking into account the following factors it can be inferred that the telecom industry does not have any close substitute as the basic need of communication with the help of telephone cannot be provided by any other mode of communication. Following are some points worth mentioning. Some companies (Reliance Info & TCS) have their own development centers. Suppliers of raw materials. Indeed. and services (such as expertise) to the firm can be a source of power over the firm. to dilute bargaining power. mobile handsets and billing software. But there are actually a number of large equipment makers around.   Improved competitive scenario and commoditization of telecom services has led to reduced bargaining power for services providers. Considering the Telecom industry. especially those well versed in the latest technologies. say. billing software. it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. components. Therefore the Threat of substitutes is low in this industry BARGAINING POWER OF SUPPLIERS The bargaining power of suppliers is also described as the market of inputs. fiber-optic cables. without high-tech broadband switching equipment. telecom operators would not be able to do the job of transmitting voice and data from place to place. However “INTERNET TELEPHONY” is the major substitute to this industry which could be a threat and can take out a big bite out of the telecom companies voice revenues.  Mobile set suppliers are also many. when there are few substitutes.  There are enough vendors. arguably. The limited pool of talented managers and engineers. Some operators even have backward integrated (Tata Indicom) and some have collaborated (Reliance & Samsung) 15 | P a g e .  At first glance.

COMPETITIVE RIVALRY 1. the bargaining power of buyers is rising.   With increased choice of telecom products and services. basic services are treated as a commodity.  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.BARGAINING POWER OF BUYERS The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure. therefore to recover the high fixed cost induced in the beginning price wars have started. which also affects the customer's sensitivity to price changes.  At the same time. Considering the Telecom industry. One can only differentiate on the prices offered for the product. No dominant player No product differentiation Price wars 2. especially those that rely more on customized products and services. Following are some points worth mentioning. Differentiation: Low in product hence “Competing on Price” Threat from the competition is high because of low differentiation of the product. they can get higher for larger business customers. 16 | P a g e . regardless of which companies are selling them. Perfect Competition      Many big firms of similar size. While switching costs are relatively low for residential telecom customers. For the most part. This translates into customers seeking low prices from companies that offer reliable service. The product is service and it has very less variable cost. buyer power can vary somewhat between market segments. Telephone and data services do not vary much.

Rural market is to be tapped as of now and urban market is already flooded wit h services whether it provides utility to customer or not. Going by latest data from the Telecom Regulatory Authority of India (Trai). INDIAN TELECOM INDUSTRY – ROAD AHEAD Indian Consumers are in a phase of transformation from using basic telephony services to hig h end value added services.17 million in March 2012. 5.3. wireless subscriber base increased from 911. Low Switching Cost: One can very easily make a shift due to several reasons like   Unsatisfactory service of the current operator Any point of difference offered in new product by a different service provider (e. With the urban pockets getting saturated and competition intense. registering a growth of 0.33 million in February 2012 to 32. forcing mobile telephony firms to drive deeper into the cost-conscious countryside to keep the numbers growing. The technology improvement has helped the sector to perform better and has also expanded the meaning of the term “telecommunication” from just audio message transformation to virtual presence of person. High Exit Barrier  Due to specialized equipment it gets difficult to move out of the highly invested business and also by that time equipment is obsolete leaving you with only one option of price war. The sector clearly shows a great scope for future. although recent information says that the famous Indian telecom juggernaut is slowing down.17 million in march 2012. Latest trend going around is the Value Added Services. subscriber addition has lost a fair bit of pace. overall it is a slow growth industry. Indian Customers are unique in nature and flexibility in choice of Service Providers has become a real challenge in front of Telecom Players.g. . Night calling cards initially offered by Reliance fetched a considerable youth market segment. wire line subscriber base declined from 32. Adding new customers and retaining old customers to maximize profitability hence requires effect ive strategies to fuel on earning revenues. Slow Growth Market   Since competitors eat away each other’s share.88%.17 million in February 2012 to 919. 4.

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Building the national infrastructure.The Scope in this Industry would definitely depend on the following in future:             Scope of Mobile VAS (Value Added Service) in India (Expected to generate 55. Think Global…Act Local Concept (GLOCAL) 18 | P a g e .000 crores by 2015) Consolidation of MVAS content provider’s Market Rural MVAS Market. Migration from separate license regime to composite license regime. Growth of M-Commerce Market.5% in 2010-2011) Opportunity in Telecom Managed Services. Differential Pricing Content Deployment of Next Generation Network. Establishment of a regulatory framework for carriage and content of telecommunication Revenue from Telecom Equipments (down by 2.

Bharti Airtel had to meet rigorous standards for networking competency. support and customer satisfaction set forth by Cisco. behind China Mobile and China Unicom. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. It operates a GSM network in all countries. It also acts as a carrier for national and international long distance communication services. in India). During the financial year [2009-10]. Ericsson agreed for the first time. Nokia Siemens Network and Huawei. Bharti has roped in a strategic partner Alcatel-Lucent to manage the network infrastructure for the Telemedia Business. Call rates have come down much further. commonly known as Airtel. To earn Gold Certification. to be paid by the minute for installation and maintenance of their equipment rather than being paid up front. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It is the largest cellular service provider in India. with over 164.61 million subscribers at the end of 2011 April. It is known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. business support by IBM and transmission towers by another company (Bharti Infratel Ltd. The company has a submarine cable landing station at Chennai. 1/minute (U$0. service.) are maintained by Ericsson. which connects the submarine cable connecting Chennai and Singapore.BHARTI AIRTEL LIMITED . Airtel is the fifth largest telecom operator in the world with over 696.8 million subscribers across 20 countries at the end of 2012. This enabled the company to provide pan-India phone call rates of Rs. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. microwave links. 19 | P a g e . Africa and the Channel Islands. Airtel also offers fixed line services and broadband services.02/minute). Its network (base stations. Airtel is the 3rd largest in-country mobile operator by subscriber base. is an Indian telecommunications company that operates in 20 countries across South Asia.INTRODUCTION Bharti Airtel Limited. providing 2G or 3G services depending upon the country of operation. etc.

Virgin etc. etc) > Possible Market saturation with over-crowding of service providers > Controversy over notice issued to Airtel by TRAI for violation of Mobile number portability regulations > Inexplicit government polices on the telecom sector 20 | P a g e . > Strategic Alliance with SonyEricsson.against the "younger looking" Vodafone. > Expansion into telecom sectors of other countries > Tie-up with Google provides Brand Building and advertising opportunities on the global context > Strategic partnerships with companies like Apple (iPhone) and RIM (Blackberry) > Replacing RevenuePer_Customer model with Revenue-Per_minute model . Nokia & SingTel enables knowledge and technology sharing > Extensive and established distribution network across the country and abroad >Bharti launches cloud enablement platform. BSNL etc > Untapped Rural market OPPORTUNITY > Roughly 50% Teledensity in India. > Not providing similar offers as competitors (eg: free local calls/minutes etc) > Price competition from VSNL.better suited to India > Targeting villages with it's "Matchbox Strategy" THREAT > More domestic players emerging in the market. WEAKNESS > Critisism over Unauthorised VAS activation > Out-sourced Towers until recently (giving competitors like Vodafone an edge) > Losing ground among the teens and youth .SWOT GRID STRENGTH > Bharti Airtel commands the highest market share with 261 million active connections in the indian market (as on 31/08/2012) > Bharti Airtel also supplies broadband and telephone services as well as many other telecommunications services to both domestic and corporate customers. leading to price wars > Strategic partners tying up with competitors (iPhone 4 with Vodafone.

and every corporation would be thrilled to own as many as possible. They are regarded as staid and boring. Market Growth serves as a proxy for industry attractiveness. They are to be "milked" continuously with as little investment as possible. in a "mature" market.  Cash cows are units with high market share in a slow-growing industry. 21 | P a g e . hence the name “Growth Share”.BECG MATRIX STARS HIGH QUESTION MARKS ISP Cellular service Leased Private G R O W T H Circuit COWS Basic Telephone (Fixed Line) DOGS LOW HIGH LOW RELATIVE MARKET GROWTH SHARE The BECG Matrix is used to find out the relative growth prospects of the product line. since such investment would be wasted in an industry with low growth. It is based on the observation that a company’s business units can be classified into four categories based on the combinations of market growth and market share relative to the largest competitor. These units typically generate cash in excess of the amount of cash needed to maintain the business. and Relative Market Share serves as a proxy for competitive advantage.

it is thought. Dogs. should be sold off. but this is worthwhile if that's what it takes for the unit to remain a leader. The hope is that stars become the next cash cows. from an accounting point of view such a unit is worthless. The result is large net cash consumption. stars become cash cows if they have been able to maintain their category leadership.  Stars are units with a high market share in a fast-growing industry. 22 | P a g e . but because they have low market shares they do not generate much cash. A question mark has the potential to gain market share and become a star. They depress a profitable company's return on assets ratio.  Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash. If the question mark does not succeed in becoming the market leader. then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units. used by many investors to judge how well a company is being managed. generating barely enough cash to maintain the business's market share. or they move from brief stardom to dogdom. and eventually a cash cow when the market growth slows. or more charitably called pets. slowgrowing industry. Sustaining the business unit's market leadership may require extra cash. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share. are units with low market share in a mature. not generating cash for the company. Dogs. When growth slows. These units typically "break even".

63% 15.6% 8.77% REVENUE MARKET SHARE  STRATEGIC ALLIANCES  30.4% 13.88% 14.COMPETITOR ANALYSIS AIRTEL VODAFONE IDEA BSNL MARKET SHARE 28.26% 23.5% APPLE-I Phone HCL.1% 21.Airtel broadband connection will be offered with every HCL PC   Verizon Wireless McLaren Mercedes  State owned ITI limited for building V Sat based network  LiveMedia . national leader in digital destination in media    STRENGTHS    Ericsson IBM Pan India Presence Strong Financials Ability to cut down cost Well established customer base 23 | P a g e .

our network follows. with 400. over 350 Vodafone stores.000 mini stores.‟  Vodafone tied up with Star India to run a complete roadblock of its fresh campaign on the entire network by unveiling the 24-hour nationwide rebranding campaign. The new catch phrase was „Make the most of now.000 multi brand outlets. over 35 mobile stores and over 3. Where ever you go. with 60% completed within 48 hours of the launch. Vodafone used all of the commercial airtime across all 13 channels in five languages.000 touchpoints rebranded in two months. The main message of the brand transition exercise: The new Vodafone is the same old Hutch. In the advertisement. was the previous slogan with the pug following the child wherever he goes. over 1. This exercise also 24 | P a g e . the pug sees a new home when it returns after an outing and feels the change is better.  Vodafone’s new advertising campaign in India carried on with the same popular pug that had become a brand ambassador for Hutch.Revenue Market Share Successful Marketing Strategies used by Vodafone  Migration from Hutch to Vodafone was one of the fastest and most comprehensive brand transitions in the history of the Vodafone Group.

transition bumpers and contest spots to promote the Vodafone Essar brand. Zoozoos became so popular that Vodafone had succeeded in its effort of viral or buzz marketing.  Being a state owned player. Rs 10 recharge for small users. home calling cards for the family of those professionals who use to work abroad.  Vodafone Essar launched low priced cell phones in India under the Vodafone brand. and also co-branded handsets sourced from major global vendors. E. and Sony Ericsson in addition to continuing as telecom services provider.included TV commercials. Cheap SMS facility for youths and facilities for circle users.  Vodafone adopted multi-segment approach. The viewership for the add was highest among all the adds. This strategy captured the imagination of millions.  Vodafone gave birth to Zoozoo: a special character created specifically to convey a value added service (VAS) offering in each of the newly released commercials. BSNL could cover rural areas. Vodafone Essar distributed bundled handsets through its existing 400. Vodafone came up with creative advertising campaign for its various plans.000 distribution outlets. This helped the company to raise not only its profits through sales but also tremendously increase its brand value. By bringing in millions of low-cost handsets from across the globe into India. Vodafone also became a mass mobile phone brand like Nokia. By flooding the market with its low-cost handsets. 25 | P a g e . In the first 10 days of IPL (Indian premier league) it had reached a cumulative of 89 million people.g. Commercial spots were purchased on Sony too. Successful Marketing Strategies used by BSNL  BSNL attracted the consumer through its low cost schemes. Motorola. and this helped it increase its subscriber base. Samsung. The strategy was a buzz that lived up to the brand image of great creative and clever marketing. They offered differentiated products for their respective markets.

a large covered area for pre-paid roaming.  Idea's focus in its ads also changed from highlighting its tariff plans and network coverage to using mobile telephony to solve social issues. Idea also developed several websites to support its ads based on social issues. Idea’s “Kaho what’s your idea” program comprised of various innovative techniques to promote thinking logically. and popular players like Sachin Tendulkar and Zaheer Khan were used to promote the brand. application of memory skills and real-life skills apart from the general knowledge factor. the sub-brand for its pre-paid cards business is Idea Chit Chat). to avoid diluting the brand equity.  The company used the mother brand `Idea' for all its services (for instance.Successful Marketing Strategies used by IDEA  Idea offered several value-added services such as vernacular SMS (in 9 languages).  Beside different campaigns.  Idea chose to promote its brand where as its competitors focused on promoting their value added services and tariff plans. weaving a story. Mumbai Indians.  Idea tied up with Indian Premier League (IPL) cricket team. 26 | P a g e . and so on. games on the mobile.  Ideas for India campaign was started to connect with the youth. it hired film star Abhishek Bachchan to endorse its brand in October 2007.  Idea expanded its geographical presence to cover several telecom circles in India.

SERVICE GAP ANALYSIS CUSTOMER GAP   Understanding Customer Expectations of Service Quality. Understanding Customer Perceptions of Service. PROVIDER GAP 1 (The Listening Gap):  Factors leading to PROVIDER GAP 1:     Inadequate Marketing Research Orientation Lack of Upward Communication Insufficient Relationship Focus Inadequate Service Recovery 27 | P a g e .

 Sales and Activity management. This findings help in an industry connecting millions.  Planning. This has been their vision which is why they have gone to a centralized application like CRM. Based on a detailed analysis of data capturing all downloaded content by Airtel mobile users in 2010.  Modules used at AIRTEL:  Marketing. video downloads. A customer should get the same quality of service no matter which of the call centers he/she contacts.  Call Center support and Opportunity management. and data traffic Highlights:  Diwali delights India most: Out of total SMS traffic of over 90 billion in the year .more than 1. this survey is compiled at the end of every calendar year .thus bringing out the India’s preferences and favorites across various categories.2 billion SMSes were exchanged on Diwali. BHARTI AIRTEL’s Approach To MARKETING RESEARCH:  AIRTEL MOBITUDE 2010  The only survey to map onto mobile phone usage trends across the country. images.  The findings of Airtel Mobitude 2010 are a true manifestation of what appeals to the Indian masses.  Campaign management and Lead Management. this is to provide services anywhere and at any time.    Captures preferences of over 150 million mobile users across the country Includes annual analysis of music. 28 | P a g e .  Katrina Kaif and Salman Khan Rule: Of 25 million images and wallpapers downloaded. both stars scored numero uno position in respective categories.  Knowledge management. bringing alive Airtel’s brand proposition of 'closer to what you love' for the customers  BHARTI AIRTEL’s Approach To RELATIONSHIP FOCUS:  CRM INITIATIVES: As a part of the company’s vision.

 BENEFITS:  Customer segmentation  Cross selling and up selling of relevant schemes  Market analytics like recording customer info  Generation of accurate leads and sms bursts to the right customer segment  Customized and simplified bill formats. Inappropriate Physical Evidence and Services cape. payment collection centers. Bharti Airtel needed to find a way to focus on developing new services that could set it apart from the competition and strengthen its customer relationships. With competition intensifying in the Indian telecom services market.  BHARTI AIRTEL’s Approach To SERVICE DESIGN: Maximized its future flexibility and growth potential by adopting a business-driven framework for integration. better value added services  Knowledge sharing among employees  e-billing  customized offers based on user profiles  same level of service all across India  reduced cost if customer  highly scalable as the number of subscribers increase  automatic problem escalation when timeline is breached  automatically suggesting products when customers leave Airtel PROVIDER GAP 2 (The Service Design and Standards Gap):  Factors leading to PROVIDER GAP 2:    Lack of Systematic Service Design Absence of Customer Defined Standards. allowing it to implement and deliver new services rapidly.  AGREEMENT WITH IBM: Bharti Airtel entered into a comprehensive 10-year agreement with IBM to transform its processes and take on the management of its IT 29 | P a g e .

through end-to-end integration of customer-facing standardized integration framework  Flexible pricing model enables capital expenditures  Ability to integrate its diverse systems and processes was essential. The scorching growth of Bharti Airtel‟s customer base. Its new platform provides a standardized framework for Bharti Airtel to integrate its channels and customer-facing processes – enabling a more seamless customer experience.5 million new customers per month  Outsourcing of technology enables Bharti Airtel to focus resources on growing the business  Improved cross-selling and targeting and a more seamless. Bharti Airtel saw the flexibility of IBM‟s integration approach – and recognized the application of IBM‟s extensive portfolio of middleware products and expertise in service-oriented architecture (SOA) – as an ideal match for its integration requirements. higher customer satisfaction and more profitable growth. The new strategy is all about delivering a truly differentiated experience.infrastructure.”  Key Benefits:  Ability to process 1. and 30 | P a g e Bharti Airtel to avoid major increases in . efficient total customer experience processes  Optimization of business processes and infrastructure through flexible. A flexible framework for integrating the systems and customer-facing processes was essential to enabling this – and that IBM‟s strength in this area would prove to be a great fit. and having the flexibility to continually improve the customer experience.  Key Drivers:  A key driver of Bharti Airtel‟s decision to outsource its IT activities to IBM was the desire to channel its internal energies and resources into capitalizing on a spectacular market opportunity rather than on the enabling platforms needed to do so.

 Results:  Two years into the agreement.  It was also driven by the desire to maximize the efficiency of its operations by entrusting IBM with the ownership and management of its IT resources. while at the same time continuously improving service quality and reliability. help desk services and the ongoing management of Bharti Airtel‟s IT environment.  The network was initially provisioned with two wavelengths of 10 Gbps each. making its IT costs more predictable and manageable. These operators have recently been awarded licenses and are under government-imposed deadlines to roll out their services.A VALUED SUPPLIER:  Ability to bring activation from four days to two hours. Bharti Airtel‟s innovation efforts have resulted in much external recognition. Bharti Airtel has been able to post an operating cash flow margin of 40 percent. illustrates the success of this strategy. thereby increasing the number of kilometers deployed significantly. 31 | P a g e . a full five percentage points higher than the rest of the industry.the ability of its business processes to keep up with this growth.  TELLABS .  In the face of declining average revenue per customer in India.  The growth in wireless operators brings in huge opportunity for Airtel as many of the new operators do not have their own optical network infrastructure. in the process. but today it provides more than 18 channels of 10Gbps services. and. and our billing cycles from 15 days to two hours  Long distance bandwidth services have been witnessing healthy  growth in the last few years. a highlight of which was receiving the 2006 NASSCOM IT & Innovation Award from the Honorable Prime Minister of India.  IBM Strategic Outsourcing provides installation services.

32 | P a g e . OFFER OF THE DAY STRATEGIES.  Establishing and implementing objective recruitment tools such as online tests based on psychometric profile.  Employee Engagement and Development  Offering “Study while Work” Programs  Setting benchmarks in Employee reward and recognitions  Developing Role Competency Matrix. attitude and skills assessment.  RETENTION PLANS.  CUSTOMER DEFINED SERVICE STANDARDS PROVIDER GAP 3 (The Service Design and Standards Gap):  Factors leading to PROVIDER GAP 3:    Ineffective Human Resource Management Ineffective Role fulfillment by customers Effective alignment with Service Intermediaries. Maximum Uptime: Airtel and Tellabs planning teams have worked together to make architectural changes in the optical network to achieve enhanced network resiliency.  BHARTI AIRTEL’s Approach To HR:  Resource Management  Talent Acquisition:  Building Supply Chain of talented workforce  In sourcing large number of employees with Airtel‟s channel partners and associates. LOYALTY PLANS. 100% BILL ACCURACY GUARANTEE.

com 33 | P a g e . Pricing  BHARTI AIRTEL’s Approach To COMMUNICATION:  External Communications:  Positioning through Slogans:  Power to keep in touch: instant communication  Touch tomorrow: capturing large market. talking to a bigger audience.  Creating and implementing effective processes for increasing productivity  Define a clear growth path for the employees  Follow a multi pronged approach for addressing the attrition rates.  Employee Service Assurance  Educating employees on organization HR policies  Conducting Employee Satisfaction surveys. PROVIDER GAP 4 (The Communication Gap):  Factors leading to PROVIDER GAP 4:   Ineffective Communication to customers.  Live every moment : touching the imagination of the customer  Express yourself: Energetic and younger look. with more entries to the market. highlighting performance and coverage  Airtel Logo  Massive Advertising:  Google Adsense  Bidvertisers  Sponsor online games at zakpak. Attrition Management  Building a strong “Bharti Airtel Services” community.

 Sales promotion  Friendz prepaid plan  Ladies special plan  Senior citizen plan  Publicity and events:  Delhi marathon. golf tournaments  TV shows like Big Boss. KBC and INDIAN IDOL  Interactive Communications: Customer Service Centers  BHARTI AIRTEL’s Approach To PRICING:    Customer based pricing strategies Flexible pricing mechanism Controlled by TRAI 34 | P a g e .

Promote the brand internationally at low cost. they may get a chance to take-over new. Bharti Airtel also supplies broadband and telephone services . Focus on its strengths in the rural markets to retain and improve market share by introducing better plans. SO Strategies 1. ST Strategies 1. Inexplicit government policies on the telecom sector 3. Extensive and established distribution network across the country and abroad 2. Expansion into telecom sectors of other countries Internal Factors 2. etc) Strengths (S) 1. small time players as well. to boost customer numbers and well as many other telecommunications services to both domestic and corporate customers. it can work with its allies and come up with special offer phones etc. Strategic partners tying up with competitors (iPhone 4 with Vodafone. Bharti Airtel has huge potential given the deals it can strike with the current service providers there. Going abroad with strengthen brand value at home and ensure strong brand presence and loyalty. Tie-up with Google provides Brand Building and advertising opportunities on the global context 1. Targeting villages with its "Matchbox Strategy" 3. With the African nations getting into the developing nations league. 2. 3. recharges etc. Get into an aggressive marketing mode and stress on the „Market Leader‟ Tag. 2. leading to price wars 2.TOWS MATRIX ANALYSIS External Opportunities (O) Threats (T) Factors 1. 3. With an already well established network in the rural parts of India. Nokia & SingTel enables knowledge and technology sharing 3. Strategic Alliance with Sony Ericsson. If government policies change. More domestic players emerging in the market. 35 | P a g e .

Weaknesses (W) 1. Use brand name and special tactics and strategies to penetrate further in to the rural markets 3. IT services (to IBM). Use the opportunity to tie up with local telecom providers and come up with own towers and infrastructure – will cut costs and raise profits. Providing better service and superior experience will ensure customer retention. 3. It utilized different payment models from revenue per share to cost per all. This had helped company in offering customers its services at low cost and also to focus its core business while handling any changes in consumer demand in a flexible way Bharti Airtel with its unique business model that helps in keeping costs low and its experience in developing the Indian market whose scenario was quite similar to Africa about 10 year back is uniquely placed to leverage this opportunity. Price competition from VSNL. Go solo as per Govt. regulations and establish distribution channels. depending on what worked for the parties involved. BUSINESS STRATEGIES Airtel was one of the first telecom companies to outsource its network deployment (to Ericsson and Nokia). Out-sourced Towers until recently (giving competitors like Vodafone an edge) 2. Untapped Rural market 3. This helped the company save on capital expenditures on and lower its operational expenses. Airtel‟s operating expenses as a share of revenue had declined 8% annually since 2003. 2. Tie-up with other vendors of software and come out with cheaper products for rural sector. and customer contact centers (to Nortel). BSNL etc WO Strategies 1. 36 | P a g e . Use revenues from abroad to improve and install new technology 2. WT Strategies 1.

and the mobile communications penetration rate is about 41. with low positioning indicating large potential of African telecom market. the terms on which old licenses are renewed and corruptly awarded ones relinquished (if at all).4%. new spectrum grants and the rules on mergers and acquisitions makes it imperative for Bharti Airtel to look at new markets to sustain and grow. the mobile subscribers in Africa increased by 12.1. while the internet subscribers approximated 77 million. Mobile signals only cover 60% of Africa South of the Sahara. Despite the fast 37 | P a g e . In 2010.9% to 333 million. Africa: The Next Growth Engine Africa had a late start in the telecom field. the fixed-line business is far less developed than the mobile business in Africa. Due to the geographical climate and political pattern of Africa. lower ARPU and unclear government policy on variety of issues like the fees on existing spectrum. African telecom market has broad prospects. Compared with other regions. the African population exceeds 1 billion. LEVERAGING UNIQUE BUSINESS MODEL & EXPERIENCE OF MARKET DEVELOPMENT IN AFRICA With Indian market getting highly competitive with new entrants resulting price-wars.

4 2012E 728.45 7.8 20.092. Year Revenue (Rs mn) EBITDA (Rs mn) EBIT (Rs mn) Net income (Rs mn) EPS (Rs) P/E (x) ROE 2010A 418.50 284.247. The US$5 bn revenue target implies a CAGR of 11.60 348.60 136.89 453.051. We believe its strategy is to grow the business largely in line with the industry.4 38 | P a g e .00 167.4 24.16 14 25.00 104.8 38.6 20.022.3% (FY 10-FY15) – broadly the midpoint of expectation (5-16%) for large African peers (MTN.50 216.464.70 171.104.999.30 35. margins of 40% could be achieved by 2013.638.072. However.6 44.22 44.133.3 2014E 976.1 14.21 390.804.348. targets for this business are not aggressive.68 242.47 38. Millicom and Vodacom).736.843.90 111.40 281.90 102.44 145.32 8. Lack of significant revenue market share gain also implies capex could remain low. Further. any divergence in growth could be largely a reflection of the players‟ geographical diversity. FINANCIAL FORECASTS FOR THE COMPANY IN AFRICA Based on our analysis of Bharti‟s Africa operations.04 168.30 16.827.302.growth in recent years which saw total mobile subscribers increasing at a CAGR of approximately 22.7 2013E 842.3 2105E 1.00 24.604.801.007.00 91.88 9.2 percent during the last six years. the teledensity is still 52% with huge variation in the region.2 2011E 612. if Bharti can bring its SG&A expenses (39% of revenue) to a level similar to its African peers (24-26%).96 12.633.237.90 26. while taking EBITDA margins to the levels of other African peers.472.721.60 63.

It is now at 218. But with a right approach and strategy this untapped market can be tapped and used to increase the ARPU. We can see an opportunity of turning this share the other way round and can get a large amount of revenues from the rural markets but it will be a slight trouble as communication to rural market may act as a barrier.9 million rural users as compared to 188 million users in urban areas. Very recently the rural subscriber base in India has overtaken the urban mobile subscriber base. The training resources will have to ensure the core values of the company are engrained into the new employees. The company will have to develop treasury management services to hedge foreign exchange risks. The HR of the company will have to start developing capabilities for handling a multi-cultural and multi-ethnic workforce spread over different countries. And also the increasing rural share year on year signifies that there is a scope of penetration in the rural markets. HR: A globalised firm brings with itself challenges of human resources. REASONS TO SUPPORT THIS STRATEGY ARE: Increasing rural share of mobile telephony Share of Rural areas in total subscription has increased.EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS  Marketing: Airtel is a home grown company with the experience of marketing only within India. Finance: The finance function will get more complex as more revenue start coming from other countries. At the same time the regulatory compliance will become more complex owing to different rules in countries. VALUE BASED PRODUCT FOR RURAL MARKET Shifting complete focus from product orientation to customer orientation by identifying the needs of the rural market and providing solution rather than the product. As it tries to expand into markets beyond Indian borders it will have to evolve into a true MNC.   2. This means the company will have to relook its entire marketing strategy to not only adapt to the new markets but also to ensure it is able to present itself a global brand. The learning curve has to be really quick if it wants to compete with global players like Vodafone and local champions like MTN in the African market. 39 | P a g e .

It may act as a window to the whole new world and can get him in touch with almost everything in this world. The following products are proposed in order to help Airtel tap this market. But it provides a major opportunity for the companies to increase their bottom-line For the above reasons Airtel should come up with a spree of products/ VAS services which act as an integral solution to the needs of Rural Markets. 110 for GSM networks and Rs. 73 for CDMA networks as of September 2010. it is hardly a sole cause for operators unable to build returns. which stood at Rs. it should position its product/service as a social cause in turn generating revenues. introduction of newer billing schemes such as per-second billing and the focus towards rural markets. Although lower ARPU does indicate decrease in revenue for network operators.Roogle A dedicated service for rural people. The main reasons for low ARPUs for the mobile operators are increasing competition from new entrants. ARPU in isolation is not necessarily an ironclad investigation. it is similar to Google but user friendly for rural people in their own local language. 40 | P a g e . The feasibility for these products was tested in the rural markets of UP West and was accepted by rural segment. if known to him he may be referred to a portal where he can say or enter his query to find the desired result. Since Airtel has a very strong Brand Equity and is able to connect with the Indian mentality.Declining ARPU India has one of the lowest Average Revenue per User (ARPU) in the world. Try to imagine that a literate person is always able to open browser and enter his/her query to find the answer and info but a villager doesn't even know about such a service. Rural Google.

The current ARPU of Airtel is Rs 126. pesticide information and market demand. This pack may include information like Mandibhav. so right from purchase to after sales service . so any pack which can guide them step and step and teach them their way out to the VAS which may act as a window to the whole new world for them.32 which though higher than the industry average of Rs 110 is still not enough to make the company operations viable. say Best Rates or say know how for maintenance. Best Rates Rural people are now able to spare some disposable income and gain access to better technology and hence buy a tractor. Krishi Seva A total dedicated pack for all the agricultural related issues.Dekho. 41 | P a g e . FINANCIAL IMPLICATIONS The Major Subscriber Base of Airtel is rural India with 55% subscribers and expected to grow to 65% in the year 2012. also there has been a continuous decline in the ARPU due to price-wars. they have smart phone which are cheap (Chinese Make) but are not able to use them to the fullest. Seekho Aur Sikhao In our study we came to know that people are not literate enough to use their mobile and use the VAS features in their mobile phone. Launching of new products in the VAS would be a major contributor to first stop the decline and then increase the ARPU which would improve the profitability. The growth rate of the company over the last couple of years has been in single digits. we can provide them with a dedicated service. Backed by new product launches we expect the CAGR of the company will be about 14% which is 5% higher the expected industry growth.

64 49921.21 Mar'14E Mar'15E Mar'12E Mar'13E 43.66 14.74 18408.05 EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS  Finance: Considering the financial aspect. the introduction of VAS products in the rural areas will help to increase the ARPU which will further lead to increase in the company's revenue. 42 | P a g e .06 9202.15 19.593. This is a very crucial part for the company as the needs of the rural people are completely different from those that Airtel has already catered to.70 49841.84 21.53 20.11 57206.80 38.Year Sales Turnover Total Income PBDT Net Profit Gross Profit Margin(%) Net Profit Margin(%) Mar '11E 38.  Human Resources: The department has to tap the right person for the right job.50 7.18 15421.51 16848.07 8.57 17.70 12.575 10049.115.99 56985.30 19.  Marketing: With Airtel penetrating in the rural markets.76 43.90 24.35 65554. All these efforts will help Airtel to establish an image so that the rural people can always connect a mobile phone with Airtel.919. It would have to work on its distribution strategies to reach last mile.128. People with better understanding of the rural markets and rural consumers would be better equipped to understand the consumers' need and sell as well as market the product.015.563. it will not only help in increasing market share but also brand building.716.86 65153.46 10974.37 18. It can capture the untapped market potential.27 22.427.79 17.22 20.

etc. Being market leaders their ploys and their tactics drive the strategies of their competitors. Be it their business plan of out-sourcing everything and focusing on what they know best to become the market leaders in India or to become the first telecom company from India to operate in 19 different countries. Airtel still manages to squeeze past its competition with brilliant and well placed promotions and offers. but it still is uncomfortable because of the number of new operators in the market. in both India and abroad. Even though they lead the rural markets as well. and holding majority shares there as well. But realizing this and the opportunity exists abroad. What they are also looking at in India is the yet untapped Rural Markets. but to the industry as a whole. It may be the best position to be in the market. it seemed obvious to us that Airtel will do better by the simple introduction of focused and „limited to only rural‟ VAS products. The telecom sector. What Airtel can control is its strengths. All said and done. which are many and vastly varied. 43 | P a g e . the company has always believed in „keeping it simple‟. especially in Africa.CONCLUSION Given the evolution of Bharti Airtel over the decades that it has been in the industry. but also increase the customer base there. but also with its business and competitive strategies. the government policies. Airtel has always believed in being innovative not only with technology. Despite this. These factors pose a threat to not just Airtel. at home. What we suggested as a part of the future strategies that can be employed by Airtel was the introduction of various Value Added Services products that can not only boost their revenue from the rural sector. Airtel‟s move to buy out local telecom companies there or go in for JVs has proved to be a really smart move. It is not just the money aspect that the rural market looks at. these strategies are just directional in nature because everything depends on the telecom industry as a whole. They are not only cementing their position as big telecom players in the world market. Keeping this in mind. but also strengthening their already pristine reputation here. the unclear policies of the government regarding technology and collaboration between two or more telecom companies in the already saturated telecom sector. they still have a long way to go to beat BSNL‟s rural coverage. it‟s also the value for money that matters to them.

is always going to have a new crop of target audience/market.especially in India. after all. TRAI‟s latest figures also put Airtel at the top of the chart for number of active users. we have amongst the youngest average age population in the world! Airtel has a strong brand name and brand loyalty. All Airtel needs to do is to do what it has done from the day it started its operations – Keep It Simple! 44 | P a g e .

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