A PROJECT REPORT on FUNDAMENTALS OF BHARTI AITREL Submitted by

DHAVAL SHAH
in partial fulfillment for the award of the degree of

POST GRADUATE DIPLOMA IN MANAGEMENT
Under the guidance of

PROF.ADITI MAHAJAN

THAKUR INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH KANDIVALI EAST MUMBAI

Thakur Institute of Management Studies and Research

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ACKNOWLE DGEMENT
In this project I have made an honest and dedicated attempt to make the research material as authentic as it could. And I earnestly hope that it provides useful and workable information and knowledge to any person reading it.
During this small time frame of two months in which the project reached its completion, there were a few people whom I would like to make a mention of and without whose help the project would have never seen the light of the day.. I would like to thank my external guide Mr. Amit Kadam and Mr Chandrakant Purab who gave me a free hand as far as going about the project work was concerned.

Dhaval. B. Shah PGDM (Finance) 2009 - 2011

Thakur Institute of Management Studies and Research

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EXECUTIVE SUMMARY
I did my summer project form Sykes & Ray Equities (I) Ltd. An attempt was to study the telecom sector and select a company which was one of the best among the sector on the basis of subscribers base and revenues and based on the fundamentals. In this two months summer training i got a lot of experience about the fundamental research of an equity and also as to how a script reacts to the news in the market. After the summer project I feel very energetic and enthusiastic as every part of it is filled with experience and learning. My summer internship project has increased my confidence level and made me understood how professional life has to be maintained. Punctuality, sincerity and commitment towards work can bring u success is among the important aspects is what all I have learned in these two months about my work.

Thakur Institute of Management Studies and Research

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TABLE OF CONTENTS

TOPIC Introduction about Sykes & Rays (I) Ltd 6 Indian telecom Sector 7 TRAI 11 Present scenario of telecom Operators 12 Financials and share price data of telecom companies 13 Future prospects of telecom industry in India 14 Graphical representation of share prices 15 Wide look on India’s 3G auctions 17 Telecom Sector and Union Budget 18 Porters five forces model on Indian Telecom Sector 19 SWOT analysis of Telecom Sector 23 Introduction to Bharti Airtel 24 Telecom Statistics, April, 2010 27
Thakur Institute of Management Studies and Research

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to win their confidence. install hope in the market and expanded the company into a sizeable retail network Since 1990 SRE has undergone a metamorphosis from being a traditional proprietary concern to a professionally managed company hiring and retaining thorough professionals and market experienced personnel.Key positives and risk associated 29 Basic financials of Bharti Airtel 30 Share price data of Bharti Airtel 32 Mobile Number Portability 33 Bharti Airtel as investment with Mutual Funds 34 SWOT analysis of Bharti Airtel 35 Porters five forces model on Bharti Airtel 36 Future prospects/Strategies 39 References 40 INTRODUCTION ABOUT SYKES & RAY EQUITIES (I) Ltd Sykes & Ray Equities (I) Ltd Sykes & Ray Equities promoted by Mr. client commitment and the values which it uphold and a culture which has been inculcated into it by the inspiring and dynamic leadership of Mr. Sykes & Ray Equities (SRE) went all out reaching out to people. SRE has evolved over a period of time. Thakur Institute of Management Studies and Research Page 5 . So much so that the group has expanded from a handful of dedicated employees in the early 90's to over 150 to date. Yogesh R Gupta and Mr. Anup R Gupta who are the current Chairman and Managing Director. Sykes and Ray Equities (I) Ltd. integrity. Its emergence has happened due to the values of dedication. When the broking fraternity limited its retail activity. (SRE). Anup R Gupta. Yogesh R Gupta and Mr.

Fixed Line and WLL(Wireless Local Loop ). with a combined turnover of more than Rs 45. The company firmly believes the substantial value addition can be made in its services by providing continuous and accurate decision making tools to the investors. Investors are provided with extensive information on markets and company through reviews. The thrust towards Information Technology has made the company among the chosen few to have acquired a trading software through its own network. Our endeavor has been to provide a transparent and systematic front office as well as back office operation The SRE Research desk is one of the most talked about research. INDIAN TELECOM SECTOR The Indian telecommunication industry. Telecom industry in India is specifically emphasizing on latest technologies like GSM (Global System for Mobile Communications).000 crores. with 621 million telephone(landline and mobile) subscribers and 584 million mobile phone connections as of March 2010 is the second largest telecommunication network in the world and the second largest in terms of number of wireless connections in the world. Fixed Service Provider (FSPs) Landline service in India is primarily run by BSNL/MTNL and Reliance Infocomm though there are several other private players too. Telecommunication sector in India is primarily subdivided into two segments. television and Internet.SRE today is one of the foremost retail stock broking service entities on the country's two major exchanges. There has been an expansion. we have successfully launched an NRI Desk. which are :Fixed Service Provider (FSPs) Cellular Services. a widening of its scope. 1. SRE has plans to provide retail investors an alternative investment opportunity through our existing distribution network. Landlines are facing stiff Thakur Institute of Management Studies and Research Page 6 . It has presence in over 100 major centers of India through a network of business associates and branches. market commentary and recommendation. With Mutual Funds and derivatives coming of age. This enables the investor to make informed decisions on the market. radio. Telecom industry in India constitutes some essential telecom services like telephone. SRE has always maintained a Chinese wall between proprietary and client trading. such asTouchtel and Tata Teleservices. CDMA(Code Division Multiple Access). In continuation to the company’s endeavor to provide complete investment services. India has a prospering market specifically in GSM mobile service and the number of subscribers is growing very fast. which assists in clients gaining live access to the two popular exchanges of BSE & NSE and also allow Order/Trade execution. its branches.

Reliance Infocomm. On landlines. In September 2004. intra circle calls are considered local calls while inter circle are considered long distance calls. There are many smaller players. Idea cellular and BSNL/MTNL. For calling Delhi. The rates are supposed to go down further with new measures to be taken by the Information Ministry. The landline network quality has improved and landline connections are now usually available on demand.g. you would dial "00" and the country code+area code+number. 2. The country is divided into multiple zones. called circles (roughly along state boundaries). For long distance calls. in the 900 MHz band. even in high density urban areas. Competition has caused prices to drop and calls across India are one of the cheapest in the world. Thakur Institute of Management Studies and Research Page 7 . The country code for India is 91. Government and several private players run local and long distance telephone services. The mobile service has seen phenomenal growth since 2000. Recent operators also operate in the 1800 MHz band. International roaming agreements exist between most operators and many foreign carriers. you would dial 011-XXXX XXXX). Currently Government is working to integrate the whole country in one telecom circle. The Mobile telecommunications system in India is the second largest in the world and it was thrown open to private players in the 1990s. The competition has forced the landline services to become more efficient. India primarily follows the GSM mobile system. Vodafone. For international calls. The breakup of wireline subscriber base in India as of September 2009 is given below. you dial the area code prefixed with a zero (e. Cellular services.competition from mobile telephones. the number of mobile phone connections have crossed fixed-line connections. with operations in only a few states. The dominant players are Airtel.

306.254(7.261 HFCL Infotel 165.Operator Subscriber base BSNL 28.85%) Reliance Communications 1.978 Teleservices Ltd 95.152.446.928.003.514.237 Tata Teleservices 1.181 All India 37.334 The breakup of wireless subscriber base in India as of December 2009 is given below Thakur Institute of Management Studies and Research Page 8 .969 MTNL 3.454 Bharti Airtel 2.

862 141.741 2.147.214 57.997 4.959 62.Operator Bharti Airtel Reliance Communications Vodafone Essar BSNL Idea Cellular Tata Teleservices Aircel MTNL MTS India Loop Mobile India Uninor HFCL Infotel Stel All India Subscriber base 118.401.449 31.872 57.130 341.031 93.875.042.795.922 Page 9 Thakur Institute of Management Studies and Research .913 3.611.208.411 525.329.730 1.023.864.613 91.861.649.

efficient management of available spectrum. measures for the development of telecommunication technology and any other matter relatable to telecommunication industry in general. iii. Notwithstanding anything contained in the Indian Telegraph Act. vi. The mission of Telecom Regulatory Authority of India (TRAI) is to ensure that the interests of consumers are protected and at the same time to nurture conditions for growth of telecommunications. revocation of license for non-compliance for terms and conditions of license: measures to facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services. 1885. i. technological improvements in the services provided by the service providers. vii. Thakur Institute of Management Studies and Research Page 10 . ensure compliance of terms and conditions of license. xi. regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services. ii. ix.‘’TRAI’’ The Telecom Regulatory Authority of India (Hindi: भारतीय दूरसंचार िविनमयक पािधकरण) or TRAI (established 1997) is the independent regulator established by the Government of India to regulate the telecommunications business in India. viii. levy fees and other charges at such rates and in respect of such services as may be determined by regulations. Perform other such functions as may be entrusted by the Central Govt. terms and conditions of license to a service provider. xiii. x. v. lay down the standards of quality of service to be provided by the service providers and ensure the quality of service and conduct the periodical survey of such service provided by the service providers so as to protect interest of the consumers of telecommunication services. ensure technical compatibility and effective inter-connection between different service providers. broadcasting and cable services in a manner and at a pace which will enable India to play a leading role in the emerging global information society. iv. xii. few of the important functions of the Authority shall be to: need and timing for introduction of new service provider.

16% 0. BSNL 5.65% * Reliance Telecom Ltd (RTL) figures will not be included from the month of April’2010 as the same is not being reported Thakur Institute of Management Studies and Research Page 11 .98% 4.67% 0.77% 1.35% 2.11% 1.26% 100% % Growth Over previous month 2. Below are the major 10 market players which constitute the indian GSM cellular service market…. GSM Opertaor wise % market share – April.87% 2. Vodafone Essar 4.48% 2. 2010.29% 1. AIRCEL 3.PRESENT SCENARIO OF CELLULAR OPERATORS The major players in the market are :1. GSM Operator Bharti Airtel Vodafone Idea Cellular BSNL Aircel Reliance Telecom (RTL)* MTNL Uninor Loop Mobile Stel All India Total Subscriber base 130619487 103755978 65288248 64744985 38469541 16311206 4817670 5021651 2894511 112391 433040658 % Market Share 30.08% 14.77% 1. Idea Cellular Let us have a look at the share of all the GSM operators wit compared to the total subscribers base of india.36% NA 0.69% 17.88% 3.16% 23. Bharti Airtel 2.76% 10.94% 8.96% 15.

28% 15.3041 IDEA 52 91.96% (2009) Idea Cellular 3.80 (21/05/10) 844 (10/01/08) 131.30 14.05 (27/10/08) 1.69 0.88% SHARE PRICE DATA OF THE ABOVE COMPANIES BHARTI AIRTEL CURRENT MKT PRICE 52 WEEK HIGH 52 WEEK LOW ALL TIME HIGH ALL TIME LOW BETA (last 1 yr.35 33.56 3.7051 Thakur Institute of Management Studies and Research Page 12 .23 0.87 43.87% 23.23 11.35 09/03/09) 1.32 (11/02/00) NA 17/02/97 0.0121 TATA COMM 241 602 (25/05/09) 237.04 13.50 (27/11/09) 574.89 0.08% BSNL 1.70 359 (11/06/09) 131.5% monthly increase in the subscribers base FINANCIALS Bharti Airtel EPS RONW ROCE D: E subscribers addition in march ’10 Total market share 40.16% Vodafone (2008) 12.22 4.45 32.60 (21/05/10) 1083.32 9.) 265 (25/05/10) 467 (01/10/03) 229.05 (27/11/09) 161 (18/10/07) 34.64 0.85% 8.33 (10/01/03) 0.36 12.28 44.94% Aircel 29.77% 30.71 1.Bharti Airtel leads the sector in terms of number of subscribers and also in market capitalization.27 17.26% 14.50 (10/10/07) 10.95 8.15 0.17 0.70 (11/06/09) 47.6201 RCOMM 147. The company also has an average growth rate of 2.

8.6 billion which will help govt deal with the rising deficit 9. about 5 – 6 million users added per month. FDI limit increased from 49% to 74% 7. 6. Second largest telecommunication network in the world and the second largest interms of number of wireless connections in the world. Skilled and competitve labour force. 2. and also have won bid for 3G. India among the countries offering highest return on investments. 4. 5. According to CRISIL Research head Manoj Mohta. 3. 3G to roll out the number of subscribers reaching around 850-900 millionby 2014 -2015 increasing by around 12% to 14% 10. Independent judiciary. making india the worlds fastest growing wireless service market. would see a gradual improvement in their profitability margin also. The rural telecom equipment market is also open to large investments. the operators which have the existing 2G spectrum.Future prospects of telecom industry in India : 1. On an average. Worlds largest democracy. Thakur Institute of Management Studies and Research Page 13 . Launch of 3G spectrum in india which filled in governments pockets by USD 3.

A graphical representation of Share Prices of few telecom companies in India Share price of Bharti Airtel since 25/05/09 to 25/05/10 Share price of Idea Celular since 25/05/09 to 25/05/10 Thakur Institute of Management Studies and Research Page 14 .

Share price of Reliance Communications since 25/05/09 to 25/05/10 Share price of Tata Communications since 25/05/09 to 25/05/10 Thakur Institute of Management Studies and Research Page 15 .

Vodafone Essar will paid Rs. The 3G auction had commenced on 9 April.719 crore. Delhi circle emerged the most valuable circle at Rs. No single bidder bid for a pan-India 3G license so state operator BSNL would be remain the biggest 3G operator in India.751 crore which ensures the Government of India a revenue of Rs 67. Among the major bidders. Orissa. followed by Mumbai at Rs.5765 cr for 11 telecom circles. Bihar. The List of 3G Winners (Private Operators ) : • Delhi & NCR: Vodafone. Idea cellular paid nearly Rs. Bharti.93 cr Thakur Institute of Management Studies and Research Page 16 . Reliance Communications at Rs 3316. The government auctioned three slots in 17 telecom service areas and four slots in the remaining five states of Punjab. 2010 and there were nine bidders in the fray for the slots of 3G spectrum on the block.A WIDE LOOK ON INDIA’S 3G AUCTIONS : India’s auction for 3G GSM Service licence ended today with bids for pan-India licence touching Rs 16.3317 crore. while India’s largest 2G Mobile service operator Bharti Airtel paid Rs. Jammu and Kashmir and Himachal Pradesh.3247 crore. 11617 crore for 9 telecom circle while Reliance Commmunication paid Rs 8583 crore for 13 telecom circles.12290 cr for 13 telecom circles.

07 cr Maharashtra & Goa: Tata Com.36 cr Himachal Pradesh :Bharti.Vodafone. Idea at Rs.258.321 cr U.P (East): Aircel. Aircel at Rs. Vodafone. Aircel at Rs.23 cr.4 cr • • • • • • • • • • Rajasthan: Reliance Communications.06 cr Andhra Pradesh: Bharti Airtel. Aircel at Rs.• • • • • • • • • Mumbai: Reliance.3247. Aircel at Rs. 222.98 cr Assam: Reliance. Bihar & Jharkhand : Stel.94 cr Kolkata: Vodafone. Idea. Reliance at Rs.58 cr Madhya Pradesh & Chattishgarh: Idea Cellular. Bharti.30 cr Thakur Institute of Management Studies and Research Page 17 . Vodafone. Aircel at Rs.30 cr Jammu & Kashmir : Idea.1464.46 cr Orissa : Stel.48 cr North East: Aircel. Aircel. Tata Telecommunications.41. Aircel.312. Vodafone.1257.91 cr Tamil Nadu: Bharti. (West): Bharti.82 cr Gujarat: Tata Com.96.14 cr Karnataka: Tata Telecommunication. Aircel at Rs.30. Reliance Communications. Tata Telecommunications at Rs. Tata Telecommunications at Rs.Reliance Telecom.01cr • Haryana: Idea Cellular. Aircel.37. Bharti. Bharti Airtel at Rs. Vodafone at Rs.42.6 cr West Bengal:Bharti.1579.1076. Tata Telecommunications.123.48 cr • Punjab: Idea Cellular.1373. Reliance Communications at Rs.364.544. Bharti. Stel. 514 cr U.Reliance at Rs. Vodafone at Rs. Vodafone at Rs. Idea Cellular. Tata Telecommunications at Rs.26 cr Kerela: Idea cellular. Reliance. Idea cellular. Aircel at Rs. Reliance Communications. Bharti at Rs. Idea cellular. Aircel.P. Idea Cellular.322. Bharti. Tata Telecommunications. Reliance at Rs.203. Reliance at Rs. Bharti.

and launched 3G mobile services in more than 430 cities across India.but the bidding price would be determined by the auction price. The continuation of exemption from basic. a re-look at licenses and indirect taxes As far as the telecom sector is concerned. PORTERS FIVE FORCES MODEL ON TELECOM SECTOR IN INDIA Thakur Institute of Management Studies and Research Page 18 .State telecom operator BSNL and MTNL already received 3G spectrum outside the auction process. but at the same time the increase in MAT from 15% to 18% is a major are of concern. Dua said that while the reduction in Corporate Surcharge would provide a minor relief. components and accessories of mobile phones is a welcome step and would help towards penetration of affordable mobile service especially to rural areas. He further added that the increase in Central excise duty from 8% to 10% is another area of concern and will lead to an increase in cost of service. Telecom Sector and Union Budget 2010: The union Budget 2010-11 neglected the telecom industry's special demands. uniform license fee of one per cent of the AGR. Telcos were looking at a rationalisation of tax and levies. CVD and special additional duties (SAD) granted to their parts. Telcos wanted a re-look at direct tax. COAI welcomed the impetus given by the Finance Minister to the use of clean/ alternate energy. tax holidays and section 81 (A).

there is no dominant firm Little differentiation between competitors products and services A mature industry with very little growth. 1. companies can only grow by stealing customers away from competitors Thakur Institute of Management Studies and Research Page 19 . A highly competitive market might result from: i) ii) iii) Many players of about the same size.Porter’s five forces model uses concepts developed by Industrial Organisation economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Highly cCOMompetitive industries generally earn low returns because the cost of competition is high. COMPETITIVE RIVALRY WITHIN AN THE INDUSTRY This describes the intensity of competition between existing firms in an industry.

Thakur Institute of Management Studies and Research Page 20 . there has been a tough competition between Bharti airtel and Vodafone each having a market share of 30 % and 24% respectively.2. (BSNL and MTNL) ii) Private Indian players. This is how much pressure customers can place on a business. At present has a subscribers base of above 6. Tata comm. Both are again in the race to start with the 3G services and cater it all across India and give a tough competition to BSNL who is already in the market.47. Idea cellular. Bharti Airtel) iii) Foreign invested companies. If one customer has a large enough impact to affect a company's margins and volumes. Let us talk about the current scenario. Idea cellular) There has been a stiff competition in the telecom market market over a period of time. BSNL is BSNL dedicatedly performing its work as it drives India into the next league of telecom supremacy by providing technologically advanced services to its discerning customers at an affordable cost On the private side. (vodafone.44. Even the growth rate of both the companies for the month of April when compared with March is around +/.985 with a market share of aprox. 15%. Here are a few reasons that customers might have power: i) ii) iii) Small number of buyers Purchases large volumes Customers are price sensitive.5% . then the customer hold substantial power. BARGAINING POWER OF CUSTOMERS. Reliance comm and Aircel are also in the race as they lack in the infrastructure when compared with Vodafone and Bharti Airtel 1.There are majorly 3 types of players in the industry… i) State owned players. (Reliance comm. BSNL has an edge over private players as it has already started with 3G specturm services across India.

Karbon. Here are a few reasons that suppliers might have power: i) ii) iii) iv) There are very few suppliers of a particular product a. etc. The easier it is for new companies to enter the industry. The major booster is the wireless mobile subscribers which have crossed 433 million. We are trying to analyze that minor role. Reliance Classic.can't do without it The supplying industry has a higher profitability than the buying industry As far as telecom industry is concerned there are very few suppliers in the market. Mobile handset suppliers : There are many handset suppliers in the market.2010 by a whooping 11 mn. There are no substitutes Switching to another (competitive) product is very costly The product is extremely important to buyers . 2. service providers are the major drivers. Wipro. etc. 2. where suppliers can have edge over. Satyam etc.Indian telecom industry is one of the fastest growing or second largest in the world.2010.Motorola. the more cutthroat competition there will be. BARGAINING POWER OF SUPPLIERS This is how much pressure suppliers can place on a business. Some examples include: i) ii) iii) Existing loyalty to major brands High fixed costs Scarcity of resources Thakur Institute of Management Studies and Research Page 21 . Sony Ericsson. Again one thing is noticable that big giants like Reliance and Tata have their own software solution departments 3. THREAT TO NEW ENTRANTS. Other important parameter in this can be the software assistance. Tata Indicom. Factors that can limit the threat of new entrants are known as barriers to entry. In this industry. some of them are Nokia. Infosys. then it holds substantial power. Micromax. So the role of suppliers is almost negligible in the industry. Samsung. If one supplier has a large enough impact to affect a company's margins and volumes. The major software providers are TCS. It is expected to grow more after the 3G sevices starting of from sep1. Some other suppliers in the industry are the suppliers of Optical fibre and Aluminium. Few of the new entrants are Spice. 1. There has been a major increase in subscribers in the month of April.

video conferencing etc.. internet. a coffee drinker may switch over to a beverage like tea. which poses a major threat to the companies. Today the difference in the price of the of two products is marginal.iv) v) High costs of switching companies Government restrictions or legislation The Indian telecom sector offers unprecedented oppurtunities for foreign companies in various areas such as 3G. Virtual Private Network. Thakur Institute of Management Studies and Research Page 22 . I) There is a cut throat competition and a price war for the tariffs of the service provider. there are consumers who are ready to change their service providers for a reduction in the tariffs. etc. then this poses a serious threat. the option of substitutes for the consumer is never ending. The market is witnessing M&A like the Bharti – Zain. international long distance calls. 4. STRENGTHS : Strong mobile subscribers growth is continuing. This sector also attracts FDI which has made it the third largest sector attracting FDI in the post liberalization era. SWOT ANALSIS OF TELECOM SECTOR. it can be viewed in the same light as a new entrant. SUBSTITUTE TO PRODUCT What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low. Also with the availaibility of additional services like GPRS. In todays scenario. II) If substitutes are similar. Here are a few factors that can affect the threat of substitutes: The main issue is the similarity of substitutes. with the market benefiting from healthy degree of competition. which are leading to consolidations in the industry. value added services. For example. if the price of coffee rises substantially.

THREATS : Government plans to increase spectrum usage charges for telecom companies. FUNDAMENTALS OF BHARTI AIRTEL Introduction to Bharti Airtel The name of the company is Bharti Airtel It belongs to the Telecommunications industry Thakur Institute of Management Studies and Research Page 23 . Japan’s NTT DoCoMo and Russia’s Sistema. Network capacity. There is an oppurtunity to cover the vast untapped rural market. Etisalat from UAE. Vodafone from U. The government wil cut license fees upto 33% for those operators whose service covers 95% of the residential area in a calling circle. Demand for mobile Value Added Services is strong and expected to grow. particularly in the mobile market.The mobile market plays host to a large number of strateic investors including Singapore’s SingTel. Stiff competition in the market will make service providers difficult to retain customers. Telecom Malaysia. Disagreement between the regulator TRAI and government ministries has led to delayed policy implementation in a number of areas. OPPURTUNITIES : The government is currently considering recommendations made by TRAI to allow the operations of MVNO’s (Mobile Vitual Network Operator) in the mobile market. most notably 3G licensing. The dominance of prepaid services has contributed to declining mobile average revenue per user (ARPU) levels. WEAKNESS : Mobile market is stil inclined towards prepaid users.K. couldstruggle to keep up with demand.

1995 by Sunil Bharti Mittal The headquarters of the company are located in New Delhi. ENTERPRISE SERVICES 1. TELE SERVICES 2. India Key people of the company are : Sunil Mittal (Chairman & MD) Sanjay Kapoor (CEO) Vision of Bharti Airtel is : To be the most admired brand in india Loved by more customers Targeted by top talent Benchmarked by more business THE KEY PRODUCTS ARE :1. DTH SERVICES 4. WIRELESS INTERNET 3. TELE SERVICES : Thakur Institute of Management Studies and Research Page 24 .The company was founded on July 07.

the company has Shah rukh khan the brand ambassador 2.145 to Rs.49 to Rs.1490 – Rs.Bharti Airtel provides Prepaid and postpaid services for both mobile phones and fixed land lines users The company charges Nominal tariff rates to its users in all the circles where it provides service Bharti Airtel also provides gprs services to the gprs unabled handsets Airtel also provides Wireless solution in blackberry and iphone As far as advertising is concerned.4290) Kareena Kapoor and Saif Ali Khan are the brand ambassadors which has helped a lot to the company to generate sales and have a competitive stand in the DTH market Thakur Institute of Management Studies and Research Page 25 .999/month (installation cost Rs.345/month (Installation Rs. DTH SERVICES : Airtel digital TV is a satellite television service It offers additional benefit like TV recorder Tariffs from Rs.2999) 3. WIRELESS INTERNET : Bharti Airtel has an easy to access Airtel usb modem for an instant internet connection It provides with a wide range of prepaid and postpaid plans available as per customer needs The company has most widespread network in the country Data card is available from Rs.

05 Tele-density 54.22 mn Monthly additions (Wireline) 16.4. 2010 Indian Telecom Sector Statistics Total telephone subscriber base 638.64 Monthly additions (Wireless) 9.00 The total density of Indian Telecom sector is still around 54%+ which is far below an average density of a developed country which still gives a scope for many players to enter the market and also gives a chance to all the existing players to expand their market share Thakur Institute of Management Studies and Research Page 26 .83 mn Wireless User base (GSM+CDMA+WLL(F) 601. ENTERPRISE SERVICES : 1st ISP (Internet service provider) in India It provides end to end telecom solutions to corporate customers National and international long distance services to ‘’carriers’’ (A company authorized by regulatory agencies to operate a telecommunication system) TELECOM STATISTICS APRIL.10% Fixed-line user base 36.

76% 10.26% 100% 0.487 subscribers) in GSM cellular service market Thakur Institute of Management Studies and Research Page 27 .77% 1.16% (13.08% 14.19.16% 23. single country mobile operator and sixth largest integrated telecom operator The below data is as on April.77% % Growth Over previous month 2. 2010 GSM Operator Total Subscriber base % Market Share 30.98% 4.Bharti Airtel is worlds 3rd largest .88% 3.69% 17.67% 0.254 subscribers) in wire line services Bharti Airtel has a market share of around 30.87% 2.35% 2.29% 1.94% 8.06.28.48% 2.16% 0.85% (29.36% NA Bharti Airtel 130619487 Vodafone 103755978 Idea Cellular 65288248 BSNL Aircel Reliance Telecom (RTL)* MTNL Uninor 64744985 38469541 16311206 4817670 5021651 1.96% 15.65% Loop Mobile 2894511 Stel All India 112391 433040658 Bharti Airtel has a market share of around 7.11% 1.

Delhi. HP. 12295 crore for the license of 3G spectrum which will help the company to cover Mumbai.There has been a growth of 2. Rajasthan.1 telecom operator in India It holds the largest market share of 30%+ being a market leader The network is spread across all 19 telecom circles and 4 metro cities which gives it a PAN (Presence Across Nation) India presence Bharti – Zain acquisition would add access to 15 more countries in Africa adding 40. Karnataka. Bihar and Jammu & Kashmir Acquiring 70% stake in Warid telecom of Bangladesh RISK ASSOCIATED: Thakur Institute of Management Studies and Research Page 28 . UP.1mn subscribers to its present data base Bharti has paid Rs. WB.35% in the month of march ’10 adding 3mn subscribers KEY POSITIVES: Bharti Airtel is presently the no. AP. TN.

It has of lately started to spread its wings in thee international market BASIC FINANCIALS OF BHARTI AIRTEL Thakur Institute of Management Studies and Research Page 29 .There will be a significant deterioration in company’s cash flow protection measure as due to a high amount of debt raised for obtaining 3G license and acquiring Zain Africa. There is a high amount of business risk involved due to the macroeconomic and political risk associated as well as lower profitability of Zain’s Africa operations Share price currently trading at 9 months low Bharti Airtel is India centric.

83 0. IN Cr) 34014 35610 21.17 0.60 O.47 0.84 RONW (%) 0.88 31.30 0.04 39. IN Cr) 7744 9426 NET PROFIT (Rs.69% SALES (Rs.82 43.22 0.07 0.07 34.08 4033.MAR 03 MAR 04 MAR 05 MAR 06 MAR 07 MAR 08 MAR09 DEBT EQUITY ROCE (%) PAT (Rs.17 0.72% AVERAGE REVENUE PER USER (ARPU) QUARTER ended 2009 Q1 Q2 Q3 Q4 ARPU 278 252 230 220 Thakur Institute of Management Studies and Research Page 30 .38 0.19 7743.54 0.46 32.27 23.96 22.01 0. IN Cr) : 0.16 23.37 1210.23 6244.55 34.67 2012.83 33.35 MAR 09 MAR 10 INCREASE IN PERCENTAGE (%) 4.

220 ARPU of Telecom Sector for Mar 2010 was Rs.ARPU facts of Bharti Airtel Average APRU for FY 2010 is Rs.245 ARPU of Bharti Airtel for Mar 2010 was Rs. than they will have to add on 90mn 3G subscribers to Break Even the cost incurred for the licensing of 3G spectrum.47 as compared with last Quarter The below table shows the ARPU per subscriber and the number of 3G subscribers required to have a BEP The above table states that if Bharti Airtel wants an ARPU of Rs.350 ARPU = Average minutes of use per user * Average rate per minute Average minute of use per user of Bharti Airtel grew from 446 minutes to 468 minutes as compared with last Quarter Average rate per minute declined from Rs.0. 360 to Rs. Thakur Institute of Management Studies and Research Page 31 .0.450 The estimated ARPU after the launch of 3G is to be estimated at Rs. 200 per subscriber. 124 The ARPU of Zain in Africa is Rs.52 to Rs.

80 (21/05/10) 844 (10/01/08) 131.35 09/03/09) 1.3041 IDEA 52 (25/05/10) 91.32 (11/02/00) NA 17/02/97 0.70 (11/06/09) 47.33 (10/01/03) 0.70 (25/05/10) 359 (11/06/09) 131.05 (27/11/09) 161 (18/10/07) 34.50 (27/11/09) 574.SHARE PRICE DATA BHARTI AIRTEL CURRENT 265 MARKET PRICE (25/05/10) 52 WEEK HIGH 467 (01/10/03) 229.6201 RELIANCE COMM 147.7051 52 WEEK LOW ALL TIME HIGH ALL TIME LOW BETA The share price of Bharti Airtel from 21/05/09 to 21/05/10 MOBILE NUMBER PORTABILITY Thakur Institute of Management Studies and Research Page 32 .05 (27/10/08) 1.0121 TATA COMM 241 (25/05/10) 602 (25/05/09) 237.50 (10/10/07) 10.60 (21/05/10) 1083.

75 crores CHARGES OF MNP Per Port Transaction Charge : It is a processing charge paid by the recipient operator (the operator to which subscriber shifts loyalty) to MNP service provided. Charges shall be Rs.) 4.1065 crores and annual operational expenditure would be Rs.184.32%. VALUE (IN Cr.5% – 20% of mobile subscribers will use MNP service Initial expenditure for the companies would be Rs.32 9. Thakur Institute of Management Studies and Research Page 33 .44 8.It is a service that allows customers to change their service providers without changing their mobile numbers MNP has been delayed till 30th June.20 Bharti Airtel as investments with Mutual Funds JM Telecom Sector Fund as on 30/04/10 EQUITY Bharti Airtel Idea Cellular Tulip Telecom Reliance Comm.50 0.77 068 1. 2010 Telecos has predicted that around 0.40 14.17 QUANTITY 150727 125448 8121 7152 % 55.40 The highest holdings of Bharti Airtel in MF’s (%)  JM Telecom Sector Fund = 55. 19 Porting Charges : It is a charge paid by the subscriber for porting his number to the recipient operator Charges shall be Rs.

density is 52%. 2010 WEAKNESS Outsourcing of telecom and IT networks. IT infrastructure. BPO services.  Franklin (I) Flexi Cap = Franklin (I) Flexi Cap (G) = 9% 10% The highest holdings of Bharti Airtel in terms of Asset Value    HDFC Equity Fund (G) = HDFC MIP . lastmile connectivity of broadband operations.LTP (G) = 6187 crores 5925 crores SBI Magnum Tax Gain (G)= 5525 crores SWOT ANALYSIS OF BHARTI AIRTEL STRENGTHS More than 130mn customers base Business has access to knowledge and technology as it holds strategic alliance with Sony-Ericsson.5%+ for FY Mar. still low as compared to developed economies Increase in subscribers base and global wide spread with Bharti – Zain acquisition THREATS Bharti Airtel is India – centric Thakur Institute of Management Studies and Research Page 34 . Inter – city optic fibre cables Risk associated with Zain acquisition like lower profitability. Nokia and Sing Tel Pan India presence Strong financials with increase in NP by 22%+ and Sales by 4. political and regulatory risks OPPURTUNITIES Bharti infratel can cut down cost in vast untapped rural and semi urban areas Current tele .

Intense competition among Indian markets Changing pace of global telecommunication industry which impacted the decision of purchase of MTN indirectly opening doors for the rivals (Reliance comm.) PORTERS FIVE FORCES MODEL Thakur Institute of Management Studies and Research Page 35 .

COMPETITIVE RIVALRY WITHIN THE INDUSTRY Many players of the same size Little differentiation between competitors products and services Company can only grow by diminishing cut throat competition and stealing away the customers Result : High Thakur Institute of Management Studies and Research Page 36 .

BARGAINING POWER OF SUPPLIER Improved competitive scenario and commoditisation of telecom services has led to reduced bargaining power for services providers. Buyer’s power varies between market segments Customers are price sensitive Result : High Thakur Institute of Management Studies and Research Page 37 . There are very less substitutes Large number of equipment makers(fibre optic cables. billing software) to dilute bargaining power Result : Low BARGAINING POWER OF CUSTOMERS 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.

1mn subscribers To continue and upgrade the unmatched service provided to the customers Also to acquire 70% stake in Warid telecom.THREAT TO NEW ENTRANTS High fixed costs and difficult access to finance Scarcity of resources Switching costs is relatively low Government restrictions or legislation Result : High FUTURE PROSPECTS/STRATEGIES To translate its expertise of Indian market to other emerging economies (Zain acq. Bangladesh Thakur Institute of Management Studies and Research Page 38 .) Purchase of Zain for $10.7bn which will increase its network to 15 more countries resulting in an increase in 40.

Thakur Institute of Management Studies and Research Page 39 .45. share price data trading at 52 weeks low and the Bharti acquiring 3G license with the highest fee payment along with the Bharti.To increase customer base by the support of 3G spectrum as it is not feasible for new entrants to take part at such high bid price Future roadmap 3G WiMax VPN & VOIP CONCLUSION : All the above factors including the highest subscriber’s base and largest market capitalization along with the EPS of Rs.Zain acquisition allowing Bharti to add 40 mn subscribers and access to more than 14 countries adds up to a conclusion for Bharti Airtel as VALUE BUY investment.40.

html Thakur Institute of Management Studies and Research Page 40 .moneycontrol.com/news/result-analysis/bharti-airtel-q4-net-falls-8_454275.REFERENCES:    ‘’Capitaline’’ software http://trak.in/tags/business/2010/04/27/telecom-subscriber-growth-vodafone-top/ http://www.

co.com/ http://telecomtalk.indiatimes.in/coai-report-gsm-operators-sign-1118-mln-users-april-2262392 http://economictimes.    http://www.com/Telecom/Telecom-sector-may-see-salary-hikes-of-up-to30/articleshow/5496113.in/tags/business/2010/05/21/airtel-mobile-subscriber-addition-april/ en.wikipedia.indiainfo.com/industryandbusiness/telecom/mobile/ http://www.articlesbase.html http://www.in http://trak.asp http://www.nseindia.com/features/industryhandbook/porter.slideshare.moneylife.indiabroadband.html http://en.ciol.com/business-opportunities-articles/the-indian-telecom-sector-movinginto-2010-1819701.wikipedia.cms http://voicendata.info/indias-3g-auction-ends-no-single-bidder-bid-for-a-pan-india-3glicense/28033/ http://www.net/amit_kumar1/airtel-ppt-presentation            Thakur Institute of Management Studies and Research Page 41 .in/article/8/3782.com/content/news1/110022607.asp http://www.org/wiki/TRAI http://www.org/wiki/Communications_in_India http://indiafocus.html http://www.coai.topnews.investopedia.net/airtel-broadband/2511-airtel-enterprise-internet.

Thakur Institute of Management Studies and Research Page 42 .

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