RP 14

Presentation By: Keerat Singh

Business Model Airtel

AGENDA
About the Company

Services Offered
SBUs Business Model Investment Highlights Revenue Figures Partners Way Ahead

Conclusion

About The Company

LARGEST private INTEGRATED telecom company in India LARGEST WIRELESS service provider in India by subscribers 5th LARGEST MOBILE telecom operator in the world 3rd LARGEST in-country wireless service operator in the world Amongst the LARGEST providers of passive infrastructure

Growth Path

Services Offered
Mobile Calling Cards Digital TV Blackberry

Home Customer Corporate Customer

Email on the go Home Phones Broadband and Internet Wireless Network

Data and IP solutions Voice Solutions Conferencing

SBUs
Cellular Mobile services across 19 countries Customer and revenue market leader in India ~227 million wireless subscribers globally as of Q2, FY2012 Offers fixed telephony and broadband internet (DSL+IPTV) Customer base of 3.3 million; 43% broadband and internet customers Services provided across 87 cities

Mobile Services

Telemedia Services

PanIndia DTH opertions

Digital TV SERVICES

6.61 mn customers with coverage across 9000 towns and cities

Bharti Infratel owns 33056 towers across 11 circles Owns 42% stake in Indus Towers, amongst the largest independent tower companies in the world with 107,998 towers across 15 circles Average tenancy ratio of ~1.8

Passive Infrastructure Services

Enterprise Services
Services to Large enterprises and carriers Serves as single point of contact for all telecom needs Global Infrastructure od over 225,000 Rkms covering 50 countries across 5 continents

Business Model- Minutes Factory

Focus on producing the lowest cost minute whilst maintaining / growing margins Drive affordability by increasing users and their usage Improving affordability to gain positive elasticity is at the heart of our Minutes Factory model

Affordability

Improved Profitability

Positive Elasticity

Economies of scale (cost efficiency)

Increase In Usage

Increased scale of minutes; driving operating leverage

Affordability

Going Mobile

Provide starter packs to make it easy for a first-time user to activate mobile service Tie-up with manufacturers such as Nokia and Apple for providing mobile handsets

Staying Mobile
Customer Rate

Plans with low recharge thresholds making staying mobile more affordable for a larger base of customers Large distribution network providing convenient accessibility to a wider customer base

Providing optimal rate plans with various combinations for On-Net, Off-Net, SMS, Interconnect and other charges

Investment Highlights

Partners

Revenue Figures

Q2 FY12 Annualized Revenue: $16.9 billion

Q2 FY 12 Annualized EBITDA: $5.1 billion

Way Ahead
1 Translate its expertise in Indian markets to other emerging economies.

Technology leadership is a must Airtel must ensure that its reliance on GSM technology does not render it obsolete.
Indian market inspite of being the worlds largest is still not matured. Opportunities abound in the hinterland which must be exploited. A Focus on Customer service and experience

They need to capture home and SMB

Robust leadership pipeline to support growth

Revenue Losses
SMS
SMS now being replaced by online applications such as WhatsAap ,eBuddy,Nimbuzz etc

VOIP
VoIP traffic is 22% of total traffic in 10 years Has captured only 0.03% of revenues Mobile VoIP to emulate fixed VoIP

Impact Analysis
High risk of replacement

Personal stay-in-touch calls and Intra-company calls run a risk of substitution by free alternatives..

Urgency
Business conference calls High

Criticality (Need for reliability)

Number of Participants

Mobility Need

High

Medium-High

Limited

Intra-company calls (mobile)

High

Medium

Medium-high

High

Personal stay-intouch calls

Low

Low-medium

Low-medium

Low-medium

Personal Emergency calls

High

High

Low-medium

High

General information calls

Medium-High

Low-medium

Low-medium

Medium

Conclusion

India has social media reach of 84 % of users

These changes in Media consumption and content pull from telco is due to 3G, new devices like smart phonestablets. Debate is on if owning the distribution channel is more important or owning the content.

Conclusion