2012

Digital and Data Business

airtel iCreate 2012

Current Business Context:

India has witnessed a rapid acceleration of Mobile Voice Consumption and today has over 800 mln Mobile Customers. Mobile Telephony has changed the way Indians communicate with each other and had significant impact on lifestyles, the economy and bridging distances and divides - across various barriers and spectrums Bharti airtel as the Leading Mobile Operator in the country has been instrumental in making mobile services available across the length and breadth of this country through innovative products, marketing strategies and through extensive network deployment backed by the best distribution infrastructure in this country Over the course of the last 3-4 years , the Mobile phone has become a " lifestyle enabler" and a extension of oneself for the consumer offering much more than pure " voice connectivity" to the user.

BUSINESS CASE
airtel would like to make the transition from being a Telecom Voice Service Provider to a digital/data Services Provider as a logical extension of keeping pace with the changing dynamics of the usage patterns of customers With one of the lowest tariffs in the world, the Indian telecom industry is facing unprecedented pressures on margins which warrant an accelerated transition to non voice Revenue generation in the Digital Space and the Data Space (Mobile Internet, 2G, 3G and 4G LTE)

CASE OBJECTIVES
1. To build and present a comprehensive 360 plan outlining the key strategies & go to market imperatives that airtel needs to execute for a successful transition into the Digital & Data business.

Sub Objective 1: How does airtel create an ecosystem that helps in accelerated penetration of Mobile Internet/Data & also drives consumption amongst existing users of Mobile Internet?

airtel iCreate 2012

Context:

Bharti airtel has a significant % of customers that have Data Enabled Devices with them who do not use Data through their Mobile Device. Also the usage/consumption amongst people who are using is very nascent and not consistent With ~ Rs 14000 crores spent for License fee for 3G Services, offtakes on 3G have to be accelerated at a rapid pace. Given India's population, a large part of our customers are in rural markets (defined as < 20K Population). How can synergy be leveraged between Rural customers and the world of Mobile Internet as a sustainable business model for Bharti airtel? Prima Facie evidence clearly suggests that consumption is a function of need and ALSO the device that the consumer is using. Hence consumption of Mobile Internet/Data is higher on Smartphones as compared to Featurephones.

Sub Objective 2 What are the key enablers/alliances that Bharti airtel should be cognizant of and also participate actively in to create an environment that helps it meet its business objectives? Context

The fundamental requirement to access the world of internet through the mobile device is the need for having a GPRS Phone for 2G Services or a 3G Enabled device (like an Iphone, Other smartphones). Hence what should be Bharti airtel's approach to possible alliances Content partnerships Smart alliances with Internet companies - like google/facebook/others as required

Sub Objective 3 Given that Bharti airtel has been a very successful business in the last 15 years - how do we build a culture/people DNA that enables success for us in this transition? Context

Bharti airtel has a successful set of employees who have grown with the organization and actively participated in the success that has been seen in the last 15 years However, the transition requires an enhanced level of understanding of the internet/data space. Speed to Market, Innovation and strong consumer insights would be required to enhance chances of success. What & how should airtel focus on building mindset, DNA and a culture that creates the right environment for success? What should be Bharti airtel's organizational investments towards this cause?

airtel iCreate 2012

Sub Question 4 How can Bharti airtel Leverage its Current Assets (Customer quantum & customer behaviour, Infrastructure, Distribution, Core Competencies) to build competitive advantage over its key competition?

Bharti airtel is the ONLY integrated player in the country with a strong presence across Mobile, DTH (Direct to Home) and Telemedia/Broadband Services on its Fixed Line/Fibre Network. Our product offerings pan across Consumer Segment (B2C) and Enterprise Segment With 200 Mln Customers across these 3 Business Lines and with a World Class Distribution Infrastructure - it is possibly best poised to make the transition. What specifics actions/initiatives need to be done to ensure that these core strengths around these elements are leveraged to the max to build a competitive edge over the other players

INDUSTRY/MARKET CONSTRAINTS

The telecom Industry has 12-13 operators in the voice space and hence it is a competitive market. Any product changes - specially pricing is likely to be copied in the next 48-72 hours by the key operators 3G is offered in the operating states by the incumbent (BSNL/MTNL) and 3 (depending on allocation of 3G Licenses post bidding) private operators. While a significant amount of Customer Analytics based on their usage behaviour is available - demographically the analytics are moderate and typically have not been used extensively for segmented propositions All operators follow their own segmented strategies for targeting customers with value propositions and offers

Overall the customer (on voice) is price sensitive and also well informed. Insights on Mobile Internet/Data, Customer Needs and consumption/usage behaviour are significantly lower than Voice.