SUMMER TRAINING PROJECT REPORT

ON

KNOWING NEED & CONSUMER

SATISFACTION OF TELECOM
SERVICES IN ENTERPRISE
SEGMENT

IN
AIRTEL
SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION
Submitted By:

Submitted To:

Jagdish Pandey

Dr. Pradeep Suri

MBA III Sem

MB06039

HOD (MBA)

INSTITUTE OF MANAGEMENT STUDIES

DEHRADUN

CERTIFICATE
I have the pleasure in certifying that Mr. Jagdish Pandey is a bonafide
student of MBA IIIrd Sem. of the Masters Degree in Business Administration
of Institute of Management Studies, Dehradun under Class ID No.
..

He has completed his/her Summer Training Project work entitled Knowing

Need & Consumer Satisfaction of Telecom in Enterprise

Segment under my guidance.
I certify that this is his original effort and has not been copied from any other
source. This project has also not been submitted in any other university for the
purpose of award of nay degree.

This project fulfills the requirement of the curriculum prescribed by Uttarakhand

Technical University, Dehradun for the said course.

Signature:
Name of the Guide:.

PREFACE

This project is the study to gain the real world knowledge and to match the
knowledge with the theoretical one. I shall look forward to and gratefully
acknowledge all the suggestions on this small step I have taken.

This project is about a survey, which was conducted to know about the Airtel
Enterprises Service .

This is the step wise process including collection of data, company profile,
product features, its division, analysis of data, and the last the conclusion and
suggestion put forward the company hoping it to help them further in their future.

CONTENTS
S.NO. TITLE

PAGE NO.

1.
2.
3.
4.
5.
6.
7.
8.
9.
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11.
12.
13
14.

EXECUTIVE SUMMARY
INTRODUCTION
COMPANY HISTORY
COMPANY PROFILE
BHARTI AIRTEL LTD AN OVERVIEW
AWARDS & RECOGNITION
OBJECTIVES
PRODUCT & SERVICES
REVIEW OF LITERATURE
METHODOLOGY
SWOT ANALYSIS
FINDINGS
CONCLUSION
SUGGESTION &

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10
16
21
25
43
47
49
52
56
60
63
72
74

15.
16.

RECOMMENDATION
QUESTIONNAIRE
BIBLIOGRAPHY

77
82

ACKNOWLEDGEMENT

I take this opportunity to express my profound and sincere gratitude to Amity

University for providing me with the opportunity to explore the corridors of the
Corporate World and gather invaluable information & practical experience via such
summer training project in Marketing.
I take the privilege of offering deep sense of gratitude and indebtedness to
Dr Pradeep Suri, HOD (MBA) for providing me help to prepare this project report
and his valuable inspiration to carry out this project.
I

express

my

sincere

gratitude

to

my

company

guide

Mr. Rajeev Punetha, Corporate Account Manager, Airtel for his guidance during
the course of my training. His sound advice has been well taken by me and it is
largely due to his patience that I was able to accomplish my target. He has been
most accommodating and supportive and has made my experience a pleasant one.
I would like to thank all my colleagues and faculty members at Amity for their
valuable suggestions and constant encouragement.

EXECUTIVE SUMMARY
The project undertaken by me at Airtel Enterprises Services as part of Summer
Internship Program provided me an opportunity to understand the Enterprise
Segment and to gain an insight into the various strategies employed to cater this
segment of the industry.
The Enterprise segment stands at the cusp of a new opportunity. This sector is
booming in India as the companies today are starting to operate globally thereby
have an increasing IT and Telecom needs. It provides a lot of opportunity for the
telecom companies to delve into this sector and find out the desired potential
market.
Working from the office in Rudrapur and Dehradun from 9th June 2007 to 8 Aug
2007, I have learnt about the various aspects of Telecom sector in India. This
project was a practical experience as I learned how to deal with the corporate
clients.
As a part of the project the following activities were done during the nine week
summer internship project at Airtel Enterprise Services

Worked with Marketing and the Portal department of Airtel Enterprise

Services at Dehradun and Rudrapur office for developing a Marketing
Intelligence Repository, posted on the intranet which has been
introduced by the company to facilitate sharing of information among
the marketing team with ease.

Carried out segmentation of Airtel Enterprise Services accounts in

western India into four different groups:
o Those who buy everything from us
o Those who buy a little from us but a lot overall.
o Those who buy a lot of one thing from us.
o Others.

To map the potential for growth of telecom services in the Enterprise

Segment the following activities were done
o Collected data from secondary sources like magazines,
Newspaper Articles etc. depicting figures for the past, Trends
that the market has shown and also the expected market and
forecast results.
o Collected primary data from companies operating in
Dehradun, and Rudrapur

with their operations spread all

across the country and globally. Details of the same are as

follows:
The survey was conducted with 38 enterprises located in various parts of
Dehradun, and Rudrapur with their operations spread all across the country.
Companies visited were from different verticals all across the business industry in
India be it Banking and Financial Institutions, manufacturers, Telecom Service
Providers, Software developers, Educational Institutions, Government and Semi

Government organizations, FMCG etc. Which prov ided me an ample amount of

learning and an opportunity to communicate with the professionals across the
segment working in leading companies and business houses.
The project has been a great experience for me as an individual and provided me
an opportunity to work in team on a practical project, thereby it acted as a
platform for me to gather first hand experience for exploring the corridors of the
corporate world.

10

INTRODUCTION
Technological changes in the telecom and computers have radically changed the
business scenario. In turn, the new demand of business have spurred many
telecom based technological innovations. In order to exploit these innovations for
competing in global market, business community the world over has been putting
pressure on governments to revise the policy, regulation and structure of the
telecom sector. Several countries across the world have respond by restructing
the state controlled telecom service provider, increasing private participation,
and deregulating service provision. The emergent organizations has attempted to
be more responsive to the business needs and have evolved mechanisms to
remain competitive even under tremendous pressures.
Over the past several years, developing countries have also recognized
important role a responsive, business oriented and technologically

the

advanced

telecom sector plays in the growth of the economy. Many developing countries
now accept the limitations of a monolith state monopoly in responding to the twin
challenges of spurring internal growth and competing in an increasingly global
economy.
Past experience of reform across many countries suggests that the fundamental
underlying issue that must be addressed in telecom reform is introduction of
competition for efficiency. Competition is considered to be an important factor
than ownership in introducing efficiency.

11

Indias 21.59 million-line telephone network is one of the largest in the world and
the 3rd largest among emerging economics (after China and Republic of Korea).
Given the low telephone penetration ratio India offers vast scope for growth. It is
therefore not surprising that India has one of the fastest growing
telecommunication system in the world with system size (total connections)
growing at an average of more than 20 percent over the last 4 years.
The industry is considered as having the highest potential for investment in India.
The growth in demand for telecom services in India is not limited to basic
telephone services. India has witnessed rapid growth in cellular, radio paging,
value-added services. This is expected to soar in the next few years
Recognizing that the telecom sector is one of the prime movers of the economy,
the Governments regulatory and policy initiatives have also been directed
towards establishing a world-class telecommunications infrastructure in India.
The telecom sector in India therefore offers an ideal environment for investment.
The telecommunication initiative in the country is lead by Ministry of
Communication through the department of Telecommunication & Department
Telecom Services and its undertaking for provision of basic telephone services,
national and international long distance communication, manufacture of complete
range of telecom equipment, research and development, and consultancy services.
The Telecom Commission performs the Executive and Policy making function.
The Telecom Regulatory Authority of India performs the function of an
independent regulatory body.

12

INDIA & OVERVIEW

13

14

Total Telecom Base

~ 230 Million

3rd largest in the

Tele-density

~ 20 %

Lowest in the World

Wireless Sub Base

~ 189 Million

3rd largest in the

world

world
Wireless Penetration ~ 17 %

Lowest in the world

ARPU
Mou/Sub/Month
world

< USD
9One of the lowest
~ 490 minutes 2nd highest in the

Realised RPM

~ 2 US cents/ min

Lowest in the world

( All Inclusive)

Fixed line Sub Base ~ 40 Million

Broadband Sub Base ~ 2 Million
market
Indiantelecom

Large potential

well placed in world telecom space

15

SERVICES OFFERED
Telephone Services, NSD/ISD Services, Computerized Trunk Services, Pay
Phone, National & International Leased Lines Circuits, Telex, Telegraph Services
(Manual & Automatic), X-25 based Packet Switched Data Network (INET),
Gateway Packet Switched Data Services (GPSS) Gateway Electronic Data
Interchange Service (GEDIS),Gateway E-mail and store & Forward FAX Services
(GEMS-400), Concert Packet Services (CPS), Satellite-based Remote Area
Business Message Network, Electronic Mail, Voice Mail, Audio-Text, Radio
Paging, Cellular Mobile Telephone, Public Mobile Radio Trunked Services,
Video-Tex, Video Conferencing, V-SAT, Internet, ISDN, INMARSAT Mobile
Service, INMARSAT Data Service, Home Country Direct Service, Intelligent
Network (IN) Services.

16

17

COMPANY HISTORY
The company has an eventful history. Each year of its existence was marked by a
number of major events that have helped shape the Company as we known it
today.

19951996
Launches mobile services brand Airtel in Delhi and Himachal Pradesh.
British Telecom Pic (BT) acquires a stake in the Company.

19971998
Becomes the first private telecom operator to obtain a license to provide
basic telephone services in the state of Madhya Pradesh.
Forms Bharti BT VSAT Ltd. , Focused on providing VSAT solutions
across India and Bharti BT Internet Ltd.

19992000
Acquires JT mobiles, cellular services operator in Punjab, Karnataka and
Andhra Pradesh and becomes the largest private sector telecom operator in
India.

18

 Expands its South Indian footprint by acquiring Skycell, Chennai.

Singapore Telecommunications Ltd. (SingTel) acquires Telecom Italians
equity stake in the Company.

20012002
Launches Indias First private sector national and international long
distance service.
Becomes the largest cellular operator in the country by entry in the East at
Kolkata through acquisition and obtaining licenses for 8 new circles.
Incorporate Indias first private sector submarine cable landing station in a
joint venture with SingTel.
Punjab cellular license restored by Department of Telecommunication
(DoT).
Initial Public offering (IPO) through Indias first 100% book building
issue.
Becomes the first private operator to offer basic telephone services in
Haryana, Delhi, Tamil Nadu, and Karnataka.

19

 Introduces the new Airtel brand campaign, featuring the signature A.R.
Rahman melody that has meanwhile set a world record with over 4 million
single ringtone downloads.
Acquires BTs equity interest in the Companys cellular operations.

20032004
Joins the US$ 1bn revenue club.
enters into historic strategic partnerships with IBM and Ericsson for the
outsourcing of the Companys core IT and network activities.
Launches BlackBerry wireless solution in India, as a result of an exclusive
tieup with Research in Motion (RIM).
Acquires a controlling stake in Hexacom, the leading mobile operator in
Rajasthan.
Becomes part of the owners consortium of SEAMEWE4, a 20,000
km next general cable system connecting India with South East Asia, the
Middle East and Europe.
Becomes a founding member of the Bridge Mobile Alliance, a consortium
of seven leading mobile operators in the region.

20052006

20

 Acquires an allIndia footprint with the launch of mobile services in

Assam.
Vodafone, the worlds largest mobile service provider, acquire 10%
economic interest in the Company.
Becomes Indias largest integrated private operator based on the total
customer base.

21

22

COMPANY PROFILE
Bharti Airtel Limited (Bharti Airtel or the company is a leading Indian telecom
services provider, with 20,925,948 millions customer as on March 31,2006.
The company has three strategic business units:
Mobile Service
Broadband and Telephone Services
Enterprise Services
MOBILE SERVICES
This business unit constitutes the largest portion of our business, both in terms of total
customer and total revenues. Bharti Airtel offers in all 23 telecom circles of India and
is, therefore, the first private mobile services operator to have an allIndia presence.

Bharti Airtels mobile customer base accounts for 21.8% share of the overall wireless
(GSM + CDMA) market as on March 31, 2006. The company has a presence in 3,778
census towns and in 80,687 noncensus towns and villages, covering an addressable
population of 40% of the total population.

23

BROADBAND & TELEPHONE SERVICES (B & T)

Bharti Airtel provides broadband (DSL) and telephone services in 90 cities across
India. As on March 31, 2006, we had 1,346,740 B & T customers of whom 315,729
(23.4%) were also subscribing to DSL services.

ENTERPRISES SERVICES
The Enterprises Service business unit has two subunits:
Carrier (long distance services)
Corporates
Enterprises ServicesCarriers
Bharti Airtel complements its mobile, broadband and telephone services with
national and international long distance services. The Company has over 32,900
route kilometers of fibre on its national

long

distance

network.

For

international connectivity to the East, it has a submarine cable landing station at

Chennai, which connects the submarine cable (owned by an associate Company)
that provides a direct link from Chennai to Singapore. For International
connectivity to the West, Bharti Airtel is jointly, with 15 others global telecom
operators, founding a member of the South East AsiaMiddle EastWestern
Europe4 (SEAMeWE --4) consortium, that has commissioned the fourth
generation cable system. SEMEWE4) support telephony, Internet,
multimedia and various other broadband and data services.

24

Enterprise ServicesCorporate
This business unit provides secure, scalable, seamless, reliable and customized
integrated voice and data communications solutions to corporate customers and to
small and medium size enterprises through a single window and dedicated
relationship management.
Growth
The company has grown from being a singlecircle mobile services entity in
1995, to one of the largest integrated private telecom players with an allIndia
mobile footprint, through a combination of organic and inorganic growth. The
strong and sustained growth demonstrated over the years is testimony to the
Companys commitment to being a customer focused, long term telecom players.
Bharti Airtel continues to capitalize on the growth opportunities in the Indian
telecommunications sector to achieve its vision:
To be the most admired brand in India by 2010:
Loved by more customers
Targeted by top talent
Benchmarked by more businesses
There was an exposure to the preparing of schemes for retailers.

25

26

BHARTI AIRTEL LTD.AN OVERVIEW

Bharti Airtel is one of Indias leading private sector providers of telecommunication
services, and was the first private player to have an all India presence. The Company
is the largest GSM mobile service provider in the country based on number of
customers. The company had an aggregate of 20,925, 948 customers as of March
31,2006, consisting of 19,579,208 mobile and 1,346,740 Broadband and Telephone
customers
During the 2005-2006 financial year, the Company crossed certain key milestones,
and maintained its position as one of the leading telecommunications services provider
in India by continuously innovating its strategy and augmenting its operations
Some of the key highlights include the following :
The Company became Indias largest integrated private operator based on the
total customer base;
Highest ever net addition of 9,084,406 customers in a year.
Full year consolidated gross revenue s of Rs. 117.3 billion (US $ 2.63 billion)
and consolidated EBITDA of Rs. 42.2 billion ( US $ 947 million)
Full year consolidated net profit of Rs. 20.3 billion ( US $ 455 million):
Yearonyear growth of total customer base by 77% resulted in a 44%
increase in revenues, 38% increase in EBITDA and 67% growth in net profit.

27

Financial Results and Results of Operations

Financial highlight of Consolidated Statements of Operations :

Particulars

Year Ended
March 31, 2006

March 31, 2005

Y to Y Growth

Gross Revenue

117,255

81,558

44%

EBITDA

42,250

30,658

38%

Cash Profit from 40,006

28,219

42%

Operation
Profit Before Tax

23,455

15,832

48%

Net Profit

20,279

12,116

67%

The strong operational performance of the Company during the year culminated
into an equally robust financial performance.
The consolidated revenues and EBITDA for the year ended March 31, 2006 was Rs.
117,255 million and Rs 42,250 million respectively. The consolidated and EBITDA
grew by 44% and 38% respectively for the year ended March 31, 2006.
The net finance cost for the years was Rs.2,244 million as compared to Rs.2,439
million for the corresponding period previous year. The finance cost decline with the
net debt going up from Rs. 41,171 million to Rs. 41, 738 million. This has been made
possible due to replacement of certain old borrowing by new borrowing at lower
finance cost and funding through network capital movement. The increase in absolute
EBITDA along with reduced finance cost during the year resulted in the cash profit

28

from operations for the year ended March 31, 2006 of Rs. 40,006 million as
compared to Rs. 28,219 million for the year ended March 31, 2005
Profit before tax for the year ended March 31. 2006 was Rs. 23,455 million, and the
net profit was at Rs. 20,279 million leading to a net profit growth of 67% over the
previous year and an earnings per share (basic) of Rs. 10,776.
Net debt for the year ended March 31, 2006 was Rs. 41,738 million resulting in the net
debt to EBITDA of 0.99 times and interest coverage ratio of 17.71 times.
Financial Highlights of Standalone Statement of Operations of the Company (legal
entity):
(in million, except ratio)

Particulars

Year Ended
March 31, 2006

March 31, 2005

Y to Y Growth

Gross Revenue

117,255

81,558

44%

EBITDA

42,250

30,658

38%

Cash Profit from 40,006

28,219

42%

Operation
Profit Before Tax

23,455

15,832

48%

Net Profit

20,279

12,116

67%

Highlights of the Year

Major agreements and alliances:

29

With the objective of consolidation and achieving business synergies, Bharti

Cellular Limited and Bharti Infotel Limited have been merged with the
Company. The same was sanctioned by the Honble High Court of Delhi on
May 21, 2005. The effective date of the merger was April 1, 2004.

Bharti Airtel signed a managed capacity expansion contract with Ericsson to

provide managed services and expand its GSM/GPRS network into rural India
in 15 circles.

The Company and IBM launched Managed Services under their joint goto
market program. The initial offering portoflio includes managed hosting
services and business resiliency and continuity services to enterprise
customers in India.

The company entered into an agreement with Nokia to expand its managed
GSM/GPRS/EDGE networks in eight circles. Nokia will provide managed
services and expand the Companys network in Mumbai, Maharashtra and
Goa, Gujarat, Bihar and Jharkhand, Orissa, Kolkata, West Bengal and Madhya
Pradesh over a three year period.

The company decided not to proceed with the proposed sponsored ADR due
to lack of sponsorship interest by most of its principal shareholders.
The company entered into strategic partnership outsourcing agreements for its
customer care call center operations to four international BPOsHinduja
TMT (HTMT), IBM Daksh, Mphasis and Tele Tech Services, with the
expectation of significantly enhancing quality of customer service delivery to

30

Bharti Airtel customers across the country. The Company also entered into an
agreement with Nortel for technological expertise and availing best practices
in customer care developed through Nortels worldwide customer base.

Vodafone acquired 10% economic interest in the Company during the

financial year 200506, by way of subscription of convertible debentures in
Bharti Enterprises Limited, representing an indirect economic interest an
indirect economic interest in Bharti Airtel Limited and acquisition of direct
interest in the Company from Warburg Pincus LLc.

South East Asia, Middle East and Western Europe 4 ( SEAMEWE4)

A consortium of 16 international telecommunications companies including
our Company successfully commissioned the next generation undersea cable
system during the year.
The Company announced its new integrated organization structure with
the appointment of Manoj Kohli as the President of all business units to
lead the integrated management structure with effect from March 1, 2006.
In order to reflect its brand essence, objective and the nature of its
business activities, the Company name was changed to Bharti Airtel
Limited from Bharti Tele-Ventures Limited, effective April 24, 2006.

New Products/Initiatives:

31

During the year, the Company introduced new and innovative products that were
received well in the market and enabled the Company to maintain its leadership
position despite competitive pressures.
The Company introduced Rs. 200/- denomination monthly recharge coupon in
May 2005. It thus lowered the recharge denomination available in the market,
thereby making mobile services more affordable.
Launch of BlackBerry @ 7100 g business phone in India in the month of June
2005 and BlackBerry 8700 g in March 2006. Bharti Airtel has made a wider
portfolio of BlackBerry products available in India in partnership with
Research in motion (RIM). BlackBerry solutions provide instant emailing
solutions.
Launch of a suite of mobile services including Bridge Roaming, Bridge
Prepaid, Bridge Enterprise and Bridge Concierge. These services will enable
our customers to enjoy a seamless mobile service experience when roaming
overseas on the Alliance Members network. Bharti Airtel is the founder
member of the Bridge Alliance, which was established in November 2004 and
includes Globe Telecom (Philippines). Maxis (Malaysia), SingTel Mobile
(Singapore), SingTel Optus (Australia), Taiwan Mobile (Taiwan), Telkomsel
(Indonesia) and CSL (Hong Kong).
The Company launched Future FactoryCentres of Innovation to incubate
pioneering mobile applications. The Future Factory has been conceptualized
with the purpose of developing applications to cater to the needs of customer
segments across the entire spectrum.
Bharti Airtel, ICICI Bank and VISA joined hands to launch mChqa credit
card on the mobile phone. This is the first mobiletomobile payment

32

option, which enable Bharti Airtel customers and ICICI Bank Visa cardholders
to pay for their purchases with their Airtel mobile phones.
Bharti Airtel launched a suite of One India plans for Mobile and
Broadband & Telephone service customers in March 2006. These plans
give the option of making calls to any location in the country at a flat rate
of Re.1 per minute.
Bharti Airtel launched the worlds first Easy Music phone user a choice of
over 18,000 songs in over 20 languages for purchase from over 100,000
Bharti Airtel retail outlets in India for use as ring tones and call back
tones.
Bharti Airtel introduced Indias first Rs. 999 Lifetime prepaid card with a
life time validity with which a mobile user can continue to recieve calls
for life time without having to recharge or worry about the validity period
of the card or coupon. The lifetimeprepaid card also offers the user full
talk time on every future recharge of any denomination.

Business Review
Mobile Services
During the financial year, the Company expanded its operations to 3,778 census
towns and over 80,687 noncensus towns and villages covering approximately
40% of the countrys total population. The Company added 8,594,928 mobile
subscribers during the year, garnering 22.7% share of the all India net additions in
the wireless market and had a wireless market share 21.8% as on March 31, 2006.

33

The Companys strong performance helped consolidate its leadership in the

market and has given it the might to take full advantage of the rapidly growing
telecom market.
The revenues from mobile services for the financial year were Rs. 83,095 million,
a growth of 50% over the revenues in the previous financial year. The mobile
services business contributed 71% to the consolidated revenues. The growth in
revenues happened despite reductions in tariffs and intense competition. This
robust growth was due to increase in subscribe base on account of the launch of
Rs. 200 monthly recharge coupon and Rs. 999 lifetime prepaid, higher traffic on
networks, and expansion of nonvoice services. With mobile tariffs in India
being among the lowest in the world, the Companys prime focus is on ensuring
customer satisfaction through superior network quality customer, customer
service and continuous innovation in valueadded services that would help
expand its mobile customer base and drive up volumes.
The key financial result of the mobile segment for the year ended March 31, 2006
are presented as belows

Financial Highlight of Mobile Services:

34

Particulars

Year ended
March 31

2006
Gross Revenue
83,095
Earnings
before 16,850
Interest

March 31

YToY

2005
55,436
10,385

Growth
50%
62%

&

Taxatrion
Broadband & Telephone Services
The Company provides Broadband & Telephone Services in 90 cities across
India. As on March 31, 2006 the Company had 1,346,740 customers, of which
23.4 % ( 315,729) were also subscribing to broadband services.
The customer base for the Broadband & Telephone Services grew by 57% in the
year ended March 31, 2006. The revenues from the Broadband & Telephone
Services were Rs. 15,075 million, a growth of 33% over the revenues in the
previous financial year. The earnings before interest and taxation was Rs. 606
million as compared to Rs. 1442 in the previous financial year. The decline in
EBIT was essentially due to the launch of services in 38 new cities during the
financial year.
The key financial results of the Broadband & Telephone Services for the year
ended March 31, 2006 are presented below.

Particulars

Year ended
March 31

March 31

YToY

2006

2005

Growth

35

Gross Revenue
15,075
Earnings
before 606

11,311
1,442

33%
-58%

Interest & Taxation

Enterprise Services
As a part of the new integrated structure, the Company has reclassified and
created two sub units under this business group, viz. Carriers (Long Distance
Services) and Corporate.
Enterprise Services Carriers
The Company complements its Mobile, Broadband and Telephone Services with
national and international long distance services. The Company has over 32,900
route kilometers of fibre on its national long distance network. For international
connectivity to the East, it has a submarine cable landing station at Chennai which
links the submarine cable (owned by an associate company) connecting Chennai
and Singapore. For international connectivity to the West, it is a member of the
South East Asia-Middle East-Western Europe 4 (SEA-ME-WE-4) consortium
jointly with 15 other global telecom operators, and has commissioned the fourth
generation cable system.
During the financial year, the Company saw significant growth in the long
distance traffic carried on its network due to the increased customer base and
lower tariffs on account of reduction in the regulatory costs (License fee and
Access Deficit Charge).
The key financial results of the long distance services division for the year ended
March 31,2006 are presented below.

36

Financial highlights of Enterprise Services Carriers:

Particulars

Year ended
March 31

2006
Gross Revenue
24,674
Earnings
before 7,794
Interest

March 31

YToY

2005
18,737
4,716

Growth
32%
65%

&

Taxatrion

Enterprise Services Corporates

This sub-unit of Enterprise Services provides secure, scalable, seamless, reliable

and customized integrated solutions of voice and data communications to
corporate, small and medium scale enterprises, thus offering total telecom
solution

through

single

window. The

unit

focuses

on

delivering

telecommunications services as an integrated offering including mobile,

broadband, telephone, national and international long distance and data
connectivity services to key account corporate customers through business
relationship management.
The key financial results of the enterprise services division for the year ended
March 31,2006 are presented below.
Financial highlights of Enterprises Services Corporates:
Particulars

Year ended
March 31

March 31

YToY

2006

2005

Growth

37

Gross Revenue
6,933
Earnings
before 1,762
Interest

5,406
2,284

28%
-23%

&

Taxatrion
Regulatory and Key Industry Developments
During the year, the following are the key regulatory developments:
Telecom Regulatory Authority of India (TRAI) introduced a revised
Interconnection Usage Charge (IUC) regime. Per-minute Access Deficit Charge
(ADC) on domestic calls has been replaced by a revenue-share of 1.5% of
adjusted gross revenue as ADC, payable to BSNL. Revenue from Rural Fixed
Wireline subscribers is exempt from ADC. Per minute ADC continues on ILD
calls but at a reduced rate. Carriage charges, which were distance based earlier,
are now left to negotiation between operators subject to a ceiling of
Rs.0.65/minute;
The IUC (Fifth Amendment) Regulation, 2005 that imposed ADC on calls
originated by national and international roamers has been set aside by TDSAT;
TRAI has issued a Regulation on Quality of Service Parameters of Basic and
Cellular Mobile Telephone Services and a Regulation on Code of Practice for
Metering and Billing Accuracy in India;
The ceiling tariffs for IPLCs prescribed by TRAI, which were contested by
VSNL, have been upheld by TDSAT and these are now in effect;

38

Pursuant to public consultations, TRAI has submitted recommendations to the

Department of Telecom on the following matters:
Spectrum
Convergence and Competition in Broadcasting and Telecommunications
Mobile Number Portability
Next Generation Networks
Measures to promote growth of telecom services in rural areas
Measures to Promote Competition in IPLC in India
Publications of Telephone Directory and Provision of Directory Enquiry
Services.
The DoT has issued guidelines for allocation of GSM spectrum beyond 10 MHz
and upto 15 MHz, and allotment of 5th and 6th CDMA carriers. The allocation
criterion continues to be linked to a minimum subscriber base. The rest of the
recommendations are under
consideration.
The Government of India enhanced the FDI ceiling in the telecom sector from
49% to 74% subject to certain preconditions.
The Central Government revised terms and conditions of several telecom service
licenses which include:
Entry Fee for NLD and ILD licenses reduced from Rs.1,000 million and
Rs. 250 million respectively to Rs. 25 million;

39

 Annual License Fee for NLD and ILD licenses reduced from15% to 6% of
Adjusted Gross Revenue (AGR);
NLD and ILD licensees permitted to access subscribers directly for
provision of Leased Circuits/ Closed User Groups;
Annual License Fee @ 6% of AGR imposed on Internet Service Providers
licensed with restricted internet telephony;
Infrastructure provider category II and VPN licenses abolished. Existing
licensees permitted to migrate to NLD/ILD licenses;
Annual License Fee for VSAT commercial license reduced from 10% to
6% of AGR.
Share Capital
The Company allotted 2,722,125 Equity Shares of Rs. 10/- each upon merger of
Bharti Cellular Limited (BCL) into the Company.
During the year the Company allotted 18,242,237 equity shares upon conversion
of Foreign Currency Convertible Bonds (FCCBs) by their holders. Due to these
reasons, as on the date of this report, the total issued, subscribed and paid up
equity share capital of the Company stands increased to 1,894,419,574 equity
shares.

40

SHAREHOLDING PATTERN
Throughout its existence, Bharti Airtel has been able to attract substantial
investments from international organizations such as BT, Telecom Italla, Warburg
Pincus, International Finance Corporation (IFC), Asian Infrastructure Fund (AIF)
and SingTel. In 2005-06 Vodafone jointed that list with (a direct and indirect)
stake of 10%. Today, the Company has two strategic investors: SingTel and
Vodafone and the composite foreign holding of Bharti Airtel is within the
prescribed limit for telecom sector. This is a clear reflection of the ever growing
interest and confidence of the Company, which in turn is an outcome of the
principles of sound corporate governance that the Company adheres to in order to
enhance its shareholders value.

S.No.
1.
2.
3
4
5
6
7
8
9
10
11
12

Holder
Bharti Telecom Limited
Postel Limited
Vodafone International Holding B.V.
Citigroup Global Market Mauritius Private Ltd.
Morgan Stanley and Co. International Ltd. A/C Mo
CLSA Merchant Bankers Ltd. A/C CLSA (Mauritius)
Life Insurance Co. of India
The Growth Fund of America, Inc.
FID Funds (Mauritius) Limited
J.P. Morgan Fleming Asset Management (Europe) S.A.R
Comment Mauritius Limited
HSBC Global Investment Funds A/C HSBC Global

%
45.40
15.61
5.62
2.75
1.38
1.23
1.20
1.11
0.85
0.81
0.78
0.73

13
14
15
16
17
18

Investment
Deutsche Securities Mauritius Limited
Euro Pacific Growth Fund
Fidelity Advisor Series I Fidelity Advisor Mid Cap
Federated Global Investment Management Crop. A/C Fe
J P Morgan Fleming Asset Management (Europe) S.A.R
Merill Lynch Capital Markets Espana, S.A.S.V

0.66
0.66
0.64
0.59
0.53
0.48

41

19
20
21
22
23
24
25
26
27
28
29
30
Total

T. Rowe Price Associates , Inc. A/C T. Rowe Price G.

0.45
Fidelity Management and Research Company A/C 0.42
Fidelity
Top 50 Asian
American Funds Insurance Series A/C American Funds
Oppenheimer Funds Inc. A/C Oppenheimer Developing
Sloane Robinson LLP A/C SR Global (Mauritius) Limited
Sloane Robinson LLP A/C SR Global (Mauritius) Limited
ICICI Prudential Life Insurance Company Ltd.
The New Economic Fund
Merill Lynch Capital Markets Espana, S.A.S.V.
Emerging Markets Growth Fund Inc.
The India Fund, Inc.

0.41
0.40
0.36
0.31
0.29
0.27
0.26
0.26
0.25
0.25
84.96

PERFORMANCE AT A GLANCE

Particulars

UNITS

Full Year Ended March 31

2003

2004

2005

2006

Customer Base
Total Customer Base

000s

3,443

7,141

11,842

20,926

Mobile Services

000s

3,071

6,504

10,984

19,579

372

637

857

1,347

Broadband

&

Telephone 000s

Services
Based on Statement of Operation
Revenue

Rs.Mn.

30,554

50,369

81,558

117,225

EBITDA

Rs.Mn.

7,643

17,055

30,685

42,250

Cash profit from operations

Rs.Mn.

4,904

14,363

28,219

40,006

42

Profit/Loss before tax

Rs.Mn

(1,762)

5,527

15,892

23,455

Net Profit/loss

Rs.Mn

(2,051)

5,837

12,116

20,279

Stockholders Equity

Rs Mn

48,262

49,146

53,200

73,624

Net Debt

Rs Mn

32,395

42,292

41,171

41,738

Capital Employed

Rs Mn

80,657

91,438

94,371

115,362

Ebitda Margin

25.0%

33.9%

37.6%

36.0%

Net Profit Margin

-6.7%

11.6%

14.9%

17.3%

Return On Stockholder Equity

-4.2%

12.0

32.7%

32.0%

Return On Capital Employed

0.9%

9.9%

15.7%

21.5%

Net Debt To Editda

Times

4.24

2.48

1.34

0.99

Interest Coverage Ratio

Times

2.44

5.24

9.65

17.71

Book Value Per Equity Share

Rs

26.04

26.52

28.70

38.87

Net Debt To Stockholders Times

0.67

0.86

0.77

0.57

Equity

(1.11)

3.15

6.53

10.78

Based on Balance Sheet

Key Ratios

Rs.

Earnings Per Share (Basic)

43

AWARDS AND RECOGNITIONS

We are pleased to report that during the year many awards were conferred on both
the company and members of our senior management.
The company was presented with the:
Best Managed company Award 2005 in large cap category by Asia
Money.
Avaya Global Connect Customer Responsiveness Award 2005 for best
customer service in the telecom sector.

44

 Silver Trophy at CII National Six Sigma Awards

for quality amongst

all service companies.

Mis Preferred Mobile Service by CNBC Awaaz Consumer Awards.
Asian Mobile News Awards 2005

and Mobile Operator of the year,

India Award.
Best GSM carrier in the Telecom Asia Awards 2005.
Market Leadership Award for managed WAN services Market, 2005 by
Frost & Sullivan.
Wireless Service Provider of the year 2006 and competitive Service
Provider of the year 2006 by Frost & Sullivan Asia Pacific.
1st Place for investor Relations in Telecommunications Sell-side view by
institutional investor.
Sunil Bharti Mittal was personal awards:
Best Asian Telecom CEO at the Telecom Asia Awards 2005.
Best CEO, Telecommunications, Asia in the Best CEO in the
Region Category by Selfside view in a survey conducted by
insitutional investor.

45

 Best CEO, India in the Best CEO in the Country category by Sellside
view in a survey conducted by institutional Investor.

Furthermore, the Company

Ranked among the top three companies in the Economic times top 500.
Featured among the top 100 global information technology companies in
Business week.
Ranked 2nd among the Best Managed Companies in India, in Asias Best
Companies 2005 poll conducted by Finance Asia.
Featured among the Forbes Global 2000 leading companies in the world
for the year 2005.

46

47

OBJECTIVES
The main objective of this project is
To develop marketing intelligence and repository for Airtel Enterprises
Services.
To study the Indian Telecom Industry in detail.
To find out the changing trends of telecom Services in Enterprise Segment
keeping the major focus on Small & Medium Enterprises as it is emerging
as a major market for Telecom & Connectivity Solution providers.

48

49

PRODUCT AND SERVICES

AIRTEL ENTERPRISE SERVICES

Its a total provider for Indias large enterprises. It works closely with the
enterprise customers to uniquely address all their strategic connectivity needs, by
using a mix of applications & technologies.
Products and services offered:

Voice services:
Centrex/widex, Voice VPN, Domestic local Toll Free, PRI, DELs, Conferencing,
VAS.

Mobile Services :
GSM plain SIMs, GPRS, Biz live SMS, voice portal, VAS
Satellite Services:
PAMA/DAMA, BIT-internet, VPN, Satellite based IPLCs for redundancy reasons.

Managed Data and internet services;

50

Global Managed Data Services, leased line services, IPLC service, internet
access, IP services.

Managed e-business service :

CoLo, Internet access, BCRS, ASP, webhosting.

Managed customized integrated solutions :

Call Centers, MPLS layers 2/3 VPN services, Integrated WAN Solution with
hybrid media, IMVS.

Major Competitors
Reliance Infocomm, Tata Indicom, Idea, BSNL, MTNL

51

52

REVIEW OF LITERATURE
DISTRIBUTION NETWORK OF AIRTEL
The distribution channel that Airtel follows for its Magic cards ,which is its
prepaid card service, is one through the direct channel.
The direct channel consists of the Distributors, who is responsible to pass on the
goods to the retailer base, which is also formed, by the Distributors. The goods
after passing from the Distributor to the retailer finally reach the end customers.
The company directly deals with the Distributors who inturn with the retailers.
The distributors that is selected by Airtel is one, which has an experience in the
distribution of FMCG product, and there no restriction, as of that the distributor
should not distribute any other products.
The Distributors places the goods to the retailers through FOS i.e field officer
sales. These are the boys who are looking after allocated areas and they are
responsible for the development of the area. The FOS are responsible to convey
scheme if any. They also provide claims that the company owes to retailers.
There is one merchandiser who is responsible to look into the visibility part of
Airtel in a particular city. He is responsible to paste Pops, banners, sun packs, and
e.t.c. as promotional supports from the company to the retailers.

53

Airtel has two types of products the prepaid and the postpaid.
There are two different type of strategies that is follows for its two different
products.
The products are
Prepaid
Postpaid
As We were just looking after the distribution channel of prepaid cards i.e. Magic
cards just giving an overview of what type of channel is used in the postpaid
section of Airtel.
In postpaid the company appoints a franchisee in an area. In an area the no. of
franchisees may depend on the area of the city. A city like Haridwar had just 2
postpaid franchisees.
The franchisees of Airtel in postpaid are known as Airtel connects. The connect
franchisees has a team of FOS. The FOS (Field Officer sales) is the actual people
who look after the sales of the products. They go to the fields generate leads ands
convert the leads and gets customers for the company. The franchisees are under
direct supervision of the company.

54

The postpaid connection are not easily available over the counter as the prepaid is
readily available with the next-door retailer as there is a lot of rigorous
verification has to be under taken for getting a connection.

A graphical

presentation of the distribution channel is being provided below.

COMPANY

COMPANY

DISTRIBUTER

AIRTEL CONNECTS

CUSTOMERS

CUSTOMERS

55

RETAILERS

56

METHODOLOGY
This project was completed in 5 phases:
First phase, involved the three different tasks firstly to understand the project, its
scope, limitation and its effective practical usage for the Airtel Enterprise
Service.
Second Phase, included the understanding of telecom Industry and factors
associated with it.
Third phase included making the understanding of SMBs and its requirements of
IT/Telecom Services.
Fourth Phase, were field work was done in order to get the necessary information
& data.
Fifth Phase, all the information received from the 2 nd, 3rd and 4th phase were
clubbed and analysed.
In order to get the necessary information for the successful completion of this
project, it was the basic need to understand the Small & Medium Business Units
and their needs & requirement in the IT and Telecom Service which ultimately
required the basic understanding of Telecom Industry and the types of Services
provided by them.

57

So the Entire task was divided in two parts. Firstly to understand the Telecom
Industry and Secondly, to understand the SMBs.
In order to understand the Telecom Industry from the close the steps taken were as
follows:
Reading of various articles from the website of TRAI & COAI.
Regular reading of magazines like Voice and Data, Computer Express etc and
later on analyzing the information provided by them.
Taking the Account Information from all the account managers responsible for
providing different telecom services to the industry.
Done Segmentation of Airtel Enterprise Services accounts of entire country in
order to get the Correct Information of the three zones, north & north East, South
and west respectively.
By preparing the database of all Airtel Enterprise Services Accounts for IMRB.
In order to understand the Small and Medium Business segment in India and their
IT/Telecom requirements following steps were taken:
Studied the material available on internet on various sites regarding the SMBs.
Analysed small and medium business segment in India according to a research
conducted by IMRB, and prepared a presentation on the Small, Medium and SMB
segment individually.
Studied the presentation available at Airtel Enterprise Services.

58

Data Collection and Field Work:

Sample Size

562 (Random Sampling)

Location

Rudrapur (SIDCUL) & Dehradun

To know the need and consumer satisfaction of Tele Services in Enterprise

Segment.

Primary Data
Collected primary data from companies operating in Rudrapur and Dehradun with
their operations spread all across.

Secondary Data
Collected data from secondary sources like magazines, Newspaper Articles etc.
depicting figures for the past, trends that the market has shown and also the
expected market and forecast results.

The survey was conducted with 562 enterprises located in various

parts of Rudrapur and Dehradun some of which are Britania,
Parle, HCL, ICICI Bank, Lucas TVS, Dabur and Tata Motors etc.

59

60

SWOT analysis on Indian ITES sector

Strengths:
a) Highly skilled, English-speaking workforce.
b) Cheaper workforce than their Western counterparts. According to
Nasscom, The wage difference is as high as 70-80 percent when compared
to their Western counterparts.
c) Lower attrition rates than in the West.
d) Dedicated workforce aiming at making a long-term career in the field.
e) Round-the-clock advantage for Western companies due to the huge time
difference.
f) Lower response time with efficient and effective service.

Weaknesses:
a) Recent months have seen a rise in the level of attrition rates among ITES
workers who are quitting their jobs to pursue higher studies. Of late
workers have shown a tendency not to pursue ITES as a full-time career.
b) The cost of telecom and network infrastructure is much higher in India
than in the US.

61

Opportunities:
a) To work closely with associations like Nasscom to portray India as the
most favored ITES destination in the world.
b) Indian ITES companies should work closely with Western governments
and assuage their concerns and issues.
c) India can be branded as a quality ITES destination rather than a low-cost
destination.

Threats:
a) The anti-outsourcing legislation in the US state of New Jersey. Three more
states in the United States are planning legislation against outsourcing
Connecticut, Missouri and Wisconsin.
b) Workers in British Telecom have protested against outsourcing of work to
Indian BPO companies.
c) Other ITES destinations such as China, Philippines and South Africa could
have an edge on the cost factor

62

63

FINDINGS
1. Are you using any mobile services?
a) Yes

b) No

0%
0%

3%

Yes
No

97%

64

2 . Which operator services you are using?

a) Hutch

b) Idea

c) Airtel

d) BSNL

e) Reliance

f) Tata Indicom

5%
20%

3%

3%

Hutch
Idea
Airtel
BSNL
Reliance
Tata Indicom

69%

65

3. Which one ?
a) Postpaid

120
100

b) Prepaid

100

80
Postpaid

60

Prepaid

40
20

0
Postpaid

Prepaid

66

4. If post paid, reason behind that

a) High Usage

b) Service

c) Lower Call Rates

d) All of the Above

40

40

35
30 30
25
20

High Usage
Services
Lower Call Rate
All of the above

22

15
10

5
0

67

5. For how long you are using this connected?

a) 6 Months

b) 6 Months1 year

c) 1 Year1.5 Year

d) 1.5 Year2 Year

e) > 2 Year

40
35
30

6 Months

25

6 Months -1 Year

20

1 Year-1 1/2 Year

15

1 1/2 Year-2 Year

10

> 2 Year

5
0

6. Reason for associated with the specific operator?

68

a) Network

b) Service

c) Call rates

d) Roaming

e) Other

35
30
25

Network

20

Services
Call Rate

15

Roaming

10

Other

5
0

69

7. How much is your monthly expense on mobile?

a) Below 300

b) Below 500

c) Below 1000

d) Above 1000

60
50
40

Below 300
Below 500
Below 1000
Above 1000

30
20
10
0

70

8. What is the significance of cellular service in your life?

a) Status symbol

b) Necessity

c) Convenience

d) Other

45
40
35
30

Status Symbol

25
20
15

Necessity
Convenient
Other

10
5
0

71

72

73

74

75

CONCLUSION

The need was felt to comprehensively assess the satisfaction level of mobile
phone users in Enterprise Segment encompassing quality of technical service,
quality and operational aspects of gadgets; and socio-psychological costs due to
unsolicited promotional calls/SMSs etc

In SIDCUL, I found that 97 % of the corporate people using various mobile

service. and 3 % of the people are not using the services in which 69% of the
corporate are using Airtel enterprises services, 20 % are using Tata Indicom
(because most of the companies are Tatas vendor) , 5% of Hutch, and 3 % of
Idea and Reliance.
In postpaid corporate connection 40% of the company believes on services, 30%
on high usage , 22 % on lower cost, 8 % are not specified.
The average monthly rental of corporate is 950 per connection. 45 % of the
corporate are using the cellular services due to the necessity, 38.5 % corporate use
the service on the basis of convenience, and 9.5 % took it as status symbol.
In SIDCUL (Small Industrial Development Corporation Of Uttarakhand
Ltd.) nearly 370 company are register in which some are under construction
125 company running corporate connection of Airtel most of the corporate
using Airtel services with high satisfaction and first time resolution.

76

77

SUGGESTION AND RECOMMENDATION

Airtel Enterprises Services need to work on developing solid database of their
clients and regularly update it.
Seeing the condition and infrastructure of SMBs in present scenario, SMBs
spending major amount on IT/Telecom Equipments and Hardware, Airtel
Enterprise Service must work in co-ordination with Telecom Equipment Vendors
and can work on offering offer package deal to the customers by associating with
them in order to increase their Customer Base (Concept of Channel Partners)
Airtel Enterprise Services should work on providing more corporate connections
of cellular as well as fixed line.
Solid Marcomm Policy and its effective implementation is necessary as
Enterprise segment thinks Airtel only stands for Mobile/Cellular Services.
Airtel Enterprises Services needs a Repository for the information related to
various services and their current updates in order to streamline the business as it
takes major amount of time to get the information regarding services.
Looking at the current scenario of market and companies outsourcing their
processes, Airtel Enterprises Services can look ahead for providing the services
like managing the database of other companies.

78

Separate wing in the Airtel Enterprise Service should be developed to look after
and study the policies, services and offerings of competitors.
Airtel Enterprise Services should work on setup cost reduction of network base in
order to maximize the profit.
Airtel Enterprise Services should work on Network expansion and grievance
redressel of the corporate.

79

80

QUESTIONNAIRE
1. Are you using any mobile services?
a) Yes

b) No

2. Which operator services you are using?

a) Hutch

b) Idea

c) Airtel

d) BSNL

e) Reliance

f) Tata Indicom

3. Which one ?
a) Postpaid

b) Prepaid

4. If Prepaid, Reason behind that?

a) Low expense

b) Easy to use

c) Both

81

5. If post paid, reason behind that

a) High Usage

b) Service

c) Lower Call Rates

d) All of the Above

6. Which plan you are using in postpaid connected?

7. For how long you are using this connected?
a) 6 Months

b) 6 Months1 year

c) 1 Year1.5 Year

d) 1.5 Year2 Year

e) > 2 Year
8. Reason for associated with the specific operator?
a) Network

b) Service

c) Call rates

d) Roaming

e) Other

82

9. How much is your monthly expense on mobile?

a) Below 300

b) Below 500

c) Below 100

d) Above 800

10. What is the significance of cellular service in your life?

a) Status symbol

b) Necessity

c) Convenience

d) Other

11. Are you satisfied with services of operator you are using?
a) Yes

b) No

12. If no reason behind that?

a) Network

b) Service

c) Call Rates
13. Are you thinking to migrate to any other operator on near future?

83

14. If yes, which one and reason for preference?

i) Airtel

ii)Hutch

iii) Idea

iv) Other

a) Call Rates

b) Billing Description

c) Network Problem

d) Faculty Assurance

Reason

e) Other
15. If you are talking a new connection what would be your 1st preference?
a) Airtel

b) Hutch

c) Idea

d) BSNL

e) Reliance

f) Other

84

85

BIBLIOGRAPHY
WEBSITES

1) www.google.com
2) www.altavista.com
3) www.askjeeves.com
4) www.nasscom.org
5) www.indiainfoline.com
6) www.airtelenterprise.com

86