Bharti Airtel

• Largest Private Integrated Telecom

Company in India
•
• 3rd Largest Wireless Operator in the World
•
• Largest & Fastest Growing Wireless
Operator in India
•
• Largest Telecom Company listed on Indian
Stock Exchange
•
• GROUP 9
In t e g ra t e d Te le c o m
Co m p a n y
q Wireless Services qEnterprise
– 2G/3G Services
– Rural Market – Carrier
– – Corporate
qTelemedia –
Services qPassive
– Fixed Line Infrastructure
– Broadband – Bharti Infratel
– DTH – Indus Tower

GROUP 9
 Telecom Ecosystem
Indian Telecom Industry Framework

Indian Government Bodies Independent Bodies

They formulate various policies and

pass laws to regulate the telecom They undertake various research activities
industry in India. and monitor the quality of service
provided in the Indian telecom industry.
Wireless They also provide various recommendations
Planning and Handles spectrum to improve the status of telecom
Coordination allocation and operations in India.
( WPC ) management
DoT – Licensee and Telecom Regulatory
Department of Authority of India
Telecommunicati frequency management Independent regulatory
( TRAI ) body
ons for telecom

Telecom Disputes
Telecom Exclusive policy making Settlement and Telecom disputes
Commission body of DoT Appellate Tribunal settlement body
( TDSAT )
Group on Telecom Handles ad hoc
and IT (GoT-IT) issues of the
telecom industry

GROUP 9
Regulatory Framework
Ø 74% FDI
Investment
Ø
Ø Lack of
Transparency in
Spectrum &
License
Allocation
Ø
Ø 3G Policy & MNP
still Pending
GROUP 9
Ø
Economic Factors
GDP growth rate - Averaged around 7.9 % from 2002-2008

Rising Tele-density – Target of 45% by 2010

Growing per capita income/disposable Income

ØRs 12000 in 2002 to Rs 33000 in 2008)

Falling Handset Prices

Moderate inflation levels which were prevalent during the past 7 years
– around 5-6%

GROUP 9
 Changing Demographics

ØDemand for VAS & Broadband

services Among Youth
Ø
Ø28 % Urban Population
Ø
ØRapid Urbanization
Ø
ØRising Income level
Ø

Source: Mckinsey Report

GROUP 9
Technology
CDMA – Already there are big
players in this segment
Reliance , Tata

3G – Value added services

potential still to be tapped
fully

2G/3G – GSM Currently

commands 70% of mobile
subscribers in India

GROUP 9
Porter’s Generic Strategy

GROUP 9
Porter’s 5 Forces

GROUP 9
1. Threat from Competition
Wireless Market – Top 4 garnering 75 %
market share

HIGH

GROUP 9
 Competitor Analysis

  OP Margin Net Margin

Company Sep - 07 Sep - 08 Sep - 072 Sep - 083
Bharti 43.00% 38.00% 26.40% 19.30%
Best OP Margins & Net Profit Margins among Peers
Rcom 37.90% 31.60% 23.90% 13.20%
IDEA 32.80% 26.60% 14.10% 6.50%
MTNL 23.70% 22.90% 7.00% 6.80%

Source: CMIE November 2008

GROUP 9
2. Customer Bargaining Power
Ø Lack of differentiation among Service
HIGH
Providers
Ø Cut throat Competition
Ø Low Switching Costs
Ø Number Portability will have –Ve Impact
Ø Businesses & Consumers

GROUP 9
 Market Scenario

Postpaid Vs Prepaid Customers & Market Share

GROUP 9
3. Suppliers Bargaining
Power
LOW

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 4. Threat of Substitutes
Ø Landline HIGH
DIMINISHING MARKET
Ø CDMA
Ø
Ø Video Conferencing
Ø BROADBAND
SERVICES
Ø VOIP - Skype, Gtalk, Yahoo Messenger
Ø e-Mail & Social Networking Websites

GROUP 9
5. Threat of New Entrants
Ø Huge License Fees to be paid upfront & High
gestation period
Ø Entry of MVNOs & WiMAX operators LOW
Ø Spectrum Availability & Regulatory Issues
Ø Infrastructure Setup Cost - High
Ø Rapidly changing technology
Ø

GROUP 9
SWOT
Strengths
• Weakness
•

 Outsourcing of Core
 Largest Telecom Systems
Player in India -  Lack of emerging
~80Mn, 22.6% market investment
 Strategic Alliance opportunity
with other
stakeholders in
Bharti Airtel
include Sony-
Ericsson, Nokia -
and Sing Tel
Source: CMIE Report NOV 08
 Pan India Presence
 Strong Financials GROUP 9
S W OT
Opportunities
• •Threats

• Bharti Infratel –  India centric – Major

Cutting Down cost revenues from
in Rural area India
• Match Box Strategy –  Falling ARPU & AMOU
Scale of
 Intense Competition
Penetration
• Current Tele-Density – & Shortage of
30.6 is still low Bandwidth
among developing
countries
• Low Broadband
Penetration, Rural
Telephony GROUP 9
BCG Matrix for Bharti Airtel
Stars ?
HIGH

Retail
Insurance
Mobile Services
DTH & IPTV

Broad Band
Cows Dogs
• • Fixed Line Services
•
•

•
LOW

HIGH LOW

Market Share
GROUP 9
Business Strength

Ø Current market share

Ø Brand image
Ø Brand equity
Ø Production capacity
Ø Corporate image
Ø Profit margins relative to
competitors
Ø R & D performance
Ø Managerial personal
Ø Promotional effectiveness
Ø
• GROUP 9
 Factors Underlying Market Attractiveness
Factors Weight Rating Value =
(1 –5) (Weight * Rating)
Resource availability 0.20 3.5 0.7

Overall market size 0.15 4 0.6

Annual Market growth rate 0.20 4 0.8

Profitability 0.15 4 0.6

Competitive intensity 0.10 4 0.4

Technological requirements 0.20 4.5 0.9

Total 1.0 4.0

GROUP 9
Factors Underlying Market/Biz
Strength
Factors Weight Rating Value =
(1 –5) (Weight * Rating)

Market share 0.15 5 0.75

New product development 0.10 3.5 0.35

Brand Image 0.10 4 0.40

Sales force 0.15 3 0.45

Pricing 0.15 3 0.45

Distribution capacity 0.10 4.5 0.45

Product quality 0.10 4.5 0.45

R&D Performance 0.15 3 0.45

Total 1.0 3.75

GROUP 9
Airtel’s GE Matrix
High Business Strengths Low

High 5 . 00
Attractive
Market Attractiveness

Airtel Enterpri
Mobile se

3 . 67

Moderate
TeleMedi
a Attractive
2 . 33

Unattractive

Low
5 . 00 3 . 67 2 . 33 1 . 00
GROUP 9
7 P’s of Airtel

GROUP 9
 Product
 Airtel Pre-paid
 Airtel Post-paid
 Blackberry Wireless Handheld
 Value Added Services (VAS)
• The different value added services provided by Airtel are-
§ Instant 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



GROUP 9
 Price
 Customer based pricing strategies.
 Flexible pricing mechanism
 Controlled by TRAI.
•

GROUP 9
 Place
 It has wide and extensive presence even in the
remotest areas
 Airtel Customer Care Touch Points

 Distributors like
• E.g. Paan shops, grocery stores, chemists, outlet
etc.


GROUP 9
 Promotion
 Large scale print and video advertising.
 Big celebrities like SRK and Sachinare roped in to
endorse the product .
 In 2002 Airtel got its Signature tune from A.R.
Rahman, this signature tune is the most
downloaded tune in India.
 Provides innovations such as Bollywood movie
premiers, music services such as ring back tones
& many more.


GROUP 9
 People
 Total Employees 25616( Bharti Airtel
consolidated) as per Q3 08.
 Dedicate and passionate workforce.
 One of the best customer support.
 Have won 2nd Best employer award in
2004.
•

GROUP 9
 Process
 Process for services is very easy and
customer can avail it very easily.
 121 is the customer support no. which
can be dialed from anywhere in India.
•

GROUP 9
Physical Environment

GROUP 9
 References
• Bharti Airtel, Annual Report -2008
• Investors presentation, Bharti Airtel Limited,
November 2008
• Telecommunication Services, Indian Industry: A
Monthly Review, CMIE – November 2008
• Analyst Report – Bharti Airtel, Asit C. Mehta
Invesment Intermediates Ltd.
• Telecommunication Sector Report – March 2008,
CRISIL
• Capitaline Database http://capitaline.com
• Indian Telecommunication Sector - August 2007,
IBEF Report
• “Next Big Spenders – Indian Middle Class”,
Businessweek
GROUP 9
THANK You !!

Prashant
Ravinder pal Singh Brar
Sapandeep Kaur
Sachin Gurjar

GROUP 9