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Bharti Airtel

Bharti Airtel Limited (NSE: BHARTIARTL, BSE: 532454), commonly known as Airtel, is an Indian telecommunications company that operates in 20 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or3G services depending upon the country of operation.[4] Airtel is the third largest telecom operator in the world with over 243.336 million customers across 20 countries as of March 2012.[5] It is the largest cellular service provider in India, with over 178.78 million subscribers at the end of February 2012.[6] Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the Airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. [7]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. It is known for being the first mobile phone company in the world to outsource all of its business operations except marketing, sales and finance. Its networkbase stations, microwave links, etc. is maintained by Ericsson, Nokia Siemens Network and Huawei,[8]and business support is provided by IBM, and transmission towers are maintained by another company (Bharti Infratel Ltd. in India).[9] Ericsson agreed for the first time to be paid by the minute for installation and maintenance of their equipment rather than being paid up front, which allowed Airtel to provide low call rates of 1/minute (US$0.02/minute).[10] During the last financial year (200910), Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for the tele-media business.

Bharti Airtel Limited

Type

Public company

Traded as

BSE: 532454NSE: BHARTIARTL BSE SENSEX Constituent

Industry

Telecommunications

Founded

July 7, 1995

Founder(s)

Sunil Bharti Mittal

Headquarters

New Delhi, India

Area served

South Asia, Africa and the Channel Islands

Key people

Sunil Bharti Mittal


(Chairman) and (MD)

Products

Fixedline Telephony Mobile Telephony Broadband Internet Digital Television IT services

Revenue

596.01 billion (US$11.89 billion)(2011)[1]

Profit

60.46 billion (US$1.21 billion)(2011)[1]

Total assets

1,007.85 billion (US$20.11 billion)(2011)[1]

Employees

20,675 (December 2011)[1]

Parent

Bharti Enterprises (52.7%)[2][3] SingTel (15.57%)[2][3] Vodafone (4.4%)

Subsidiaries

Airtel Africa Airtel Digital TV Airtel Sri Lanka Airtel Bangla

History
Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with Germany's Siemens to manufacture push-button telephone models for the Indian market. In 1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in India to offer pushbutton telephones, establishing the basis of Bharti Enterprises. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Skycell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar. This expansion allowed it to offer voice services all across India. In 2009, Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel Today, Airtel is the largest cellular service provider in India and the fourth largest in the world. [edit]Organisational

Structure

The organisational structure that existed until recently concentrated on the hierarchy of the operations inside the company as a whole. The structure depicts the corresponding operation/region of different in-charges and it didn't hold anyone responsible for each of its services. So, the company found it better to restructure its organizational chart. The transformed organisational structure will have two distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer) and B2B (Business to Business) segments. Bharti Airtel's B2C business unit will comprehensively service the retail consumers, homes and small offices, by combining the erstwhile business units Mobile, Telemedia, Digital TV, and other emerging businesses (like M-commerce, M-health, Madvertising etc.). The B2C organization will consist of Consumer Business and Market Operations. It is the largest telecommunication company in India. [edit]Worldwide

presence

Coverage map of Bharti Airtel across 20 countries

Airtel is the third largest mobile operator in the world in terms of subscriber base and has a commercial presence in 20 countries and the Channel Islands. Its area of operations include:

The Indian Subcontinent:


Airtel Bangla, in Bangladesh Airtel, in India Airtel Sri Lanka, in Sri Lanka Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

Airtel Africa, which operates in 17 African countries:

The British Crown Dependency islands of Jersey and Guernsey, under the brand name AirtelVodafone, through an agreement withVodafone.

Airtel operates in the following countries: Country Site Remarks

Bangladesh

Airtel Bangladesh

Airtel Bangladesh had about 5.1 million customers at the end of June 2011.[11]

Burkina Faso

Airtel Burkina Faso

Airtel Burkina Faso is the dominant player with 1,433,000 customers representing 50% market share.[12]

Chad

Airtel Chad

Airtel Chad is the #1 operator with 69% market share.[12]

Democratic Republic of the Congo

Airtel DRC

Airtel is the market leader with almost 5 million customers at the end of 2010.

Gabon

Airtel Gabon has 829,000 Airtel Gabon customers and its market share stood at 61%.[13]

Ghana

Airtel Ghana had about Airtel Ghana 1.76 million customers at the end of 2010.[14]

India

Airtel

Airtel is the market leader with almost 152.5 million customers at the end of 2010.[14]

Kenya

Airtel Kenya is the second Airtel Kenya largest operator and has 4 million customers.[15]

Madagascar

Airtel holds second place in the mobile telecom market in Airtel Madagascar, has a 39% market Madagascar share and over 1.4 million customers.[12]

Malawi

Airtel Malawi

Airtel Malawi is the market leader with a market share of 72%.[12]

Niger

Airtel Niger

Airtel Niger is the market leader with a 68% market share.[12]

Nigeria

Airtel Nigeria

Republic of the Congo

Airtel Congo Airtel Congo is the market leader B with a 55% market share.[12]

Rwanda

Airtel Rwanda

Airtel launched services in Rwanda on 30 March 2012.[16]

Seychelles

Airtel Seychelles

Airtel is the leading comprehensive telecommunications services providers with over 55% market share of mobile market in Seychelles.[17]

Sierra Leone

Airtel Sierra Leone

Sri Lanka

Airtel Sri Lanka

Airtel Sri Lanka commenced operations on 12 January 2009. It had about 1.8 million mobile customers at the end of 2010.[14]

Tanzania

Airtel Tanzania

Airtel Tanzania is the market leader with a 38% market share.[12]

Uganda

Airtel Uganda

Airtel Uganda stands as the #2 operator with a market share of 38%.[12]

Zambia

Airtel Zambia

Channel Islands :

Jersey and

Guernsey

Airtel

Airtel operates in the Channel Islands under the brand name

Vodafone

AirtelVodafone through an agreement with Vodafone.

Jersey and Guernsey are British Crown Dependencies. They are not independent countries. Therefore, Airtel's countries of operation is
considered to be 19.

[edit]India [edit]Mobile Airtel has nationwide presence, and is the 6th most valued brand according to an annual survey conducted by Brand Finance and The Economic Times in 2010.[18][19] On 19 October 2004, Airtel announced the launch of a BlackBerry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-Ventures Limited and Research In Motion (RIM). The Apple iPhone 3G was rolled out in India in 2008 by Airtel and Vodafone. However, high prices and contract bonds discouraged consumers and it was not as successful as the iPhone is in other markets of the world. The Apple iPhone 4 was introduced on May 27, 2011 by Airtel and Aircel. [edit]3G On May 18, 2010, 3G spectrum auction was completed and Airtel will have to pay the Indian government 122.95 billion (US$2.45 billion) for spectrum in 13 circles, the most amount spent by an operator in this auction. Airtel won 3G licences in 13 telecom circles of India: Delhi,Mumbai, Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (east), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Assam, North East, and Jammu & Kashmir.[20] Airtel also operates 3G services in Maharastra, Goa, Kanpur and Kolkata through an agreement withVodafone and in Gujarat through an agreement with Idea. This gives Airtel a 3G presence in 15 out of 22 circles in India. On September 20, 2010, Bharti Airtel said that it has given contracts to Ericsson India, Nokia Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G services in the country. These vendors will plan, design, deploy and maintain 3GHSPA (third generation, high speed packet access) networks in 13 telecom circles where the company has won 3G licences. While Bharti Airtel has awarded network contracts for seven 3G circles to Ericsson India, NSN would manage networks in three circles. Chinese telecom equipment vendor Huawei Technologies has been introduced as the third partner for three circles.[21] On January 24, 2011, Airtel launched 3G services in Bangalore, Karnatakaits largest circle by revenue. With this launch, Airtel became the third private operator (fifth overall) to launch its 3G services in the country following Reliance Communications and Tata Docomo.[22] On January 27, 2011, Airtel launched 3G in Chennai and Coimbatore. On July 27, 2011 Airtel launched 3G in three major cities in Kerala (Trivandrum, Cochin and Calicut).[23]

Airtel plans to cover 1,500 cities across 13 circles by the end of March 2012. The company, which has 3G licences for 13 circles, is also in talks with other service providers to roll out the services in the remaining 10 circles as part of its roaming offerings.[24] Airtel had about 3 million 3G subscribers as of May 2011.[25] [edit]4G On 19 May 2010, the broadband wireless access (BWA) or 4G[26] spectrum auction in India ended. Airtel paid 33.1436 billion for spectrum in 4 circles: Maharashtra, Karnataka, Punjab and Kolkata.[27] The company was allocated 20 Mhz of BWA spectrum in 2.3 Ghz frequency band. Airtel has selected ZTE to build and operate its TD-LTE network in Kolkata and Nokia Siemens Networks in Maharashtra.[28] On 10 April 2012, Airtel launched 4G services using TD-LTE technology in Kolkata, becoming the first company in India to offer 4G services. Airtel will be launching 4G in Bangalore in April 2012 and later in Pune and Chandigarh.[29] [edit]Airtel

Money

Airtel has started a new mCommerce platform called Airtel Money with collaboration with Infosys. It is launched on April 5th 2012, in Infosys Campus of bangalore. with the help of Airtelmoney,users can transfer money,pay bills and other financial transactions using mobile phone.[30] [edit]VAS Fraud There has been lot of criticism about Airtel for its unauthorised VAS activation. Many of its services were activated automatically according to a complaint forum. Several thousands of users were falsely billed, for example downloading wallpaper or ringtones. In return Airtel launched STOP/START 121 services for such issues.[31][32] Alternatively, you can sign up on the "Do Not Disturb" list to avoid all telemarketing calls and SMSes.[33] [edit]Controversy Bharti Airtel (India), along with Loop Mobile, Idea Cellular, Reliance Communications and Vodafone, was issued notices by Telecom Regulatory Authority of India (TRAI) for violation of Mobile number portability (MNP) regulations. According to TRAI, they had received complaints from customers regarding unwarranted rejection of porting requests by telecom operators and 10 had been charged for a message requesting porting code through number 1900.[34] [edit]Telemedia The Telemedia business provides services in 89 Indian cities and consists of two brands. Airtel Broadband provides broadband and IPTV services. Airtel provides both capped as well as unlimited download plans (reduced speeds at unlimited data are implied). The maximum speed available for home users is 16Mbit/s.

Airtel has about 3.16 million wireline customers, of which 42.6% are broadband internet subscribers as of August 2010. Until 18 September 2004, Bharti provided Fixedline telephony and broadband services under the Touchtel brand. Bharti now provides all telecom services including fixedline services under a common brand "Airtel". [edit]Digital Television Main article: Airtel digital TV The Digital TV business provides Direct-to-Home (DTH) TV services across India under the brand name Airtel digital TV. It started services on 9 October 2008 and has about 32.44 million customers as of August 2010.[35] [edit]Enterprise The Enterprise business provides end-to-end telecom solutions to corporate customers and national and international long distance services to telcos through its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing stations. It has two sections under it. [edit]Mobile data service The different services under mobile data are BlackBerry services,a web-enabled mobile email solution working on 'Push Technology', USB modem that helps in getting instant access to Internet and corporate applications,Airtel Data Card that gives the liberty to access the internet anytime, Easy Mail is a platform that provides access to personal/corporate e-mails independent of handset operating system and application services that shorten the queues at the billing section, off-load the pressure on the billing staff and bring convenience to the user. [edit]Enterprise business solutions There are two kind of solutions offered by Airtel. One is GPRS Based Solutions like mobile applications tools for enterprise, TrackMate, automatic meter reading solutions etc. and the other is SMS Based Solutions like interactive sms, bulk sms, inbound call center solutions. [edit]Android-based tablet Beetel Teletech Ltd., a unit of Bharti Enterprises Ltd., on 18 August launched a 9,999 ($220) 7-inch tablet in India based on Google Inc.'s Android operating system. The offering is intended to capitalize on the expected demand for cheap computing devices in the world's fastest-growing and second-largest mobile phone market.[36] [edit]Rest [edit]Africa Main article: Airtel Africa [edit]Bangladesh Main article: Airtel Bangla

of the World

[edit]Sri Lanka Main article: Bharti Airtel Lanka [edit]Channel Islands: Jersey and Guernsey Main article: Airtel-Vodafone Yaya ya On 1 May 2007, Jersey Airtel and Guernsey Airtel, both wholly owned subsidiaries of the Bharti Group, announced they would launch mobile services in the British Crown Dependency islands of Jersey and Guernsey[37][38] under the brand name Airtel-Vodafone after signing an agreement with Vodafone. Airtel-Vodafone operates a 3G network in Jersey and Guernsey. Jersey and Guernsey are British Crown Dependencies. They are not independent countries. Therefore, Airtel's countries of operation is considered to be 19. [edit]Subscriber

Base

Bharti Airtel has about 243.336 million subscribers worldwide232.95 million in India and South Asia and 50.949 million in Africa as of the end of December 2011. The numbers include mobile services subscribers in 19 countries and Indian Telemedia services and Digital services subscribers.[5] [edit]India The Airtel subscriber base according to Cellular Operators Association of India (COAI) as of December 2010 was: Metros

Hyderabad 8,947,870 Chennai 2,947,870 Delhi 7,420,171 Mumbai 3,263,688 Kanpur - 3,259,687 Kolkata 3,181,073

"A" Circle

Andhra Pradesh 15,329,598 Gujarat 5,980,024 Karnataka 14,004,247 Maharashtra 7,865,425 Tamil Nadu 9,157,295

"B" Circle

Haryana 1,856,093

Kerala 3,383,097 Madhya Pradesh 8,527,584 Punjab 5,946,742 Rajasthan 12,001,442 Uttar Pradesh (East) 11,455,638 Uttar Pradesh (West) 5,475,843 West Bengal 7,592,487

"C" Circle

Assam 2,828,490 Bihar 13,901,163 Himachal Pradesh 1,528,727 Jammu and Kashmir 1,879,828 North Eastern States 1,748,202 Orissa 4,989,102

Airtel is the market leader in India with about 152,495,219 out of the total 745,000,000 subscribers in India or about 20.46% market share as of December 2010.[citation needed] The Brand Trust Report[39] published by Trust Research Advisory, places Airtel as the only mobile operator in the top 10 most trusted brands in India. [edit]Acquisitions [edit]MTN In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN Group, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The Financial Times reported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative nature of the talks, while The Economist magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers, higher revenues and broader geographic coverage.[40] However, the talks fell apart as MTN group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company.[41] In May 2009, Bharti Airtel again confirmed that it is in Talks with MTN and companies have now agreed discuss the potential transaction exclusively by 31 July 2009.[42] Bharti Airtel said in a statement "Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group".[43] Talks eventually ended without agreement, due to the South African government opposition.[44] [edit]Zain In March 2010, Bharti struck a deal to buy the Kuwait firm's mobile operations in 15 African countries, in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus in 2007. Bharti Airtel completed its $9 billion acquisition of African operations from Kuwait's Zain,

and Mergers

making the firm the world's No. 5 wireless carrier by subscribers.Airtel has reported that its revenues for the fourth quarter of 2010 grew by 53% to US$3.2 billion compared to the previous year, newly acquired Zain Africa division contributed US$911 million to the total.However, net profits dropped by 41% from US$470 million last year to US$291 million this year due to a US$188 million increase in radio spectrum charges in India and an increase of US$106 million in debt interest.[citation needed] [edit]Telecom Seychelles On August 11, 2010, Bharti Airtel announced that it would acquire 100% stake in Telecom Seychelles for US$62 million taking its global presence to 19 countries. Telecom Seychelles began operations in 1998 and operates 3G, Fixed Line, ship to shore services satellite telephony, among value added services like VSAT and Gateways for International Traffic across the Seychelles under the Airtel brand. The company has over 57% share of the mobile market of Seychelles.[45] Airtel announced plans to invest US$10 million in its fixed and mobile telecoms network in the Seychelles over three years, whilst also participating in the Seychelles East Africa submarine cable (SEAS) project. The US$34 million SEAS project is aimed at improving the Seychelles global connectivity by building a 2,000 km undersea high speed link to Dar es Salaam in Tanzania.[46] [edit]Joint

Ventures

[edit]Airtel-Ericsson As per a five-year managed services agreement signed recently[when?], Ericsson will manage and optimize Airtels mobile networks in Africa. Ericsson will modernize and upgrade Airtels mobile networks in Africa with the latest technology including its multi standard RBS 6000 base station. As part of the modernization, Ericsson will also provide technology consulting, network planning & design and network deployment.Ericsson has been the managed services and network technology partner in the Asian operations.[citation needed] [edit]Rebranding On 18 November 2010, Airtel rebranded itself in India in the first phase of a global rebranding strategy. The company unveiled a new logo with 'airtel' written in lower case. Designed by Londonbased brand agency, The Brand Union, the new logo is the letter 'a' in lowercase, with 'airtel' written in lowercase under the logo.[47] On 23 November 2010, Airtel's Africa operations were rebranded to 'airtel'. Sri Lanka followed on 28 November 2010 and on 20 December 2010, Warid Telecom rebranded to 'airtel' in Bangladesh. [edit]One

Network

One Network is a borderless mobile phone network across all Airtel operating countries which enables customers to move freely between the countries in which Airtel operates, and be treated as virtual local customers of the visited network in terms of pricing, while retaining their home network service functionality. One Network allows customers travelling to One Network countries to make outgoing calls/SMS at the same rates as local customers and recharge with local top-up cards or with home network top up

cards while using the same number and SIM. Incoming calls however are charged at between $0.03 - 0.15 depending on the country the call is received from. Airtel offers the service currently to its Africa customers travelling to any of the following 27countries.In eight of these countries, the One Network is operated in partnership with other mobile operators. They are also listed below. S. No. Country Network

Burkina Faso

Airtel

Bangladesh

Airtel

Chad

Airtel

Channels Islands: Jersey and Guernsey Airtel

Democratic Republic of the Congo

Airtel

Gabon

Airtel

Ghana

Airtel

India

Airtel

Kenya

Airtel

10

Madagascar

Airtel

11

Malawi

Airtel

12

Niger

Airtel

13

Nigeria

Airtel

14

Republic of the Congo

Airtel

15

Sierra Leone

Airtel

16

Seychelles

Airtel

17

Sri Lanka

Airtel

18

Tanzania

Airtel

19

Uganda

Airtel

20

Bahrain

Zain

21

Iraq

Zain

22

Jordan

Zain

23

Kuwait

Zain

24

Saudi Arabia

Zain

25

Sudan

Zain

26

South Africa

Cell C

27

Egypt

Mobinil

It will be extended to Airtel's operations in South East Asia as well as in Seychelles soon. [edit]Sponsorship

The Circuit's official logo.

On 9 May 2009 Airtel signed a major deal with Manchester United Football Club. As a result of the deal, Airtel gets the rights to broadcast the matches played by the team to its customers. Bharti Airtel signed a five-year deal with ESPN Star Sports to become the title sponsor of theChampions League Twenty20 cricket tournament. But now the deal is terminated and Nokia is sponsoring Champions League Twenty20 cricket."[48] Airtel, also signed a deal to be title sponsor the inaugural Formula One Indian Grand Prix during the 2011 season.[49] [edit]Signature

tune

The signature tune of Airtel is composed by Indian musician A. R. Rahman. The tune became hugely popular and is the world's most downloaded mobile music with over 150 million downloads.[50] A new version of the song was released on 18 November 2010, as part of the rebranding of the company.[50][51] This version too was composed by Rahman himself.[51] [edit]Green

initiative

This unreferenced section requires citations to ensureverifiability.

This section appears to be written like an advertisement. Please help improve it by rewriting promotional content from a neutral point of view and removing any inappropriate external links.(October 2011) [edit]GreenTowers P7 program As of today,Bharti Infratel is the only telecom tower company, which has installed almost 3 MWT of solar capacity on their network, generating more than 5 mn units of electricity every year.The Green Towers P7 program is scoped for 22,000 tower sites (primarily rural areas having low or no Grid Power availability) out of which 5,500 sites have already been implemented in the first year as a part of this 3-year program. Once completed, the initiative will reduce diesel consumption by 66 mn litres per year with a significant carbon dioxide reduction of around 1.5 lac MT per year. Bharti Infratel bagged the 2011 'Green Mobile Award ' at the GSMA Mobile World Congress at Barcelona and was also awarded the 2010 innovative infrastructure company of the year award at the CNBC Infrastructure Awards for this groundbreaking initiative.Bharti remains the first company in the world to introduce the practice of sharing of passive infrastructure by collaborating with their competition to share mobile towers and to reduce the collective carbon footprint of the industry. This has become a subject of case studies in institutions including the Harvard Business School.[citation needed] [edit]Energy conservation The company has installed solar hot water generator at its main campus in Gurgaon for fulfilling the hot water requirement in the cafeteria. Majority of its facilities across NCR region are now equipped with LES (Lighting Energy Savers) which have reduced energy consumption in the lighting system to the tune of 1025%. Variable Frequency Drives installed in AHU (Air Handling Unit) at its campus have helped in enhancing the efficiency of cooling system by 10%. These measures have resulted in a total saving of 8.5 lakh units of electricity per year. Airtel has embarked upon technology related initiatives like virtualization of servers that has helped it release over 500 CPUs. Also the drive of sending e-bills to the post-paid customers is helping save 12,840 trees annually. Within its campus the Secure Print Solution' an automated queue management based secured printing solution has led to an annualized saving of about 8 metric tonnes of paper. Alternate energy sources such as solar energy They have already deployed these at as many as 1050 sites thus saving 6.9 mn litres of diesel and approximately 280 million. Energy efficiency measures such as Integrated Power Management Systems and variable speed DC generators It has resulted in the reduction in the rate of diesel consumption by 1.2 mn litres. They have already saved 47 million across nearly 900 sites. Demand side management like Free Cooling Units (FCU) instead of air conditioners It has already been implemented across 3400+ sites, saving consumption of 4.1 mn litres of diesel.

[edit]Timeline

Logo used by Airtel till 2010 November

The chronology of events since Bharti Tele-Ventures was incorporated in 1995:[52] 1995

Bharti Cellular launched cellular services as "AirTel" in Delhi.

2010

On 18 May 2010, Airtel won 3G spectrum in 13 circles: Delhi, Mumbai, Andhra Pradesh,Karnataka, Tamil Nadu, Uttar Pradesh (West), Rajasthan, West Bengal, Himachal Pradesh,Bihar, Assam, North East, Jammu & Kashmir for Rs. 12,295 crores.[20] Bharti Airtel wins broadband spectrum in four circles: Maharashtra, Karnataka, Punjab and Kolkata for Rs. 3314.36 crores.[27] On 18 November 2010, Bharti Airtel announced a re-branding campaign wherein, they would be referred as airtel, with a new logo.[53] On 20 December 2010, Airtel launched its new identity for Bangladesh subscribers.[54] On 23 December 2010, Airtel opened its first underground terrestrial fibre optic cable built in alliance with China Telecom.[55]

2011

On 24 January 2011, Airtel announced the launch of its 3G services in India.[56] On 31 January 2011, Airtel launched wallet service - Airtel Money in the millennium city of Gurgaon.[57] On 18 February 2011, Airtel Digital TV brings cricket world cup in High Definition.[58] On 14 March 2011, Bharti Airtel announced the launch of Airtel Broadband TV.[59] On 11 April 2011, Bharti Airtel and Apple bring the iPhone 4 to India.[60] On 18 April 2011, Bharti Airtel enters into a partnership with photo service Zoomin.com.[61] On 17 May 2011, Airtel launches the worlds first USSD-based Facebook access service in India Facebook by Fonetwish.[62] On 2 June 2011, Bharti Airtel offers on-demand online movie viewing services - launches Airtel Movies[63] On 16 June 2011, Airtel digital TV launches iKisaan the worlds first interactive service in Hindi.[64]

On 27 June 2011, Airtel 3G launches international video calling services.[65] On 7 July 2011, Bharti Airtel announces new organisation structure for its India and South Asia operations.[66] On 18 July 2011, Airtel digital TV adds 41 new channels.[67] On 25 July 2011, Bharti Airtel Launches Facebook For Every Phone.[68] On 16 August 2011, Wide availability of Airtel Service Centers in Rajasthan creates easy touch points for customer service.[69] On 19 September 2011, Bharti Airtel announces GO! GO! GOAL Contest 2011.[70] On 22 September 2011, Airtel digital TV brings the TV series Johnny Test to India.[71] On 26 September 2011, Airtel Youth Star kicks off Friends Dance Carnival in Andhra Pradesh.[72] On 28 October 2011, 2011 Formula 1 Airtel Grand Prix of India Winner's Trophy Revealed.[73] On 1 November 2011, Airtel digital TV now has 11 True HD channels,Expands total channel count to 262.[74] On 11 November 2011, Bharti Airtel named amongst the top 25 companies for leaders globally.[75] On 25 November 2011, Mr. Sharlin Thayil, CEO Bharti Airtel, AP launches iPhone 4S in Hyderabad. On 1 December 2011, Airtel introduces Indias first free mobile access to Twitter.[76] On 12 December 2011, Bharti Airtel recognized for the delivery of best network services with customer focus at Telecom Centre of Excellence Awards.[77] On 21 December 2011, Airtel launches exciting recharge offers for mobile customers in Rajasthan.[78]

2012

On 11 January 2012, Airtel launched Comedy FM on Airtel Mobile.[79] On 12 January 2012, Airtel launches all new BBM Plan for its postpaid mobile customers on BlackBerry.[80] On 23 January 2012, Airtel prepaid mobile recharge made easier with netbanking at www.airtel.in[81] On 30 January 2012, Airtel digital TV launches iKidsworld.[82] On 2 February 2012, Airtel launched Vh1 Radio GAGA powered by Hungama on Airtel Mobile.[83] On 3 February 2012, Indias largest collection of Hello Tunes is now available online for Airtel mobile customers.[84] On 4 February 2012, Bharti Airtel announces consolidated IFRS results for the third quarter and nine months ended December 31, 2011.[85] On 10 February 2012, Bharti Airtel launched 3 Pack Education Portal for its mobile customers across India. [86] On 27 February 2012, Bharti Airtel selects Infosys as its technology partner for airtel money. [87]

On 29 February 2012, Bharti Airtel appoints Nokia Siemens Networks to supply, manage 4G network in Maharashtra. [88]

Airtel Africa
Airtel Africa is the collective name given to the African operations of Indian telecommunications company Bharti Airtel[2]

History
On 14, February 2010 a statement issued by Zain Ghana, said "the Board of Directors of Kuwait's Zain Group, after its meeting on February 14, 2010, issued a resolution to accept a proposal received from Bharti Airtel Limited (Bharti) to enter into exclusive discussions until 25 March 2010, regarding the sale of its African unit, Zain Africa BV." The offer was for $10.7 billion. The deal would provide Bharti access to 15 more countries in the region, adding around 40.1 million subscribers to its already 125 million-plus user base. The combined revenue of the two entities would be around $12 billion. The deal ran into hurdles after the government of Gabon had come out against the deal, but later approved the sale. The government of Congo Republic had also said Bharti-Zain deal broke law. There was also a dispute about minority ownership of Zain's operations in Nigeria, the biggest market in the deal. Minority shareholder Econet was seeking to overturn a 2006 deal by Zain - then called Celtel - in which it bought a majority stake in Nigerian mobile operator Vee Networks Ltd, now Zain Nigeria. On 8, June 2010, Bharti said the Nigeria ownership dispute had been settled.[3] On 8, June 2010, Bharti Airtel, in the largest ever telecom takeover by an Indian firm, completed a deal to buy Kuwait-based Zain Telecom's businesses in 15 African countries for $10.7 billion. The transaction is the largest ever cross-border deal in an emerging market and will result in combined revenues of about $13 billion."[4] The overall integration should be complete by the end of this financial year. On September 1, 2010, Chairman and Managing Director Sunil Bharti Mittal said that Bharti Airtel Ltd would change its Africa operations brand from Zain to Airtel by 23 November 2010.[5] On August 11, 2010, Bharti Airtel announced that it would acquire 100% stake in Telecom Seychelles for US$62 million taking its global presence to 19 countries. Telecom Seychelles began operations in 1998 and operates 3G, Fixed Line, ship to shore services satellite telephony, among value added services like VSAT and Gateways for International Traffic across the Seychelles under the Airtel brand. The company has over 57% share of the mobile market of Seychelles.[6] On 8 September 2011, Bharti Airtel announced that it had been awarded a licence by the Rwanda Utilities Regulatory Agency to operate 2G and 3G GSM mobile services in Rwanda. With this licence, the company's footprint across the African continent will expand to 17 countries. The company plans to invest over USD 100 million in its operations in Rwanda over the next three years. Sunil Bharti Mittal, CMD of Bharti Airtel said, "We are pleased to be part of the vision of the government of Rwanda to take telecommunications forward as a priority. We will work with the Government to bring affordable and best in class mobile services that add value to the lives of people of Rwanda and contribute towards bridging the digital divide in the country." Minister in the

President's Office in Charge of ICT, Dr. Ignace Gatare said, "We are entering an exciting era in telecommunications in Rwanda, which entails bringing advanced broadband wireless services at more competitive prices and allowing more people in rural areas to access mobile technology...this also marks the largest investment out of India into Rwanda and will be invaluable in enhancing the economic cooperation between the two nations."[7] On 30 November 2011, Airtel announced it acquired its 50 millionth mobile customer in Africa,[8] within 17 months of acquiring Zain Telecom's Africa operations. [edit]Operations Airtel Africa operates in 17 countries in Africa. [edit]Burkina Faso In April 2005, Celtel was acquired by and became a subsidiary of Zain (formerly the Mobile Telecommunications Company). At the time, the company had about 24 million subscribers in 14 African countries. On 8 June 2010, the company was purchased by Bharti Airtel from Zain. On 22 November 2010, it was rebranded as 'airtel'. [edit]Democratic Republic of the Congo (DRC) In the DRC, airtel replaces the Zain brand and comes with the promise of delivering high quality customer benefits through the scale of the global airtel brand. Bharti Airtel is planning to spend $400 million to improve its network in the DRC over the next three years. We are looking to expand our reach to the most rural areas, according to Antoine Pamboro, Airtels managing director in Congo. [edit]Ghana Bharti Airtel on November 22, 2010 officially launched their brand in Ghana at the Banquet Hall in Accra, after taking over the operations of Zain. Bharti Airtel is pumping 200 million dollars to expand its operations in Ghana and has also planned to bring its ecosystem of global partners to the country which could result in additional employment opportunities. The operator has also partnered with telecommunications infrastructure suppliers such as Nokia, Siemens, Ericsson, Huawei among others to extend its network to rural areas which are at present disconnected from the world and ensure that Airtel has the best quality network in Ghana and becomes the leader in Africa by 2015. Unveiling the new brand in Ghana, Philip Sowah, Managing Director of Airtel Ghana made the promise of making mobile communications affordable for all by launching a bundle of products made up of a new Nokia phone plus Airtel Sim card, talk time and SMS credits that is effectively free.[9] Airtel Ghana had about 1.76 million subscribers at the end of 2010.[10] Airtel operates a 3.75G network in Ghana.[11] iWallet, a new online payment service has been launched by Dream Oval Ltd in partnership with Airtel Money. The service will enable users to make and receive payments for products and services online. iWallet will also allow local merchants to expand across the internet and make their products available for sale to customers across the country.

[edit]Kenya Airtel Kenya is the second largest mobile phone operator in Kenya. It has 4 million subscribers as on January 15, 2011. Bharti Airtel Ltd.s Kenyan unit will focus on reducing call rates and expanding its customer base after changing its name to Airtel Kenya from Zain Kenya, a company official said. Airtel plans to keep costs down in Kenya by sharing infrastructure with existing players and through its partnerships with service providers including IBM Corp., Huawei Technologies Co. and Nokia Oyj, said Rene Meza, managing director of the Kenyan unit. The tariffs will remain low due to lower overall cost of operations as we enjoy economies of scale through these partnerships, Meza said at the press briefing. Airtel suffered losses as a result of the reduction in call charges, though the company is keen for those tariffs to remain low as it seeks to grow market share, Meza said.[12] On 27 February 2012, Airtel launched 3.75G services in Kenya.[13][14] Airtel Kenya competes with Safaricom Ltd., Kenyas biggest mobile-phone company, and Telkom Kenya, a unit of France Telecom. [edit]Malawi During his visit to Malawi, Sunil Mittal said that Airtel would install up to 200 new towers by the end of 2011. He said once Airtel Malawi completes its initial investment in the country, Malawi would join the list of countries in Africa with first class networks. The coming of Airtel into Malawi has brought in other investors in the country such as IBM, Tech-Mahindra, Ericsson and Nokia who have established their operations to provide subordinate services to Airtel. Mittal was accompanied on his visit by Bharti Airtels international Chief Executive Officer Manoj Kohli. [edit]Niger Manoj Kohli said penetration rates in Niger, a poor desert nation currently in the grips of a food crisis, was one of the lowest at 10 percent to 11 percent. "If Niger is to develop, it much reach (penetration rates) of 40 percent," he said. "Our group is going to invest here to ensure that we can make the difference in telecommunications here in Niger." [edit]Nigeria Airtel Nigeria started operations as Econet Nigeria. Econet was rebranded to Vodacom, South Africas second largest telecommunication brand. However, Vodacom did not last a week in the Nigeria. The development prompted Nigerias first GSM brand to operate in the country without identifiable corporate name and strategy for over two months. The circumstances created Vmobile, which was made up of a group of Nigerian entrepreneurs who vowed never to let the brand exit without a fight. They (Vmobile) led the unbranded Vmobile to the threshold of MTC, owners of Celtel brand that later acquired the Vmobile and rebranded it, Celtel in Nigeria. Two years after the success story of Celtel, Zain announced takeover of the Celtel brand from MTC across Africa and Middle East. It would be recalled Celtel in 2006. But two years later, precisely on August 1, 2008, Celtel made the way for Zain following the global acquisition of Celtel International by MTC Group, which transformed to Zain.

In just another two years interval, Zain was acquired by Bharti Airtel and rebranded for the sixth time to 'Airtel'.[15] On 29 February 2012, Airtel launched 3.75G services in Nigeria.[16] [edit]Rwanda On 8 September 2011, Bharti Airtel announced that it had been awarded a licence by the Rwanda Utilities Regulatory Agency to operate 2G and 3G GSM mobile services in Rwanda. The company plans to invest over USD 100 million in its operations in Rwanda over the next three years. Sunil Bharti Mittal, CMD of Bharti Airtel said, "We are pleased to be part of the vision of the government of Rwanda to take telecommunications forward as a priority. We will work with the Government to bring affordable and best in class mobile services that add value to the lives of people of Rwanda and contribute towards bridging the digital divide in the country." Minister in the President's Office in Charge of ICT, Dr. Ignace Gatare said, "We are entering an exciting era in telecommunications in Rwanda, which entails bringing advanced broadband wireless services at more competitive prices and allowing more people in rural areas to access mobile technology...this also marks the largest investment out of India into Rwanda and will be invaluable in enhancing the economic cooperation between the two nations."[7] On 23 September 2011, Airtel announced the appointment of Marcellin Paluku as the country manager in Rwanda. Paluka, with over 15 years experience at FMCG and telecom companies including Coca-Cola and Celtel and having worked across the continent, was the commercial director at Airtel DRC.[17] On 30 March 2012, Airtel launched their mobile services in Rwanda.[18] [edit]Seychelles On August 11, 2010, Bharti Airtel announced that it would acquire 100% stake in Telecom Seychelles for US$62 million taking its global presence to 19 countries. Telecom Seychelles began operations in 1998 and operates 3G, Fixed Line, ship to shore services satellite telephony, among value added services like VSAT and Gateways for International Traffic across the Seychelles under the Airtel brand. The company has over 57 percent share of the mobile market of Seychelles.[6] Airtel announced plans to invest US$10 million in its fixed and mobile telecoms network in the Seychelles over three years, whilst also participating in the Seychelles East Africa submarine cable (SEAS) project. The US$34 million SEAS project is aimed at improving the Seychelles global connectivity by building a 2,000 km undersea high speed link to Dar es Salaam in Tanzania.[19] [edit]Sierra Leone Airtel officially launched their brand in Sierra Leone on November 19, 2010 and is the most innovative mobile phone operator in the country. Airtel Sierra Leone introduced the BlackBerry Enterprise service. Airtel Sierra Leone on the 25th February 2011 were worthy recipients of a certificate by the Independent Media Commission for their support to the commission and for their relentless sponsorship of the commissions awards ceremony since its inception in 2005. Mr. Kelvin E Kellie, Airtels Head of Corporate Communications was in acceptance of the certificate on behalf of company.[20]

On 3 February 2012, Airtel launched 3.75G services in Sierra Leone.[21] [edit]Tanzania Airtel Tanzania plans to expand its network and boost market penetration, writes the Citizen Reporter citing comments from Bharti Airtel MD Sam Elangalloor. He said that that Airtel had signed contracts with Ericsson, Huawei and Nokia Siemens Networks (NSN) to extend its network to underserved areas. He added that Airtel was looking to expand its group subscriber base by 150 percent by 2013 to 100 million customers across Africa. To help boost take-up in rural areas, Airtel has unveiled a new package in Tanzania offering an Airtel SIM card, Nokia 1280 phone and the equivalent value in Airtel talktime and SMS text messages for TZS 39,000.[22] On 13 March 2012, Airtel launched 3.75G services in Tanzania.[23] [edit]Uganda Bharti Airtel entered one of Africas most competitive markets that Sunil Bharti Mittal, the chairman of Bharti Airtel, referred to as the continent of hope and opportunity. The east African country has a competitive telecommunications market with six GSM operators. The market is dominated by the local subsidiary of South Africa's MTN Group controlling more than half of the subscriber base. Ugandas telecom sector is considered by current operators as crowded. There are seven players; MTN, Zain, Uganda telecom, Warid, I-Telecom, Smile and Orange. According to the Uganda Communications Commission(UCC), the telecom industry regulator, revenues from the sector are forecast to increase at an annual rate of 25-30 percent over the next five years, underpinned by a rapid uptake of internet services. [edit]Zambia Airtel has also unveiled its new brand identity across its sixteen African operations including Zambia. Bhart Airtel Limited Chief Executive Officer and Joint Managing Director MANOJ KOHLI said the rebranding will see more employment opportunities created in Zambia. Airtel Zambia Managing Director FAYAZ KING said Airtel is committed to bridging the digital divide in the country by expanding to rural areas. About US$ 150 million will be spent in network expansions. On 17 January 2012, Airtel launched 3.75G services in Zambia.[24][25] [edit]3G Airtel has 3G licences in 12 out of the 17 countries in Africa it operates in and offers services in 11 of them. The remaining 5 countries would also get Airtel 3G services as soon licences are issued for them.[26] The company wants to tap the African 3G market with a special focus on video services, as it sees a huge demand for video based services there. On 25 October 2011, Airtel launched 3G services in Congo. This was the first 3G service launched in Central Africa and the second amongst the French-speaking African nations, after Senegal.[27]

[edit]One

Network

One Network is a borderless mobile phone network across all Airtel operating countries which enables customers to move freely between the countries in which Airtel operates, and be treated as virtual local customers of the visited network in terms of pricing, while retaining their home network service functionality. One Network allows customers travelling to One Network countries to make outgoing calls/SMS at the same rates as local customers and recharge with local top-up cards or with home network top up cards while using the same number and SIM. Incoming calls however are charged at between $0.03 - 0.15 depending on the country the call is received from. Airtel offers the service to its Africa customers travelling to any of the following 27 countries.[28] In seven of these countries, the One Network is operated in partnership with other mobile operators. They are also listed below. S. No. Country Network

Burkina Faso

Airtel

Bangladesh

Airtel

Chad

Airtel

Channels Islands: Jersey and Guernsey Airtel

Democratic Republic of the Congo

Airtel

Gabon

Airtel

Ghana

Airtel

India

Airtel

Kenya

Airtel

10

Madagascar

Airtel

11

Malawi

Airtel

12

Niger

Airtel

13

Nigeria

Airtel

14

Republic of the Congo

Airtel

15

Sierra Leone

Airtel

16

Seychelles

Airtel

17

Sri Lanka

Airtel

18

Tanzania

Airtel

19

Uganda

Airtel

20

Bahrain

Zain

21

Iraq

Zain

22

Jordan

Zain

23

Kuwait

Zain

24

Saudi Arabia

Zain

25

Sudan

Zain

26

South Africa

Cell C

27

Egypt

Mobinil

[edit]Airtel

Money

Airtel money is a Mobile Commerce service that allows you to access services that include Transfer money from your mobile phone to another mobile phone recipient wherever you are, any time you want Top up your mobile phone or another customer's mobile phone Access and manage your Bank Account Pay for your utility bills.[29] [edit]Airtel

Rising Stars

Airtel conceptualised a unique football property across its 16 markets in Africa that supported talent and provided a platform to gain football skills and have a chance to become football stars in each country. The cooperation and support of all stakeholders uplifted these stars onto a world stage. Airtel Rising Stars,[30] an ambitious Pan African soccer talent programme that focussed on identifying and nurturing budding soccer talent from the grassroots onto a national stage. The program provided a platform for upcoming soccer talent under the age of seventeen to showcase their skills to leading scouts, coaches and have an opportunity to further their football skills. The initiative targets boys and girls across the country and supported by one of the worlds leading soccer teams, Manchester United.
Profit & Loss - Bharti Airtel Ltd.Print
Mar'11
12 Months

Mar'10
12 Months

Mar'09
12 Months

Mar'08
12 Months

Mar'07
12 Months

INCOME:
Sales Turnover 38,015.80 35,609.54 34,048.32 25,761.11 17,851.61

Excise Duty

0.00

0.00

0.00

0.00

0.00

NET SALES
Other Income

38,015.80
0.00

35,609.54
0.00

34,048.32
0.00

25,761.11
0.00

17,851.61
0.00

TOTAL INCOME

38,170.70

35,758.53

34,284.31

26,028.02

17,953.31

EXPENDITURE:
Manufacturing Expenses Material Consumed Personal Expenses Selling Expenses Administrative Expenses Expenses Capitalised Provisions Made 14,204.20 244.10 1,304.50 3,180.20 5,680.00 0.00 0.00 11,882.41 313.63 1,401.66 2,404.91 5,982.64 -293.31 0.00 8,627.13 281.65 1,397.54 2,210.43 8,608.03 -269.25 0.00 7,339.01 33.85 1,297.88 1,842.51 4,588.53 0.00 0.00 5,017.27 22.08 1,076.95 1,126.34 3,351.31 0.00 0.00

TOTAL EXPENDITURE
Operating Profit

24,613.00
13,402.80

21,691.93
13,917.61

20,855.54
13,192.78

15,101.78
10,659.34

10,593.96
7,257.65

EBITDA
Depreciation Other Write-offs

13,557.70
4,193.70 417.90

14,066.60
3,890.08 207.84

13,428.77
3,206.28 178.82

10,926.24
3,166.58 266.07

7,359.35
2,353.30 137.80

EBIT
Interest

8,946.10
296.70

9,968.68
283.35

10,043.67
434.16

7,493.59
393.43

4,868.24
282.07

EBT
Taxes

8,649.40
1,007.60

9,685.32
1,177.87

9,609.50
321.78

7,100.16
632.43

4,586.17
566.79

Profit and Loss for the Year


Non Recurring Items Other Non Cash Adjustments Other Adjustments REPORTED PAT

7,641.80
63.30 11.80 0.00 7,716.90

8,507.45
969.48 -50.78 0.00 9,426.15

9,287.72
-1,497.74 -46.15 0.00 7,743.84

6,467.73
-162.87 -60.67 0.00 6,244.19

4,019.39
3.92 9.92 0.00 4,033.23

KEY ITEMS
Preference Dividend Equity Dividend Equity Dividend (%) Shares in Issue (Lakhs) 0.00 379.80 20.00 37,975.30 0.00 379.79 20.00 37,975.30 0.00 379.65 20.00 18,982.40 0.00 0.00 0.00 18,979.07 0.00 0.00 0.00 18,959.34

EPS - Annualised (Rs)

20.32

24.82

40.79

32.90

21.27

Balancesheet - Bharti Airtel Ltd.Print


Particulars Liabilities
Share Capital Reserves & Surplus

Mar'11 12 Months
2,177.40 41,932.10

Mar'10 12 Months
2,084.86 34,650.19

Mar'09 12 Months
2,014.46 25,627.38

Mar'08 12 Months
1,955.54 18,283.82

Mar'07 12 Months
1,925.93 9,515.21

Net Worth
Secured Loans Unsecured Loans

44,111.60
17.10 11,880.40

36,737.18
39.43 4,999.49

27,643.96
51.73 7,661.92

20,241.49
52.42 6,517.92

11,443.27
266.45 5,044.36

TOTAL LIABILITIES

56,009.10

41,776.10

35,357.61

26,811.84

16,754.07 Assets

Gross Block (-) Acc. Depreciation

61,437.50 20,736.70

44,212.53 16,187.56

37,266.70 12,253.34

28,115.65 9,085.00

26,509.93 7,204.30

Net Block
Capital Work in Progress. Investments. Inventories Sundry Debtors Cash And Bank

40,698.70
6,497.60 11,813.00 34.40 2,375.80 133.80

28,022.84
1,594.74 15,773.32 27.24 2,104.98 816.74

25,011.23
2,566.67 11,777.76 62.15 2,550.05 2,251.60

19,028.52
2,751.08 10,952.85 56.86 2,776.46 502.94

19,303.51
2,375.82 705.82 47.81 1,418.52 780.46

Loans And Advances

11,186.10

7,072.42

5,602.83

5,103.13

3,160.02

Total Current Assets


Current Liabilities Provisions

13,730.10
16,104.80 627.60

10,021.38
12,979.55 658.75

10,466.63
13,832.49 634.40

8,439.38
12,400.38 1,961.95

5,406.81
9,809.83 1,232.84

Total Current Liabilities NET CURRENT ASSETS


Misc. Expenses

16,732.40 -3,002.30
0.00

13,638.30 -3,616.92
0.00

14,466.89 -4,000.26
0.09

14,362.33 -5,922.95
0.20

11,042.67 -5,635.86
2.66

TOTAL ASSETS (A+B+C+D+E)

56,009.10

41,776.10

35,357.61

26,811.84

16,754.07

Case study

Bharti Is Zain a good match?


On 15th Feb, 2010 Bharti announced the acceptance of its bid for Zains Africa business by Zains board. The deal value is $ 10.7 billion which Bharti plans to fund by loans arranged by Standard Chartered Bank and a couple of other Banks. This is the third attempt by Bharti to enter Africa after two failed attempts with MTN of South Africa. The share price of Bharti took a serious beating after this announcement as most of the analyst felt that Bharti is overpaying for Zains assets by around $ 2 billion. My analysis shows that it is a good deal for Bharti and its stock price would rise in the long run. In fact, just after the announcement of the deal, I brought Bharti shares and my optimism is based on the following facts:

1. Low Financial Leverage

Bharti has a very low Net Debt to Equity Ratio of 0.05 at the end of Dec., 2009 which means that it is virtually a debt free company. It is good to have low debt but zero debt is not a desirable situation as debt can increase the shareholders return on their investment due to tax advantages associated with borrowing. The figure along side illustrates how financial leverage can help companies optimize their cost of capital. As it can be seen from the figure, the total cost of capital is high if there is no or low debt and there is a level of financial leverage where the total cost of capital is the lowest. Most of the companies try to maintain leverage at the level where the total cost of capital is lowest. Bharti is a profitable company with over 40% EBIDTA margins which is higher than the cost of debt. This means that it is better for the company to pay interest than

paying dividends to a large number of shareholders and hence it should either reduce the shareholding (through share buyback) or increase debt and deploy debt in a profitable way. Bharti has selected the second option and is taking debt to buy Zain that would return higher profits in the long term. It is like investing for the future. Even if Bharti were to pickup $ 7 billion for the Zain acquisition as debt, then also the leverage is unlikely to exceed 1 which would still be lower than many listed companies. To put the case in perspective, Verizon has a debt to equity ratio of1:45 while the similar ratio for Sprint Nextel is at 1.19 and for Telefonica, it is as high as 2.78 (source: Forbes financial application).
2. Free Cash

Bharti is one of the few carriers across the world that has free cash flow and it does not make sense for the company to keep sitting on the pile of cash when it can deploy it in productive assets. The capex in the Indian operations have started to decline and hence the free cash flow is likely to increase even further in future. If Bharti decides to fund the Zain acquisition through debt, it would not find much problem in servicing this debt due to generation of free cash flow in the years to come.

3. Attractiveness of African Market

Africa is the next frontier as far as mobility is concerned. As markets saturate, the carriers start to look at opportunities outside of their domestic markets. Vodafone invested in India around three years back to increase the growth potential of its revenues. Now that the tariffs have declined significantly in India and that the

penetration levels have crossed 45% in India, there is little opportunity left in the domestic market for Bharti. The penetration levels in Africa are around 33% and the ARPU levels are high varying from $8 12 (apart from Kenya and Ghana where it is closer to India ARPU levels of $4). Bharti can replicate its low cost model in the African market which would not only bring the cost down but would also result in significantly higher subscriber addition. The level of competition in Africa is not as intense as India as most of the countries have no more than 4-5 operators. The countries where Zain has operations in Africa have a population of close to 500 million which is an indicator of the opportunity that lies in Africa.
Summary

I believe that with this deal, Bharti would be able to increase the valuation of the company in the longer term. The Zain deal would turn out to be better than MTN as it would be an outright purchase rather than co-ownership as in case of MTN deal. Most of the joint ventures or mergers fail due to cultural issues and ego issues between partners and the ego issues are more likely in co-ownership model. Moreover, in case of Zain, the regulators are unlikely to hold the deal on account of nation pride as Zain does not belong to any of African country and hence there would not be any insistence on dual listing or any similar binding as it was in the case of MTN.

Bharti-Zain Deal: Is it a Good Deal?


Bharti Group: Bharti-Airtel Groups, with a customer base of more than 121million subscriber, form the largest cellular service provider of India. The Bharti group is now the worlds third-largest, single-country mobile operator and sixth-largest integrated telecom operator. The groups cater the mobile service in India under the brand name of Airtel and are headed by Sunil Bharti Mittal, He is termed as the Indian Telecom Mogul because of his largest telecom service provider in India. He is the chairman and the managing director of the Bharti Groups. The company has a turnover of US$ 12 billion. The businesses at Bharti Airtel have always been structured into three individual strategic business units (SBUs) Mobile Services, Airtel Telemedia Services & Enterprise Services. The Company has a market share of around 24.6% of the whole chunk of the mobile subscriber in India followed by Reliance Communication with 17.7% and Vodafone by 17.4%.

Airtel has always looked at the overseas market also. The Bharti Groups always tried to take the brand of Airtel outside of India. To an extent it has been successful also in doing this as it has nearly started its operation in Srilanka and Bangladesh also under the brand name of Airtel. In December 2008, Bharti Airtel rolled out third generation services in Sri Lanka in association with Singapore Telecommunications. SingTel is a major player in the 3G space in Asia. It operates third generation networks in several markets across Asia. The operation of Airtel in Srilanka is under the name of Airtel-Srilanka. Recently in January,2010 it announced of its operation in Bangladesh. Revenue : US$ Operating Income : US$ Net Income Total Assets : US$ 11.853 billion Zain Group: : US$ 7.254billion 2.043Billion 1.662billion

Zain is a Kuwait based company started under the name of Mobile Telecommunication Company (MTC) in 1983 and was later rebranded to ZAIN in 2007. Zain has present operation in 25 countries covering 17 countries in Africa and 8 countries in Middle-East, with a estimated workforce of 15000. As on February 2010, about 60% of the Zain customers are in Africa contributing only 15% to the net profit of Zain. Zain has a total of 65 million customers. Out of which 39 million customers are from Africa. The eight countries in Middle-East where Zain has it Operation are Bahrain, Iraq, Jordan, Kuwait, Saudi Arab, Lebanon, Palestine and Sudan, It has its operation in Lebanon under the brand name of MTC TOUCH. The seventeen countries which comprises of the members of the Zains Operative family in Africa are Burkina Faso, Chad, Democratic Republic of Congo, Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leona, Tanzania, Uganda, Zambia and Morocco. Mr. Nabeel Bin Salamah is the CEO of the Zain Groups and Mr. Barak Al-Sabeeh is the chairman of the board of Director of the company. Revenue : Net Income :US$ 1.196 Billion US$ 7.441 Billion

Why African Telecom Sector? One of the best penetrating opportunities for the global telecom players is the telecom market in Africa. In Asia, Europe, North America, the telecom sector is approaching a saturation point. The

growth in these areas will be comparatively slower. The companies always look for the maximization of profit, whether it may be through cutting down of cost or increasing the sales. If the market reaches a saturation point then there is no opportunity to increase the sale. And if the company cannot decrease the cost then it will try either to diversify or to expand it grip in the global market. If the areas like North America, Asia and Europe are already in a saturation point then the next growing market for the global player will be Africa continent. Some of the major players in the telecom sectors of Africa are MTN, Zain, Vodacom, STC etc. Since the processes of liberalization and privatization have been taken into consideration by African countries such as Uganda, Tanzania, Nigeria, The Sudan, South Africa and Kenya, their telecommunication infrastructures have improved drastically. Many African governments have developed their telecommunication infrastructure by privatizing their former state-owned enterprises. So these open up the stage for global players to perform in it. Africa has become the fastest growing mobile-network market during last five years. The mobile user base has increased to more than 82 million in Africa. A survey by Ernst & Young shows that between 2002-07, the industry grew by 49.3 percent as opposed to Asia which recorded a 27.4 percent growth. This reports estimate growth of the industry almost doubles that of Brazil which stood at 28 percent in the same period and is almost seven times the growth of France which grew at 7.5 percent over the same time. Even there was a report by The World Bank in which it mentioned that Afro-nations like Kenya have 95% of mobile network penetration and coverage gap of only 5%. Thus making it an attractive market to lure some of the major player from the world. Lets think a bit over this scenario. Why the Afro mobile market is developing so late and faster than any area that used to be at the same period of time. In 2004, only 6% of the African citizen owned mobile. The supply side was much higher than the demand side. And the prices dropped, but made the African mobile network market a huge potential market for the global players. They produced low cost and user-friendly phones and network plans to attract more and more customer so that the company can increase its customer base. But there some other criteria or which we also call as external environment of a company which affects a company to operate in that area. The Law of Land also affects the company to design its operation in a country. They may be the tax-policy, the FDI policy of the government, the policy regarding and regulating the telecom sectors etc. Because of these regulations, there are many Afro-nations like South Africa which hold a huge potential market. In South Africa, there are only three players in telecom network market. The heavy tax burden on both the operator and consumer is the major challenge for the industry, with an average taxation on the operators profits standing at 30%. For example, in Kenya, people pay tax of 26% on mobile communication and the operator pay the remaining 4%. The total tax paid is 30%. But still the government of these nations opines that the industry is highly profitable, despite of the fact that return on investment could be delayed due to poor infrastructure. The Afro-nation doesnt have the apt infrastructure or the geographical hindrances as well as the population is scattered. The main problem lies with the electric infrastructure. The company has to keep more than 2000 standby generators because of frequent power failure. On of the company operating in Kenya, Safaricom spends over KShs 171 million on diesels due to lack of power supply. This makes the cost of investment much high in comparison to the other area. The operating cost of the

company is high in this area because of frequent power cut and even the tax rate is also high, thus bringing down the profit of the company. But it may be the future scenario of these countries which lures the global players. The company may sustain the loss in the short-run but it may earn profit in the long-run. Because the economy of Afro-nations are growing at a remarkable rate and the infrastructure are also gradually increasing. So it may in the long-run be aptly developed so as to favor the network industry. Moreover this is the entry level of the network sector in Africa as it is developing but once it get saturated the threat to entrants decreases because if they enter in to the segment, they will not find any extras to lure the customers. Bharti-Zain Deal Zains profitability is lower than Bharti despite average higher spending by its users. However, as per an estimate only one in two Africans holds mobile phone and with Zain having a strong presence in most of the countries in Africa, Bharti is well set to dream big in terms of global ambitions. On 11th February, 2010, Sunil Bharti Mittal, on behalf of the management of Bharti, confirmed that it is in an exclusive talk with Zain Telecom for buying the African asset of Zain (excluding Sudan and Morocco) for $10.7 billion. He declared that the company is going to raise a debt of $9 billion to finance its acquisition of Zains Africa operations. And the rest amount of $1.7 billion would be met from the cash reserves of the Bharti. The share price of Bharti- Airtel was Rs.311.85 on 11th February, 2010 on the date of declaration of this deal. The investor became pessimistic on this deal and with the bearish mood they sold out their holding shares. This behavior pushed the price of the Bharti-Airtel down to Rs. 272.8 in the first week of March. When asked by a Media Person about this reaction of shareholders, Mr. Mittal replied that it is obvious that when a company makes an acquisition, the share price of that company falls who acquire and the share price of that company rise which is acquired. Now let us analyze this behavior of share-holders. The company when acquire another company, it not only become the owner of the assets of the company but also he become liable to pay-off the debt or the liability of the company. So the acquiring company has to pay the liability from his own pocket and thereby decreasing the Profit and the EPS. So the share holders feel insecure of their holdings of shares and they try to sell out their holdings. Whereas on the counterpart when a company is acquired, the shareholder feel secured that the outstanding liability would paid off, a new and better management is going to run the company and bring it back to track. The company will earn profit in the hand of new management and give a better return on the investment. So the shareholders show a characteristic of bearish on the shares of acquired company. For this reason the share holder are bullish on the acquired company and bearish on the acquiring company. After the declaration by the company of this deal, there were many rumors that rolled in the market and the printing media as well as the electronic media. Many analysts termed it as a forced marriage or this deal has black futures etc. They were of this view because they felt that the Bharti- Airtel is paying much higher than the actual value. Even the S&P revised its rating on the Bharti- Airtel share price. Some of their views were:

It felt that there is higher rate of business risk on the Zain Deal which Bharti may have to bear. It revised the ranking of Bharti share and rated as negative credit watch.

The impact of this rating by S&P on the share price of Bharti would that the rate on borrowing by the Bharti Airtel may increase. But after the rating provided by the S&P, Anand Sharma, Minister for Trade and Commerce, on behalf of Government of India said that if an Indian Company is trying to take the essence of Indian Trade to world market then GOI would back such acquisition. Coming back to the point that whether the Bharti groups is over-paying for Zain deal? And because of this will the stock come under more pressure?