UNDERSTANDING DISTRIBUTION

ISSUES WITH AIRTEL

SUBMITTED BY:
AMIT GANGWAR 09BSHYD0073
ARPITA SHARMA 09BSHYD0166
DIPESH VORA 09BSHYD0262
ISHWARYA B. 09BSHYD0326
MEHUL MEHTA 09BSHYD0450
SUMEET PALLAV 09BSHYD0877
SURUCHI SAXENA 09BSHYD0894
Introduction

Bharti Airtel Limited, a group company of Bharti Enterprises

It is India’s leading telecom services provider with an aggregate of 71.77

million customers (as of end of June 2008), consisting of 69.38 million
mobile customers.

Highest ever-net addition of  75.09 lakh customers in a single quarter.

Market leader with a market share of all India wireless subscribers

at 24.2%.
Product Portfolio

The company is structured into four strategic business units - Mobile, Tele media,
Enterprise and Digital TV.

●
Mobile: The mobile business offers services in India and Sri Lanka
●
Tele media : The Tele media business provides broadband, IPTV and telephone services in 95 Indian
cities
●
Enterprise: The Enterprise business provides end-to-end telecom solutions to corporate customers
and national and international long distance services to carriers.
●
Digital TV: The Digital TV business provides Direct-to-Home TV services across India
Cont..

The Mobile/Wireless SBU, concentrates on the

following:

●
Mobile
●
Home phones
●
Email on go
●
Calling cards
●
Broadband & Internet
●
Voice solution
●
conferencing
Channel structure for
Distribution

Airtel has a wide & effectively spread channel structure all over India. The
channel structure is simple and effective. Complications are kept out in order
to make the overall process very effective and efficient
Direct Selling Associates

1) The main duties of a Direct sales

associate are centred around generating
and following up with leads and closing
the sale for specific products or
services.

2) In involves direct face to

face interaction with the
clientele.

3) He will also involve in following up

on blind leads, taking inquiry calls,
meeting up with potential customer and
providing impeccable customer service.
Corporate Sales Associate:

The sales associate will identify

and cultivate clients, initiate
and follow up on new business
opportunities and work with
underwriting to move the
account into closing status.

He or she will participate in

an extensive training program
and receive mentoring from
two or three successful
Account Executives.
Airtel Relationship Center

The Airtel relationship centre’s are established in a

number of area’s within a city.

●
They allow the customers to meet their employee’s and get their queries solved.
●
Grievance addressable cell’s are maintained in the Arc’s to provide instant
feedback and solutions.
●
Allows payments towards postpaid plans.
Strategy used for Distribution

Implementing modular roll-out of cellular networks

with initial focus on potential high value generating
areas

Negotiating centrally with all vendors to take

advantage of scale and volumes

Offering a loyalty and retention program targeted at

our post-paid customers.

Care Touch
Channel Structure for
Sales:
Sales Territory

Hub and Spoke model:

Location Details
 Head office:-Bharti Airtel Limited
(A Bharti Enterprise)
Qutab Ambience (at Qutab Minar),
Mehrauli Road,
New Delhi - 110030
 Noida Head :- B- 38/C1 , Sector-57
office
Distribution
Delhi circle- 20 AirTel Connects, 34 AirTel Points, 362 sub-dealers
supplying SIM cards and other cellular telephone equipment to retail
outlets throughout Delhi, 20 full time corporate sales representatives
who identify and solicit major potential corporate accounts, for prepaid
services FMCG distribution channel strategy 13 distributors and 4314
retailers

Karnataka circle- 18 AirTel Connects shops, 51 AirTel Points and

185 sub-dealers, for pre-paid cards 32 distributors, 4,380 retailers, four
company sales people and 225 corporate sales agents.
Contd..
Andhra Pradesh Circles- 18 AirTel Connects, 43 AirTel Points, 72 sub-dealers, for
prepaid 64 distributors, 4,294 retailers, five company sales people and 240 corporate
sales agents

Chennai circle- 9AirTel Connects, 8 AirTel Points, 30 sub-dealers, for prepaid 6

distributors, 2250 retailers, 9 company sales people, 160 corporate sales agents

Himachal Pradesh- 7 AirTel Connects,31 dealers, 15 company sales people

Kolkata circle- 5 AirTel Connects,90AirTel Points,12 distributors, 2709retailers, 7

company salesmen, 200 corporate sales agents.
Sales Objective given to
Territory Manager

Focus on maximising revenues and margins.

Offer multiple telecommunication services to provide

customers with “one-stop-shop” solution.

Capture maximum telecommunications revenue potential

with minimum geographical coverage.

Focus satisfying and retaining their customers by ensuring

high level of customer satisfaction.
Selection Of Dealers:
(done by territory manager)

1) The dealers should have a sound financial background. The financial capability of
a dealer is solely depended on the discretion of the company officials.

2) The dealers should have a good market reputation, since the dealers help the
customers in forming the first impression a customer has about the company.

3) The dealer should have a good previous track record, i.e. of timely payments, no
criminal background etc.

4) The dealers should have good market penetration. The company’s ability to gain
maximum customers in this era of competition solely depends on the penetration the
dealers have in the market.

5) The last criterion of dealer’s selection for Airtel is the area the dealers cover. This
would include different geographical areas which are covered by a dealer.
Channel Quotas Allotted

For pre-paid connections in all of their circles, distributors and

franchisees are remunerated a fixed amount, approximately 20%
and 15%, respectively, of the value of the card sold to the customer.

For pre-paid recharge coupons, the distributors and franchisees

receive approximately 7% of the value of the coupon sold.

For post-paid connections in all their circles, the rates may increase
up to 100% of base commissions on meeting quality and quantity
targets.
Issues in Allocating
Territory:
Depending
There upon
are differences
Allocation specified
territories
between theallocated,
offers that
to rural
are
andretailers
offered
urban
targets andto quota’s
retailers
in differ.
different
differ.areas.
Reasons For Channel
Conflict:
Problem of service gap: Cases have been found where the retailer has run out of its recharging balance
and the balance has not been refilled by the distributor timely. This may be caused because of the time
lag or because of the no credit policy of the distributor. This however leads to some loss to the company
as the customer has to return back without recharging. This also weakens the company’s image in the
eyes of the customer as retailer here acts as the face of the company.

Competition: Due to large number of players, now the retailer has to keep
competitor products as well. However they are unwilling to make extra investment
and reduce the share of each existing company to accommodate the competitor
products.

Non-availabilty of particular offers: There have been instances where the company has
announced new offers. However those are not available at the retailer’s outlet. This may
happen due to lag in information passage from the company to the retailer. This situation is
seen especially in the rural areas where number of retailers is less compared to urban areas.
This may lead to loss of potential customers and ultimately unrest among the retailers.
Cont..

Retailers selling SIM Cards at a cost lesser than the MRP:

●
Big retailers who purchase the SIM Cards in bulk sell the SIM Cards at a cost lower than the MRP. They use the economy of scale
achieved through bulk purchase, reduce money from their commission and pass on the difference to the end customer. Thus they are
able to sell the SIM Cards at a lower cost then the competing retailer. This leads to unequal sell by the various retailers.

Old SIM Cards not replaced in time

●
Once some offer is over, the SIM Cards which hold that offer has to be taken back by the distributor and
replaced by new SIM Cards. However there have been instances where the distributor is late on completing
this activity. This leads to inventory accumulation at the retailer’s shop which the retailer cannot sell.
Potential Reasons For a
Channel Conflict in Future
Rural expansion may turn out to be margin dilutive

●
Rural expansion has not been margin dilutive so far despite aggressive rural network Rollouts, but maintaining
operating margins would require a continued focus on managing costs.

The Impact of MNP

●
Introduction of Mobile number portability (MNP) is expected to be neutral to marginally positive.

The Arrival of 3G Technology

●
Management does not expect the incremental capex for 3G to be substantial, given that it will be an overlay on
the existing 2G infrastructure.
Channel Conflict
Management

To avoid conflicts, Airtel has adopted a Second and Third

Degree Distribution network.
Second Degree distribution network:

●
Company makes invoice of SIMs, PEFs, GSM Pay Phones, RCVs of various denominations chiefly
Rs.10, Rs 30 and Rs. 60 to only Urban Distributors and Rural Super Distributors. Easy balance is
also transferred to only Urban Distributors (UDs) and Rural Supers (RS).
●
Urban distributors distribute the above items to retailers according to the demand and transfer easy
balance to retailer through FOS (Field Sales Officer) SIM. This is more suitable for the urban market
where demand is obscurely driven.
Third degree distribution
network:
Rural Distributor thenthe
distribute the
ThisRS threedistributes
level distributionabove
is used to
above to
items items among the retailer
reach to subRural Distributors
urban and rural areas
according to the demand of it and
commonly
since there isknown
transfer easy balanceastoRDs and
lesser popular density
retailer
and large geographical
transfers easyfrom spread
balance that
into
through FOS SIM easy balance
Rural has to be catered
of Distributors
Distributor to.
SIM.SIM.
THANK YOU