G ro u p - V I

Bharti Group - Overview
• Asia’s leading integrated telecom services provider • Largest Telecom player in India with 24% market share • Indian telecom subscriber increasing by 89 mn/month on average with total around 400mn currently • Stru ctu re d i to fo u r stra te g i b u si e ss n c n u n i - M o b i e , Te l m e d i , E n te rp ri a n d ts l e a se D i i lT V g ta

Performance
Heading Net Revenue from Operations Net Profit/Loss Before Tax FY’05 7944.19 1564.27 FY’ 06 11290.58 2285.8 FY’ 07 17887.99 4601.37 FY’ 08 25939.37 6972.54 FY’ 09 34155.03 8161.53

Group Companies
Bharti AirTel Bharti TeletechTelecom Seychelles FieldFresh Food Bharti AXA Investment Managers Bharti Foundation Bharti Retail Bharti AXA General Insurance Comviva Tech Ltd Bharti AXA Life Insurance Guernsey Airtel

Centum Jursey Airtel Learning Ltd Bharti Realty Bharti Infratel

Mobile services
•G ro w th ra te s w e re d o w n fro m th e p re vi u s q u a rte r o •R e a so n i i cre a se d s n co m p e ti o n a n d ta ri w a rs. ti ff •I d i ' te l co m re g u l to r, n as e a Te l co m R e g u l to ry A u th o ri o f e a ty I d i ( T R A I h a s re p o rte d a n a ), d e cl n e i A R P U ( a ve ra g e i n re ve n u e p e r u se r) a n d u ti i ti n b y co n su m e rs a cro ss l za o se rvi p ro vi e rs fro m th e fi ce d rst q u a rte r o f th i ye a r s •

Fixed Line
surges

xed lines decline as mobile use

Rising affordability of mobile services

Impact of new entrants in 2G and 3G

DTH

arket which began commercial ons in 2003 has been able to over 12 Million subscribers during the past five years

major reason for this may be the

M arket Share late entry of Airtel into the market which is 4%
8% 1 6% 17 % 2 0% 35 %
DD DTH Dish TV Tata Sky Su n DTH Big DTH Airtel DTH

Broadband
bring broadband connection to India

e first telecom providers to

Competition with BSNL

Bharti Retail

etail Ltd. is a wholly owned subsidiary of Bharti Enterprises

Tie up with Wall Mart

cilities over 7 years and would employ 5,000 people. Each store would occupy 50,000

Joint partnership in agri company FieldFresh

Bharti AXA Life Insurance Company

joint venture between Bharti Enterprises and AXA

nge of life insurance and wealth management products

ccrued a loss of Rs.15.5 Crores in the 2009

ccrued a loss of Rs.15.5 Crores in the 2009

ccrued a loss of Rs.15.5 Crores in the 2009

Contribution of Revenue

Segment Revenue FY Comparison

Rs. Million Mobile Telemedia Enterprise - Corporate Others Passive Infrastructure Services Sub total Revenue Less Intersegment Eliminations Total Revenue

FY08 217861 28484 13217 2431 6023 311186 40936 270250

FY09 303601 33517 16945 42489 3611 468100 98485 369615

%Change 39% 18 28 1648 -40 50 141 37

Strategy of Bharti Group
Acquisition Strategy

Company has acquisition strategy to extend its fixed and cellular footprint from north and central India to south India. Global presence like in Srilanka ,Seychelles .Attempt to acquire MTN to to gain entry through a company already operating in 21 African nations.
Concentration on Core Competencies

Bharti's strength is brand management, people management and customer management

Bharti Group-BCG Matrix
SBU Major Competitors Market Share of RMS Log Transfer Market Growth (Approx) Revenue (in Rs. Cr) SBU Competitor

Airtel

Reliance Teleservices

23.65%

18.3%

1.29

1.462

7%

36,962

Airtel DTH

DD Direct

4%

35%

0.115

-.942

38.9%

25694

Bharti Broadband

BSNL Broadband 3.62%

54%

0.067

-1.173

16%

36291

Bharti AXA LIC

1.1%

62.45%

0.018

-1.754

33%

362

Bharti Retail Pantaloon

0.07%

54.6%

0.0013

-2.892

35%

236

Bharti Group-BCG Matrix

SWOT Analysis
Strength •Over 100mn users •Largest Service provider in India •Strong Pan India presence •Strategic alliance with Syntel, Nokia and Sony gives them access to best global technologies Weakness •Till recently did not own mobile towers •Failure of MTN deal will signal no real market investment •Data services not delivering on its high expectations

Opportunities •Strategic partenership with Blackberry •Focus on expanding business in rural areas •Tie up with other companies in “Indus Towers”

Threats •Presence of close and strong competitors •Increasing comeptition from GSM & CDMA •Potential entry of global players

Growth Areas: •Airtel looking at rural marketing as long term growth segment •Gearing up to increase revenue share from VAS (Value Added Services) and applications •Value Added Services

Growth Limiters : •Reaching Industry Limit – Teledensity expected to reach 51% by 2012 •Very high competition, especially on pricing front •Falling Margins •Failure of MTN deal

Recommendations
• This over reliance on few sectors should be reduced through more focus on growth potential sectors like Insurance and Retail • It should also go for a very aggressive growth in Latin American and African markets • Bharti should use its strength of large network to promote its other SBUs like insurance, DTH and broadband • Improving the quality of DTH and changing its brand name • To develop core competency in segments like fixed lines telephones and broadband.

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