Group-7

SWOT Analysis of Bharti Airtel-Zain Deal

Strength
Largest Telecom Player In India Strong Financials Strategic Alliance with other stake holders, including Nokia, SingTel & Sony Ericson Pan-India Presence EPS is accretive, total subscriber base of 140 million in INDIA.

Strength
ARPU in Africa ranges from $3 to $10, which compares favourably with India, where Airtel ARPU is $5(Rs 230)

Weakness
Outsourcing of core systems Integration pain likely to remain for about 12 to 18 months The African assets of Zain reported a loss of $35 million in 2008 In the first months of 2009,it has seen a 17 % drop in net profit.

Weakness
According to Zains Q3 presentation, 47% to 50% of all revenue comes from non-African sources. Bharti paying a 55 % premium for zain Ebitta, in comparison with Bhartis own valuation. Nigeria is not profitable and reported a loss of $88mn on revenue of $986 mn, as of sept ,09

Opportunities
Tie ups for the customer application Strong presence in the emerging markets. Match box Strategy scale of Penetration. Current tele density of 30.6% in Africa is still low considering other developing countries and opportunity of a new brand to bring a market.

Threats
o Intense competition & shortage of bandwidth o Falling ARPU o For a set of assets that are not positive at this point, analysts maintain that Bharti have to absorb it from its profitable India operations..