Submitted by: Rinkal Soni Enrollment No.: 118050592022 Sem III Shift II S.R.Luthra Institute of Management
INTRODUCTION
Airtel (Bharti Airtel Ltd.)
which constitute, 44.6 million mobile and5.4 million fixed line customers, as of March 31, 2007.A i r t e l c o m e s t o u s f r o m B h a r t i A i r t e l L i m i t e d a part of theb i g g e s t p r i v a t e i n t e g r a t e d t e l e c o m c o n g l o m e r a t e , B h a r t i Enterprises. Bharti provides a range of telecom services, whic h include Cellular, Basic, Internet and recently introduced NationalLong Distance. Bharti also manufactures and exports
telephonet e r m i n a l s a n d c o r d l e s s p h o n e s . A p a r t f r o m b e i n g t h e l a r g e s t man ufacturer of telephone instruments in India, it is also the firstcompany to export its products to the USA. Bharti has also put itsfootsteps into Insurance and Retail segment in collaboration with M u l t i - N a t i o n a l g i a n t s . B h a r t i i s t h e l e a d i n g c e l l u l a r s e r v i c e provider, with a footprint in 23 states covering all four metros and more than 50 million satisfied customers.
Corporate responsibility
Bharti Airtel limited promotes the employees to take judgment and devisethe industry relationship process between the public and surroundings.Corporate Social Responsibility in Bharti Airtel limited covers more public contactprograms. This program is connecting the business of Bharti Airtel
The spirit of Bhartis dedication to CSR is surrounded in the company Values,which curtail its warm seized idea. The ethics are: Respond to the needs of customers Expectation and Good result From employees Progress the services resourcefully Visible and insightful in dealings with the shareholders morals, equality and life form will be proper conference and going away from submissive and lawful necessities Esteem greetings given towards shareholders and the public. Developing the atmosphereCSR way of life and pledge all through a three-split approach: Engage with shareholders Guarantee the policies and performs to the Shareholders Conducting programs for employees, and for the public.In Bharti Airtel Limited, each employee is aware to Corporate SocialResponsibility issues and thus procedures are prejudiced.
SWOT ANALYSIS
Environmental Analysis and informations of the organizations areseparate into internal (strengths and weaknesses) and external issues(opportunities and threats). Once these issues concluded, SWOT investigationconcludes what may support the firm to complete its objectives, and whatdifficulty should be overcome to complete the desired consequences
STRENGTHS: Price gain Present influential in superiority service Biggest sharing network Capability to continuously improvement Extremely skilled workers Commercial enthusiasm Airtels improved fair play and advertise top.
WEAKNESSES: Evidence integrity Price anxiety Call for Government sustain Responsiveness Vending and advertising
OPPORTUNITIES: Maintain enthusiasm and dedication Airtels marketplace growing at other service contributor Accomplish superior worth service Mutual trade needs to be survey Little dispersion level in urban.
THREATS:
Overseas deal Global movement Need inclusive equality in telecom tariff Other rivalry
PEST ANALYSIS
growtelecommunication Industries. Due to high taxes the tariff rate are more over highearlier. At the moment it becomes little bit low due to permit fees with incomesharing plan and extended the permit period from 10 years to 20 years. US$23billion contract among South Africa's MTN and India's Bharti Airtel Limited whichtake place after the difficult scheme concerned much interference beginning fromsupporting leaders and unions.
ECONOMICAL FACTORS: Earlier Inflation rates were higher. Singapore Telecommunications(SingTel) purchased additional 1.52% shares in Indias leading private telecomBharti Airtel limited and will pay up to INR 3008.4 crore in three part paymentcollection more than 18 months. SingTel supposed, it has penetrated into aunconfirmed share pay for agreement with Bharti Group body to procure anfurther 7,30 thousands of issue shares in Bharti Telecom, a supporter companyof Bharti AirTel. Bharti AirTel Limited holds approximately 45.3% of the sharecapital of Bharti telecom. As a result of the acquisition, SingTels efficientcuriosity in Bharti Telecom will increasemarketsharein growing mobile market and has more than 110 million customers. Bharti Airtel Limited has standardeconomic growth and development of Indias economy registered a growth of 21%. (IANS) the price war in the telecom sector firm has in use of duty pay onBharti Airtel Limited, which place a net turnover of INR.2, 209.8 crore(INR.22.098 crore/$479 lakh) for the section ended December 31, a modest 2.4% rise from the year-ago period.
SOCIAL FACTORS:
Bharti Airtel Limited binds up with twitter in this year.Bharti AirtelLimited, the leading mobile carter in India, said it has attained a pact with.Apple (AAPL)to vend the iPhone in the upcoming months, Bharti Airtel said ithas put forward a bid to participate in the countrys 3G bandwidth public sale;winning bidders would be permitted to offer 3G services. Bharti Airtel selectslong-term and contrarians funds are believed to be collectingsharesof telecomfirm. Bharti Airtel, which registered 2.5 million downloads of mobile applicationscontained by 30 days to begin of its application stores, its possibly the firstpointer that operators, and not handset makers, will drive this space in emergingmarkets. Fifty-year-old Mittal took over the charge from Harsh Pati Singhaniaafter the conclusion of FICCIs 82nd Annual General Meeting (AGM) which wasattended by Finance Minister Pranab Mukherjee .1 . E d u c a t e a n d I n s p i r e 2.Support Talent to Bloom Scholarships and Mentorship 3.Public Health 4.Rural Empowerment 5.Disaster Relief 6.Cultural Connect - Be one with India's diversitySource
TECHNOLOGICALFACTORS: Bharti AirTel Limited provides roaming services and other value addedservices first time in India telecomm industry. Customer care services areefficient. Gateway of e-commerce, Bharti AirTel Limited Introduced thebroadband services, extensive distance services, and internet services. NokiaSiemens will be expanding and upgrading the operator's 2.5G network toincrease network capacity by 50 percent in eight service areas. Bharti AirtelLimited has started its Internet Protocol Television (IPTV) services, this serviceplay a vital role in the country. Bharti AirTel Limited invest Rs 500 crore innetwork improvement and another Rs 100 crore in connected activities in thecurrent economic in the North East region.
DEMOGRAPHICS FACTORS:
Free market democracy. Product development and back office processingare one of the benefits. Steady profitable position, elongated improvementBharti Airtel having enormous market prospective in the largest consumer markets.
LEGAL FACTORS:
Bharti AirTel is connected with Mobile Virtual Network Operator (MVNO).MVNOs having complete power over the SIM tag, brand name, advertising,invoice, and customer care functions. OSS and BSS to maintain the MVNO,Bharti AirTel Limited nearly keep own OSS/BSS processes and procedures toseparate those of the MVNOs. The government of India is marketing three to four slots of spectrum across the nation. It has fixed Rs 3,500 crore as the reserveprice for pan-India spectrum Bharti AirTel takes this opportunity to reserve theplace in spectrum.Leading Indian mobile service provider Bharti Airtel plans to expand its service inother SAARC (South Asian Association for Regional Cooperation) countriesincluding Bangladesh. Government of India going to Launch Mobile Number Portability (MNP) .The mobile number portability (MNP) would allow the users toswitch service providers without changing phone numbers. However, the servicegot delayed due to it delay in security clearance from the government. At presentits introduced by Bharti AirTel Limited in Chennai and Bangalore.
4.Promotion
PRODUCT
Airtel Pre-paid Airtel Post-paid Blackberry Wireless Handheld ValueAddedServices(VAS)The different value added services provided by AirtelareInstant Balance Enquiry 24Hr recharge Facility Caller line identification Call divert, Call wait & Call Hold Multimedia messaging service (MMS) Airtel Live Portal SMS based Information Service
PRICE
PLACE
It has wide and extensive presence even in the remotestareas Airtel Customer Care Touch Points Distributors likeE.g. Paan shops, grocery stores, chemists, outlet etc.
PROMOTION
Big celebrities like SRK and Sachin are roped in to endorse theproduct because it . In 2002 Airtel got its Signature tune from A.R. Rehman, thissignature tune is the most downloaded tune in India. Provides innovations such as Bollywood movie premiers,music services such as ring back tones & many more.
To encourage learning within the organisation, the company has set up astate-of-the- art learning centre. Here, employees can get logged on tocustomised training programmes developed by British Telecom (BT). Though thematerial is transmitted through the Internet, Padhi says that they are notaccessible to anybody outside the organisation as the access is protected.Airtel also seeks to certify every employee on quality and IT. ``To be aheadin the business, we need to train, develop and re-certify our employees on acontinuous basis,'' he says. Over the years, it is the HR steering committee (HRSC) of the company thathas acted as the fulcrum of the HRD efforts in the organisation. HRSCconsists of the CEO, the CO and all other functional heads. The committeemeets once a week to discuss various initiatives and the plan of action onthe same. To carry forward these plans, the entire organisation is measured on fiveperformance parameters: profitability, market share, brand saliency,customer satisfaction, and employee satisfaction. Further, each employee isgiven individual targets that are linked to these five parameters. Eventually, there are the performance-related bonuses that set the tone forthese activities. Padhi informs us that 60 per cent of the employees are ona variable pay structure, and that explains the success Airtel has had inbusiness and HRD. Padhi's team also conducts an internal employee satisfaction survey calledPACE (Progressive Assessment of Culture and Environment), the inputs ofwhich go into the company's annual strategy. ``Measurement is indeed a key driver of business within Airtel. A philosophyof constant monitoring has been established. `Measurement Boards' for everydepartment are prominently displayed where the performance indicators of thesame are displayed graphically,'' says Padhi. ``We believe that an individual can be effective if he knows what isexpected of him. Formal job description documents have been issued to allour employees that clearly mention the `key result areas'. This goal settinghas helped us in communicating to each of our employees about ourexperiences from them, and established role clarity,'' he adds. The HR department also sets up cross-functional teams in times of product orservice launches. ``Such teams typically constitute high performers fromeach department, who collectively make it happen,'' says Padhi.
Some of the other key HR initiatives include the managers' communicationforum, open house, family group meetings, HR interface and HR intranet. Toexplain them, the managers' communication forum, undertaken once a quarter,facilitates direct interaction of the employees with the top management.``They get to discuss issues relating to the performance of the previousquarter, directions for the next quarter, an update on the
regulatoryenvironment and the key initiatives for the period,'' says Nayar. The `open house' conducted between the departments and HR takes upindividual grievances. In the case of family group meetings, each HODconducts meetings with his direct reportees once a month, wherein issuesother than those related to work are discussed. To further HR interface, every member of the HR department has been assignedtwo departments each to discuss and sort out all HR, personnel andadministration issues. ``The idea is to provide employees with a singlewindow to the department,'' Padhi explains. The HR Intranet provides information on HR policies, organisationalstructure, training calender and the house journal. With these initiatives, Nayar says, ``Airtel has won a special place in theBharti group. The quality of service and customer care is a reflection ofthe quality of people and our belief in constant improvement andupgradation.'' On the business side, Airtel has won the Techies award for three consecutiveyears in 1997, 1998 and 1999. The HR award will galvanise the company totouch even greater heights.
Wireless Market Top 4 garnering 75% market share The subscriber growth for Airtel is only 37% as compared to Reliance & Vodafone whose growthi s n e a r l y 6 0 % . A f t e r t h e l a u n c h o f R e l i a n c e G S M i n a l l I n d i a b a s i s t h e s u b s c r i b e r b a s e h a s increased tremendously. In Mumbai region Airtel could not become No. 1 because of its technical problems in coverage.
c.
Low Switching
C o s t s d.Number Portability
will
have
Impacte . B u s i n e s s e s & C o n s u m e r s
a L a n d l i n e b CDMA
c Video Conferencing d. VOIP - Skype, Gtalk, Yahoo Messenger e. e-Mail & Social Networking Websites
5.Threat of New Entrants a. Huge License Fees to be paid upfront & High gestation period b. Entry of MVNOs & WiMAX operators c.Spectrum Availability & Regulatory Issues d.Infrastructure Setup Cost - Highe . R a p i d l y c h a n g i n g t e c h n o l o g y
MARKETING STRATEGY A D O P T E D B H A R T I
B Y
Bharti has spent a considerable amount on advertising its mobilephone service, Airtel. Besides print advertising, the company had put up large no of hoardings and kiosks in and around Delhi. The objective behind designing a promotion campaign for theAirtel services is to promote the brand awareness and to buildbrand preferences.I t i s t r y i n g t o s e t u p a t h e m a t i c c a m p a i g n t o b u i l d a s t r o n g e r brand equity for Airtel. Since the cellular phone category itself ist o o r e s t r i c t e d , a l s o t h e f a c t t h a t a C e l l u l a r p h o n e i s a h i ghinvolvement product, price doesn't qualify as an effecti v e differentiator. The image of the service provider counts a greatdeal. Given the Cell phone category, it is the network efficiencyand the quality of service that becomes important. W hat nowthe buyer is looking at is to get the optimum priceperformancepackage. This awareness is also serves as an effective differentiatorBrand
spread
through
the'
campaigns
and
brand p r e f e r e n c e t h r o u g h
'teaser' hoardings across the city,'bearing just the company's name and without explaining what Airtel was. In the next phase the campaign associated Airtel with Cellular only thereafter was the Bharti Cellular connectio n brought up. Vans with Airtel logos roamed the city, handing out brochures aboutthe company and its services to all consumers. About 50,000 direct callers were sent out. When the name wasw e l l e n t r e n c h e d i n t h e D e l h i i t e s s m i n d , t h e A i r t e l c a m p a i g n began to focus on the utility of Cellphone. In the
first fourmonths alone Airtei's advertisement spend excee d e d R s . 4 crores.As of today the awareness level Is 60% unaided. This impliesthat if potential or knowledgeable consumers are asked to namea Cellular phone service provider that is on the top of his/h ermind 60% of them would name Airtel. As for aided it -is 100%(by giving clues and hints etc.).Brand
strength of a product or the health of a brand is measuredby the percentage score of the brand on the above aided and theunaided tests. The figures show that Airtel is a healthy and athriving brand.Every company has a goal, which might comprise a sales targeta n d a g a m e p l a n w i t h d u e r e g a r d t o I t s c o m p e t i t o r . A i r t e l ' s campaign strategy is designed keeping in mind its
marketingstrategy. The tone, tenor and the stance of the visual ads aredesigned to convey the image of a market leader in terms of itsm a r k e t s h a r e . I t t r i e s t o p o r t r a y t h e i m a g e o f b e i n g a " f i r s t mover every time" and that of a "market leader".
The status of the product in terms of its life cycle has jus t reached the maturity stage in India. It is still on the rising part of the product life cycle curve in the maturity stage. The diagram on the left hand side shows the percentage of theusers classified into heavy, medium and low categories. Theright hand side shows the revenue share earned from the threetypes of users.Airtel, keeping in mind the importance of the customer
retention,v a l u e s i t s h e a v y u s e r s t h e m o s t a n d c o n s t a n t l y i n d u l g e s i n service innovation. But, since heavy users comprise only 15 -20% of the population the other segment cannot be neglected. The population which has just realised the importance of cellularphones has to be roped in. It is for this reason that the serviceprovider offers a plethora of incentives and discounts. Concertslike the "Freedom concert" are being organised by Airtel in orderto promote sales. The media channel is chosen with economy inmind. The target segment is not very concrete ana t t e m p t T h e t o but, f o c u s o n t h o s e there w h o c a n a f f o r d . is
different1 h i g h e r ) i s a n i m p o r t a n t v a r i a b l e i n d e t e r m i n i n g t h e t a r g e t audience.
Challenge/Opportunity
Bharti Airtel was faced with the challenge of profitably serving the rural areas of India. It is an extremely daunting task due to a variety of factors: rural users' low incomes, a widely dispersed population, and a less than ideal public infrastructure (i.e., roads, electricity, etc.). Specifically, Bharti Airtel had to address the following conditions: The incomes of Indian rural residents are significantly lower than urban residents. The average revenue per user (ARPU) for rural residents was typically less than US$2 per month. Besides deploying a scalable network, Bharti Airtel also needed to establish a costeffective marketing, sales, and distribution channel to provide service promotion and customer support. Counter to these challenges were the significant opportunity that the Indian rural market represented and Bharti Airtel's unique ability to address it. The future growth of the Indian mobile market is expected to be driven by rural customers, which account for about 70 percent of the country's total population (1.1 billion people) with a teledensity of only 18.5 percent as of September 2009. Indian urban mobile penetration is already over 100 percent. Rural dwellers place a high value on communications. Contacting urban/overseas relatives and friends often requires a long and sometimes treacherous trip to the nearest town to reach a payphone. Various studies (e.g., fishermen in the Indian state of Kerala and grain producers in Niger) have shown that increased mobile service penetration in rural areas could have tremendous socio-economic benefits for the rural population. With its strong presence in the relatively untapped rural market (over 27 percent market share as of September 2009), Bharti Airtel is well-placed to continue growth with its focus on under-penetrated Indian regions with new revenue streams such 3G-enabled data services and pay-TV. Alliances/Partnerships
To extend its reach in India's rural markets, Bharti Airtel is focusing on innovative initiatives, including efficient infrastructure deployments, expanding its distribution network via partnerships, and customized content and tariffs. Bharti Airtel has launched microfinancing agreements in collaboration with Nokia and SKS Micro-finance. Under these partnerships, Bharti provides subsidized tariffs and subscriber identity module (SIM) cards to rural users, Nokia provides subsidized handsets, and SKS offers microfinancing. To expand coverage into rural regions, Bharti Airtel is sharing passive infrastructure services with Vodafone (42 percent ownership) and Idea (16 percent ownership) through its joint venture, Indus Towers. Sharing the infrastructure cost and usage between multiple operators has helped Bharti Airtel to reduce its operating and capital expenses. Bharti Airtel also formed a joint venture with the Indian Farmers Fertilizer Cooperative Limited (IFFCO). Its joint venture, IFFCO Kisan Sanchar, uses IFFCO's wide rural presence (present in 80 percent of Indian villages) and appeal among the rural agricultural community to market and distribute Bharti's products. IFFCO Kisan Sanchar provides subsidized handsets and connections at competitive rates in rural areas. It also helps Bharti Airtel to identify and acquire suitable locations for deploying its cell sites. In addition, it offers tailored services including voice-based updates on crop prices, farming techniques, rural health initiatives, and "help line" services.
Strategy
Bharti Airtel first studies the commercial viability of a rural community (and the surrounding villages) based on parameters such as source of livelihood, average income, and involvement in frequent commercial transactions or travels. The company has developed a prioritized deployment strategy based on the specified criteria. Qualifying villages are first to receive a base station, which also caters to nearby communities. To help ensure efficient usage and profitability for each of these base stations, Bharti Airtel tracks the revenue generated per base station (instead of ARPU, which is considered less relevant in a rural context). The following best practices have also been established: Bharti Airtel has adopted the strategy of direct communications to market its value proposition to rural customers. To make its services accessible, the company provides all
of its marketing content in local languages. Vans are used to cover rural areas with staff who educate locals about mobile services and usage. The company has developed a shared phone service called Public Call Offices (PCOs) in rural regions to increase awareness about its brand and services. Bharti Airtel Service Centers have been set up in villages to address customer queries and complaints as well as act as sales and distribution points. These centers employ local people and offer sales and customer services using local dialects. Bharti Airtel has already established over 18,000 service centers in rural India, covering over 400 languages and local dialects. The company plans to expand this network.
Success Factors/Metrics/Monetization
Bharti Airtel does not provide separate rural key performance indicators, but the following results have been publicly announced: As of April 2010, Bharti Airtel's network covered 440,000 villages in India, which, together with its urban services, accounted for coverage of approximately 84 percent of India's total population. As of March 31, 2010, Bharti Airtel had added 9 million new customers to reach a total of 128 million connections. Ovum estimates that rural users accounted for 60 percent of the company's net subscriber adds in that quarter. Despite Bharti Airetel's overall ARPU of just under $5, its mobile division's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin was approximately 30 percent, and its earnings before interest and taxes (EBIT) margin was approximately 19 percent, which indicate a healthy return on overall (including significant rural) investments.
COMPETITIVE ADVANTAGE
Bharti Airtels competitive advantage can be seen right from the period of 1990s. Bharti wasthe first Indian company to manufacture cordless telephones.
Acquisitions and joint ventures One of their main competitive advantages is their acquisitions and jo int ventures. Startingfrom the time they entered this telecom circle in Delhi till today Airtel is clear with the ideaof making strategic alliances. When Airtel initially rolled out its service in the name Bharti t e l e v e n t u r e s i n D e l h i i t a l s o w e n t i n t o a n a g r e e m e n t w i t h S i e m e n s t o m a r k e t t e l e p h o n e terminals under Siemens and Beetel brand names.For a company into the telecom service business cannot maintain growth without expansion. W h e n e v e r A i r t e l e n t e r e d a n e w s t a t e i n I n d i a i t w a s o n l y t h r o u g h t h e a c q u i s i t i o n o f a n existing player in that state. Airtel entered Andhra Pradesh and Karnatake by acquiring stakei n J T Mobiles. It entered Kolkata by acquiring Spice cell. Airtel entered T a m i l N a d u b y acquiring Sky cell in Chennai circle. This is how Airtel is even trying now to make its global presence by acquiring Zain in Africa.
Outsourcing Retaining the core business and outsourcing the allied activities is an e f f e c t i v e s t r a t e g y followed by Airtel. Due to its rapid growing customer base Airtel outsourced its customer service operations to various BPOs and signed agreements with major IT companies like IBM and CISCO to manage the back end operations of its customer service activities.
Supplier Relationships and Integrations Change is something which any business has to undergo to ma i n t a i n i t s c o m p e t i t i v e advantage. Providing voice transfer in telecom
business has become an outdated model now.Data transfer is the idea in which all telecom players are concentrating now.After the public sector telecom operator, Airtel leads all other players in providing this datatransfer right from the time it started with its GPRS service for mobile phones and now thelargest private player to provide the new 3G service. Airtel also has expanded its business byentering the broadband service as a part of its forward integration.I t h a s a l s o acquired stake with Indus and also has its own Bharti Infratel which p r o v i d e s tower solutions which is a part of backward integrati on. Also the relationships that Airtel
maintains with its suppliers are all long term relationships. G o i n g b a c k t o t h e i n i t i a l agreement with IBM which is a 10 year contract, the contract with Siemens which it still hasright from the time of Airtels incorporation.