GROUP No.

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MEMBERS

Shweta Bhatawadekar Varun Saykhedkar Neha Salvi Mayank Mehta Ruchi Sharma Chandana Awasthi

3 19 27 49 52 54

PROJECT ON

ABOUT AIRTEL
Bharti Airtel Limited is a provider of telecommunication services. It operates in three primary business segments: Mobile Services, Telemedia Services and Enterprise Services. It offers an integrated suite of telecom solutions to its enterprise customers, in addition to providing long distance connectivity both nationally and internationally. It also offers Digital TV and Internet protocol television (IPTV) Services. All these services are rendered under the airtel brand. The Company has its presence in 19 countries, including India, and South Asia and Africa. During the fiscal year ended March 31, 2011 (fiscal 2011), it launched 3G Services, airtel money, airtel call manager, airtel voice blog, airtel world SIM, Live Aarti and LearnNext. On February 25, 2010, it acquired a 70% interest in Airtel Bangladesh Limited. On June 8, 2010, the Company acquired a 100% interest in Zain Africa B.V. (Zain). On August 27, 2010, it acquired a 100% interest in Telecom Seychelles Limited.

Bharti Airtel Limited (NSE: BHARTIARTL, BSE: 532454), commonly known as Airtel, is Indian telecommunications company that operates in 20 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or3G services depending upon the country of operation. Airtel is the third largest telecom operator in the world with over 243.336 million customers across 20 countries as of March 2012. It is the largest cellular service provider in India, with over 178.78 million subscribers at the end of February 2012. Airtel is the third largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.

Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services. It offers its telecom services under the Airtel brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve Cisco Gold Certification. Airtel is the third largest mobile operator in the world in terms of subscriber base and has a commercial presence in 20 countries and the Channel Islands.

Its area of operations consists of:

The Indian Subcontinent: Airtel Bangla, in Bangladesh Airtel, in India Airtel Sri Lanka, in Sri Lanka

Airtel Africa, which operates in 17 African countries: Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Rwanda, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia.

The British Crown Dependency islands of Jersey and Guernsey, under the brand name Airtel-Vodafone, through an agreement with Vodafone. It is known for being the first mobile phone company in the world to outsource all of its business operations except marketing, sales and finance. Its networkbase stations, microwave links, etc.is maintained by Ericsson, Nokia Siemens Network and Huawei,[8]and business support is provided by IBM, and transmission towers are maintained by another company (Bharti Infratel Ltd. in India).

PRODUCTS OFFERED
Fixedline telephony Mobile Telephony Broadband internet Digital Television It service

Business Description
Bharti Airtel provides GSM mobile services in all the 22 telecom circles in India, Srilanka, Bangladesh and now in 16 Countries of Africa. It provides telemedia services (fixed line and broadband services through DSL) in 88 cities in India. Also offer suite of Enterprise solutions, DTH and IPTV Services

Established
July 07, 1995, as a Public Limited Company
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Proportionate revenue
Rs. 157,560 million (ended December 31, 2010-Audited) Rs. 103,053 million ( ended December 31, 2009-Audited) As per IFRS Accounts

Proportionate EBITD
Rs. 49,816 million ( ended December 31, 2010 Audited) Rs. 40,823 million ( ended December 31, 2009 Audited) As per IFRS Accounts

Shares in issue
3,797,530,096 as at December 31, 2010

Listings
The Stock Exchange, Mumbai (BSE) The National Stock Exchange of India Limited (NSE)

Customer base
India: 157,485,000 GSM mobile and 3,257,000 Telemedia Customers. (status as on Dec 31, 2010) Africa: 42,124,000 GSM mobile(status as on Dec 2010)

Partners
Mobile Services Nokia, Siemens, Ericsson, Huawei Telemedia & Long Distance Services - Nokia ,Siemens, Juniper, Cisco, Alcatel, Lucent, ECI, Tellabs Information Technology IBM Call Centre Operations - IBM Daksh, Hinduja TMT, Teleperformance, Mphasis, Firstsource & Aegis Equity Partner {Strategic}- Singtel

Various SBUs
CORPORATE LEVEL: It is concerned with the scope and the purpose of an organization and how value will be added to the different business units of the organization.

Growth
Airtels acquisition of Kuwaiti firm Zain's African assets to capture the 16 African countries The acquisition takes Airtel past Chinas Unicom, Swedens Telia Sonera, and Germanys T-Mobile A $10.7-billion (Rs 49,700 crore) offer Airtel - worlds third-largest telecom service provider company by subscribers Bharti Airtel, January 2010 also acquired 70% stake in Warid Telecom of Bangladesh for $300 million (about Rs 1,363 crore) A subsidiary of the Dhabi Group, offers mobile telecom services with a user base of over 2.9 million in Bangladesh

Integration
Bharti Airtel had to maximize its future flexibility and growth potential Need to develop new services to differentiate from competition Strengthen its customer relationships

Solution
Bharti Airtel entered into a comprehensive 10-year agreement with IBM To transform its processes and take on the management of its IT infrastructure Standardized framework for Bharti Airtel to integrate its channels and customerfacing processes Enables a more seamless customer experience, higher customer satisfaction and more profitable growth

Key Benefits
Outsourcing of technology enables Bharti Airtel to focus resources on growing the business Optimization of business processes and infrastructure through flexible, standardized integration framework
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Diversification
BHARTI INFRATEL One of the worlds largest Telecom Passive Infrastructure providers Pioneer of the passive infrastructure sharing concept in India, and also the leaders with over 30,000 Towers across the circles they operate in Reduced Capital Investment - as new infrastructure need not be created for them Faster - as these towers have a large geographic footprint, and cover existing, highrevenue telecom circles Operational efficiencies - as best practices adopted by the market leader automatically benefit them too 42% stake in Indus towers which was created as a Joint Venture between Bharti Infratel, Vodafone and Idea to hive off the Towers business 12 circles

Bharti Reality Limited

Has expanding interests in commercial, retail and residential real estate It has constructed and managed over ten top of the line facilities for Bharti group companies and third party clients It has now forayed into developing quality commercial real estate in the central business district (CBD) areas of metropolitan cities

Business level
It deals with Porters generic strategies and how to operate in particular markets.

Focus
Focussing on the newly acquired African markets Strategic partnership with IBM, Tech Mahindra and Spanco to drive world class customer service across the 16 African countries Outsource core customer service functions like call centres and back office to its subscribers Igniting a rapid growth in the nascent African Business Process (BPO) to deliver economic growth to many African countries The partnership is also aimed at redefining and providing a world class and seamless customer experience in all 16 African countries Help creating additional jobs and provide services in each market which will sustain and build skills, capabilities and resources Become more competitive in Africa as it focuses on making mobile communications affordable and available to everyone
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Differentiation
Indias first mobile wallet service by a telecom operator- airtel money launched in Gurgaon Aimed at offering customers with an efficient alternative to cash transactions and secure way of making payments Use - Load cash, Pay bills & recharge, Shop & make payments A joint venture with State Bank of India to provide banking and financial services to assist Indians in using the mobile platform

Cost leadership
The cost leadership strategy of prepaid and postpaid mobile services are comparatively lower as compared to their competition The 3G service plans of Airtel is at par with any other service provider To increase their market share in the future the price to value ratio of the various 3G plans can catapult its market share by a huge margin

Functional level
Concerned with how the component parts of the organization effectively deliver the corporate and business level strategies in terms of resources, processes and people

Human resources
State of the art learning centre and training practices Well defined rewards and recognition system Employees decide training needs PACE(Progressive assessment of culture and environment) feedback taken by employees

Target Market:
Elite Up market professionals Entrepreneur with business plans Low income mass category Youth Women and senior citizens by post paid connection

The First mover advantage (FMA)

Electronic recharge Hello tunes Airtel Live! Portfolio manager Easy music access

Rural strategies:
Airtel follows Match-box strategy It is about making available Airtel recharge cards wherever matchboxes could be found. The firm expands regularly in Bihar, piggybacking on 300 distributors and more than 50,000 retail outlets selling Airtel prepaid cards Covers over 4,00,000 villages and hopes to expand to other 1,00,000 by 2009

MISSION
We at Airtel always think fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more.

VISION 2015
Loved by more customers Enriching the lives of millions

VISION 2020
To build Indias finest conglomerate by 2020 To support education of underprivileged children through the Bharti foundation

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INDUSTRIAL ORGANIZATION MODEL

The I/O Model adopts an external perspective to explain that forces outside of the organization have dominating influences on a firm's strategic actions and is based on the following four assumptions:

The external Environment The general, industry, and competitive environments impose pressures and constraints on firms and determines strategies that will result in superior returns Most firms competing in an industry or an industry segment control similar sets of strategically-relevant resources and thus pursue similar strategies Resources used to implement strategies are highly mobile across firms Organizational decision-makers are assumed to be rational and committed to acting only in the best interests of the firm

Telecom Industry market share 2011 Bharti Airtel remains the market leader with 28.2% share. Vodafone Essar is catching up close on 2nd position with 23.6% and Idea cellular is on 3rd spot with 15.88% share.

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EXTERNAL ANALYSIS THROUGH PESTEL MODEL Political and Regulatory Issues

Telecom Sector in the Pre-liberalisation Era (1980-1990): Before liberalisation, the public sector held a monopoly in provision of telecom services. The entire telecom services operation in the country was carried out by the Department of Telecommunication (DoT), a public sector entity established in 1985. It managed the planning, engineering, installation, maintenance, management, and operations of telecom services for the whole of India. In order to ease out its operations, two new public sector corporations viz. MTNL and VSNL were set up under the DoT in 1986. Prior to liberalisation the telecom services were broadly classified as domestic basic (which included basic telephony, telex and fax), domestic value-added services (VAS) which covered all other services such as paging, cellular, data services, VSAT and international basic and VAS. Telecom Sector in the Post-liberalisation Era: Private sector participation in the Indian telecom sector has been a gradual process, wherein the government initially permitted players from the private sector to provide Value Added Services (VAS) such as Paging Services and Cellular Mobile Telephone Services (CMTS), followed by the Fixed Telephony Services (FTS) or Basic services. Eventually the private sector has been allowed to provide almost all telecom services. Liberalisation process in the telecom services market began in 1992. In 1994 P.N Rao led govt introduced national telecommunications policy [NTP] in which brought changes in areas of: ownership, service and regulation of telecommunications infrastructure. The country was divided into circles (or categories) on the basis of economic potential. Thus, primarily these divisions were mostly adjoining the states of India. During 1994, through a competitive bidding process, licenses were granted to private CMTS operators. India joined the World Trade Organisation (WTO) in 1995, the Telecom Regulatory Authority of India (TRAI) was established in 19971 to regulate telecom services Current Structure of the Indian Telecom Industry: Currently, both public sector players as well as the private sector players are actively catering to the rapidly growing telecommunication needs in India. Private participation is permitted in all segments of the telecom industry, including ILD, DLD, basic cellular, internet, radio paging, et al. Private operators have played a very crucial role in the growth of the telecommunication industry, primarily in the mobile services. With the liberalisation of the telecom industry.

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Economic
Economic growth, interest rates, exchange rates and the inflation rate play a key role. There is growth in the services and manufacturing sectors. India has a large youth population and the literacy rate is also going up. Besides this the level of personal income of individuals is rising and there is good availability of retail credit. As a result of which consumer spending are increasing.

Social
It Includes cultural aspects, population growth rate, age distribution, career attitudes etc. Trends in social factors affect the demand for a product or a service. India has lowest mobile penetration being the second most populous country in the world. Approximately 35 % population below 14 yrs of age comprises of huge future customer base. Urbanization is increasing leading to an increased demand for connectivity for all mobile communication services.

Technological
Include technological and environmental aspects, such as R&D activity, automation, technology incentives and the rate of technological change.

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Several telecommunications companies market wireless mobile Internet services as 3G, indicating that the advertised service is provided over a 3G wireless network. Services advertised as 3G are required to meet IMT-2000 technical standards, including standards for reliability and speed (data transfer rates). WiMAX (Worldwide Interoperability for Microwave Access) is a communication technology for wirelessly delivering high-speed Internet service to large geographical areas. It is a part of a fourth generation, or 4G, of wireless-communication technology. WiMax offers data-transfer rates of up to 75 Mbit/s, which is superior to conventional cable-modem and DSL connections. However, the bandwidth must be split among multiple users and thus yields lower speeds in practice.

Environmental
It Includes weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance Growing awareness of environmental factors make the industries responsible for their activities Radio frequency waves emitted from the mobile phones harms body cells and damages the DNA This is not yet proved that such changes were risk to human health

Legal
Govt Launched Mobile Number Portability (MNP) Govt is marketing 3-4 slots of spectrum across the nation Govt fixed Rs 3,500 crore as reserve price for pan-India spectrum FDIs up to 74%

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PORTERS FIVE FORCES

Threat of New Entrants

The number of major players in the Indian telecom is 12 companies. This has changed the tactics followed by companies, it all started by TATA DoCoMo bringing about the concept of per second billing. This made the companies to shift focus from Average revenue per user(ARPU) to per minute cost. So a smaller company has shaken the foundation of the sector. Moreover in the recent days the inclusion of 3G has brought about as is often said the entry of a 900 pound gorilla in the telecom industry as a major competitor. The newer players are turning the tide. Uninors variable pricing too has left feathers ruffled. This shows the increasing threat being offered by new entrants into the market.
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Power of Suppliers
At first glance, it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. Indeed, without high-tech broadband switching equipment, fibre-optic cables, mobile handsets and billing software, telecom operators would not be able to do the job of transmitting voice and data from place to place. But there are actually a number of large equipment makers around. There are enough vendors, arguably, to dilute bargaining power. The largest monopoly is the allocation of the bandwidth by the government to the telecom companies. The concept of bidding should have been transparent but time and time again have proved to be anything but. This can lead to severe losses as the allocation of bandwidth is the essence of telecommunication. The limited pool of talented managers and engineers, especially those well versed in the latest technologies, places companies in a weak position. This is because the cost incurred by the company to train these new inductees is high and quite often the technology changes just as they are inducted. Reliance Infratel has around 50,000 towers. The largest tower firm Indus Towers has around 1,00,000 towers and is a combination of Bharti Airtel, Vodafone Essar and Idea Cellular operating in 16 service areas. This is how the tower firms dictate conditions to the telecom operators.

Power of Buyers
All this chaos has created one of biggest power in the telecom industry the customer. The end user will be the happiest as the price wars ensue. This will lead to a change in the method of revenue generation as the concept of manufacturing minutes goes belly up in the future. Telecom in the present day holds low brand loyalty and brand switching is becoming more and more a norm. This would be more rampant when the clearance of free transfer of number while changing the service takes place. The end user should now be targeted more like a retail customer than that of speciality goods.

Availability of Substitutes
In the recent years with the advent of internet into the domain of mobile, the demarcation between the two sectors has faded. As high speed internet is made available on the mobile phones the role of phone calls and short messaging services will diminish, which are a major source of revenue for the telecom companies in India. The use of software like SKYPE and Gtalk will be the order of the day. This has created a new theatre for the telecom companies to look into for revenue

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generation because if they are not prepared the losses due to the inclusion of internet based communication devices would be a lot.

Competitive Rivalry
It is said that Indian telecom is a big pie being shared by many people and the rivalry had been dormant in the past few years when everyone used to follow the antics of the market leader, case in point Airtel. But of late the impact made by newer companies has led to a major price war among all the players. Recent statistics show that the minutes were being sold by the companies at 60p in 2008 but now, are being sold at 35p. This with the cost to the company at 25p (for Airtel) has hit the bottom line drastically. Rivalry in this sector has just begun to show up because the changes being brought forward are too many and those who adapt will survive. Competitors of Airtel are flanking it from the side by trying out newer ways to woo the customer. This makes an impact because the main target for the rivals is the youth who ask for low cost. But Airtel works very similar to a bank which likes to have more money coming in through valued customers rather than low cost urban connections especially when the cost in such demography is high for the company.

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RB MODEL SWOT Analysis

STRENGTH VERY FOCUSED ON TELECOM Bharti Airtel is largely focused on the telecom, around 93% of the total revenue comes from telecom(Total telecom revenue Rs 3,326). LEADERSHIP IN FAST GROWING CELLULAR SEGMENT Airtel is holding leadership position in cellular market.. Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 27,239,757 customers as on August 31, 2006, consisting of 25,648,686 GSM mobile and 1,591,071 broadband & telephone customers. PAN INDIA FOOTPRINT Airtel offers the most expansive roaming network. Letting you roam anywhere in India with its Pan-India presence, and trot across the globe with International Roaming spread in over 240 networks. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 92 cities. THE ONLY OPERATOR IN INDIA OTHER THAN VSNL HAVING INTERNATIONAL SUBMARINE CABLES. Airtel, the monopoly breaker shattered the Telecom monopoly in the International Long Distance space with the launch of International Submarine cable Network i2i jointly with Singapore Telecommunications Ltd. in the year 2002. This has brought a huge value to the IPLC customers, delivering them an option besides the incumbent carrier, to connect to the outside world.

WEAKNESS Price Competition from BSNL and MTNL. Airtel is tough competition from the operators like BSNL and MTNL as these two operators are offering services at a low rate.
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Untapped Rural market. Although Airtel have strong Presence throughout the country but still they are far away from the Indian rural part and generally this part is covered by BSNL so indirectly Airtel is loosing revenue from the rural sector. OPPORTUNITIES THE FAST EXTENDING IPLC MARKET An IPLC (international private leased circuit) is a point-to-point private line used by an organization to communicate between offices that are geographically dispersed throughout the world. An IPLC can be used for Internet access, business data exchange, video conferencing, and any other form of telecommunication. Airtel Enterprise Services and SingTel jointly provide IPLCs on then Network i2i. The Landing Station in Singapore is managed by SingTel and by Airtel in Chennai (India). Each Landing Station has Power Feeding Equipment, Submarine Line Terminating Equipment and SDH system to power the cable, add wavelengths and convert the STM-64 output to STM-1 data streams respectively. LATEST TECHNOLOGY AND LOW COST ADVANTAGE: The costs of introducing cellular services for Airtel are marginal in nature, as it needs only to augment its cellular switch/equipment capacity and increase the number of base stations. The number of cities, towns and villages it has covered already works to its advantage as putting more base stations for cellular coverage in these areas comes with negligible marginal cost. Besides such cost advantages, it has also other cost advantages for the latest cellular technology. As a late entrant into the cellular market, it has dual advantage of latest technology with modern features, unlike other private cellular operators who started their service more than 4-5 years back and low capital cost due to advantages of large scale buying of cellular switch/equipment. HUGE MARKET The cellular telephony market is presently expanding at a phenomenal / whopping rate every year and there is still vast scope for Airtel to enter /expand in this market. Besides there is a vast rural segment where the cellular services have not made much headway and many customers are looking towards Airtel for providing the service to them. With its wide and extensive presence even in the remotest areas, Airtel poised to gain a big market share in this segment when it expands cellular services into the rural areas.

THREATS COMPETITION FROM OTHER CELLULAR It is time for BSNL to improve/expand its cellular services. Fierce and cut-throat competition is already in place with the markets ever abuzz with several tariff reductions
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and announcement of attractive packages, trying to grab most of the mind share of the king - the consumer, whose benefits are increasing with passing of everyday. If BSNL is not innovative and agile, its cellular service will be a flop. It needs to be proactive with attractive packaging, pricing and marketing policies lest its presence in the market be treated with disdain by the private cellular companies. The launch of WLL services by Reliance Infocomm has aggravated the situation. MARKET MATURITY IN BASIC TELEPHONY SEGMENT Although Airtelentered in the basic telephony market its a biggest there for the company as the basic telephony market has reached

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BCG MATRIX

BCG Matrix is used to find out the relative growth prospects of the product line. Within the Airtel product line leased, private, circuit are among star. Airtel is going to have a submarine cable between Singapore and Chennai with the collaboration of singtel. This will help Airtel to maintain its position in IPLC market. Right in India only VSNL have such cables.

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GE MATRIX

Business Strength: Current Market Share Brand image and Brand equity Production capacity R & D performance Corporate image Profit margins relative to competitors Promotional effectiveness.

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Factors underlying Market Attractiveness:

Factors Weight Rating (1 5) Resource availability Overall market size Annual Market growth rate Profitability Competitive intensity Technological requirements Total 0.20 0.15 0.20 0.15 0.10 0.20 1.0 3.5 4 4 4 4 4.5 Value = (Weight * Rating) 0.7 0.6 0.8 0.6 0.4 0.9 4.0

Factors

Weight

Rating (1 5)

Value = (Weight * Rating) 0.75

Market share

0.15

New product development Brand Image Sales force

0.10 0.10 0.15

3.5 4 3

0.35 0.40 0.45

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Pricing Distribution capacity Product quality R&D Performance Total

0.15 0.10 0.10 0.15 1.0

3 4.5 4.5 3

0.45 0.45 0.45 0.45 3.75

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Value Chain Analysis

Firm infrastructure - CRM tools, MIS, ERP, Networking Equipment, Telecom equipment for coverage and signal strength, IT Infrastructure HR management - IT skilled work force, Telecom engineers, SCM specialists Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 employees in Mobile services, Owned retail staffing and training. Technology development - Creating a 3G enabled network, mChek - Launching M commerce by tie ups with banks and credit cards. Procurement - Established a SCM network to acquire networking & Telecom tools, Maintain long term relation with suppliers to provide handsets & services.

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RULE OF THREE
Only three major players survive and mid size companies either die or grow by M&A. 70% of market share is dominated by Full line generalist,20% by Specialist and rest by small players. Being 22% of major market share Airtel is a Leader but since it is not more than 40%-70% Rule of three is not applicable. But being a leader it can acquire more market share to reach The Rule of Three gradually may be after following strategies: Go Global: The Right time of entry Fast Follower Search for newer market Attract Customers Penetrate in Rural and isolated market by different pricing strategies. Value Added Service (VAS) Rolling out of advanced VAS has been possible due to Technological advancement and hence creating higher value for buyers and sellers.

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RECOMMENDATION
Improve in Technology: Airtel should concentrate on better network coverage for the customers. Pricing: Airtel should keep their pricing flexible according to market condition and competition Untapped Rural Market: Large part of Indian Rural market is still untapped therefore Airtel is required to bring that area under mobility M&A: Merge and acquire companies with market share less than 10 %, to gain more market share VAS: Increase more VAS to increase more profitability

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REFERENCES

GOOGLE SEARCH ftp://ftp.software.ibm.com/software/solutions/pdfs/ODC03064-USEN-00.pdf http://allafrica.com/stories/201011010259.html http://www.fonearena.com/blog/14528/the-9-telecom-companies-who-bid-for-3gauctions-in-india.html http://www.airtel.in/wps/wcm/connect/About%20Bharti%20Airtel/bharti+airtel/medi a+centre/bharti+airtel+news/mobile/pg-goodbye-cash-hello-airtel-money http://www.airtel.in/

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