Role of Multinational Company in Bangladesh.

A study on

Bharti Airtel (Airtel Bangla in Bangladesh)

An assignment

Submitted in partial fulfillment

Of the requirements for the degree of

Master of Business Administration

At

Independent University, Bangladesh

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Assignment

On

International Business

(MBA- )

Submitted

To

Dr. Shibly Noman Khan

Associate professor

Business administration

Submitted

By

Md. Tashrique Shahab

ID# 1015004

Masters of Business Administration Program

Department Of Business Administration

Independent University, Bangladesh

2

Declaration

This is to notify that this assignment submitted in partial fulfillment of the requirement for the

degree of Masters of Business Administration of Independent University Bangladesh is my

original work and it has not been submitted else where for the award of any other degree,

diploma or other similar title or prize.

Md. Tashrique Shahab

M.B.A Program

ID# 1015004

Independent University Bangladesh

_____________

Signature

Independent University, Bangladesh

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9th March’ 2011

Dr. Shibly Noman Khan

Associate professor

Department of Business Administration

Independent University Bangladesh,

Subject: Submission of Term paper.

Sir,

It’s my great pleasure to submit the Assignment. A study was making on a multinational

company that you have asked us to prepare and I have select “Airtel” to study. I tried my best to

follow the instruction that was given by you.

Throughout this study I tried to identify company’s background, product line, organization

structure and in Bangladesh perspective- Investment, employe size, industrial setup, marketing

techniques and detail information on that. While preparing this assignment I took help from

internet.

I sincerely hope that you will enjoy this assignment as I enjoyed while writing it. If you need any

further clarification or quarry in interpreting this analysis, I will be glad to oblige you.

Thank you,

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Table of content:

1.0 Introduction 7

2.0 Company Background 8

3.0 Product/service line 9

4.0 Organization structure 12

5.0 Bangladesh perspective 13

5.1 Investment 14

5.2 Employee size 14

5.3 Industrial setup 14

5.4 Marketing plan 15

5.5 How they entered 16

6.0 Lesson I learned 16

7.0 Conclusion 17

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Bharti Airtel

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1.0 Introduction:

Bharti Airtel Limited commonly known as airtel is an Indian telecommunications company that

operates in 19 countries across South Asia, Africa and the Channel Islands. It operates a GSM

network in all countries, providing 2G or 3G services depending upon the country of operation.

Airtel is the fifth largest telecom operator in the world with over 207.8 million subscribers across

19 countries at the end of 2010. It is the largest cellular service provider in India, with over 152.5

million subscribers at the end of 2010. Airtel is the 3rd largest in-country mobile operator by

subscriber base, behind China Mobile and China Unicom. Airtel also offers fixed line services

and broadband 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 this Cisco

Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for

networking competency, service, support and customer satisfaction set forth by Cisco. The

company also provides land-line telephone services and broadband Internet access in over 96

cities in India. It also acts as a carrier for national and international long distance communication

services. The company has a submarine cable landing station at Chennai, which connects the

submarine cable connecting Chennai and Singapore. It is known for being the first mobile phone

company in the world to outsource everything except marketing and sales and finance. Its

network is maintained by Ericsson, Nokia Siemens Network and Huawei, business support by

IBM and transmission towers by another company (Bharti Infratel Ltd. in India). Ericsson agreed

for the first time, to be paid by the minute for installation and maintenance of their equipment

rather than being paid up front. This enabled the company to provide pan-India phone call rates

of Rs. 1/minute (U$0.02/minute). Call rates have come down much further. During the last

financial year [2009-10], Bharti has roped in a strategic partner Alcatel-Lucent to manage the

network infrastructure for the Telemedia Business. The company is structured into four strategic

business units - Mobile, Telemedia, Enterprise and Digital TV. The Telemedia business provides

broadband, IPTV and telephone services in 89 Indian cities. The Digital TV business provides

Direct-to-Home TV services across India. The Enterprise business provides end-to-end telecom

solutions to corporate customers and national and international long distance services to telcos.

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2.0 Company Background:

Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with

Germany's Siemens to manufacture the company's push-button telephone models for the Indian

market. In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his

company became the first in India to offer push-button telephones, establishing the basis of

Bharti Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing

capacity elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also

launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal

won a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the

cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular

service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT

Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti

acquired control of Sky cell Communications, in Chennai. In 2001, the company acquired

control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was

listed on Mumbai Stock Exchange and National Stock Exchange of India. In 2003, the cellular

phone operations were re branded under the single Airtel brand. In 2004, Bharti acquired control

of Hexacom and entered Rajasthan. In 2005, Bharti extended its network to Andaman and

Nicobar. In 2009, Airtel launched its first international mobile network in Sri Lanka. In 2010,

Airtel began operating in Bangladesh and 16 African countries. Today, Airtel is the largest

cellular service provider in India and fifth largest in the world.

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3.0 Product/Service Line:

3.1 In India:

Mobile service: Airtel has nationwide presence and is the market leader with a market share of

almost completely (as of May 2010). It is 6th most valued brand according to an annual survey

conducted by Brand Finance and The Economic Times in 2010. On 19 October 2004, Airtel

announced the launch of a BlackBerry Wireless Solution in India. The launch is a result of a tie-

up between Bharti Tele-Ventures Limited and Research in Motion (RIM). The Apple iPhone 3G

was rolled out in India on 22 August 2008 by Airtel & Vodafone. Both the cellular service

providers rolled out their Apple iPhone 3GS in the first quarter of 2010. However, high prices

and contract bonds discouraged consumers and it was not as successful for both the service

providers as much as the iPhone is successful in other markets of the world. There has been lot

of criticism about Airtel for its unauthorised VAS activation. Many of its services were activated

automatically according to a complaint forum. In return Airtel launched STOP/START 121

services for such issues.

3G: On May 18, 2010, 3G spectrum auction was completed and Airtel will have to pay the

Indian government 12,295 crore (US$2.67 billion) for spectrum in 13 circles, the most amount

spent by an operator in this auction. Airtel won 3G licences in 13 telecom circles of India:

Andhra Pradesh, Assam, Bihar, Delhi, Himachal Pradesh, Jammu & Kashmir, Karnataka,

Mumbai, Rajasthan, Tamil Nadu, Uttar Pradesh (East), West Bengal and North East. On 20

September 2010, Bharti Airtel said that it has given contracts to Ericsson India, Nokia Siemens

Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G services in

the country. These vendors will plan, design, deploy and maintain 3G-HSPA (third generation,

high speed packet access) networks in 13 telecom circles where the company has won 3G

licences. While Bharti Airtel has awarded network contracts for seven 3G circles to Ericsson

India, NSN would manage networks in three circles. Chinese telecom equipment vendor Huawei

Technologies has been introduced as the third partner for three circles. On January 24, 2011,

Airtel launched 3G service in Bangalore, Karnataka - its largest circle by revenue. With this

launch Bharti Airtel becomes the third private operator (fifth overall) to launch its 3G services in

the country following Reliance Communications and Tata Docomo. The operator will is

expected to launch 3G services across 40 cities (11 of which are expected to be in Karnataka) in

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13 telecom circles by March 2011. Airtel plans to cover 1,000 cities across these 13 circles by

the end of March 2012. The company, which has 3G licenses for 13 circles, is also in talks with

other service providers to roll out the services in the remaining 9 circles as part of its roaming

offerings.

3.2 In Bangladesh:

There are basically here types of product.

Prepaid

Postpaid

International roaming

Pre paid:

Different people love different things. To cater to all user needs, airtel offers 3 different packages

in one prepaid connection. The airtel Prepaid category is divided into four segments:

1. Adda

2. Golpo

3. Kotha

Adda- Someone who loves to keep in touch with a close group of friends. A person likes to

browse the net when bored and make the most of his/her time on phone. 'adda' will give the

maximum fnf and all that at fantastic rates.

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Golpo- Someone who loves making long conversations, our 'golpo' package with 24 hrs flat tariff

to any number is something you will fall in love with. Talk to any number anytime at a fixed flat

rate.

Kotha- Sharing every little moment with the ones user loves with airtel 'kotha'-the package plan

with 1 sec pulse from the very first second.

Post-paid:

Their postpaid which comes with 2 packages is designed to cater to both users professional and

personal communication needs. It has 2 parts.

1. Airtel classic

2. Airtel advantage

Airtel classic- airtel classic offers flexible tariff plans which will help users to explore a wide

range of services and keep overall cost to a reasonable limit.

Airtel advantage- airtel advantage comes with an attractive flat tariff plan, large close calling

circle which makes communication simple.

International roaming:

With Airtel, user does not have to worry about roaming around the world. No matter where in

the world he/she travels, Airtels vast roaming coverage will keep user seamlessly connected.

International Roaming provides users the freedom of using his/her Airtel number when he/she

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travels outside Bangladesh. Company empowers user to roam anywhere & everywhere around

the globe. However, International Roaming is available only to Airtel postpaid user

4.0 Organization Structure:

As an outcome of a restructuring exercise conducted within the company; a new integrated

organizational structure has emerged; with realigned roles, responsibilities and reporting

relationships of bharti’s key team players. With effect from March 01, 2006, this unified

management structure of 'One airtel' will enable continued improvement in the delivery of the

Group’s strategic vision.

Bharti airtel - organization structure:

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Airtel Bangla

Bangladesh perspective

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5.0 Company Background in Bangladesh:

Airtel Bangladesh has 3.2 million mobile customers and offers mobile services across 64 districts

of Bangladesh with a distribution network of over 59,665 retailers across the country. The

burgeoning economy of Bangladesh coupled with low Tele-density and a youth-strong

population

5.1 Investment:

Bharti Airtel is making a fresh investment of USD 300 million to rapidly expand the operations

of Warid Telecom and have management and board control of the company. This is the largest

investment in Bangladesh by an Indian company. Dhabi Group continues as a strategic partner

retaining 30% shareholding and has its nominees on the Board of the Company. The new

funding is being utilized for expansion of the network, both for coverage and capacity, and

introduction of innovative products and services. As a result of this additional investment, the

overall investment in the company will be in the region of USD 1 billion.

5.2 Employee size:

Airtel is the largest cellular service provider in India and fifth largest in the world with 24,501

employee (December 10). In December 1009 the number of employee was 18,619 and it is

increasing day by day. In Bangladesh the number of employee remains almost same after it

become Airtel bangle from Warid telecom. But after being Airtel 400 Bangladeshi employee was

terminated as Indian employee took the place.

5.3 Industrial setup:

Airtel Bangladesh Ltd. is a GSM-based cellular operator in Bangladesh. Airtel Bangladesh is the

sixth mobile phone carrier to enter the Bangladesh market, and launched commercial operations

on May 10, 2007. Warid Telecom International LLC, an Abu Dhabi based consortium, sold a

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majority 70% stake in the company to India's Bharti Airtel Limited for US$300 million. Bharti

Airtel Limited will take management control of the company and its board, and rebranded the

company's services under its own Airtel brand from 20th December, 2010. The acquisition has

been approved by Bangladesh Telecommunication Regulatory Commission (BTRC) while the

investments plan has been submitted under which Bharti is set to pay off Warid’s debts of

BDT2.3 billion (USD33 million) to local financial institutions along with massive network

expansion under an initial BDT21 billion budget. In January 2010, Bharti Airtel Limited, Asia’s

leading integrated telecom services provider, acquired 70% stake in Warid Telecom, Bangladesh,

a subsidiary of the UAE-based Abu Dhabi Group. This is Bharti Airtel’s second operation

outside of India. The company launched its mobile services in Sri Lanka in January 2009 on a

state-of-the-art 3.5G network. On July 19, 2007 Warid Telecom announced in major dailies of

having achieved one million subscribers in the first of 70 days of operation. As of December,

2009 Warid has secured 2.99 million subscribers and is ranked fourth among the six operators.

5.4 Marketing Plan:

Airtel provides both post-paid and pre-paid connection plans. The post-paid plan is branded and

marketed across the country under the name airtel Postpaid, which means leader or royalty. The

pre-paid segment is branded and marketed as airtel Prepaid. Airtel-Postpaid and Airtel Prepaid

user enjoy various value added services(VAS), such as SMS, MMS, GPRS, 64K SIM, Dual SIM

product, Corporate packages for product advertising via SMS, and a host of other features.

Symbol& logo: The unique symbol of company is an interpretation of the ‘a’ in airtel. The

curved shape & the gentle highlights on the red color make it warm & inviting, almost as if it

were a living object. It represents a dynamic force of unparalleled energy that brings it and its

customer’s closer. Company’s specially designed logo type is modern, vibrant & friendly. It

signals our resolve to be accessible, while the use of all lowercase is company’s recognition for

the need for humanity. Red is part of our heritage. It is the color of energy & passion that

expresses the dynamism that has made airtel the success it is today, in India, and now on the

global stage.

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5.5 How they entered:

Bharti Airtel is making a fresh investment of USD 300 million to rapidly expand the operations

of Warid Telecom and have management and board control of the company. This is the largest

investment in Bangladesh by an Indian company. Dhabi Group continues as a strategic partner

retaining 30% shareholding and has its nominees on the Board of the Company. Warid Telecom

(Bangladesh) whose 70% stake was acquired by Indian telco Bharti Airtel will be renamed Airtel

Bangla Ltd and will be operational under this name by the end of this month. The acquisition has

been approved by Bangladesh Telecommunication Regulatory Commission (BTRC) while the

investments plan has been submitted under which Bharti is set to pay off Warid’s debts of

BDT2.3 billion (USD33 million) to local financial institutions along with massive network

expansion under an initial BDT21 billion budget.

6.0 Lesson I learned:

Bharti Airtel is India’s largest and fifth telecommunication company in the world. It contains

24,501 employee and its annual revenue is $9.29 billion and profit $ 1.99 billion (December 10).

It started its journey in 7th July 1995. In Bangladesh it launched its operation in 20th December

2010 with a huge fresh investment of 300 million. Previously this service was operated by Warid

telecom a UAE-based Abu Dhabi Group. Later Airtel purchased 70% of its share and began to

provide service in Bangladesh. It is a good sign for Bangladesh that foreign investors are

interested in investing in the country and participating to active country’s economy as well as

contributing to solve unemployment problem. On the other hand there are some disadvantages

also. It taking millions of national currency outside, pressuring domestic companies with better

business strategies, bring customers who are the users of domestic product/service. For example

the cheap call rate of airtel attracted the service holders who used TeleTalk and most alarming

sign is to entering foreign employee.

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7.0 Conclusion:

Creating value for customers, employees, investors, partners, vendors and the society at large lie

sat the root of company’s fundamental business strategy. The core principles of trust and

transparency have come a long way in helping it to develop and nurture long-term relationships

with its key stakeholders. The performance exudes from Airtel’s belief in and commitment to the

telecom sector; and translates into creating innovative exciting opportunities for one and all.

Airtel believes Enriching lives means putting the customer at the heart of everything it do. It will

meet their needs based on its deep understanding of their ambitions, wherever they are. By

having this focus airtel will enrich its own lives and those of its other key stakeholders. Only

then will it be thought of as exciting, innovation, on their side and a truly world class company.

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Bibliography:

Google, Yahoo, Answer.com,

Marketing Strategy Comparison of Airtel and Hutch

Reference:

Airtel official website (airtel.com)

Airtel Bangla official website (http://www.bd.airtel.com/)

Bharti Airtel encyclopedia

Airtel Banhla encyclopedia

Banglasedh Directory- Airtel Bangladesh

Wireless Federation- Warid Bangladesh renamed as Airtel Bangla

Bharti Airtel Limited - Quarterly report on the results for the third quarter and nine months ended December 31, 2010

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