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  • Best service provider, good call center serice esp. in local languages, good service even in the remote areas, emphasis on “barriers break when people speak”, new initiatives like google search on airtellive, downloads etc2. Long term HR strategy, Gallup Great Workplace Award, Both internal development as well as external hiring, development programs with iims etc, Young leader development program for top 18 MBA prog3. retail, insurance, realty
  • MNP – Mobile Number Portability
  • The CDMA subscriber base has reached 74.36m in the quarter ending June 2008 as against 68.37m at the end of the previous quarter. The growth in this quarter is 8.76% as against 11.37% for the previous quarter. Reliance remains the largest CDMA mobile operator followed by Tata Teleservices and BSNL with subscriber base of 42.71m, 26.33m and 4.59m respectively. Wimax – This is a disruptive technology facing Indian telecosVoIP – This will put pressure on the Telecos since ISP can offer virtually free internet based mobile phones – Also License fees is 2 Cr against 1650 Cr for telecom operators4 G – people are already talking about it
  • Cellular Services address the communication needs and staying connected.Hence a necessityThere is no substitute that can replace it completely.
  • What they are doing in retail for last 4 years. What to put in Cash Cow.BhartiInfratelThe Company has entered into a joint ventureagreement with Vodafone Essar Limited (Vodafone)and Idea Cellular Limited (Idea) to form an independenttower company (“Indus Towers Limited” or “IndusTower”) to provide passive infrastructure services in16 circles of India. The Company and Vodafone willhold approximately 42% each in Indus Tower and thebalance 16% will be held by Idea. Pursuant to theaforesaid agreement, BhartiInfratel Limited hassubscribed 50,000 equity shares of Rs. 10 each in IndusTowers Limited on December 17, 2007 for an aggregatevalue of Rs. 500 thousand. For this purpose, BhartiInfratel Ventures Limited has been incorporated as awholly owned subsidiary of BhartiInfratel Ltd. Thetelecom passive infrastructure will be transferred toBharti Infratel Ventures for ultimate merger in IndusTowers Limited.TheCompany’s 61,984,721 mobile customers accounted fora 23.8% of wireless (GSM + CDMA) market share as onMarch 31, 2008.The revenues from the mobile services for the financialyear were Rs. 218,697 mn., a growth of 55% over therevenues in the previous financial year. The mobile servicesbusiness contributed 80% to the consolidated revenues.Telemedia ServicesDuring the year, the Broadband and Telephone Servicesbusiness was renamed as Telemedia Services in line withthe Company’s growing focus on new media solutionsand foray into IPTV and DTH businesses.The Company provides broadband (DSL) and telephoneservices (fixed line) in 15 circles spanning over 94 citiesacross India. As on March 31, 2008, the Company had2,283,328 customers (a growth of 22%), of which 34.8%(~795,000) were subscribing to broadband / internetservices.The Company’s strategy for Telemedia business is to focuson the cities with high revenue potential, excepting forDTH which will be an all India offering. The productoffering in this segment includes supply and installationof fixed-line telephones providing local, national andinternational long distance voice connectivity andbroadband Internet access through DSL. The business alsoprovides value added services such as intelligent networkPassive Infrastructure ServicesThe undertaking relating to the entire assets and liabilitiesof telecom passive infrastructure was transferred fromBhartiAirtel Limited to BhartiInfratel Limited pursuant toa scheme of arrangement sanctioned by the Honble HighCourt of Delhi. BhartiInfratel provides passiveinfrastructure services on a non-discriminatory basis to alltelecom operators in India. BhartiInfratel deploys, ownsand manages passive infrastructure on an all India basis.The Company has approximately 52,000 towers as onMarch 31, 2008, of which approx 30,000 towers will betransferred to Indus Towers Ltd (a Joint Venture betweenBhartiInfratel, Vodafone and Idea Cellular) for 16 circles.
  • Telemedia – Airtel Industry % BroadBand - 0.2 4.5 4 Fixed Line 1.2 40 3 Broadband ..HP and Airtel had a deal …As on March 31, 2008, the Company had2,283,328 customers (a growth of 22%), of which 34.8%(~795,000) were subscribing to broadband / internetservices.Broadband subscribers - 4.38 million at the end of June 2008 as compared to 3.87 million at the end of March 2008 (growth rate @ 13.18%)Out of total 4.38 million broadband subscribers, 3.72 million are DSL based; 0.42 million Cable Modem; 0.11 million Ethernet LAN; 0.045 million Fiber; 0.057 million Radio, Leased Line 0.018 million and 0.005 million use other technologies.The key financial results of the Long Distance Servicesdivision for the year ended March 31,2008 are presentedbelow. About 25% growth ..Enterprise Services – Corporates--- 49% growth ….

Air1 Air1 Presentation Transcript

  • Bharti Airtel
    • Largest Private Integrated Telecom Company in India
    • 3rd Largest Wireless Operator in the World
    • Largest & Fastest Growing Wireless Operator in India
    • Largest Telecom Company listed on Indian Stock Exchange
    2
    GROUP 7
  • Integrated Telecom Company
    • Wireless Services
    • 2G/3G
    • Rural Market
    • TelemediaServices
    • Fixed Line
    • Broadband
    • DTH
    • Enterprise Services
    • Carrier
    • Corporate
    • Passive Infrastructure
    • BhartiInfratel
    • Indus Tower
    GROUP 7
    3
  • Financials Snapshot
    4
    GROUP 7
  • Financial Snapshot - Ratios
    GROUP 7
    5
  • Vision 2010
    By 2010 Airtel will be the most admired brand in India:
    Loved by more customers
    Targeted by top talent
    Benchmarked by more businesses
  • Vision 2020
    To build India's finest business conglomerate by 2020
    Supporting education of underprivileged children through Bharti Foundation
    Strategic Intent:
    To create a conglomerate of the future by bringing about “Big Transformations through Brave Actions.”
  • Mission
    “ 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”
  • 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 and energize new ideas with a strong passion and 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.
  • Objectives/Goals
    To undertake transformational projects that have a positive impact on the society and contribute to the nation building process.
    To Diversify into new businesses in agriculture, financial services and retail business with world-class partners
    To lay the foundation for building a “conglomerate” of future
  • Indian Telecom Sector
    • Fastest Growing Sector – CAGR 22% (2002-07)
    • Second Largest Telecom Market
    • Lowest tariff charges in the world
    • Wireless Subscribers – 315.3 Mn
    • Wireline Subscribers – 38.4 Mn
    • Teledensity – 30.6
    • 23 Circles - 4 Categories ( Metro, A, B & C)
    • BhartiAirtel – Largest player with presence in 23 Circles
    11
    GROUP 7
  • 12
    Why Mad Rush for Telecom ??
    Low teledensity (depicting large untapped potential)
    Large number of additions in telecom subscribers
    Telecom
    Advantage
    GROUP 7
    CAGR 40.4%
  • 13
    Evolution of Telecom In India
    Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.
    ILDservices was opened to competition
    BSNL was established by DoT
    Number portability was proposed (pending)
    Intra-circle merger guidelines were established
    Independent regulator, TRAI, was established
    Private players were allowed in Value Added Services
    Calling Party Pays (CPP) was implemented
    Attempted to boost Rural telephony
    Go-ahead to the CDMA technology
    1999
    2007
    1994
    2002
    2005
    2003
    2004
    2006
    2000
    Internet telephony initiated
    Unified Access Licensing (UASL) regime was introduced
    INDIA
    1992
    1997
    Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010
    Decision on 3G services (awaited)
    National Telecom Policy (NTP) was formulated
    NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime
    Reduction of licence fees
    FDI limit was increased from 49 to 74 percent
    Reference Interconnect order was issued
    ILD – International Long Distance
    GROUP 7
  • Telecom Ecosystem
    14
    Indian Telecom Industry Framework
    Indian Government Bodies
    Independent Bodies
    They formulate various policies and pass laws to regulate the telecom industry in India.
    They undertake various research activities and monitor the quality of service provided in the Indian telecom industry. They also provide various recommendations to improve the status of telecom operations in India.
    Wireless Planning and Coordination (WPC)
    Handles spectrum allocation and management
    Department of Telecommunications
    Telecom Regulatory Authority of India (TRAI)
    DoT – Licensee and frequency management for telecom
    Independent regulatory body
    Telecom Disputes Settlement and Appellate Tribunal (TDSAT)
    Telecom Commission
    Telecom disputes settlement body
    Exclusive policy making body of DoT
    Handles ad hoc issues of the telecom industry
    Group on Telecom and IT (GoT-IT)
    GROUP 7
  • Regulatory Framework
    • 74% FDI Investment
    • Lack of Transparency in Spectrum & License Allocation
    • 3G Policy & MNP still Pending
    GROUP 7
    15
  • Declinging Tariff – Rising Revenue
    GROUP 7
    16
    Source: TRAI Report
  • Economic Factors
    GDP growth rate - Averaged around 7.9 % from 2002-2008
    Rising Tele-density – Target of 45% by 2010
    Growing per capita income/disposable Income
    • Rs 12000 in 2002 to Rs 33000 in 2008)
    Falling Handset Prices
    Moderate inflation levels which were prevalent during the past 7 years – around 5-6%
  • Changing Demographics
    • Demand for VAS & Broadband services Among Youth
    • 28 % Urban Population
    • Rapid Urbanization
    • Rising Income level
    Source: Mckinsey Report
  • Technology
    CDMA – Already there are big players in this segment Reliance , Tata
    3G – Value added services potential still to be tapped fully
    2G/3G – GSM Currently commands 70% of mobile subscribers in India
  • Porter’s Generic Strategy
    20
    GROUP 7
  • Porter’s 5 Forces
    21
    GROUP 7
  • 1. Threat from Competition
    Wireless Market – Top 4 garnering 75% market share
    22
    GROUP 7
    HIGH
  • Competitor Analysis
    23
    GROUP 7
    Best OP Margins & Net Profit Margins among Peers
    Source: CMIE November 2008
  • AMOU & ARPU Stats
    Minutes of Usage per Month – Mobile Services
    Despite a low teledensity of approximately 19 percent, India has the second highest minutes of usage per month. This offers huge growth opportunity to telecom companies.
    ARPU* in India – Mobile Services
    The declining ARPU implies that India Inc. is tapping a large market at the bottom of the pyramid by reducing tariffs; thereby, enhancing affordability.
    24
    GROUP 7
  • 2. Customer Bargaining Power
    • Lack of differentiation among Service Providers
    • Cut throat Competition
    • Low Switching Costs
    • Number Portability will have –Ve Impact
    • Businesses & Consumers
    25
    GROUP 7
    HIGH
  • Market Scenario
    GROUP 7
    26
    Postpaid Vs Prepaid
    Customers & Market Share
  • 3. Suppliers Bargaining Power
    27
    GROUP 7
    LOW
  • 4. Threat of Substitutes
    • Landline
    • CDMA
    • Video Conferencing
    • VOIP - Skype, Gtalk, Yahoo Messenger
    • e-Mail & Social Networking Websites
    28
    GROUP 7
    HIGH
    DIMINISHING MARKET
    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
    29
    GROUP 7
    LOW
  • SWOT
    Strengths
    Largest Telecom Player in India - ~80Mn, 22.6%
    Strategic Alliance with other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel
    Pan India Presence
    Strong Financials
    Weakness
    Outsourcing of Core Systems
    Lack of emerging market investment opportunity
    Source: CMIE Report NOV 08
    30
    GROUP 7
  • SWOT
    Opportunities
    • BhartiInfratel – Cutting Down cost in Rural area
    • Match Box Strategy – Scale of Penetration
    • Current Tele-Density – 30.6 is still low among developing countries
    • Low Broadband Penetration, Rural Telephoney
    Threats
    India centric – Major revenues from India
    Falling ARPU & AMOU
    Intense Competition & Shortage of Bandwidth
    31
    GROUP 7
  • BCG Matrix for Bharti Airtel
    HIGH
    Mobile Services
    DTH & IPTV
    Broad Band
    Market Growth Rate
    LOW
    LOW
    HIGH
    Market Share
    32
    GROUP 7
  • GE Matrix Classification
    Business Strength
    Strong
    Medium
    Weak
    5.00
    High
    3.67
    Medium
    Market Attractiveness
    2.33
    Low
    33
    GROUP 7
    5.00
    1.00
    2.33
    3.67
  • Business Strength
    • Current market share
    • Brand image
    • Brand equity
    • Production capacity
    • Corporate image
    • Profit margins relative to competitors
    • R & D performance
    • Managerial personal
    • Promotional effectiveness
    34
    GROUP 7
  • Factors Underlying Market Attractiveness
    35
    GROUP 7
  • Factors Underlying Market/Biz Strength
    36
    GROUP 7
  • Airtel’s GE Matrix
    Business Strengths
    Low
    High
    5.00
    High
    Attractive
    Airtel
    Enterprise
    Mobile
    3.67
    Moderate Attractive
    Market Attractiveness
    TeleMedia
    2.33
    Unattractive
    Low
    5.00
    1.00
    2.33
    3.67
    37
    GROUP 7
  • Airtel – Strategy
    MANTRA : Focus on Core Competencies and Outsource the rest!
  • Strategy
    • Airtelpartnered with leading players in telecommunication players across the globe.
    • It has managed to work with the best of domain specialists globally and emerge as a world class entity.
    • Partnerships include operational contracts with marquee vendors and strategic investors ranging from private equity investors to global telecom giants.
  • Strategic partnerships/ Shareholders – Technology and Capital
    Warburg Pincus – a celebrated PE investor held a stake for a substantial period of time and was instrumental in providing Airtel support in its early stages.
    Vodafone was a strategic investor in Airtel.
    Temasek – the Singapore based investor holds a considerable stake in it.
    Was also affiliated with Singapore Telecom.
  • Outsourcing deals in 2004
    Ericsson was given the mandate to provide, manage and maintain the equipment as well as provide quality assurance in Airtel‘s then 13 mobile circles.
    IBM was given the mandate to handle the back office requirements of Airtel’s presence in India
  • Operational Strategies.
    • Higher emphasis on ARPU/min – stark contrast with other operators who concentrate on ARPU only.
    • Aim to be become a one stop shop for all telecommunication services under the Bharti umbrella.
    • Exploring opportunities in international markets.
    • Hived off tower infrastructure into a separate entity.
  • Performance till date
    Bharti Airtel has enjoyed an excellent run ever since the telecom sector opened.
    It has managed to hold on to its leadership position inspite of the presence of other players with deep pockets – Ambani’s, Tata’s, Birla’s and Vodafone.
    Has coped well with regulatory changes.
    Continues to attract and delight customers.
  • Future Strategies
    • Translate its expertise in Indian markets to other emerging economies.
    • This could call for acquisitions globally.
    • Technology leadership is a must – Airtel must ensure that its reliance on GSM technology does not render it obsolete.
    • Indian market inspite of being the worlds largest is still not matured. Opportunities abound in the hinterland which must be exploited.
  • Growth Factors
    GROUP 7
    45
  • Road Map – Growth Path
    GROUP 7
    46
    VPN & VoIP
    WiMAX
    3G
    2G/2.5G
  • Airtel - Strategy
    MANTRA : Focus on Core Competencies and Outsource the rest!
  • References
    • BhartiAirtel, Annual Report -2008
    • Investors presentation, BhartiAirtel Limited, November 2008
    • Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November 2008
    • Analyst Report – BhartiAirtel, Asit C. Mehta Invesment Intermediates Ltd.
    • Telecommunication Sector Report – March 2008, CRISIL
    • Capitaline Database http://capitaline.com
    • Indian Telecommunication Sector - August 2007, IBEF Report
    • “Next Big Spenders – Indian Middle Class”, Businessweek
    GROUP 7
    48
  • THANK You !!
    GROUP 7
    49