BUSINESS STRATEGY OF

BHARTI AIRTEL LIMITED

AND IT’S PERFORMANCE IN THE
YEARS
2007, 2008 AND 2009
A BRIEF OVERVIEW OF BHARTI AIRTEL
LIMITED

Bharti Airtel is one of Asia's leading providers of

telecommunication services with presence in all the 22
licensed jurisdictions (also known as Telecom Circles) in
India, and in Sri Lanka. The Company served an aggregate
of 96.6 million customers as of March 31, 2009; of whom
93.9 million subscribe to GSM services and 2.7 million use
Telemedia Services either for voice and/or broadband access
delivered through DSL. The Company also offers an
integrated suite of telecom solutions to enterprise
customers, in addition to providing long distance
connectivity both nationally and internationally. The
Company also deploys, owns and manages passive
infrastructure pertaining to telecom operations under its
subsidiary Bharti Infratel Limited. Bharti Infratel owns 42%
of Indus Towers Limited. Bharti Infratel and Indus Towers
are the two top providers of passive infrastructure services
in India.

SERVICES OF BHARTI AIRTEL

The Company Bharti Airtel is in India the biggest

integrated and also the 1st telephone service provider in the
private sector. Bharti Airtel Limited has been since its very
beginning using the latest technology and thus the company
has paved the way for the telecom sector in India with its
world-class services and products. This has helped Bharti
Airtel Company to grow for the number of its customers has
increased very rapidly over the years.
The Company Bharti Airtel is divided into 3 business
units that are:

• Broadband & Telephone (B&T) services

• Enterprise services
• Mobile services

Among the various services that the Bharti Airtel Limited

Company provides to its customers, the services of
broadband and telephone (B&T) are 1 of them. The company
provides broadband Internet services of high speed for it has
the best network in India. The company Bharti Airtel also
provides telephone services in around 94 cities of the
country and this helps the people to stay connected with one
another. The company plans to expand its broadband and
telephone services by providing IPTV services and DTH
operations.

Further Bharti Airtel provides enterprise services to its

customers. The services of enterprise provide telecom end-
to-end solutions to customers who belong to the corporate
sector and also long distance services to international and
national carriers. The company Bharti Airtel has more than
35,016 kilometers of optic fiber, a submarine landing
station, and is also a member of South East Asia- Middle
East- Western Europe- 4. All this has helped the company to
provide the best enterprise services to its customers. The
company Bharti Airtel Limited plans to expand its enterprise
services so that it can achieve the status of a global carrier
within a period of 2- 3 years.

The company Bharti Airtel Limited provides mobile

services to its customers. The company provides fixed and
mobile wireless services in around 23 telecom circles by
using the GSM technology. Bharti Airtel Company has
become the biggest mobile service provider in India on the
basis of the number of customers. The company in the
future plans to expand its network in order to establish its
presence in more than 500,000 villages all across the
country by 2010.

Bharti Airtel has become a leading company in the

telecom sector in India due to the fact that it has provided
the best quality of services to its customers. And this has
been possible for the company has a wide telecom network
that is of the latest technology. The Company Bharti Airtel
Limited in the future also should continue to upgrade its
facilities for this will ensure that high grade of services are
provided to its customers.

VISION OF BHARTI AIRTEL LIMITED

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

• Loved by more customers
• Targeted by top talent
• Benchmarked by more business.

SWOT Analysis Bharti Airtel

Strengths

1. 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.

2. 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.

3.The company has covered the entire Indian nation

with its network. This has underpinned its large and
rising customer base.

Weaknesses

1.An often cited original weakness is that when the

business was started by Sunil Bharti Mittal over 15
years ago, the business has little knowledge and
experience of how a cellular telephone system
actually worked. So the start-up business had to
outsource to industry experts in the field.

2.Until recently Airtel did not own its own towers,

which was a particular strength of some of its
competitors such as Hutchison Essar. Towers are
important if your company wishes to provide wide
coverage nationally.

3.The fact that the Airtel has not pulled off a deal
with South Africa's MTN could signal the lack of any
real emerging market investment opportunity for the
business once the Indian market has become
mature.

Opportunities

1.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.

2.Global telecommunications and new technology

brands see Airtel as a key strategic player in the
Indian market. The new iPhone will be launched in
India via an Airtel distributorship. Another strategic
partnership is held with BlackBerry Wireless
Solutions.

3.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.

4.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.

5.Bharti Airtel is embarking on another joint venture

with Vodafone Essar and Idea Cellular to create a
new independent tower company called Indus
Towers. This new business will control more than
60% of India's network towers. IPTV is another
potential new service that could underpin the
company's long-term strategy.
Threats

1.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.

2.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. This opened the door for
talks between Reliance Communication's Anil Ambani
and MTN, allowing a competing Inidan industrialist to
invest in the new emerging African
telecommunications market.

Bharti Airtel could also be the target for the

takeover vision of other global
telecommunications players that wish to move
into the Indian

BUSINESS MODEL ESTABLISHED BY

BHARTI AIRTEL LIMITED AND
IBM INDIA PRIVATE LIMITED

While Bharti is a leader in telecom services,

IBM is the global leader in the IT market.
Innovation highlights

• The agreement was the largest ever IT deal in India and at

the time of signing, was estimated to be of an order of US$
750 million in value.
• MIS Asia has awarded this Innovative Business Model three
pan-Asia awards in the last two years including the MIS Asia
IT Excellence Award for Best Change Management in 2005,
the MIS Asia IT Excellence Award for Best Bottom Line IT in
2006 and the MIS Asia IT Excellence Award for Best
Knowledge Management in 2006.

The innovation

IBM assumed responsibility for all of Bharti’s IT

systems,applications, infrastructure, operations and people
with the agreement coming into force. The agreement
entailed Bharti paying IBM a percentage of its revenues,
which directly linked IT cost to business performance. The
agreement construct was innovative not only from the
perspective of the remuneration model for IBM, but also in
terms of the scope of the delivery, which was comprehensive
and included practically all of IT—current and future. It made
innovation all pervasive as IBM introduced changes in the
area of processes, people and systems to usher in business
transformation, improve operational excellence and
efficiency and optimize performance.
Customer Speak
“The agreement demonstrates our strategic intent to
create a globally admired telecom company. With
predictable IT spend, improved cash flow, and optimized use
of technology resources, the agreement with IBM will
enhance Bharti-Televentures’ share value.”
--Sunil Bharti Mittal, Chairman
And Managing Director, Bharti Enterprises
A BRIEF REVIEW OF THE PERFORMANCE OF
BHARTI AIRTEL LIMITED IN THE YEARS
2007, 2008 AND 2009

Results for the fourth quarter and full year ended March
31, 2008

Highlights for Full Year ended March 31, 2008

*Overall customer base crosses 6.4 crore

*Highest ever-net addition of 2.5 crore customers in a year

*Market leader with a market share of all India wireless

subscribers at 23.8%(22.4% last year)

*Total Revenues of Rs. 27,025 crore (up 46% Y-o-Y)

*EBITDA of Rs. 11,372 crore (up 53% Y-o-Y)

*Cash Profit of Rs. 11,137 crore (up 52% Y-o-Y)

*Net Income of Rs. 6,701 crore (up 57% Y-o-Y)

Highlights for Fourth Quarter ended March 31, 2008

*Highest ever-net addition of 69.27 lakh customers in a

single quarter
*Total Revenues of Rs. 7,819 crore (up 45% Y-o-Y)

*EBITDA of Rs. 3,252 crore (up 45% Y-o-Y)

*Cash Profit of Rs. 3,036 crore (up 38% Y-o-Y)

*Net Income of Rs. 1,853 crore (up 37% Y-o-Y)

Commenting on the results and performance, Mr.

Sunil Bharti Mittal, Chairman & Managing Director,
Bharti Airtel Limited, said, “This has been another year of
record growth for the telecom industry and Bharti Airtel.
The Indian telecom story is now entering the second wave
of growth, which will come from rural India. As an industry
leader we are committed to be at the forefront of this
growth and take our services deeper into rural areas and
provide affordable world-class services to customers. The
coming year will be an exciting one for the company as we
launch our services in new segments such as DTH and go
live with our operations in Sri Lanka. Going forward, we see
another year of strong demand in all business segments
and we will continue to build on our organisational
strengths.”

Highlights for Full Year ended March 31, 2009

During the financial year 2008-09, the Company

achieved various accomplishments and became the largest
integrated telecom company in India based on total telecom
subscribers.
Some of the key highlights include the following:
* First operator in India to cross the total customer base of
96 million.
* Highest net addition of 31.93 million of total customers in
a year.
* Full year consolidated gross revenue of Rs 374 billion and
consolidated EBITDA
of Rs 153 billion.
* Full year consolidated net profit of Rs 79 billion.
* Year on Year (Y-o-Y) growth of total customer base by
50% resulted in 38%
increase in revenues and 23% increase in net profit.
* Mobile Network is present in 5060 census towns and
414,906 non-census
towns and villages in India, thus covering approximately
81% of the
country's population.
* Focus on rural penetration and customer affordability has
led to mobile
tariffs of 1.2 cents/minute, one of the lowest in the world.
* Expanded its international footprint by launching mobile
operations in
Sri Lanka on a state-of-the-art 3.5G network
* Made its television debut by launching Airtel Digital TV, its
Direct-to-
Home (DTH) satellite TV service.
* Debuted Triple Play service with Airtel digital TV
interactive - its
Internet Protocol Television Service in NCR under a unified
brand 'Airtel'

KEY STRATEGIES FOR THE YEAR

In the year gone by, Bharti Airtel has focused on making

telecom services affordable through a dedicated effort of
rationalizing and simplifying tariffs. The Company will
continue to pursue this strategy of affordability, availability
and simplicity. The customer has been at the centre of their
strategy and going forward their full focus will be, and
remain on customer service. The Company believes that
infrastructure sharing will provide a boost to managing
efficient operations, resulting in significant cost savings.
They will explore the extent of active infrastructure sharing
based on guidelines issued by TRAI. They recognize the
potential offered by the rural Indian market. Significant
expansion, both of network and distribution, is being
planned. In the coming year, the Company expects more
than half of its new business to come from rural customers.

In addition to rural expansion, Bharti Airtel has also

expanded abroad through the launch of its operations in Sri
Lanka where it has successfully replicated its unique
business model.

The coming year will see a stronger emphasis on non-

mobile business with Direct -to- home (DTH) services and
IPTV services. The Company will increase investments in the
area of broadband to enhance penetration and usage of
broadband services. The Company will focus on non-voice
business by developing customized solutions in the B2B
space.

Highlights for the year 2009

Bharti Airtel Ltd reported a 21 per cent increase in its net profit
to Rs 2,239 crore for the fourth quarter ended March 31, 2009
compared with Rs 1,853 crore for the previous quarter last year.
It saw the highest ever net additions in a single quarter with
83.79 lakh new subscribers during the Jan-March period. Total
revenues increased 26 per cent to Rs 9,825 crore from Rs 7,819
crore. The company declared its maiden dividend of 20 per cent of
face value for the year. Further, the company has proposed sub-
division of existing equity shares of Rs 10 each into two equity
shares of Rs 5 each.
The average revenue per user (ARPU) for its mobile services
declined 15 per cent from Rs 324 a month in March 2008 to Rs 305
in March 2009. Its ARPU is, however, higher than the industry
average of Rs 220 a month. Minutes of usage have increased from
89,058 million in March 2008 to 1,30,669 million by March 2009.
Total subscriber base has grown from 64.2 million to 96.6 million.
The company said it plans to invest $3 billion during 2009-10. Its
share price increased 3.25 per cent to close at Rs 749.30 on the
BSE.