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AIRTEL

Business Strategy
REPORT

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

Contents
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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INDIAN TELECOM INDUSTRY – An Introduction
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 : http://www.indiacallinginfo.com/india-telecom-circles extracted on 14th Aug 2012 , Tuesday at 1200 Hrs

MACRO ENVIRONMENTAL INFLUENCES – THE PESTEL ANALYSIS
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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 These bodies will continue to ensure the right mix of freedom and regulation 5. GDP/GNP trends. there is a direct correlation between the growth in mobile tele-density and the growth in GDP per capita in developing countries. Unemployment and Disposable Income. 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.  A spate of anti-graft regulations and growing accountability is expected to reduce the corruption over the next few years. 2. Contribution to GDP:  According to the UNCTAD. Healthcare and Educational Services. Indirect Benefits: Lower Transaction Costs. Better access to Information. 4. The total FDI equity inflows in telecom sector have been US$2223 million during April-November 2009-2010. Money Supply. which tend to have a high percentage of rural population. Economic Benefits of Telecom Industry:   Direct Benefits: Increase GDP. Increases Productivity of Business through voice and data services. 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. Inflation. ECONOMIC FACTORS The Economic Factors that influences the industry on a whole include the Business cycles.3. 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. 5|P a ge . Interest rates. Some of the above factors which affect the Telecom Industry have been discussed below: 1.

an indication of efficiency and profitability.indiatimes.6% of total GDP in FY10. Source: http://ronnie05. Saturday at 1400 hrs.com/2011-08-11/news/29876401_1_telecom-sector-mobilebroadband-mobile-operators extracted on 26th Aug 2012. Sunday at 1100 hrs. 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)}. the telecom industry has received more investments and has implemented higher technology. 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. the need for higher FDI is felt across sectors in the Indian economy. 3.economictimes.  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. 4.com/2009/12/01/w890/ extracted on 1st Sept 2012. and therefore. The share of the telecom services industry in the total GDP has been rising over the past few years. The share of telecommunication services in India’s GDP is expected to increase to 15% by 2015. Foreign Direct Investment (FDI): Foreign direct investment has been one of the major contributors in the growth of the Indian economy. Liberalization:  The relaxation of telecom regulations has played a major role in the development of the Indian telecom industry. is much higher for private companies than for government companies. Source: http://articles. 5.wordpress.  The ratio of number of subscribers to employees. 6|P a ge . accounting for nearly 3.

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. there was rapid growth in the number of data processing centers and inbound/outbound call centers. which thrives on reliable telecommunication infrastructure. however.6 billion for 2010. $2. As per DIPP figures. 6. 7|P a ge .liberalization era. 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. with introduction of internet & mobile banking the long queues at the banks are slowly becoming a thing of the past. which ultimately led to the outsourcing revolution in India. the cumulative FDI inflow for 2011 is $1. After the introduction of IP telephony.e.53% ( A p r 2 0 0 0 .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. India has become an important outsourcing destination for the world and the boom in this sector also has transformed India’s economic dynamics. FDI Inflow: Telecom accounts for 8.7 billion which is down by 35% as compared to previous year i. Financial Services:  Banking in India has become service-oriented. 7.  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. 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. Further.

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. In fact. the falling handset prices and the add-on features have triggered growth of the Indian telecom industry.indiatelecomonline. especially the voice telephony services. the vast rural market holds a huge potential to drive the future growth of the telecom companies. Taking NNP growth at 8. Thus.9% in rural areas and 14.75% during 2010-15. the manufacturers introduced lower. 8|P a ge . 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 top 20% households are seen gaining the most. Penetration in rural areas will not only support the growth of telecom service providers but also boost demand for equipment and telecom infrastructure.  Rural Telephony – Connecting the Real India : With the urban markets fast reaching their saturation points for telecom services. Income Distribution: One of the striking findings of the paper is the increase in inequality in both rural as well as urban India. which encouraged mobile handset manufacturers to enter the market and to cater to the growing demand. The worrisome feature of inequality is that it has increased significantly during the last decade (12.priced handsets with add-on facilities to cater to the increasing number of subscribers from different strata of the society. Further. which will certainly bring further structural changes in the economy. Further. Now even entry-level handsets come with features like colored display and FM radio. which reflects the extent of u n t a p p e d opportunity. Thursday at 1900 Hrs. th Source: http://www.SOCIO CULTURAL FACTORS 1. The last decade was one of high economic growth that is expected to Continue. the teledensity in rural areas is 32.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.  Increasing Affordability of Handsets: The phenomenal growth in the Indian telecom industry was predominantly aided by the meteoric rise in wireless subscribers.9% in urban areas).11%. from 37% share in total income in 1993-94 to 58% in 2014-15. which is comparable to the inequality levels prevalent in the developed countries.

urbanization. a burgeoning middle class with growing disposable income. in present times mobiles are perceived as a utility rather than a luxury. increasing literacy levels and higher adaptability to technology. These new features have multiplied the need to be connected always and to own a wireless phone and therefore.2. 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 . The changed profile is characterized by a large young population. Changing Demographic Profile The changing demographic profile of India has also played an important role in subscriber growth.

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

and simultaneously if needed. though higher rates are possible).5G). Enhancements have been made to the existing 2nd generation systems (so called 2. Speech is simply treated as a particular data application. delivering multiple services with differing bandwidth requirements. as packets rather than circuit switched.8kbps and 64kbps.A region with a strong technological foundation enables companies to leverage multiple tools like mobile technology and Enterprise methodologies to streamline operations. In telecommunication industry technology is defined by the following:        Degree of Automation Emerging Technologies Impact of Internet. the next generation of cellular telephony (3G) known globally as IMT 2000 and in Europe as UMT. In order to learn more about the technological environment of an area and a region’s propensity to adopt new technologies. Now. With the 11 | P a g e . which will enable the data to be carried much more easily at higher rates (typically between 28. has been uniquely designed to carry packet data.5G developments are expected to be available in the short term. Data rates of up to several hundred kbps will be readily available to the terminal (with so much being done. the end user device is no longer just a mobile phone). and interestingly where required. 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. and certainly within the same period that Bluetooth will make its entrance. 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. Bluetooth will support enhanced 2nd generation as well as 3G systems in the delivery of a wide range of services. eliminate bottlenecks and provide their workforce with collaborative knowledge management systems. The 2. 3G systems will allow the end user flexibility in the traffic channel.

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. 1999 (NTP-99): The Policy became effective from 1st April 1999. 3. recommendatory and tariff setting in the telecom sector. employment law. The New Telecom Policy. 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. International Long Distance: Under this scheme there is no limit on the number of service providers in this sector. The licensee for ILD is issued for a period of 20 years with an automatic extension of 5 years. Considering the Telecom Industry. 5. 12 | P a g e .development of such broad capabilities.5 and 3G systems to support every new application and even some of the old ones too. 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. and health and safety laws.     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. 4. LEGAL FACTORS The legal environment takes into consideration factors that include discrimination law. Following are some points worth mentioning 1. Telecom Regulatory Authority of India (TRAI) acts as a regulator for the Telecom Sector. Regulatory Framework: Set up in March 1997. it will be rather tempting to make use of the 2. The TRAI’s functions are regulatory.

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. 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.  With a customer base of 200 million. fixed line. because of its reach is able to make its presence and connect with the rural segment. 4. 2. 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. high speed broadband. 13 | P a g e . 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. DTH. 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. a large segment of rural market is still untapped.e. Companies like RIM which are catering to both CDMA and GSM markets hold good EOS for at least their communication and branding part. Although. you can change your telecom operator without changing the number. IPTV. 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.PORTER’S FIVE FORCES ANALYSIS THREAT OF ENTRY 1. BSNL. turnkey telecom solutions for enterprises and national & international long distance services to carriers. 3.

14 | P a g e . It is very inexpensive mode of communication Skype: is an expensive tool in the form of software application. It enables the user to make voice. 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. 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. Online chat: It is a mode of communication that provides instantaneous transmission of text-based messages.5.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. Legislation or government Action (High): Licensing is a big problem in establishing a new setup in telecom industry. Following are some points worth mentioning. 7. video calls and chats over the internet. 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. easy and convenient to access and gives more flexibility to the customers. 6.    Non. An industry becomes more competitive if there are close substitutes thereby decreasing the profit potential for the firms in the industry. Substitutes basically shape the competitive structure of the industry. Various new modes of communication have come which are cheap. Considering the Telecom industry. 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. Some of them are:    E-mail: Digital messages can be exchanged between the parties in a very easy and effective manner.

say.   Improved competitive scenario and commoditization of telecom services has led to reduced bargaining power for services providers. But there are actually a number of large equipment makers around. it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. when there are few substitutes. fiber-optic cables.  There are enough vendors. India houses many IT giants that provide the related software/solutions to them. and services (such as expertise) to the firm can be a source of power over the firm. mobile handsets and billing software. telecom operators would not be able to do the job of transmitting voice and data from place to place. to dilute bargaining power. Considering the Telecom industry.  Mobile set suppliers are also many. Some companies (Reliance Info & TCS) have their own development centers. Here some bargaining power can be exercised since Vodafone cannot approach Tata for. Following are some points worth mentioning. The limited pool of talented managers and engineers. 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. without high-tech broadband switching equipment.  At first glance. labor.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. arguably. places companies in a weak position in terms of hiring and salaries. especially those well versed in the latest technologies. Indeed. Suppliers of raw materials. components. billing software. Some operators even have backward integrated (Tata Indicom) and some have collaborated (Reliance & Samsung) 15 | P a g e . 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.

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

4. With the urban pockets getting saturated and competition intense. 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. although recent information says that the famous Indian telecom juggernaut is slowing down. wire line subscriber base declined from 32. subscriber addition has lost a fair bit of pace. registering a growth of 0. Adding new customers and retaining old customers to maximize profitability hence requires effect ive strategies to fuel on earning revenues. 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. 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. forcing mobile telephony firms to drive deeper into the cost-conscious countryside to keep the numbers growing. The sector clearly shows a great scope for future. Going by latest data from the Telecom Regulatory Authority of India (Trai).33 million in February 2012 to 32. . Slow Growth Market   Since competitors eat away each other’s share. Night calling cards initially offered by Reliance fetched a considerable youth market segment.17 million in March 2012. overall it is a slow growth industry. wireless subscriber base increased from 911.17 million in February 2012 to 919. 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.g. 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.3. Indian Customers are unique in nature and flexibility in choice of Service Providers has become a real challenge in front of Telecom Players.88%.17 million in march 2012. Latest trend going around is the Value Added Services. 5.

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000 crores by 2015) Consolidation of MVAS content provider’s Market Rural MVAS Market.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. Growth of M-Commerce Market. Building the national infrastructure.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. Migration from separate license regime to composite license regime. Think Global…Act Local Concept (GLOCAL) 18 | P a g e .

commonly known as Airtel. To earn Gold Certification. etc. Airtel also offers fixed line services and broadband services. support and customer satisfaction set forth by Cisco. During the financial year [2009-10]. This enabled the company to provide pan-India phone call rates of Rs.) are maintained by Ericsson. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. service. It operates a GSM network in all countries. Africa and the Channel Islands. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. is an Indian telecommunications company that operates in 20 countries across South Asia. Its network (base stations.INTRODUCTION Bharti Airtel Limited. business support by IBM and transmission towers by another company (Bharti Infratel Ltd. in India).BHARTI AIRTEL LIMITED . It is known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. 19 | P a g e . Call rates have come down much further. providing 2G or 3G services depending upon the country of operation. to be paid by the minute for installation and maintenance of their equipment rather than being paid up front.61 million subscribers at the end of 2011 April. Airtel is the fifth largest telecom operator in the world with over 696. It also acts as a carrier for national and international long distance communication services. behind China Mobile and China Unicom. Nokia Siemens Network and Huawei.02/minute). Airtel is the 3rd largest in-country mobile operator by subscriber base. Bharti has roped in a strategic partner Alcatel-Lucent to manage the network infrastructure for the Telemedia Business.8 million subscribers across 20 countries at the end of 2012. Ericsson agreed for the first time. microwave links. It is the largest cellular service provider in India. 1/minute (U$0. which connects the submarine cable connecting Chennai and Singapore. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. The company has a submarine cable landing station at Chennai. Bharti Airtel had to meet rigorous standards for networking competency. with over 164.

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. 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 . WEAKNESS > Critisism over Unauthorised VAS activation > Out-sourced Towers until recently (giving competitors like Vodafone an edge) > Losing ground among the teens and youth . Nokia & SingTel enables knowledge and technology sharing > Extensive and established distribution network across the country and abroad >Bharti launches cloud enablement platform.against the "younger looking" Vodafone. leading to price wars > Strategic partners tying up with competitors (iPhone 4 with Vodafone. 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. Virgin etc. > Strategic Alliance with SonyEricsson. > 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 .better suited to India > Targeting villages with it's "Matchbox Strategy" THREAT > More domestic players emerging in the market.

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. and Relative Market Share serves as a proxy for competitive advantage. 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. 21 | P a g e . These units typically generate cash in excess of the amount of cash needed to maintain the business. and every corporation would be thrilled to own as many as possible. hence the name “Growth Share”. since such investment would be wasted in an industry with low growth. They are to be "milked" continuously with as little investment as possible.  Cash cows are units with high market share in a slow-growing industry. Market Growth serves as a proxy for industry attractiveness. in a "mature" market. They are regarded as staid and boring.

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

6% 8.63% 15.COMPETITOR ANALYSIS AIRTEL VODAFONE IDEA BSNL MARKET SHARE 28.88% 14.77% REVENUE MARKET SHARE  STRATEGIC ALLIANCES  30.5% APPLE-I Phone HCL.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 .26% 23.4% 13.1% 21.

In the advertisement.000 touchpoints rebranded in two months. The new catch phrase was „Make the most of now.  Vodafone’s new advertising campaign in India carried on with the same popular pug that had become a brand ambassador for Hutch.‟  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 pug sees a new home when it returns after an outing and feels the change is better. The main message of the brand transition exercise: The new Vodafone is the same old Hutch. with 60% completed within 48 hours of the launch. This exercise also 24 | P a g e .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. Where ever you go.000 mini stores. with 400. over 1. our network follows. over 350 Vodafone stores. was the previous slogan with the pug following the child wherever he goes. Vodafone used all of the commercial airtime across all 13 channels in five languages. over 35 mobile stores and over 3.000 multi brand outlets.

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

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

SERVICE GAP ANALYSIS CUSTOMER GAP   Understanding Customer Expectations of Service Quality. 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 . Understanding Customer Perceptions of Service.

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

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. 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. allowing it to implement and deliver new services rapidly. Inappropriate Physical Evidence and Services cape. payment collection centers. 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.  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 .

 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. efficient total customer experience processes  Optimization of business processes and infrastructure through flexible. The scorching growth of Bharti Airtel‟s customer base. 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.infrastructure. Its new platform provides a standardized framework for Bharti Airtel to integrate its channels and customer-facing processes – enabling a more seamless customer experience. higher customer satisfaction and more profitable growth. and having the flexibility to continually improve the customer experience.”  Key Benefits:  Ability to process 1. and 30 | P a g e Bharti Airtel to avoid major increases in . The new strategy is all about delivering a truly differentiated experience. 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. 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.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.

but today it provides more than 18 channels of 10Gbps services. These operators have recently been awarded licenses and are under government-imposed deadlines to roll out their services.  TELLABS . Bharti Airtel has been able to post an operating cash flow margin of 40 percent. making its IT costs more predictable and manageable. and. 31 | P a g e . a full five percentage points higher than the rest of the industry. thereby increasing the number of kilometers deployed significantly.  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. Bharti Airtel‟s innovation efforts have resulted in much external recognition.the ability of its business processes to keep up with this growth. help desk services and the ongoing management of Bharti Airtel‟s IT environment.  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.  The network was initially provisioned with two wavelengths of 10 Gbps each. in the process. while at the same time continuously improving service quality and reliability.  Results:  Two years into the agreement. and our billing cycles from 15 days to two hours  Long distance bandwidth services have been witnessing healthy  growth in the last few years. illustrates the success of this strategy.  In the face of declining average revenue per customer in India.  IBM Strategic Outsourcing provides installation services. a highlight of which was receiving the 2006 NASSCOM IT & Innovation Award from the Honorable Prime Minister of India.A VALUED SUPPLIER:  Ability to bring activation from four days to two hours.

attitude and skills assessment. OFFER OF THE DAY STRATEGIES. 100% BILL ACCURACY GUARANTEE.  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. 32 | P a g e .  RETENTION PLANS. Maximum Uptime: Airtel and Tellabs planning teams have worked together to make architectural changes in the optical network to achieve enhanced network resiliency.  Establishing and implementing objective recruitment tools such as online tests based on psychometric profile.  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.  Employee Engagement and Development  Offering “Study while Work” Programs  Setting benchmarks in Employee reward and recognitions  Developing Role Competency Matrix. LOYALTY PLANS.

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

golf tournaments  TV shows like Big Boss. Sales promotion  Friendz prepaid plan  Ladies special plan  Senior citizen plan  Publicity and events:  Delhi marathon. 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 .

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

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

and the mobile communications penetration rate is about 41. with low positioning indicating large potential of African telecom market.4%. In 2010. African telecom market has broad prospects. 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. Mobile signals only cover 60% of Africa South of the Sahara. the terms on which old licenses are renewed and corruptly awarded ones relinquished (if at all). Africa: The Next Growth Engine Africa had a late start in the telecom field.1.9% to 333 million. the mobile subscribers in Africa increased by 12. Despite the fast 37 | P a g e . the fixed-line business is far less developed than the mobile business in Africa. the African population exceeds 1 billion. Compared with other regions. while the internet subscribers approximated 77 million. Due to the geographical climate and political pattern of Africa. LEVERAGING UNIQUE BUSINESS MODEL & EXPERIENCE OF MARKET DEVELOPMENT IN AFRICA With Indian market getting highly competitive with new entrants resulting price-wars. lower ARPU and unclear government policy on variety of issues like the fees on existing spectrum.

8 20.3% (FY 10-FY15) – broadly the midpoint of expectation (5-16%) for large African peers (MTN.4 24.092.32 8.40 224. The US$5 bn revenue target implies a CAGR of 11. We believe its strategy is to grow the business largely in line with the industry.094.237.growth in recent years which saw total mobile subscribers increasing at a CAGR of approximately 22.60 136.736. while taking EBITDA margins to the levels of other African peers.2 2011E 612.133. targets for this business are not aggressive. Lack of significant revenue market share gain also implies capex could remain low.04 168.21 390. any divergence in growth could be largely a reflection of the players‟ geographical diversity.007.827.96 12.241.022.999. Year Revenue (Rs mn) EBITDA (Rs mn) EBIT (Rs mn) Net income (Rs mn) EPS (Rs) P/E (x) ROE 2010A 418.3 2105E 1.843.68 242.00 91.00 167. However.16 14 25.6 44.604.104.16 281.721.30 35.70 171.2 percent during the last six years. margins of 40% could be achieved by 2013.4 38 | P a g e .801.051.47 38.89 453. Further.472.633.6 20. the teledensity is still 52% with huge variation in the region.464.90 111.00 104.00 24.072.44 145.45 7.302.88 9.348.60 63.4 2012E 728.22 44.3 2014E 976.247. Millicom and Vodacom).60 348.50 284.804.50 216. FINANCIAL FORECASTS FOR THE COMPANY IN AFRICA Based on our analysis of Bharti‟s Africa operations.90 26.30 16.7 2013E 842. if Bharti can bring its SG&A expenses (39% of revenue) to a level similar to its African peers (24-26%).8 38.1 14.638.90 102.

39 | P a g e . REASONS TO SUPPORT THIS STRATEGY ARE: Increasing rural share of mobile telephony Share of Rural areas in total subscription has increased.9 million rural users as compared to 188 million users in urban areas. It is now at 218. The company will have to develop treasury management services to hedge foreign exchange risks. As it tries to expand into markets beyond Indian borders it will have to evolve into a true MNC. The HR of the company will have to start developing capabilities for handling a multi-cultural and multi-ethnic workforce spread over different countries. 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.EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS  Marketing: Airtel is a home grown company with the experience of marketing only within India. 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 training resources will have to ensure the core values of the company are engrained into the new employees.   2. 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. 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. Finance: The finance function will get more complex as more revenue start coming from other countries. Very recently the rural subscriber base in India has overtaken the urban mobile subscriber base. At the same time the regulatory compliance will become more complex owing to different rules in countries. But with a right approach and strategy this untapped market can be tapped and used to increase the ARPU. 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.

introduction of newer billing schemes such as per-second billing and the focus towards rural markets. Rural Google. which stood at Rs. 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.Declining ARPU India has one of the lowest Average Revenue per User (ARPU) in the world. 40 | P a g e . 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. it should position its product/service as a social cause in turn generating revenues. It may act as a window to the whole new world and can get him in touch with almost everything in this world. Although lower ARPU does indicate decrease in revenue for network operators. ARPU in isolation is not necessarily an ironclad investigation. The feasibility for these products was tested in the rural markets of UP West and was accepted by rural segment.Roogle A dedicated service for rural people. it is hardly a sole cause for operators unable to build returns. Since Airtel has a very strong Brand Equity and is able to connect with the Indian mentality. it is similar to Google but user friendly for rural people in their own local language. if known to him he may be referred to a portal where he can say or enter his query to find the desired result. 110 for GSM networks and Rs. The main reasons for low ARPUs for the mobile operators are increasing competition from new entrants. 73 for CDMA networks as of September 2010.

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

53 20.37 18.128.86 65153.50 7. 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. It would have to work on its distribution strategies to reach last mile.18 15421. 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.27 22.80 38.06 9202.05 EFFECT OF THIS STRATEGY ON THE FUNCTIONAL DEPARTMENTS  Finance: Considering the financial aspect.563.70 12.427.07 8.21 Mar'14E Mar'15E Mar'12E Mar'13E 43. 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 .90 24.593. it will not only help in increasing market share but also brand building.35 65554.Year Sales Turnover Total Income PBDT Net Profit Gross Profit Margin(%) Net Profit Margin(%) Mar '11E 38.66 14.919.74 18408.70 49841.  Human Resources: The department has to tap the right person for the right job.575 10049.716.99 56985.79 17.  Marketing: With Airtel penetrating in the rural markets.015.15 19. It can capture the untapped market potential.84 21. All these efforts will help Airtel to establish an image so that the rural people can always connect a mobile phone with Airtel.22 20.64 49921.11 57206.115.76 43.30 19.51 16848.57 17.46 10974.

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

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 . we have amongst the youngest average age population in the world! Airtel has a strong brand name and brand loyalty.especially in India. is always going to have a new crop of target audience/market. TRAI‟s latest figures also put Airtel at the top of the chart for number of active users. after all.