Strategy Analysis of Airtel

7/28/2019 Strategy Analysis of Airtel

1/19

Strategy Analysis

Bharti AirtelBY GROUP 1KIRAN JAGTAP

JAISHREE VISHWANATHAN

CHANDAN LUTHRA

PALLAVI MOHADIKAR

NAMIT JAIN


2/19

Telecom sector: Brief Timeline

1994 1997

National

Telecom

Policy (NTP)

is

formulated

TRAI is

established

NTP-1999, high

cost fixed

license fee to

low cost

revenue

sharing

1999 2000

BSNL

established by

DoT

2002

ILD opened

to

competition

CDMA

introduced

Calling Party

pays

Unified

Access

Licensing

Regime

2003 20052001

Communication

Convergence

Bill introduced

FDI limit

increased

from 49 to

74 percent

2006

100 million

mobile

subscribers

Fastest

growing

market

2009

500 mil

subscrib

0.8 %

Teledensity

8 mn Total

Phone, 2.5 mn

waiting

Source: TRAI


3/19

Indian Telecom Sector

919.17 million activemobile phoneconnections as of Mar2012


4/19

Growth of TeledensiGrowth in Subscriber Base

Source: TRAI Annual Report

Source: TRAI Annual Re

Telecom penetration rate from less t78% as of Mar 2012

T l S t E i t


5/19

Telecom Sector : EnvironmentAnalysis

Economic

Telecom accounts for 2.8% of IndiasGDP

10% increase in broadband penetrationleads to 1.3%increase in GDP

Employees 20million people

Social

Lifestyle changes- people havconnected

Younger generations are mormore informed

Consumer Activism- Consume

more aware about their right

Internet is seen as a knowled

T l S t E i t


6/19


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 andspectrum

Exponential growth in the value added services

Increased computing power of hand held devices

T l S t E i t


7/19


Porters Analysis

Threat ofsubstitutes

Low switchingcost

MNP providesseamlesstransition

IP telephonyprovides betterquality atcheaper rates

Applications likeSkype, viber,whatsaap

Entry Barrier

High initialcapitalinvestment

Brand identity

Low switching

costs Huge untapped

ruralmarket(40%penetration)

Rivalry

6-8 serviceproviders inevery circle

Over capacity-leading to price

wars Averagerevenue peruser is low

Almost nodifferentiation

High exit costs

Buyer power

No switchingcost

Small volume

MNP makesswitching easier

Bargo

Higcossup

Baint

telcom

T l S t E i t


8/19


Untapped Landscape

New Technologies

Strong Strategic PartnershipsOpportunity

Regulatory & Economic

Environment

Hyper CompetitionThreats


9/19

Bharti Airtel : Brief History

1995 1996

Launches

services in

India,

Delhi

Entered

in HP

Acquired

JT Mobiles,

entered

Ktk., AP.

Acquired

Skynet to

enter

Chennai

1999-2000

2002

First SP to

operate in 23

circles

2006

Bharti Axa

Life

Insurance

launched

Received DTH

license to

operate

2007 20082005

Wireline

services in

Delhi,

Haryana,

KTK & TN

First to

launch ILD

services

Bharti, Idea,

Vodafone

formed

Indus

Towers

Easy Day

retail store

opened in

Ludhiana

2010

Acquires Z

Telecom (

African

countries

70% stake

Wahid

Telecom

Banglade

Source: Telecommunication Industry in India, Rajkumar Upadhyay


10/19

Bharti Airtel

Ownership

Promoters GroupBharti Telecom LimitedPastel LimitedIndian Continent Investment LimitedViridan LimitedTotal Promoters SharePublic holding more than 1% shares

LICICICI Prudential Life InsuranceNational Westminster Bank

Businesses as % in Revenue

Mobile Services Telemedia Services Airtel Business


11/19

Bharti Airtel: Internal Analysis

Poor

Infrastructure

Highly

Competitive

Industry

Price Wars2G Spectrum

Scandal


12/19

Bharti Airtel: Internal Analysis

Poor

Infrastructure

Highly

Competitive

Industry


Scandal


13/19

Bharti Airtel: Strengths

Poor

Infrastructure

Highly

Competitive

Industry


Scandal

Strategic Alliances Wide Network Coverage Infrastructure Focus on Core Activities


14/19

Bharti Airtel: Strengths

Poor

Infrastructure

Highly

Competitive

Industry


Scandal

Strategic Alliances Wide Network Coverage Infrastructure Focus on Core Activities

World renowned partners

Pay per Usage

Network in all circles of

India Owns tower business

Shares towers with other

operators

Sales & Marketing

Financials


15/19

Bharti Airtel: Weakness

Lack of IntegrityPoor Customer

ServiceInability to

Contain CostsNot well

Diversified

Involvement in 2G

scandal can dent

investor confidence

Customer service is not

a necessity anymore,

but a differentiator

Costs have not come

down significantly over

the years

Airtel is still t

revenue gen

Bharti g


16/19

Bharti Airtel: Core Competencies

Strategic Alliance High Quality

Focus on core activities

Low Cost

Infrastructure

Sales & Marketing

Financials

Product Innovation

Customer Experience

Wider Distribution

Better Brand Ima


17/19

Bharti Airtel: Strategy

Business StrategyInnovative Business Model

Building on strengths

Improving weakness

Corporate StrategyDiversification

Leveraging core competencies

to succeed in new sectors

Currently operating in 5

Sectors

Focus on high growth areas

international StraVenturing in emerg

markets

Focusing on telecom s

for now

Following inorganic r

Present in Africa, Sri L

and recently Banglad

International acquisitio

make it 5th largest pl

worldwide


18/19

Bharti Airtel: Future

New

Technologies

3G

4G

Acquisitions

Zain

Warid

Improved

Services

Internet

Apps

Support

other sectors

Cashless Ban

Healthca


19/19

THANK YOU

Strategy Analysis of Airtel

Documents

Transcript of Strategy Analysis of Airtel