Group - VI

Bharti Group - Overview

• Asia’s leading integrated telecom services provider• Largest Telecom player in India with 24% market

share• Indian telecom subscriber increasing by 8-9 mn

/month on average with total around 400mn currently

• Structured into four strategic business units - Mobile, Telemedia , Enterprise and Digital TV

Performance

Heading FY’05 FY’ 06 FY’ 07 FY’ 08 FY’ 09

Net Revenue from Operations 7944.19 11290.58 17887.99 25939.37 34155.03

Net Profit/Loss Before Tax 1564.27 2285.8 4601.37 6972.54 8161.53

Group Companies

Bharti AirTel Bharti Teletech Telecom Seychelles Comviva Tech Ltd

FieldFresh Food Bharti Retail Bharti AXA General Insurance

Bharti AXA Life Insurance

Bharti AXA Investment Managers

Centum Learning Ltd

Jursey Airtel Guernsey Airtel

Bharti Foundation Bharti Realty Bharti Infratel

Mobile services

•Growth rates were down from the previous quarter•Reason is increased competition and tariff wars.•India's telecom regulator, Telecom Regulatory Authority of India (TRAI), has reported a decline in ARPU (average revenue per user) and utilization by consumers across service providers from the first quarter of this year

Fixed Line

Rising affordability of mobile services

Fixed lines decline as mobile use surges

Impact of new entrants in 2G and 3G

DTH

•The DTH market which began commercial operations in 2003 has been able to acquire over 12 Million subscribers during the past five years

Market share of Airtel DTH is the lowest. The major reason for this may be the late entry of Airtel into the market which is in 2008

35%

20%17%

16%

8% 4%

Market Share

DD DTH

Dish TV

Tata Sky

Sun DTH

Big DTH

Airtel DTH

Broadband

Competition with BSNL

•Airtel was one of the first telecom providers to bring broadband connection to India

Bharti Retail

Bharti Retail Ltd. is a wholly owned subsidiary of Bharti Enterprises

Tie up with Wall Mart

The companies would open 10 - 15 cash-and-carry facilities over 7 years and would employ 5,000 people. Each store would occupy 50,000-100,000 square feet.

Joint partnership in agri company FieldFresh

Bharti AXA Life Insurance Company

Offers a range of life insurance and wealth management products

74:26 joint venture between Bharti Enterprises and AXA

Accrued a loss of Rs.15.5 Crores in the 2009

Accrued a loss of Rs.15.5 Crores in the 2009

Accrued a loss of Rs.15.5 Crores in the 2009

Contribution of Revenue

Segment Revenue FY Comparison

Rs. Million FY08 FY09 %Change

Mobile 217861 303601 39%

Telemedia 28484 33517 18

Enterprise - Corporate 13217 16945 28

Others 2431 42489 1648

Passive Infrastructure Services 6023 3611 -40

Sub total Revenue 311186 468100 50

Less Intersegment Eliminations 40936 98485 141

Total Revenue 270250 369615 37

Strategy of Bharti Group

Concentration on Core Competencies

Acquisition Strategy

Company has acquisition strategy to extend its fixed and cellular footprint from north and central India to south India.Global presence like in Srilanka ,Seychelles .Attempt to acquire MTN to to gain entry through a company already operating in 21 African nations.

Bharti's strength is brand management, people management and customer management

Bharti Group-BCG MatrixSBU Major

CompetitorsMarket Share of RMS Log

TransferMarket Growth (Approx)

Revenue(in Rs. Cr)

SBU Competitor

Airtel Reliance Teleservices

23.65% 18.3% 1.29 1.462 7% 36,962

Airtel DTH DD Direct 4% 35% 0.115 -.942 38.9% 25694

Bharti Broadband

BSNL Broadband

3.62% 54% 0.067 -1.173 16% 36291

Bharti AXA LIC 1.1% 62.45% 0.018 -1.754 33% 362

Bharti Retail

Pantaloon 0.07% 54.6% 0.0013 -2.892 35% 236

Bharti Group-BCG Matrix

-4-3-2-1012

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Market Growth (Approx)

Airtel

Airtel Broadband

Airtel DTH

Bharti Retail

Bharti AXA

SWOT Analysis

Strength Over 100mn users Largest Service provider in India Strong Pan India presence Strategic alliance with Syntel, Nokia

and Sony gives them access to best global technologies

Weakness Till recently did not own mobile

towers Failure of MTN deal will signal no

real market investment Data services not delivering on its

high expectations

Opportunities Strategic partenership with Blackberry Focus on expanding business in rural

areas Tie up with other companies in “Indus

Towers”

Threats Presence of close and strong

competitors Increasing comeptition from GSM &

CDMA Potential entry of global players

Growth Areas: • Airtel looking at rural marketing as long term growth segment• Gearing up to increase revenue share from VAS (Value Added Services) and

applications• Value Added Services

Growth Limiters :• Reaching Industry Limit – Teledensity expected to reach 51% by 2012• Very high competition, especially on pricing front• Falling Margins• Failure of MTN deal

Recommendations

• This over reliance on few sectors should be reduced through more focus on growth potential sectors like Insurance and Retail

• It should also go for a very aggressive growth in Latin American and African markets

• Bharti should use its strength of large network to promote its other SBUs like insurance, DTH and broadband

• Improving the quality of DTH and changing its brand name • To develop core competency in segments like fixed lines telephones and

broadband.