PROJECT REPORT

On

STRATEGIC ANALYSIS OF BHARTI AIRTEL

Section: Q1531 Course Code: MGN502

Submitted by

Registration Roll
Number Name Number
11510921 Babina Gupta RQ1531B37
11510934 Ravi Kumar RQ1531B38
11510947 MD Khalid Ekram RQ1531B39
11510948 Equbal Mahboob RQ1531B40

Submited to:
Dr. Mridula Mishra
Lovely Faculty of Business and Arts

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 INTRODUCTION

Bharti Airtel Limited is Indian multinational telecommunications services

company Incorporated on 7 July 1995, headquartered in Bharti Crescent, 1, Nelson
Mandela Road, New Delhi in India. It business in 20 countries Like South Asia,
Africa, and the Channel Islands. In India, the company's product offerings include
2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed
DSL broadband, IPTV, DTH. Bharti Airtel is largest cellular service provider in
India, with 229 million subscribers as of May 2015.Airtel is the largest mobile
operator in South Asia and the fourth largest in the world with a 307 million
subscriber base. Aortal was named India's second most valuable brand in the first
ever Brandz ranking by Millward Brown and WPP plc... Bharti Airtel services
under the Airtel brand and is governed by Sunil Bharti Mittal. Airtel is the 1st
Indian telecom company to achieve Cisco Gold Certification. Bharti Airtel have
done lot of work to achieve this certification. services, supports and customers
satisfaction set by Cisco. Airtel is the first mobile phone company in the world to
outsource everything except sales marketing and finance. Its networks (base
stations, microwave links, etc.) is maintained by many companies like Nokia,
Ericssion Siemens Network Huawei. Airtel business support by IBM and
transmission towers by company like Bharti Infratel Ltd..The company also
provides land-line telephone services and broadband Internet access (DSL) in over
96 cities in India. It also acts as a carrier for national and international long
distance communication services. The company has a submarine cable landing
station at Chennai, which connects the submarine cable connecting Chennai and
Singapore. Airtel is listed in Bombay Stock exchange Limited (BSE) and National
Stock Exchange of India Limited (NSE).

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 The company structured into diffrent strategic business units - Mobile, Digital
Tv, Telemedia, Enterprise. Telemedia business provides broadband & phone
services in 89 cities.Digital Tv business provides DTH Tv services in India. The
Enterprise business gives end to end telecom solution to corporate customer and
national and international long distance services to Telco’s.

STRATEGIC BUSINESS UNIT OF AIRTEL

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 Digital TV Services

“Airtel Digital TV” service Launched in October 2008 as fifth operator providing
Direct-to-Home (DTH) services in India

First Company in India which provides real integration of all the three screens ex.
mobile, television and computer enabling our customers to record their favourite
Television programs through mobile and web

Subscriber base is 10.142 million subscribers.

Digital TV service Present across 639 districts in India.

Airtel Digital TV offers 470 channels including 30 HD channels, four international

channels and three interactive services.

Airtel Digital TV offers High Definition (HD) Set Top Boxes and Digital TV
Recorders with 3D capabilities delivering superior customer experience

Key Performance Indicators (Q1FY16)

Average ARPU of Rs 222 per month for quarter ended June 30, 2015.

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 BUSINESS PARTNERS

Outsourcing Deals Vendors/Partners Features/Advantages

Network outsourcing & Ericssion Ease in network planning
maintenance
Nokia Siemens network Payments Linked to

-Usage & Network quality

- Service level agreement

Informational technology IBM Pricing & payment as a %
of Revenue
Passive infrastructure Bharti Infratel Reduced capex spend

Indus Towers Increase focus on sharing

passive Infrastructure
Call center outsourcing Aegis BPO Enhanced & Consistent
customer experience
IBM
Common platform across
Mphasis
the group
Hinduja TMT

Nortel

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 Partners Role

Service Partners/Vendors Role

Mobile services Ericission & Nokia Network Equipments
partners
IBM Daksh

Mphasis
Call center operations
Hinduja TMT

Tele tech
Telemedia & Enterprise Siemens Equipments suppliers
services
Nortel
IT requirements IBM Group wide technology
requirements

Call center technology

Nortel
requirements

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 ORGANISATION STRUCTURE

(Airtel.co.in)

COMPETITORS

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 • Airtel is the leader in mobile services in India.

• Other competitors along with the market share has been shown in the
chart below.

BSNL, VODAFONE, RELIANCE, IDEA, AIRCEL

SUBSCRIBER GROWTH

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 www.trai.gov.in

PORTER’s 5 Forces Analysis

Porter's five forces is a framework for industry analysis and business strategy
development formed by Michael Porter of Harvard Business School in year 1979.

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It can be used to assess the attractiveness and market potential of a branch by
evaluating the five important forces that determine competitive power in a business
situation.
(Strategic Management Theory: An Integrated Approach by Charles Hill, Gareth Jones)

5-FORCE MODEL

1. The intensity of rivalry among established companies within an

industry

Airtel has strong competitor like BSNL, IDEA, RELIANCE, HUTCH

(Vodafone). Initially, it had only fewer competitors but now this figure has
crossed to more than ten. Many New companies are now in Market like
Aircel, Tata Docomo,Videocon,Vodafone,Spice,Bpl,Tata Cdma All these
companies are providing same services with the same capabilities and
companies like Aircel,Tata,Reliance is providing at less rate.Operators
increased its investment in last few years, they working hard to expand its
network. The presence of strong competitors is major threat for its
successful survival.
Price war is really very fierce in telecom industry. Price war in this industry
has commoditized the market that branding has taken a backseat. New
operators reducing their costs to get better position in the

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 market and in turn the big players like Airtel, Vodafone also have to compete
by introducing low tariff plans.

http://telecomtalk.info/trai-releases-telecom-subscription-data-airtel-continues-to-lead-
the-market-as-of- ( feb-2015/133904/)

2. The Risk Of entry by potential Competitors.

Current telecom technologies need heavy investment so chances of success

for new operators are less, But it is seen that few new operators like Tata
Docomo, Aircel growing fastly and the growth is higher than the top
companies.
The most common forms of entry barriers, except intrinsic physical or legal
obstacles, are as follows:

 Distribution channels: These Channels providing a major determining factor.

Distribution
 Channels are not loyal to any company. Competitors can easily access them
and make out
 Work for them.
 Economies of scale: In these type of industries the economies of scale exists
from the supplier side. Companies try to increase their subscriber base at
drastic rate.
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 Huge licence fee and high gestation period reduces the threat of new entrant
and discourages investment in the telecom sector.
 Limited Spectrum: Again leads to high licence fee also restrict new players
from entering into the market.
 Efficient Infrastructure and rapidly changing technology is the major factor
which stops new player to enter into the telecom sector.
 New entrants are ready to enter huge capital considering the attractiveness of
the market.
 Increase in FDI limits to 100 %( http://www.dot.gov.in/investment-
promotion/fdi-policy-telecom) is bringing competition from foreign players.
Huge investments are being made by the foreign companies to setup better
infrastructure and getting latest technology into the country.
 MOBILE NUMBER PORTABILITY (MNP): Customer switching cost is
very low, as cost of new connection is really low. And new connection offers
more benefits to the customers.

3. The bargaining power of buyers

Subscriber is not purchase in bulk but still can easily go for better quality,
coverage and rates. Subscribers’ position is strong. Airtel is the leading
operator in number of subscribers. However, in term of net additions during
the quarter (April 2015 to June 2015), Idea recorded the highest growth,
Airtel is at 2nd position,
The following points influence the power of buyer:
 Lack of differentiation among the service provider: As phone and data
service does not vary much regardless of which companies are selling
them.
 Cut throat competition: Increase in new foreign and domestic
companies. Buyer is getting benefit everywhere due to price war
amongst the companies.
 Customer is price sensitive: High level of competition among the
companies, Every companies is offering low tariffs with best services

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  MOBILE NUMBER PORTABILITY: cost of changing is less from
one operator to other without changing their number (Nation Wide
MNP).
 Companies providing various Schemes for new connections.
 Availability of many companies in a state.

4. The bargaining power of suppliers

The advantage and disadvantage to all service providers is equal that may be
in human resource or products.

Large number of suppliers (Call centre outsourcing): The industry has

large number of suppliers like Aegis, Mphasis, IBM, and Hinduja, a lot of
option. They try to choose the best option to deliver the value to the
customers and to have a competitive advantage from their competitor.
Shared tower infrastructure: Technology has helped them to share the tower
infrastructure. This basically helps them to reduce the initial investment a
lot. (Bharti infratel, Indus tower)
Need of good engineers for research, for that they have to give high salary
because of this reason companies does not hire more skilled
engineers, which put the companies into weaker side.

5. The closeness of substitutes to an industry’s products.

Substitute Products are easily available .These products is a great threat for
established companies. Because of substitute goods companies have to decline
their rates.

The substitutes for telecom industries are as follows:

Products and services from non-traditional telecom industries is serious

substitution threats. Cable Tv and Satellite operators now compete for buyers. The
cable companies, with their own direct lines into homes, offer broadband services,
and satellite links can substitute for high-speed business networking needs.
Wireless phones getting cheaper year by year over the last decade.
Video conferencing, Skype, Gtalk, Yahoo messenger, Whatsapp, Way2sms.com
from these websites or app anyone can easily talk anywhere in the world with
the help of Internet.

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Talking through internet is very much cheaper as compare to calling from phone.

.
PORTER’s 5 Forces
FORCES HIGH MEDIUM LOW

Intensity of Competition √

Threats of new entry √

Bargaining power of customers √

Bargaining Power of Suppliers √

Threats Of Substitutes √

Table: Analysis of Porter’s Five Forces

SWOT ANALYSIS
SWOT (Strengths, Weaknesses, Opportunities, and Threats ) is a framework for
identifying and analyzing the internal and external factors that can have an impact
on the viability of a project, product, place or person.

His framework is credited to Albert Humphrey, who tested the approach in 1960s
and 1970s at the Stanford Research Institute (SRI). Developed for business and
based on data from Fortune 500 companies, the SWOT analysis has been adopted
by organizations of all types as an aid to making decisions.
(http://searchcio.techtarget.com/definition/SWOT-analysis-strengths-weaknesses-opportunities-and-threats-
analysis)

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 http://timgarrattnottingham.co.uk/

STRENGHT

i. Biggest mobile service provider in India and third largest in the

world: Mobile phone subscribers are Increasing subscriber day by day.
Highest number of subscriber in India around 229 million .It covers
around 24% of total subscribers in India.

ii. Good Infrastructure: As we all know that Airtel is the oldest telecom
company, so the numbers of towers is high, is available all over the
country, this the big advantage of Airtel. For new technology or
increasing capacity at that times requires software and minimum
hardware up gradation.

iii. Good Brand image: Airtel in India is a Big Brand. Airtel is doing
advertisement through television, prints and others form of advertising
mostly all parts of the India. Various celebrities endorse Airtel.
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 iv. Good Network and reliable: Airtel (along with Vodafone) have one
of the best mobile networks in India. Airtel offer high quality of
services as compare to other companies.

v. Strategic Alliance with other stakeholders in Bharti Airtel includes

Nokia, Erission and Microsoft.

vi. Financial position of Bharti Airtel is too Strong.

WEAKNESS

1. High competition in the Market: As we all know that in India number of

telecom companies is increasing, there are more than 10 companies available
in India. These companies are providing cheaper rate tariff and all others
plans. This is affecting Airtel Market.

2. Debt: According to Current financial report of Airtel, there is

lot of borrowing, How can Airtel pay this debt, this is the
Question?

3. Late starting of 3G and wireless technologies: Due to various political

issues, regulatory problems and delayed spectrum auction .Airtel were late
to start 3G services. 3G services launched by Airtel in early 2011. The tariffs
were high as compare to 2G, speeds were not so good and customer
acceptance of 3G was too slow. The company don’t have nationwide 3G
license. 3G Services available in 13 out of 22 telecom service areas.
Airtel’s(4G) network for mobile broadband is staring only in four cities in
India.

OPPURTUNITIES

 Untapped voice market: Despite of many customers in India, hundreds of

millions people are without phone. According to TRAI around 12% of total
connection in India is inactive. Airtel have to make strategy for this type of
customers.
 Revenue from 3G service: As per the Data only 5% revenue generate from
3G, Airtel have to work on this issue, and increase their revenue from 3G.

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  LTE (4G): Whole world is moving towards LTE. Airtel service is going to
start in 4 cities, Airtel have to make good strategy for this segment.
THREATS

 SPECTRUM AUCTION: TRAI and Government of India kept too high

reserve price for 3g and LTE service. Airtel has spent 123 billion rupees for
3g services and their return is very slow. Bharti Airtel has acquired 111.6
MHz of spectrum across 900 MHz, 1800 MHz and 2100 MHz bands for a
total consideration of Rs 29,130 crore in the just concluded spectrum
auction. Of this, Rs 17,618 crore has been spent on renewal of existing
spectrum, while the remaining Rs 11,512 crore has been spent on procuring
new spectrum.( http://www.medianama.com/2015/03/223-telecom-spectrum-auction-results/)
 Mobile Number Portability : MNP gives independence to customer to
change the service provider while retaining the same number within the
country. With similar tariffs across various telecom and satisfaction with the
current service provider consumers are willing to change. The larger
operators like Airtel, Vodafone are losing many customers to the newer
companies who attract these customers with their offer.
 Intense Competition: In the Telecom market is biggest threat for Bharti
Airtel, as other companies are providing very cheap tariff as compare to
Airtel, so people are switching to other companies.

SWOT ANALYSIS

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STRENGTH WEAKNESS

- Biggest Mobile Service In India - High competition

- Good Brand Image - High Debt

- Good Infrastructure - Late adaptation of new

technology
- Good Network & Reliable

- Good Financial Position

OPPORTUNITIES THREAT

- Untapped Voice market - Spectrum Auction

- Generate Revenue from 3G - Mobile Number Portability

- Introduction of LTE (4G) - Intense Competition

(Swot analysis of Bharti Airtel)

PEST Analysis of Bharti Airtel Limited

PEST stand for Political, Economic, Social and Technological. This analysis is
used to assess these four external factors in relation to your business situation.

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Basically, a PEST analysis helps you determine how these factors will affect the
performance and activities of your business in the long-term.
(http://pestleanalysis.com/pest-analysis/)

Political

Government of India hike the FDI limits 49 to 100 in telecom industries, this
increase the competition, due to increase in FDI.

Mobile number portability increases the competition in the telecom industries.

Customer can switch to any companies according to their choice.

Lack of transparency in spectrum and license allocation; there was a 2G spectrum

scam .there is lack of transparency, political party take lots of bribes.

ECONOMICAL

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In telecom budget 2015(http://economictimes.indiatimes.com/), raw materials for the
manufacture of electronic hardware exempted from excise duty, which lowers the
price of network equipment it gives benefit to major mobile services provider.
Airtel can expand network coverage to rural areas at cheaper cost.

Tariff rate is declining from the year 2002. Indian Government announced per
second tariff for the subscriber along with the per minute tariff plan. Per second
plan is not beneficial for the operators. This could reduce the revenue from 10-
15%.companies are struggling with the low Average Revenue Per user (ARPUs)
because of high taxes (30 % of the gross revenue earned by companies goes as
various taxes), levied by government will now struggle more with this new plan.
To overcome this Airtel launched per minute plans and per second plan. As most
of the customers make long duration calls so, per second call could not be
beneficent for them with the new per min. plan.

The Indian mobile economy is growing rapidly and will contribute approximately
US$ 400 billion to India’s gross domestic product (GDP), according to report
prepared by GSMA in collaboration with BCG.

The total mobile services market revenue in India will reach US$ 29.8 billion in
2014 and is expected to touch US$ 37 billion in 2017, registering a compound
annual growth rate (CAGR) of 5.2 per cent, according to research firm IDC.

It is also considered to be one of the major sectors which provide direct

employment which indirectly helps in economic growth of India.

Social factor

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Due to Family bonding in Indian culture, people always connected with their
family members and relatives and friend. In India family bonding is very high.

Tech generation: This generation is tech based generation, most of the new
generation people used mobile phone. Introduction of social sites like Facebook,
Twitter, Whatsapp that makes new generation to stick to the mobile.

Status symbol: In 21st Era mobile phone is a status symbol. People use different
types of mobile now a day. Mobile market is rapidly increase due to this consumer
of Telecom Company is also increasing.

Technology factor

Increase in FDI(foreign direct Investment): FDI limit benefited inflow of latest

technologies with improved infrastructure.AIRTEL is well established with best
infrastructure so it can provide best services to the customers of urban and can
expand its network in rural areas.

Introduction of MNP: mobile number portability allows the customer to retain their
number, even switching of companies and circles. Subscribers can switch to
another company if they are not satisfied with the existing company.

Introduction of 3G and LTE services: as the 3G and 4G service introduce data

transmission capacity increases. Airtel already qualified for the bid for 4G service.
Airtel is the 1st company in India to start 4G (LTE) services.

First cellular service who provide roaming service and value added services.

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 BCG MATTRIX

BCG is based on product life cycle theory that is used to explain how different
products should be prioritized in a company’s portfolio. BCG has two dimensions,
market growth and market share. These dimensions are used to create a quadrant
matrix in which all the products of a company’s product portfolio are categorized
into four categories. BCG analysis helps avoid a strategy mistake made frequently
that is of measuring the performance of different products on the basis of a single
criteria like, Generic growth rate. Framework assumes that an increase in relative
market share will result in an increase in generation of cash.

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STARS

High growth product which have a large market share in concern industries. In case
of Airtel Communications its mobile services can be called stars because they have
high share of 23% of the market which growing @ 9.6%.18% of total revenues
contributed by this only.

CASH COWS

Products that are leaders in markets and which are growing slowly but the
company has a large share in the market. As a result these types of products
generate large amounts of revenue. Because of the slow rate of growth of the
market investments in this products should be kept low. These are the foundation
of a company and provide cash required to turn question marks into market leader.
Airtel cellular services are growing at 5.35% monthly, are the cash cow which
form the foundation of Airtel.

DOGS

Products in which the company has very small share in slow growing market. As a
result their contribution to revenues is limited and they can turn into cash traps.
Because of money tied up in a business which has limited potential. Therefore the
company should be beware of expensive plans and should try to divest in these
products. In case of Bharti Airtel its fixed line services can be called the dog for the
company.

QUESTION MARKS
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This type of product growing fastly and consume large amounts of money. They
have a low market share they do not generate more cash. But if good measures are
not taken to increase the market share they come into dogs after years of cash
consumption. The company should aim at investing more to increase market share
or sell to generate whatever cash it can. In case of Airtel there are many products
which can be into question marks category for example Direct To Home,
Broadband.

A major limitation of question mark is that it assumes market growth rate the only
factor of industry attractiveness and relative market share to be the only indicator
of competitive advantage. Therefore it ignores the strategy where a business might
use a “dog” to gain a competitive advantage in other business units.

RECOMMENDATION

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  Airtel perceived as the common man’s phone. Airtel needs to come out
of the mid-segment trap by catering to the high end subscribers who
bring in larger ARPU (Average Revenue per User).
 It is highly important to retain customer because there are lot of
competition in telecom sector and other companies providing low tariff.
 3G Expansion: The 3G services are currently being offered in not all the
cities. They should be extended to other cities/towns as well
 4G Introduction: Target the upper segment customers. These customers
are looking forward for high speed data availability.
 With increasing in number of telecom companies, existing subscribers
will be move to an operator offering best and cheap service, it is highly
recommended that Bharti Airtel pulls up its socks and improves its
service quality which is not good in certain areas ex, network coverage
and billing.
 Bharti Airtel has the most extensive private network in the country and
needs to be on its position by improving its standards and living up to
its famous brand name
 There is a huge demand for telecommunication services in rural areas.68
percent subscribers are from urban areas and only 32 percent from rural
areas. So the chance of growth is more in rural areas. Expansion of
services needed in rural areas.

CONCLUSION
Airtel have done a good job by improving their core competencies.

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Airtel is working on their research and development. This is the main reason he is
on the top position.

Airtel is the first Player to enter into 4G market, so Airtel have to take the
advantage.

Airtel have to Focus over the rural areas and expend the business in rural areas.

Any business they should have vision, mission, objective and organizational
structure. For cover the all of Criteria Company need to make or build up a
strategic decision by which they can reach in their main goal point. Company
should maintain all major process also the others factors.

With this view Bharti Airtel is continuously working in,There are several
competitors like Reliance,Airtel,Vodafone already in the market with the similar
Game Plan. This project gives the conclusion that with the changing economic and
political scenario telecom sector faces many ups and downs. In order to maintain
the 1stposition Bharti Airtel needs to follow some different strategy.
The project has given the clear cut vision as to how change strategy from other
competitors an how to use the strong point and convert the weak point of other
company as an opportunity

“Refine your processes, strive for dominance and build a brand”

MR. Sunil Bharti Mittal

REFERENCES

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• www.trai.gov.in

• www.airtel.in

• www.wikipedia.com/airtel/

• www.google.com

• http://economictimes.indiatimes.com

• BOOK: Strategic Management Theory: An Integrated Approach by Charles

Hill, Gareth Jones

• http://telecomtalk.info/trai-releases-telecom-subscription-data-airtel-
continues-to-lead-the-market-as-of-feb-2015/133904/

• www.airtel-broadband.com

• http://www.foodtech-portal.eu/index.php?title=Porter_five_forces_analysis

• http://www.dot.gov.in/investment-promotion/fdi-policy-telecom

• http://www.televisionpost.com/dth/airtel-digital-tv-q1-arpu-touches-new-
high-ebitda-up-15-9-qoq/ | TelevisionPost.com

• Quickmba.com

• www.investopedia.com/terms/a/arpu.asp

• http://pestleanalysis.com/pest-analysis/

• http://searchcio.techtarget.com

• http://www.medianama.com/2015/03/223-telecom-spectrum-auction-
results/

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