PRESENTATION ON AIRTEL AND CELL PHONE SERVICE INDUSTRY

Presented by:Shruti bansal Bawa suneja Gagandeep kaur Neha chabbra

BHARTI AIRTEL
Bharti Airtel Limited is a leading integrated telecommunications company with operations in

20 countries across Asia and Africa. Headquartered in New Delhi, India, the company ranks amongst the top 5 mobile service providers globally in terms of subscribers. Bharti Airtel had over 246 million customers across its operations at the end of February 2012.

Cont
In India, the company's product offerings include 2G, 3G and 4G services, fixed line, high speed

broadband through DSL, IPTV, DTH, enterprise services including national & international long distance services to carriers.

Bharti Airtel commands 250.04 million

connections and has a revenue of $3.04 billion. Airtel also operates in 20 countries across South Asia, Africa and the Channel Islands.

SUBSCRIBERS & NET ADDITIONS

200 180

DEC-12

160

140

120

100

80

60

40

20

-20 SUBSCRIBERS (mn) SUBSCRIBER'S MARKET SHARE NET ADDITIONS

BHARTI 178.78 27.22% 1.82 20.77%

VODAFONE 149.44 22.75% 0.84 9.55%

RCOM 0 0.00% 0 0.00%

IDEA 110.71 16.85% 2.58 29.42%

SHARE OF NET ADDITIONS

SUBSCRIBER'S MARKET SHARE 27.22% 22.75% 0.00%

-0.09%

-0.18%

0.00%

0.17%

IDEA, 12.48% AIRTEL , 19.94%

RELIANCE, 16.58%

VODAFONE, 16.41%

comparison on the basis of revenue,customer base , market share(FY2012)

AIRTEL VODAFONE RELIANCE IDEA

115.5 172698

12.48%

153 16.58% 196800

153 16.41% 153538

236.9 203820

19.94%

REVENUES( Rs mn)

CUSTOMER BASE(mn)

market share

INDUSTRY PROFILE
The Indian telecommunication industry is one of the world's fastest growing industries with

653.92 million telephone (landlines and mobile) subscribers and 617.53 million mobile phone connections. It is the second largest telecommunication network in the world in terms of number of wireless connections after China. Telecom companies predominantly divide their business into 4 major sub-segments i.e. Mobile, Fixed Line, Internet and Enterprise.

Cont..
The key players in this industry may be broadly classified into,

-State owned companies like - BSNL and MTNL. -Private Indian owned companies like Reliance Communications -Foreign invested companies like - VodafoneEssar, Bharti Airtel, Idea Cellular, Aircel Etc

REVENUE ANALYSIS
Mobile/Cellular services Cellular mobile service providers (CMSP) derive revenues by way of tariff charges for outgoing calls made by subscribers on its network. Subscribers: Growth in a CMSP's subscriber base is dependent on several factors, the key amongst them being:- Economic growth - Rising income level - Affordability

Cont
II. Fixed line services
The fixed (wire line) services are dominantly provided for BSNL and MTNL. Although this had been a dominant mode of telecommunication in the past, it is fast being replaced with mobil telephony, which has the advantage of connectivity on the move. The fundamental business of a fixed line operator is almost similar to that of CMSP, in terms of ARPU and Subscriber base.

Cont
III. Internet/Broadband
The Internet services are provided either by telecom service providers or independent Internet service providers (ISP) who deal exclusively in providing this service. There are two forms of Internet that are currently popularthe dial-up connections and the broadband connections.

ENVIRONMENTAL ANALYSIS
It is a systematic examination of al 3 levels of the environment with at least three purposes:

1. Detecting important economic, social, cultural, environmental, health, technological, and political trends, situations, and events 2. Identifying the potential opportunities and threats for the institution implied by these trends, situations, and events. 3. Gaining an accurate understanding of your organ izations strengths and limitations.

Cont.
A near environment analysis indicates that the competitors are becoming active resource rivals

(political and financial) apart from applying pressures as customer rivals. The customer has, needless to say, benefited from increased choice from within the communications services basket itself.

PEST ANALYSIS
Political
Regulations Political Opposition to participation by the private players Govt support to promote FDI in Telecom sector

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

Economic
Cost of calls Being Driven Down Worldwide Recession- Both Boon & Bane Middle class consumer base growing due to accelerated economic growth Untapped markets in emerging Economies New Opportunity

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

Porters 5 Forces

Customer Bargaining Power

Threat of New Entrants

Threat from Competition

Threat of Substitutes

Supplier Bargaining Power

PORTERS FIVE FORCES

Threat of New Entrants The number of major players in the Indian telecom is 12 companies. This has changed the tactics followed by companies, it all started by TATA DoCoMo bringing about the concept of per second billing. Moreover in the recent days the inclusion of 3G has brought about as is often said the entry of a 900 pound gorilla in the telecom industry as a major competitor.

1.

Threat from Competition

Wireless Market Top 4 garnering 75% market share

HIGH

Cont
Power of Suppliers At first glance, it might look like telecom equipment suppliers have considerable bargaining power over telecom operators. Indeed, without high-tech broadband switching equipment, fibre-optic cables, mobile handsets and billing software, telecom operators would not be able to do the job of transmitting voice and data from place to place.

2. Customer Bargaining Power

Lack of differentiation among Service Providers Cut throat Competition Low Switching Costs Number Portability has Ve Impact Businesses & Consumers
Customers & Market Share HIGH

3. Suppliers Bargaining Power

LOW

4. Threat of Substitutes

Landline

CDMA
Video Conferencing

DIMINISHING MARKET

HIGH

VOIP - Skype, Gtalk, Yahoo Messenger

e-Mail & Social Networking Websites

BROADBAND SERVICES

Cont.
Reliance Infratel has around 50,000 towers. The largest tower firm Indus Towers has around 1,00,000 towers and is a combination of Bharti Airtel, Vodafone Essar and Idea Cellular operating in 16 service areas. Power of Buyers The end user will be the happiest as the price wars ensue. This will lead to a change in the method of revenue generation as the concept of manufacturing minutes goes belly up in the future. Telecom in the present day holds low brand loyalty and brand switching is becoming more and more a norm.

Cont
Competitive Rivalry Rivalry in this sector has just begun to show up because the changes being brought forward are too many and those who adapt will survive. Competitors of Airtel are flanking it from the side by trying out newer ways to woo the customer.

THE ANALYSIS OF AIRTEL

DoCoMo through its per second rates and has changed the revenue model of Indian mobile

operators ever since. This led to the fall of the Average Revenue per User(ARPU) but the price of making those minutes rose. This fall in ARPU, the advent of 3G and acquisitions by companies, have increased cost of making minutes.

Cont
Almost 80% of the revenue generated by the telecom companies is through voice services.

This is important because it means that a large chunk of these can defect to a product such as Skype. But sustain the same level of revenue generation through voice the company can enter into a new market. Airtel should not be hit badly since they havea lready sprouted few revenue generation portals like AppCentral, though the margin will fall.

COMPETITIVE ADVANTAGE
Bharti Airtels competitive advantage can be seen right from the period of 1990s. Bharti was

the first Indian company to manufacture cordless telephones. Acquisitions and joint ventures Outsourcing Supplier Relationships and Integrations

Swot Analysis
OPPORTUNITIES

WEAKNESS
1. Reduced profit margin due to

1. Largest wireless network among all the players in the market. Followed by the largest market share. Customer base of 133 million. High Customer Service and Quality. 2. The best performing (quality) network coverage in India. 3. Highly effective Value added services in form of AppCentral which had a million plus downloads last month 4. Penetration into the rural market through collaboration with IMIMobile to launch Cell Shakti. 5. Partnered with VMware to look forward into the domain of cloud computing, which is purported as the future of information?

increasing cost per minute and falling selling price. 2. Increased debt by acquiring companies in newer markets. 3. Preparedness towards the changing role of telecom i.e. shifting focus from calls and SMS. 4. Penetration into rural market. 5. Charging for customer care

SWOT ANALYSIS
OPPORTUNITIES

THREATS

1. The entry into the newer markets of Africa as the domestic market goes though a state of unrest. 2. Telecom is slowly looked upon as a commodity so higher quality at a lesser price is needed. 3. Large section of the population which is not exposed to internet and need better connectivity. 4. The scope of breaching into the sector of internet and creating an amalgamation of sorts between the two. 5. Mobile Banking Services.

. Too many players which can lead to diluted focus and can give a chance to a smaller rival to move ahead. 2. Internet based services taking over a part of the telecommunications domain. Likes of SKYPE and Gtalk. 3. Government regulations over the bandwidth and other telecom regulations. 4. Presence of Reliance into the theatre of telecommunication. 5. Customer preference of price over performance.

STRATEGIES ROLLED OUT

Outsourcing all major operations except Marketing, Sales and Finance. Bharti Airtel has a joint Venture with AlcatelLucent to manage the network infrastructure for the Telemedia Business. Bharti Airtel and Google announced a strategic partnership, as part of the agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal. Google will also incorporate

advertising through its Mobile Ads product on the Airtel Live mobile portal.

Cont..
M-Commerce. Targeting 55 million farmers under its fold, Indian

Farmers Fertiliser Cooperative (IFFCO) have agreed upon a joint venture with telecom major Bharti Airtel to provide a boost to Indian agriculture and rural economy at large. Hiring the best or attracting the best (poaching or otherwise) Airtel has a history of hiring some of the high level officials from other companies to be an integral part of their business. Expansion into Africa.

Projection of Future Financial Position

Customer base: The customer base as on 31st March 2010 stood at 137.6 million for the

company across India, Sri Lanka and Bangladesh. By the year ending March 2013, the customer base is projected to increase to 450 million. Revenues: Bharti Airtel posted revenues of Rs 41829.5 crores for the year ended 31st March 2010. The revenues have been increasing but at a decreasing rate. Keeping that in mind, the company should be able to post net revenue of

Cont.
Net profits: For the year ended 31st March 2010, net profits were Rs 9426.2 crores which was a

22% Y-o-Y increase. The projected profits for March 2013 should stand at Rs 16449 crores taking into account an increase of about 25% of profits over sales. Growth rate: Bharti Airtel grew at 7% for the financial year 2009-2010. It has been projected to maintain an average growth rate of 10-15% in the next 3 years.

Cont..
Market share: Currently Bharti Airtel operates full-fledged in India, Sri Lanka and Bangladesh. It

has recently begun operations in Africa. In India, despite the high competition there is more to look forward, as the penetration levels are way below the global average at 38%. Employees: The number of employees should be at around 41000 by March 2013.

Future strategies
Lookout for acquisitions post shakeout. Africa and the El Dorado illusion. Contingencies to combat recession. Threat of Internet. Their strategic alliance with VmWare is crucial and must be played out well because the storage space within any hand held device is limited.

Cont.
With election coming up in a few years they

must make provisions for changes in the telecom regulations if there is a change at the Centre. The business model implemented in Africa would have to be different from that of India. The segment of Airtel which focuses on broadcasting services must look into the facet of integrating internet into the television experience.

THANK YOU