TELECOM INDUSTRYTELECOM INDUSTRY ' ' Indian Telecom Industry' Indian Telecom Industry' is the third largest is the third largest

and fastest growing in the world with nearly 200 and fastest growing in the world with nearly 200 million connections.million connections.

Subscriber growth rate is 45%Subscriber growth rate is 45% The wireless technologies currently in use ' The wireless technologies currently in use '

Indian Telecom Industry Indian Telecom Industry ' ' Global System for Mobile Communications Global System for Mobile Communications

(GSM) (GSM) Code Division Multiple Access (CDMA). Code Division Multiple Access (CDMA).

There are primarily 11 GSM and 4 CDMA There are primarily 11 GSM and 4 CDMA operators providing mobile services in 19 operators providing mobile services in 19 telecommunication circles and 4 metro cities, telecommunication circles and 4 metro cities, covering more than 2000 towns across the covering more than 2000 towns across the country.country.

Telecom Industry in India Telecom Industry in India ' is regulated by ' is regulated by 'Telecom Regulatory Authority of India' (TRAI). 'Telecom Regulatory Authority of India' (TRAI).

Three types of players exist in ' Three types of players exist in ' Indian Telecom Indian Telecom Industry Industry ' :' : State owned companies like - BSNL and State owned companies like - BSNL and

MTNL. MTNL. Private Indian owned companies like - Private Indian owned companies like -

Reliance Infocomm and Tata Teleservices. Reliance Infocomm and Tata Teleservices. Foreign invested companies like – Hutchison-Foreign invested companies like – Hutchison-

Essar , Bharti Tele-Ventures, Escotel, Idea Essar , Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications Cellular, BPL Mobile, Spice Communications etc. etc.

MARKET SHAREMARKET SHARE 

BHARTI ENTERPRISESBHARTI ENTERPRISES

BHARTI ENTERPRISES

BharatiTeletech

Ltd.

Telecom Seychelles

Ltd.

Bharti Telecom

Ltd.

Jersey AirtelLtd.

Bharti AXA Insurance

Co. Ltd

Bharti Telesoft

Ltd.

Field Fresh

Foods Pvt.Ltd.

Bharti Retail Pvt.

Ltd.

Teletech Services(India) Ltd. Bharti Airtel

Ltd

BHARTI AIRTEL BHARTI AIRTEL LIMITEDLIMITED Established in June 07, 1995 as a Public Limited Established in June 07, 1995 as a Public Limited

Company.Company. Largest Cellular Operator in India.Largest Cellular Operator in India. Listed on Bombay Stock Exchange (BSE) & Listed on Bombay Stock Exchange (BSE) &

National Stock Exchange of India Limited (NSE) National Stock Exchange of India Limited (NSE) Operational Network: Operational Network:

Provides GSM mobile services in all the 23 Provides GSM mobile services in all the 23 telecom circles in India, and was the first telecom circles in India, and was the first private operator to have an all India presence.private operator to have an all India presence.

Provides broadband (DSL) and telephone Provides broadband (DSL) and telephone services (fixed line) in 94 cities in Indiaservices (fixed line) in 94 cities in India

Mobile Services: Mobile Services: This unit constitutes the largest portion of the This unit constitutes the largest portion of the

company’s business in terms of total revenues and company’s business in terms of total revenues and customers. customers.

The company’s mobile customer base accounts for The company’s mobile customer base accounts for 22.9% of the overall wireless (GSM+CDMA) market. 22.9% of the overall wireless (GSM+CDMA) market.

Broadband and Telephone ServicesBroadband and Telephone Services This unit provides fixed line and broadband services This unit provides fixed line and broadband services

over the same copper lines.over the same copper lines. Plans to introduce IPTV (Internet Protocol Television)Plans to introduce IPTV (Internet Protocol Television)

Enterprise Services : Enterprise Services : Two sub-units are – Two sub-units are – Carriers : It handles long distance national & Carriers : It handles long distance national &

international mobile, broadband and telephone international mobile, broadband and telephone services.services.

Corporates: It provides customised integrated voice Corporates: It provides customised integrated voice and data communications solutions to corporate and data communications solutions to corporate customers.customers.

STRATEGIC BUSINESS STRATEGIC BUSINESS UNITUNIT

PERFORMANCE AT A PERFORMANCE AT A GLANCEGLANCE

Particulars Units Full Year Ended March 31

    2003 2004 2005 2006 2007

Total Customer Base (In 1000) 3,443 7,141 11,842 20,926 39,013

Mobile Services (In 1000) 3,071 6,504 10,984 19,579 37,141

Broadband and Telephone Services (In 1000) 372 637 857 1,347 1,871

             

Revenue Rs. Mn 30,554 50,369 81,558 116,641 184,202

Profit After Tax Rs. Mn (2,051) 5,837 12,116 20,279 40,621

Return on Capital employed % 0.9 9.9 15.7 21.5 31.6

ANSOFF’S MODELANSOFF’S MODELMARKET PENETRATION STRATEGYMARKET PENETRATION STRATEGY(Increase Market Share)(Increase Market Share) Attract users of competitors products : Full

Talktime Convert nonusers into users :Lifetime plans to

attract low income groups Increase product usage : Easy Recharges Increase the frequency of purchase : Recharge

through ATM ; Internet based recharging through leading banks ; Products available on Indiatimes shopping and Rediff shopping

Find new applications for current users : Collaboration with banks to facilitate fund transfer through mobile; Global Money Transfer.

NEW PRODUCT DEVELOPMENTNEW PRODUCT DEVELOPMENT

Product quality improvement strategy : Good mobile coverage.

Product feature additions strategy : Wap Services ; EDGE Service; Airtel Live ( Cricket news, downloads, astrology, travel etc.) ;

New product development strategy : Blackberry

MARKET DEVELOPMENT MARKET DEVELOPMENT (Intensive)(Intensive)

  Expand geographically : Expand geographically : Entering new Entering new markets in the west (U.K) ; Launching mobile markets in the west (U.K) ; Launching mobile services in Sri Lanka ; GSM license in Bhutanservices in Sri Lanka ; GSM license in Bhutan

Target new segments : Target new segments : CallHome service for CallHome service for NRIs living in USA to be in touch with their loved NRIs living in USA to be in touch with their loved ones.ones.

DIVERSIFICATIONDIVERSIFICATION

Broadband Services.Broadband Services. Telephone Services - Touchtel. Telephone Services - Touchtel. Consultancy services to industry verticals Consultancy services to industry verticals

like Banking, Financial services and like Banking, Financial services and Insurance, ITES, etc. to meet their Insurance, ITES, etc. to meet their telecom needs.telecom needs.

FOUR PsFOUR Ps

FIVE PRODUCT LEVELSFIVE PRODUCT LEVELS

Core Product: Communication; Core Product: Communication; Basic Product: Mobile telephonyBasic Product: Mobile telephony Expected Product: Strong network Expected Product: Strong network

coveragecoverage Augmented Product: Caller tunes, Augmented Product: Caller tunes,

Wallpaper, Ring tones, WAP, SMS Wallpaper, Ring tones, WAP, SMS alerts, Voice SMS alerts, Voice SMS

Potential Product:Potential Product:

PRODUCTPRODUCT

Product Variety:Product Variety: PrepaidPrepaid Postpaid Postpaid Value added servicesValue added services BlackberryBlackberry Business solutionsBusiness solutions

PRICEPRICE

Easy payment options. Anytime Easy payment options. Anytime AnywhereAnywhere

Easy billingEasy billing Flexible Credit limitFlexible Credit limit Happy recharge ( full talktime Happy recharge ( full talktime

everytime)everytime)

PLACEPLACE

Operating in 23 circles in IndiaOperating in 23 circles in India Strong distribution network with Strong distribution network with

approximately 160,000 family of approximately 160,000 family of retailersretailers

Over 500 exclusive outletsOver 500 exclusive outlets Operation in foreign countriesOperation in foreign countries

PROMOTIONPROMOTION Celebrity endorsements ( Sachin Tendulkar,

Amitabh Bachhan, Shahrukh Khan, AR Rehman, Madhavan,Kareena Kapoor)

Loyalty rewards Lower tariffs Discount coupons Talk time schemes Special season offers Innovative advertisement campaigns Mass promotion campaigns Setting up of exclusive stalls to promote existing

and new products. Corporate Social Responsibility: “Satya Bharti

School” providing primary education for underprivileged children in rural areas.

SEGMENTATIONSEGMENTATION Geographic Segmentation : 23 telecom circles Geographic Segmentation : 23 telecom circles

(different tariff for different circles)(different tariff for different circles) Demographic Segmentation :Demographic Segmentation :

Age : Senior citizen.Age : Senior citizen. Gender : Women.Gender : Women. Occupation : Students ( Youth Plan) , Corporate .Occupation : Students ( Youth Plan) , Corporate . Income: All income groups ( Different plans for various Income: All income groups ( Different plans for various

income groups)income groups)

AirTel positions itself in the market as a very AirTel positions itself in the market as a very reliable, effective and consumer savvy brandreliable, effective and consumer savvy brand

Positioning as a brand which people can trust in Positioning as a brand which people can trust in terms of quality and performancesterms of quality and performances

Plans to position itself as complete telecom Plans to position itself as complete telecom service provider with a strong presence in global service provider with a strong presence in global network network

POSITIONINGPOSITIONING

Suppliers Suppliers (supplier (supplier power)power)

Ericsson – Ericsson – GSM Network GSM Network Management Management Service Service ProviderProvider

Industry Industry CompetitorsCompetitors Hutch, BSNL, Hutch, BSNL, Idea, MTNL, Tata Idea, MTNL, Tata Indicom, Reliance Indicom, Reliance

SubstitutesSubstitutesCDMA CDMA technology, technology, Internet Internet messengers, messengers, Net-to-Phone Net-to-Phone

Potential Potential entrantsentrants-Entry of Global Entry of Global Telecom providersTelecom providers

BuyersBuyers

Loyalty shift.Loyalty shift.

FIVE FORCE ANALYSISFIVE FORCE ANALYSIS

COMPETITOR – HUTCHCOMPETITOR – HUTCH Hutch is the second largest cellular operator in Hutch is the second largest cellular operator in

India in terms of revenue.India in terms of revenue. Operates in 16 telecom circles.Operates in 16 telecom circles. Subscriber base : 26.73 Million.Subscriber base : 26.73 Million. Market share : 20% of the GSM market.Market share : 20% of the GSM market. Highest average revenue per user in industry.Highest average revenue per user in industry. Vodafone has acquired a 67% of holding in Vodafone has acquired a 67% of holding in

Hutch-Essar for Hutch-Essar for US$11.1 billionUS$11.1 billion

PrepaidPrepaid PostpaidPostpaid Calling CardsCalling Cards HandyPhoneHandyPhone Hutch PCOHutch PCO Hutch World (GPRS service)Hutch World (GPRS service) Hutch services on mobileHutch services on mobile PlanetHutch servicesPlanetHutch services Mobile E-mail solutionsMobile E-mail solutions

SERVICE PORTFOLIOSERVICE PORTFOLIO

AIRTEL vs HUTCH AIRTEL vs HUTCH (Revenue Comparison)(Revenue Comparison)

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FY - 2005-06 FY 2006-07

Year

Rev

enu

e (

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)

Airtel Hutch

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FY - 2005-06 FY 2006-07

Year

Rev

enu

e (

in C

rore

)

Airtel Hutch

11291

17888

6837

10565

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FY - 2005-06 FY 2006-07

Year

Rev

enu

e (

in C

rore

)

Airtel Hutch

RECOMMENDATIONSRECOMMENDATIONS

Airtel should consider acquisition of domestic and Airtel should consider acquisition of domestic and local GSM service providers, thereby increasing its local GSM service providers, thereby increasing its market share. E.g. , acquisition of Spice.market share. E.g. , acquisition of Spice.

It has to be quick to adapt to and bring new It has to be quick to adapt to and bring new emerging technologies like 3G and 4G in India at emerging technologies like 3G and 4G in India at affordable cost.affordable cost.

It should start Mobile Bill Payment Van services.It should start Mobile Bill Payment Van services. It should put more focus on entering into new It should put more focus on entering into new

countries and establishing itself as a global brand.countries and establishing itself as a global brand. It should expand its rural network coverage to It should expand its rural network coverage to

widen its customer base.widen its customer base.

THANK YOUTHANK YOU