Airtel Bitm

Rakesh SonarVikas Sharma

RESEARCH PRODUCT

Lokesh GuptaManish Pandey

Baijanath MandalAditya Mahakulkar

Index

• Introduction to Indian Telecom Industry.

• Introduction to Bharti Airtel.

• Subscriber Growth.

• Value Chain.

• SIPOC.

• Financial Analysis.

• Marketing Analysis.

• Porters Generic Strategy.

• BCG.

• 5 Force Model.

• SWOT.

• Awards.

INTRODUCTION

Indian Telecom Market

Source : Telecommunication Services, Indian Industry: A Monthly Review, CMIE – December 2008

• Subscriber base- 384.79 million as on Jan 2009.

• Wireless penetration- 33.23 %

• CAGR (wireless)- 68%

• Second Largest Telecom Market

• Wireless Subscribers – 346.09 Mn• Wireline Subscribers – 38.7 Mn• Teledensity – 33.23 • Share in Asia Pacific mobile phone market- 6.4• Mobile subscriber base growth rate- 82.2%, 42% of the

population below 20

• 9 GSM players in 19 circles and 4 metro cities connecting 2000 towns

Industry

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.

Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL).

India's largest and world's second largest cellular service provider.

More than 88 million subscribers as of 31 December 2008.

Airtel brand is headed by Sunil Bharti Mittal.

Airtel provides mobile & fixed wireless services using GSM technology across 23 telecom circles .

About Bharti Airtel

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Sunil_Mittal

India’s First Telecom Company that provides telecom services in all the circles.

• The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

• Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE) .

• Per Share price of Airtel in BSE is Rs 601.40( 5th march 2009)

http://en.wikipedia.org/wiki/Chennai

http://en.wikipedia.org/wiki/Singapore

Organization Structure

Investor Relations :- http://www.bhartiairtel.in

Vision 2010

By 2010 Airtel will be the most admired brand in India:

Loved by more customers.

Targeted by top talent.

Benchmarked by more businesses .

“ We at Airtel always think in 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”

• Bharti Hexacom

• Bharti Comtel

• Bharti Aquanet

• Bharti Broadband

• Bharti Infratel

• Bharti Telemedia

• Bharti Airtel (UK, USA, Canada, Hongkong, USA, Lanka)

Subsidiary Companies

National Coverage


Enterprise Services – Carriers ILD


PRESENT COMPETITION

National Long Distance

• BSNL, RELIANCE, VSNL, VODAPHONE, TATA, IDEA

International Long Distance

• VSNL, RELIANCE , BSNL

PRODUCTS

PRODUCTS

Satisfaction with Mobile Services

0

20

40

60

80

100

120

Telecom Operators

Sa

tis

fac

tio

n (

in

%)

2008 2007 2006 2005

2008 85.44 88.64 87.1 91.96 91.97 87.38 86.75 91.47 87.84 90.67 95.09

2007 92.23 87.77 91.9 86.03 87.74 82.34 91.2 82.53 75.71 80.49

2006 88.4 90.2 86.8 87 89.2 88.3 86.4 87.6 88.5 90.3

2005 85.8 93.3 97.9 87.7 93.8 91.5 97.9 89.7 89.8 80.2

Aircel Bharti Airtel BPL BSNL Vodafone Idea MTNL Reliance SpiceTata(Indico

m)Virgin Mobile

Source : Voice & Data

Overall Satisfaction Score (2008)

0

50

100

150

Telecom Operator

Sat

isfa

ctio

n ( i

n %

)

Sales & Presales Network Quality Value Added Services

Customer Care Billing Integrity

Sales & Presales 91.93 97.7 98 98.1 95.4 94.4 99.3 95.3 97.5 97.4 99.6

Network Quality 85.9 90.1 98.2 89.1 91.2 90.2 97 91.2 89.8 93 96.9

Value Added Services 78.8 93.3 95.6 95.9 93.2 87.5 91.9 94.4 91.9 93.7 94.7

Customer Care 87.9 77.5 54.1 85.6 86.3 76.6 65.3 85.9 80.2 80.2 88.9

Billing Integrity 83.4 84.6 89.6 91.1 93.7 88.2 80.3 90.6 79.8 89 95.3

AircelBharti Airtel

BPL BSNL Vodafone Idea MTNL Reliance SpiceTata(Indico

m)Virgin Mobile


METRO CRICLES

83.4 %

91.4 %

93.4 %

92.4 %

92.5 %

90.7 %

91.7 %

95.7 %


YEAR 2008

A CIRCLE

90.3 %

93.7 %

87.9 %

89.4 %

91.6 %

85.5 %

91.3 %

84.7 %

YEAR 2008

B & C CIRCLE


YEAR 2008

SUBSCRIBER TREND

MILLION


SUBSCRIBER GROWTH

Source –Tele.net / jan 2009

Prepaid and Postpaid user

Source –Tele.net / jan 2009

OPERATOR SALIENCE & PERCEPTION


CONTINUE

Source : Voice & DataSource : Voice & Data

TOP OF MIND ADVERTISER

CONTINUE

Source : Voice & DataSource : Voice & Data

PROVIDES THE MOST COST EFFECTIVE TARIFF PLANS

10 Million Net Adds Per Month

GROWING WIRELESS MARKET


Detailed Value Chain

INTEL(ORIGINAL EQUIPMENT

MANUFACTURER 1 , CHIP LEVEL)

NOKIA-SEMIENSERRICSON

(equipment vendor)

CISCO(ORIGINAL EQUIPMENT

MANUFACTURER 2,ROUTERs, SWITCH LEVEL)

BHARTIINFRATEL

IBM(INDEPENDENT

SOFTWARE VENDOR)

INFYTCS

(Application Provider)

ON MOBILE, INDIA TIMESHUNGA MOBILE.

(CONTENT AGGREGATOR)

MAUJ, ONE 97IMI MOBILE.

(CONTENT PROVIDER)

AIRTEL(Service Provider)

Nil(MVNO)

PUBLIC(USER)

NI(network integrator)

SI(System integrator)

AFFLE(THIRD PARTY APPLICATION

PROVIDER)

Generic Value Chain

VENDOR

NETWORK INTEGRATOR

SERVICE PROVIDER

OSS/BSS PRODUCT

VENDOR

SYSTEM INTEGRATOR

BILLING SOLUTION PROVIDER

ISV

I II

III

IV V

END USER

SIPOC

SupplierSupplier InputInput ProcessProcess OutputOutput CustomerCustomer

OEM1-NORTELOEM2-CISCO

EV-NOKIA-SEMIENS

ERRICSON

ISV-IBM

3APP- AFFLE

CA- INDIA TIMES

ASP-INFY

Network Infrastructure

Spectrums

Technology

Finance

Licenses

GSM Services

VAS

Fixed Lines

Broadband

DTH

IPTV

Public

Corporate

Businesses

SME’s

Institutes

Customer

ImportanceCustomer

Importance

TechnologyTechnology

CompetitivePosition

CompetitivePosition

CapableSupplierCapableSupplier

StartStart

Telecom Processes Detailed

Corporate Customers

Hathway – Internet gateway. National Long distance services.

EFD Corporation -

Raymond

Bajaj Allianz

Mphasis

Wipro

IBM Daksh

Large Stock Broking Company

source:- http://www.bhartiairtel.in

FINANCIALS

LATEST RESULT Q3 FY08/09

Q3 FY 09 Y-ON-Y

CUSTOMERS 88.27 MN 54.0 %

REVENUE $1,983 MN 38.3 %

EBITDA $ 812 MN 33.12 %

CASH PROFIT $ 773 MN 38.07 %

NET INCOME $ 444 MN 25.37 %


CONTINUED STRING PERFORMANCE

•Wireless Customer market share leadership at 24.7 %.

•Total minutes on network carried in Q3 – 143 billion.

•Total employee strength – 25,553.

•Balance sheet strength :

• Assets - $ 12 billion

• Net Debt - $ 677 million

• Net Debt to EBITDA – 0.21 times


REVENUE USD MILLION

1155

13221423

1433

1983



Value Added Services (VAS)

VAS Contribution is 10.6 % of total revenue (for 2007-08).

VAS revenue is 2844 cr. In 2007-08.

Composition of VAS Revenue (2007-08)

Source-IMRB Reserch

Airtel Revenue in Telecom Sector (07-08)

Source- voice and data / jul 2008

MARKETING

• Performance

• Dynamism

• Leadership

Core Values of Airtel

• Elite

• Up market professionals

• Entrepreneur with business plans

• Low income mass category

• Youth

• Women and senior citizens by post paid connection

TARGETING

First Mover Advantage / Product Innovations

• Airtel basically uses two appeal to connect to the users

• Emotional

• Humorous

AIRTEL ADVERTISEMENT

PORTERS GENERIC STRATEGY

Porters Generic Strategy

Differential Strategy Cost Leadership

Narrow Market Scope

Broad Market Scope

Uniqueness Competency

Low CostCompetency

BCG Matrix for Bharti Airtel

LOWHIGH

HIG

HLO

W

Mobile Services

DTH & IPTV

Broad Band

5 Force Model

5 Force Model

1 .Threat from Competition

HIGHHIGH

Wireless Market – Top 4 garnering 75% market share

Lack of differentiation among Service Providers

Cut throat Competition

Low Switching Costs

Number Portability will have –Ve Impact

Businesses & Consumers

2.Customer Bargaining Power

HIGHHIGH

3.Supplier Bargaining Power

LOWLOW

4. Threat of Substitutes.

HIGHHIGH

Landline CDMA

Video Conferencing

VOIP - Skype, Gtalk, Yahoo Messenger e-Mail & Social Networking Websites

52GROUP 7

BROADBAND SERVICES

DIMINISHING MARKET

5. Threat of New Entrant.

LOWLOW

Huge License Fees to be paid upfront & High gestation

period

Entry of MVNOs & WiMAX operators

Spectrum Availability & Regulatory Issues

Infrastructure Setup Cost - High

Rapidly changing technology

53GROUP 7

SWOT

Strength

• Market Leader

• Recognized Globally

• Strong Brand Image

• Strong New Business Development team

• Strong Financials

• Largest Telecom Player 22.6%

Weakness

• Outsourcing of core system

• Network Coverage

Opportunities

• Low Broadband Penetration, Rural

• Telephony

• Bharti Infratel – Cutting Down cost in

Rural area

• Current Tele-Density – 30.6 is still low

among developing countries

Threats

• Falling ARPU

• Intense Competition & Shortage of

Bandwidth

• New Players coming in India

• Uncertain Economic Condition

• Bharti Airtel, Annual Report -2008 http://www.bhartiairtel.in

• Investors presentation, Bharti Airtel Limited, November 2008

• Telecommunication Services, Indian Industry: A Monthly

Review, CMIE – November 2008

• Analyst Report – Bharti Airtel, Assist C. Mehta Investments

Intermediates Ltd.

• Telecommunication Sector Report – March 2008, CRISIL

• Capitaline Database http://capitaline.com

• www.Wikipedia.com/airtel/

• “Next Big Spenders – Indian Middle Class”, Business week

REFERENCES

http://capitaline.com/

Thank You!!!!!!!