esr on airtel
DESCRIPTION
It gives an idea of the Enviromental Scanning of Airtel as a whole prepared wholly to give an insight about what the company is doing.TRANSCRIPT
![Page 1: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/1.jpg)
Environmental Scanning Reporton
![Page 2: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/2.jpg)
Bharti Airtel
• Incorporated on July 7, 1995 • Largest Private Integrated Telecom Company in
India• 4th Largest Wireless Operator in the World• Largest Telecom Company listed on Indian Stock
Exchange
2
![Page 3: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/3.jpg)
Milestones1995-1996• Launches Airtel in Delhi & HP• BT acquires stakes in Airtel1999-2000• Becomes largest private telecom
player• JV with Singtel2001-2002• Launches Indiaone• Launches India’s first private
submarine cable• Initial IPO• Introduces AR Rehman Signature
Tone• Airtel_Jingle_-_FluteOnly_-
_Original.mp3
2003-2004• SA with IBM & Ericsson• Launches Blackberry• First private player to launch mobile
service in J&K2006-2007• SA with Google,• SA with Microsoft• Forays into Srilanka and USA
![Page 4: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/4.jpg)
The Company is first :
• To launch full roaming service on pre-paid in the country.
• To launch 32K SIM cards.• In Asia to deploy the multi band feature in a wireless
network for efficient usage of spectrum.• To deploy Voice Quality Enhancers to improve voice
quality and acoustics.• Telecom company in the world to receive the ISO
9001:2000 certification from British Standards Institute.
![Page 5: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/5.jpg)
Awards• CNBC-TV18 India Business Leader Award for the Outstanding Company of the year,
2007 • Top honours at the NDTV Profit Business Leadership Awards 2007• Among the top 10 best performing companies in the world according to
BusinessWeek IT 100 list • "Indian Mobile Operator of the Year 2005” • 'The Best Asian Telecom CEO' award. • Asia's 'Best GSM Carrier’
![Page 6: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/6.jpg)
Integrated Telecom Company
Mobile Services– Mobile and fixed
wireless service– GSM technology– Value added services like
Hello Tunes, GPRS, Voice Mail, call conference, call wait, call divert, SMS
Enterprise Services– Internet – VPN – IPLC– VSAT– Audio & Video conferencing. Telemedia Services– Fixed Line– Broadband– DTH
6
![Page 7: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/7.jpg)
Business Segments
![Page 8: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/8.jpg)
Indian Telecom Sector• Fastest Growing Sector – CAGR 22% (2002-07)• Second Largest Telecom Market• Lowest Tariffs• Low Teledensity
8
225.21206
140.398.4
7653
19.9
5.17.0
9.112.8
18.3
0
50
100
150
200
250
2002–03 2003–04 2004–05 2005–06 2006–07 2007–08 (asof June2007)
Sub
scrib
ers
(in m
illion
)
0
4
8
12
16
20
24
Tel
eden
sity
(in
per
cent
)
Telecom Subscriber Base Teledensity
![Page 9: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/9.jpg)
99
0.230.22
0.19
0.170.16
0.11 0.11 0.11
0.09
0.05 0.050.04
0.030.02
0
0.05
0.1
0.15
0.2
0.25
Be
lgiu
m
Ita
ly
UK
Fra
nce
Bra
zil
Ph
ilip
pin
es
Ta
iwa
n
Arg
en
tin
a
Ma
laya
sia
Ho
ng
Ko
ng
Th
aila
nd
Pa
kis
tan
Ch
ina
Ind
ia
US
DINDIAN CONSUMERS GET THE WORLD’S LOWEST MOBILE TARIFFS
Source: Merrill Lynch Global Matrix - Q1 2007
![Page 10: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/10.jpg)
Health Indicators
• Average Revenue Per User (ARPU) • Churn • Minutes of Usage • Total Customers
>>
![Page 11: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/11.jpg)
ARPU TRENDS
![Page 12: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/12.jpg)
<<<<<<
84
159179
315 320 323 326
461
Russia Malaysia Australia Korea Singapore China Thailand India
Source: Merrill Lynch Global Matrix – Q1 2007
HIGHEST MINUTES OF USAGE
![Page 13: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/13.jpg)
SUBSCRIBER BASE
• Average %age Growth =80%
• <<<
Customer Base- Airtel
0.0010.00
20.0030.00
40.0050.00
60.0070.00
Year
Tota
l Sub
scri
bers
(in
Mn)
Customer Base
![Page 14: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/14.jpg)
Health Indicators
Parameters Unit Dec. 2008 Sept. 2008 Jun-08 Mar-08 Dec. 2007 Sept. 2007 Jun-07
Customers 000s 88,270 79,988 71,777 64,268 57,341 50,950 44,676
Average Revenue Per User (ARPU) INR 324 331 350 357 358 366 390
Minutes of Use (MOU) Minutes 505 526 534 507 474 469 478
Post-paid Voluntary Churn % 1.10% 1.10% 1.00% 1.00% 0.90% 1.10% 1.10%
Post-paid Company Initiated Churn % 1.20% 1.40% 1.40% 1.50% 1.80% 2.10% 2.50%
Pre- paid Churn % 2.90% 3.20% 3.80% 4.30% 3.90% 3.80% 4.00%
![Page 15: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/15.jpg)
STEEP ANALYSIS
Telecom Environment
![Page 16: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/16.jpg)
Demand for VAS & Broadband services Among Youth
28 % Urban Population
Rapid Urbanization
Rising Income level
Out of town employment
Outstation trips
Social Factors
Source: Mckinsey Report
![Page 17: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/17.jpg)
CDMA – Already there are big players in this segment Reliance , Tata
3G – Value added services potential still to be tapped fully
2G/3G – GSM Currently commands 70% of mobile subscribers in India
Threat from VOIP
Next Generation Network
Infrastructure sharing
Technology
![Page 18: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/18.jpg)
GDP growth rate - Averaged around 7.9 % from 2002-2008
Growing per capita income/disposable Income Rs 18,885 in 2002 to Rs 38,084 in 2008
Falling Handset Prices (ASP= INR 3150)
Falling Tariffs
Economic Factors
![Page 19: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/19.jpg)
Regulatory Framework
TRAI, DoT, TDSAT 74% FDI Investment High taxes etc in the telecom industry : 17-26% Lack of Transparency in Spectrum & License Allocation 3G Policy & MNP still Pending
19
![Page 20: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/20.jpg)
COMPETITOR ANALYSIS
![Page 21: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/21.jpg)
Major Players
![Page 22: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/22.jpg)
Customer Base Comparison
![Page 23: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/23.jpg)
Financial Comparison
Competitors InformationNet Sales (INR
billion
OperatingProfit (INR billion)
Net Profit (INR billion)
Total Assets (INR billion)
Earnings per Share (INR)
Bharti Airtel 257. 61 106.62 62.44 268.12 32. 9
Reliance Communications 147. 92 61.73 25.86 451.26 12. 53
Idea Cellular 67. 2 24.91 10.44 100.61 3. .96
Tata Communications 32. 83 6.45 3.04 73.25 10. 68
![Page 24: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/24.jpg)
Porter’s 5 Forces
24
![Page 25: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/25.jpg)
1. Threat from CompetitionWireless Market – Top 4 garnering 75% market share
25
HIGH
![Page 26: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/26.jpg)
2. Customer Bargaining Power Lack of differentiation among
Service Providers
Cut throat Competition
Low Switching Costs
Number Portability will have –ve
Impact
26
HIGH
![Page 27: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/27.jpg)
3. Suppliers Bargaining Power
27
LOW
![Page 28: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/28.jpg)
4. Threat of Substitutes
Landline
CDMA
Video Conferencing
VoIP – Skype , Gtalk, Yahoo Messenger e-Mail & Social Networking Websites
28
BROADBAND SERVICES
DIMINISHING MARKETHIGH
![Page 29: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/29.jpg)
5. Threat of New Entrants
Huge License Fees to be paid upfront
High gestation period
Highly regulated
Spectrum Availability & Regulatory Issues
Infrastructure Setup Cost - High
Rapidly changing technology
29
LOW
![Page 30: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/30.jpg)
SWOT ANALYSIS
Strengths• Pan India Presence• Largest Telecom Player in India • Strategic Alliance with Sony-
Ericsson, Nokia - and Sing Tel• Strong Financials• Very focused on telecom.• Leadership in fast growing cellular
segment.• The only Indian operator, other
than VSNL, that has an international submarine cable.
Weakness• Outsourcing of Core Systems• Price Competition from BSNL and
MTNL• Untapped Rural Market • Absence of own towers.
Source: CMIE Report NOV 08
30
![Page 31: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/31.jpg)
SWOT ANALYSIS
Opportunities• Rural Markets• International Markets • 3G/ Wimax• Current Tele-Density is still
low among developing countries
• Low Broadband Penetration
Threats• Introduction of MNP• Intense Competition &
Shortage of Bandwidth• Substantial payment for 3G
licensing • Saturation point in Basic
telephony service
31
![Page 32: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/32.jpg)
BCG Matrix for Bharti Airtel
LOWHIGH
HIG
HLO
W
32
IPLCCELLULAR SERVICE
ISPBROADBAND
BASIC TELEPHONE(Fixed Line)
![Page 33: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/33.jpg)
ANSOFF MATRIX
MARKET PENETRATION
ENTERED IN BROADBAND AND FIXED LINE MARKET
PRODUCT DEVELOPMENT
IPLC PRODUCTS
MARKETDEVELOPMENT
LOOKING FOR OVERSEAS MARKET AND RURAL MARKET
DIVERSIFICATION
OUTSOURCING New Market
Existing Market
New Product
Existing Product
![Page 34: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/34.jpg)
FINANCIAL REPORTS
![Page 35: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/35.jpg)
REVENUE TRENDS• Average %age Growth =55%Financial Metrics -Airtel
0
50,000
100,000
150,000
200,000
250,000
300,000
2003 2004 2005 2006 2007 2008
Year
Reve
nue
(in M
n)
Series1
![Page 36: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/36.jpg)
EBITA TRENDS
• Average %age Growth =76%Financial Metrics-Airtel
0
20,000
40,000
60,000
80,000
100,000
120,000
2003 2004 2005 2006 2007 2008
Year
EBIT
DA (i
n Rs
Mn)
Series1
![Page 37: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/37.jpg)
FINANCIAL GROWTH
![Page 38: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/38.jpg)
Financials Snapshot-Performance Indicators
38
Particulars 2008
Revenue (in Rs Mn) 2,70,122
EBITDA (Rs. Mn) 114,018
PAT (Rs. Mn) 63,954
EPS (Basic) Rs. 34.23
![Page 39: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/39.jpg)
Financial Snapshot - Ratios
39
Key Ratios AirtelTelecom Industry
Debt-Equity Ratio 0.38 0.35
Long Term Debt-Equity Ratio 0.35 0.3
ROCE (%) 34. 88 9.72
RONW (%) 39. 53 10.11
![Page 40: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/40.jpg)
Growth Factors
40
![Page 41: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/41.jpg)
Road Map – Growth Path
41
VPN & VoIP
WiMAX
3G
2G/2.5G
![Page 42: ESR on Airtel](https://reader035.vdocuments.us/reader035/viewer/2022081413/54687102af795997368b5b6d/html5/thumbnails/42.jpg)
THANK YOU !!
42