Strategy Analysis of

BY G R O U P 1
Bharti Airtel
K I R A N JA G TA P
JA I S H R E E V I S H WA N AT H A N
C H A N D A N LU T H R A
PA L L AV I M O H A D I K A R
N A M I T JA I N
 Telecom sector: Brief Timeline

NTP-1999, high • Calling Party • 100 million • 3G

National cost fixed • ILD opened pays mobile licenses
Telecom license fee to to • Unified FDI limit subscribers auctioned
BSNL Communication
Policy (NTP) low cost competition Access increased • Fastest • 650
TRAI is revenue established by Convergence • CDMA from 49 to 500 million MNP
is Bill introduced Licensing growing million
established sharing DoT introduced 74 percent subscriber introduced
formulated Regime market subscriber

1994 1997 1999 2000 2001 2002 2003 2005 2006 2009 2010 2011

• 0.8 %
Teledensity
• 8 mn Total
Phone, 2.5 mn
waiting

Source: TRAI
Indian Telecom Sector
 919.17 million active
mobile phone
connections as of Mar
2012
Growth in Subscriber Base Growth of Teledensity

Source: TRAI Annual Report

Source: TRAI Annual Report
 Telecom penetration rate from less than 3% in 1999 to over
78% as of Mar 2012
Telecom Sector : Environment Analysis
Economic
• Telecom accounts for 2.8% of India’s
GDP
• 10% increase in broadband penetration
leads to 1.3%increase in GDP
• Employees 20million people
Social
• Lifestyle changes- people have become more
connected
• Younger generations are more tech savvy and
more informed
• Consumer Activism- Consumers have become
more aware about their rights
• Internet is seen as a knowledge repository
Telecom Sector : Environment Analysis
Technology

• 3G data services are growing and 4G services are soon to be launched

• More that UD$ 100billion have been spent on acquiring 3G license and
spectrum
• Exponential growth in the value added services
• Increased computing power of hand held devices
Telecom Sector : Environment Analysis
Porters Analysis
Threat of Bargaining power
Entry Barrier Rivalry Buyer power
substitutes of supplier
• Low switching • High initial • 6-8 service • No switching • High switching
cost capital providers in cost cost for
• MNP provides investment every circle • Small volume suppliers
seamless • Brand identity • Over capacity- • MNP makes • Backward
transition • Low switching leading to price switching easier integration by
• IP telephony costs wars telecom
provides better • Huge untapped • Average companies
quality at rural revenue per
cheaper rates market(40%pen user is low
• Applications like etration) • Almost no
Skype, viber, differentiation
whatsaap • High exit costs
Telecom Sector : Environment Analysis

• Untapped Landscape
Opportunity • New Technologies
• Strong Strategic Partnerships

• Regulatory & Economic

Environment
Threats
• Hyper Competition
Bharti Airtel : Brief History

• Bharti, Idea,
• Acquired • Wireline Vodafone • Acquires Zain
JT Mobiles, services in formed Telecom (15
entered Delhi, Indus African
Ktk., AP. Haryana, Towers countries)
Launches • Acquired KTK & TN Bharti Axa • “Easy Day” • 70% stake in
Skynet to First SP to Life Received DTH Wahid Airtel First SP to
services in • First to retail store
Entered enter operate in 23 Insurance license to opened in Telecom Money launch 4G
India, launch ILD
in HP Chennai circles launched operate Ludhiana Bangladesh services services
Delhi services

1995 1996 1999- 2002 2005 2006 2007 2008 2010 2011 2012
2000

Source: Telecommunication Industry in India, Rajkumar Upadhyay

Bharti Airtel
Businesses as % in Revenue Ownership

Promoters Group % Holdings

Bharti Telecom Limited 45.70 %
Pastel Limited 15.57%
Indian Continent Investment Limited 7.00%
Viridan Limited 0.22%
Total Promoters Share 68.49%

Public holding more than 1% shares % Holdings

LIC 4.98 %
ICICI Prudential Life Insurance 1.68%
Mobile Services Telemedia Services Airtel Business National Westminster Bank 1.07%
Bharti Airtel: Internal Analysis

Highly 2G Spectrum
Poor Price Wars
Competitive Scandal
Infrastructure
Industry
Bharti Airtel: Internal Analysis

CAGR of
17%

Highly 2G Spectrum
Poor Price Wars
Competitive Scandal
Infrastructure
Industry
Bharti Airtel: Strengths
Strategic Alliances Wide Network Coverage Infrastructure Focus on Core Activities
CAGR of
17%

Highly 2G Spectrum
Poor Price Wars
Competitive Scandal
Infrastructure
Industry
Bharti Airtel: Strengths
Strategic Alliances Wide Network Coverage Infrastructure Focus on Core Activities
CAGR of
17%
• World renowned partners • Network in all circles of • Owns tower business • Sales & Marketing
India
• Pay per Usage • Shares towers with other • Financials
operators

Highly 2G Spectrum
Poor Price Wars
Competitive Scandal
Infrastructure
Industry
Bharti Airtel: Weakness

Poor Customer Inability to Not well

Lack of Integrity
Service Contain Costs Diversified

Involvement in 2G Customer service is not Costs have not come Airtel is still the biggest
scandal can dent a necessity anymore, down significantly over revenue generator for
investor confidence but a differentiator the years Bharti group
 Bharti Airtel: Core Competencies
Low Cost

Product Innovation
Strategic Alliance High Quality

Better Brand Image Increased Market Share

Infrastructure
Customer Experience

Focus on core activities Sales & Marketing

Financials Wider Distribution

Bharti Airtel: Strategy

international Strategy

Venturing in emerging
markets
Corporate Strategy
Focusing on telecom sector
Diversification for now

Leveraging core competencies Following inorganic route

Business Strategy to succeed in new sectors
Present in Africa, Sri Lanka
Innovative Business Model Currently operating in 5 and recently Bangladesh
Sectors
Building on strengths
International acquisitions also
Focus on high growth areas make it 5th largest player
Improving weakness
worldwide
Bharti Airtel: Future

Cashless Banking
Support Healthcare
Internet other sectors
Improved Apps
Zain Services
Warid
Acquisitions
3G
New
4G
Technologies
THANK YOU