BHARTI AIRTEL

Director :- Sunil Bharti Mittal

Bussiness discription: - provides mobile voice and data services, fixed line, 3G & 4G, IPTV and DTH services.

Established : - July 07 1995 as a public limited co.

FACT SHEET

As of March 31, 2013 airtel has 189 million wireless subscribers

Market share is 22 %

Worlds 5th largest operator in terms of subscribers

1st to provide 4g services in the country

Provides these services currently in 4 cities – Bengaluru, Chandigarh, Kolkatta and Pune.

Manages 1,34,000 (approx) mobile tower sites through Bharti Infratel & Indus towers.

Past 4 years have not been fruitful for the company with its financial performance witnessing a major slide.

During 2012-13, it witnessed lowest net profit in 7 years and 50 % decline from the year 2012-13

Downfall

The biggest challenge that the company is facing is servicing its debt which stood at Rs 640 billions as of March 31,2013.

The debt was raised largely to fund the acquisition of Zains African operation in 2010

Challange

The financial pressure is expected to increase as the company needs funds to pay the one time spectrum fee and to renew its license for Delhi and Kolkata circles in 2014

In this scenario reviewing its exixting bussiness strategy, tapping new revenue streams are the only way forward for the company

Hyper-competition

The entry of new players in the market in 2008 led to a price war and airtel was forced to offer services at rock-bottom prices.

Losing market share to peers like idea which has doubled its share from 9 to 18 % in last four years.

KEY Concerns

Airtel’s African operations have been a big drag on its resource.

The company is yet to record profits

Net loss of the company increased from INR 130 billion in 2011-12 to INR 220 billion in 2012-13

Difficult regulatory environment

Bharti airtel has undertaken a restructuring exercise to bring all verticals under two heads

Individuals Enterprises

The entire country has been divided into 8 regions instead of 3 previously to ensure greater focus on each region.

Revival Strategies

To ease pressures on financial front the operator has been initiating several initiatives

These include Hike in Tariffs

Reducing promotional offers and discounts

The company recently divested 5 % stake in Qatar endowment for around 67.9 billion

Sold majority of it stake in value added services (VAS) company Comm-viva technologies to tech Mahindra.

Intends to sell minority stakes in telemedia and DTH businesses to reduce debt

These 3 services are valued at about 110 billion, 65 billion and 60 billion respectively

Although the financial performance of its African business is not up to the mark, bharti has been generating adequate cash to cover its capital cost, taxes and interest payment on acquisition debt

In nigeria, which is bharti’s biggest market in africa, it has been losing share due to increase in competetion and has reduced the tariffs by 30% to remain competetive

Global challenges and opportunities

Despite posing economic and regulatory challenges, africa presents major opportunities as an emerging telecom market

Income level in africa are lower than in india, which is a challenge but improving political and economic prospects and a large youth population makes it a promising future market.

Bharti is looking to expand its operations in Myanmar, which has only two government based operators. Bharti has an opportunity to cater to 60 million people with almost no competetion

Initiatives in the data space and enhancing rural services

Expanding its 4g operations to Delhi and Mumbai

Bharti is also focusing on m-commerce market. Bharti airtel money has generated a positive response in 15 countries

The way forward