EXPRESSING OURSELVES

1) Soumyadeep Roy
2) Rituraj Hans
3) Rahul Bhattacharjee
4) Rik Sarkar
5) Amitabha Chakraborty
6) Siddhart Routhray
7) Aswini Kumar Singhania
8) Prithwis Das
9) Nikunj Girish Saglani
10) Arnab Chakraborty
11) Ujjawal Singh

GROUP 7 2
Indian Telecom Sector
• Fastest Growing Sector – CAGR 27% (2009-10)

• Second Largest Telecom Market

– Lowest tariff charges in the world
– Wireless Subscribers – 729.57 Mn
– Wireline Subscribers – 35.19 Mn
– Teledensity – 64.34
(source: economics times,26th January,2011)

• 23 Circles - 4 Categories ( Metro, A, B & C)

• Bharti Airtel – Largest player with presence in 23 Circles

GROUP 7 3
GROUP 7 4
Evolution
Department of Telecommunication (DoT) is the main body
formulating laws and various regulations for the Indian telecom
industry.

ILD services was

BSNL was Number portability
Independent opened to Intra-circle
established was proposed
Private regulator, competition merger
by DoT Calling Party (pending)
players were TRAI, was guidelines were
Attempted
Pays (CPP) was
allowed in established Go-ahead to established to boost
implemented
Value Added the CDMA Rural
Services technology telephony
1994 1999 2007
INDIA

2002 2003 2004 2005

1992 2000 Internet Unified 2006

1997
telephony Access
initiated Licensing Broadband
(UASL) policy 2004
National Decision on 3G
NTP-99 led to Reduction regime was was
Telecom FDI limit was services
migration from of licence Reference
introduced formulated—
Policy (NTP) increased (awaited)
high-cost fixed fees Interconnec targeting 20
was from 49 to 74
license fee to low- t order was million
formulated percent
cost revenue issued subscribers
sharing regime by 2010

ILD – International Long Distance

GROUP 7 5
EVOLUTION

• In 1992, Bharti entered the cellular

market by launching services in
Delhi.
• Soon extended to other places.
• Cellular showrooms in 1995.
• Value added services in 1997.
 VALUE ADDED SERVICES
• STD/ISD
• CALL LINE IDENTIFICATION
• CALL WAIT/HOLD/DIVERT
• VOICE MAIL
• CALL CONFERENCE
• AIRTEL ROAMING
• 32K SIM CARD
CONTINUED…….
• RINGTONES AND LOGOS
• TEXT MESSAGING
• VERNACULAR SMS
• SMS GAMES
• MOBILE MESSENGER
• MOBILE CHAT
• TRAFFIC AND WEATHER UPDATE
AIRTEL-LEADERSHIP CAMPAIGN(LATE 90s)

GROUP 7 9
 LEADERSHIP CAMPAIGN
• Bharti became the market leader.
• Call rates Rupees 16/minute.
• Global market saturation.
• Essar searching for untapped
potential.
• Domestic players.
 REDUCTION IN TARIFF RATES
 Competition in the sector intensified
 Telecom players extended their horizons

Source: TRAI Report

GROUP 7 11
 TOUCH TOMORROW

• Adding emotion to
leadership.
• In 2000, Bharti
launched its
“TOUCH
TOMORROW”
campaign.
• To strengthen its
relationship with
customers.
TOUCH TOMORROW

GROUP 7 13
GROUP 7 14
 Changing Demographics

28 % Urban Population

Rapid Urbanization

Rising Income level

50% of the Indian population

is below the age of 25,
according to the CIA
FACTBOOK.
Source: Mckinsey Report

The average age of an

Indian is 33.
 LIVE EVERY MOMENT

• Give Airtel a younger look.

• To attract the youth.
• The logo symbolized friendliness, energy
and innovation.
GROUP 7 17
GROUP 7 18
GROUP 7 19
Porter’s Generic
Strategy

GROUP 7 20
Porter’s 5 Forces

GROUP 7 21
1. Threat from Competition
Wireless Market – Top 4 garnering 75%
market share

HIGH

GROUP 7 22
Competitor Analysis

  OP Margin Net Margin

Compan Sep-07 Sep-08 Sep- Sep-
Best OP Margins
y 072 083
& Net Profit Bharti 43.00% 38.00% 26.40% 19.30%
Margins among
Rcom 37.90% 31.60% 23.90% 13.20%
Peers
IDEA 32.80% 26.60% 14.10% 6.50%
MTNL 23.70% 22.90% 7.00% 6.80%

Source: CMIE November 2008

GROUP 7 23
 AMOU & ARPU Stats
Minutes of Usage per Month – Mobile
Services
USA 838
Despite a low teledensity of approximately
India 461 19 percent, India has the second highest
minutes of usage per month. This offers
China 303
huge growth opportunity to telecom
Rus sia 88 companies.

ARPU* in India – Mobile Services

10
ARPU (USD per month)

6 The declining ARPU implies that India Inc. is

4 tapping a large market at the bottom of the
2 pyramid by reducing tariffs; thereby,
0
Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007
enhancing affordability.
GSM CDMA

GROUP 7 24
2. Customer Bargaining
Power
 Lack of differentiation among HIGH

Service Providers
 Cut throat Competition
 Low Switching Costs
 Number Portability will have –Ve
Impact
 Businesses & Consumers
GROUP 7 25
3. Suppliers Bargaining
Power
LOW

GROUP 7 26
4. Threat of Substitutes
 Landline DIMINISHING HIGH
 CDMA MARKET

 Video Conferencing
BROADBAND
SERVICES
 VOIP - Skype, Gtalk, Yahoo Messenger
 e-Mail & Social Networking Websites

GROUP 7 27
5. Threat of New Entrants
 Huge License Fees to be paid upfront & High
gestation period
LOW
 Entry of MVNOs & WiMAX operators

 Spectrum Availability & Regulatory Issues

 Infrastructure Setup Cost - High

 Rapidly changing technology

GROUP 7 28
SWOT
Strengths Weakness
• Largest Telecom Player in • Outsourcing of Core
India - ~80Mn, 22.6% Systems
• Strategic Alliance with • Lack of emerging
other stakeholders in market investment
Bharti Airtel include Sony- opportunity
Ericsson, Nokia - and Sing
Tel
• Pan India Presence
• Strong Financials

Source: CMIE Report NOV 08

GROUP 7 29
SWOT
Opportunities Threats
• Bharti Infratel – • India centric – Major
Cutting Down cost in revenues from India
Rural area
• Falling ARPU & AMOU
• Match Box Strategy –
Scale of Penetration • Intense Competition &
• Current Tele-Density – Shortage of Bandwidth
30.6 is still low among
developing countries
• Low Broadband
Penetration, Rural
Telephoney
GROUP 7 30
BCG Matrix for Bharti Airtel
HIGH

Mobile Services
DTH & IPTV

Broad Band
LOW

HIGH LOW
GROUP 7 31
Future Growth Avenues

GROUP 7 32
A New look

GROUP 7 33
GROUP 7 34
Road Map – Growth Path
VPN &
VoIP

WiMAX

3G

2G/2.5G

GROUP 7 35
Breaking barriers?

GROUP 7 36
Grassroots connection

GROUP 7 37
Rural strategy

GROUP 7 38
THANK
YOU !!

GROUP 7 39