AIRTEL

STRATEGIC MANAGEMENT Group No 32

Chaitanya Pothakanoori 166 Click to edit Master subtitle style Raghu Chittari 167 Ankur Malhotra 168 Amrit Keyal 169 Ackshatt Aradhye 170

PESTEL
Political :

SWOT
Strengths : Largest cellular provider in India. Broadband,telephone,other services Has access to knowledge and technology from other Eg: Sony-Ericsson, Nokia - and Sing Tel Covered the entire Indian nation with its network

Disorderly regulatory regimes left behind by corrupt previous governments. Many countries freshly out from the civil war and apartheid. Government intervention in the industry

Economic:

Penetration rate in mobile market has increased. Monthly mobile ARPU has broken the US$10 barrier in most markets, but some operators are achieving up to 60% higher ARPU than their direct competitors.

Weaknesses : Did not own its own towers until recently

Opportunities : Customized version of the Google search engine which will enhance broadband services to customers- enhance the Airtel brand Strategic partnership is held with BlackBerry Wireless Solutions Less well-off consumers may only be able to afford a few tens of Rupees per call-'Matchbox' strategy Indus Towers -joint venture with Vodafone Essar and Idea Cellular IPTV is another potential new service that could underpin the company's long-term strategy.

Socio-cultural:

Women in sub-Saharan African countries contribute over 40% of the economic activity of most nations. The literacy of women is low relative to men and lower still relative to literacy figures in most world nations even many other developing nations. The Grameen Telecom model of the Village Pay Phone has facilitates mobile phone entrepreneurs in rural villages through microcredit.

Technological:

Extensive national fibre optic backbone networks are being rolled out. 3G mobile services launched in Nigeria and underway in other countries Expansion of GSM networks even in instable Somalia Upgradations in data transmissions due to rapid growth of ADSL and wireless broadband services.

Threats :

Knowledge and technology sharingAirtel 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. Acquisition trail which may make it vulnerable if the world goes into recession.

Legal:

 Why ZaIN

Drawbacks

Africa is the next growth destination Huge Opportunity

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The addressable base in Africa is around 1 billion currently there are 500 million people in the continent of working age, and by 2040, this number is expected to exceed 1.1 billion.

ZAIN present in countries with lower penetration & Revenue Potential + Political Issues (Sub-Saharan Africa). A Costly deal at $10.8 Billion Shoddy Infrastructure & Poor Governance will make it a difficult Market

No integration & Synergies of The median age of Africas Competitive Advantage of zain Consumer and market knowledge in operations in the 15 nations. population is 17 years, lower africa & licences in the contiguous countries than that of India. ZAIN is a poor second to MTN - The urbanization is 40% in -

The other side of the coin !

Advantage
A) )

ZAIN from BHARTI Bharti may bring in tariff schemes for a low ARPU but high volume market. Zain can also benefit from Bharti s efficiency in managing network operations. BHARTI from ZAIN Bharti can understand African market better. It can learn a lot from zain expertise in data service such as 3G and 3.5G

B) )

Issues & Results

Africa-specific challenges faced by Airtel

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Results
By the numbers: 42 mn (existing) customers plus huge untapped demographic Airtel became worlds 5thlargest wireless telecom company For Zain: $3.3 bn (deal worth $10.7 bn) Bharti Airtel stock rose 2.11% toRs.277.90 [Jun 10, 2010, BSE], with corresponding upward swing in market capitalization

The principle of age: age = experience = wisdom = authority; no meritocracy The timelessness principle: no time bounds on taking decisions, especially when large number of people is going to be affected The nepotism principle: African firms do not frown upon favouring kith and kin over external prospective employees; again, no meritocracy Underdeveloped support infrastructure Low purchasing power of native populations

Bangladesh-specific challenges faced by Airtel

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Relatively lower than cultural/commercial issues in Africa, since Bangladesh has more commonalities with Indian business ethos poor resource planning & inadequate infrastructure Autocratic tendencies of managers &

Thank You