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report of airtel , researched by bitm guys.
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Balaji Institute of Telecom & ManagementPune
Research ReportOn
Researched by:
Vikas Sharma TM 08 - 109Lokesh Gupta TM 08 - 025Rakesh Sonar TM 08 - 091Manish Pandey TM 08 - 027Baijnath Mandal TM 08 - 068Aditya Mahakulkar TM 08 - 062
Specializations: Telecom & ITBatch 2008 - 2010
Submitted to:
Mr. Abhijeet Kumar Singh Mr. Milind M. OkaVisiting Faculty- BITM Director - BITM
1
TABLE OF CONTENTS
Chapter 1
Introduction 4
1.1 Summary of Abstract 4
1.2 Objective 5
1.3 Scope of Study 6
1.4 Methodology 6
1.4 Review of literature 7
Chapter 2
2.1 Company profile 8
2.2 Core Business Area 8
2.3 History 10
2.4 Organizational Structure 14
2.5 Products 15
2.6 Market Share 15
2.7 National Coverage 16
2.8 Financial Analysis 16
Chapter 3
3.1 Value Chain 18
3.2 SIPOC 21
3.2 Marketing Strategy 22
3.3 BCG Matrix 23
3.4 5 Force Model 23
3.5 SWOT Analysis 27
3.6 OSS / BSS 28
3.6 OSS/BSS Integration Enablers 31
3.7 Future Perspective 32
2
3.8 Our Recommendations 32
LIST OF FIGURES & CHARTS
Figures:
Fig 1 Organizational Structure 15
Fig 2 Products 16
Fig 3 National Coverage 17
Fig 4 Value Chain 18
Fig 5 SIPOC 22
Fig 6 BCG Matrix 24
Fig 7 5 Force model 24
Fig 8 Wireless Market 25
Fig 9 OSS 30
Fig 10 BSS 30
References 35
3
CHAPTER 1
INTRODUCTION
ABSTRACT
This document is the Final Research Product for BITM, titled “OVERVIEW OF TELECOM
SERVICES INDUSTRY IN INDIA & ANALYSIS OF BHARTI AIRTEL”.
ABOUT BHARTI AIRTEL
Bharti Airtel is India’s no.1 reliable network, serving at around 88 million voice & data user
subscribers. The need of research study is to study about Bharti Airtel, understanding its
various strategies that keep it ahead of all other competitors like Vodaphone, Idea, Reliance
etc.. This study is undergone through various steps of research project. The method used for the
research project are- Group Discussion, internet browsing, different graphs & chart study etc.
From this analysis we found that Bharti Airtel has the largest market share due to its calling
plans, Tariff plans and other strategies.
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 third largest cellular service provider.
More than 88 million subscribers as of 31 December 2008.
Airtel provides mobile & fixed wireless services using GSM technology across 23 telecom
circles.
Largest Telecom Company listed on Indian Stock Exchanges.
The company also has a submarine cable landing station at Chennai, which connects the
submarine cable connecting Chennai and Singapore.
4
OBJECTIVE
The aim of this research project is to study about different strategies used, different products
used by Bharti Airtel. It also includes Indian market study, Bharti Airtel Corporate Study, its
financial & Industrial study.
The following are the objectives of studying the Indian Telecom leader AIRTEL.
1. To understand the functioning of AIRTEL.
Corporate strategies
Marketing practices
Technologies.
2. To prepare an analysis of the company
SWOT analysis
Marketing analysis
Competitor analysis.
3. To enhance our knowledge about business processes of the company
5
SCOPE OF THE STUDY
This study would enable us to understand as to how the companies in the national, international
market function. Also, we can evaluate the company growth in the different-different year and
what was the marketing strategy. It also tells us that, how company work at different places in
same sector.
METHODOLOGY
Viewing the mergers & acquisitions done by the company & predicting its strategy.
Examine the research papers & annual reports published by the company.
Analyzing the information given by the company about their products, available on
company website.
6
REVIEW OF LITERATURE
Indian telecom Market Leader AIRTEL is top 5 global players in terms of subscriber base.
Keeping in mind, the fact that a telecom company is among a few industries which is less
affected by recession, we carry out the research. Our interest grew in AIRTEL as it is the largest
TSP in India and also has wide range of products and services.
On our research we have seen that much research on the various products
and services of AIRTEL have been done but AIRTEL as a whole has not been yet analyzed. So
our attempt is to touch upon every aspect of AIRTEL and thereby put forward a macroscopic
view of all its aspects ranging from its history till it’s presence situation, including its services
so as to come to a valid conclusion. SO we have used methods such as
1. Comparison: - Example data such as revenue, profit, users and so on can be
compared with that of previous year and also with competitors. It helps in comparative
evaluation of different aspects of AIRTEL and helps to understand things in a better
way.
2. Charts: - Use of pie charts and bar diagrams to interpret the available data has led to
better and easier understanding of the matter for the readers.
3. SWOT: - Certain managerial tool such as SWOT analysis has also been done to
understand the strong and weak points of its subsidiary. This shows on which factors to
concentrate upon and which factors to leave untouched. It helps to understand the
strategy that the company has adopted.
4. Pictorial Depiction: - For better understanding the core of the matter most of the
facts and figures have been depicted in pictorial form.
7
CHAPTER 2
COMPANY PROFILE
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 third largest cellular service provider.
More than 100 million subscribers as on 31 May 2009.
Airtel brand is headed by Sunil Bharti Mittal .
Airtel provides mobile & fixed wireless services using GSM technology across 23
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
Company shares are listed on The Stock Exchange, Mumbai (BSE) and The
Per Share price of Airtel in BSE is Rs 840.40 (17 may 2009).
CORE BUSINESS AREA
Mobile Services - We offer mobile services using GSM technology on 900MHz and
1800MHz bands, and are the largest wireless service provider in the country, based on
the
Number of customers. Our 85,650,733 mobile customers accounted for a market
share of 24.7% of wireless market, as on December 31, 2008. We offer post-
paid, pre-paid, roaming and value added services through our extensive sales and
distribution channel covering 1,069,706 outlets. Our network is present in 5,057
census towns and 401,882 non-census towns and villages in India, thus covering
approximately 79% of the country’s population. Our network operating centres,
which monitor the health of our mobile network are located in Gurgaon, near
Delhi, and Chennai.
8
Telemedia Services – We provide broadband (DSL) and telephone services (fixed line)
in 95 cities with growing focus on new media and entertainment solutions such as DTH
and IPTV. We had 2,619,461 customers as on December 31, 2008 of which 37.9% were
subscribing to broadband/internet services. Our product offerings in this segment
include supply and installation of fixed-line telephones providing local, national and
international long distance voice connectivity and broadband Internet access through
DSL. We also remain strongly committed to our focus on Small and Medium Business
enterprises .We provide a range of customised Telecom/ IT solutions and aim to achieve
revenue leadership in this rapidly growing segment of the ICT market. The strategy of
our Telemedia business is to focus on cities with high revenue potential, except for DTH
which is an all- India offering. Airtel digital TV is available to customers through
23,200 retail points in 120 cities across the country.
Enterprise Services - Enterprise Services provides a broad portfolio of services to large
Enterprise and Carrier customers. This division comprises the Carrier and Corporate
business units. Enterprise Services is regarded as the trusted communications partner to
India's leading organizations, helping them to meet the challenges of growth.
Carriers – Carrier business unit provides long distance wholesale voice and data
services to carrier customers as well as to other business units of Airtel. It also offers
virtual
Calling card services in the overseas markets. The business unit owns a state of
the art national and international long distance network infrastructure enabling it
to provide connectivity services both within India and connecting India to the
world. The national long distance infrastructure comprises of 90,205 kms of
optical fibre, over 1,500 MPLS and SDH POPs and over 1,250 POIs with the
local exchanges, providing a pan India reach. The international infrastructure
includes ownership of the i2i submarine cable system connecting Chennai to
Singapore, consortium ownership of the SMW4 submarine cable system and
investment in capacities across a number of diverse submarine cable systems
across transatlantic and transpacific routes.
9
Corporate – This business unit delivers end to end telecom solutions to India’s large
corporate. It serves as the single point of contact for all telecommunication needs for
corporate customers in India by providing full suite of communication services across
data, voice and managed services. It specializes in providing customized solutions to
address unique requirements of different industry verticals; BFSI, IT, ITeS,
Manufacturing and distribution, media, education, telecom, Government and PSUs and
retail among others. Backed by the alliances with leading technology companies
worldwide and state of the art infrastructure, it offers complete range of telecom
solutions. These solutions enable corporate to network their offices within India and
across the globe, provide them infrastructure to run business critical applications and
provide them means to connect with their customers, vendors and employees.
Passive Infrastructure Services – Bharti Infratel provides passive infrastructure
services on a non-discriminatory basis to all telecom operators in India. Bharti Infratel
deploys, owns and manages passive infrastructure on an all India basis. The company
had approx 61,355 towers as on December 31, 2008, out of which 35,066 towers would
be transferred to Indus Towers Ltd (a Joint Venture between Bharti Infratel, Vodafone
& Idea Cellular). An Indus tower has built 10,433 towers during April 2008 to
December 2008.
10
HISTORY
Bharti Tele-Ventures was incorporated on July 7, 1995 as a company with limited liability
under the Companies Act, for promoting telecommunications services. Bharti Tele-Ventures
received certificate for commencement of business on January 18, 1996. The Company was
initially formed as a wholly-owned subsidiary of Bharti Telecom ltd.
The chronology of events since Bharti Tele-Ventures was incorporated in 1995 is as follows:
Calendar year & Events
1995
Bharti Cellular launched cellular services'AirTel'in Delhi
1996
STET International Netherlands NV, or STET, a company promoted by Teleco
Italia, Italy acquired a 20% equity interest in Bharti Tele-Ventures.
Bharti Telenet launched cellular services in Himachal Pradesh.
1997
Bharti Telenet obtained a license for providing fixed-line services in Madhya
Pradesh circle
Bharti Telecom and British Telecom formed a 51% : 49% joint venture, Bharti BT,
for providing VSAT services
1998
First Indian private fixed-line services launched in Indore in the Madhya Pradesh
circle on June 4, 1998 by Bharti Telenet thereby ending fixed-line services monopoly
of DoT (now BSNL)
11
1999
Bharti Tele-Ventures (by acquiring a 63.45% equity interest in SC Cellular Holdings)
acquired an effective 32.36% equity interest in Bharti Mobile (formerly JT Mobiles),
the cellular services provider in Karnataka and Andhra Pradesh circles
New York Life Insurance Fund, or NYLIF, acquired a 3% equity interest in Bharti
Cellular
2000
Bharti Tele-Ventures acquired an effective equity interest of 40.5% in Bharti
Mobinet (formerly Skycell Communications), the cellular services provider in
Chennai
Bharti Tele-Ventures acquired a 30.2% equity interest of Telecom Italia in Bharti
Telenet and 18.8% from Bharti Telecom thereby making Bharti Telenet a 100%
Subsidiary of Bharti Tele-Ventures
SingTel (through its investment company Pastel Limited) acquired STET's 15.3%
equity interest in Bharti Tele-Ventures
2001
Bharti Telesonic entered into a joint venture, Bharti Aquanet, with SingTel for
establishing a submarine cable landing station at Chennai.
Bharti Cellular acquired a 100% equity interest in Bharti Mobitel (formerly Spice
Cell), the cellular services provider in Kolkata.
Bharti Tele-Ventures acquired 85% and 15% in Bharti Telespatial from Bharti
Telecom and Intel, respectively.
Bharti Tele-Ventures acquired a 44% equity interest in Bharti Cellular from British
Telecom, thereby making Bharti Cellular its 100% subsidiary.
Bharti Telenet entered into license agreements to provide fixed-line services in the
Haryana, Delhi, Tamil Nadu and Karnataka circles
Bharti Telesonic entered into a license agreement with the DoT to provide national
long distance services across India.
Bharti Telenet launched fixed line services in Haryana under the brand name of
TouchTel.
12
2002
Issue price fixed at Rs 45 per share, floor price fixed by the company. Raises Rs 834cr
Shares listed on BSE and NSE opens at 11% premium to its issue price of Rs 45.
Enters into a 5-year agreement with Escotel and ETL of the Escorts group to contract
leased line connectivity for its cellular operations.
ICICI Bank ties up with Bharti for pre-paid mobile cards via ATMs.
Sunil Mittal, Chairman & Managing Director of the company, bags Businessman of
the year award by Business India.
2003
Airtel breaks interconnectivity with Tata Teleservices in Andhra Pradesh Circle.
Air Tel launches Local direct dialling facility in Chennai circle.
Mobilises 5 m long term foreign currency borrowings for expansion of cellular
operations
Bharti Cellular unveils CareTouch service.
Punjab, Haryana get free incoming calls from Airtel.
AirTel provides SMS facilities to hearing impaired in Chennai
Goa, Maharashtra gets 'voice portal' services by Bharti Cellular.
AirTel mobile service in Chennai, today launched its GPRS (General Packet Radio
Service) network and an MMS (multi-media messaging) on the GPRS platform
Airtel surpasses 4 lakh subscriber base in Karnataka
2004
Bharti unveils new card for Mecca piligrims
AirTel enrolls 50,000 customers in its mobile service in 60 days
Launches WAP enabled portal Service in Kerala
Bharti Cellular's AirTel has extended its mobile connectivity to Karaikkal, Nagur,
Mannargudi and Kovilpalayam in Tamil Nadu circle.
Samsung India Electronics Limited has tied up with cellular operator Bharti for
bundling its mobile handsets with a connection.
Airtel launched two-way international roaming and GPRS for prepaid customers in
the Maharshtra and Goa circles
2005
13
Airtel launches video services for its GPRS customers on February 22, 2005
Airtel unveils new TV ad featuring Sachin, Sharukh
Bharti Tele-Ventures launches telecom network in Andaman & Nicobar
BTVL unveil fixed line, broadband services
Bharti inks 5-m deal with Nokia for rural network expansion
Bharti Tele Ventures - Airtel introduces BlackBerry Connect in India.
Bharti Tele Ventures announces agreement with Vodafone.
2006
Airtel unveils Re 1 STD plans
Airtel sets up customer centre
Sunil Mittal bags CEO of the Year award.
Cellebrum join hands with Airtel.
Airtel Mega unveiled in Coimbatore
Airtel joins hand with Microsoft.
2007
Bharti Airtel, telecom major, has come out with a slew of initiatives including buying
out SingTel's 50 per cent stake in joint venture under sea cable company Network i2i.
Bharti Airtel Ltd has announced the following changes in the operational leadership
Structure and roles in the Company effective April 01, 2007.
Airtel signs agreement with HTC for touch screen mobile.
ORGANIZATIONAL STRUCTURE
14
FIG 1
15
FIG 2
MARKET SHARE:
CHART 1
NATIONAL COVERAGE:
16
FIG 3
FILANCIAL ANLALYSIS:
(Revenue in US mn $)
Investor Relations: - http://www.bhartiairtel.in
CHART 2
17
VALUE CHAIN- BHARTI AIRTEL
CHART 3
CHAPTER 3
18
BSNL3542229%
Airtel2654622%
Reliance1922715%
Vodafone1548012%
Tata Commn82047%
Idea67205%
MTNL47004%
TTSL50024%
Othes32003%
REVENUE in Cr. RS
BSNL
Airet
Reliance
Vodafone
Tata Commn
Idea
MTNL
TTSL
Othes
VALUE CHAIN
FIG 4
OEM 1: Stands for original equipment manufacturers level 1.
INTEL
OEM 2: Stands for original equipment manufacturers level 2.It comprises basically the networking
elements vendors like switches, routers and gateways.
CISCO
19
EV: Stands for equipment vendor.
NOKIA
ERRICSON
HUWAEI
NI: Stands for network integrator and the operation areas are to integrate the network elements to
have a fault tolerant network infrastructure.
NO: Stands for network operators. It the basic infrastructure company.
BHARTI INFRATEL
INDUS TOWER
SP: Stands for service provider.
AIRTEL
MVNO: Stands for mobile virtual network operator. Depending upon the infrastructure they are
owning they are further classified into Full or Partial MVNO. They do not own the infrastructure or
the service rather they leverage upon their brand names.
SI: Stands for the system integrator. They have product as well as domain knowledge.
ISV: Stands for independent software vendor. They are the original developer of the software
packages.
IBM
ASP: Stands for application service provider. Organizations that host software applications on own
servers within own facilities.
INFOSYS
3PAP: Stands for 3rd party application provider. There are value added reseller and do not have
permanent contract with either service provider or the system integrator.
AFFLE
EU: Stands for the end user. The final entity who consumes the services.
20
SUBSCRIBER
CORPORATE
CA: Stands for the content aggregator. They basically do the conversion work of information into
required protocol suit.
ON MOBILE
INDIA TIMES
HUNGAMA MOBILE
CP: Stands for content provider. They are the information supplier.
MAUJ ONE 97
IMI MOBILE
SIPOC- BHARTI AIRTEL
21
There are 5 steps in the SIPOC process.
1. Supplier
2. Inputs
3. Process
4. Outputs
5. Customers
FIG 5
22
MARKETING STRATEGY
Core Value Of Airtel
• Performance
• Dynamism
• Leadership
Targeting –
• Elite
• Up market professionals
• Entrepreneur with business plans
• Low income mass category
• Youth
• Women and senior citizens by post paid connection
Advertisement-
Airtel basically uses two appeals to connect to the users
• Emotional
• Humorous
23
BCG MATRIX-
FIG 6
5 FORCE MODEL
FIG 7
24
1. Threat from Competition (High)
FIG 8
2. Customer Bargaining power(High)
Lack of differentiation among Service Providers
Cut throat Competition
Low Switching Costs
Number Portability will have –Ve Impact
Businesses & Consumers.
25
3. Supplier Bargaining power (Low)
4 Threats of Substitutes (High)
Landline - Outdates
CDMA
Video Conferencing - Broadband services
VOIP - Skype, Gtalk, Yahoo Messenger
e-Mail & Social Networking Websites
5 Threat of new Entrants (Low)
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
26
SWOT ANALYSIS
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
27
OSS/BSS
OPERATION SUPPORT SYSTEM / BUSSINESS SUPPORT SYSTEM
Airtel systems architecture consists of three layers:
1. Business Support System (BSS) layer
2. Operations Support System (OSS) layer
3. Networks layer
In addition to these traditional layers, integration enablers are needed to provide
the ability to successfully interconnect OSS and BSS.
The BSS layer has a focus towards customers and business partners. The BSS also
manages most of the financial transaction processing as well as act as a front-end
towards the end-users of the systems.
The OSS layer contains the infrastructure for technical network management. The OSS
systems are built around product, service and resource inventories.
The networks layer contains the network operator’s network infrastructure. Multiple
networks can be managed simultaneously by one system.
The OSS and BSS systems should communicate using integration enablers in order
to maximize application plug ability and overall solution flexibility.
28
OSS provides components, such as
Topology – Network and service topology component.
Inventory – Network and service inventories.
Service activation – Component for interfacing towards different service directories
and retrieving activation context.
Network activation – Abstraction service utilizing needed specific service components
Fault management – Component for alarm monitoring and processing for network
elements.
Performance management – Component for performance data collection,
KPI calculation and reporting
Business Process Engine (BPE) – Managing OSS sub-processes (such as service
deployment) which are integrated to higher-level business processes.
BSS layer
A self service (web) portal, where the subscriber is able to manage his subscription
and activate new services and deactivate unwanted ones:
Customer Relationship Management (CRM) system
Order management
Subscriber management
Pricing and rating information
Charging & billing system
29
OSS:
BSS:
FIG 9 & 10
30
AIRTRL OSS BSS INTEGRATION ENABLERS
The integration enablers consist of the integration technology platform (OSS and IT
middleware), with both generic framework and OSS/BSS-specific abstraction services,
which are accessed through standard APIs when possible (please refer to the picture below).
OSS/BSS integration enablers in brief:
OSS/BSS and OSS Access APIs provide standard interfaces towards OSS applications
and middleware software components to enable simple OSS/BSS integration. APIs are
mainly based on the OSS/J, when a standard interface exists.
Custom API toolkits (e.g. EAI tools) are used for integrating systems without
standard interfaces
Standard OSS middleware provides the generic framework and OSS specifi c
abstraction services such as Service inventory and Service activation.
Standard IT middleware, such as J2EE container and database.
Standard service management interfaces (e.g. Web Services)
BSS:
IBM Daksha, Mphasis, Teletech, HTMT handles call center outsourcing for AIRTEL.
IBM Daksha handles and control customer care of AIRTEL.
TCS is providing BILLING solution of AIRTEL.
OSS:
ALCATEL LUCENT handles the network management part of AIRTEL.
NORTEL handles performance management.
31
FUTURE PERSPECTIVE:
Concentration on Rural Market Penetration.
3G Deployment.
Become Market Leader on Internet / Broadband.
Become Market Leader on DTH and IPTV.
Emerge as Global Telecom Player.
Benchmark for the other telco’s.
Defend the market Share.
Increase subscriber Base upto 200 mn till 2013.
Merger and acquisitions.
OUR RECOMMENDATION:
The teledensity in urban and rural india is not that much high as compare to other
countries like china, US.
The opportunity for Airtel to Penetrate the market.
The Internet Broadband user is also very low, so there is good opportunity to penetrate
the market.
DTH is emerging Technology, so it should much concentrate on marketing of DTH.
SO many new players are entering in to the indian telecom market, so much
concentration should be defend the market share and leadership.
Approximately 10 percent of revenue comes from Value added services, so should be
try to increase it.
Merger and acquisition should take place, for entering into global market.
REFERENCES
32
WEB SITES
http://www.bhartiairtel.in .
http://capitaline.com .
www.pluggd.in .
www.analysismason.com .
www.payin2.com
www.ibef.org
www.shop.informatm.com
www.wikipedia.com/airtel
www.telecomfourm.com
MAGZENES:
Voice and Data.
Tele.net
Telecom ERA.
Telecom Asia.
REPORTS:
IMRB Research reports.
Investors presentation, Bharti Airtel Limited, November 2008
Analyst Report – Bharti Airtel, Assist C. Mehta Investments Intermediates Ltd.
Telecommunication Sector Report – March 2008, CRISIL.
Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November 2008
33