PESTAL

Political environment of nation in which business is operating directly impact business performance.
A stable Government favorable business environment, regulatory uncertainty around the policies is
reduced, ensure law and order and effective policy implementations.

 Before 90’s telecom industry was dominated by DoT (Department of Telecom). The industry
gets deregulated in mid-90’s through National Telecom policies and New National Telecom
policies. Post that in 1997 TRAI -Telecom regulator came into picture to keep checks on the
Telecom providers. These deregulations and NTP given chance to Private players like Airtel
to entered in the Telcom Market.
 In 2005 Government increase FDI in Telcom sector from 49% to 79% and further to 100 % in
2013. These changes in FDI limits has increased the competition in Industry, wherein lots of
Foreign players entered in the Industry.
 In 2011 MNP (Mobile Number Portability) started in India. This another polices which
impacted Airtel adversely initially. This gives freedom to user to move to different service
provider without losing the his/her original number.
 Import Tariffs – Import duty levied on Telcom equipment’s and Industrial products increased
the cost of setting up business.
 Inter Connection Usage Charge – This charge is paid by one provider to another for carrying
call or terminating the call. Airtel revenues has dip after reduction in ICU charges.

Based on our situational analysis we have drill down the following SWOT analysis of Airtel.

Strengths:

 Airtel has strong brand value and reputation in the market its rank among top #3 mobile
operator in world with strong presence in #17 countries across South East Asia and Africa
 It has large network coverage with #237577 mobile towers, #752136 broadband base
station and with #355097 route kilometer of optic fiber network across the countries.
 With diversified business segments and product offerings which includes mobile services,
home service i.e., broadband, digital TV services, and Airtel business service i.e., mobile
payments and banking.
 Around 1.13Mn strong distribution and retail network across countries helps Airtel to reach
out to 95% of Indian population.
 Airtel mobile banking has hit the breakeven in FY 2021-22 and showing exponentially
growth with monthly transacting user base of #36.7 Mn who transacted gross merchandise
value of Rs 1,334 Bn throughout the year.
 Under his digital services online music streaming app Wynk have been installed by 100+ Mn
users and monthly there is 3Bn+ sing plays in 14 different languages to choose from.

Weaknesses:

 It has high debt level of Rs 1,600 Bn with interest coverage ratio of 4.36 times compared to
its competitors which has strategically lowered their debts to zero
 Challenges in delivering consistent network quality and customer experience
 Limited presence in rural areas
  The need for significant investments in technology and infrastructure. Airtel invested
around Rs 147,350 Mn into in network compare to rival which is around 55% higher Rs
228,000 Mn invested by Jio in his network expansion

Opportunities:

 Growing demand for digital services and increased internet penetration. There are around
626 Mn internet user in India which is 45% of population. This is existing market which Airtel
serve and still there is under penetration compared to covered developed world.
 Expansion into new markets, both within India and globally
 Average time spent by users on internet is 6hours 36min and almost 76% of the internet
traffic are coming from mobile device. This clearly shows increased demand for high-speed
broadband and 5G services
 Growing demand for digital financial services, there is around 560M users making digitally
enabled payment

Threats:

 Intense competition from other telecommunications providers. In recent spectrum auction

its competitor has acquired 24.7 GHz which is around 50% of the total auctioned spectrum
compared to Airtel which is able to acquired only 19.8 GHz of spectrum
 Government regulations and policies like mobile number portability, increase in FDI and
increase in import duties are some of the policies which that impact the industry and Airtel
 Changing consumer preferences and technology advancements
 Economic and political instability that affects consumer spending and market demand.