Professional Documents
Culture Documents
Airtel Generic Strategies
Airtel Generic Strategies
Airtel Generic Strategies
INTRODUCTION
Incorporated on July 7, 1995 for promoting telecommunications services.
It is one of Indias leading private sector providers of telecommunications
services with more than 249.31 million customers with market share of
22.48%.
The net profit for the financial year 2014-15 was 65,401 million
The ROE of Airtel is 8.52%
Growth rate of the company is 7% for the financial year 2014-15
Growth rate of the Indian telecom industry for financial year 2014-15 is 11%
Rank
Operator
Market Share %
Bharti Airtel
22.48%
Vodafone
18.16%
Idea Cellular
14.58%
Reliance Communications
13.17%
BSNL + MTNL
10.99%
TATA
7.07%
Aircel
7.66%
Uninor
3.80%
2.09%
Total
100%
POLITICAL FACTORS
Regulatory bodies TRAI
Lack of Transparency in
Spectrum & License
Allocation
SOCIAL FACTORS
ECONOMIC FACTORS
Fast Growing Sector
CAGR 11%
Tariff rates declining since
the year 2000
Declining ARPU but
increasing subscriber base
PEST Analysis
Customers notion
regarding brand and status
symbol
Cost factor is major
concern to customers
Likes and dislikes of a
teenager and adult not the
same
TECHNOLOGICAL
FACTORS
e-commerce portal
R&D driven industry
Introduction of newer
products/ services/ plans
3G, 4G and high speed
broadband in the market
Barriers to
Entry
HIGH
Bargaining
power of
Suppliers
MODERATE
Indust
ry
Rivalr
y
HIGH
Threat of
Substitute
s
MODERATE
SWOT Analysis
STRENGTHS
Internal
S1
S2
S3
S4
S5
OPPORTUNITIES
External
O1 3G expansion
O2 4G introduction
O3 Low rural
penetration
O4 m Commerce
WEAKNESSES
W1 Infrastructure issues
W2 Higher price
THREATS
T1 Increased
competition
T2 Regulatory Issues
T3 Vulnerability to
recession
T4 Mobile number
portability
Outsourcing
Telecom Tower
Infrastructure service
providers (Bharati Infratel
Ltd)
Building Mobile Towers
(Indus Towers)
Acquisitions
Efficient and Innovative
Techniques in Operations
Differentiation
Cost Leadership
Outsourcing
Bharti Airtel has cost advantage in outsourcing as their average cost per customer
is comparatively less than their competitors.
Company
Customer
Outsourcing
Base
Cost
They make
Airtel
249 mn
800 mn
rather than buy,
Vodafone
184 mn
1 bn
thus minimizing
their costs.
Idea
162.8 mn
800 mn
Acquisitions
For a company into the telecom service business cannot maintain growth without
expansion.
Whenever Airtel entered a new state in India it was only through the acquisition of
an existing player in that state.
Airtel entered Andhra Pradesh and Karnataka by acquiring stake in JT Mobiles.
It entered Kolkata by acquiring Spice cell.
Airtel entered Tamil Nadu by acquiring Sky cell in Chennai circle.
Airtel is even trying now to make its globalpresence by acquiring Zain in Africa
Deployed over two-third of sites on sharing and this process continues for new sites
as well, reducing the energy consumption by a minimum 30% over the standalone
sites.
Converted indoor sites to outdoor sites by installing FCU for switching off the Aircon,
making them feasible for alternative energy sources, like solar.
Deployed low-power consuming BTS (Base Transceiver Station) sites, which are able
to achieve a reduction in power consumption by a minimum of 30%, over the last 4-5
years.
Network planning and design is done by in-house experts. Through this, Airtel has
been successful in delivering the most advanced network to its customers.
Differentiation Strategy
They
differentiated
their products
across B2C and
B2B markets
Services
Exclusive Applications
Provides its
customers with
exclusivity and
feel loyal to the
company
SmartDrive is navigation app exclusive to Airtel customers. The app features voicebasedturn by turn navigation, traffic updates, and approximate travel time based on
current conditions.
Airtel has also started a newmCommerceplatform called Airtel Money in 2012. Using
Airtel Money, users can transfer money, pay bills and perform other financial
transactions directly on the mobile phone. It has an all-India presence.
Pricing (Sample)
Company
4G (1 GB)
3G (1 GB)
2G (1 GB)
Call Rates
Airtel
255
255
175
30/min
Idea
253
175
35/min
Reliance
225
199
30/min
BSNL
198
198
40/min
Vodafone
297
175
40/min
Limitations
Non availability of key financial and statistical data and other information relating to
their strategic decision making.
Airtel
Idea
Reliance
BSNL
Vodafone
Industry Average
Price/Unit
(Call Rates)
Overall Cost
30 paise/minute
35 paise/minute
30 paise/minute
40 paise/minute
40 paise/minute
35 paise/minute
36065.30 crores
21606.06 crores
27973 crores
N/A
23697.34 Crores
Raw Material
Cost
4115.10 crores
2394.40 crores
9145.00 crores
1289 crores
N/A
N/A
2599.5 Crores
Labour Cost
1691.50 crores
1358.73 crores
269 crores
11008 crores
N/A
3581.81 Crores
Net Profits
65401.00 crores
16.893.10 Crores
-4470.00 Crores
-70197.60 Crores
-1149.00 Crores
1295.62 Crores
Airtel
Idea
Reliance
BSNL
Vodafone
Industry Avg
Subscribers
249.31 mn
162.08 mn
109.90 mn
93.29 mn
183.8 mn
159.67 mn
ARPU (Avg
Revenue Per
User)
198
182
147
105.03
187
163.80
Note: 1. Prices of only call rates have been considered for the purpose of analysis.
2. Rest of the financial data is of whole of their operations.
Financial Analysis
References
http://
economictimes.indiatimes.com/bharti-airtel-ltd/infocompanyhistory/companyid-2718.cm
s
https://www.scribd.com/doc/37092403/Airtel-Strategic-Management
http
://www.airtel.in/airtel-annual-report-2014-15/pdf/Airtel%20DLX%20AR%202014-15.pdf
https://en.wikipedia.org/wiki/Airtel_India
https://prowess.cmie.com/
http://
trai.gov.in/Content/PerformanceIndicatorsReports/4_1_PerformanceIndicatorsReports.as
px