AN ASSIGNMENT

OF

E-BUSINESS

BHARTI AIRTEL

SESSION 2009-2010

SUBMITTED TO: - SUBMITTED BY:-

Mrs. Rajani Sadiora Surbhi Jain
Deptt. Of Commerce 10+2(Com.) - E
ROLL NO - 22254371

S.A.N.JAIN MODEL SENIOR

SECONDARY SCHOOL
 BHARTI AIRTEL
COMPANY PROFILE:

Bharti Airtel, formerly known as Bharti Tele-Ventures LTD (BTVL) is India's largest
cellular service provider with more than 100 million subscribers as of May 2009.
With this, Bharti is now the world's third-largest, single-country mobile operator and
sixth-largest integrated telecom operator. It also offers fixed line services and
broadband services. It offers its TELECOM services under the Airtel brand and is
headed by Sunil Bharti Mittal. The company also provides telephone services and
Internet access over DSL in 14 circles. 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.

The businesses at Bharti Airtel have been structured into three individual strategic
business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise
Services. The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the Airtel Telemedia Services business
offers broadband & telephone services in 95 cities and has recently launched a Direct-
to-Home (DTH) service, Airtel digital TV. The company provides end-to-end data
and enterprise services to the corporate customers through its nationwide fiber optic
backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and
international bandwidth access through the gateways and landing station.

Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber
base, behind China Mobile and China Unicom. In India, the company has a 24.0%
share of the wireless services market, followed by 17.7% for Reliance
Communications and 17.4% for Vodafone Essar. Airtel was born free, a force
unleashed into the market with a relentless and unwavering determination to succeed.
A spirit charged with energy, creativity and a team driven “to seize the day” with an
ambition to become the most globally admired telecom service..
COMPANY HISTORY:

Airtel was started by Mr.Sunil Bharti Mittal, a graduate from Ludhiana

(PUNJAB).earlier he was owner of local telecom company Beetel. Afterwards he
planned to expand his company at national level and the consequence is Airtel, what
we see today. Bharti Airtel Limited, a part of Bharti Enterprises, is India's leading
provider of telecommunications services. The businesses at Bharti Airtel have been
structured into three individual strategic business units (SBU’s) - mobile services,
telemedia services (ATS) & enterprise services. The mobile services group provides
GSM mobile services across India in 23 telecom circles, while the ATS business
group provides broadband & telephone services in 94 cities. The Enterprise services
group has two sub-units - carriers (long distance services) and services to corporates.
All these services are provided under the Airtel brand.

VISION AND PROMISE

By 2010 Airtel wil be the most admired brand in India:

 Loved by more customers

 Targeted by top talent

 Benchmarked by more businesses.

Airtel always finds out fresh and innovative ways to serve the needs of customers and
delivers what it promises and can also go out of the way to delight it’s customers. It is
also working on mission R.A.C.E. i.e. revenue and customer excellence.

LOGO

The Airtel logo is a specially drawn wood mark. It incorporates two solid, red
rectangular forms whose counter-form creates an open doorway. The title case
lettering with its capital ‘A’ reinforces our leadership position. The red dot cues in our
focus on innovation. Our logo is a reflection of our identity – a confident symbol of a
brand that is always ahead of the rest, always ‘In-touch’ and on customer’s side.

OUR BRAND
Airtel was born free, a force unleashed into the market with a relentless and
unwavering determination to succeed. A spirit charged with energy, creativity and a
team driven “to seize the day” with an ambition to become the most globally admired
telecom service. Airtel, in just ten years of operations, rose to the pinnacle to
achievement and continues to lead.As India's leading telecommunications company
Airtel brand has played the role as a major catalyst in India's reforms, contributing to
its economic resurgence.Today we touch peoples lives with our Mobile services, Tele
media services, to connecting India's leading 1000+ corporate. We also connect
Indians living in USA, UK and Canada with our call home service

BHARTI AIRTEL
ORGANISATIONAL STRUCTURE
 Chairman & Managing Director

Chairman & Managing Director since October 2001

Board director since: July 1995
Age: 49 years

Sunil Bharti Mittal is the Founder, Chairman and Managing Director of Bharti Airtel.
Sunil is a path-breaking pioneer in the mobile communications industry and is
credited with the phenomenal growth of the telecom sector in India over the last ten
years. A first generation Entrepreneur, he started his first business in 1976 with a
capital investment of Rs 20,000. He initially founded a number of trading concerns,
and established the first company to manufacture push button telephones in India.
 Bharti TeleTech is today one of the largest manufacturers of telephones in the
world.
 He started his career at a young age of 18 after graduating from Punjab
University in India and founded Bharti, with a modest capital, in the year
1976.
 Today, at 51 he heads a successful Enterprise, amongst the top 5 in India, with
a market capitalization of over US$ 25 billion and employing over 30,000
people.
 He is an alumnus of Harvard Business School, MA, USA.
 He has been honored with one of India's highest civilian award – Padma
Bhushan.
 He received the GSM Association Chairman's Award for the year 2008. He is
also on the board of the International Telecommunication Union (ITU), the
leading United Nations Agency for Information and Communication
Technology.

AWARD & RECOGNITION

 Bharti Airtel declared Service Provider of the Year
2009 at the 2009 Frost & Sullivan Asia Pacific ICT Awards.
 Infrastructure Excellence Awards
Bharti infratel was voted as the Telecom Infrastruture Company of the
year at the CNBC-TV18 Infrastruture Excellence Awards.
 World Communications Awards
Bharti Airtel recevied the best content service award for the Airtel-IFFCO
Farmer Information Dissemintation Platform at the World Communication
Awards in London.
 Bharti Airtel also receive the Best Project Management Awards for its
Gujrat E-GRAM project.
 Best Practices in Corporate Social Responsibility
Bharti Airtel ranked 3rd among india’s 500 most valuaable companies for
2008
  Buzziest Brands of the year
SWOT Analysis Bharti Airtel

Strengths

 Bharti Airtel has more than 65 million customers (July 2008). It is the largest
cellular provider in India, and also supplies broadband and telephone services
- as well as many other telecommunications services to both domestic and
corporate customers.
 Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing
Tel, with whom they hold a strategic alliance. This means that the business has
access to knowledge and technology from other parts of the
telecommunications world.
 The company has covered the entire Indian nation with its network. This has
underpinned its large and rising customer base.
 experience of how a cellular telephone system actually worked. So the start-up
business had to outsource to industry experts in the field.

Opportunities
 The company possesses a customized version of the Google search engine
which will enhance broadband services to customers. The tie-up with Google
can only enhance the Airtel brand, and also provides advertising opportunities
in Indian for Google.
 Global telecommunications and new technology brands see Airtel as a key
strategic player in the Indian market. The new I-Phone will be launched in
India via an Airtel distributorship. Another strategic partnership is held with
Blackberry Wireless Solutions.
 Despite being forced to outsource much of its technical operations in the early
days, this allowed Airtel to work from its own blank sheet of paper, and to
question industry approaches and practices - for example replacing the
Revenue-Per-Customer model with a Revenue-Per-Minute model which is
 better suited to India, as the company moved into small and remote villages
and towns.
 The company is investing in its operation in 120,000 to 160,000 small villages
every year. It sees that less well-off consumers may only be able to afford a
few tens of Rupees per call, and also so that the business benefits are scalable -
using its 'Matchbox' strategy.
 Bharti Airtel is embarking on another joint venture with Vodafone Essar and
Idea Cellular to create a new independent tower company called Indus
Towers.

 Airtel and Vodafone seem to be having an on/off relationship. Vodafone

which owned a 5.6% stake in the Airtel business sold it back to Airtel, and
instead invested in its rival Hutchison Essar. Knowledge and technology
previously available to Airtel now moves into the hands of one of its
competitors.
 The quickly changing pace of the global telecommunications industry could
tempt Airtel to go along the acquisition trail which may make it vulnerable if
the world goes into recession. Perhaps this was an impact upon the decision
not to proceed with talks about the potential purchase of South Africa's MTN
in May 2008.

Key milestones

Timeline Milestone / Event

- Profit crosses $1bn
2006-
2008 - Receives license for providing 2G and 3G
mobile services in Sri Lanka
- All India footprint with launch of mobile
2005- services in Assam
2006 - Becomes India’s largest integrated private
operator based on total customer base
 - Joins the $1bn revenue club
2003-
2004 - Strategic partnership with IBM and
Ericsson for outsourcing IT and network activities
- Launches India’s first private sector
2001- national and international long distance service
2002
- Becomes a public limited company
- Acquisition of JT Mobile makes it the
1999- largest private telecom operator in India
2000 - Acquires Sky cell to expand its footprint in
South India
- First Private operator to offer fixed line
1997- telephony in Madhya Pradesh
1998
- VSAT launched across India
- Incorporated
1995-
1996 - British Telecom acquires a stake in the
company

FINANCIAL PERFORMANCE
OF THE COMPANY OVER THE
LAST FEW YEARS.
Particulars 2003 2004 2005 2006 2007 2008
Revenues (Rs. Mn) 30,554 50,369 81,558 116,641 184,202 270,122
EBITDA (Rs. Mn) 7,634 17,055 30,658 41,636 74,407 114,018
PAT (Rs. Mn) (2,051) 5,837 12,116 20,279 40,621 63,954
EBITDA (%) 25.0% 33.9 37.6 35.7 40.4 42.2
PAT (%) -6.7% 11.6 14.9 17.4 22.1 23.7
ROCE (%) 0.9% 9.9 15.7 21.5 31.6 33.3
ROE (%) -4.2% 12.0 23.7 32.0 43.1 38.5
Debt-Equity (x) 0.67 0.86 0.77 0.57 0.37 0.19
EPS (Basic) Rs. (1.11) 3.15 6.53 10.78 21.43 34.23

The consolidated revenue and EBITDA of the Company has grown at a CAGR of
54% and 72% respectively over the last five years. The Company's gross and net
margin has shown an impressive growth over the years. The company turned
profitable in 2004 and has seen a more than ten-fold growth in the profit since then.

As we seen in the above figure that the PAT (Profit After Tax) has been increasing
continuously from the last five years that is a good sign for the company and this
means that the company is in a good position. The increase in company’s revenues is
attributable to the growth in the total customer base more specifically the number of
mobile subscribers which has grown at a CAGR of 82% in the last five years All
business segments of Bharti have registered consistent growth in both top and bottom
lines over the past four years. The Company added 24.8 million mobile customers in
FY2007-08, representing a customer addition of 67% over the previous year. As on
March 31, 2008, the Company had an aggregate of 64.3 million customers, consisting
of 62.0 million mobile and 2.3 million Telemedia Services customers.

FINANCIAL PERFORMANCE OF
THE COMPANY QUARTER WISE
Particulars Q1FY09 Q2FY09 Q3FY09
Revenue (Rs million) 84,833 90,203 96,334
EBITDA (Rs million) 35,106 36,993 39,450
EBITDA Margin 41.40% 41.00% 41.00%
Mobile subscribers (million) 69.4 77.5 85.7
Telemedia subscribers (million) 2.4 6.5 2.6
ARPU (Mobile) 350 331 324
ARPU (Telemedia) 1138 1147 1,098
MoU (Mobile) 534 526 505
EPS (Rs) 10.7 10.8 11.39

Capex (Rs million) 40,671 31,870 38,775

The Company’s revenue increased by 38% to Rs 96,334 million in Q3FY09 as
compared to the same quarter last year. Net Income rose to Rs 21,593 million from
17,224 million in the same quarter last year. The company added 8.17 million
subscribers in Q3FY09 compared with the 5.31 added by its nearest rival Reliance
Communications. Average revenue per user fell from Rs 331 in Q2FY09 to Rs 324 in
Q3FY09. The Company’s market share of net additions also fell from 28.5% in
Q2FY008 to 25.9% in this quarter.

FUTURE PROSPECTS AND PLAN

• Bharti Airtel Unveils New Global Wholesale Service Portfolio for Telcos
Across the World
• Airtel launches Hosted Mail for SMBs
• Royal Government of Bhutan to partner with Airtel for fulfilling its 2013 ICT
vision
• Airtel digital TV expands bouquet to 164 channels
• Airtel presents industry first – new ‘true and rich’ broadband experience

BHARTI AIRTEL COMPETITOR

Company Location
 Aditya Birla Management Mumbai, India

Bharat Sanchar Nigam New Delhi, India

Mumbai, India
Tata Communications

PRODUCT LIFE CYCLE

A product's life cycle (PLC) can be divided into several stages characterized by
the revenue generated by the product. If a curve is drawn showing product
revenue over time, it may take one of many different shapes, an example of which
is shown below:

BALANCE SHEET OF AIRTEL

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Sources of funds
Owner's fund
Equity share capital 1,898.24 1,897.91 1,895.93 1,893.88 1,853.37
 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Share application money 116.22 57.63 30.00 12.13 2.72
Preference share capital - - - - -
Reserves & surplus 25,627.38 18,283.82 9,515.21 5,437.42 2,675.38
Loan funds
Secured loans 51.73 52.42 266.45 2,863.37 3,959.88
Unsecured loans 7,661.92 6,517.92 5,044.36 1,932.92 1,034.41
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Uses of funds
Fixed assets
Gross block 37,266.70 28,115.65 26,509.93 17,951.74 13,240.63
Less : revaluation reserve 2.13 2.13 2.13 2.13 2.13
Less : accumulated depreciation 12,253.34 9,085.00 7,204.30 4,944.86 3,475.64
Net block 25,011.23 19,028.52 19,303.51 13,004.75 9,762.86
Capital work-in-progress 2,566.67 2,751.08 2,375.82 2,341.25 994.46
Investments 11,777.76 10,952.85 705.82 719.70 931.90
Net current assets
Current assets, loans & advances 10,466.63 8,439.38 5,406.81 3,338.88 2,486.31
Less : current liabilities & provisions 14,466.89 14,362.33 11,042.67 7,272.80 4,708.12
Total net current assets -4,000.26 -5,922.95 -5,635.86 -3,933.92 -2,221.80
Miscellaneous expenses not written 0.09 0.20 2.66 7.94 58.35
Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76
Notes:
Book value of unquoted investments 9,898.56 9,379.62 580.43 476.52 460.83
Market value of quoted investments 1,887.76 1,574.29 125.85 243.99 472.71
Contingent liabilities 4,104.25 7,140.59 7,615.04 4,740.34 3,017.26
Number of equity sharesoutstanding 18982.40 18979.07 18959.34 18938.79 18533.67
(Lacs)

PROFIT LOSS ACCOUNT OF AIRTEL

Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income
Operating income 34,048.32 25,761.11 17,851.61 11,259.12 8,142.44
Expenses
 Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Material consumed 12.41 33.85 22.08 67.40 72.10
Manufacturing expenses 8,627.13 7,339.01 5,017.27 3,299.73 2,365.51
Personnel expenses 1,397.54 1,297.88 1,076.95 734.20 475.86
Selling expenses 2,210.43 1,842.51 1,126.34 804.15 828.20
Adminstrative expenses 8,608.03 4,588.53 3,351.31 2,315.91 1,403.09
Expenses capitalised - - - - -
Cost of sales 20,855.54 15,101.78 10,593.96 7,221.40 5,144.77
Operating profit 13,192.78 10,659.34 7,257.65 4,037.72 2,997.67
Other recurring income 235.99 266.91 101.70 40.75 18.93
Adjusted PBDIT 13,428.77 10,926.24 7,359.35 4,078.47 3,016.61
Financial expenses 434.16 393.43 282.07 236.81 317.00
Depreciation 3,206.28 3,166.58 2,353.30 1,432.34 1,019.36
Other write offs 178.82 266.07 137.80 127.39 161.34
Adjusted PBT 9,609.50 7,100.16 4,586.17 2,281.93 1,518.90
Tax charges 321.78 632.43 566.79 273.68 353.60
Adjusted PAT 9,287.72 6,467.73 4,019.39 2,008.25 1,165.30
Non recurring items -1,497.74 -162.87 3.92 -13.81 -1,726.88
Other non cash
-46.15 -60.67 9.92 17.64 22.23
adjustments
Reported net profit 7,743.84 6,244.19 4,033.23 2,012.08 -539.35
Earnigs before
19,541.05 11,778.12 5,489.61 1,225.65 -538.55
appropriation
Equity dividend 379.65 - - - -
Preference dividend - - - - -
Dividend tax 64.52 - - - -
Retained earnings 19,096.89 11,778.12 5,489.61 1,225.65 -538.55