Airtel vs reliance


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Benchmarking Analysis of Airtel over Reliance.

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Airtel vs reliance

  1. 1. Benchmarking Analysis By- Saurabh Shukla (JIM,Lucknow)
  2. 2. We build it because you want it- Sunil Bharti Mittal. (Founder, Chairman and Group CEO of Bharti Enterprises) Mukesh Dhirubhai Ambani. (Chairman, Managing Director and largest shareholder of Reliance Industries Limited)
  3. 3. Airtel- Our Mission -To be globally admired for telecom services that delight customers-bench marked by more business-first private telecommunication company to launch long distance services.
  4. 4. • Bharti Airtel is the largest mobile telephony operator in the GSM space with 19.8% share of the Indian wireless market (as at the end of FY12). The company, apart from being the largest player in the mobile segment with subscribers in all the 22-telecom circles of the country, also provides varied services like fixed line, broadband and retail internet access. During the period FY07 to FY12, the company grew its sales and profits at average annual rates of 31% and 1% respectively. • Reliance Communication Ltd. (RCL) is the second largest private sector mobile telephone operator in India with a wireless (CDMA and GSM) subscriber base of nearly 50 m. Airtel Vs Reliance- Revenue
  5. 5. • Airtel has been successfully segmenting its market. 1. Geographic-  Airtel is now acting as a global player and has set its network all around the world. It operates in 20 countries across South Asia, Africa, and the Channel Islands. It has its network in Germany, Bangladesh, Burkina Faso, Ghana, Tanzania, Kenya, Uganda, Nigeria, Republic of the Congo, Sri Lanka, Zambia and many more countries. Airtel- Segmentation Strategy
  6. 6. 2. Demographic-  Airtel has majorly segmented people of every age group i.e. young, old.  Gender-Male, female.  Income- And it’s target has always been people of upper middle class and rich people.  Occupation- Student and professional workers.  Education- Literate.  Religion- Every religion  Nationality- Being global. 3. Psychographic-  Social class- Upper lower, Working Class, Upper Middle Class,  Lifestyle- Achievers  Personality- Gregarious, Authoritarian, Ambitious. 4. Behavioral  Benefits  Loyal- It has always focused more and more towards people who are loyal customers and their loyalty begins from speed and ends at service.
  7. 7. • Reliance- Being more focused towards CDMA in India and GSM in 8 circles outside India. Reliance has not been able to set its network in major regions whereas Airtel has GSM network and has built a strong network. • In demographic variables, Reliance has majorly focused on young people and that too mainly on college students who don’t have much paying capacity and at this age when they need more talk time, they need that kind of network. Reliance is popular among students and hence it has been abandoned by working class people. Hence high revenue is not expected. • Reliance is popular among lower class people and upper lower class people and hence it has failed to capture posh areas. • Reliance has no specific plans for different occasions and it has not been able to capture eyes of people during and occasions whereas Airtel, Idea, Vodafone keep on bringing new plans on every occasions.
  8. 8. • Airtel has been targeting posh areas and customers who value speed and wants good service and as Airtel is mostly known for its services, they has been able to serve in the best manner. Airtel is doing majorly Differentiated marketing, Niche marketing whereas Reliance is doing mass marketing and micromarketing (local and individual marketing). Airtel Vs Reliance- Targeting Strategy
  9. 9. • Reliance- Consumer define calling charges i.e. free or very cheap rates on r2r as an important attributes of reliance. • Airtel- Consumer define internet broadband connections, WiFi, internet charges, services as important attributes of airtel. • Reliance is positioned as for calling purpose and Airtel is positioned as best for internet usage. Airtel Vs Reliance- Positioning Strategy
  10. 10. • In terms of service Airtel has defeated every other company. People are highly satisfied with their service and main reason why people are switching on to Airtel is because of their fast service. Question is how? • Reliance- Works- Airtel Vs Reliance- Service BCG Matrix
  11. 11. • Airtel earns revenue majorly from broadband sector and it there will be any loop-hole, company will suffer a lot and thus it keeps eyes and ears open and if it finds any problem faced by customers, quick services are provided to those customers. But in case of Reliance, though the company is very big and investing huge amount in broadband sector, people complaint mainly for its poor services. During our survey when we were asking their installation engineers that what is the problem Reliance is facing in terms of services, they said that instead of focusing more towards service, if company finds any kind of loss from this sector, they try to recover it from the earnings of other sector. No proper incentives is provided to installation engineers, services provider etc.
  12. 12. • Product- Both companies offer broadband connections and are also in telecom field. • Price- In Broadband connection, Airtel is considered costlier than reliance and Reliance and its plans for internet usage and calling are cheaper than Airtel. Where internet monthly plans are of Rs. 499, Rs. 1099, reliance costs Rs. 299, etc. • Place- Airtel targets posh areas, urban markets, upper- societies, hostels, institutes, hotels apartments etc. Reliance targets individuals mainly students, lower class people. • Promotion- Airtel promotes its product more than Reliance and its on very occasion it brings some or the other plan and promotes it. And as Reliance earns its huge revenue from oil segment and other industries also, it promotes its telecom related products on lower scale in comparison with Airtel. Airtel Vs Reliance- 4Ps
  13. 13. Airtel- Setting new standards
  14. 14. • Now here comes the biggest competition. Reliance Jio entering, the competition again hots up. • Reliance- disclosed plans for 4G. • Investment of $14 billion has been done. • This move of Reliance has shaken up rivals like Bharti Airtel, Vodafone etc. Airtel Vs Reliance
  15. 15. March 31, 2013 Data- EPS- Earnings per share Reliance- Rs3.3 Airtel- Rs 6.0 Net Sales- Reliance- Rs (m)205,610 Airtel- Rs (m)803,590 Profit after tax- Reliance- Rs (m)6,720 Airtel- Rs (m) 22,757 Return on equity (%) Reliance- 2.0 Airtel- 4.5 Return on capital (%) Reliance- 5.2 Airtel-8.9 Airtel Vs Reliance- Performance Measurement
  16. 16. “Miles have we come, miles to go” Service Plans Speed Network Reliability Standard