ON

COMPARATIVE STUDY OF AVERAGE REVENUE PER USER of B.S.N.L. AGAINST AIRTEL

2012-2013
Submitted For the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted To :Mr. D.N Upadhyaya (S.D.O & Manager) Submitted By :Piyush Mishra M.B.A. IIIrd Sem. Roll No-1115470014

F.M.T. HARISH CHANDRA P.G.COLLEGE

BAWAN BEEGHA, VARANASI

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DECLARATION
I, Piyush Mishra, student of 3rd-semester, Faculty of Management & Technology, Harish Chandra P.G. College, Varanasi, declare that the Industrial Analysis Report on COMPARATIVE STUDY OF AVERAGE REVENUE PER USER B.S.N.L. AGAINST AIRTEL is the result of my own efforts and it is based on the data collected and guidance given to me.

I have prepared it during my 3rd semester of MBA program. This report is correct to the best of my knowledge and so far has not been published anywhere else.

Piyush Mishra
MBA IIIrd Sem. Roll No.-1115470014

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PREFACE
It is great privilege for me to place this report before the reader. The report is concern about COMPARATIVE STUDY OF AVERAGE REVENUE PER USER of B.S.N.L. AGAINST AIRTEL. This report is presented in very simple & understanding language on the basis of primary and secondary data.

Piyush Mishra MBA IIIrd Sem. Roll No.-1115470014

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ACKNOWLEDGEMENT
This project of mine has imprints of all those who formally or informally helped me to developed it. My hearties thanks to all of them.

I extend my sincere gratitude to my supervisor Mr. D.N Upadhyaya (S.D.O & Manager) for guiding and helping me as and when required and taking pains to give his valuable inputs to structure the project.

I specially wish to thank my parents and all my friends without whose response this Project would not have been possible.

Piyush Mishra MBA IIIrd Sem. Roll No-1115470014

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CONTENT
Introduction Research Objective Detailed Study of Research Methodology Conclusions Suggestions Limitations Bibliography

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CHAPTER -1

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INTRODUCTION
The year was truly eventful for the Indian cellular Industry. Average Revenue per user (ARPU) is a measure most often used by telecommunication companies. Although it is also sometimes used by others in similar industries- It states How much money the company makes from the average user. This is the revenue from the services provided divided by the number of users buying those services. ARPU is an acronym for average per user or average revenue per unit. It is a powerful extremely useful indicator of just how well a telecom company is accessing its customers revenue potential. Many company, telecom companies especially, find ARPU to be prime indicator of profit potential. It is an accurate method of tracking data,
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service use, and revenue potential. This provides the company a granular view at a per user of unit basis and allows it to track revenue sources and growth. ARPU is an important because it providers a breakdown of what is driving margins. Growing by increasing revenues from user tend to her better for margins than increasing revenues by increasing the user base, as the latter incurs additional costs. ARPU growth can also indicate how successful a company is being in moving users to new services (e.g. pictures messaging, data connections etc.) that are regarded as strategically important and an indicator of how margins will fare (newer services tend to be higher margin). However, companies often disclose the composition of their revenues streams separately in any case. ARPU. The revenue generated by a single customer or unit, typically on a monthly basis. It is commonly used in the telecommunications industry. Ever since the evolution of man on this earth, he wanted to communicate with his fellow human being. In that era, he used to communicate through signs and symbols. Gradually with time, he started using words and today it is through mobiles, e-mails, fax etc through which one communicates from one place to another.

Current Scenario of Indian Telecommunication Sector Invention of mobile phones, have given a huge boost to telecommunications in India. Today constant efforts are being made, both by public and private sector to enhance telecommunication
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facilities. In today's era of globalization India is rapidly developing as a telecommunication giant in the global scenario. Bsnl, Mtnl, Idea, Reliance, Airtel, Vodafone are some of the leading service providers in India. BSNL is the world's seventh largest telecom company in terms of the number of subscribers. In 1975, it was the department of telecom which had the responsibility of providing telecom services in India. In 1985 MTNL (Mahanagar Telephone Nigam Limited) was established to provide services in Delhi and Mumbai.

Growth of Indian Telecommunication Industry The growth of Indian telecommunication market can be understood from the fact that in 2008, the country saw the 75 million new mobile subscribers being added. For the first time, GSM mobile operators subscriber base has crossed 200 million milestones In India, both CDMA and GSM technologies are used in the mobile sector. Though BSNL controls the major market of telecommunications in the country, private service providers are also not behind. There is stiff competition between them and each provider offers attractive offers to attract customers, some of these providers are the leading business houses of India, such as Aaditya Birla (Idea) and Anil Ambani (Reliance). Thousands and crores of rupees are being spent in promoting the brands and even international companies are coming to Indian markets. The leading service provider of UK Vodafone has
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started their services in India and very soon India is going to be one of the biggest markets of telecommunications in the world.

Telecom and Internet The telecom network (21.59 million-lines) of India is extensive and acclaimed as the largest in Asia as well as in the entire world. There are 27,753 telephone exchanges in India, with a capacity of 272.17 lakh lines and 226.3 lakh working telephones, many of which provides facilities like International Subscriber Dialing (ISD) to various countries. The overall number of places linked to National Subscriber Dialing (NSD) is over 18,000. The International Communications of India is growing at a rapid pace, with facilities like Satellite Communications and Submarine Links, which have provided a new face to global communication. Ministry of Communications directs the telecommunications initiative of India through the Department of Telecommunication & Department of Telecom Services.

About 1,70,000 route km of long distance transmission network of India is done through microwave radio relay and co-axial cables, and about 171,000 route km is through optical fiber cables. The telecommunication network of India comprises of both voice and nonvoice telecom services and includes data transmission, mobile radio, radio paging, facsimile, V-SAT and chartered line services. Services like I-NET (Packet Switched Public Data Network) and ISDN have also contributed to the steep ascendance of telecom sector in the
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Country. As far as international communications is concerned, Videsh Sanchar Nigam Limited (VSNL) has contributed a lions share to telecommunication development by exploiting technologies like satellite earth stations, high-tech digital gateways, optical fiber, multi media submarine cables and multi media data switches. VSNL is also striving to add futuristic touches to Indian telecom, in the form of bandwidth on demand, ISDN, B-ISDN, VSATs, Mini-M and Global Virtual Private Networks. Other services that are in the pipeline include Intelligent Network (IN), Frame Relay (FR) and

Asynchronous Transfer Mode (ATM) for wide band multimedia. India has also witnessed communication revolution in the form of Internet. Earlier internet connectivity in India was mostly in the form of government monopoly, with VSNL and DOT (Department of Telecommunications) catering to all the connectivity needs. However, after economic liberalization in the year 1992, many private ISPs (Internet Service Providers) have entered the competitive and lucrative market of internet sector, thus facilitating its dominance in India. At present times, Internet communication is a boon to many companies. It has also led to the emergence of various web-related business activities, in the form of website creation, software development and many service-oriented businesses. Thus, if we look back at the history of telecom in India, starting with the introduction of telegraph in 1850, we can construe that the country has emerged as a major player. Moreover, with the introduction of various promising services and
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products in the near future, the telecom and internet sector of India will surely scale more heights.

Definition of: ARPU (Average Revenue per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ARPU can be defined as Total revenue divided by total subscriber base ARPU is an acronym for average revenue per user or average revenue per unit. This term is used by companies that offer subscription services to clients for example, telephone carriers, Internet Service Providers, and Holsters etc. It is a measure of the revenue generated by one customer phone, pager, etc., per month. In mobile telephony, ARPU includes not only the revenues billed to the customer each month for usage, but also the revenue generated from incoming calls, payable within the regulatory interconnection regime. This provides the company a granular view at a per user or unit basis and allows it to track revenue sources and growth There is a trend by telecommunications and Internet companies and their suppliers to sell extra services to users and a lot of the promotion that is used by these companies talks of increased ARPU for these operators. It typically manifests in the form of value-added services such as entertainment being sold to customers especially in markets where the primary service offered to the
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customer, such as the telephony or Internet service, is sold at a commodity rate. ARPU is a term bandied about quite a bit in these days of the telecommunications boom. ARPU stands for Average Revenue Per User. It is a powerful and extremely useful indicator of just how well a telecom company is accessing its customers revenue potential. ARPU is commonly calculated in standard mathematical fashion, by dividing the aggregate amount of revenue by the total number of users who provide that revenue. Such numbers are static, but are usually taken as gospel in accounting departments around the world. Other measurements are tracked as well, including revenue generated by new customers as compared to existing customers and revenue generated by new services as compared to existing services. The company that tracks ARPU will most likely want to know its profit potential in broad terms. However, mobile phone companies also track ARPU by examining revenues brought in by customers incoming calls as compared to revenues generated by monthly or annual fees. In this way, ARPU can be both general and specific. Its not just telecom companies that use ARPU, however. Internet companies track ARPU as well. So do other electronic service providers. Many companies, telecom companies especially, find ARPU to be a prime indicator of profit potential. ARPU, however, has dangers as well. For instance, with the prevalence of telecom users these days and the overwhelming variety of services available, the average user is thought by many
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analysts to be a myth. The total number of people who use basic services might not at all equate to the total number of people who use a whole host of services. However, using ARPU, many of the users in both categories are considered to be in the same avenue of revenue potential. Another related danger of using ARPU exclusively is that it tends to skew toward users of more services. For example, Customer A might pay $80 a month for her services and Customer B might pay $120 a month for his services. Taken together, the ARPU of each of these customers is $100 a month. Evaluating solely by ARPU, a company might think that both of these customers are subscribing to the same amount of services. Decisions made on this incorrect reasoning might have serious consequences when company executives are deciding which services to maintain or discontinue. Overall, though, ARPU continues to be the industry standard for telecom, Internet, and other kinds of companies. Much more often than not, it is an accurate method of tracking data, service use, and revenue potential. The new players, including Videocon-controlled Datacom Solutions, Unitech, Shyam Sistema, Swam Telecom, STel and Essar Group firm Loop Telecom, are expected to start operations by the end of this year. Also, existing GSM operators like Idea Cellular, Tata Teleservices Ltd and Reliance Communications are looking at expanding into new circles.
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A Department of Telecommunications (DoT) official said: To get a headstart, the new entrants will be looking at starting operations in B and C circles where there is not much competition. This means they will acquire entry-level subscribers, resulting in a low ARPU. The ARPU from rural and remote circles will be less than even this. For the entry-level players, this means initial losses, he adds. According to Frost & Sullivans Principal Consultant (ICT Practice, South Asia and West Asia) Sourabh Kaushal, the companies ARPU will depend on the strategy they adopt to increase their subscriber base. If the companies are to start operations with urban and rural circles, chances are that the ARPU will be much lower than the industry average, he says. The companies would also be looking at a huge churn (users moving from one service provider to another). However, Datacom Solutions (a subsidiary of Videocon Industries) CEO Ravi Sharma has a different view. Most new entrants will be looking at increasing their subscriber base and according to a recent study, the churn in the industry stands at around 3.5 per cent per month. This, on an annual basis, will be around 42 per cent of the 287 million subscribers in the country, A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. Thus answere of Average Revenue Per User (ARPU)
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 Average revenue per user or average revenue per unit (ARPU) is an expression of the income generated by a typical subscriber or device per unit time in a telecommunications network. The ARPU provides an indication of the effectiveness with which revenue-generating potential is exploited. To calculate the ARPU, a standard time period must be defined. Most telecommunications carriers operate by the month. The total revenue generated by all units (paying subscribers or communications devices) during that period is determined. Then that figure is divided by the number of units. Because the number of units can vary from day to day, the average number of units must be calculated or estimated for a given month to obtain the most accurate possible ARPU figure for that month. Average Revenue Per User (ARPU) is a financial performance benchmark in the telecom industry that measures the average monthly revenue generated per customer. Originally used by telephone carriers, the term has been adapted to other telecom industries and is now used by carriers providing services such as Internet connection, cable services, cellphone, pager, VoIP services and so on. In the telecom industry, there are numerous instances where one comes across the term average revenue per user (ARPU). In common parlance, it is simply total revenue divided by the total subscribers for a particular time period.
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However, one should also clearly indicate the time frame associated with the figure ie whether the ARPU figure is per month, quarter, half year or a year.

Types of ARPU
Broad ARPU Broad or consolidated ARPU is arrived at by calculating the gross or total revenue and dividing it by total number of subscribers/users for any given period. This should ideally be termed as average gross revenue per user. Net ARPU Net ARPU must be calculated because not all the revenue collected by the telecom operator (cellular or fixed) is retained by it. Consider a cellular operator for example. When its customers go to a circle where
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the same operator does not provide its services, then some portion of the total bill goes to another operator. It means he has to pay access and interconnection charges. Similar costs borne by the cellular operator that include revenue share with the Government (as license fee), interconnect charges, roaming charges to other service providers, national and international long distance charges to long distance carriers and service taxes.Again, if one is considering the pre-paid segment, then there are channel margins to be paid. Thus ifone was to subtract all the above costs from gross revenue to get the net revenue and then divide bythe total subscriber base for a given period, one arrives at net ARPU, which gives a clearer picture. Based on the classifications mentioned till now, the overall ARPU might not be of great use. The prepaidand post-paid customers show drastically different tendencies. Pre paid subscribers are generally low-end subscribers and post-paid subscribers are the high-endusers. When one calculates ARPU without differentiating between the pre-paid and the post-paidsubscribers then the

ARPU figure one arrives at is called the blended ARPU. Thus based on the differentclassifications discussed above, one can arrive at blended gross ARPU, blended net ARPU, gross ARPUof pre-paid,
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gross ARPU of post-paid segment, net ARPU of pre-paid segment, net ARPU of post-paid segment. ARPU vs. MoU MoU (minutes of use) is a measurement usually in minutes time unit that show how long each user (in average) consumes a product/service in a month. This measurement often used in telecommunication industries or other industries which the product/service consumption is due to time unit (time based pricing) such as: electric/power companies, gas companies, sterilized water companies, etc. The value of MoU can be used as one of performance indicators in some businesses. Just like MoU; ARPU (Average Revenue per User) is also one of performance indicators in running one business. This is the measurement usually in currency unit (such as: US $, ID Rp., Pound sterling, etc.) that show how much money each user spend to consume one or more products or services. Both of MoU and ARPU are indicate the business performance that still could be related to the revenue as its end result. For example: a service company has 3,000 customers with MoUs value is 120 minutes per month. If the unit price of its service is US $ 1.5 per minute (in average), we can conclude that the monthly revenue of that company is = 3,000 x 120 x 1.5 = US $ 540,000. Assumed if the next coming month the MoU increase to 150 minutes at the constantly unit price. We can easily calculate the revenue based on the previous
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month revenue. We just do the simple mathematics operation as follow: 150/120 x 540,000 = US $ 675,000.

Just like MoU, almost the same simple mathematics operation do in ARPU calculation, but a little more simple. For example: if the ARPU of a company is US $ 180 and the number of customers is 3,000 users then the revenue of that month is = 3,000 x 180 = US $ 540,000. Imagine if in the next coming month the value of ARPU increase from US $ 180 to US $ 225. The revenue will be increase also to: 225/180 x 540,000 = US $ 675,000. In the reverse mathematical operation we can see the differences of these two kinds methods. We can see the differences from its formulated variables. Variables that effect to MoU are totally time usage (for all customers) and number of customers. In other side, ARPUs variable is: the number of customers and the totally revenue. Either ARPU or MoU is indicate the using of each customer in a month or one periodic time. The only different is its the measurement unit. ARPU measured in currency but MoU measured in time unit. They both have the same variable, number of customers. To the increasing of revenue, they both still indicate the same symptom too. The increasing of ARPU indicates the increasing of revenue and so does the MoU.

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The only question is: when do we use ARPU and when do we use MoU in our analysis? ARPU usually use for two or more products consumption combination, and usually the measurement unit also variated too. For example a telecommunication operator that provides voice call (pricing in US $ per minutes), data internet (pricing in US $ per Mbyte), and also mailbox feature (pricing in US $ per month). We should use ARPU method for analysis. For getting the ARPUs value, we have to calculate the average of invoice of all customers we have. But if in case internet service provider which used flat rate time based charging method, we could use MoU method for analysis in order to evaluate the business performance. Actually, MoU and ARPU would be better used in complementary one another. In case above, for heterogenic products we usually use ARPU for our analysis. But for further analysis, we could also use MoU (for detailed specific product) such as MoU for International Call, MoU for VOIP, and MoU for local call. MoU also could be used for analysis which the objective is to know or evaluate the effect of marketing program especially in pricing to the increasing of the usage of every customer (in average).

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Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL) is India's largest cellular service provider with more than 75 million subscribers as of August 2008. It is India's largest telecommunication company with 33% market share as on March 31, 2008. It also offers fixed line services and broadband services. It offers its TELECOM services under the Airtel brand and is headed by Sunil Mittal. The company also provides telephone services and Internet access over DSL in 14 circles. The company complements its mobile, broadband & telephone services with national and international long distance services. The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. The company provides end-to-end data and enterprise services to the corporate
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customers through its nationwide fiber optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station. Airtel is a brand of telecommunication services in India operated by Bharti Airtel. Airtel is the largest cellular service provider in India in terms of number of subscribers. Bharti Airtel owns the Airtel brand and provides the following services under the brand name Airtel: Mobile Services (using GSM Technology), Broadband & Telephone Services (Fixed line, Internet Connectivity(DSL) and Leased Line), Long Distance Services and Enterprise Services (Telecommunications Consulting for corporates). It has presence in all 23 circles of the country and covers 71% of the current population (as of FY07). Leading international

telecommunication companies such as Vodafone and singtel held partial stakes in Bharti Airtel. In April 2006 Bharti Global Limited was awarded a telecommunications licence in Jersey in the Channel Islands by the local telecommunications regulator the JCRA. In September 2006 the Office of Utility Regulation in Guernsey awarded Guernsey Airtel with a mobile telecommunications licence. In May 2007 Jersey Airtel and Guernsey Airtel announced the launch of a relationship with Vodafone for Island mobile subscribers. In July 2007, Bharti Airtel signed an MoU with Nokia-Siemens for a 900 million dollar expansion of its mobile and fixed network. In August
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2007, the company announced it will be launching a customized version of Google search engine that will provide an 'array of services' to its broadband customers. In March 2008, Bharti Airtel will roll out third generation services in Sri Lanka in association with singtel this is because Singapore-based Asian telecom major Singtel, which owns a little over 30% in Bharti Airtel, is a major player in the 3G space as it has already third generation networks in several markets across Asia.Until September 18, 2004, Bharti provided fixed-line telephony and broadband services under the Touchtel brand. Bharti now provides all telecom services including fixed-line services under a common brand "Airtel" As of 22nd August 2008, the Apple iPhone 3G is available in India on Airtel and Vodafone. Awards and recognition

Wireless service provider of the year 2005 at the Frost and Sulivan Asia-Pacific ICT awards

Competitive service provider of the year 2005 at the Frost and Sulivan Asia-Pacific ICT awards

Airtel also received the title of India's best Broadband service,from the PC World Magazine in the first broadband survey held in India.

In the news On February 12, 2007 Vodafone sold its 5.6% stake in AirTel back to AirTel for US $1.6 billion; and purchased a controlling stake in rival
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Hutchison Essar. In its monthly press release following statistics have been presented for end of April 2007.

Bharti Airtel added the highest ever net addition of 5.3 million customers in a single quarter (Q4-FY0607) and also the highest ever net addition of 18 million total subscribers in 2006-07

The company will invest up to $3.5 billion this fiscal (07-08) in network expansion.

It has an installed base of 40,000 cellsites and 59% population coverage

After the proposed network expansion, an additional 30,000 towers will result in the company achieving 70% population coverage

Bharti has over 39 million users as on March 31, 2007 It has set a target of 125 million subscribers by 2010 Prepaid customers account for 88.5% of Bhartis total subscriber base, an increase from 82.7% a year ago

ARPU has dropped to Rs 406 Non-voice revenues, (SMS, voice mail, call management, hello tunes and Airtel Live) constituted 10% of total revenues during Q4, lower than 10.7% in the Q4 of the previous year

Blended monthly minutes of usage per customer in Q4 was at 475 minutes

Has completed 100% verification of its subscribers and in the process disconnected three lakh subscribers
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Bharti Airtels enterprise Services, President - David is busy connecting India to Europe. David announced the building of 15,000 km 3.84 Terrabit OFC sub-marince cable system connecting Europe [London] to India via the Middle East. The project is known as Europe India gateway [EIG] and is expected to cost $700 million, which is to be completed by Q2-2010. Alcatel Lucent and Tyco are the telecom vendors for the project.

Members in the EIG consortium include - AT&T, BT, C&W, Djibouti Telecom, Du, Gibtelecom, IAM, Libyan Telecom, MTN Group Ltd., Omantel, PT Comunicacoes-S.A, Saudi Telecom Company, Telecom Egypt, Telkom SA Ltd, and Verizon Business. In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN Group, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The Financial Times reported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative nature of the talks, while The Economist magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers, higher revenues and broader geographic coverage.[ However, the talks fell apart as MTN group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company .
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Subscriber base The Airtel subscriber base according to COAI - Cellular Operator Association of India as of May 2008 was:

Tamil Nadu - 4,218,705 Kerala - 1,703,298 Punjab - 3,239,200 Haryana - 1,067,990 Uttar Pradesh (West) - 1,624,001 Uttar Pradesh (East) - 3,897,278 Rajasthan - 4,242,006 Delhi - 4,055,704 Mumbai - 2,468,016 Chennai - 1,823,532 Kolkata - 1,852,838 Maharashtra & Goa - 4,345,945 Gujarat - 3,004,824 Andhra Pradesh - 6,516,332 Karnataka - 7,316,500 Madhya Pradesh - 3,084,776 West Bengal & Andaman and Nicobar - 2,106,163 Himachal Pradesh - 809,829 Bihar - 4,912,900 Orissa - 1,911,070 Assam - 939,746 North Eastern States - 585,213
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Jammu & Kashmir - 1,100,069

The total is 67,425,935 or 32.81% of the total 205,460,762 GSM mobile connections in India till May 2008.

Bharat

Sanchar

Nigam

Limited

(known is It

as a is

BSNL, public India's

India sector largest

Communications telecommunication

Corporation company

Limited) in India.

telecommunication company with 24% market share as on March 31, 2008. Its headquarters are at Bharat Sanchar Bhawan, Harish Chandra Mathur Lane, Janpath, New Delhi. It has the status of Mini Ratna, a status assigned to reputed public sector companies in India. BSNL is India's oldest and largest Communication Service Provider (CSP). Currently has a customer base of 73 million as of June 2008. It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi which are managed by MTNL. As on March 31, 2008 BSNL commanded a customer base of 31.55 million Wireline, 4.58 million CDMA-WLL and 36.21 million GSM Mobile subscribers. BSNL's earnings for the Financial Year ending March 31, 2007 stood at INR 397.15b (US$ 9.67 b) with net profit of INR 78.06b
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(US$ 1.90 billion). Today, BSNL is India's largest telco and one of the largest public sector undertakings with estimated market value of $ 100 Billion. The company is planning an IPO with in 6 months to offload 10% to public in the Rs 300-400 range valuing the company at over $100 billion.

Services BSNL Mobile Prepaid Mobile BSNL Broadband BSNL provides almost every telecom service in India. Following are the main telecom services provided by BSNL:

Universal Telecom Sevices : Fixed wireline services & Wireless in Local loop (WLL) using CDMA Technology called bfone and Tarang respectively. BSNL is dominant operator in fixed line. As of December 31, 2007, BSNL has 81% marketshare of fixed lines.

Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under the brand name CellOne. Prepaid cellular services of

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BSNL are know as Excel. As of March 31, 2007 BSNL has 17% share of mobile telephony in the country.

Internet: BSNL provides internet services through dial-up connection (Sancharnet) as Prepaid, (NetOne) as Postpaid and ADSL broadband (DataOne). BSNL has around 50% market share in broadband in India. BSNL has planned aggressive rollout in broadband for current financial year.

Intelligent Network (IN): BSNL provides IN services like televoting, toll free calling, premium calling etc.

Present and future Since its corporatization in October 2000, BSNL has been actively providing connections in both urban and rural areas and the efficiency of the company has drastically improved from the days when one had to wait for years to get a phone connection to now when one can get a connection in even hours. Pre-activated Mobile connections are available at many places across India. BSNL has also unveiled very cost-effective broadband internet access plans (DataOne) targeted at homes and small businesses. At present BSNL enjoy's around 45% of market share of ISP services. Year 2007 has been declared as "Year of Broadband" in India and BSNL is in the process of providing 5 million Broadband connectivity by the end of 2007. BSNL has upgraded existing Dataone
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(Broadband) connections for a speed of up to 2 Mbit/s without any extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost of just US$ 11.7 per month (as of 21/07/2008 and at a limit of 2.5GB monthly limit with 0200-0800 hrs as no charge period). Further, BSNL is rolling out new broadband services such as triple play. BSNL is planning to increase its customer base to 108 million customers by 2010. With the frantic activity in the communication sector in India, the target appears achievable, however due to intense competition in Indian Telecom sector in recent past BSNL's growth has slowed down.

BSNL is a pioneer of rural telephony in India. BSNL has recently bagged 80% of US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India. Challenges During the financial year 2006-2007 (from April 1, 2006 to March 31, 2007) BSNL has added 9.6 million new customers in various telephone services taking its customer base to 64.8 million. BSNL's nearest competitor Bharti Airtel is standing at a customer base of 39 million. However, despite impressive growth shown by BSNL in recent times, the Fixed line customer base of BSNL is declining. In order to woo back its fixed-line customers BSNL has brought down long distance calling rate under OneIndia plan, however, the success
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of the scheme is not known. However, BSNL faces bleak fiscal 20062007 as users flee, which has been accepted by the CMD BSNL. Presently there is an intense competition in Indian Telecom sector and various Telcos are rolling out attractive schemes and are providing good customer services. Access Deficit Charges (ADC, a levy being paid by the private operators to BSNL for provide service in nonlucrative areas especially rural areas) has been slashed by 37% by TRAI, w.e.f. April 1, 2007. The reduction in ADC may hit the bottomlines of BSNL. CIRCLE AND LICENSE AREAS POLICY

India's telecom sector is carved into 23 circles or zones, classified as "Metro" and "A", "B" and "C" circles, based on subscriber potential. or Entire Nation is divided into 4 circles Metros, A, B & C

Metro circle: Delhi, Mumbai, Kolkata & Chennai

A Circle: States of Maharshtra, Gujarat, Andhra, Karnataka & Tamilnadu.

B Circle: States of Kerala, Punjab, Haryana, Uttar Pradesh, Rajasthan & Madhya Pradesh
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C Circle: States of Himachal, Bihar, Orissa, Assam, Kashmir and North East States

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Circle Definition: Areas classified on the basis of subscriber and revenue potential, where Metro circle has the highest potential and C circle has the lowest.
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Each circle requires a different license. As in case of Metro cities, each city license is sold separately. Operators can sell their license to any operator in case they are willing to exit from the license.

The subscriber growth saw a phenomenal increase from 2002 onwards. This was Mainly due to lowered call tariffs and full scale implementation of SMS services all Over India. December 2002, where India touched the 10 million mark could be Defined as a milestone for Indian wireless industry. Subscriber growth continued from 2002-03 and there were close to 22 million subscribers as of December 2003, now its become crosses the figure around 300 million and we expect the subscriber base in India to increase by 60.2% from 329 million to 527 million, During the forecast period from 2008 to 2010.

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The TWO major operators in the country will continue to have similar market shares over the next several years. Bharti-Airtel and BSNL Thus we saw the phenomena growth of Indias wireless market is growing at ~6-7 Million new subscribers every month.

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Two main elements for this phenomenal growth are 1. Lowered call tariffs & 2.Free incoming calls.

Consumers who were once reluctant to subscribe to mobile subscriptions founded Feasible and convenient to avail as now there was hardly any difference between the Monthly bills compared to fixed line, and mobility was definitely a crucial element. The above phenomena in India is taking shape because of the presence of huge Middle class population. On an estimate there are some 300 to 350 million people Belonging to this group in India. Unlike a car or a television set (where one is enough in the family) with the lowered call tariffs it became possible even for family Members to own a mobile phone each.

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CHAPTER -2

RESEARCH METHODOLOGY
Page 39

Research methodology is a way to systematically solve the problem. It is the science of studying how research is done scientifically. For this study, only secondary data was considered.

TYPE OF RESEARCH - Descriptive Research

It involves statistical method involving the collection of data, presentation and characterization of a set of data in order to describe the various features of that set of data.

The proposed method of analysis is Descriptive study. Descriptive research includes surveys and fact findings enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. In social science and business research we quite often use the term export facto research for descriptive research studies. The main characteristics of this method are that the researcher has no control over the variable. He can only report what has happened or what is happening. Most expost facto research Projects are used for Descriptive studies in which the researcher seeks to measure such items as for ex: - frequency of shopping, preference of people, Or similar data. Expost facto studies also include attempts by researcher to discover causes even when they cant control the variable. The method of research utilized in descriptive research is survey method of all kinds, including
Page 40

corporative and co relational methods. In analytical studies on other hand, the researcher has to use facts and information already available.

DATA COLLECTION METHOD - There are two types of data collection. Primary data collection and secondary data collection. This study is secondary data study. It is simply the analysis of preexisting data in a different way or to answer a different question than originally intended. Secondary data analysis utilizes the data that was collected by someone else in order to further a study that resarcher is interested in completing.

SOURCES OF DATA CMIE database. Business Magazines Website.

The Centre for Monitoring Indian Economy monitors the Indian economy,
Page 41

 Builds databases Undertakes research Produces documents and database products Services its clients' needs for economic and business information

Thousands of organizations, in India and overseas, subscribe to CMIE's services. Centre for Monitoring Indian Economy Pvt Ltd was established in 1976 by the eminent economist Dr. Narottam Shah. The company has grown into India's leading private sector economic research institution. CMIE is headquartered at Mumbai. It has 17 offices in India and has a 330-person strong team.

CMIE is a professionally managed company governed by its Board of Directors.

S A Dave Mahesh Vyas

Chairman Managing Director & CE0

Ajay Shah Shobhana Vyas Kalpana

Director Director

Director
Page 42

Sampat

Director

The Industry Analysis Service is a powerful combination that brings together the advantages of a database service and analysis. It provides both. It helps you remain fully abreast of the trends in individual industries. The service covers around hundred industries. It provides an up-to-date database and an incisive analysis of what the numbers speak. The database is at the core of the IAS. It presents detailed data on Demand and Supply Prices Financial performance Investments etc. of the industries Demand and supply includes production, trade, consumption and in some cases inventories. A price includes those in multiple markets and for multiple grades. The financial performance includes quarterly growth in sales profits and profitability of companies in the industries. CMIE's share price indices are the most broad based and comprehensive. They include sectoral indices. IAS provides these series. The database is available in the form of long timeseries. It provides the basic inputs required by any analyst to perform his/her own analysis. IAS also provides news abstracts relevant for the industries covered.
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The IAS also provides its own analysis of the individual industries. This includes forecasts and descriptive analysis of the current trends. These analytical reports are available in the form of PDF files. Such reports are prepared by CMIE every month. The forecasts are updated every month to reflect changes, if any are required in the light of the new data. Thus, the IAS blends the art of professional monitoring and scientific analysis.

The IAS is most optimally used when it is combined with Prowess. Prowess is a database of large and medium Indian firms. It contains detailed information on over 20,000 firms. These comprise All companies traded on India's major stock exchanges Several others including the central public sector enterprises.

The database covers most of the Organised industrial activities Banking Organised financial and other services sectors in India. The companies covered in Prowess account for 75 per cent of all corporate taxes
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 Over 95 per cent of excise duty collected by the Government of India. Prowess provides detailed information on each company. This includes a normalized database of the financials covering 1,500 data items and ratios per company. Besides, it provides quantitative information on Production Sales Consumption of raw material Energy.

Totally, the number of indicators per company is close to two thousand. Such information is usually available for over ten years. You will also find useful Contact information Share holding pattern List of bankers Auditors News abstracts Prowess also provides daily time series of share prices, computed returns that include

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 Dividends and other gains P/E based on the profits of the last four quarters A host of other useful ratios and values. Prowess has found useful applications in places where trust matters the most Commercial banks Investment companies Researchers Chartered Accountants/Transfer Pricing

It packages a normalised database in versatile and amazingly powerful software. The software permits unlimited querying power to the user.

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CHAPTER -3

RESEARCH OBJECTIVE OF STUDY

Page 47

To Evaluate Total Number of Outstanding Subscriber of AIRTEL & BSNL in Last Three years.

To Evaluate Total Revenues of AIRTEL & BSNL in Last Six years.

To Evaluate Total Expenses of AIRTEL & BSNL in Last Six years.

To Evaluate Net Profit of AIRTEL & BSNL in Last Six years.

To Evaluate the Increasing Teledensity of India.

To Evaluate ARPU of AIRTEL & BSNL in Last Three years.

Comparing the ARPU & Net Profit of AIRTEL & BSNL in Last Three years. I.e. finding correlation between them, when ARPU increases or decreases --.net profit.

Page 48

CHAPTER -4
DATA ANALYSIS & INTERPRETATION

To Evaluate Total Number of Outstanding Telecom Subscriber of AIRTEL & BSNL in Last Three years.

Page 49

Total subscriber's (in million) Bharti Airtel Ltd. Bharat Sanchar 15.82 26.04 35.66 2007 16.32 2008 31.97 2009 55.16

Nigam Ltd.

Total Outstanding Telecom Subscriber's of Airtel & BSNL in last 3Year

Bharti Airtel Ltd. 60

Bharat Sanchar Nigam Ltd.

subscriber (in million)

50 40 30 20 10 0 Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd. 1 16.32 15.82 2 31.97 26.04 year 3 55.16 35.66

There are two largest operators in India, Bharati Airtel as well as BSNL in telecom industry. There are vital growth in their total Number of outstanding subscribers in every year. But the growth % change of Bharti Airtel subscribers are much more differ with compare to BSNL. .

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Bharti Airtel was standing at 16.32 millions & has 95.8 % growth in year 2008, 72.35 % growth in year 2009. Where as BSNL was standing at 15.82 millions & has 64.46 % growth in year 2008 and 36.69 % in year 2009.

1. To Evaluate Total Revenues of AIRTEL & BSNL in the Last Six years.

Total Income Rs. Crore Mar (Non- Annualized) Bharti Airtel Ltd.

Mar

Mar

Mar

Mar 2008

Mar 2009

2004 2005 2006 2007 66.19 72.92 63.3

8309.03 11329.04 17968.47

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Bharti Airtel Ltd. 20000 Income (in Crore) 15000 10000 5000 0

Mar 2004

Mar 2005

Mar 2006 63.3

Mar 2007

Mar 2008

Mar 2009

Bharti Airtel Ltd. 66.19 72.92

8309 11329 17968

year Bharti Airtel Ltd.

Bharti Airtel Revenue had been continuously increasing for last Three years and in year 2006-2007 it had taken a marvelous jump of 63.3 crore to 8309 crore & now it has become 17968 crore in year 2009. where as in year 2008 revenue was 11329 crore & hence Bharti Airtel income growth was 10.16 % in year 2004-2005, in year 2005-2006 there was a slight 13.19 % reduction in growth & again in year

2006-2007 there was a vital %age growth in Airtel Revenue, The %age growth in year 2005-2006 & 2008-2009 were 36.34 & 58.86 respectively.

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Total Income Rs. Crore Annualised) Bharat Sanchar 27638.31 28498.03 36592.27 39357.57 40759.53 40953.63 (NonMar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

Nigam Ltd.

Bharat Sanchar Nigam Ltd. 45000 Income (in Crore) 40000 35000 30000 25000 20000 15000 10000 5000 0 Mar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

Bharat Sanchar Nigam Ltd.

27638 28498 36592 39358 40760 40954 year Bharat Sanchar Nigam Ltd.

The Graph of Bharat Sanchar Nigam Ltd. Shows that it has an increasing tendency but on the slow rate. The Income %age growth rate of BSNL was 3.12 % in year 2004-2005. In year 2005-2006 the Income %age growth rate was 28.4, in years 2006-2007, 20072008, 2008-2009 it was 7 7.5 %, 3.56 %, 0.47 % respectively.

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Net Crore

Income

Rs. (NonMar 2004 66.19 Mar 2005 72.92 Mar 2006 63.3 Mar 2007 8309.03 Mar 2008 11329.04 Mar 2009 17968.47

Annualised) Bharti Airtel Ltd. Bharat Nigam Ltd. Sanchar

27638.31

28498.03

36592.27

39357.57

40759.53

40953.63

Net Income
Bharti Airtel Ltd. Income (in crore) 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 Mar 2004 66.19 27638 Mar 2005 72.92 28498 Mar 2006 63.3 36592 Mar 2007 8309 39358 Mar 2008 11329 40760 Mar 2009 17968 40954 Bharat Sanchar Nigam Ltd.

Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd.

year

From the above chart, it is no doubt that the BSNL net income is more higher as compared to Bharti Airtel. But as we have earlier discussed that the %age income growth rate of AIRTEL was growing higher & higher in Year of Years (YoY).

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2. To Evaluate Total Expenses of AIRTEL & BSNL in Last Six years.

Total Expenses Rs. Crore (Non- Annualised) Bharti Airtel Ltd.

Mar 2004 66.06

Mar 2005 72.7

Mar 2006 62.93

Mar 2007 7109.92

Mar 2008 9303.12 Mar 2009 13965.31

Bharti Airtel Ltd.

Total Expenses (in crore)

16000 14000 12000 10000 8000 6000 4000 2000 0

Mar 2004

Mar 2005 72.7

Mar 2006

Mar 2007

Mar 2008

Mar 2009

Bharti Airtel Ltd. 66.06

62.93 7109.9 9303.1 13965

Year Bharti Airtel Ltd.

Bharti Airtel Expenses stands at 66.06 crore in year 2002, now it has become 13965 crore in year 2007 where as in year 2006 expenses were 9303.10 crore. Bharti Airtel expenses percentage growth rate was 10.05 in year 2002-2003, & it had a decrease %age growth rate of 13.43 in year 2003-2004. & again in year 2004-2005 there was a vital %age growth rate in Airtel Expenses, The %age growth Rate in year 2005-2006 & 2006-2007 were 30.85 & 50.12 respectively.
Page 55

Total Expenses Rs. Crore (Nonanualised) Bharat Sanchar Nigam Ltd. 21468.53 27053.58 30615.74 29174.28 31819.84 33147.76 Mar 2004 Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009

Bharat Sanchar Nigam Ltd.

Total Expenses (in crore)

35000 30000 25000 20000 15000 10000 5000 0

Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008

Mar 2009

Bharat Sanchar 21469 27054 30616 29174 31820 33148 Nigam Ltd. Year Bharat Sanchar Nigam Ltd.

BSNL Expenses stands at 21469 crore in year 2002, now it had become 33148 crore in year 2007 where as in year 2006 expenses were 31820 crore.

BSNL expenses percentage growth rate were 26.01 in year 2002-2003, & in year 2003-2004 it was 13.16 %, there was a slight decrease of 4.7 % in year 2004-

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2005. Again it has a gain of 9.06 %, 4.17 % in years 2005-2006 & 2006-2007 respectively.

Net Expenses Crore Annualised)

Rs. (NonMar 2004 66.06 Mar 2005 72.7 Mar 2006 62.93 Mar 2007 7109.92 Mar 2008 9303.12 Mar 2009 13965.31

Bharti Airtel Ltd. Bharat Nigam Ltd. Sanchar

21468.53

27053.58

30615.74

29174.28

31819.84

33147.76

Net Expenses
Bharti Airtel Ltd. 35000 Expenses (in crore) 30000 25000 20000 15000 10000 5000 0 Bharat Sanchar Nigam Ltd.

Mar Mar Mar Mar Mar Mar 2004 2005 2006 2007 2008 2009

Bharti Airtel Ltd. 66.06 72.7 62.93 7110 9303 13965 Bharat Sanchar 21469 27054 30616 29174 31820 33148 Nigam Ltd. Year

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The net ratio of BSNL Expenses is to much higher as compared with Bharti Airtel. As We have earlier discussed, the Expenses Figure of BSNL is higher as Bharti Airtel in Year of Year (YoY).

3. To Evaluate Net Profit of AIRTEL & BSNL in Last Six years.

PAT

Rs.

Crore

Mar 2004 0.13

Mar 2005 0.22

Mar 2006 0.37

Mar 2007

Mar 2008

Mar 2009

(Non-Annualised) Bharti Airtel Ltd.

1210.67 2012.08 4033.23

Bharti Airtel Ltd. 5000 Profit (in crore) 4000 3000 2000 1000 0 Mar Mar Mar Mar Mar Mar 2004 2005 2006 2007 2008 2009 0.13 0.22 0.37 1211 2012 4033

Bharti Airtel Ltd.

Year Bharti Airtel Ltd.

Page 58

The PAT of Bharti Airtel company stands at 0.13 crore in 2002 and has growth of 69.2 % in 2003. In year 2004 it has a growth of 68.18 %, in year 2005 it has grown up from a tremendous rate of change , in year 2006 & 2007 it has grown up from a rate of change of 66.14 % & 100.42 % respectively.

PAT

Rs. Crore

Mar 2004

Mar 2005

Mar 2006

Mar 2007

Mar 2008

Mar 2009

(Non-Annualised) Bharat Sanchar

Nigam Ltd.

6312.17 1444.45 5976.53 10183.29 8939.69 7805.87

Bharat Sanchar Nigam Ltd. 12000 Profit (in crore) 10000 8000 6000 4000 2000 0 Mar Mar Mar Mar Mar Mar 2004 2005 2006 2007 2008 2009

Bharat Sanchar 6312 1444 5977 10183 8940 7806 Nigam Ltd. Year Bharat Sanchar Nigam Ltd.
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The PAT of the BSNL company stands at 6312 crore in year 2002 and has fell down from 77.11 % in year 2003. In year 2004 it has grown up with 31.37 %, in year 2005 it has again grown up with 70.38 %, in year 2006 & 2007 it had a fall of 12.21 % and 12.68 % age respectively.

Net PAT Rs. Crore (Non-Annualised) Bharti Airtel Ltd. Bharat Nigam Ltd. Sanchar

Mar 2002 0.13

Mar 2003 0.22

Mar 2004 0.37

Mar 2005 1210.67

Mar 2006 2012.08 Mar 2007 4033.23

6312.17

1444.45

5976.53

10183.29

8939.69

7805.87

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Net Profit
Bharti Airtel Ltd. 12000 Bharat Sanchar Nigam Ltd.

profit (in crore)

10000 8000 6000 4000 2000 0 Mar Mar Mar Mar Mar Mar 2002 2003 2004 2005 2006 2007 0.13 0.22 0.37 1211 2012 4033

Bharti Airtel Ltd.

Bharat Sanchar 6312 1444 5977 10183 8940 7806 Nigam Ltd. Year

It has clearly been understood from trade line of BSNL and Airtel that Net Profit of Bharti Airtel has increased in Year of Year (YoY). Where as BSNL had a fell down in YoY. It has only increased in years 2003 to 2005.

4. To Evaluate the Increasing Teledensity Growth of India.

Year Teledensity (%)

1995 1.07

1996 1.28

1997 1.56

1998 1.94

1999 2.33

2000 2.86

2001 3.58

2002 4.29

2003 5.11

2004 8

2007 22

2008 27.59

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Tele-density
30 25 20 15 10 5 0 Tele-density (%)

The number of landline telephones in use for every 100 individuals living within an area. A teledensity greater than 100 means there are more telephones than people. Tele-density reaches 27.59%. As on May08

5. To Evaluate ARPU of AIRTEL & BSNL in Last Three years.

ARPU in Rs.

2005
Page 62

2006

2007

Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd.

509 248

354 156

325 114

ARPU of Airtel & BSNL in last 3Year (in Rs.) Bharti Airtel Ltd. 600 500 Bharat Sanchar Nigam Ltd.

Rupees

400 300 200 100 0 Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd. 1 509 248 2 354 156 Year 3 325 114

Average Revenue per User of Bharti Airtel in year 2005 was Rs.509, in the next year it falls by Rs. 155. And has become Rs. 354 in year 2006 and had again a fall of Rs. 29 in year 2007 and has become 325 Rs. The same as declined nature of Average Revenue per User of Bharat Sanchar Nigam Ltd. in year 2005 was Rs.248. In the next year it falls by 92 Rs. And has become Rs. 156 and had again a fall of Rs. 42 in year 2007 and has become Rs 114.
6. Comparing the ARPU & Net Profit of AIRTEL & BSNL in Last Three Years. i.e. finding correlation between them, when ARPU increases or decreases net profit

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Net PAT( in crore) Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd.

2005 1210.67

2006 2012.08

2007 4033.23

10183.29

8939.69

7805.87

Net PAT
Bharti Airtel Ltd. 12000 10000 8000 6000 4000 2000 0 1 YEAR 1 Bharti Airtel Ltd. Bharat Sanchar Nigam Ltd. 1210.67 10183.29 2 2012.08 8939.69 3 4033.23 7805.87 2 3 Bharat Sanchar Nigam Ltd.

PAT( in Crore) Bharti Airtel Ltd.

It is clearly understood from trade line of BSNL and Airtel, Net Profit of Bharti Airtel is increasing in Year of Year (YoY). Where as BSNL falls down in YoY.

Bharti Airtel Ltd. PAT (in Crore) ARPU (in Rs.)

2005 1210.67 509

2006 2012.08 354

2007 4033.23 325

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Bharti Airtel Ltd.

4500 4000 3500 3000

ARPU

PAT

2500 2000 1500 1000 500 0 PAT (in Crore) ARPU (in Rs.) 1 1210.67 509 2 2012.08 354 Year PAT (in Crore) ARPU (in Rs.) 3 4033.23 325

The plotted graph of Bharti Airtel at Two Axis shows Net profit expression unit of Telecom Company in figure of Crore and ARPU Expression unit in figure of Rupees. Bharti Airtel ARPU is declining year by year but their net profit growth increases year by year.

Bhrat Sanchar Nigam Ltd. 2005 2006

Page 65

2007

PAT (in Crore) ARPU (in Rs.)

10183.29 248

8939.69 156

7805.87 114

Bharat Sanchar Nigam Ltd.

12000

ARPU

10000

8000

PAT

6000

4000

2000

0 PAT (in Crore) ARPU (in Rs.)

1 10183.29 248

2 8939.69 156 Year

3 7805.87 114

PAT (in Crore)

ARPU (in Rs.)

The plotted graph of BSNL at Two Axis is Net profit expression unit of Telecom Company in figure of Crore and ARPU Expression unit in figure of Rupees. BSNL- ARPU is declining in nature in year by year and their net profit also falls down in year by year. Thus we observe that ARPU of both Telecom operators are declining in year by Year but net Profit of Bharti Airtel is increasing. There are n numbers of regions of ARPU decreasing of telecom industries. In one of them - ARPU vs. Subscriber Statistics

Indian consumers are extremely cost conscious. And the cost syndrome- call costs fell, no. of subscribers rose! In a way, as operators ARPU declined.
Page 66

CHAPTER -5
CONCLUSIONS

CONCLUSIONS
Page 67

Based on the detailed analysis of Indian Telecom Industry, Bharti Airtel Limited and its competitors- BSNL we conclude the following regarding the financial health of Bharti Airtel Limited:

Growth:

Bharti Airtel Ltd is the market leader in mobile phone services with over 22% market share in terms subscriber base where as BSNL share market by 15%. And Bharti Airtel being added 6 million mobile subscribers every month in India hence the future growth of Bharti Airtel Ltd looks very strong.

Profitability:

The PAT of Bharti Airtel company stands at 0.13 crore in 2002 and has growth of 69.2 % in 2003. In year 2004 it has a growth of 68.18 %, in year 2005 it has grown up from a tremendous rate of change , in year 2006 & 2007 it has grown up from a rate of change of 66.14 % & 100.42 % respectively. Where as The PAT of the BSNL company stands at 6312 crore in year 2002 and has fell down from 77.11 % in year 2003. In year 2004 it has grown up with 31.37 %, in year 2005 it has again grown up with 70.38 %, in year 2006 & 2007 it had a fall of 12.21 % and 12.68 % age respectively. All these parameters suggest that the company is achieving increased levels of profitability in spite of massive growth.

Solvency:

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The Debt Ratio has decreased from 0.35 in 2005 to 0.21 in 2007. The DER has also decreased from 0.97 in 2005 to 0.49 in 2007. The Interest coverage ratio has improved from 7.36 to 16.99 which is a positive sign. The Debt service coverage ratio however stands at 0.91 in 2007 and needs improvement. The business expansion is being funded more by the Profits rather than external borrowings.

Liquidity:

Liquidity is a cause of concern Bharti Airtel Ltd is much more effective as compared to its competitors. The low liquidity could be attributed to the fact that the company invests heavily in growth.

Efficiency:

Total Assets, Debt Turnover Ratio, Fixed Assets Turnover Ratio and Current Assets Turnover Ratio have all improved and are higher as compared to its competitors. This points that Bharti Airtel Limited is more efficient in using its resources.

Overall the company has very strong fundamentals for future performance.

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SUGGESTIONS

Page 70

SUGGESTIONS From the above analysis we came to the conclusion that the growth rate in the ARPU of BSNL is continuously declining and the road ahead for BSNL is going to be much arduous than better. So the public sector owned the BSNL and other telecom operators have to do same strategic thinking to retain their existing subscribers base and reaching out to enrich. BSNL especially has to make the value addition to it service to the match the services promoted by it competitors.

The government a India has granted licensees (spectrum) to as many as half a dozen new telecom company to operate in all most all the twenty-two telecom circles of India in both the CDMA & GSM sector. Once this telecom company became operation arised they will try to snatch away the existing subscribers the AIRTEL & BSNL by providing much more value added and almost oriented service, and again there will be further decline in the ARPUs these companies.

Therefore it becomes Imperative for the BSNL to raise its ARPU by reaching out to the large emerged areas since its acrossbility is much higher than the other telecom companies.
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LIMITATIONS
Page 72

LIMITATIONS
Although a proper care has taken to keep the study unaffected of any inconsistencies, a few have always been unavoidable. Listed below are a few of the limitations that this study suffers from:1. This study is based on secondary data, though Primary Source of data were not considered.

2. Due to time consistent, it is very much palpable that Some aspects may have not been properly dealt with.

3. Constraint of money.

4. Any error due to human nature or by chance

Page 73

CHAPTER -6

Page 74

BIBLIOGRAPHY

Page 75

BIBLIOGRAPHY

CMIE Data-Base

Text Books KOTHARI C. R., Methodology of Research in Social Sciences, Mumbai Himalaya Publishing House 2003.

Business Magazines Business & Economy, 18 October 2007- The Raucous 500!!! Business Standard, 26 November 2008- Market share of the top telecom players.

Website
Page 76

 http://www.airtelworld.com http://www.bsnl.co.in/index.html http://www.bseindia.com http://www.rbi.org.in/home.aspx http://www.dot.gov.in/ http://www.investopedia.com/

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