airtel strategic

7/29/2019 airtel strategic

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PRESENTATION ON AIRTEL AND CELL

PHONE SERVICE INDUSTRY

Presented by:-

Shruti bansal

Bawa sunejaGagandeep kaur

Neha chabbra


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BHARTI AIRTEL

Bharti Airtel Limited is a leading integrated

telecommunications company with operations in

20 countries across Asia and Africa.

Headquartered in New Delhi, India, the company

ranks amongst the top 5 mobile service providers

globally in terms of subscribers.

Bharti Airtel had over 246 million customersacross its operations at the end of February 2012.


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Cont

In India, the company's product offerings include2G, 3G and 4G services, fixed line, high speedbroadband through DSL, IPTV, DTH, enterprise

services including national & international longdistance services to carriers.

Bharti Airtel commands 250.04 millionconnections and has a revenue of $3.04

billion. Airtel also operates in 20 countries across

South Asia, Africa and the Channel Islands.


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BHARTI VODAFONE RCOM IDEA

SUBSCRIBERS (mn) 178.78 149.44 0 110.71

SUBSCRIBER'S MARKET SHARE 27.22% 22.75% 0.00% 16.85%

NET ADDITIONS 1.82 0.84 0 2.58

SHARE OF NET ADDITIONS 20.77% 9.55% 0.00% 29.42%SUBSCRIBER'S MARKET SHARE 27.22% 22.75%

0.00%-0.09% -0.18% 0.00% 0.17%

-20

0

20

40

60

80

100

120

140

160

180

200

DEC

-12

SUBSCRIBERS & NET ADDITIONS


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AIRTEL , 19.94%

VODAFONE, 16.41%

RELIANCE, 16.58%

IDEA, 12.48%


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203820

236.919.94%

153538

153

16.41%

196800

15316.58%

172698115.5 12.48%

REVENUES( Rs mn) CUSTOMER BASE(mn) market share

comparison on the basis of revenue,customer base , market

share(FY2012)

AIRTEL VODAFONE RELIANCE IDEA


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INDUSTRY PROFILE

The Indian telecommunication industry is one ofthe world's fastest growing industries with653.92 million telephone (landlines and mobile)

subscribers and 617.53 million mobile phoneconnections.

It is the second largest telecommunicationnetwork in the world in terms of number of

wireless connections after China. Telecom companies predominantly divide their

business into 4 major sub-segments i.e. Mobile,Fixed Line, Internet and Enterprise.


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The key players in this industry may be broadly

classified into,

-State owned companies like - BSNL and MTNL.

-Private Indian owned companies like Reliance

Communications

-Foreign invested companies like - Vodafone-

Essar, Bharti Airtel, Idea Cellular, Aircel Etc


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REVENUE ANALYSIS

Mobile/Cellular services

Cellular mobile service providers (CMSP) deriverevenues by way of tariff charges for outgoing calls

made by subscribers on its network.Subscribers: Growth in a CMSP's subscriber base isdependent on several factors, the key amongst thembeing:-

- Economic growth- Rising income level

- Affordability


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II. Fixed line services

The fixed (wire line) services are dominantly

provided for BSNL and MTNL. Although this hadbeen a dominant mode of telecommunication in

the past, it is fast being replaced with mobil

telephony, which has the advantage of

connectivity on the move. The fundamentalbusiness of a fixed line operator is almost similar

to that of CMSP, in terms of ARPU andSubscriber base.


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III. Internet/Broadband

The Internet services are provided either by

telecom service providers or independentInternet service providers (ISP) who deal

exclusively in providing this service. There are

two forms of Internet that are currently popular-

the dial-up connections and the broadbandconnections.


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ENVIRONMENTAL ANALYSIS

It is a systematic examination of al 3 levels of theenvironment with at least three purposes:

1. Detecting important economic, social, cultural,

environmental, health, technological, andpolitical trends, situations, and events

2. Identifying the potential opportunities andthreats for the institutionimplied by these trends, situations, and events.

3. Gaining an accurate understanding of your organizations strengths and limitations.


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Cont.

A near environment analysis indicates that the

competitors are becoming active resource rivals

(political and financial) apart from applying

pressures as customer rivals. The customer has,needless to say, benefited from increased choice

from within the communications services basketitself.


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PEST ANALYSIS

Political

Regulations

Political Opposition to participation by the

private players

Govt support to promote FDI in Telecom sector

Technology

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

Socio-Cultural

High End Phones becoming status

symbol Due to Intimate family bonding inIndian Culture, there is need to remainconnected

Tech Savvy Generation

EconomicCost 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


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Porters 5 Forces

Threat fromCompetition

CustomerBargaining

Power

Threat ofSubstitutes

SupplierBargaining

Power

Threat ofNew

Entrants


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PORTERS FIVE FORCES

Threat of New Entrants

The number of major players in the Indiantelecom is 12 companies. This has changed the

tactics followed by companies, it all started byTATA DoCoMo bringing about the concept of persecond billing.

Moreover in the recent days the inclusion of 3G

has brought about as is often said the entry of a900 pound gorilla in the telecom industry as amajor competitor.


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1. Threat from Competition

Wireless Market

Top 4 garnering 75% market share

HIGH


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Power of Suppliers

At first glance, it might look like telecom

equipment suppliers have considerable

bargaining power over telecom operators.

Indeed, without high-tech broadband switching

equipment, fibre-optic cables, mobile handsets

and billing software, telecom operators wouldnot be able to do the job of transmitting voice

and data from place to place.


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2. Customer Bargaining Power

Lack of differentiation among Service Providers

Cut throat Competition

Low Switching Costs

Number Portability has Ve Impact

Businesses & Consumers

HIGH

Customers & Market Share

3 S li B i i P


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3. Suppliers Bargaining Power

LOW

4 Threat of Substitutes


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4. Threat of Substitutes

Landline

CDMA

Video Conferencing

VOIP - Skype, Gtalk, Yahoo Messenger

e-Mail & Social Networking WebsitesBROADBANDSERVICES

DIMINISHING MARKET HIGH


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Cont.

Reliance Infratel has around 50,000 towers. Thelargest tower firm Indus Towers has around 1,00,000towers and is a combination of Bharti Airtel,Vodafone Essar and Idea Cellular operating in 16service areas.

Power of Buyers

The end user will be the happiest as the price warsensue. This will lead to a change in the method ofrevenue generation as the concept of manufacturingminutes goes belly up in the future. Telecom in thepresent day holds low brand loyalty and brandswitching is becoming more and more a norm.


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Cont

Competitive Rivalry

Rivalry in this sector has just begun to show up

because the changes being brought forward are

too many and those who adapt will survive.

Competitors of Airtel are flanking it from the side

by trying out newer ways to woo the customer.


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THE ANALYSIS OF AIRTEL

DoCoMo through its per second rates and has

changed the revenue model of Indian mobile

operators ever since. This led to the fall of the

Average Revenue per User(ARPU) but the priceof making those minutes rose. This fall in ARPU,

the advent of 3G and acquisitions by companies,have increased cost of making minutes.


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Almost 80% of the revenue generated by the

telecom companies is through voice services.

This is important because it means that a large

chunk of these can defect to a product such asSkype. But sustain the same level of revenue

generation through voice the company can enterinto a new market.

Airtel should not be hit badly since they havea

lready sprouted few revenue generation portals

like AppCentral, though the margin will fall.


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COMPETITIVE ADVANTAGE

Bharti Airtels competitive advantage can be

seen right from the period of 1990s. Bharti was

the first Indian company to manufacture cordless

telephones.

Acquisitions and joint ventures

Outsourcing

Supplier Relationships and Integrations


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Swot Analysis

OPPORTUNITIES WEAKNESS 1. Largest wireless network among all the

players in the market. Followed by thelargest market share. Customer base of 133million. High Customer Service and Quality.

2. The best performing (quality) networkcoverage in India.

3. Highly effective Value added services inform of AppCentral which had a million plusdownloads last month

4. Penetration into the rural market throughcollaboration with IMIMobile to launch

Cell Shakti.

5. Partnered with VMware to look forwardinto the domain of cloud computing, whichis purported as the future of information?

1. Reduced profit margin due to

increasing cost per minute and

falling selling price. 2. Increased debt by acquiring

companies in newer markets.

3. Preparedness towards thechanging role of telecom i.e.

shifting focus from calls andSMS.

4. Penetration into rural market.

5. Charging for customer care


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SWOT ANALYSIS

OPPORTUNITIES THREATS

1. The entry into the newer markets of

Africa as the domestic market goes

though a state of unrest.

2. Telecom is slowly looked upon as a

commodity so higher quality at a

lesser price is needed.

3. Large section of the population which

is not exposed to internet and need

better connectivity.

4. The scope of breaching into the sector

of internet and creating an

amalgamation of sorts between the

two.

5. Mobile Banking Services.

. Too many players which can lead to

diluted focus and can give a chance to

a smaller rival to move ahead.

2. Internet based services taking over a

part of the telecommunications

domain. Likes of SKYPE and Gtalk.

3. Government regulations over the

bandwidth and other telecom

regulations.

4. Presence of Reliance into the theatre

of telecommunication.

5. Customer preference of price over

performance.


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STRATEGIES ROLLED OUT

Outsourcing all major operations exceptMarketing, Sales and Finance.

Bharti Airtel has a joint Venture with Alcatel-

Lucent to manage the network infrastructure forthe Telemedia Business.

Bharti Airtel and Google announced a strategicpartnership, as part of the agreement, Airtel will

bring Google search to the Airtel Live mobileWAP portal. Google will also incorporateadvertising through its Mobile Ads product onthe Airtel Live mobile portal.


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M-Commerce.

Targeting 55 million farmers under its fold, IndianFarmers Fertiliser Cooperative (IFFCO) have agreed

upon a joint venture with telecom major Bharti Airtelto provide a boost to Indian agriculture and ruraleconomy at large.

Hiring the best or attracting the best (poaching orotherwise) Airtel has a history of hiring some of thehigh level officials from other companies to be anintegral part of their business.

Expansion into Africa.


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Projection of Future Financial

Position

Customer base: The customer base as on 31st

March 2010 stood at 137.6 million for the

company across India, Sri Lanka and

Bangladesh. By the year ending March 2013, thecustomer base is projected to increase to 450

million.

Revenues: Bharti Airtel posted revenues of Rs41829.5 crores for the year ended 31st March

2010. The revenues have been increasing but at a

decreasing rate. Keeping that in mind, the

company should be able to post net revenue of


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Cont.

Net profits: For the year ended 31st March 2010,

net profits were Rs 9426.2 crores which was a

22% Y-o-Y increase. The projected profits for

March 2013 should stand at Rs 16449 crorestaking into account an increase of about 25% of

profits over sales.

Growth rate: Bharti Airtel grew at 7% for thefinancial year 2009-2010. It has been projected

to maintain an average growth rate of 10-15% in

the next 3 years.


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Market share: Currently Bharti Airtel operates

full-fledged in India, Sri Lanka and Bangladesh. It

has recently begun operations in Africa. In India,

despite the high competition there is more tolook forward, as the penetration levels are way

below the global average at 38%.

Employees: The number of employees should beat around 41000 by March 2013.


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Future strategies

Lookout for acquisitions post shakeout.

Africa and the El Dorado illusion.

Contingencies to combat recession. Threat of Internet.

Their strategic alliance with VmWare is crucial

and must be played out well because the storage

space within any hand held device is limited.


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Cont.

With election coming up in a few years theymust make provisions for changes in thetelecom regulations if there is a change at the

Centre. The business model implemented in Africa

would have to be different from that of India.

The segment of Airtel which focuses onbroadcasting services must look into thefacet of integrating internet into thetelevision experience.


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THANK YOU

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