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AIRTEL 4G

Marketing Plan

Group Members
Aditi Agarwal Amit Mutha Anil Gawade Apurva Suvarna Arpita Kalubarme Ashwin Nair Chintan Gala Mikhil Sabadra Nikhil Kele Rajdeep Malhotra Sujitkumar Birendranath Tasneem Nawab Vishal Yadav

Objectives:

20% of 3G users shift to 4G (5.18 million 3G Subscribers) Every year, we attract 10% new users (2G / Vodafone / Reliance, etc.) ARPU will also increase by 10% YoY
Growth Potential: Compounded growth of 12% in Total Revenue YoY

Flow of Presentation
• Timeline • Sector Overview

• Competitor Analysis
• PEST Analysis • Porter's Five Forces Analysis • Primary and Secondary Research • Integrated Marketing Communications

• Cost - Benefit Analysis

Timeline of Important Telecom Regulations in India Private Players Allowed in VAS 1992 1994 NTP was formulated CPP Implemented ILD services were opened to competition 2002 Reduction of License fees Internet Telephony Initiated UASL was Introduced TRAI was established 1997 BSNL was established by DOT 2000 1999 2003 NTP-99 Migration from High cost to low cost revenue sharing CDMA Technology .

spectrum Allotment awaited .Timeline of Important Telecom Regulations in India Number Portability was proposed 500 million connections Intra-circle Merger Guideline Boost Rural Telephony MNP Implemented 2009 2011 2012 Service Tax 10% -> 12% 2004 2005 2006 2008 Broadband policy formulated FDI limit increased from 49 %to 74% 3G policy announced.

Present: Indian Telecom Industry • Second largest wireless network in the world • 926.55 million Telephone connection after China • India will achieve 1 billion telephone connections • Wireless telephones are increasing Recent Updates •India will allow wireless broadband airwave holders to provide voice services • Samsung prepping a $100 contract free 4G LTE smartphone for India •Indian consumers would not be able to enjoy 4G data services on their Apple products .

Wireless services driving growth : Major players .

Net addition in past year .

The Company could have an advantage over the competition .Competitor Analysis Reliance Jio Infocomm • Only owner of pan-India BWA spectrum • To set up over 1 lakh telecom towers on its own • Offer voice services •Plans to roll out in 69 cities by 2014 • It can change the pecking order in the world's third biggest telecom market as most players are reeling under huge debts amid falling margins Tikona Digital • Won the BWA spectrum in the five circles • Planning to launch its 4G services sometime later this year or in early 2014 Aircel • Has BWA spectrum in eight circles and 3G spectrum in 13 circles • Roll out 4G services in the current year • Will invest Rs 7500 crores Videocon • Bagged liberalised spectrum for seven circles • Launch 4G long-term evolution (LTE) services in the Gujarat circle • Tied up with Nokia Siemens • Using 4G technology based on FDD-LTE.

PEST ANALYSIS Political • 2G Spectrum Case • 2G Auctions second round • 3G Auction • 4G in India • Stability of Government Economic • Economic Growth and GDP trends • Business Cycle Stage • Infrastructure Cost Social • Demographics changes • Lifestyle changes • Income Distribution • Level of Education • Ease of availability of services Technology • Technology Infrastructure • High capital investment • Sharing of towers • Different generation .

High competition 2. Well established players 3.Low scope of forward integration Power of Buyers: High 1. Low Brand Loyalty .Porter’s Five Forces Analysis Barriers to Entry: High 1. Internet telephony Power of Suppliers: Low 1. MNP 3. of competitors 2. Large no. Evolving Technology Degree of rivalry: High Threat of substitutes: Moderate 1. High capital investment 2. Low Switching Costs 2.

Primary Market Research Top Competitors: • Vodafone • Dolphin/MTNL • Idea • Reliance • Aircel • Tata Docomo .

Primary Market Research .

Secondary Market Research Smartphones Customer Demand • 31% of smartphone users and 37% of non-users would upgrade to a 4G smartphone package • Existing smartphone users would agree to pay a premium of EUR 8-10 for a 4G plan • In all markets price is the single most important criteria • Only in Sweden coverage is also of high concern Mobile Broadband • 37% of current mobile broadband users and 41% of non-users are willing to opt for a 4G dongle/card • Also in mobile broadband current users would pay a premium of EUR 8-10 • Price is the leading buying criteria but QoS parameter such as speed and coverage are more important than for Smartphones Willingness to pay Key buying criteria .

making real-time applications such as VoIP. and online gaming possible .Advantages of 4G over 3G Higher user speeds Faster connection times Less roundtrip latency • 4G enables users to download more content than 3G in the same amount of time • This makes data-intensive. on-the-go downloads such as music or high-definition video streaming a reality • 4G requires 95 percent less time to connect than evolved highspeed packet access (HSPA+). video calls. assuring an “always-on” service experience • LTE offers a 50 percent reduction in round-trip latency compared to HSPA+.

OPERATIONS .

4G License in India Service Provider Airtel Aircel Qualcomm Tikona Price (in Cr Rs) 3314 3438 4912 1057 Augere 124 .

Future of 4G in India • Current licenses(as of May 2010) are for 2300 MHz frequency band • New spectrum allocation in mid 2014 • No of 4G users is estimated to be 1 million by 2015 with new operators coming • New technologies like TD-LTE are evolving • Voice over 4G services .

4G Service Launch City Kolkata Date 10th April. 2012 Partner ZTE Bangalore Pune 7th May. 2012 Huawei Nokia Siemens Kolkata Launch: • 4G dongles – 7999 Rs and wi-fi – 7750 Rs • Rental – 999 Rs and 1999 Rs • Plan – Data usage (6-30 GB) with cash back offer • Speed reduced to 128 kbps after limit . 2012 18th Oct.

Current Product Portfolio Tariff plans Name of the Bill Plan Rental (in Rs) Free usage (in GB) Charges after free usage Speed post free usage Cash back offer Cash back period break free 999 6 break free max 1399 9 break free ultra 1999 18 break free ultimate 2999 30 break free supreme 4799 50 Nil 128 Kbps Nil 128 Kbps Nil 128 Kbps Nil 128 Kbps Nil 128 Kbps 167 6 months 466 6 months 312 12 months 417 12 months 417 12 months 1 month 2 month discount of Rs discount of Rs discount of Rs Description of rental over 6 rental over 6 3749 over 12 4999 over 12 4999 over 12 cash back months months months months months .

4999 • LTE network only with USIM Customer Premises Equipment • Rs. 4999 • Built-in DHCP Server and NAT • Security serve Huawei Ascend P1 LTE • Expected launch date before November 2013 • Expected Price:Rs.Current Product Portfolio Wireless Dongle • 4G Multi Mode Dongle • Rs.27000 • Expected rollout in Delhi and Mumbai USIM (Universal Subscriber Identification Module) • New sim for new connection • USIM is a 128 KB SIM card • Price at Rs 49 .

you will need a 4G enabled USIM card  You will require a 4G enabled device & airtel 4G network to enjoy airtel 4G services  All packs will work on both on USB Modem and 4G enabled indoor wi.fi device  You cannot recharge a data pack with another data pack till previous balance is above 500MB  On recharge with new data pack (when balance less than 500MB)/change in existing pack. earlier data balance available in your account will be forfeited .Fine prints regarding Airtel’s 4G plans In order to enjoy 4G LTE services.

1L Airtel 4G Specifications Speed 100 Mbit/s for high mobility communication Hi Speed Wireless Broadband Service 1 Gbit/s for low mobility communication Voice Calling Future Launches Other Cities Haryana Kerala Services . 1L DELHI Huawei 3000 405 Cr.Upcoming 4G Launches LOCATIONS PARTNER NO OF BASE STATIONS TOTAL FIXED COST OF B STATIONS TC /MONTH/ BS = CAPEX + OPEX (appx) CHANDIGARH ZTE 1000 135 Cr. 1L MUMBAI Huawei 3000 405 Cr.

for instance. for highspeed 4G LTE connectivity. Connect to multiple laptops with high-speed 4G LTE connectivity. LTE enabled Fast performance and LTE speeds .Upcoming 4G Launches Objective To become 1st to launch 4G in licensed circle To recover high cost of licenses Technology LTE is preferred over WiMax TD-LTE is preferred over FDLTE Voice Technology Nokia Siemens Network CSFB in LTE 4G LTE DEVICES Device Features 4G LTE USB Modems 4G LTE Indoor Wireless Gateways Smartphones Dongle CPE Connect to a laptop or compatible tablet PC via USB. in a family or an enterprise. Perfect when there are multiple users.

Challenges • Device and data tariffs remain high • Unavailability of relevant content • Less demand to drive wireless broadband services penetration • Inability to upgrade / exchange 3G device with 4G(LTE adaptable) device • New or separate SIM or number for airtel 4G LTE .

Airtel ventures in for the elite class.i.Segmentation • Done on the basis of Regulatory norms. across all urban & rural segments . Telecom circles based on states & regions • Market-wise.e. Corporates & young professionals requiring quality mobile telecom facilities • Provide all over India.

Corporates. the educated. well-aware class of people . quality seekers • Target Women & Senior Citizens with postpaid plans • Airtel should start targeting across various geographical social classes of India • Being the first mover for quite some time India with new services like Hello Tunes. YUPS(Young Upward Profesionals) Youth – Achievers & aspiring individuals. Airtel Live. Airtel’s target market has been of those who are ahead of the curve. Blackberry handsets etc. electronic recharge.Targeting • Elite class .

be it network. offerings or services • Sponsor events like Golf which particularly entices the privileged class • Tagline 'touch tomorrow' to cater to other aspirational segments of the population .Positioning • • Core values of the brand. leadership. performance and dynamism • Position itself in the premium category aimed at elite class of society • Created Airtel as an aspiration and lifestyle brand • The tagline "power to keep in touch' • The brand should resonate leadership. everywhere. innovations.

Some Big Ticket Ideas Corporate plans. 4G enabed handsets . Dongles.Closed User Groups Airtel Platinum Service for 4G users Give 4G enabled hardware free with 4G services to build the necessary infrastructure eg.Tie ups with corporates to set up 4G wifi/dongles ‘Lighter strategy’.making airtel recharge cards available wherever lighters can be found Focus where 3G is underpenetrated and provide direct mobilization of the non data users to 4G CUG.

broadband and wifi Enable all this on a single device and a single bil Offer video on demand and IPTV to subscribers .Some Big Ticket Ideas A single pipe that meets all the requirements A portable dongle. set top box at home that will allow video streaming TV. broadband data and VOIP calls Will be able to do away with multiple players for various functions such as direct to home.

the objectives will be to first skim the market and go mass slowly Double the premium of 3G Dongles priced at 4999 a piece. voice and data is 900 at the lower end of scale Payment services to create captive payment gateways so users can pay for apps on a monthly basis rather than per usage basis Free voice calls with a certain GB of data and some free minutes of video streaming . Base plan monthly rental of 999 Avg Indian household’s monthly spend on cable TV.Pricing 4G. movies.4P’s.price and content is vital Selective about the audience.

Reliance to launch 5500 Rs 4G handsets in collaboration with Samsung by end of year 2013 B2B B2C Objective : Lock customers before Reliance launch Mobile TG Dongles / Broadbands TG .Integrated Marketing Communications 4G Services TG Current Scenario : Airtel 4G High Costs.

Tie up with Tab cabs . CNBC awards. Delhi Marathon HoReCa Tie ups • Waiting lounges at airports and 3AC and above railway lounges.B2B Tie ups with corporates • Set up “Airtel World” Shops which can double up as Work from Home Kiosks Event Tie ups for trials • Sponsoring of business events like ET business leader.5 Star Hotels.

is not attached to the mobile personally. scores. uses the mobile to check for relevant news updates usually set up through a RSS feed. alarm. alerts regularly Is not worried about the cost – not deal seeking Constant Mover : (S)he uses the mobile to check for routes while traveling. uses utilitarian applications like torchlight. get news updates. uses the mobile to stay connected and check mails sporadically Costs are a moderate consideration SuperConnect ed Executiv e ConstantMo ver . uses the mobile to check for mails when outside office. uses the mobile to find decent hotels to stay in. while traveling to college or work to stay connected or to play games (Mobile Apps). etc… Might have budgetary constraints – look for deals Utilitarian – Executive : (S)he is a committed professional. uses the mobile to check for train / Flight schedules.B2C – Mobile Target Groups Super-Connected : (S)he uses the mobile in the morning to check his mails and update his social networking sites. to search trivia online.

Mobile TG – Provide superior bundled services Super-Connected • Theatre schedules and restaurant locators to plan their evening • nexGTV – monthly services for watching sitcoms while travelling Utilitarian – Executive • Alive App of TOI – Augmented Content • Personal Digital Assistant Sync • Flight Schedules Constant Mover • Use RSS feed and sports score / Financial sites to keep up to date with the latest happenings • Google Maps are also used by Super Connected to find routes within a city .

football at clubs Tie-up with F1 team     Developing co-branded merchandise Offering mobile apps and F1 updates to subscribers Organising driver meet and greet sessions for consumer promotions Connect with F1 fans and youth across the Indian subcontinent .B2C-Dongles/Broadband TG • • • • • • Offers 4G Pack share Watch your favourite movies on Bigflix without buffer Separate Airtel 4G zones at malls for gaming.playstations Airtel 4G zones at airports for Wi-Fi 4G experience Live streaming of cricket.

4.214.36 crores . Punjab and Karnataka • Additional Capital Expenditure (operational expansion) Rs. 1. 3.00 crores Total Capital Expenditure __________________ Rs.000.314.36 crores Rs. Maharashtra.Cost – Benefit Analysis CAPITAL EXPENDITURE • Already incurred for Telecom circles of Kolkata.

Airtel has 51.96 1.36 lakh 2. Of Users – • 20% of the users of Airtel 3G will convert to 4G • 5% new users who will straight up use Airtel 4G (Currently.8 lakh 3G subscribers) - 10.95 14.59 lakh • Our Marketing Strategy will help us see a 10% YoY growth in Users • Projections for User data over the next 5 years is as follows: (in lakhs) Year Total No. Of Users Incremental No.67 1.95 12. Of Users 2014 2015 2016 2017 2018 12.42 17.57 18.25 1.Cost – Benefit Analysis Objective in terms of No.24 1.72 .30 15.

But lower margins offset that increase.74 113.11 250. taken as equal to data.23 2018 137. Thus. Our Marketing Strategy will help us see a 10% YoY growth in Values Projections for ARPU data over the next 5 years is as follows: (in Rs.00 2015 103. Thus. ARPU for 4G Data = Rs.63 137.80 2016 113.11 125.) Year DATA VOICE Total Revenue / User 2014 94.40 103.40 206.48 2017 125.25 .00 94.94 Revenues from Voice Services tend to be higher than those from Data Services.00 188.Cost – Benefit Analysis AVERAGE REVENUE PER USER (ARPU): The ARPU for Airtel 3G’s Data Service is Rs.63 275.74 227. 47 4G is priced at double the premium of 3G.

000 1.90.000 10 1.) % of Users 5.000 40 2.900 .000 40.Cost – Benefit Analysis ONE – TIME REVENUES: The Average Pricing of the three major categories of Products offered along with the Product Mix is as follows: Routers USIMs Dongles Total Average One Time Revenue / new user Avg Price (Rs.000 50 100 Value Mix 50.000 1.000 1.00.

In crores) Year 2014 2015 2016 2017 2018 One Time Data and Voice Total Revenue 246.214.Cost – Benefit Analysis REVENUE SUMMARY (Projections): (Rs. the Present Value of the cash flows from 4G business amounts to Rs. .61 29. 1.40 crores making this a Profitable venture.75 52.40 24.90 32.94 The trend shows a 12% YoY growth in Revenues from Year 2 onwards Using the Perpetuity formula. 4.36. 5.13 72.77 43.46 54.05 24.64 62.676.19 84.35 270.462.07 35. gives us a surplus of Rs.76 Subtracting the initial outflow of Rs.71 29.06 27.