BSNL VS AIRTEL

TABLE OF CONTENTS
DIFFERENT TYPES OF BUSINESS ENTITY-: An active, in which different person exchange something of value whether goods or service for service for mutual gain or Profit. In other word, An enterprise engaged in production and distribution of good for sale in market or rendering services for a price. There are many types of business entity defined in the legal systems of various countries. These include corporations, partnerships, sole traders, and other specialized types of organization. It should be remembered, however, that the regulations governing particular types of entity, even those described as roughly equivalent, may differ to a greater or lesser extent between countries. The form of organization will be decided by various factors, such asSize and nature of the business to be started. Technical difficulties Market conditions (i.e.- competition and scope of the article in the market) Capital required starting the business and the means to collect the funds. Limitations and restriction put forth by the government (i.e. - grant of loan, license, foreign exchange and other such things. Depending on which type of business entity you choose will also influence the legal structure. Various type of business organization on the basic of various social, economic and human requirements are mentioned below. A. B. C. D. E.

A.

Public Sector 1. Departmental organization 2. Public corporations 3. Government company

B.

Private Sector 1. Individual ownership or Sole proprietorship 2. Partnership 3. Joint stock company 4. Co-operative organization

C.

Joint Sector Ownership and control shared by private entrepreneur, state and public.

OBJECTIVE

To make a comparative analysis of trend of productivity of these two sectors which have been taken into account particularly after the liberalization of Indian economy. NATURE OF CHANGES IN INDIAN BUSINESS ENVIRONMENT AFTER ECONOMIC PLAN TRENDS OF PRIVATE SECTOR (Power), PUBLIC SECTOR (Power)

UNDERTAKINGS IN INDIAN ECONOMY BEHAVIOUR OF THESE UNDERTAKING AFTER NEW ECONOMY POLICY.

For the following Companies:

1. BHARAT SANCHAR NIGAM LTDs. 2. BHARTI AIRTEL LIMITED.

PART I

STUDY OF THE TREND OF

MANAGERIAL ECONOMICS
at

BHARAT SANCHAR NIGAM LTD.

A PUBLIC SECTOR UNIT

www.bsnl.co.in

PUBLIC SECTOR UNIT BHARAT SANCHAR NIGAM LTD.

Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest Telecommunications Company providing comprehensive range of telecom services in India: Wire-line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN, VSAT, VoIP services, IN Services etc. Presently it is one of the largest & leading public sector units in India. BSNL has installed Quality Telecom Network in the country and now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages and wining customer's confidence. Today, it has about 47.3 million line basic telephone capacity, 4 million WLL capacity, 48.11 Million GSM Capacity, more than 37382 fixed exchanges, 44966 BTS, 3140 Node B ( 3G BTS), 287 Satellite Stations, 480196 Rkm of OFC Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330 cities/towns and 5.5 Lakhs villages.

BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers who access Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country. BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that provides convergent services like voice, data and video through the same Backbone and Broadband Access Network. At present there are 0.6 million DataOne broadband customers. The company has vast experience in Planning, Installation, network integration and Maintenance of Switching & Transmission Networks and also has a world class ISO 9000 certified Telecom Training Institute. Scaling new heights of success, the present turnover of BSNL is more than Rs.351, 820 million (US $ 8 billion) with net profit to the tune of Rs.99, 390 million (US $ 2.26 billion) for last financial year. The infrastructure asset on telephone alone is worth about Rs.630, 000 million (US $ 14.37 billion). BSNL plans to expand its customer base from present 47 millions lines to 125 million lines by December 2007 and infrastructure investment plan to the tune of Rs. 733 crores (US$ 16.67 million) in the next three years. The turnover, nationwide coverage, reach, comprehensive range of telecom services and the desire to excel has made BSNL the No. 1 Telecom Company of India. Bharat Sanchar Nigam Limited has got net fixed assets valuing more than Rs. 54698 Crores (US $ 13.67 billion), which are in the form of Land, Buildings Cables, Apparatus & Plants etc. as on 31.03.2008.

VISION OF BSNL
To become the largest telecom Service Provider in Asia.

MISSION OF BSNL
To provide world class State-of-art technology telecom services to its customers on demand at competitive prices. To provide world class telecom infrastructure in its area of operation and to contribute to the growth of the country's economy.

BOARD OF DIRECTORS
Corporate structure of BSNL Board consists of CMD & Five full time Directors, Human Resource (HR), Consumer Mobility, Consumer Fixed Access, Finance, Enterprise, who manage the entire gamut of BSNL operations. There are five other Directors in the full Board of BSNL.

CMD - Shri Kuldeep Goyal Director - Consumer Fixed Access(CFA)- Shri Rajesh Wadhwa Director - Consumer Mobility(CM)-Shri R.K.Aggarwal Director (Enterprise) - Shri Rajendra Singh Director (HR)- Shri Gopal Das Shri J.S.Deepak, I.A.S., Govt. Director Shri P.K.Mittal, Govt. Director Shri Mahesh Shah, Director Dr. S.K.Kak, Director Sanjiv Gupta, Director

SERVICES PROVIDED BY BSNL

Services provided by BSNL are as follows

BSNL LANDLINE BSNL MOBILE

POSTPAID PREPAID

BSNL WLL INTERNET SERVICES

BROADBAND WI-FI DIAL UP INTERNET

BSNL MANAGED NETWORK SERVICES BSNL MPLS-VPN ISDN LEASED LINE INTELLIGENT NETWORK VIDEO CONFERENCING AUDIO CONFERENCING I NET TELEX/ TELEGRAPH EPABX INMARSAT KU-BAND TRANSPONDER

SOCIAL COMMITMENT
BSNL is committed to provide quality Telecom Services at affordable price to the citizens of the remotest part of the Country. BSNL is making all effort to ensure that the main objectives of the new Telecom Policy 1999 (salient points indicated below) are achieved: Access to telecommunications is of utmost importance for achievement of the country's social and economic goals. Availability of affordable and effective communications for the citizens is at the core of the vision and goal of the new Telecom policy 1999. Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the country's economy; Encourage development of telecommunication facilities in remote, hilly and tribal areas of the country; Transform in a time bound manner, the telecommunications sector to a greater competitive environment in both urban and rural areas providing equal opportunities and level playing field for all players.

GROWTH PLAN
BSNL's future plan include a fast expansion programme of increasing the present 34 million lines to twice that number by 2005 and some 120 million lines by 2010. The shift in demand from voice to data domination, and from wire line to wireless, has revolutionized the very nature of the network. BSNL has already set in place several measures that should enable it to evolve into a fully integrated multi-operator by 2005 and its incumbent status, size, infrastructure and human resource should certainly, give it a distinct advantage. Consolidation of the network and maintaining high quality of service comparable to International standards is the key aim of the Growth Plan.

10

STUDY OF THE TREND OF MANAGERIAL ECONOMICS

For discussing the trend of managerial economics in any public sector undertaking, we require at least seven parameters as follows: Employment and Wages Sales Total Cost Total income Investment pattern Productivity Profit after tax No. of Users (subscribers)

EMPLOYMENT & WAGES

Here we will try to analyse the nature of the movement of employment, average productivity and wage rate in the BSNL during the last decade. We will also try to examine the relationship between changes in employment and money wage rate and between net sale & total income during that period. As we have discussed about production earlier, so by knowing employment we can easily evaluate the productivity of the company for different years. Employment by BSNL Year Employment in cr 2001 INR 2,748.70 2002 INR 5,203.10 2003 INR 7,302.39 2004 INR 6,810.89 2005 INR 8,393.02 2006 INR 7,833.61 2007 INR 7,693.56 2008 INR 8,808.91

11

SALES
Sales and other incomes has been tremendously increased over the last decade. The main reason to this may be the increased productivity and the marketing strategies of the company. It is also accompanying with the degradation of value of currency. The main reason to this may be the increased productivity and the marketing strategies of the company. It is also accompanying with the degradation of value of currency. Net Sales of BSNL Net Sale in cr INR 11,663.89 INR 24,297.21 INR 25,293.00 INR 31,399.00 INR 33,450.04 INR 36,138.93 INR 34,616.21 INR 32,359.53

Year 2001 2002 2003 2004 2005 2006 2007 2008

12

TOTAL COSTS
DIFFERENT COST OF BSNLIN INR Cr.
Year Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses 2008 0.00 1687.36 8808.91 2007 0 1522.5 7693.5 6 7995.2 6 3156.1 4 1854.8 1 2006 0 1357.64 7833.61 2005 0 0 8393.02 2004 0 1144.82 6810.89 2003 0 1050.94 7302.39 2002 0 891.52 5203.1 2001 0 357.29 2748.7

8558.25

7432.27

4562.09

4266.25

4169.47

1926.35

3136.18

3176.1

11364.2 4

2704.37

2371.91

1941.35

24.59

1214

2495.62

534.38

2848.16

2022.5

884.39

2505.76

13

Less: Preoperative Expenses Capitalised Total Expenditure

429.55

452.27

474.99

436.2

1089.73

1403.89

690.78

33636.4 3

21770

21820.2 5

20291.6 4

17634.1 3

15924.2 6

11685.9 4

6871.91

TOTAL INCOME
Year Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income 2008
33093.49 0 33093.49 5883.81 0

2007
34616.21 0 34616.21 5252.21 0

2006
36138.93 0 36138.93 4620.61 0

2005
33450.04 0 33450.04 4405.91 0

2004
31399.34 0 31399.34 5192.93 0

2003
25293.15 0 25293.15 3204.88 0

2002
24297.21 0 24297.21 3483.5 0

2001
11663.89 0 11663.89 87.43 0

3008.50

39868.42

40759.54

37855.95

36592.27

28498.03

27780.71

11751.32

14

INVESTMENT PATTERN
Investments of BSNL Year 2001 2002 2003 2004 2005 2006 2007 2008 Investments in INR Cr 0.00 0.00 200.00 200.00 200.00 200.00 200.00 200.00

15

PRODUCTIVITY

Productivity BSNL Year 2001 2002 2003 2004 2005 2006 2007 2008 Productivity 1.71 2.38 1.79 2.08 1.87 1.87 1.83 1.13

PROFIT
PROFIT BEFOR TAX, TAX & NET PROFIT OF BSNL in INR Cr.
Year 2008 2007 2006 2005 2004 2003 2002 2001

16

Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit Extraordinary Items Adjusted Net Profit

17257.55 472.58 16784.97 8921.93 7863.04 733.88 33 424.12 6672.04 100.89 3009.39

18098.42 796.6 17301.82 9149.31 8152.51 767.59 37 -457.95 7805.87 7.06 7798.81

18939.29 1120.62 17818.67 9376.69 8441.98 801.3 41 -1340.02 8939.7 535.33 8404.37

17564.31 29.29 17535.02 9624.86 7910.16 -513.8 0 -1759.33 10183.29 1589.95 8593.34

18958.14 88.24 18869.9 9873.74 8996.16 2045.2 0 974.44 5976.52 1529.14 4447.38

12573.77 364.55 12209.22 9551.31 2657.91 204.33 0 1009.13 1444.45 1231.31 213.14

16094.77 496.46 15598.31 8746.13 6852.18 540.01 0 0 6312.17 2112.34 4199.83

4879.41 274.28 4605.13 3858.08 747.05 0 0 0 747.05 -1.77 748.82

NO. OF USERS (SUBSCRIBERS)

No. of Subscribers of BSNL

17

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009

Subscribers in Million 0.82 2.04 5.96 8.88 14.80 24.78 35.92 45.28 57.30

18

SUMMARY OF MAIN FINDINGS

As per the discussion done above, we can conclude Economic Parameters Employment Sales Total Cost Total Income Investment Pattern Productivity Net Profit No. of Subscribers BSNL Upward trend followed by constant Upward trend Upward trend Upward trend Steadily Constant No Such Pattern Upward trend followed by downward Upward trend

BSNL has shown a sharp upward trend in the number of subscribers, which help BSNL to make more income by more sales hence more profit during last few years accept in year 2008. In year 2008 its shown huge decrement in its profit. One of the reasons for this is recession period over that period. BSNL has also shown an upward trend in total expenditure (cost) over that period of time but employment cost has been almost constant during last few years. BSNL has shown no particular pattern in it productivity but it has shown a bit of negativity in it pattern. BSNL has start investing since 2003 & after that a constant investment of Rs. 200 cr is made every year.

19

PART II

STUDY OF THE TREND OF

MANAGERIAL ECONOMICS
at

BHARTI AIRTEL LIMITED.

A PRIVATE SECTOR UNIT

www.airtel.co.in

20

PUBLIC SECTOR UNIT BHARTI AIRTEL LIMITED

Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management. Airtel comes to you from Bharti Airtel Limited, Indias largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel
21

since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched India's best Direct-to-Home (DTH) service, Airtel digital TV. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand. We are one of Asia leading providers of telecommunication services with presence in all the 22 licensed jurisdictions (also known as Telecom Circles) in India, and in Srilanka. We served an aggregate of 105,195,762 customers as of June 30, 2009; of whom 102,367,881 subscribe to our GSM services and 2,827,881 use our Telemedia Services either for voice and/or broadband access delivered through DSL. We are the largest wireless service provider in the country, based on the number of subscribers as of June 30, 2009. We also offer an integrated suite of telecom solutions to our enterprise customers, in addition to providing long distance connectivity both nationally and internationally. We have recently forayed into media by launching our DTH and IPTV Services. All these services are rendered under a unified brand Airtel. The company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in India. Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE). The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. The company mobile network equipment partners include Ericsson and Nokia. In the case of the broadband and telephone services and enterprise services (carriers), equipment
22

suppliers include Siemens, Nortel, Corning, among others. The Company also has an information technology alliance with IBM for its group-wide information technology requirements and with Nortel for call center technology requirements. The call center operations for the mobile services have been outsourced to IBM Daksh, Hinduja TMT, Teletech & Mphasis. As an outcome of a restructuring exercise conducted within the company; a new integrated organizational structure has emerged; with realigned roles, responsibilities and reporting relationships of Bhartis key team players. With effect from March 01, 2006, this unified management structure of 'One Airtel' will enable continued improvement in the delivery of the Group strategic vision.

VISION & PROMISE OF AIRTEL

By 2010 Airtel will be the most admired brand in India: Loved by more customers Targeted by top talent Benchmarked by more businesses 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

BOARD OF DIRECTORS

23

The board of directors of the Company has an optimum mix of executive and nonexecutive directors, which consists of two executive and fourteen non-executive directors.The Chairman and Managing Director, Mr. Sunil Bharti Mittal, is an Executive Director and the number of Independent Directors on the Board is 50% of the total board strength. The independence of a director is determined on the basis that such director does not have any material pecuniary relationship with the Company, its promoters or its management, which may affect the independence of the judgment of a Director. The board members possess requisite skills, experience and expertise required to take decisions, which are in the best interest of the Company. The composition of the Board is as under: Sunil Bharti Mittal Rajan Bharti Mittal Akhil Gupta Rakesh Bharti Mittal Chua Sock Koong N. Kumar

24

SERVICES PROVIDED BY AIRTEL

Services provided by AIRTEL are as follows

AIRTEL LANDLINE AIRTEL MOBILE

POSTPAID PREPAID

AIRTEL WLL INTERNET SERVICES

BROADBAND WI-FI DIAL UP INTERNET

AIRTEL MANAGED NETWORK SERVICES AIRTEL MPLS-VPN ISDN LEASED LINE INTELLIGENT NETWORK VIDEO CONFERENCING AUDIO CONFERENCING I NET TELEX/ TELEGRAPH EPABX INMARSAT KU-BAND TRANSPONDER

25

AWARDS AND RECOGNITIONS

Voted Indias most innovative company in a survey conducted by The Wall Street Journal in 2008 Winner of the Gallup Great Workplace Award- Gallup Consulting, 2008 2nd Most Trusted Service Brand - Annual Economic Times-Brand Equity, Most Trusted Brands survey 2008 Best Content Service Award for its Farmer Information Dissemination Platform for Bharti Airtels joint venture with IFFCO, IKSL (IFFCO Kisan Samachar) - World Communications Awards 2008 Best Project Management Award for its Gujarat e-GRAM project - World Communications Awards 2008 Best Telecom Company at the NDTV Profit Business Leadership Awards Best Carrier India for innovative products & services and efficient cost models and the Ovum Telco-Transformation award recognizing philosophy and execution of a successful outsourcing strategy at the Telecom Asia Awards 2008 Sunil Bharti Mittal was awarded the GSM Association Chairmans Award 2008. The highest honour in global telecom sector, recognized his tremendous contribution to the development of Indias telecom sector Sunil Bharti Mittal adjudged the Business Leader Transforming India, 2008 at the NDTV Profit Business Leadership Awards

CORPORATE RESPONSIBILITY AT BHARTI AIRTEL

At Bharti, CSR is a way of life. Each department and employee strives to be sensitive to the stakeholders and environment within their work context. Bharti encourages employees to take decisions and design business-linked processes that are sensitive to communities and environment. Corporate Social Responsibility (CSR) in Bharti encompasses much more than only social outreach programs. It is an integral part of the way Bharti conducts its business. The essence of Bhartis commitment to Corporate Social Responsibility is embedded in the Corporate Values, which stem from its deepest held beliefs. These Values are: To be responsive to the needs of our customers To trust and respect our employees To be transparent and sensitive in our dealings with all stakeholders

We encourage our employees to take decisions and design business processes, keeping in mind the following:
26

Ethics, fairness and being correct Meeting and going beyond compliances and legal requirements Showing respect and sensitivity towards stakeholders and communities, and Nurturing the environment We practice our CSR beliefs and commitments through a three-pronged approach: Engaging with stakeholders Ensuring stakeholder sensitive policies and practices Undertaking programs for our employees, community and environment

Bharti Airtel sensitizes its employees towards CSR issues at various forums. We feel that it is important that each employee should understand the importance of environmental, social and economical aspects while taking business decisions. At Bharti, each employee is sensitized towards CSR issues and thus operations at the ground level are influenced. Such sensitization exercises have resulted in many socially and environmentally sensitive decisions on the ground. For example, Confidence Plan for hearing impaired people, covers noise-making DG sets at extra cost, investing in consumer awareness campaigns to ensure safe use of mobile are some examples of the above. Bharti Airtel Limited firmly believes in the principles of Corporate Governance and is committed to conduct its business in a manner, which will ensure sustainable, capitalefficient and long-term growth thereby maximising value for its shareholders, customers, employees and society at large. Companys policies are in line with Corporate Governance guidelines prescribed under Listing Agreement/s with Stock Exchanges and the Company ensures that various disclosures requirements are complied in letter and spirit for effective Corporate Governance.

27

FACTSHEET
Business Description Provides GSM mobile services in all the 22 telecom circles in India, and was the first private operator to have an all India presence. Provides telemedia services (fixed line and broadband services through DSL) in 95 cities in India. July 07, 1995, as a Public Limited Company Rs. 369,615 million (year ended March 31, 2009-Audited) Rs. 270,250 million (year ended March 31, 2008-Audited) As per US GAAP Accounts Rs. 151,678 million (year ended March 31, 2009 - Audited) Rs. 113,715 million (year ended March 31, 2008 - Audited) As per US GAAP Accounts 1,898,373,280 as at June 30, 2009 The Stock Exchange, Mumbai (BSE) The National Stock Exchange of India Limited (NSE)

Established Proportionate Revenue Proportionate EBITDA Shares in Issue Listings Market Capitalisation Customer Base Operational Network

102,367,881 GSM mobile and 2,827,881 Telemedia Customers (status as on June 30, 2009) Provides GSM mobile services in all the 22 telecom circles in India, and was the first private operator to have an all India presence. Provides telemedia services (fixed line) in 95 cities in India.

Registered Office

Bharti Airtel Limited (A Bharti Enterprise) Aravali Crescent, 1 Nelson Mandela Road, Vasant Kunj Phase II New Delhi - 110 070 Tel. No.: +91 11 4666 6100 Fax No.: +91 11 4666 6411

STUDY OF THE TREND OF MANAGERIAL ECONOMICS

28

For discussing the trend of managerial economics in any public sector undertaking, we require at least seven parameters as follows: Employment and Wages Sales Total Cost Total income Investment pattern Productivity Profit after tax No. of Users (subscribers)

EMPLOYMENT & WAGES

Here we will try to analyze the nature of the movement of employment, average productivity and wage rate in the AIRTEL during the last decade. We will also try to examine the relationship between changes in employment and money wage rate and between net sale & total income during that period. As we have discussed about production earlier, so by knowing employment we can easily evaluate the productivity of the company for different years.

Employment by AirTel Year Employment in INR Cr 2001 7.99 2002 19.35 2003 18.94 2004 16.84 2005 488.13 2006 754.99 2007 1102.03 2008 1306.70

SALES
29

Sales and other incomes has been tremendously increased over the last decade. The main reason to this may be the increased productivity and the marketing strategies of the company. It is also accompanying with the degradation of value of currency. The main reason to this may be the increased productivity and the marketing strategies of the company. It is also accompanying with the degradation of value of currency. Net Sales of AIRTEL Net Sale in INR Cr 0.00 0.00 0.00 0.00 7903.03 11231.47 17851.60 25761.11

Year 2001 2002 2003 2004 2005 2006 2007 2008

TOTAL COSTS

30

DIFFERENT COST OF AIRTEL IN INR Cr.

Year Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Administration Expenses Miscellaneous Expenses Less: Preoperative Expenses Capitalised Total Expenditure 2008 155.3 1045.16 1306.57 8184.4 3747.17 1056.99 112.4 15383.1 9 2007 53.95 658.78 1102.03 5813.82 2250.33 887.6 1.8 10764.7 1 2006 54.42 26.98 754.99 4404.7 8 1330.0 7 671.92 0.85 7242.3 1 2005 83.7 16.69 488.13 3139.4 8 869.69 538.32 0.03 5135.9 8 2004 0 0.38 16.8 4 1.29 15 4.16 0 37.6 7 2003 0 0.1 18.9 4 2.41 10.5 5.85 0 37.8 2002 0 0.12 19.3 5 1.21 26.4 2 6.64 0 53.7 4 2001 0 0.12 7.99 1.67 13.19 1.84 0 24.81

TOTAL INCOME
31

Year Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income

2008
25761.11 0 25761.11 359.91 9.05 26130.07

2007
17851.6 0 17851.6 148.49 30.07 18030.16

2006
11231.47 0 11231.47 94.3 -13.84 11311.93

2005
7903.03 0 7903.03 122.02 11.57 8036.62

2004
0 0 0 63.15 0 63.15

2003
0 0 0 72.9 0 72.9

2002
0 0 0 66.2 0 66.2

2001
0 0 0 57.85 0 57.85

INVESTMENT PATTERN

32

INVESTMENTS OF AIRTEL Year 2001 2002 2003 2004 2005 2006 2007 2008 Investments in INR Cr 794.47 1899.67 1467.79 1762.67 931.90 719.70 1102.03 1306.57

33

PRODUCTIVITY

Productivity AIRTEL Year 2001 2002 2003 2004 2005 2006 2007 Productivity 2.33 1.23 1.93 1.68 1.56 1.56 1.67

34

2008

1.70

PROFIT
PROFIT BEFOR TAX, TAX & NET PROFIT OF AIRTEL in INR Cr.
Year Operating Profit Interest Gross Profit Depreciation Profit Before Tax Tax Fringe Benefit tax Deferred Tax Reported Net Profit 2008 10746.88 2007 7265.45 2006 4069.62 2005 2900.64 2004 25.48 2003 35.1 2002 12.46 2001 33.04

607.76 10139.12 3166.58 6972.54 859.36 37.23 -168.24 6244.19

310.78 6954.67 2353.3 4601.37 495.03 25.5 47.61 4033.23

236.81 3832.81 1547.02 2285.79 166.52 19.05 88.14 2012.08

317 2583.64 1019.36 1564.28 8.61 0 345 1210.67

21.36 4.12 3.87 0.25 -0.12 0 0 0.37

31.23 3.87 3.6 0.27 0.05 0 0 0.22

9.09 3.37 3.23 0.14 0.01 0 0 0.13

29 4.04 3.45 0.59 0.2 0 0 0.39

35

Extraordinary Items Adjusted Net Profit

48.38 6195.81

31.19 4002.04

12.57 1999.51

28.22 1182.45

13.29 -12.92

23.13 -22.91

47.59 -47.46

28.09 -27.7

NO. OF USERS (SUBSCRIBERS)

No. of Subscribers of AIRTEL Year 2001 2002 2003 2004 2005 2006 2007 2008 Subscribers in Million 0.77 1.11 3.36 9.83 16.30 22.77 52.96 82.92

36

2009

107.99

SUMMARY OF MAIN FINDINGS As per the discussion done above, we can conclude Economic Parameters Employment Sales Total Cost Total Income Investment Pattern Productivity Net Profit AIRTEL Upward trend Upward trend Upward trend Sharp Upward trend No Such Pattern Almost Constant Sharp Upward trend

37

No. of Subscribers

Sharp Upward trend

AIRTEL has shown a sharp upward trend in the number of subscribers, which help AIRTEL to make more income by more sales hence more profit during last few years accept in year 2008. In year 2008 its shown huge decrement in its profit. One of the reasons for this is recession period over that period. AIRTEL also has shown an upward trend in total expenditure (cost) over that period of time with increase in employment cost as well during last few years. AIRTEL has shown no particular pattern in it productivity but it has shown a bit of negativity in it pattern. AIRTEL has not shown any certainty in its investments.

38

PART III COMPARATIVE ANALYSIS OF THE TREND OF MANAGERIAL ECONOMICS

At BHARAT SANCHAR NIGAM LTD.

A PUBLIC SECTOR UNIT

www.bsnl.co.in

&
BHARTI AIRTEL LIMITED.
A PRIVATE SECTOR UNIT

www.airtel.co.in

39

COMPARATIVE ANALYSIS
For doing Comparatives analysis between a public sector undertakings (BHARAT SANCHAR NIGAM LIMITED) & private sector undertakings (BHARTI AIRTEL LIMITED) we require following parameters of managerial economics: Employment and Wages Sales Total Cost Total income Investment pattern Productivity Profit after tax No. of Users (subscribers)

40

COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF EMPLOYMENT & WAGES
Comparative Analysis of BSNL & Airtel in Terms of Employment provided by them in INR Cr. Year 2001 2002 2003 2004 2005 2006 2007 2008 BSNL 2748.70 5203.10 7302.39 6810.89 8393.02 7833.61 7693.56 8808.91 AIRTEL 7.99 19.35 18.94 16.84 488.13 754.99 1102.03 1306.70

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF SALES

Comparative Analysis of BSNL & AIRTEL in Terms of NET SALES in cr. Year BSNL AIRTEL 2001 11663.89 0.00 2002 24297.21 0.00 2003 25293.00 0.00 2004 31399.00 0.00 2005 33450.04 7903.03 2006 36138.93 11231.47 2007 34616.21 17851.60 2008 32359.53 25761.11

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF TOTAL COST

Comparative Analysis of BSNL & Airtel in Terms of Expenditure in Cr. Year 2001 2002 2003 2004 2005 2006 2007 2008 BSNL 6871.91 11685.94 15924.26 17634.13 20291.64 21820.25 21770.00 33636.43 AIRTEL 24.81 53.74 37.80 37.67 5135.98 7242.31 10764.71 15383.19

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF TOTAL INCOME

Comparative Analysis of BSNL & Airtel in Terms of Total Income in cr. Year BSNL AIRTEL 2001 11751.32 57.85 2002 27780.71 66.20 2003 28498.03 72.90 2004 36592.27 63.15 2005 37855.95 8036.62 2006 40759.54 11311.93 2007 39868.42 18030.16 2008 38053.40 26130.70

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF INVESTMENT PATTERN

Comparative Analysis of BSNL & AIRTEL in Terms of Investments in cr. Year BSNL AIRTEL 2001 0.00 794.47 2002 0.00 1899.67 2003 200.00 1467.79 2004 200.00 1762.67 2005 200.00 931.90 2006 200.00 719.70 2007 200.00 1102.03 2008 200.00 1306.57

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF

PRODUCTIVITY Comparative Analysis of BSNL & AIREL in Terms of Productivity Year BSNL AIRTEL 1.71 2.33 2001 2.38 1.23 2002 1.79 1.93 2003 2.08 1.68 2004 1.87 1.56 2005 1.87 1.56 2006 1.83 1.67 2007 1.13 1.70 2008

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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF

PROFIT AFTER TAX Comparative Analysis of BSNL & Airtel in Terms of Net Profit in INR Cr. Year BSNL AIRTEL 748.82 -27.70 2001 4199.83 -47.46 2002 213.14 -22.91 2003 4447.38 -12.92 2004 8593.34 1182.45 2005 8404.37 1999.51 2006 7798.81 4002.04 2007 3009.39 6195.81 2008

COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF

NO. OF USERS (SUBSCRIBERS)
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Comparative Analysis of BSNL & Airtel in Terms of Subscribers in Million Year BSNL AIRTEL 2001 0.82 0.77 2002 2.04 1.11 2003 5.96 3.36 2004 8.88 9.83 2005 14.80 16.30 2006 24.78 22.77 2007 35.92 52.96 2008 45.28 82.92 2009 57.30 107.99

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SUMMARY COMPARITIVE ANALYSIS Shown below is the performance of BSNL and AIRTEL in the following economic parameters over the last 10 years, as discussed above: Economic Parameters Employment Sales Total Cost Total Income Investment Pattern Productivity Net Profit No. of Subscribers BSNL Upward trend followed by constant Upward trend Upward trend Upward trend Steadily Constant No Such Pattern Upward trend followed by downward Upward trend AIRTEL Upward trend Upward trend Upward trend Sharp Upward trend No Such Pattern Almost Constant Sharp Upward trend Sharp Upward trend

In the above analysis we have found that no of subscribers in both BSNL & Airtel has been incresed wich helps to increase their sale & total income. Althoug we also find some incerase in cost to the both the companies. Both Airtel & BSNL have shown an upward trend in profit except in 2008 by BSNL. Althoug Airtel have shown some loses till 2004 but after that it showed a great degree of upward trend BSNL has shown an constant investment pattern where as no perticular pattern is shown by Bharti Airtel.

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CONCLUSION Telecom sector is one of the sectors which are really booming in India. In every organization whether it is public or private company or even on the individual level telecommunication plays a very important role for transformation of information. It is one sector touching life every where. Due to the ever increasing need of computer hardware and system software applications in both public and private sectors, Which helped telecom sector to plays an important role to connect them world wide. Thus we see the growth of telecom sector helps in the growth of IT sector & vice versa. Telecom industry has grown exponentially in the past 10 years. The New Economic Policy adopted by the Govt. of India since 1991 has helped augment the growth with easier access to international markets. This has been mainly due to: The rise in the telecom sector and the boom in the Indian economy. The rise in the demand in the market due to good economic conditions. Fall in the price of phone (handset). The availability of new technologies in India and outside. The emergence of new markets. The investments by these companies for their expansion. It has been observed that the total income, sales, no. of user (subscribers) of the two companies have increased during the time period. This helps to providing more employment as the employment cost & wages increasing. Bharat Sanchar Nigam limited has made the income of more than Rs. 30853 cr with a profit of more than Rs. 3009 Cr in year 2008. BSNL has succeed to add more 12 million Subscribers to his network in last year making its 57 millions subscriber enterprise with the growth rate of 22.36%. Bharti Airtel limited is one company which has shown the growth rate of 44.47% last year in his income & making a profit of RS. 6195.35 cr with the growth rate of 54.79% as compared to 2007. Airtel has added 25 million people in 2008 with the growth rate of more than 30%. Which makes its no subscriber more than 110 million people.

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BIBLIOGRAPHY Retrieved from following websites: www.bsnl.co.in www.airtel.co.in www.trie.com www.bworld.com www.business2.com www.business-today.com

Retrieved from following books: Wage-productivity Relationship in Indian Public Sector Author:-Dr. P.K. Chakrabarti Investment Decision in Indian Public Sector Author:-Dr. P.K. Chakrabarti Coal Industry in West Bengal Author:-Dr. P.K. Chakrabarti CAPITALINE Database.

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