PRESENTATION BY Group 5:

Kinny Jain Nikhil SarafDionysiaMichalopoulouRajinder Pal Singh

HIGHLIGHTS OF THIS PRESENTATION: Airtel Background External Analysis

Macro-Environmental Analysis: PEST ANALYSIS Micro-Environmental Analysis: PORTERS 5 FORCES [ ILC, SGA] Opportunities and Threats

Internal Analysis Resource Audit UNIQUE RESOURCES Core Competencies: PORTERS VALUE CHAIN FRAMEWORK Strengths and Weaknesses

Organisational Purpose: AIRTEL MISSION STATEMENT EVALUATION

Competitive Strategy Analysis: PORTERS GENERIC FRAMEWORK Development Strategy Analysis: ANSOFF’S PRODUCT/ MARKET FRAMEWORK

Conclusions and Recommendations

PART A

PART B

PART C

Go-ahead to the CDMA technology

IND

IA

Private players were allowed in Value Added Services

National Telecom Policy (NTP) was formulated

1992

1994

1997

Independent regulator, TRAI, was established

NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime

1999

2000

2002

BSNL was established by DoT

ILD services was opened to competition

Internet telephony initiated

Reduction of licence fees

2003

Calling Party Pays (CPP) was implemented

Unified Access Licensing (UASL) regime was introduced

Reference Interconnect order was issued

2004

Intra-circle merger guidelines were established

Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010

2005

FDI limit was increased from 49 to 74 percent

Attempted to boost Rural telephony

2006

Number portability was proposed (pending)

Decision on 3G services (awaited)

2007

Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.

Evolution of Telecom In India

INTRODUCTION

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.

It is one of India’s leading private sector providers of telecommunications

services with more than 110 million customers.

The businesses at Bharti Airtel have been structured into three individual

strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services &

Enterprise Services.

Core values Empowering People - to do their best

Being Flexible - to adapt to the changing environment and evolving

customer needs

Making it Happen - by striving to change the status quo, innovate

& energize new ideas with a strong passion &

entrepreneurial spirit,

Openness and transparency - with an innate desire to do good

Creating Positive Impact – with a desire to create a meaningful difference in

society.

National Coverage

Investor Relations :- http://www.bhartiairtel.in

Integrated Telecom Company

Mobile / Wireless Services

– 2G / 3G– Rural Market

Telemedia Services

– Fixed Line– Broadband– DTH

Enterprise Services

– Carrier– Corporate

Passive Infrastructure

– Bharti Infratel– Indus Tower

6

PEST

PEST ANALYSIS- EXTERNAL ANALYSIS

PoliticalRegulationsPolitical Opposition to participation by the private players Govt support to promote FDI in Telecom sectorBanning of Phone Use in Certain Circumstances

Technology Equipped with New Technology Rapid Industrial growth rate

induced by emerging technologies.

Strong Fibre Optic Network Utiilization of E- Commerce

facilities Efficient Customer Care

Services

Socio-Cultural High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture, there is need to remain connectedTech Savvy Generation

EconomicCost of calls Being Driven Down Worldwide Recession- Both Boon & BaneMiddle class consumer base growing due to accelerated economic growthUntapped markets in emerging Economies - New Opportunity

PORTER 5 FORCES

INDUSTRY LIFE CYSLCE

STRATEGIC GROUP ANALYSIS

Porter’s 5 Forces

Threat from Competition

Customer Bargaining

Power

Threat of Substitutes

Supplier Bargaining

Power

Threat of New Entrants

1. Threat from Competition

Wireless Market – Top 4 garnering 75% market share

HIGH

Competitor Market Share – Threat HIGH

2. Customer Bargaining Power

Lack of differentiation among Service Providers

Cut throat Competition

Low Switching Costs

Number Portability will have –Ve Impact

Businesses & Consumers

HIGH

Customers & Market Share

3. Suppliers Bargaining Power

LOW

4. Threat of Substitutes

Landline CDMA

Video Conferencing

VOIP - Skype, Gtalk, Yahoo Messenger e-Mail & Social Networking Websites

BROADBAND SERVICES

DIMINISHING MARKET HIGH

5. Threat of New Entrants

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

LOW

AIRTEL

TELECOMMUNICATION INDUSTRY LIFE CYCLE

Johnson , Scholes & Whittington : Pg. 68, 2008

TELECOMMUNICATION INDUSTRY LIFE CYCLE

Telecom Industry is in its mature growth stage.

Significant achievements have happened in this sector.

In 2009 February, there was a rise in subscriber base by 13.25 million.

Total subscriber base was 375 million in 2009. A hike by 50%.

This shows the changes in the consumption pattern among the middle class.

AIRTEL

STRATEGIC GROUP ANALYSIS

Competitor Analysis

Bharti Rcom IDEA MTNL0.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%

Competitor Analysis

OP Margin Net Margin

Company Sep-07 Sep-08 Sep-072 Sep-083

Bharti 43.00% 38.00% 26.40% 19.30%

Rcom 37.90% 31.60% 23.90% 13.20%

IDEA 32.80% 26.60% 14.10% 6.50%

MTNL 23.70% 22.90% 7.00% 6.80%

Best OP Margins & Net Profit Margins

among Peers

Source: CMIE November 2008

AMOU & ARPU Stats

838

461

303

88Russia

China

India

USA

0

2

4

6

8

10

Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

AR

PU

(U

SD

per

mon

th)

GSM CDMA

Minutes of Usage per Month – Mobile Services

ARPU* in India – Mobile Services

Despite a low tele-density of approximately 30.5%

India has the second highest minutes of usage per month.

This offers huge growth opportunity to telecom companies.

The declining ARPU implies that India Inc. is tapping a large market at the bottom of the pyramid by reducing tariffs; thereby, enhancing affordability.

Strategic Group AnalysisPR

OD

UCT

RAN

GE

N

arro

w

Bro

ad

NATIONAL GLOBALGEOGRAPHICAL SCOPE

BSNL, MTNL

15.00 %

Other – 5%

Airtel 25%

10 %

Reliance 18%

Vodafone 17%

TATA 9.3%IDEA 9.6%

VIRGIN -0.5%

INTERAL ANALYSIS

RESOURCE AUDIT AND PROCESS VALUE CHAIN

Human resources well defined rewards and recognition system Young team - Average age is 26years Employees decide their training needs. A state-of-the-art learning centre and training

practices adopted from British Telecom PACE (Progressive Assessment of Culture and

Environment) feedback taken from employees used for company’s strategy

Physical Over 110 million customers Received license to provide 2G ad 3G in Sri Lanka First Telecom operator in India to offer MS

Windows Mobile 5.0 Strong Distribution channel.

Financial Profit crosses US$1 bn Fixed asset (09) $ 7,986,254,556 Dividend offered for 2008-09 is 20% of

the face value of each share Received US$1.275 bn investment from

international investors in Bharti Infratel. Ability to raise funds

Intangible Strategic partnership with Google. Goodwill & Reputation Facility based Operator license in

Singapore.

AIRTEL Resource audit (unique resources) – Internal Analysis

Supp

ortin

g Ac

tiviti

es

Primary Activities

Firm infrastructure - CRM tools, MIS, ERP, Networking Equipment, Telecom equipment for coverage and signal strength, IT InfrastructureHR management - IT skilled work force, Telecom engineers, SCM specialists Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 employees in Mobile services, Owned retail staffing and training.

Technology development - Creating a 3G enabled network, mChek - Launching M commerce by tie ups with banks and credit cards.

Procurement - Established a SCM network to acquire networking & Telecom tools, Maintain long term relation with suppliers to provide handsets & services

Inbound LogisticsNetwork Infrastructure1. Equipment vendor2. Equipment Manufacturer - Routers, Switch level3. Equipment Manufacturer - Chip LevelSoftware and content provider1. Software Vendor2. Application Provider3. Content Aggregator4. Content Provider

Operations

1. NETWORK INTEGRATION2. SYSTEM INTEGRATION3. INFRASTRUCTURAL DEVELOPMENT 4. GSM SERVICES, VAS, BASE

Outbound Logistics

1. Sound Distributor2. Retail network across India for both prepaid and post paid services3. Online Ordering of VAS 4. Update of existing plan

Marketing & Sales

1. Online marketing 2. Celebrity endorsement3. Brand positioning 4. Promotional Bundle offers – Extra minutes/ Text or Handsets 5. Promotion at events, organizations

Post Sale Service

1. Multilingual Customer Service Center2. Informative website3. Customer Retention4. Easy online payment options for both pre paid & post paid services

MARGIN

MARGIN

Primary Activities - Analysis

InputMarketin

g & Sales

Process OutputPost

Sale

•Network InfrastructureNokia-Siemens, CISCO , INTEL  

•Software and content providerIBM, INFY TCS, AFFLE, On Mobile, India Times, Hungama Mobile, Mauj , One 97 IMI MOBILE. •Finance•Licenses

• Strong Channel Distribution

•Market Innovators

•Trend Setters•Unique advertising strategy – Emotional values & Humor

•GSM Services

•VAS

•Fixed Lines

•Broadband

Public

Corporate

Businesses

SME’s

Institutes

Infrastructure Development

Network Integration

CompetitivePosition

CapableSupplier

Start

Value Chain Analysis – Conclusions & Recommendations

Inbound Logistics

Operations

Output

Marketing & Planning

Post SaleValue Chain Outcome - 37% PM

• Aero mobile, MATE, GPS tracking device for B2B

• M-commerce

•wide network coverage as they own their network infrastructure

Android platform based HTC mobile unique marketing strategy, low STD rates – Trend setters

Bill payments and Indian rail tickets using m commerce

SWOT

SUMMATION OF EXTERNAL & INTERNAL ENVIRONMENT ANALYSIS

AIRTEL Strength & Weakness

STRENGTHS WEAKNESSES

OPPORTUNITIES THREATS

INT

ER

NA

LE

XT

ER

NA

L

Tele-Density – 30.6% Low among Developing Countries

Low Broadband Penetration

Untapped Rural Market

Bharti Infratel – Cutting Down cost in Rural area

Growing Globally

First Indian Sponsor to signed Manchester United

• Falling ARPU

• Intense Competition From Nearest Competitor

• Shortage of Bandwidth

• New Players Entering Indian telecom sector

• Uncertain Economic Condition

• Valuable Business Partners – Techno & Financial

•Strong Brand Image• First Mover Advantage • Single Private Leading Indian Telecom Company

• Enthusiastic & Innovative Business Development team

•Marketing Driven Low Cost Model• Blessed with Directional Visionary - S.N. Mittal

• Massive Economies of scale from large subscriber base

• Outsourcing of Core Systems

• Lagging behind in Exploring market Investment opportunity

NoNoYesYesNoYesNoYesYes

An evaluation matrix of the mission statement

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AIRTEL ORGANISATIONAL PURPOSE

VisionBy 2010 Airtel will be the most admired brand in India:

Loved by more customers Targeted by top talent Benchmarked by more businesses

Mission Statement

“We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”

AnsOff Directional Matrix

PRODUCT

MARKET

EXISTING

EXISTING NEW

NEW

AIRTEL ANSOFF DIRECTIONAL MATRIX

PRODUCT DEVELOPMENT

MATE – Mobile Application Tool for Enterprise

M commerce – mChek (Recharge Anywhere, Anytime)

Airtel Way Finder - GPS Service Blackberry

New Tech-Savvy Handset Options in Prepaid & Post Paid Schemes: HTC, BlackBerry, Apple iPhone

Lowered Overseas Call Rates – Bahrain @ Rs 5.00/-

3G Network – Awaiting for GOI Approval

AeroMobile – Airtel in-flight connectivity on Emirates and Malaysian Airlines

Bridge Alliance – Roaming in Asia Pacific Region

MARKET PENETRATION

“The Airtel Advantage” : 50 paisa / min Call on both National Long Distance Calls & Local calls

Value Added Services: Airtel Live, Hello Tunes, Astrology

Lowered National & International Roaming Tariff

Extensive & Increasing Sales & Distribution channel covering 1.27 million

Delhi Half Marathon – 2nd Edition – 28000 participants

Celebratory Endorsement - Top BollyWood & International Personality

Tie with major TV events – KBC, India Got its Talent

MARKET DEVELOPMENT

3G Network Implementation in Sri Lanka

Airtel –Vodafone Alliance: Debut in Europe through Channel Islands (Jersey & Guernsey) Low cost Calling Cards to India - UK, USA, Singapore etc.

MTN – Airtel Alliance - South-South Cooperation **

Bhutan’s 2013 ICT Vision – Gov of Bhutan & Airtel Alliance

DIVERSIFICATION

Bharti InfraTel & Indus Towers - Passive Infrastructure Provider

Bharti Teletech – Landline & Telephone Equipment

Bharti Telemedia Services – Broadband & Internet, DTH, IPTV

Airtel Tracking Services – GPS Bharti Walmart – Sipermarket Bharti Realtek – Realty Business

Ansoff Product / Market Framework

110 million Mobile Customer Base 24% of wireless market

3rd largest single country mobile services operator

Sixth largest in-country integrated telecom operator in the world

Poter’s Generic Matrix

Porters Generic Strategy

Differential Strategy Cost Leadership

Narrow Market Scope

Broad Market Scope

Uniqueness Competency

Low CostCompetency

Porters Generic Strategy (Cont….)

Own Tower Infrastructure Operator in 23 circles in india Huge Distribution Network High Customer Base Huge Economy of scale

Low cost Mobiles on Postpaid & prepaid

Lowest fare International Calling cards

First in class Value added services,

Mobile web- internet on mobile,

Hello Tunes, MATE - mobile application

tool for enterprise.

Aero mobile- the In-flight connectivity

iphone and Blackberry Phones.

AIRTEL

LOW

COST

UNIQUENESS

BROAD MARKET NARROW MARKET

CONCLUSION AND RECOMMENDATIONS

“Refine your processes, strive for dominance and build a brand”MR. Sunil Bharti Mittal

Airtel have done a good job by Improving their core competencies.

Being the market leader & Especially in building a brand

We would recommend Bharti Airtel to continue with their good work

and concentrate more on mobile services which is Bharti’s cash

cow, in its process of huge diversification.

Thank You