30 Airtel+Project

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GC UNIVERSITY,FAISALABAD

DEPARTMENT OF PUBLICADMINISTRATION

PROJECT:

AIRTEL

Submitted to : SIR SAEED LIAQAT

Submitted by : TAHIR RAZA 7483

AQSA NAEEM 7480

SANAM NAZ 7468

BILAL ASLAM 7472

BEENISH IQBAL 7485

AHSAN UMAIR 7454

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Class : MPA (2nd SEMESTER) (M)

ACKNOWLEDGEMENT

There are many people, who have been of enormously help in the preparation ofthis Project on Airtel, we are especially thankful to our Marketing Managementteacher Sir. Saeed Liaqat who has given us this opportunity to undertake thisproject and not only explained the topics very well but all have thrown a goodinsight at the practical aspect too.

I am thankful to all my group members on giving their remarkable contributionand I would also like to mention their efforts in compiling this project on time.

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EXECUTIVE SUMMARY

This report on Airtel is done to find out certain objective regarding the strategicapproach Adopted by Airtel to stand strongly in the competitive telecom market.Airtels marketing strategies are analyses using various models like SWOTanalysis, BCG Matrix, Ansoffs matrix, porters five forces etc.

The outcomes of these models are properly analyzed to find out the variousaspects like companies position and competitors position in the market.This report on Airtel not just give description about the company but it also talks

about the various marketing strategy adopted by the company.SWOT analysis of Airtel helps to find out the weak points of the company and tofind out the way to overcome this problem.Similarly with the help of Ansoff matrix it can be finding that what are the differentstrategic options available to the company under the different market condition.And to find the answer that why company is looking for overseas market likeNigeria and Seychelles.

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INTRODUCTION (Company overview)Incorporated on July 7, 1995, Airtel Ltd is a division of Enterprises. Thebusinesses of Airtel are structured into two main strategic groups - Mobility andInfotel. The Mobility business provides GSM mobile services in all 23

telecommunications circles in India, while the Infotel business group providestelephone services and Internet access over DSL in 15 circles. The companycomplements its mobile, broadband, and telephone services with national andinternational long-distance services. The company also has a submarine cablelanding station at Chennai, which connects the submarine cable connectingChennai and Singapore. Tele-Ventures provides end-to-end data and enterpriseservices to corporate customers by leveraging its nationwide fiber-opticbackbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP andinternational bandwidth access through the gateways and landing station. All ofTele-Ventures' services are provided under the Airtel brand.As of September 2005, Tele-Ventures were the only company to provide mobile

services in all 23 telecom circles in India.By the end of October 2005, Tele-Ventures was serving more than 14.74 millionGSM mobile subscribers and 1.10 million broadband and telephone (fixed line)customers.The equity shares of Tele-Ventures are currently listed on the National StockExchange of India Ltd (NSE) and the Stock Exchange, Mumbai (BSE). As ofSeptember 30, 2005, the main shareholders of Tele-Ventures were: BhartiTelecom Ltd (45.65%), a subsidiary of Bharti Enterprises; Singapore Telecom

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(15.69%), through its investment division Pastel Ltd; and, Warburg Pincus(5.65%), through its investment company Brentwood Investment Holdings Ltd).Other shareholders with more than a 1% stake were: Citi Group Global MarketsMauritius Pvt Ltd (2.99%); Euro pacific Growth Fund (2.04%); Morgan Stanley &Co International Ltd (1.93%); CLSA Merchant Bankers Ltd A/C Calyon (1.33%);

Life Insurance Corporation of India (1.34%); and, The Growth Fund of AmericaInc (1.11%).Sunil Bharti Mittal, the founder-chairman of Bharti Enterprises (which ownsAirtel), is today, the most celebrated face of the telecom sector in India. Hesymbolizes the adage that success comes to those who dream big and then workassiduously to deliver it.

Corporate Structure

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OBJECTIVE

The Indian communications scenario has transformed into a multiplayer, multi

product market with varied market size and segments. Within the basic phoneservice the value chain has split into domestic/local calls, long distance players,and international long distance players. Apart from having to cope with thechange in structure and culture (government to corporate), Airtel has had to gearitself to meet competition in various segments basic services, longdistance(LD), International Long Distance (ILD), and Internet Service Provision(ISP).It has forayed into mobile service provision as well.Objective of study are:

What marketing strategies the Airtel is implementing to defend andincrease the market share.

To find who are the competitors of the Airtel and the market shares of thecompetitors and what strategies Airtel is implementing to beat itscompetitors.

To find out how Airtel react to the technology changes in thecommunications sector,

METHODOLOGY

PRIMARY DATA SOURCES

Observation method, and

Experiment

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SECONDARY SOURCE

Internet Newspaper

Magazines

Others

AIRTEL ENTERPRISE SERVICES

The Company is a part ofBharti Enterprises, and is India's leading provider oftelecommunications services. The businesses at Airtel have been structured intothree individual strategic business units (SBUs) - mobile services, broadband &telephone services (B&T) & enterprise services. The mobile services groupprovides GSM mobile services across India in 23 telecom circles, while the B&Tbusiness group provides broadband & telephone services in 90 cities. TheEnterprise services group has two sub-units - carriers (long distance services)and services to corporate. All these services are provided under the Airtel brand.Its include

Voice Services

Mobile ServicesSatellite ServicesManaged Data & Internet ServicesManaged e-Business Services

Voice ServicesBharti Airtel became the first private fixed-line service provider in India. It is nowpromoted under the Airtel brand. Recently, the Government opened the fixed-lineindustry to unlimited competition. Airtel has subsequently started providing fixed-line services in the several circles.Airtel Enterprise Services believes that these circles have high

telecommunications potential, especially for carrying Voice & Data traffic. Thesecircles were strategically selected so as to provide synergies with Airtels longdistance network and Airtels extensive mobile network.Airtel Enterprise Services, India's premium telecommunication service, brings toyou a whole new experience in telephony. From integrated telephone services forEnterprises and small business enterprises to user-friendly plans for BroadbandInternet Services (DSL), we bring innovative, cost-effective, comprehensive andmulti-product solutions to cater to all your telecom and data needs.

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Mobile ServicesAirtels mobile footprint extends across the country in 21 telecom circles. Itsservice standards compare with the very best in the world. In fact, thats howBharti has managed to win the trust of millions of customers and makes it one of

the top 5 operators in the world, in terms of service and subscriber base.The company has several Firsts to its credit:

The First to launch full roaming service on pre-paid in the country.

The First to launch 32K SIM cards.

The First in Asia to deploy the multi band feature in a wireless network forefficient usage of spectrum.

The First to deploy Voice Quality Enhancers to improve voice quality andacoustics.

The First telecom company in the world to receive the ISO 9001:2000certification from British Standards Institute

Satellite Services

Airtel Enterprise Services provides you connectivity where ever you take yourbusiness Our Satellite Services bring you the benefits of access in remote

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locations. Airtel Enterprise Services is a leading provider of broadband IPsatellite services and DAMA/PAMA services in India. Our solutions supportaudio, video and voice applications on demand.

Satellite Services include :

PAMA/DAMABIT - Internet

VPN

Satellite based IPLCs for redundancy reasons

Managed Data & Internet Services

Airtel Enterprise Services brings you a comprehensive suite of data technologies.So we are able to support all types of networks and ensure our customers can

migrate their network to the future seamlessly. Our Managed Data & Internetservices make our customers future proof.

Managed Data & Internet Services include :

MPLS

ATM

FR

Internet

IPLC

Leased Lines

Customized SolutionsInternational Managed Services

Metro Ethernet

Managed e-Business Services

Airtel Enterprise Services offers an internationally benchmarked, carrier classhosting, storage and business continuity services.A range of services that help to keep your business running the way you want-24x7.

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OPPORTUNITIES THREATS

STRENGTH

VERY FOCUSED ON TELECOM Airtel is largely focused on the telecom,around 93% of the total revenue comes from telecom (Total telecomrevenue Rs 3,326).

LEADERSHIP IN FAST GROWING CELLULAR SEGMENT Airtel isholding leadership position in cellular market.. Bharti Airtel is one of India'sleading private sector providers of telecommunications services based onan aggregate of 27,239,757 customers as on August 31, 2006, consistingof 25,648,686 GSM mobile and 1,591,071 broadband & telephonecustomers.

PAN INDIA FOOTPRINT Airtel offers the most expansive roamingnetwork. Letting you roam anywhere in India with its Pan-India presence,and trot across the globe with International Roaming spread in over 240networks. The mobile services group provides GSM mobile servicesacross India in 23 telecom circles, while the B&T business group providesbroadband & telephone services in 92 cities.

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THE ONLY OPERATOR IN INDIA OTHER THAN VSNL HAVINGINTERNATIONAL SUBMARINE CABLES. Airtel, the monopoly breakershattered the Telecom monopoly in the International Long Distance spacewith the launch of International Submarine cable Network i2i jointly withSingapore Telecommunications Ltd. in the year 2002. This has brought a

huge value to the IPLC customers, delivering them an option besides theincumbent carrier, to connect to the outside world.

WEAKNESS

Price Competition from BSNL and MTNL. Airtel is tough competition fromthe operators like BSNL and MTNL as these two operators are offeringservices at a low rate.

Untapped Rural market. Although Airtel have strong Presencethroughout the country but still they are far away from the Indian rural partand generally this part is covered by BSNL so indirectly Airtel is loosingrevenue from the rural sector.

OPPORTUNITIES

THE FAST EXTENDING IPLC MARKET An IPLC (international privateleased circuit) is a point-to-point private line used by an organization tocommunicate between offices that are geographically dispersedthroughout the world. An IPLC can be used for Internet access, businessdata exchange, video conferencing, and any other form oftelecommunication. Airtel Enterprise Services and SingTel jointly provideIPLCs on the Network i2i. The Landing Station in Singapore is managedby SingTel and by Airtel in Chennai (India). Each Landing Station hasPower Feeding Equipment, Submarine Line Terminating Equipment and

SDH system to power the cable, add wavelengths and convert the STM-64 output to STM-1 data streams respectively.

LATEST TECHNOLOGY AND LOW COST ADVANTAGE The costs ofintroducing cellular services for Airtel are marginal in nature, as it needsonly to augment its cellular switch/equipment capacity and increase thenumber of base stations. The number of cities, towns and villages it hascovered already works to its advantage as putting more base stations for

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cellular coverage in these areas comes with negligible marginal cost.Besides such cost advantages, it has also other cost advantages for thelatest cellular technology. As a late entrant into the cellular market, it hasdual advantage of latest technology with modern features, unlike otherprivate cellular operators who started their service more than 4-5 years

back and low capital cost due to advantages of large scale buying ofcellular switch/equipment.

HUGE MARKET The cellular telephony market is presently expanding ata phenomenal / whopping __ rate every year and there is still vast scopeforAirtel to enter /expand in this market. Besides there is a vast ruralsegment where the cellular services have not made much headway andmany customers are looking towards Airtel for providing the service to

them. With its wide and extensive presence even in the remotest areas,Airtel poised to gain a big market share in this segment when it expandscellular services into the rural areas.

THREATS

COMPETITION FROM OTHER CELLULAR It is time for BSNL toimprove/expand its cellular services. Fierce and cut-throat competition isalready in place with the markets ever abuzz with several tariff reductionsand announcement of attractive packages, trying to grab most of the mindshare of the king - the consumer, whose benefits are increasing with

passing of everyday. If BSNL is not innovative and agile, its cellularservice will be a flop. It needs to be proactive with attractive packaging,pricing and marketing policies lest its presence in the market be treatedwith disdain by the private cellular companies. The launch of WLL servicesby Reliance Info COM has aggravated the situation.

MARKET MATURITY IN BASIC TELEPHONY SEGMENT Although Airtelentered in the basic telephony market its a biggest there for the companyas the basic telephony market has reached

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BCG MATRIX

RELATIVE MARKET SHARE

LEASED

PRIVATE

CIRCUIT

ISP

CELLULAR SERVICE

BASIC TELEPHONE

(Fixed Line)

STARS QUESTIONMARKS

COWS DDDDDDOGS

HIGH

LOW

LOW

GROWTH %

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BCG Matrix is used to find out the relative growth prospects of the product line.

Within the Airtel product line leased, private, circuit are among star.Airtel is going to have a submarine cable between Singapore and Chennai withthe collaboration of Singh tel. This wills Airtel to maintain its position in IPLCmarket. Right in India only VSNL have such cables.

ANSOFF MATRIX

To portray alternative corporate growth strategies, Igor Ansoffconceptualized amatrix that focused on the firmspresentandpotentialproducts and markets /customers. He called the four product-market strategic alternatives market penetration [existing market + existing product],

market development[existing product + new market],

product development[existing market + new product], and

Diversification [new product + new market].

MARKET

PENETRATION

ENTERED INBROADBAND AND

FIXED LINE MARKET

PRODUCT

DEVELOPMENT

IPLC PRODUCTS

MARKET

DEVELOPMENT

LOOKING FOROVERSEAS MARKET

DIVERSIFICATION

OUTSOURCING

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The company should follow all four strategies depending on the demand andproduct as indicated in the matrix. The company perhaps needs to focus more onthe comparatively neglected area of diversification.

MARKET PENETRATION: Airtel entered in broadband and fixed phone

line market. PRODUCT DEVELOPMENT: IPLC products

MARKET DEVELOPMENT: Airtel is now looking for overseas market.Company has already make his presence in Nigeria and Seychelles

DIVERSIFICATION : Airtel has now outsourcing sum of its services likecustomer services with IBM

INDUSTRY STRUCTURE PORTERS MODEL

The industry structure has become relatively unfavorable compared to earliermonopolistic times

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ENVIRONMENTAL ANALYSIS

It is a systematic examination of all 3 levels of the environment with at least threepurposes:

Detecting important economic, social, cultural, environmental, health,technological, and political trends, situations, and events

Identifying the potential opportunities and threats for the institutionimplied by these trends, situations, and events

Gaining an accurate understanding of your organizations strengthsand limitations

STEEP refers to changes in the social, technological, economic, environmental,and political sectors that affect organizations directly and indirectly.

A STEEP analysis of the macro environment indicates that economic (a phonecall being a cheaper way to stay in touch than outstation travel for example) andsocial factors (working outside the home town) have forced the pace of utilizationof technology (Public Call Offices, mobile phones, networked companies).Increasing customer awareness has raised expectations and vocal demands arebeing articulated for consumer rights; such political factors have in turn impactedthe competitive environment by way of entry of private players, independentregulation, and a policy framework tilted towards a level playing field for newentrants. A near environment analysis indicates that the competitors arebecoming active resource rivals (political and financial) apart from applyingpressures as customer rivals. The customer has, needless to say, benefited fromincreased choice from within the communications services basket itself.

CORE COMPETENCEAirtel core competencies are sales & promotions and as of now Airtel is leadingbrand in mobile services in India. Airte have three big personality Viz. SachinTendulkar , Shahrukh Khan and music maestro A. R. Rahman for endorsingthere product and services currently Airtel is outsourcing there no competencefunction and try to fully concentrate on his core competency that is salespromotion.

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ANNEXURE

Subscriber Base as on 31st July 2005 ( in millions)

Fixed Mobile Total

Marketshare

(%age)

PrivateOperators

6.43 47.33 53.76 50.24

PSU Operators 40.74 12.50 53.24 49.76

Total 47.17 59.83 107.00 100

S.No. Service Providers Subscribers(in millions) Market Share

(% age)

1BSNL 36.8 78.02

2MTNL 3.94 8.35

3Tata 3.23 6.85

4Reliance 1.86 3.94

5Bharti 0.97 2.06

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6HFCL 0.21 0.44

7Shyam 0.16 0.34

All India 47.17 100

OPERATOR WISE SUBSCRIBER BASE OF FIXED SERVICES & THEIR MARKET SHARE

S.No. ServiceProviders

Subscribers(in millions) Market

Share

(% age)

1 Bharti 12.79 21.382 Reliance 12.15 20.31

3 BSNL 11.16 18.65

4 Hutch 8.85 14.80

5 IDEA 5.73 9.58

6 BPL 2.7 4.51

7 Aircel 1.94 3.24

8 Tata 1.61 2.69

9 Spice 1.49 2.49

10 MTNL 1.33 2.2211 HFCL 0.06 0.10

12 Shyam 0.02 0.03

All India 59.83 100

OPERATOR WISE SUBSCRIBER BASE OF MOBILE SERVICES & THEIR MARKET

SHARE

S.No. Service Providers Subscribers(in millions) Market

Share

(% age)1 BSNL 47.96 44.82

2 Reliance 14.01 13.09

3 Bharti 13.76 12.86

4 Hutch 8.85 8.27

5 IDEA 5.73 5.36

6 MTNL 5.27 4.93

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7 Tata 4.84 4.52

8 BPL 2.7 2.52

9 Aircel 1.94 1.82

10 Spice 1.49 1.39

11 HFCL 0.27 0.25

12 Shyam 0.18 0.17

All India107 100

OPERATOR WISE TOTAL SUBSCRIBER BASE OF MOBILE AND FIXED TELECOM SERVICES AND THEIRMARKET SHARE AS ON JULY 2005

GROWTH PATTERN OF MOBILE AND FIXED SUBSCRIBERS OF PSUS AND PRIVATEOPERATORS FOR THE LAST SEVEN YEAR

Nov. 05 Dec 05 Jan. 06

TOTAL SUBSCRIBERS 119.9 Mn 123.85Mn 129.82 Mn

TELE DENSITY 11.00 11.43 12.00

FIXED LINE 48.47Mn 48.93 Mn 49.21 Mn

ADDITION DURING THE MONTH 0.28 Mn 0.46 Mn 0.28 MnMOBILE 71.46Mn 75.92 Mn 80.61 Mn

ADDITION DURING THE MONTH 3.51Mn 4.46 Mn 4.69 Mn

GSM ADDITION 2.32 Mn 3.19 Mn 3.52Mn

CDMA ADDITION 1.18Mn 1.17Mn 1.17Mn

India telecom stats

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Fact sheet [Bharti Airtel Limited]

Proportionate RevenueRs. 117,255 million (year ended March 31, 2006-Audited)

Rs. 81,558 million (year ended March 31, 2005-Audited)

As per Indian GAAP Accounts

Proportionate EBITDARs. 42,250 million (year ended March 31, 2006-Audited)Rs. 30,658 million (year ended March 31, 2005-Audited)

As per Indian GAAP Accounts

Shares in Issue1,895,241,565 as at June 30, 2006

Listings

The Stock Exchange, Mumbai (BSE)The National Stock Exchange of India Limited (NSE)

Market Capitalization

Customer Base25,648,686 GSM mobile and 1,591,071 broadband & telephone (fixed line)customers (Status as at month ended August 31, 2006)Operational NetworkProvides GSM mobile services in all the 23 telecom circles in India, and was thefirst private operator to have an all India presence.Provides broadband (DSL) and telephone services (fixed line) in 92 cities inIndia.

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FINDINGS

Strategic alliance The Company has a strategic alliance with SingTel.The investment made by SingTel is one of the largest investments madein the world outside Singapore in the company. The company also has a

strategic alliance with Vodafone. The investment made by Vodafone inBharti is one of the largest single foreign investments made in the Indiantelecom sector. The companys mobile network equipment partnersinclude Ericsson and Nokia. In the case of the broadband and telephoneservices and enterprise services (carriers), equipment suppliers includeSiemens, Nortel, Corning, among others. The Company also has aninformation technology alliance with IBM for its group-wide informationtechnology requirements and with Nortel for call center technologyrequirements.

Outsourcing The call center operations for the mobile services have been

outsourced to IBM Daksh, Hinduja TMT, and Teletech & Mphasis.

Overseas Market. Airtel is looking for overseas market and alreadystarted operation in Nigeria and Seychelles.

Competition Airtel is facing strong competition on from MTNL and BSNLinspite of the fact they are far away from airtel technologically but butthese two have an inside rich in rural and urban area and have low tariffrates.

Brand Ambassador Airtel have strong brand ambassador, Sachintendulkar, Shahrukh khan and A.R. rehman to promote there product andservices.

Leader in Telecom market Airtel is holding a position of Market Leaderby having 21 percent of the total market share.

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RECOMMENDATIONSAfter the complete analysis of entire STUDY we put forward a set ofrecommendations which are a follows:

PRICING Depending on the market conditions / competition from cellularor wll-mobile service providers and also to suit local conditions, thereshould be flexible pricing mechanism (either at central or local level).

IMPROVEMENT IN TECHNOLOGY Airtel should immediately shift tothird generation switches by replacing its c-dot switches. This will improvethe quality of service to desired level and provide simultaneous integrationwith the nationwide network. The special distribution of the transmissiontowers should be increased to avoid no signal pockets

ESTABLISHMENT OF DISTRIBUTION CHANNELS Airtel shouldestablish widespread and conspicuous distribution to match that of thecompetitors. The distribution network shall make the product visible and

available at convenient locations.

UNTAPPED RURAL MARKET Large part of Indian rural market is stilluntapped therefore airtel is required to bring that area under mobility.

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