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PRESENTATION BY Group 5:

Kinny Jain
Nikhil Saraf
DionysiaMichalopoulou
Rajinder Pal Singh

HIGHLIGHTS OF THIS PRESENTATION:


PART A

PART B

Airtel Background
External Analysis
Macro-Environmental Analysis:
PEST ANALYSIS
Micro-Environmental Analysis: PORTERS 5 FORCES [ ILC, SGA]
Opportunities and Threats
Internal Analysis
Resource Audit
UNIQUE RESOURCES
Core Competencies:
PORTERS VALUE CHAIN FRAMEWORK
Strengths and Weaknesses
Organisational Purpose:
AIRTEL MISSION STATEMENT
EVALUATION

Competitive Strategy Analysis: PORTERS GENERIC FRAMEWORK


Development Strategy Analysis:
ANSOFFS PRODUCT/ MARKE
FRAMEWORK

PART C
Conclusions and Recommendations

Evolution of Telecom In India


Department of Telecommunication (DoT) is the main body
formulating laws and various regulations for the Indian telecom
industry.

INDIA

Private
players were
allowed in
Value Added
Services

Independent
regulator,
TRAI, was
established
1999

1994

1992

National
Telecom Policy
(NTP) was
formulated

BSNL was
established
by DoT

1997

ILD services was


opened to
competition

2002
2000

NTP-99 led to
migration from
high-cost fixed
license fee to lowcost revenue
sharing regime

Go-ahead
to the
CDMA
technology
Internet
telephony
initiated

Reduction
of licence
fees

Intra-circle
merger
Calling Party
guidelines were
Attempted
Pays (CPP) was
established to boost
implemented
Rural
telephony
2005
2003
2004
Unified
Access
Licensing
(UASL)
regime was
Reference
introduced
Interconnec
t order was
issued

Number portability
was proposed
(pending)

2007
2006

Broadband
policy 2004
was
formulated
targeting 20
million
subscribers
by 2010

Decision on 3G
FDI limit was services
(awaited)
increased
from 49 to 74
percent

INTRODUCTION
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.
It is one of Indias leading private sector providers of telecommunications
services with more than 110 million customers.
The businesses at Bharti Airtel have been structured into three individual
strategic business units (SBUs) - Mobile Services, Airtel Telemedia Services &
Enterprise Services.

Core values
Empowering People - to do their best
Being Flexible - to adapt to the changing environment and evolving
customer needs
Making it Happen - by striving to change the status quo, innovate
& energize new ideas with a strong passion &
entrepreneurial spirit,
Openness and transparency - with an innate desire to do good
Creating Positive Impact with a desire to create a meaningful difference in

National Coverage

Investor Relations :- http://www.bhartiairtel.in

Integrated Telecom Company

Mobile / Wireless
Services
2G / 3G
Rural Market

Enterprise Services
Carrier
Corporate

Passive Infrastructure
Telemedia Services
Fixed Line
Broadband
DTH

Bharti Infratel
Indus Tower

PEST

PEST ANALYSIS- EXTERNAL ANALYSIS


Political

Technology

Regulations
Political Opposition to participation by the
private players
Govt support to promote FDI in Telecom
sector
Banning of Phone Use in Certain
Circumstances

Equipped with New Technology


Rapid Industrial growth rate
induced by emerging
technologies.
Strong Fibre Optic Network
Utiilization of E- Commerce
facilities
Efficient Customer Care
Services

Economic
Cost of calls Being Driven Down
Worldwide Recession- Both Boon & Bane
Middle class consumer base growing due
to accelerated economic growth
Untapped markets in emerging
Economies - New Opportunity

Socio-Cultural

High End Phones becoming


status
symbol
Due to Intimate family bonding
in
Indian Culture, there is need to
remain
connected
Tech Savvy Generation

PORTER 5 FORCES
INDUSTRY LIFE CYSLCE
STRATEGIC GROUP ANALYSIS

Porters 5 Forces

Customer
Bargaining
Power

Threat of
New
Entrants

Threat from
Competition

Supplier
Bargaining
Power

Threat of
Substitutes

1. Threat from Competition


Wireless Market Top 4 garnering 75%
market share

HIGH

Competitor Market Share Threat HIGH

2. Customer Bargaining Power


Lack of differentiation among Service Providers
Cut throat Competition
HIGH

Low Switching Costs


Number Portability will have Ve Impact
Businesses & Consumers

Customers & Market Share

3. Suppliers Bargaining Power


LOW

4. Threat of Substitutes

Landline
CDMA

DIMINISHING MARKET

HIGH

Video Conferencing
VOIP - Skype, Gtalk, Yahoo Messenger
e-Mail & Social Networking Websites

BROADBAND
SERVICES

5. Threat of New Entrants


Huge License Fees to be paid upfront & High
gestation period
Entry of MVNOs & WiMAX operators
Spectrum Availability & Regulatory Issues
Infrastructure Setup Cost - High
Rapidly changing technology

LOW

TELECOMMUNICATION INDUSTRY LIFE CYCLE


AIRTEL

Johnson , Scholes & Whittington : Pg. 68, 2008

TELECOMMUNICATION INDUSTRY LIFE CYCLE


AIRTEL

Telecom Industry is in its mature growth stage.


Significant achievements have happened in this sector.
In 2009 February, there was a rise in subscriber base by 13.25 million.
Total subscriber base was 375 million in 2009. A hike by 50%.
This shows the changes in the consumption pattern among the middle class.

STRATEGIC GROUP ANALYSIS

Competitor Analysis

Competitor Analysis
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

Bharti

Rcom

IDEA

Best OP Margins &


Net Profit Margins
among Peers

MTNL

Compan
y
Bharti
Rcom
IDEA
MTNL

OP Margin

Net Margin
SepSepSep-07 Sep-08 072
083
43.00% 38.00% 26.40% 19.30%
37.90% 31.60% 23.90% 13.20%
32.80% 26.60% 14.10% 6.50%
23.70% 22.90% 7.00% 6.80%

Source: CMIE November 2008

AMOU & ARPU Stats


Minutes of Usage per Month Mobile
Services

Despite a low tele-density of approximately


30.5%
India has the second highest minutes of
usage per month.
This offers huge growth opportunity to
telecom companies.

ARPU* in India Mobile Services

The declining ARPU implies that India Inc. is


tapping a large market at the bottom of the
pyramid by reducing tariffs; thereby,
enhancing affordability.

Strategic Group Analysis

Reliance 18%

Vodafone 17%

BSNL,
MTNL
15.00 %

Narrow

10 %
Other 5%

IDEA 9.6%

TATA 9.3%

Broad

PRODUCT RANGE

Airtel 25%

VIRGIN -0.5%

NATIONAL

GLOBAL

GEOGRAPHICAL SCOPE

INTERAL ANALYSIS
RESOURCE AUDIT AND PROCESS VALUE CHAIN

AIRTEL
Resource audit (unique resources) Internal Analysis
Financial

Human resources
well defined rewards and recognition system
Young team - Average age is 26years
Employees decide their training needs.
A state-of-the-art learning centre and training
practices adopted from British Telecom
PACE (Progressive Assessment of Culture and
Environment) feedback taken from employees
used for companys strategy

Physical

Over 110 million customers


Received license to provide 2G ad 3G in Sri Lanka
First Telecom operator in India to offer MS
Windows Mobile 5.0
Strong Distribution channel.

Profit crosses US$1 bn


Fixed asset (09) $ 7,986,254,556
Dividend offered for 2008-09 is 20% of
the face value of each share
Received US$1.275 bn investment from
international investors in Bharti Infratel.
Ability to raise funds

Intangible

Strategic partnership with Google.


Goodwill & Reputation
Facility based Operator license in
Singapore.

Firm infrastructure - CRM tools, MIS, ERP, Networking


Supporting
Activities

Equipment, Telecom equipment for coverage and signal strength,


IT Infrastructure
HR
management - IT skilled work force, Telecom engineers, SCM
specialists Customer service & Telesales training, Franchisee
management, 7,646 out of 23,789 employees in Mobile services,
Owned retail staffing and training.
Technology development - Creating a 3G enabled network,
mChek - Launching M commerce by tie ups with banks and credit
cards.
Procurement - Established a SCM network to acquire networking &
Telecom tools, Maintain long term relation with suppliers to provide
handsets & services
Inbound
Logistics
Network
Infrastructure
1. Equipment
vendor
2. Equipment
Manufacturer Routers, Switch
level
3. Equipment
Manufacturer Chip Level
Software and
content
provider
1. Software
Vendor
2. Application
Provider

Operations
NETWORK
INTEGRATION
2. SYSTEM
INTEGRATION
3.
INFRASTRUCT
URAL
DEVELOPMENT
4. GSM
SERVICES,
VAS, BASE

Outbound
Logistics

Marketing &
Sales

Post Sale
Service

1. Online
marketing
2. Celebrity
endorsement
3. Brand
positioning
4. Promotional
Bundle offers
Extra
minutes/ Text
or Handsets
5. Promotion
at events,
organizations

1. Multilingual
Customer
Service Center
2. Informative
website
3. Customer
Retention
4. Easy online
payment
options for
both pre paid
& post paid
services

M
A
R
G
I
N

1.

1. Sound
Distributor
2. Retail
network
across India
for both
prepaid and
post paid
services
3. Online
Ordering of
VAS
4. Update of
existing plan

Primary Activities

M
A
R
G
I
N

Primary Activities - Analysis

Input
Network
Infrastructure
Nokia-Siemens,
CISCO , INTEL

Software and
content provider
IBM, INFY TCS,
AFFLE, On Mobile,
India Times,
Hungama Mobile,
Mauj , One 97 IMI
MOBILE.
Finance
Licenses

Process

Output

Infrastructure
Development

Network
Integration
Competitive
Position
Capable
Supplier

Start

Marketin
g&
Sales

Post
Sale

Strong
Channel
Distribution
GSM
Services
VAS
Fixed Lines
Broadband

Public
Market
Innovators
Trend
Setters
Unique
advertising
strategy
Emotional
values &
Humor

Corporate
Businesses
SMEs
Institutes

Value Chain Analysis


Conclusions & Recommendations
wide network coverage as they own their
network infrastructure

Inbound
Logistics

M-commerce
Operatio
ns

Aero mobile, MATE, GPS


tracking device for B2B

Output

Android platform based


HTC mobile unique
marketing strategy, low
STD rates Trend
setters
Bill payments and Indian
rail tickets using m

Marketin
g&
Planning
Post Sale

Value Chain
Outcome 37% PM

SWOT
SUMMATION OF EXTERNAL & INTERNAL ENVIRONMENT ANALYSIS

AIRTEL Strength & Weakness

INTERNAL

STRENGTHS
Valuable Business Partners Techno &
Financial
Strong Brand Image
First Mover Advantage
Single Private Leading Indian Telecom
Company

WEAKNESSES
Outsourcing of Core Systems
Lagging behind in Exploring market Investment
opportunity

EXTERNAL

Enthusiastic & Innovative Business Development


team
Marketing Driven Low Cost Model
Blessed with Directional Visionary - S.N.
Mittal

OPPORTUNITIES

Massive Economies of scale from large subscriber


base
Tele-Density 30.6% Low among Developing
Countries
Low Broadband Penetration
Untapped Rural Market
Bharti Infratel Cutting Down cost in Rural area
Growing Globally
First Indian Sponsor to signed Manchester United

THREATS
Falling ARPU
Intense Competition From Nearest Competitor
Shortage of Bandwidth
New Players Entering Indian telecom sector
Uncertain Economic Condition

AIRTEL ORGANISATIONAL PURPOSE


Vision
By 2010 Airtel will be the most admired brand in India:
Loved by more customers
Targeted by top talent
Benchmarked by more businesses

Mission Statement
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

No

Yes

Yes

No

Concern for
Employees

Concern for
Public Image

Yes

Self-Concept

No

Philosophy

Markets

Yes

Concern for survival,


Growth Profitability

Product /
Services

Yes

Technology

Customer

An evaluation matrix of the mission statement

No

AnsOff Directional Matrix

AIRTEL ANSOFF DIRECTIONAL MATRIX


PRODUCT

M
A
R
K
E
T

E
X
I
S
T
I
N
G

EXISTING

NEW

MARKET PENETRATION

PRODUCT DEVELOPMENT

The Airtel Advantage : 50 paisa / min Call on both National


Long Distance Calls & Local calls

MATE Mobile Application Tool for Enterprise


M commerce mChek (Recharge Anywhere, Anytime)

Value Added Services: Airtel Live, Hello Tunes, Astrology


Airtel Way Finder - GPS Service Blackberry
Lowered National & International Roaming Tariff
Extensive & Increasing Sales & Distribution channel covering
1.27 million

New Tech-Savvy Handset Options in Prepaid & Post Paid


Schemes: HTC, BlackBerry, Apple iPhone
Lowered Overseas Call Rates Bahrain @ Rs 5.00/-

Delhi Half Marathon 2nd Edition 28000 participants


3G Network Awaiting for GOI Approval
Celebratory Endorsement - Top BollyWood & International
Personality

AeroMobile Airtel in-flight connectivity on Emirates and


Malaysian Airlines

Tie with major TV events KBC, India Got its Talent


Bridge Alliance Roaming in Asia Pacific Region
MARKET DEVELOPMENT
3G Network Implementation in Sri Lanka

N
E Airtel Vodafone Alliance: Debut in Europe through Channel
W Islands (Jersey & Guernsey)

DIVERSIFICATION
Bharti InfraTel & Indus Towers - Passive Infrastructure Provider
Bharti Teletech Landline & Telephone Equipment
Bharti Telemedia Services Broadband & Internet, DTH, IPTV

Low cost Calling Cards to India - UK, USA, Singapore etc.


MTN Airtel Alliance - South-South Cooperation **

Airtel Tracking Services GPS


Bharti Walmart Sipermarket

Ansoff Product / Market Framework

110 million Mobile Customer Base 24% of wireless


market
3rd largest single country mobile services operator
Sixth largest in-country integrated telecom operator in
the world

Poters Generic Matrix

Porters Generic Strategy


Narrow
Market
Scope

Broad
Market
Scope
Differential Strategy
Uniqueness
Competency

Cost Leadership
Low Cost
Competency

Porters Generic Strategy (Cont.)


BROAD MARKET

L
O
W
C
O
S
T
U
N
I
Q
U
E
N
E
S
S

Own Tower Infrastructure


Operator in 23 circles in
india
Huge Distribution
Network

NARROW MARKET
Low cost Mobiles on Postpaid &
prepaid
Lowest fare International Calling
cards

High Customer Base


Huge Economy of scale

AIRTEL

First in class Value


added services,
Mobile web- internet on
mobile,
Hello Tunes,
MATE - mobile
application tool for
enterprise.

Aero mobile- the In-flight


connectivity
iphone and Blackberry
Phones.

CONCLUSION AND RECOMMENDATIONS

Refine your processes, strive for dominance and build a brand


MR. Sunil Bharti Mittal

Airtel have done a good job by Improving their core competencies.


Being the market leader & Especially in building a brand
We would recommend Bharti Airtel to continue with their good work
and concentrate more on mobile services which is Bhartis cash
cow, in its process of huge diversification.

Thank You