PRESENTATION BY Group 5:

Kinny Jain Nikhil Saraf DionysiaMichalopoulou Rajinder Pal Singh

HIGHLIGHTS OF THIS PRESENTATION:

PART A
Airtel Background External Analysis Macro-Environmental Analysis: Micro-Environmental Analysis: Opportunities and Threats Internal Analysis Resource Audit Core Competencies: Strengths and Weaknesses Organisational Purpose:

PEST ANALYSIS PORTERS 5 FORCES [ ILC, SGA]

UNIQUE RESOURCES PORTERS VALUE CHAIN FRAMEWORK AIRTEL MISSION STATEMENT EVALUATION

PART B

Competitive Strategy Analysis: Development Strategy Analysis:

PORTERS GENERIC FRAMEWORK ANSOFFS PRODUCT/ MARKET FRAMEWORK

PART C

Conclusions and Recommendations

Evolution of Telecom In India

Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.

Private players were allowed in Value Added Services

Independent regulator, TRAI, was established

BSNL was established by DoT

ILD services was opened to competition Go-ahead to the CDMA technology 2002

Calling Party Pays (CPP) was implemented 2003

Number portability Intra-circle merger was proposed guidelines were established Attempted to (pending) boost Rural telephony 2004 2005 2006 Broadband policy 2004 was formulated targeting 20 million subscribers by 2010 2007

INDIA

1994
1992 1997

1999 2000

Internet telephony initiated Reduction of licence fees

National Telecom Policy (NTP) was formulated

Unified Access Licensing (UASL) regime was introduced

Reference Interconnect order was issued

NTP-99 led to migration from highcost fixed license fee to low-cost revenue sharing regime

Decision on 3G services (awaited) FDI limit was increased from 49 to 74 percent

INTRODUCTION
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.

It is one of Indias leading private sector providers of telecommunications services with

more than 110 million customers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) - Mobile Services, Airtel Telemedia Services & Enterprise Services.

Core values
Empowering People - to do their best Being Flexible - to adapt to the changing environment and evolving customer needs Making it Happen - by striving to change the status quo, innovate & energize new ideas with a strong passion & entrepreneurial spirit, Openness and transparency - with an innate desire to do good Creating Positive Impact with a desire to create a meaningful difference in society.

National Coverage

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

Integrated Telecom Company

Mobile / Wireless Services 2G / 3G Rural Market

Enterprise Services Carrier Corporate

Telemedia Services Fixed Line Broadband DTH

Passive Infrastructure Bharti Infratel Indus Tower

PEST

PEST ANALYSIS- EXTERNAL ANALYSIS

Political
Regulations Political Opposition to participation by the private players Govt support to promote FDI in Telecom sector Banning of Phone Use in Certain Circumstances

Technology
Equipped with New Technology Rapid Industrial growth rate induced by emerging technologies. Strong Fibre Optic Network Utiilization of E- Commerce facilities Efficient Customer Care Services

Economic
Cost of calls Being Driven Down Worldwide Recession- Both Boon & Bane Middle class consumer base growing due to accelerated economic growth Untapped markets in emerging Economies New Opportunity

Socio-Cultural
High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture, there is need to remain connected Tech Savvy Generation

PORTER 5 FORCES INDUSTRY LIFE CYSLCE STRATEGIC GROUP ANALYSIS

Porters 5 Forces

Customer Bargaining Power

Threat of New Entrants

Threat from Competition

Threat of Substitutes

Supplier Bargaining Power

1. Threat from Competition

Wireless Market Top 4 garnering 75% market share

HIGH

Competitor Market Share Threat HIGH

2. Customer Bargaining Power

Lack of differentiation among Service Providers Cut throat Competition Low Switching Costs Number Portability will have Ve Impact Businesses & Consumers
Customers & Market Share HIGH

3. Suppliers Bargaining Power

LOW

4. Threat of Substitutes

Landline

CDMA
Video Conferencing

DIMINISHING MARKET

HIGH

VOIP - Skype, Gtalk, Yahoo Messenger

e-Mail & Social Networking Websites

BROADBAND SERVICES

5. Threat of New Entrants

Huge License Fees to be paid upfront & High gestation

period
Entry of MVNOs & WiMAX operators Spectrum Availability & Regulatory Issues Infrastructure Setup Cost - High Rapidly changing technology
LOW

TELECOMMUNICATION INDUSTRY LIFE CYCLE

AIRTEL

Johnson , Scholes & Whittington : Pg. 68, 2008

TELECOMMUNICATION INDUSTRY LIFE CYCLE

AIRTEL

Telecom Industry is in its mature growth stage. Significant achievements have happened in this sector. In 2009 February, there was a rise in subscriber base by 13.25 million. Total subscriber base was 375 million in 2009. A hike by 50%. This shows the changes in the consumption pattern among the middle class.

STRATEGIC GROUP ANALYSIS

Competitor Analysis

Competitor Analysis
40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Bharti Rcom IDEA MTNL

OP Margin

Net Margin

Best OP Margins & Net Profit Margins among Peers

Company Sep-07
Bharti Rcom IDEA MTNL 43.00% 37.90% 32.80% 23.70%

Sep-08
38.00% 31.60% 26.60% 22.90%

Sep-072
26.40% 23.90% 14.10% 7.00%

Sep-083
19.30% 13.20% 6.50% 6.80%

Source: CMIE November 2008

AMOU & ARPU Stats

Minutes of Usage per Month Mobile Services
USA
838

Despite a low tele-density of approximately 30.5% India has the second highest minutes of usage per month. This offers huge growth opportunity to telecom companies.

India

461

China

303

Russia

88

ARPU* in India Mobile Services

ARPU (USD per month)
10 8 6 4 2 0 Q1 2006 Q2 2006 Q3 2006 GSM CDMA Q4 2006 Q1 2007

The declining ARPU implies that India Inc. is tapping a large market at the bottom of the pyramid by reducing tariffs; thereby, enhancing affordability.

Strategic Group Analysis

Airtel 25%

Broad

Reliance 18%

PRODUCT RANGE

BSNL, MTNL 15.00 %

Vodafone 17%

10 %
Other 5% IDEA 9.6% TATA 9.3%

Narrow

VIRGIN -0.5%

NATIONAL

GLOBAL

GEOGRAPHICAL SCOPE

INTERAL ANALYSIS

RESOURCE AUDIT AND PROCESS VALUE CHAIN

AIRTEL Resource audit (unique resources) Internal Analysis

Human resources
well defined rewards and recognition system Young team - Average age is 26years Employees decide their training needs. A state-of-the-art learning centre and training practices adopted from British Telecom PACE (Progressive Assessment of Culture and Environment) feedback taken from employees used for companys strategy

Financial
Profit crosses US$1 bn Fixed asset (09) $ 7,986,254,556 Dividend offered for 2008-09 is 20% of the face value of each share Received US$1.275 bn investment from international investors in Bharti Infratel. Ability to raise funds

Physical
Over 110 million customers Received license to provide 2G ad 3G in Sri Lanka First Telecom operator in India to offer MS Windows Mobile 5.0 Strong Distribution channel.

Intangible
Strategic partnership with Google. Goodwill & Reputation Facility based Operator license in Singapore.

Firm infrastructure - CRM tools, MIS, ERP, Networking Equipment, Telecom Supporting Activities
equipment for coverage and signal strength, IT Infrastructure HR management - IT skilled work force, Telecom engineers, SCM specialists Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 employees in Mobile services, Owned retail staffing and training.

Technology development - Creating a 3G enabled network, mChek - Launching M

commerce by tie ups with banks and credit cards.

Procurement - Established a SCM network to acquire networking & Telecom tools,

Maintain long term relation with suppliers to provide handsets & services
Inbound Logistics
Network Infrastructure
1. Equipment vendor 2. Equipment Manufacturer Routers, Switch level 3. Equipment Manufacturer - Chip Level

M A R G I N

Operations
1. NETWORK

Outbound Logistics

Marketing & Sales

Post Sale Service

INTEGRATION 2. SYSTEM INTEGRATION 3. INFRASTRUCTURAL DEVELOPMENT

1. Sound Distributor 1. Online marketing 1. Multilingual Customer Service 2. Retail network 2. Celebrity Center across India for both endorsement prepaid and post paid services 3. Brand positioning 2. Informative website 4. Promotional 3. Online Ordering Bundle offers 3. Customer of VAS Extra minutes/ Text Retention 4. Update of existing or Handsets 4. Easy online plan payment options for 5. Promotion at both pre paid & post events, paid services organizations

Software and content 4. GSM SERVICES, VAS, BASE provider 1. Software Vendor 2. Application Provider 3. Content Aggregator 4. Content Provider

M A R G I N

Primary Activities

Primary Activities - Analysis

Input

Process

Output

Marketin g& Sales

Strong Channel Distribution

Post Sale

Network Infrastructure
Nokia-Siemens, CISCO , INTEL

Infrastructure Development

Network Integration Competitive Position Capable Supplier

Software and content provider IBM, INFY TCS, AFFLE, On Mobile, India Times, Hungama Mobile, Mauj , One 97 IMI MOBILE. Finance Licenses

GSM Services VAS Fixed Lines Broadband

Public Market Innovators Trend Setters Unique advertising strategy Emotional values & Humor Corporate Businesses SMEs Institutes

Start

Value Chain Analysis Conclusions & Recommendations

wide network coverage as they own their network infrastructure Inbound Logistics Operations Aero mobile, MATE, GPS tracking device for B2B M-commerce

Output

Android platform based HTC mobile unique marketing strategy, low STD rates Trend setters

Marketing & Planning Value Chain Outcome - 37% PM

Bill payments and Indian rail tickets using m commerce

Post Sale

SWOT
SUMMATION OF EXTERNAL & INTERNAL ENVIRONMENT ANALYSIS

AIRTEL Strength & Weakness

STRENGTHS INTERNAL
Valuable Business Partners Techno & Financial

WEAKNESSES
Outsourcing of Core Systems Lagging behind in Exploring market Investment opportunity

Strong Brand Image First Mover Advantage Single Private Leading Indian Telecom Company
Enthusiastic & Innovative Business Development team Marketing Driven Low Cost Model Blessed with Directional Visionary - S.N. Mittal Massive Economies of scale from large subscriber base

EXTERNAL

OPPORTUNITIES
Tele-Density 30.6% Low among Developing Countries Low Broadband Penetration Untapped Rural Market Bharti Infratel Cutting Down cost in Rural area Growing Globally First Indian Sponsor to signed Manchester United

THREATS
Falling ARPU
Intense Competition From Nearest Competitor Shortage of Bandwidth New Players Entering Indian telecom sector

Uncertain Economic Condition

AIRTEL ORGANISATIONAL PURPOSE

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

Mission Statement
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
An evaluation matrix of the mission statement
Concern for survival, Growth Profitability Technology

Self-Concept

Concern for Public Image

Customer

Product / Services

Philosophy

Yes

Yes

No

Yes

No

Yes

Yes

No

No

Concern for Employees

Markets

AnsOff Directional Matrix

AIRTEL ANSOFF DIRECTIONAL MATRIX

PRODUCT
EXISTING
MARKET PENETRATION

NEW
PRODUCT DEVELOPMENT MATE Mobile Application Tool for Enterprise M commerce mChek (Recharge Anywhere, Anytime)

E X I S MT A IN RG

The Airtel Advantage : 50 paisa / min Call on both National Long Distance Calls & Local calls Value Added Services: Airtel Live, Hello Tunes, Astrology

Airtel Way Finder - GPS Service Blackberry Lowered National & International Roaming Tariff Extensive & Increasing Sales & Distribution channel covering 1.27 million Delhi Half Marathon 2nd Edition 28000 participants 3G Network Awaiting for GOI Approval Celebratory Endorsement - Top BollyWood & International Personality Tie with major TV events KBC, India Got its Talent Bridge Alliance Roaming in Asia Pacific Region MARKET DEVELOPMENT 3G Network Implementation in Sri Lanka DIVERSIFICATION Bharti InfraTel & Indus Towers - Passive Infrastructure Provider Bharti Teletech Landline & Telephone Equipment AeroMobile Airtel in-flight connectivity on Emirates and Malaysian Airlines New Tech-Savvy Handset Options in Prepaid & Post Paid Schemes: HTC, BlackBerry, Apple iPhone Lowered Overseas Call Rates Bahrain @ Rs 5.00/-

K E T

N E Airtel Vodafone Alliance: Debut in Europe through Channel W Islands (Jersey & Guernsey)
Low cost Calling Cards to India - UK, USA, Singapore etc. MTN Airtel Alliance - South-South Cooperation **

Bharti Telemedia Services Broadband & Internet, DTH, IPTV

Airtel Tracking Services GPS Bharti Walmart Sipermarket

Ansoff Product / Market Framework

110 million Mobile Customer Base 24% of wireless market

3rd largest single country mobile services operator

Sixth largest in-country integrated telecom operator in the world

Poters Generic Matrix

Porters Generic Strategy

Narrow Market Scope

Broad Market Scope Differential Strategy

Uniqueness Competency

Cost Leadership
Low Cost Competency

Porters Generic Strategy (Cont.)

BROAD MARKET
L O W Own Tower Infrastructure Operator in 23 circles in india Huge Distribution Network High Customer Base Huge Economy of scale

NARROW MARKET
Low cost Mobiles on Postpaid & prepaid Lowest fare International Calling cards

C O S T
U N I Q U E N E S S

First in class Value added services, Mobile web- internet on mobile, Hello Tunes, MATE - mobile application tool for enterprise.

Aero mobile- the In-flight connectivity iphone and Blackberry Phones.

CONCLUSION AND RECOMMENDATIONS

Refine your processes, strive for dominance and build a brand

MR. Sunil Bharti Mittal

Airtel have done a good job by Improving their core competencies. Being the market leader & Especially in building a brand We would recommend Bharti Airtel to continue with their good work and concentrate more on mobile services which is Bhartis cash cow, in its process of huge diversification.

Thank You