Overview

Bharti Airtel Limited, also known as Airtel, is an Indian multinational telecommunications

services company based in New Delhi, Delhi NCT. It operates in 18 countries across South Asia
and Africa, and also in the Channel Islands. Airtel provides 2G, 4G LTE, 4G+ mobile services,
fixed line broadband and voice services depending upon the country of operation. Airtel had also
rolled out its VoLTE technology across all Indian telecom circles. It is the second largest mobile
network operator in India and the Second largest mobile network operator in the world with over
457.96 million (45.796 crore) subscribers. Airtel was named India's 2nd most valuable brand in
the first ever Brandz ranking by Millward Brown and WPP plc.

Shareholding pattern of the company

Promoters holding remains unchanged at 56.23% in Dec 2020 quarter. FII/FPI have increased
holdings from 17.57% to 17.75% in Dec 2020 qtr. Number of FII/FPI investors increased from
1082 to 1084 in Dec 2020 qtr. Mutual Funds have decreased holdings from 14.36% to 13.95% in
Dec 2020 qtr. Number of MF schemes remains unchanged at 38 in Dec 2020 qtr. Institutional
Investors have increased holdings from 39.3% to 39.53% in Dec 2020 qtr.

Management of the company

The board of directors of the company has an optimum mix of executive and non-executive
directors, which consists of two executive and nine non-executive directors. Mr. Sunil Bharti
Mittal, Chairman and Mr. Gopal Vittal, MD & CEO (India and South Asia) are two executive
directors on the board is 50% of the total board strength. The independence of a director is
determined on the basis that such director does not have any material pecuniary relationship with
the company, its promoters or its management, which may affect the independence of the
judgment of a director. The board members possess requisite skills, experience and expertise
required to take decisions, which are in the best interest of the company.

Strengths, Weaknesses, Opportunities & Threats (SWOT) analysis of the

company
1. Strengths:
 Renowned Telecom company: With its 19+ years of rich experience in telecom industry
this MNC had travelled far to become world’s 3rd largest telecom operator overseas with
operations in nearly 20 countries.
 High Brand Equity: It is one of the pioneer brands in telecommunication having a high
brand recall and with a whopping subscriber base.
 Extensive infrastructure: With the formation of Indus tower & due to its partnership with
Idea & Vodafone, the infrastructure of Airtel has extended in all parts of the country
resulting into nationwide penetration.
 Strategic Alliances: The company has top notch stakeholders, namely Sony Ericsson,
Nokia and SingTel, and the recent one being Apple. Such strategic alliances boost the brand
equity and the bottom line of the company.
2. Weaknesses:

 Outsourced Operations: Outsourcing operations helped Airtel in lowering its cost. But on
the other hand, they are running the risk of being dependent on some other companies which
may affect its operations.
 Venturing into African operations: Although it’s been 4 years that Airtel has acquired
Zain’s Africa business, but Airtel is still struggling to turn around the unit which was bought
at a whopping 9 billion dollars.
 High Debt: With its acquisitions turning out to bad investment, and credit being high and
margins being low, Airtel group is under high debt. Airtel does not have as deep pockets as
Vodafone.

3. Opportunities:

 Strategic Partnership: Partnering with smart phone companies is going to be a smart

strategy as far as MNP (mobile number portability in India) is concerned. This will ensure fixed
cash flows in the future and a higher customer base.
 Market Development: With fierce competition in the telecom industry & shrinking margins,
venturing out in new markets/developing economies will prove fruitful for the company.
 VAS: VAS (Value Added services) is going to future of the telecommunication industry &
by specializing itself in this vertical Airtel can differentiate itself in highly competitive market.
With introduction of unique services, Airtel can avail higher margins.

 Untapped geography of the current market: Although it is currently providing 3G & 4G

services, but these services are limited to specific geographical locations. Expansion of these
services to most of its regions will help the company get more margins and customers.

4. Threats:

 Government Regulatory Framework: With the auction of spectrum & change in the
government policies on a regular basis, it is a potential threat to the stability & existence of
this industry thereby affecting the players.
 Competition: Price war in the home market and declining margins due to this is adversely
affecting the overall business of the group.
 MNP (Mobile number portability): MNP gives the customer independence to change the
service provider while retaining the number and as Airtel charges are premium over other
service providers, it can see slump in subscriber base in the next fiscal year with PAN India
MNP applicable from May 3rd 2015.

Competitive Analysis
Bharti Airtel holds a dominant position in the telecom industry worldwide. It is the second-
largest mobile network in the world and is currently the second-largest operator in India holding
a market share of 28.35% compared to the largest operator Reliance Jio which holds a market
share of 32.99% as of data obtained in February 20202. Airtel has been able to achieve profits by
outsourcing most of its business operations and focusing heavily on marketing, sales, and finance
and focusing on a ‘minutes factory’ model which helps in maximizing profits by offering its
services at very low cost in order to attract and retain customers.

Some of the major competitors of Airtel in the telecom industry are Reliance Jio, Vodafone Idea
(Now Viu from their merger in 2018). Apart from telecom services, Airtel also offers services
such as fixed-line services, high-speed broadband, DTH, and enterprise services such as long-
distance services to carriers. The threat of new entrants is low as Bharti Airtel has established
trust among the consumers since its long-term provision of services, and its effective marketing
strategies which make any new entrant difficult to compete even if they aim to offer low-cost
services.

Even though Airtel has held a very high competitive position in the following years, it is
beginning to lose its market share to Reliance Jio telecommunications due to the extremely low
prices offered by Jio due to large capital injected by the founder, and external investors. Jio has
been able to capture a very large market segment due to its extremely low prices and its
marketing strategies. With the large foreign investment, Jio has also been able to achieve a very
large economy of scale over a very short period exclusively because of its foreign investments of
over 30 billion USD.

Conclusion

Airtel has a competitive advantage mainly because of its rich brand heritage and its early entry
into the telecom market. However, with new entrants like Jio who have a wide array of foreign
investments and capital ready to spend, Airtel’s competitive position might be at risk. Unless
Airtel manages to offer faster and broader connectivity than its competitors, it will be hard for
Airtel to sustain its competitive position. Hence, Airtel must invest in R&D and marketing in
order to drive future growth.