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Bharti Airtel Ltd.

Going Global

AIRTELS OVERVIEW
Bharti airtel limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. Third largest telecom network in the world Second largest mobile network. Bharti airtel has been ranked among the six best performing technology companies in the world by business week. Bharti airtel had 200 million customers across its operations.

AIRTELS OVERVIEW
Fifth largest telecom operator in the world with about 230.8 million subscribers across 19 countries at the end of June 2011. Largest cellular service provider in India with over 171.85 million subscribers as of August 2011, Has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

Strategic Intent

Promise: We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more

History
1985- Mittal started manufacturing telecom equipment under the brand name Beetel and created Bharti Telecom Limited (BTL). In 1991, when the Government of India (GOI) was considering calling for bids for licenses to operate a mobile phone network for the first time, Mittal decided to foray into the mobile telecom business. Bharti won its first mobile-phone network license for Delhi under the brand name Airtel and started its operations in early 1995. In 2002, it went in for an Initial Public Offer (IPO), through a 100% book building process, listing itself on the Bombay Stock Exchange (BSE).

EMERGING AS THE MARKET LEADER


In 2000 BAL had been focusing only on the premium segment of customers but it realized that it could not afford to ignore other segments any longer. Failure of subscriber-led model through which companies tried to generate the maximum average revenue per user (ARPU). In 2001, BAL came up with the Minute Factory model, which revolutionized the way telecom companies operated. It focused on reducing costs by turning fixed cost into variable costs by outsourcing various critical business processes. This system enabled BAL to expand its network quickly across all key markets with lower capital expenditure. In 2005, BAL introduced Future Factory Center of Innovation, a Research and Development (R&D) set-up in Bangalore which employed a dedicated team for the development of innovative and path-breaking applications.

MARKET SCENARIO

Expansion in Rural Areas


WHY ? Saturating urban market. Huge Market Potential (600,000 villages) Below average tele-density levels. THE CHALLENGES Low incomes Widely dispersed population Less than ideal public infrastructure

Strategy Adopted
Focusing on innovative initiatives. Selection of IBM to manage the computing technology and services. Selection of IBM, Tech Mahindra and Spanco as strategic partners in the Business Processing Outsourcing (BPO) Expanding its distribution network via partnerships. In December 2007, BAL, Vodafone Essar (Vodafone)[33], and Idea together created a separate company, Indus Towers, which provided network expansion and sharing passive network across the country Customized content and tariffs.

Going Global
In October 1997 BAL entered Seychelles though its subsidiary, Telecom Seychelles Ltd. In 2007, Airtel partnered with Vodafone and started providing telecom services in the twin-country Channel Islands through its subsidiaries Jersey Airtel Ltd. and Guernsey Airtel Ltd. In early 2008, BAL entered the neighboring country of Sri Lanka and signed a US$200 million investment agreement with the Board of Investment (BOI) of that country. January 2009, BAL also entered Bangladesh by acquiring a 70% stake in Warid Telecom (Warid) which had about 51 million mobile subscribers in Bangladesh. Acquired ZAIN in march 2010. Became world's No. 5 wireless carrier by subscribers.

CHALLENGES IN AFRICA
Diversity and Cultural spread in Africa. Economic and regulatory challenges. Currency fluctuation. Out of the 15 countries, 12 had per capita Gross Domestic Product (GDP) of less than US$1000. Irregular or absence of power supply in many of the regions, towers required that diesel gensets be running throughout the year increasing further costs. Competition from already established players such as MTN, Vodacom, and Safricom Ltd.

Strategy Adopted
The Minutes Factory Model It can add small capacities fairly rapidly and economically. The key to this is an array of partnerships that manufacture the minutes. The speed comes because each partner is a specialist and can do its bit better than anyone. Financially this works because Bharti doesnt have to invest in equipment and towers in advance.

Strategy Adopted
Drop tariffs, expand the market. For instance, in Kenya, it reduced call rates by 50% to US$0.037, the lowest in all the African countries. Introducion of customer-friendly schemes, which would allow customers to talk more at lower prices. Rollout of 3G services and expansion of m-commerce. Investing over $1.2 billion to roll out more networks and services. Pushing governments to reduce high interconnect rates

Network expansion in Africa


NSN will manage network operations, including planning, design and implementation of 2G and 3G networks for Airtel in seven African countries, Bharti Airtel said in a statement. The vendor will provide energy-efficient base stations to expand Airtel's network coverage in under-served areas, including smaller towns and villages in the seven countries.

Recommendation
Airtel should expand the business in international markets keeping the top management unchanged as they have been successful in showing their worth so far and hiring the officials at lower and middle level who well understand the psychology of local customers and clients.

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