Telecom Warfare The battle for Survival

The sequence of events……

The ‘per-second-billing’ revolution by Tata Docomo’s GSM service

The introduction of 50p pulse flat by Rcom - a wave of lowest tariff buzz in the country enthralled every one

A damage of Rs 35,000 crore to Bharti’s valuation RCom meanwhile witnessed its valuation declining

by 21 % at Rs 14,169 crore. Such a huge loss just a result to per sec and 50p

pulse. Did anybody imagined it????

Testing the pocketsOur listed telcos collectively lost Rs 54,000 cr Idea lost Rs 3534 crore MTNL lost Rs 522 croreTata Teleservices (Maha) Rs 531 croreTata Communication Rs 370 croreSpice Communication Rs 227 crore

Industry Scenario

The telecom subscriber base in India reached the 525.65 mn mark

Overall Tele-density in India - 44.87 (Wireline-3.18)Fastest Growing Sector – CAGR 22% (2002-07)Second Largest Telecom Market - Lowest tariffLack of Transparency in Spectrum & License

Allocation

Industry Scenario

Difficult to differentiate service offerings or

customer service

Huge License Fees to be paid upfront

High gestation period

Rapidly changing technology

Infrastructure Setup Cost - High

Indian Telecom Market

Hyper competition…….???

It occurs when technologies or offerings are so new that standards and rules are in flux.

This results in competitive advantages that cannot be sustained.

In response, companies must constantly compete in price or quality, or innovate in supply chain management, new value creation, or have enough financial capital to outlast other competitors.”

The Person

Big Daddy of the industry Takes care of you where ever you goMost respected and classic personalityReliable and dependable family

memberVisionary ,looking beyond the horizonTruly, a global Indian

9

Mission

“ We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more”

Bharti Airtel

Largest Private Integrated Telecom Company in India

3rd Largest Wireless Operator in the World

Bharti Airtel formerly known as Bharti Tele-ventures Limited (BTVL) is a JV between Singtel and Bharti Telecom. (31.9 % stake)

11GROUP 7

Meaning behind the logo

Airtel logo is a strong ,contempory, a confident symbol of a brand that is always ahead of the rest , always ‘In-touch’ and on customer’s side.

It incorporates two solid, red rectangular forms whose counter-form creates an open doorway.

The title case lettering with its capital ‘A’ reinforces the leadership position.

The red dot cues in the focus on innovation.

Express yourselfExpress yourself

Mile Stones of Bharti Airtel• Bharti Airtel was established as Bharti Tele-Ventures, in 1995.

• The company offered its initial public offering in 2002.

• Vodafone acquired a 10% stake in Bharti Tele-Ventures for around $1.5 billion, in 2005.

• Bharti Tele-Ventures renamed itself to Bharti Airtel Limited, in 2006.

• Airtel launched its Iphone in august 2008.

• Airtel successfully tested 3G services in Delhi, Mumbai and Bangalore and are waiting for the spectrum to be allocated.

• MTN -Bharti merger begins to take shape in June -09

• MTN Bharti deal called off in Sept -09

• Joins the pricing war at the end of November - 09

Integrated Telecom CompanyWireless Services

– 2G/3G– VAS, Blackberry

Telemedia Services– Fixed Line– Broadband– DTH / IPTV

Enterprise Services– Carrier– Corporate

Passive Infrastructure– Bharti Infratel– Indus Tower

GROUP 7 14

Price

Customer based pricing strategies.Flexible pricing mechanism Late adopter to price warFinally changed to per second billing with

reduced roaming rates.

Investor Relations :- http://www.bhartiairtel.in

Place

• It has wide and extensive presence even in the remotest areas.(Pan India coverage)

• Airtel Customer Care Touch Points

• Distributors like

E.g. Paan shops, grocery stores, chemists, outlet etc.

Promotion• Large scale print and video advertising.• Brand endorsers - Big celebrities like SRK Saif,

Kareena • In 2002 Airtel got its Signature tune from A.R.

Rehman, this signature tune is the most downloaded tune in India.

• Ads based on the emotional connect

Tagline evolution

Current market share - Market Leader Pan India Network Recognized Globally Brand and corporate image Focused Leadership Managerial personal Promotional effectiveness

Business Strength

22

Airtel – Strategy

MANTRA : Focus on Core Competencies and Outsource the rest!

Ericssion – Networking IBM – IT Mphasis – call centre Bharti Infratel – Tele Infra

Core Competenci

es

Future Strategies

Translate its expertise in Indian markets to other emerging economies. This could call for acquisitions globally.

Bharti Airtel to invest US$ 126.5 million to ramp up its networks in the Assam and Northeast circles

Technology leadership is a must – Airtel must ensure that its dependency 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.

Innovate. Stimulate

.

Liberate.

To be the most customer-focused mobile service brand, continuously innovating to help liberate our

customers from the shackles of time & space

Till about eight years ago, the corporate name used to be the butt of many jokes.

???

BATATA!!

A three-way joint venture between the Birla Group, Tata and AT&T, it was called the

Birla-AT&T-TATA

INORGANIC GROWTH STRATEGY

8 YEAR DEAL WITH IBM WORTH $19.2 MILLION

40.8 % STAKE

PRESENT STRATEGY

• Present in 21 of 22 circles, latest entry - ASSAM

MAHARASHTRA

UTTAR PRADESH

HARYANA

• Special pricing/ tariffs for each circle during entry

• From basic voice & Short Message Service (SMS) services to high-end value added services such as Mobile TV, Games etc - IDEA is seen as an innovative, customer focused brand

'Best celebrity endorsement award' at NDTV Tech Life Awards

“I remember, I salute, I pledge”

Talk for India at Citizen’s Park on November 26.

• Idea is simultaneously conducting indoor WiMAX trials in three cities - Pune, Bangalore and Kochi.

• Eyes rural circles• `cover gaps quickly'

Entered other circles in 2005

STATUS QUO

NGN expertise of Maxis telecom in more mature markets like Malaysia especially with 3G & WiMAX.

$10 billion - investment till 2011Rs. 20 billion for 3G spectrum despite

economic slowdown.

2.88%

4.65%

A special handset for senior citizens. This will only have four buttons; one each for the doctor and police with two for calling two relatives

VAS & DATA SERVICES

• To be a nation wide player by end of 2009

• To acquire more number of subscribers

• To increase its tower numbers

• 3G• Data play, VAS• Roping in more partners• Banking on increasing

churn rate• Focus on youth

FUTURE???

NO CLEAR RURAL STRATEGY

BRAND PERSONALITY

Make the most of now

Vodafone

• Cute• Friendly• Trend setter• Approachable• Youth student

Vodafone

• Youth oriented Brand • Boy - girl • Quirky – Zoo Zoo• Friendly – Happy to help • Fun – Make the most of now • Hugely popular – 323 million subscribers

world wide

• Red: For the passion and spirit• Rock Solid: dependable and empathetic• Restless: always challenging to improve and

being funny.• Glocal brand

Vodafone

Original Corporate Logo ofVodafone before 1997 New Corporate Logo of

Vodafone as of 1997.

• It represents a quotation mark within a circle. With 'O' in the Vodafone logotype being opening and closing quotation marks, suggesting conversation. Its logo is a true representation of that belief - The start of a new conversation, a trigger, a catalyst, a mark of true pioneering.

• The name Vodafone comes from Voice data fone, chosen by the

company to "reflect the provision of voice and data services over mobile phones.“

• Products and services offered by Vodafone Voice Mobile telecommunication services Mobile Text centre (Messaging Services – SMS, PXT and MMS) Data Services Fixed line Fixed line internet access Device (Handsets and Vodafone mobile connect)

Mr. Vittorio Colao of Italy is the new CEO of Vodafone after Mr. Arun Sarin took retirement on 29th July, 2008. Mr. Asim Ghosh is the CEO of Vodafone Essar, India

Rank Brand Sector

Trademark Value /

Enterprise Value(%)

BrandScore Brand Rating

1 Coca-Cola Beverages 39% 94 AAA+

2 Microsoft Software 15% 91 AAA+

3 Citibank Financial Services 13% 79 AA+

4 Wal-Mart Retail 15% 55 A

5 IBM Computers 23% 70 AA-

6 HSBC Financial Services 14% 88 AAA

7 GE (General Electric) Miscellaneous Manufactur 4% 77 AA+

8 Bank of America Financial Services 12% 79 AA+

9 Hewlett-Packard Computers 24% 77 AA+

10 Marlboro Tobacco 14% 67 AA-

11 Vodafone Telecommunications 17% 74 AA

12 Gillette Cosmetics/Personal Care 12% 91 AAA+

13 Intel Computers 22% 79 AA+

14 L'Oreal Cosmetics/Personal Care 39% 77 AA+

15 Google Internet 19% 90 AAA+

16 Toyota Auto Manufacturers 9% 69 AA-

17 Nokia Wireless Equipment 35% 89 AAA

18 McDonalds Retail-Restaurants 36% 92 AAA+

19 Pepsi-Cola Beverages 22% 74 AA

20 Dell Computers 53% 89 AAA

• Product and services in India– World calling card– Post paid services – Prepaid services– Vodafone handy phone– Vodafone PCO

Campaign s

• 9xm• IPL• 24 hour 20th Sept 07• Puzzles • Inter circle • F& F

• Partner of Mc laren , England team & Uefa formerly Man U

• Sometimes capable off resorting to crazy ad campaigns

Challenges

• Amazing image not really translating to increased subscribers

• Increase competition with similar offerings• Lack of presence in Broadband , WLL market

BSNL

• Boring• Dull• Slow to react • Mammoth• Resists change• Babu

Bsnl• Known by many names for various avatars Cellone, Bfone and Dataone

now all known as BSNL• Like s the Liril Girls Priety now Deepika • Have a lot money Rs 10,000 Crore cash Reserves• Was known to be very unreliable but now known as low cost alternative • Have better Pan India presence than all other networks only present in

Mumbai & Delhi where you will find sister concern MTNL • Also known as Mini Ratna esteemed in Indian PSU Sector • Known to have had the best network in villages • Used to have the best Std plans before all the new players came into the

market and started talking bout one paise • Only 2 Co s provide 3g in India right now at affordable rates

BSNL

• Have a lot of advantages that rivals don t have in terms of 3G one year lead @30 ps per min for video call 50 ps Std

• Despite this no longer popular last year had a market share of 17% this year 13.6 %

• BSNL is a confused personality with an obsolete outlook that youth nowadays don’t connect with , hence it has been looking for foreign strategic partner with AT& T interested

Strategy

• To remain market leader in providing world class Telecom and IT related services at affordable prices and to become a global player.

• Zain• Swan• Value added services• Tele infra • Quality of services • Technology • I- Phone

Products • BSNL LANDLINE • PHONE PLUS SERVICE • NEW TELEPHONE CONNECTION • PERMANENT CONNECTION • CONCESSION IN RENTALS • SHIFT OF TELEPHONE • TRANSFER OF TELEPHONE • TELEPHONE TARIFF

• BSNL MOBILE • POSTPAID • PREPAID • UNIFIED MESSAGING • GPRS/WAP/MMS • DEMOs • TARIFF • SMS & BULK SMS • BSNL WLL

• INTERNET SERVICES

NETWORK • BROADBAND • TYPES OF ACCESS • WI-FI • CO-LOCATION SERVICE • BSNL WEB HOSTING • INTERNET TARIFF • DIAL UP INTERNET • SMS& BULK SMS BSNL BROADBAND

• REGISTER ONLINE • TARIFF • CHECK USAGE • BSNL MANAGED NETWORK SERVICES • BSNL MPLS-VPN • ISDN

Bsnl • STRENGHTS• It has a competitive pricing policy.• BSNL has the support of Government• BSNL has a good Financial standing• BSNL maintains solid partnerships and is the go to person in the industry in

terms of infra • • WEAKNESSES:• Although it is investing too much in R&D but its marketing skills are below

average. • Although the industry is growing very fast ,at the same time it is losing its

customers as well because the competitors are eroding it s market share • Inability to convert it s advantages into strengths

• OPPORTUNITIES:• It can retain its customers by improving its marketing skills.• Leverage on it s 3G advantage • The Group can strengthen and expedite research and

development in order to deliver products of top international standards.

• THREATS:• Price war • New competition• The other threat can be the market saturation in terms of

business opportunities available in the conventional telecom business.

ACCESSIBLE

UNRELIABLEUNETHICAL

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HIGH COST

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VERY LOW COST

HIGH VARIETY

INCOMING

15 SECONDS PULSE RATE

Outgoing Calls at 10paise

One time membership

Java enabled, multimedia ready

VALUE ADDED SERVICES

BIGGEST PROMOTIONAL SCHEME EVER 1 MILLION SUBSCRIBERS IN 10 DAYS

TAPPING INTO INTERNAL RESOURCES

DHIRUBHAI AMBANI ENTREPRENEURSHIP

PROGRAM

ADVERTISING – EDUCATING MASSES AND

EVOKING EMOTIONS

DIFFERENT SECTIONS OF SOCIETY

Today.........We Have Mobiles coz of Reliance!!!!!!!!!!by pratap on Jun 18, 2009 06:26 PM | Hide replies

Considering poor/middle class peopleReliance Produced Mobiles for Everyone...........

.

today everyone have mobile just because of RELIANCE.........

POOR people have mobile just because of RELIANCE.........

I and YOU keeps 2-3 mobiles just because of RELIANCE.........

Call rates are reducing day by day just because of RELIANCE.........

Other network has reduce the cost of sim and call rates just because of RELIANCE.........

.

Today a Rikshawala has Mobile just because of RELIANCE.........

OTHERWISE WE WILL BE TALKING 8.50 Rs./Min for Outgoing and 4.50 Rs/Min for Incoming.

There may be little bit bad network but one who bring every hand Mobile was......RELIANCE

Am i right or wrong???

1132

MARKET LEADER IN JAPAN

WORLD LEADER IN VAS

LEADER IN MOBILETECHNOLOGY

HUGE MARKET PENETRATION

TEMPORARY PRICE WAR

DIFFICULTY IN SCALING UP

WHY NEW BRAND IDENTITYDifferentiated

tariff plans

DO co mo

BRAND AMBASSADORS

ENTRY INTO INDIA

STRATEGIC PARTNERSHIP

MORE SHARE – MORE CAPITAL

BOTH GSM AND CDMA – MARKET PENETRATION

TECHNOLOGY FROM WORLD LEADER

External factor – Govt.’s Role 74% as FDI cap in telecom sector Lack of effective guidance from the

govt The Govt. is as confused as ever State owned BSNL loses market

share (47% to 14%) Sam Pitroda, to the rescue of the 3G

auction

External factors

Govt. to garner Rs 35000 cr from the 3G auction and set up dedicated OFC N/w for the defense forces.

Falling Handset Prices.

11 digit mobile number – beyond 600mn subscriber base.

External factors- 3G3G - auction -January 14, 20103G subscribers in India is likely to touch 90

mn by 2013 WiMAX users are expected to reach 7 mn by

the end of 2011 (Gartner)Google eyeing opportunities in the 3G.It might

participate in the auction.

External factors- MNPTo be launched in various phases from Jan,10On payment of Rs19 the user retain his number

and switch to any other service provider.Game changer – to take competition to a different

levelTo increase the customer churning –

Low Switching Costs

The future Falling ARPU

Intense Competition & Shortage of Bandwidth

New Players coming in India – MTS, Uninor

Increase in mobile presence – Payments, ads Consolidation in the industry ??? See long-term potential – Rural and technology

Who will win?

The Indian urban market is 80-90 % penetrated. The winner would try to reach penetration levels of 70% in the rural markets as well (rural tele density at 16%)

Would build a strong and vast network. In the fight to reduce tariffs the companies have to bear in mind the aspect of network quality too.

3G, Wimax…The ability to embrace new technologies fastest will be of huge importance.

Profitability…Irrespective of anything, the companies have to ensure a positive balance sheet and generate cash-flow.

THANK YOU !!

GROUP 7 95