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Airtel ppt

  1. 1. Strategic Management Presentation Telecom Industry By, Chenthil Kumaran Arvind Kannan Anand Parameswaran
  2. 2. Major Players in Industry - Airtel - Vodafone - Idea - Reliance - Tata Docomo - BSNL
  3. 3. Bharti Airtel Bharti Airtel Limited commonly known as is an Indian Telecommunication services company headquartered at New Delhi World’s 3rd Largest Mobile Telecommunications Company Largest Cellular service provider in India with 251.80 million subscribers as of September Overall customer base stands at 262.60 million, across 20 countries and becomes the 4th largest global mobile operator Bharti Airtel is the first Indian telecom service provider to achieve “Cisco Gold Certification” It offers its telecom services under the airtel brand and is headed by Mr. Sunil Bharti Mittal
  4. 4. Vision & Promise" Enriching lives means putting theCustomer Need : Customer at the heart of everything we doProduct / Service : We will meet their needs based on our deep understandingof their ambitions, wherever they are.Profitable Growth : By having this focus we will enrich our own lives andthose of our other key stakeholdersPublic Image : Only then will we be thought of as excitingTechnology : InnovationSelf-Concept : Truly World Class Company
  5. 5. The Company – Bharti Airtel Offering end to end solutions and entering new geographies
  6. 6. Organizational Structure
  7. 7. Customer Business Unit It has two distinct Customer Business Units (CBU) with clear focus on : “Airtel Business” Business to Customer (B2C) Business to Business (B2B) Retail Consumers, Homes Services to the Businesses across Vertical And Including IT, ITES, Government, Small Offices FMCG, BFSI and Media Network Infrastructure, Mobile, Telemedia, Local connectivity, Digital TV and other Ethernet, Internet Service emerging business Provider solutions spanning voice and data
  8. 8. Integrated Telecom Company Passive Infrastructure - Bharti Infratel - Indus TowerEnterprise Services Telemedia Services - Carrier - Fixed Line - Corporate - Broadband - DTH Wireless Services - 2G - 3G - 4G
  9. 9. Porter’s 5 Force
  10. 10. 1. Threat from Competition Customer Market Share (%) High
  11. 11. 2. Customer Bargaining Power - Cut Throat Competition High - Low Switching Costs - Mobile Number Portability
  12. 12. Low3. Suppliers Bargaining Power Outsourcing Vendors Features Advantages Deals Ease in Network Planning Network Payments linked to Outsourcing & - Usage and Network Quality Maintenance - Service Level Agreements (SLA’s) - Pricing & Payment as a % of revenues Information - Service Delivery Platform enabling Technology delivery of content to end - Increased focus on sharing passive Passive -Bharti Infratel infrastructure Infrastructure -Indus Towers - Reduce Capital Expenditure Spend - IBM Daksh - Enhanced & Consistent customer Call Center - Mphasis experience Outsoucing - Hinduja - Common platform across the group Aegis BPO
  13. 13. 4.Threat of Substitutes - Landline High Diminishing Market - CDMA - Video Conferencing - VOIP – Skype, Gtalk, Broadband Services Yahoo Messenger,, whatsapp
  14. 14. 5. Threat of New Entrants - Huge License Fees to be paid upfront High & High Gestation Period - Spectrum Availability and Regulatory Issues - Rapidly Changing Technology - Infrastructure Setup Cost
  15. 15. SWOT Analysis Strengths Weakness - Largest Telecom Player with a customer base stands at 262.60 million as on Sep,2012 - Outsourcing of Core Systems - Strategic Alliance with other - Low Broadband Penetration even stakeholders in Bharti Airtel includes Ericsson, Nokia and in cities Indus Tower - World Presence - Strong Financials
  16. 16. SWOT Analysis Opportunities - Bharti Infratel – Cutting down Threats cost in Rural area - India Centric – Major Revenues - Match Box Strategy – Scale of from India Penetration level - Current Tele Density (M-Check, - Falling ARPU & AMOU M-Commerce & E-Commerce) - Intense Competition & Shortage - Android Market – Launch of of Bandwidth Beetel Tablet- Wide Scope in Broadband & 4G LTE Penetration ARPU - Average Revenue per user (First Mover Advantage) AMOU - Minutes of Usage
  17. 17. BCG Matrix for Bharti Airtel High Stars ? Market Growth Rate Cows Dogs Low High Market Share Low
  18. 18. Statement of Income as per InternationalFinancials Snapshot Financial Reporting Standards (IFRS)Though there was a massive increase in terms of Revenue, the EBITDA betweenthe year 2007- 2012 increased due to acquisition & strategic alliances with leadinglocal and international telecom players (Zain Telecom, Seychelles, 3G servicesagreement with Idea (Gujarat Circle) in the year 2010 which influenced theincrease in Debt - Interest Payment and depreciation amortization consequentlythere is shortfall in Net Profit throughout the succeeding years Source:
  19. 19. Statement from CFO - Airtel "Dividend distribution tax on account of our tower company Indus Towers, additional capital investments, interest costs and forex loss are the key reasons for the dip in net profit," said Sarvjit Dhillon, Group Chief Financial Officer at Bharti. Bharti faces profit pressure but still the Market Leader : Bharti Airtel’s (Bharti) revenue came marginally higher during the year 2012, however on the PAT front, the company underperformed the expectations (-30%), due to the increase in the service tax rates(12.5%) and payouts to the tune of thousands of crores in regulatory fees when government imposed a one time spectrum charge on mobile operators and for renewing its mobile permits from next year, but during 2012, airtel has still demonstrated a strong resilience even in the midst of such a hyper- competitive. Source:
  20. 20. Bharti Airtel - StrategyStrategy :Focus on Core Competenciesand Outsource the rest
  21. 21. Strategy - Airtel partnered with leading players in telecommunication players across the globe (Indus Towers & Zain Telecom) - Agreement with Idea which gives presence in 15 out of 22 circles in India- Contracts given to Ericsson India, Nokia Siemens Networks and Huawei Technologies to setup for providing 3G services in India in its 13 telecom circles where the company won 3G licenses - Ericsson India – 7 Circles - Nokia Siemens Network – 3 Circles - Huawei Technologies – 3 Circles
  22. 22. Operational Strategies - Higher emphasis on ARPU/Min – stark contrast with other operators who concentrate on ARPU only - Aim to become a one stop shop for all telecommunication services under the Bharti Umbrella- Exploring Opportunities in International Markets after acquisition of Zain Mobile Operations in 15 African Countries on March, 2010 and Seychelles on August 2010 - Hived off tower infrastructure into a separate entity - Bharti Infratel
  23. 23. Future Strategies - Translate its expertise in Indian Markets to other emerging economies - Acquisitions Globally - Indian Market in spite of being the world’s largest is still not matured, lot of opportunities in bringing new technologies - Launch of Android Tablets from its unit Beetel Teletech Ltd
  24. 24. Airtel’s Performance - Bharti Airtel has enjoyed an excellent run over since the telecom Sector opened- It managed to hold on to its leadership position right from the inception in spite of the presence of Global Leaders such as Reliance, Tata’s, Birla’s and Vodafone - Airtel coped well with the regulatory changes from TRAI - “One Network” – world’s first free intercontinental incoming roaming service - Continue to attract and delight customers with its new signature tunes and a change in logo recently to emerge into world
  25. 25. Green Initiative - Green Towers P7 program- Only Telecom tower Company installed almost 3MWT of solar capacity generating more than 5 million units of electricity every year - Green Initiative reduce 66 million liters per year with a significant carbon dioxide reduction of around 150,000 MT per year- Bharti remains the First company in the world to introduce the practice of sharing of passive infrastructure (Indus Towers, Vodafone and Idea) by collaborating with their competition to share mobile towers and to reduce the collective carbon footprint of the industry
  26. 26. Industry & Airtel Lifecycle Landlines Wireless Services Industry Output DTH & Airtel Business Time
  27. 27. References _full_2010-2011.pdf 08/news/34992539_1_depreciation-and-amortisation-costs-net- profit-interest-outgo
  28. 28. Thank You !