Airtel Company Analysis Report

7/27/2019 Airtel Company Analysis Report

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INTRODUCTIONTO THE STUDY

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Need For the Study

As a student of Business Administration a need is felt to understand the Overview of

an Organization in its Financial, Marketing and Human resource Performance examining

the overview of the above factors will help a student like me to gain insight in the

Mission, Vision and Operational Goals and Strategies of Organization to perform well

to the satisfaction of its stake holders.

Objectives of the Study

The Indian communications scenario has transformed into a multiplayer, Multi product

market with varied market size and segments. Within the basic phone service the value

chain has split into domestic/local calls, long distance players, and international longdistance players. Apart form having to cope with the change in structure and culture,

Airtel has to gear itself to meet competition in various segments- Basic services, long

distance, International Long Distance and Internet Service Provision. It has forayed

into mobile service provision as well.

Objectives are:

What are strategies that Airtel is implementing to defend and increase the

market share

To know about the telecom industry.

To know the present scenario of telecom industry.

To know the factors affecting the growth of telecom industry.

To analyze the Different statements of Balance sheet, Profit and loss account.

Cash flow statement and HR Information

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Scope of the study

The Scope of Company analysis is limited to one company Bharti Airtel, to know its

performance, by analyzing the secondary data from various sources and understanding

them.

Limitations of the study

The study is carried completely by considering data. As the study is carried completely

relying on secondary sources no first hand Information have been gathered or

collected from company officials relating to research.

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INDUSTRY PROFILE

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A midst all the talk of slowdown in the Indian economy, telecom is one sector that has had a fairlygood year in terms of subscriber additions and revenue growth in 2008.Mobile service companies

have managed to add subscribers at the rate of eight million a month in 2008. This makes India thesecond fastest growth for mobile services in the world. However, even as this gives some reason tocheer for the telecom incumbents, there are a few trends in key metrics of the companies that suggestincreasing pressure on margins.

This is not the situation only this year the subscriber base of Indian telecom industry is increasing dayby-day and year by year. If we just have a glance on the Indian telecom industry it is divided into23 circles spread allover the country with 9 Operators in the country.

A large population, low telephony penetration levels, and a rise in consumers' income and spending

owing to strong economic growth have helped make India the fastest-growing telecom market in theworld. The first and largest operator is the state-owned incumbent BSNL, which is also the 7th largesttelecom company in the world in terms of its number of subscribers. BSNL was created bycorporatization of the erstwhile DTS (Department of Telecommunication Services), a governmentunit responsible for provision of telephony services. Subsequently, after the telecommunicationpolicies were revised to allow private operators, companies such as Bharti Telecom, Tata Indicom,Vodafone, MTNL, Idea, Vodafone and BPL have entered the space as Major Operators in India.However, rural India still lacks strong infrastructure.

In 2007, an article byBusiness weekmagazine reported that India's mobile phone market is the fastestgrowing in the world, with companies adding some 6 million new customers a month.

The total number of telephones in the country crossed the 300 million mark on June 18 2008. Theoverall tele-density has increased to 36.98% in March 2009. In the wireless segment, 15.87 millionsubscribers have been added in March 2009. The total wireless subscribers (GSM, CDMA & WLL(F)) base is more than 391.76 million now. The wire line segment subscriber base stood at 38.22million with a decline of 0.13 million in October 2008.

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http://en.wikipedia.org/wiki/Bharat_Sanchar_Nigam_Limitedhttp://en.wikipedia.org/wiki/Bharti_Telecomhttp://en.wikipedia.org/wiki/Tata_Indicomhttp://en.wikipedia.org/wiki/Vodafone_Essarhttp://en.wikipedia.org/wiki/Mahanagar_Telephone_Nigam_Limitedhttp://en.wikipedia.org/wiki/BPL_grouphttp://en.wikipedia.org/wiki/Category:Telecommunication_companies_of_Indiahttp://en.wikipedia.org/wiki/Telephoneshttp://en.wikipedia.org/wiki/Bharat_Sanchar_Nigam_Limitedhttp://en.wikipedia.org/wiki/Bharti_Telecomhttp://en.wikipedia.org/wiki/Tata_Indicomhttp://en.wikipedia.org/wiki/Vodafone_Essarhttp://en.wikipedia.org/wiki/Mahanagar_Telephone_Nigam_Limitedhttp://en.wikipedia.org/wiki/BPL_grouphttp://en.wikipedia.org/wiki/Category:Telecommunication_companies_of_Indiahttp://en.wikipedia.org/wiki/Telephones


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Growth of mobile technology

India has become one of the fastest-growingmobile markets in the world.]

The mobile services werecommercially launched in August 1995 in India. In the initial 56 years the average monthlysubscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base inDecember 2002 stood at 10.5 millions. However, after the number of proactive initiatives taken byregulator and licensor, the monthly mobile subscriber additions increased to around 2 million permonth in the year 2003-04 and 2004-05.

Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in the earlyyears because of the high price of hand sets as well as the high tariff structure of mobile telephones.The New Telecom Policy in 1999, the industry heralded several pro consumer initiatives. Mobile

subscriber additions started picking up. The number of mobile phones added throughout the countryin 2003 was 16 million, followed by 22 million in 2004, 32 million in 2005 and 65 million in 2006.The only country with more mobile phones than India with 246 million mobile phones is China 408million.

India has opted for the use of both the GSM (global system for mobile communications) andCDMA( code-division multiple access ) technologies in the mobile sector. In addition tolandline and mobilephones, some of the companies also provide the WLL service.

The mobile tariffs in India have also become lowest in the world. A new mobile connection can beactivated with a monthly commitment of US$0.15 only. In 2005 alone 32 million handsets were sold

in India. The data reveals the real potential for growth of the Indian mobile market.

In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million,which represented a nearly 50% growth when compared with previous year.

In April 2008 the Indian Department of Telecom (DoT) has directed all mobile Phone service users todisconnect the usage of unbranded Chinese mobile phones that do not have International MobileEquipment Identity (IMEI) numbers, because they pose a serious security risk to the country. Mobilenetwork operators therefore planned to suspend the usage of around 30 million mobile phones (about8 % of all mobiles in the country) by April 30.

Revenue and growthThe total revenue in the telecom service sector was Rs. 86,720 crore in 2005-06 as against Rs. 71, 674crore in 2004-2005, registering a growth of 21%. The total investment in the telecom services sectorreached Rs. 200,660 crore in 2005-06, up from Rs. 178,831 crore in the previous fiscal.

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http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Global_System_for_Mobile_Communicationshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Wireless_local_loophttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/CDMAhttp://en.wikipedia.org/w/index.php?title=Indian_Department_of_Telecom&action=edit&redlink=1http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Global_System_for_Mobile_Communicationshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Wireless_local_loophttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/CDMAhttp://en.wikipedia.org/w/index.php?title=Indian_Department_of_Telecom&action=edit&redlink=1http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Crorehttp://en.wikipedia.org/wiki/Crore


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Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internetsubscriber base has risen to 6.94 million in 2005- 2006. Out of this 1.35 million were broadbandconnections. More than a billion people use the internet globally.

Under the Bharat Nirman Programme, the Government of India will ensure that 66,822 revenue

villages in the country, which have not yet been provided with a Village Public Telephone (VPT), willbe connected. However doubts have been raised about what it would mean for the poor in the country.

It is difficult to ascertain fully the employment potential of the telecom sector but the enormity of theopportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December2005 up from 2.3 million in December 2004.

The value added services (VAS) market within the mobile industry in India has the potential to growfrom $500 million in 2006 to a whopping $10 billion by 2009.

On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber base followed by

Reliance with 20.3%, BSNL with 18.6%, Vodafone with 14.7% subscriber base (as per June 2005data).

Following list shows the GSM subscriber figure till Jan 2009

1 Bharti Airtel -------------------88382758--------------------- 33.04%

2 Vodafone Essar---------------- 63340024 ----------------------23.68%

3 BSNL---------------------------- 42673357 ---------------------15.95%

4 IDEA ---------------------------40016153 ----------------------14.96%

5 Aircel--------------------------- 16761397---------------------- 6.27%

6 Reliance Telecom --------------10353841--------------------- 3.87%

8 MTNL--------------------------- 4003807 ------------------------1.50%

9 BPL------------------------------ 2007303----------------------- 0.75%

The mobile service has seen phenomenal growth since 2000. In September 2004, the number ofmobile phone connections has crossed fixed-line connections. Currently there are an estimated 201.29million mobile phone users in India compared to 39.73 million fixed line subscribers. India primarilyfollows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800MHz band. The dominant players are Airtel, Reliance Infocomm, Vodafone, Idea cellularandBSNL/MTNL. There are many smaller players, with operations in only a few states.

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http://en.wikipedia.org/wiki/Broadbandhttp://en.wikipedia.org/w/index.php?title=Bharat_Nirman_Programme&action=edit&redlink=1http://en.wikipedia.org/wiki/Airtelhttp://en.wikipedia.org/wiki/Reliancehttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/Vodafonehttp://en.wikipedia.org/wiki/Bharti_Airtelhttp://en.wikipedia.org/wiki/Vodafone_Essarhttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/MTNLhttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/Airtelhttp://en.wikipedia.org/wiki/Reliance_Infocommhttp://en.wikipedia.org/wiki/Vodafonehttp://en.wikipedia.org/wiki/Idea_cellularhttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/MTNLhttp://en.wikipedia.org/wiki/Broadbandhttp://en.wikipedia.org/w/index.php?title=Bharat_Nirman_Programme&action=edit&redlink=1http://en.wikipedia.org/wiki/Airtelhttp://en.wikipedia.org/wiki/Reliancehttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/Vodafonehttp://en.wikipedia.org/wiki/Bharti_Airtelhttp://en.wikipedia.org/wiki/Vodafone_Essarhttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/Reliance_Communicationshttp://en.wikipedia.org/wiki/MTNLhttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/Airtelhttp://en.wikipedia.org/wiki/Reliance_Infocommhttp://en.wikipedia.org/wiki/Vodafonehttp://en.wikipedia.org/wiki/Idea_cellularhttp://en.wikipedia.org/wiki/BSNLhttp://en.wikipedia.org/wiki/MTNL


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Origin of Cellular Telephony

1947

Bell Laboratories introduced the idea of cellular communications with the police car technology. The basicconcept of cellular phones began, when researchers looked at crude mobile (car) phones and realized that byusing small cells (range of service area) with frequency reuse they could increase the traffic capacity of mobilephones substantially. However at that time, the technology to do so was nonexistent

1968

AT&T and Bell Labs proposed a cellular system to the FCC of many small, low-powered, broadcast towers,each covering a 'cell' a few miles in radius and collectively covering a larger area. Each tower would use only afew of the total frequencies allocated to the system. As the phones traveled across the area, calls would bepassed from tower to tower.

1973 (April)

The first call on a portable cell phone is made by Dr Martin Cooper, a former general manager for the systemsdivision at Motorola, who is also considered the inventor of the first modern portable handset

1979

The first commercial cellular telephone system began operation in Tokyo

1982

FCC authorizes commercial cellular service for the USA

1987

Cellular telephone subscribers exceeded one million and the airways were crowded

1991

Commercial launch of cellular service based on GSM standard in Finland

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History f CellularTelephony

inIndia

1992

Telecommunication sector in India liberalized to bridge the gap through government spending & to provideadditional resources for the nations telecom target. Private sector allowed participating.

1994

License for providing cellular mobile services granted by the government of India for the Metropolitan cites ofDelhi, Mumbai, Kolkata & Chennai. Cellular mobile service to be duopoly (i.e. not more than two cellularmobile operators could be licensed in each telecom circle), under a fixed license fee regime for 10 years

1995(August)

Kolkata became the first metro to have a cellular network

1997

Telecom Regulatory Authority of India is set up

1998

Annual foreign investment in telecom stands at Rs 17,756.4 million.

1999

FDI inflow into telecom sector falls by almost 90% to Rs. 2126.7 million. Tariff rebalancing exercise getsinitiated

1999

National Telecom Policy is announced

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2000

Amendment of TRAI ActFDI inflow drops further down to Rs 918 million

GrowthtrendsThe burgeoning subscriber base and more stringent spectrum allocation regime creates a higher

requirement of cell sites or tower sites for operators, to allow greater re-use of the radio frequencyallotted to operators.

The Indian telecom industry continued on its high growth path with teledensity crossing the22%mark. The customer base surpassed 260 million, making India the second larges mobile marketin the world ahead of the USA. The Industry has been adding more than 8 million customers amonth, which is more than the monthly average of Chinas telecom industry. In the fixed linesegment, significant convergence is taking place, as is evident from the growth of broadband andIPTV services.

India has become one of the fastest-growingmobile markets in the world. ]The mobile services werecommercially launched in August 1995 in India. In the initial 56 years the average monthlysubscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base inDecember 2002 stood at 10.5 millions. However, after the number of proactive initiatives taken byregulator and licensor, the monthly mobile subscriber additions increased to around 2 million permonth in the year 2003-04 and 2004-05.

Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in the early

years because of the high price of hand sets as well as the high tariff structure of mobile telephones.The New Telecom Policy in 1999, the industry heralded several pro consumer initiatives. Mobilesubscriber additions started picking up. The number of mobile phones added throughout the countryin 2003 was 16 million, followed by 22 million in 2004, 32 million in 2005 and 65 million in 2006.The only country with more mobile phones than India with 246 million mobile phones is China 408million.

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http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/China


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India has opted for the use of both the GSM (global system for mobile communications) andCDMA( code-division multiple access ) technologies in the mobile sector. In addition tolandline and mobilephones, some of the companies also provide the WLL service.

The mobile tariffs in India have also become lowest in the world. A new mobile connection can be

activated with a monthly commitment of US$0.15 only. In 2005 alone 32 million handsets were soldin India. The data reveals the real potential for growth of the Indian mobile market.

In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million,which represented a nearly 50% growth when compared with previous year.

In April 2008 the Indian Department of Telecom (DoT) has directed all mobile Phone service users todisconnect the usage of unbranded Chinese mobile phones that do not have International MobileEquipment Identity (IMEI) numbers, because they pose a serious security risk to the country. Mobilenetwork operators therefore planned to suspend the usage of around 30 million mobile phones (about8 % of all mobiles in the country) by April 30.

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http://en.wikipedia.org/wiki/Global_System_for_Mobile_Communicationshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Wireless_local_loophttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/CDMAhttp://en.wikipedia.org/w/index.php?title=Indian_Department_of_Telecom&action=edit&redlink=1http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Global_System_for_Mobile_Communicationshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Code_division_multiple_accesshttp://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/Landlinehttp://en.wikipedia.org/wiki/Wireless_local_loophttp://en.wikipedia.org/wiki/GSMhttp://en.wikipedia.org/wiki/CDMAhttp://en.wikipedia.org/w/index.php?title=Indian_Department_of_Telecom&action=edit&redlink=1http://en.wikipedia.org/wiki/Mobile_phonehttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/International_Mobile_Equipment_Identityhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Mobile_phone


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COMPANY PROFILE

Airtel was started by Mr.Sunil Bharti Mittal,a graduate from Ludhiana (PUNJAB).earlier he was owner oflocal telecom company Beetel. Afterwards he planned to expand his company at national level and theconsequence is Airtel, what we see today. Bharti Airtel is Indias largest telecommunications company bysubscriber base, which stood at 85.7 million in December 2008, and total revenues, which were Rs.270 billionin 2007/08.

Airtel is one of Asias leading providers of telecommunication services with presence in all the 22 licensedjurisdictions (also known as Telecom Circles) in India, and in Srilanka. It served an aggregate of 96,649,487customers as of March 31, 2009; of whom 93,923,248 subscribe to GSM services and 2,726,239 useTelemedia Services either for voice and/or broadband access delivered through DSL. It is the largest wirelessservice provider in the country, based on the number of subscribers as of March 31, 2009. It also offered anintegrated suite of telecom solutions to our enterprise customers, in addition to providing long distance

connectivity both nationally and internationally. It had recently forayed into media by launching our DTH andIPTV Services. All these services are rendered under a unified brand Airtel.The Company also deploys,owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti InfratelLimited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are the two topproviders of passive infrastructure services in India.

Sunil Bharti Mittal, the founder chairman of Bharti Enterprises (who owns Airtel), is today, the most famousface of the telecom sector in India. He symbolizes the adage that success comes to those who dream big andthen worked assiduously to deliver it. His strong entrepreneurial instincts gave him a unique flair for sensingnew business opportunities. In the early years, Bharti established itself as a supplier of basic telecomequipment. His true calling came in the mid 1990s when the government opened up the sector and allowed

private players to provide telecom services.

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diversebusiness portfolio and has created global brands in the telecommunication sector. Bharti has recently forayedinto retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It hassuccessfully launched an international venture with EL Rothschild Group to export fresh agri productsexclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under ajoint venture with AXA, world leader in financial protection and wealth management.

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Vision

2010y Airtel will be the most admired brand in India: Loved by more customers Targeted by top talent Benchmarked by more business.

Key Milestones

Date of Incorporation-------------------------------------------------------------- July 07, 1995

First private operator to offer fixed line telephony---------------------------- June 04, 1998

Became a public limited company in India ------------------------------------ February 18, 2002

First telecom company to have an all India mobile footprint

(Presence in all 23 telecom circles in India)------------------------------------ March 30, 2005

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Compay History

Each year of Airtels existence has been marked by historic and far reaching milestones including many firsts,all to which have been stepping stones to their success and performance. A brief history of the Companysmajor events is:

1995-96

Mobile services under the brand name Airtel launched for the first time in Delhi and Himachal Pradesh

1997-1998

The first private telecom service provider to obtain a license fro landline telephony in Madhya PradeshIncorporation of Bharti BT VSAT Ltd. For providing VSAT solutions across India and Bharti BT Internet Ltd.

1999-2000

The larges private sector telecom operator in India after acquiring JT Mobile for providing cellular services inPunjab, Karnataka and Andhra Pradesh

Acquires Skycell, Chennai and expands its south Indian foot print Singapore Telecommunications Ltd. (SingTel) acquires Telecom Italias equity stake in the Company.

2001-2002

India One, Indias first private sector national and international long distance service launched.

Eastern foray through acquisition and new licenses for eight new circles across India.

Indias first private submarine cable landing station in a joint venture with Singtel.Initial Public offering through Indias first 100% book-building issue.

First private operator to offer basic telephone services in Haryana Delhi Tamil Nadu and Karnataka

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2003-2004

Join the US $1 billion revenue club

Strategic partnerships with IBM and Ericsson for outsourcing of the companys core IT and network activities.

Acquires a controlling stake in Hexacom, the leading mobile operator in Rajasthan and holding a license tooffer services in the NorthEast.

First private operator to launch mobile services in Jammu and Kashmir.

Founding member of the Bridge Mobile Alliance, a consortium of seven leading mobile operators in theregion.

2005-2006

All-India foot print with the launch of mobile services in Assam.

Becomes Indias largest intergrated private operator based on the total customer base

2006-2008

Profit crosses US $ billion.

Receives license for providing 2G and 3G mobile services in Srilanka

Launch of Airtel CallHome service, a calling card service for various countries aimed at the Indian diaspora.

Strategic partnership with Google, enabling search through mobile phones.

Strategic tie-up with Microsoft and becomes the first telecom operator to offer Microsoft Windows Mobile 5.0technology.

Facility Based operator license in Singapore, enabling the company to operate international carrier facilitiesfrom Singapore.

Joins international consortia of leading telecom companies to build 3 high bandwidth submarine cables AAG,I-ME-WE AND Unity.

Receives US $ 1.275 billion investment from leading international investors in Bharti Infratel, a subsidiaryestablished with the aim to provide passive infrastructure services to all mobile services operators in India

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Boardf directors

Sunil Bharti Mittal ------------------ ---Chairman and Managing DirectorManoj Kohli -----------------------------Joint Managing DirectorAkhil Gupta ------------------------------Non Executive DirectorChua Sock Koong -----------------------Non Executive DirectorPaul OSullivan --------------------------Non Executive DirectorQuah Kung Yang ------------------------Non Executive DirectorRajan Bharti Mittal ----------------------Non Executive DirectorRakesh Bharti Mittal --------------------Non Executive DirectorCraig Ehrlish -----------------------------Independent Non Executive DirectorAjay Lal ----------------------------------Independent Non Executive DirectorArun Bharat Ram -----------------------Independent Non Executive DirectorBashir Abdulla Currimjee -------------Independent Non Executive DirectorMauro Sentinelli ------------------------Independent Non Executive DirectorN.Kumar ---------------------------------Independent Non Executive DirectorNikesh Arora ----------------------------Independent Non Executive DirectorPulak Chandan Prasad -----------------Independent Non Executive Director

Fact sheet

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Name Bharti Airtel Limited.

Business

Description

Provides GSM mobile services in all the 22 telecom circles in India, and was thefirst private operator to have an all India presence. Provides telemedia services(fixed line and broadband services through DSL) in 95 cities in India.

Established July 07, 1995, as a Public Limited Company

Proportionate

Revenue

Rs. 369,615 million (year ended March 31, 2009-Audited)Rs. 270,250 million (year ended March 31, 2008-Audited)As per US GAAP Accounts

Proportionate

EBITDA

Rs. 151,678 million (year ended March 31, 2009 - Audited)Rs. 113,715 million (year ended March 31, 2008 - Audited)As per US GAAP Accounts

Shares in Issue 1,898,239,796 as at March 31, 2009

Listings The Stock Exchange, Mumbai (BSE)

The National Stock Exchange of India Limited (NSE)

Market

Capitalisation

Customer Base 93,923,248 GSM mobile and 2,726,239 Telemedia Customers (status as on March31, 2009)

Operational

Network

Provides GSM mobile services in all the 22 telecom circles in India, and was thefirst private operator to have an all India presence.

Provides telemedia services (fixed line) in 95 cities in India.

Registered OfficeBharti Airtel Limited

(A Bharti Enterprise)

Aravali Crescent,1, Nelson Mandela Road,Vasant Kunj, Phase II,New Delhi 110 070, India

Tel.No.: +91 11 4266 6400Fax No.: +91 11 4166 6137

Airtel Services


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irtel services

ireless services 2G/3G

Rural Market

elemedia Services Fixed Line

Broadband

DTH(Media)

nterprise Services Carriers Corporate

assive Infrastructure Services

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ResearchMethodology

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Tyes of data

The types of data that is used in this report is of secondary data from

o Internet

www.airtel.inwww.coai.inwww.wikipedi.orgwww.wikinvest.comwww.hindustantimes.com

o Magazines

The Hindu Survey of Indian industry 2004, 2007, 2009.

o Newspapers

The HinduDeccan chronicle

Methoology used

The methodology of this report was carried by observing and analyzing the data from differentsecondary sources. The study is carried by considering one company Bharti Airtel from telecomsector to know its performance, Competition are considered for the analysis.

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http://www.airtel.in/http://www.coai.in/http://www.wikipedi.org/http://www.wikinvest.com/http://www.hindustantimes.com/http://www.airtel.in/http://www.coai.in/http://www.wikipedi.org/http://www.wikinvest.com/http://www.hindustantimes.com/


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Analysis on Reports

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Data interpretation

From the above balance sheet of 2006 & 2007 the major changes were found in the

Particulars Values for

2006

Values for

2007

Difference (Increase

/Decrease)

Percentage of

change

Fixed assets 193056341 130068771 62987570 Increase 48.426

Current

assets29542935 44454766 14911831 Increase 50.475

Current

Liabilities66991634 98446711 31455077 Increase 46.953

Net current

assets37448699 53991945 16543246 Increase 24.694

Investments 7196981 7058179 138802 Decrease 1.928Share capital 18938793 18959342 20549 Decrease 0.1085

Secured

loans28633707 2664475

25969232

Increase 90.69462

Inventory 177444 478145 300701 Decrease 169.462

Cash & Bank

Balances3074285 7804605 4730320 Decrease 153.867

o The changes in the fixed assets were due to the capital work in progress it includes Capital

advances of 2, 00,443 and the other reasons are fluctuations of foreign exchange rates,Buying computers.

o The investments are done in the different areas like Government securities, Mutual funds andDebentures.

o The changes in current assets were due to the Debit outstanding for period exceeds six

months, Advances and loans given to subsidiary companies like Bharti comtel, Airtel (USA),Bharti Hexacom, Bharti Broadband Ltd.

o The changes in current liabilities are due to the outstanding due of small scale industries

undertakings, Advance received form customers is decreased and Advance Billing.o The change in the share capital is due to

a) 1,516,390,970 Equity Shares issued as fully paid up bonus shares out of Share premiumaccount.b) 20,088,445 Equity Shares are allotted as fully paid up upon the conversion of OCRD

without payment being received in cash.c) 19,591,420 Equity shares are allotted as fully paid up on the conversion of FCCBsd) 2,772,125 Equity Shares are allotted as fully paid up under the scheme of amalgamationwithout payments being received in cash.

o The loans in above balance sheet were secured from banks as advances and also as term loans

and vehicle loanso The inventory i.e. Stock in-Trade was increased.

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Data Interpretation

From the above Profit and loss statement of 2006 & 2007 the major changes were found in the

Particulars Values for 2006 Values for

2007

Difference Increase/

Decrease

Percentage

Networking

operating

11408836 19214108 7805272 Increase 68.41427118

Cost of Sales of

goods

674043 220849 -453194 Decrease -67.23517639

Personnel 11263414 7754523 -3508891 Decrease -31.15299677

Sales andMarketing 10691655 8013612 -2678043 Decrease -25.04797433

Amministrative

and Others

16609713 11953078 -4656635 Decrease -28.03561386

Other income 618980 935600 316620 Increase 51.15189505

Finance expense 2558440 2256011 -302429 Decrease -11.82083613

o The Expenditure was increased by 39.783 percent this is due to the inter connect charges,

Installation, Power & fuel, Rent, Insurance , Repairs and Maintenance and also due to theLeased line Gate way charges, Increase in the cost of goods sold, Personnel expenditure likesalaries, wages, Bonus & Provident fund contribution, Staff welfare and Recruitment andtraining.

o The difference of Network operation is due to the Interconnect Charges and PSTN Rentals,

Installation, Power and Fuel, Insurance, Internet Access and Bandwidth Charges.

o The change in Personnel is due to the Salaries, wages and Bonus, Contribution of Provident

and Other funds, Staff welfare Recruitment and Training.

o

The change in the sales in the marketing expenditure is because of the Advertisement andMarketing, Sales commission and Incentive, Sim card utilization.

o The change in the administrative and other expenditure is due to Legal and professional, Rates

and taxes, Power and Fuel, Travelling and conveyance rent, Insurance, Provision for doubtfuldebts and advances, Collection and recovery expenses.

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Data Interpretation

From the above Balance sheet of 2007 & 2008 the major changes were found in the

Particulars Values for2007

Values for2008

Difference Increase/Decrease

Percentage

Fixed assets 193056341 190306475 2749866 Decrease1.424385

22

Current assets 44454766 625101101805534

4Increase

40.6150917

Current

Liabilities98446711 121100901

22654190

Increase23.01162

70

Net current assets 53991945 58590791 4598846 Increase8.517652

03

Investments 7058179 1095285281024703

49Increase

1451.79583

Secured loans 2664475 524244 2140231 Decrease80.32467

93

Inventory 478145 568607 90462 Increase18.91936

54

Share capital 18959342 18979074 19732 Increase0.104075

34

Cash and Bank

Balances7804605 5029390 2775215 Decrease

35.5586861

o The changes that took place in fixed assets are due to the capital work in progress i.e. capital

advances and it also includes goods in transit and also for the license fees for unified accessservice for long distance for 7 to 17 years and 14 years.

o The increase in current assets includes Goods in transit Rs.23,408 and also Net of Provision

for diminution in value Rs. 43,113 and also for Intrest Acquired on Investment and Advancesin cash

o The current liabilities are increased due to the advances to companies and also for Fringe

benefits tax, warranty and wealth tax.

o Investments in 2008 Increased due to the investment in Govt securities, Mutual funds,

Debentures and Bonds and also in IFFCO Kissan Sanchar Ltd of 100,000 equity shares.

o The changes in the share capital was due to

a) 1,516,390,970 Equity Shares issued as fully paid up bonus shares out of Share Premiumaccount.

b) 20,088,445 Equity Shares are allotted as fully paid up upon the conversion of OptionallyConvertible Redeemable Debentures without payment being received in cash.

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c) 21,315,734 Equity Shares are allotted as fully paid up opon the conversion of ForeignCurrency Convertible bonds.

d) 2,722,125 Equity Shares are allotted as fully paid up under the scheme of amalgamationwithout payments being received in cash

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Data Interpretation

From the above Profit and loss statement of 2007 & 2008 the major changes were found in the

ParticularsValues for

2007

Values for

2008Difference

Increase/

DecreasePercentage

Profit before tax 46013712 697254232371171

1Increase

51.53183686

Total Income 177944343 2570350967909075

3Increase

44.44690495

Expenditure 88958316 1243490123539069

6Increase

39.78345993

Profit after tax 40332265 624419222210965

7Increase

54.81878342

Network

Operating 19214108 33004746

1379063

8 Increase

71.77350

101

Cost of goods sold 220849 338502 117653 Increase53.27305

082

Sales and

Marketing10691655 17849080 7157425 Increase

66.94403252

o The Expenditure was increased by 45.064 percent this is due to the inter connect charges,

Installation, Power & fuel, Rent, Insurance , Repairs and Maintenance and also due to theLeased line Gate way charges, Increase in the cost of goods sold, Personnel expenditure likesalaries, wages, Bonus & Provident fund contribution, Staff welfare and Recruitment andtraining

o The difference of Network operation is due to the Interconnect Charges and PSTN Rentals,

Installation, Power and Fuel, Insurance, Internet Access and Bandwidth Charges.

o The increase in the cost of goods sold is due to the opening stock addition of purchases,

Internal issues. Net provision for diminution in value of 30,824 thousand.

o The change in the sales in the marketing expenditure is because of the Advertisement and

Marketing, Sales commission and Incentive, Sim card utilization.

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Revenue graph

Data Interpretation

From the above graph for revenue of airtel the interpretations are

a) There was a loss of Rs.2051million in the year 2003 and revenue was Rs. 30,554 million inthe same year.

b) Thereafter there is a gradual increase in the in both the revenue and profit year after year.

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HR Report

o Bharti Airtel Limited (popularly known as Airtel) is the flagship company of The Bharti

Enterprises. A telecom giant, it is the pioneer and the leading brand name in the privatetelecom service providers with its services spanning 94 cities. It is divided and organized inmobile services, Airtel telemedia services and enterprise services (corporate and carrier)services business divisions.

Airtel values its human resources and its HR policies are aimed at targeting and retaining besttalent in the industry. With the focus on the same, Airtel also has a Bharti CampusRecruitment Program to recruit young students from various elite campuses

The key functions of the HR Committee include the followings:

o

Attraction and Retention strategies for employees.o Employees Development Strategies.

o Compensation (including salaries and salary adjustments, incentives/benefits bonuses, stock

options) and performance targets for the Chairman and Managing Director (CMD) and JointManaging Directors (JMDs) Executive Directors.

o All Human Resources related issue.

o Other key issues / matters as may be referred by the Board or as may be necessary in view of

Clause 49 of the Listing Agreement or any statutory provisions.

o Measurement is indeed a key driver of business within Airtel. A philosophy of constant

monitoring has been established. `Measurement Boards' for every department are prominently

displayed where the performance indicators of the same are displayed graphically; Airtel's HRsuccess was powered by a well defined rewards and recognition system. This was backed by astrong training programme. ``Unlike most other organizations, we let our employees decidetheir training needs. And if the individual does not know what his training needs are, then wedon't need him,'' says Nayar.

o To encourage learning within the organization, the company has set up a state-of-the-art

learning centre. Here, employees can get logged on to customized training programmesdeveloped by British Telecom (BT). Though the material is transmitted through the Internet,they are not accessible to anybody outside the organisation as the access is protected. Airtelalso seeks to certify every employee on quality and IT. ``

o Eventually, there are the performance-related bonuses that set the tone for these activities.

Padhi informs us that 60 per cent of the employees are on a variable pay structure, and thatexplains the success Airtel has had in business and HRD.

o The HR department also sets up cross-functional teams in times of product or service

launches. ``Such teams typically constitute high performers from each department, whocollectively make it happen,''

o To further HR interface, every member of the HR department has been assigned two

departments each to discuss and sort out all HR, personnel and administration issues. ``Theidea is to provide employees with a single window to the department,''

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Summary

The company analysis has outlined a scenario of the Bharti Airtel. i.e, current

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scenario, future perspective, business development, retention of customers, Hr

policies, study of different financial reports to know and understand the stand

of the company

Bharti Airtel speedy activity is one of its best attributes that has made it gain

an international status across the world. It is always updated with the latestdata and is highly competent. Quality remains the prime concern and is

maintained strictly by the team.

With such achievements, Bharti Airtel is still ruling the Indian telecom Industry

and is aiming high to gain popularity and success around the world in brand

building by making new discoveries everyday.

Based on the above, observations can be made that it promises unprecedented

and efficient control over the market.

From the analysis on the reports the conclusions drawn were, there was a

continuous increase in the share capital, Differed tax liability, unsecured loans,Stock options.

The profits are transferred into reserves in surplus

The company has invested the funds in fixed assets.

The cost of sale of goods is been reduced by company with other expenditures

but the sale of goods has been reduced.

The profit is been increased due to the service revenue but not by the sale of

goods.

Strengths

Very focused on telecom.

Leader in fast growing cellular segment.

Pan India footprint.

The only Indian operator, other than VSNL, that has an international submarine

cable

Weakness Price competition from BSNL and MTNL

Untapped Rural Market

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Opportunities

Fast expanding Indian cellular market.

Latest and low cost technology Huge market

Threats

Competition from other cellular and mobile operators

Saturation point in Basic telephony service

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Bibliography

Internet

www.airtel.in

www.coai.in

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www.wikipedi.org

www.wikinvest.com

www.hindustantimes.com

Magazines

Survey of Indian Industry -2004



News papers

The Hindu

Deccan chronicle
http://www.wikipedi.org/http://www.wikinvest.com/http://www.hindustantimes.com/http://www.wikipedi.org/http://www.wikinvest.com/http://www.hindustantimes.com/

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Airtel Company Analysis Report

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