Keys to Success

• Upgrade services to 2.5G or 3G• 3G will be the expectation moving forward.

• Customer Service

• Coverage area

• Pricing

Core Competencies

• Customer Service• Low number of dropped calls• Go service coverage

• Faster Speeds• Investment in fiber-optic network

• Coverage in small areas• Aggressive mobile license strategy• Expect to have full coverage by 2006

Pro’s and Con’s of Outsourcing• Pro’s

• Don’t pay for excess capacity• Outsourcing portions of non-critical functions

• Con’s• Excessive dependence on vendors• Outsourcing critical functions• ~1000 employee transfer (culture, morale, etc.)

Outsourcing Concerns? (I moved this slide up)

• IBM• Control over operational applications• Internal customer service and maintenance on all hardware and

software including that of other vendors (? don’t understand)• Can IBM work well with other vendors?• Will lose a share of revenue as payment for 5 years with option for

additional 5 years (I would summarize by saying “5 year revenue share pricing”)

• Ericcson, Nokia, Siemens• Control of maintenance over network hardware• Lose some operations control• Initial agreement is 3 years (long enough?)

Outsourcing Agreement Structure (IBM and Nokia) I moved this slide up

• Most of the risk is taken by the vendors – should adjust structure where Bharti takes on that risk

• Be able to hire own employees – don’t take on new employees simply through a transfer

• Number of employees should be decided by vendor• IBM could look at a fixed payment as well as revenue

sharing to avoid risk

Recommendations• Identify all functions that you are thinking about offshoring• Identify critical / strategic functions to keep in house and

those less critical / resource intensive for outsourcing• Obtain input from other colleagues on the list of functions

to outsource • Renegotiate deals with vendors for less critical functions

(vendors will likely be less cautious)• Add a strategic initiative to enhance demand planning

system to allow management to make better strategic, data-driven decisions (instead of taking the less strategic way and outsourcing everything)

Outsourcing Agreements

• Should Bharti Enter into Gupta’s agreements?• Yes

• Advantages• Vendors have more experience and resources

• Disadvantages• Bharti loses some control over operations• Additional expense

Outsourcing Agreement Structure (Bharti)

• Payments• Payment Structures are somewhat in favor of Bharti with Ericcson,

Nokia, and Siemens• Adjust payment structure with IBM to be a fixed amount

• Other