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Project Report

On

TELECOM INDUSTRY ANALYSIS

Submitted to: Submitted By

Mrs. Indrish Kaur madan sharma

( Prof. Business Strategy)

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Certificate

This is to certify that Madangopalsharma,

student ofMasters of Business Administration(MBA) at Faculty of Management Studies,Manav Rachna International University have completed their project report titled

ANALYSIS OF SERVICES STRATEGY with reference to Telecom

INDUSTRY under my guidance and supervision. The work submitted is

genuine and authentic.

Mrs. INDRISH KAURProfessor and Project Guide

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ACKNOWLEDGEMENT

Acknowledgement, which itself says that the time has come when a trainee in a project express

his sincere gratitude to all the members who helped him/her for sharing their experiences to

make this a successful project internship.

Sincerely We would like to thank Mrs. INDRISH KAUR, who acted as my guide for this project.

His invaluable guidance and support during the course program is highly appreciated. He shared

his remarkable experiences which result to end of successful closure of my project. The

theme/topic is suggested by him only.

Also, we would like to thank Manav Rachna International University, Faridabad, for his never

say no attitude, he also help me in improving my reports and project thesis. His guidance and

encouragement has showed the path for completion of my project successfully.

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INTRODUCTION

Company Profile

Name Bharti Airtel Limited.

Business

Description

Provides GSM mobile services in all the 22

telecom circles in India, Srilanka, Bangladesh and

now in 16 Countries of Africa.

Provides telemedia services (fixed line and

broadband services through DSL) in 88 cities in

India.

We also offer suite of Enterprise solutions, DTH

and IPTV Services

Established July 07, 1995, as a Public Limited Company

Proportionate

Revenue

Rs. 152,150 million (ended September 30, 2010-

Audited)

Rs. 103,785 million ( ended September 30, 2009-

Audited)

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As per IFRS Accounts

Proportionate

EBITDA

Rs. 51,212 million ( ended September 30, 2010 -

Audited)

Rs. 43,007 million ( ended September 30, 2009 -

Audited)

As per IFRS Accounts

Shares in Issue 3,797,530,096 as at September 30, 2010

Listings The Stock Exchange, Mumbai (BSE)

The National Stock Exchange of India Limited

(NSE)

Market

Capitalisation

Customer Base India: 147,626,000 GSM mobile and 3,216,000

Telemedia Customers.

(status as on September 30, 2010)

Africa: 40,082,000 GSM mobile.

(status as on September 30, 2010)

Operational

Network

Provides GSM mobile services in all the 22

telecom circles in India, Srilanka, Bangladesh and

now in 16 Countries of Africa.

Provides telemedia services (fixed line) in 88

cities in India.

Provides an integrated suite of Enterprise

solutions, in addition to providing long distance

connectivity both Nationally and Internationally.

We also offer DTH and IPTV Services.

Registered

Office

Bharti Airtel Limited

(A Bharti Enterprise)

Bharti Crescent, 1 Nelson Mandela Road, Vasant

Kunj Phase II

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New Delhi - 110 070

Tel. No.: +91 11 4666 6100

Fax No.: +91 11 4666 6411

Airtel is one of worlds leading providers of telecommunication services with presence in all

the 22 licensed jurisdictions (also known as Telecom Circles) in India, and operations in

Srilanka, Bangladesh and in Africa. It served an aggregate of 194.8 million customers as of

September 30, 2010; of whom 187.7 million subscribe to our GSM services and 3.2 million

use our Telemedia Services either for voice or broadband access delivered through DSL. It is

the largest wireless service provider in India, based on the number of customers as of

September 30, 2010. It offer an integrated suite of telecom solutions to our enterprise

customers, in addition to providing long distance connectivity both nationally and

internationally. Company also offer DTH and IPTV 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 Infratel Limited. Bharti Infratel owns 42% of Indus

Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive

infrastructure services in India.

Partners

Network

Equipment

Mobile Services Nokia Siemens, Ericsson, Huawei

Telemedia & Long

Distance Services

Nokia Siemens, Juniper, Cisco, Alcatel

Lucent, ECI, Tellabs

Information Technology IBM

Call Centre Operations

IBM Daksh, Hinduja TMT,

Teleperformance,

Mphasis, Firstsource & Aegis

Equity Partner {Strategic} Singtel

About airtel :-

Telecom gaint Bharti Airtel is the flagship company of Bharti Enterprise.

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Airtel comes to you from Bharti Airtel Limited, Indias largest integrated and the frist private

telecom services provider in all the 23 telecom circles.

SBUs:-

-Mobile service:-Bharti Airtel offers GSM mobile services in all the 23-telecom circles inIndia & is the largest mobile service provider in the country, based on the number of

customers.

-Airtel telemedia services :-1)The group offers high speed internet with a best in class

network.

2)Landline services in 94 cities.

-Enterprise services:-1)Enterprise services provides a broad portfolio of services to large

enterprise and a carrier customers. This division comparises of the

carrier and corporate business unit.

2)Enterprise services is regarded as the trusted communications partner.

Companies of Airtel

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Airtel is a brand of telecommunication services in India operated by Bharti Airtel.

A brief introduction to each of its companies is given below:

1. Bharti Airtel Ltd

Bharti Airtel Ltd is India's leading provider of telecommunications services. The companyhas 4 distinct Business divisions - Mobile & telephone services, broadband services, long

distance services and enterprise services.

2. Bharti TeleTech Ltd

Bharti TeleTech Ltd manufactures and exports world-class telecom equipment under the

brand 'Beetel'.

3. Telecom Seychelles Ltd

Telecom Seychelles Ltd provides telecom services in Seychelles, under the brand 'Airtel'.

VISION 2010:-

By 2010 Airtel will be the most admired brand in india:

1)Loved by more customers.

2)Targeted by top talent

3)Benchmarked by more businesses

VISION 2020:-

1)To build indias finest conglomerate by 2020.

2)Supporting education of underprivileged children through Bharti foundation.

Strategic Intent:-

To create a conglomerate of the future by bringing about big transformations through braveactions.

MISSION:-

We at airtel always think fresh and innovative ways about the needs of our customer s and

how we want tem to feel. We deliver what we promise and go out of our way to delight the

customer with a little bit more.

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Bharti Airtel (Mobile Services):-

1)Provides GSM services.

2)Market share of 23% in wireless segment.

3)Provides services in all 23 telecom circles.

4)3rd largest wireless operator in the world.

5) Around 76 million subscriber base.

Strategic Intent

Promise:We at Airtel always think in fresh and customers and how we want them to feel. We deliverwhat we promise and go out of our way to delight the customer with a little bit more.

Objectives of the StudyAirtel has set an ambitious target of doubling the subscriber base in next 2-3 years. Throughthis study we will understand the strategic position, Strength, Weaknesses, Opportunities andthreats that will play a role in achieving Airtels target.

External AnalysisIndian Telecom Sector Analysis.The Indian telecom Sector has seen a phenomenal growth and currently has close to 525 Milliontelecom customers. Indian telecom market is Worlds second largest market, second to onlyChina. However the penetration is one of the lowest in the world.

The India population stands close to 1.2 billion with increasing urbanization and relatively largeyoung population, which is a major driver for telecom sector. The current Telecom penetrationstands at 44.87% ie 525.65 mn telecom subs which is one of the lowest in the world. The growth

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will come from expanding market as well as increased penetration, giving dual advantage.Growth is expected in Broadband subscribers also as the penetration is just 0.63% 7.40 mn,which is again the lowest in the world. Government has set a target to reach 20 mn broadbandsubscribers by 2010.

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Indias Competitive Advantage in Mobile SectorThe Porters Diamond Model below shows the Competitive Advantage of Indian Mobile Sector.All Five factors namely Government; Firms Strategy, Structure and Rivalry; Factor Conditions;Related and Supporting Industries and Demand Conditions are Favorable

PESTEL AnalysisPolitical and Regulatory IssuesPolitical factors are how and to what degree a government intervenes in theeconomy. The unprecedented growth of the Indian telecom industry has been well supported bythe policy reforms. Some of the key Highlights are given belowRegime- Charges have beenrationalizedbile ability are given below:

January 2010 Proposal to Waiver of License fees in Rural Areas2009

Regulatory on Quality of Services for Telecom Sector Interconnection Regulation for Broadcasting Sector Interconnection Usage Charge Regime-Charges have been rationalized Resale of International Private Leased Circuit (IPLC) GoM has been constitutes to decide the pricing of 3G Spectrum

2008 Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid. DoT issues 121 Letters of Intent (LoIs) for UAS licences Guidelines for Mobile Number Portability Services

DoT allows active infrastructure sharing2007

Dual Technology Allowed2006

Number portability proposed2005

An attempt to boost rural telephony was made FDI limit was raised from 49 to 74 per cent

2004 Intra-circle merger guidelines were established Broadband Policy 2004 was formulated to target 20 million internet users by 2010

2003 Calling Party Pays (CPP) implemented Unified Access Licensing (UAL) regime established Reference interconnect order issued

2002 ILD services unlocked to competition Go-ahead to CDMA technology Initiation of internet telephony in India Reduction of license fees

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2001 Additional licenses in basic and cellular services Reduction of license fee Limited launch of CDMA WLL (M) Reduction of GSM cellular tariff Widening of service coverage by the then players Initiation of 3rd and 4th GSM operator networks

The above table from TRAI shows the impact of various regulations on the cost ofservices and hence on the subscriber base between 1998 and 2007. The Mobile chargesin India are amongst the lowest in the World due to gradual reduction in the licensingfees. clearly, the above regulations have helped the Sector to grow, develop and providequality service at affordable prices.

ECONOMICEconomic factors include economic growth, interest rates, exchange rates and the inflation rate.These factors have major impacts on how businesses operate and make decisions. It isundisputed that India is a long term growth Story with decent levels of Inflation and GDP. Indiais still posting a robust growth of 8 % GDP which is fuelled by the growth in the services andmanufacturing sectors. The telecom is said to contribute to the growth of Economy. And inIndias case the telecom will continue to play an important role. Hence we foresee that the

Economic factors in India likeGrowing GDP and disposable income will help in Growth of theMobile industry.

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SOCIALSocial factors include the cultural aspects, population growth rate, age distribution, careerattitudes etc.. Trends in social factors affect the demand for a product or a service. Firstly, Indiahas favorable Social factors with one of the lowest mobile penetration in the second mostpopulous country in the world. Secondly, 35 % population is below 14 yrs of age which is a hugefuture customer base. Thirdly, Urbanization is increasing leading to an increased demand forconnectivity. This also hints that growth in the rural industry can be a good impetus for Growth.

Clearly the Social Scenario is also in favor of the industry.

TECHNOLOGICALTechnological factors include technological and environmental aspects, such as R&D activity,automation, technology incentives and the rate of technological change. They can determinebarriers to entry, minimum efficient production level and influence outsourcing decisions.Furthermore, technological shifts can affect costs, quality, and lead to innovation.

The Indian telecom sector offers unprecedented opportunities for foreign companies in variousareas, such as 3G , virtual private network, international long distance calls, value addedservices, etc.

The above diagram shows various Technologies that will provide Growth Avenues in the MobileIndustry.

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3G Services The New Buzz WordIn the conducive business environment, India Inc. awaits the rollout of3G services. The global revenue for 3G is 60 per cent higher than thatof other services. India expects to replicate its 2G growth in 3Gservices. The Indian market is well poised to leverage the 3G serviceofferings in content categories such as sports, games and music.

Worldwide Interoperability for Microwave Access (WiMAX)- Bridge the Digital DivideInfrastructure SharingOptimizing Costs In the midst of the telecom boom, common infrastructure will improvecoverage and quality of calls and reduce costs.Active Infrastructure sharing has started in 2008 which enables sharing of Antenna systems,Cables and transmission systems, Backhaul (core infrastructure with switches and networking).

Value Added Service (VAS)Rolling out of advanced VAS has been possible due to Technological advancement and hencecreating higher value for buyers and sellers.

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Porters Ge

Narrow

Porters Generic S

Own Tower Infr

O erator in 23 c

LO

W

BROAD MA

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Stars

BCG Matrix for Bh

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PRESENT COMPET

National Long Distan

BSNL, RELI

168 channels,7 movie channels,21 audio channels

Price between Rs 2,490-3,990 (initial payment), Rs 100 for up to 85 channels, Rs

300 for 140 channels

USP: Free gaming portal, multilingual voice-overs coupled with astrological

services and customized sports.

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TATA SKY

150 channels

Price: Rs 2,499 for initial installation; Rs 175 for 65 channels, Rs 310 for123

channels

USP : Interactive offering like quiz, story telling, broadcast like shrines and

cooking portals among other offerings

BIG TV

202 channels, 32 movie channels and 10 interactive channelsPrice Rs 2,499 for initial installation, Rs 100 for bouquet of 44 channels, Rs 175for a pack of 101 channels

USP: Movie channels on a monthly subscription, niche channels at low add-on

charges, USB port in the set-top box

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SUN DIRECT

110 Channels(initially no Hindi channel)

Initial instalment of Rs.1999 with one year free subscription,Rs.75 per month

Add-ons such as the Hindi package, the kids package, or the English movie

package, which cost Rs 20-140 more.

USP: Its not a rich mans product. Low cost makes it easily available.

Prasar Bharti owned DTH service which is free to air service which just need an

initial installment to buy set top box.

Market Share of Various Players

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PRICING STRATEGY

No. of channels in the packages and value added services. Competitors prices in the market. Technology used in the digitalTV service. As per the current policy, the total foreign equity including

FDI/NRI/OCB/FII cannot exceed 49% and within this FDI component notmore than 20%,so price has to be kept high for overcoming cost ofexpansion and thus price.

Usage based. ARPU is increasing unlike the telecom sectors.

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Prepaid and Postp

PostPaid

19.7mn23%

LATEST RESULT Q

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Detailed Value Ch

NOKIA-SEMIENSERRICSON

NI(network inte

Generic Value Ch

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SWOT Analysis Bharti Airtel

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Strengths Bharti Airtelhas more than 65 million customers (July 2008). It is the largest cellular

provider in India, and also supplies broadband and telephone services - as well as manyother telecommunications services to both domestic and corporate customers.

Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, withwhom they hold a strategic alliance. This means that the business has access toknowledge and technology from other parts of the telecommunications world.

The company has covered the entire Indian nation with its network. This has underpinnedits large and rising customer base.

Weaknesses An often cited original weakness is that when the business was started by Sunil Bharti

Mittal over 15 years ago, the business has little knowledge and experience of how acellular telephone system actually worked. So the start-up business had to outsource toindustry experts in the field.

Until recently Airtel did not own its own towers, which was a particular strength of someof its competitors such as Hutchison Essar. Towers are important if your company wishesto provide wide coverage nationally.

The fact that the Airtel has not pulled off a deal with South Africa's MTN could signalthe lack of any real emerging market investment opportunity for the business once theIndian market has become mature.

Opportunities The company possesses a customized version of the Google search engine which will

enhance broadband services to customers. The tie-up with Google can only enhance theAirtel brand, and also provides advertising opportunities in Indian for Google.

Global telecommunications and new technology brands see Airtel as a key strategicplayer in the Indian market. The new iPhone will be launched in India via an Airteldistributorship. Another strategic partnership is held with BlackBerry Wireless Solutions.

Despite being forced to outsource much of its technical operations in the early days, thisallowed Airtel to work from its own blank sheet of paper, and to question industryapproaches and practices - for example replacing the Revenue-Per-Customer model witha Revenue-Per-Minute model which is better suited to India, as the company moved intosmall and remote villages and towns.

The company is investing in its operation in 120,000 to 160,000 small villages everyyear. It sees that less well-off consumers may only be able to afford a few tens of Rupees

per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.

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Department of Telecommunication (DoTvarious regulations for the Indian teleco

Evolution of Tele

National Co

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Integrated Telec

Mobile / Wirele

1. Threat from

Wireless Market Top 4

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2. Customer Ba

Lack of differentia

Cut throat Com e

3. Suppliers Ba

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4. Threat of Su

Landline

5. Threat of Ne

Huge License

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TELECOMMUNICA

TELECOMMUNI

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Competitor Anal

35.00%40.00%

Bharti Rcom IDEA

Competitor

AMOU & ARPU

303

88

USA

Minutes of Usage per Month M

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Strategic Group

Human reso well defined rewards and r

Young team - Average age

AIRTEL

Resource audit (

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Firm infrastructure-Cequipment for coverage a

HR management- IT skiCustomer service & Telesaemployees in Mobile servi

Technology develop

Primary Activities

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Value Chain Ana

Conclusions & R

Inbound

EXISTI

AIRTEL ANSOFF

MARKET PEN

The Airtel Advantage : 50 pais

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SCENARIO ANALYSIS