Airtel finncial analysis & marketing strategy


Published on

Various strategy of Airtel which makes it to remain No. 1 Company in India by Subscriber & Revenue.

Published in: Business
No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Airtel finncial analysis & marketing strategy

  2. 2. CONTENTS Executive Summary 3 Introduction 4-8
  3. 3. History Change in Brand Logo & Taglines Objectives 9 Mission Company Overview Subsidiary Company 10 Organisation Structure 10 Strategic Business Unit 12 Market Share of Airtel 12-14 Subscriber Trend & Growth Competitors Business Partners & Partners Role 14 Marketing Mix 16 Value Chain Strategy 19 Financial Analysis 20-25 Company's Revenue Company's Working Capital Analysis Company's Advertisement Expenditure Revenue from Value Added services Marketing Analysis 25-29 Porters generic Strategy BCG Matrix 5-Force Model SWOT Analysis Awards & Recognitions 30 Research Methodology 30
  4. 4. EXECUTIVE SUMMARY This report on Bharti Airtel is done to find out certain objective regarding the strategic approach adopted by Airtel to stand strongly in the competitive Telecom market. Airtel marketing strategy analysis is done using various models like Porters generic Strategy, BCG Matrix, 5-Force Model & SWOT Analysis of Airtel etc. Also the detailed study of Financial Position of Company is done to find out its position in Market. The study includes Revenue Analysis, Working Capital Analysis, Asset turnover ratio of Airtel, & its expenditure on Advertisement as a percentage of Sales in recent period. The report gives information about how Airtel adjusted itself in changing market conditions, what are the various strategies it takes to become India’s 1st company by Subscriber & Revenue. INTRODUCTION
  5. 5. Bharti Airtel Limited formerly known as Bharti Tele-Ventures LTD (BTVL) is an Indian company offering telecommunication services in 19 countries. It is the largest cellular service provider in India, with more than 141 million subscriptions as of August 2010. Bharti Airtel is the world's third largest, single-country mobile operator and fifth largest telecom operator in the world with a subscriber base of over 180 million. It also offers fixed line services and broadband services. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. HISTORY OF AIRTEL
  6. 6. • Bharti Cellular launched cellular services 'AIRTEL‘ in Delhi in 1995,Himachal Pradesh in 1997, Karnataka and Andhra Pradesh circles in 1999 • In 1998, Bharti Telenet obtained a license for providing fixed-line services in Madhya Pradesh circle and in the same year, Bharti Telecom and British Telecom formed a 51% : 49% joint venture • In 1999, New York Life Insurance Fund acquired a 3% equity interest in Bharti Cellular. • In 2001, Bharti Cellular entered into a joint venture, Bharti Aqua net, with SingTel for establishing a submarine cable landing station at Chennai. • In 2002, Bharti Cellular entered into license agreements to provide cellular services in eight new circles. • In 2002, Bharti Cellular Ties up with Secondary School Certification Board, Hyderabad, where Bharti will announce SSC results to its customers on their mobile phones. • In the same year, 2002, ICICI Bank ties up with Bharti for pre-paid mobile cards via ATMs. • In 2003, Bharti Group's cellular brand Airtel has unveiled free multimedia messaging services (MMS) for its customers. The company has also rolled out pan-India GPRS (General Packet Radio Services) for its corporate subscribers. • Launches its `IndiaOne MeetXpress' audio-conferencing service(2003) • Airtel provides SMS facilities to hearing impaired in Chennai(2003) • In 2003, Airtel Subscribers exceed 3 million mark. • In 2004, Bharti Cellular entered into license agreements to provide cellular services in 6 new circles including Uttar Pradesh (East), West Bengal & Andaman Nicobar, Orissa, Bihar and Jammu & Kashmir. • Same year Airtel launches GPRS services for pre-paid customers.
  7. 7. Brand Logo TAGLINES OF BRAND 'Power to keep in Touch‘ (1995) 'Touch tomorrow‘ (1999) 'Live Every Moment' (2002) 'Express yourself‘ (2003)
  8. 8. Following are the reasons for change in Tagline of Airtel 'Power to keep in Touch‘ YEAR- 1995-1998 SIGNIFICANCE- -- The tag line 'Power to keep in Touch' used in the brand promise was designed to make the user feel 'in control…powerful' -- Positioned in premium category aimed at elite class of society. -- Perception of aspiration and lifestyle brand REASON FOR CHANGE- -- Now, cellular service operators could drop their prices and target new customer segments. -- As the category developed with prices going down sharply, Airtel began talking to a wider spectrum of potential users. This gives the birth to the new Tagline. 'Touch tomorrow‘ YEAR- 1999-2001 SIGNIFICANCE– -- Airtel started talking to new segments by positively positioning and establishing itself as a brand that improved the quality of life. -- New look and the feel of the brand tagline indicated the core values of the brand i.e. leadership, performance and dynamism. REASON FOR CHANGE- -- Airtel started to look from a regional level to pan India position
  9. 9. -- Rediffussion DY&R, which is the ad agency that took charge of revamping Airtel's brand image thought, To become a Indian leader, Airtel need to change its tagline 'Live Every Moment' YEAR– 2002-2003 SIGNIFICANCE— -- This was the first time A R Rehman had agreed to work for any brand, anywhere in the world. The music from the commercial became the most downloaded ring tone in the history of telecommunications. -- Tagline denotes that each and every person in India live every moment (emotions, feelings etc.) of the life with Airtel. REASONS FOR CHANGE– -- Rediffussion DY&R, which is the ad agency that took charge of revamping Airtel's brand image again changed the tagline to give better tagline to Airtel which catches some emotional appeal. 'Express yourself‘ YEAR- 2003-2008……. SIGNIFICANCE— -- ‘Express yourself' was successfully launched taking the ownership of the entire space of communication and strengthening the emotional bond Airtel enjoys with its customers -- The masterminds behind the 'Express Yourself' campaign are the joint vice- presidents: Mr. Prashant Godbole and Zarwan Patel.
  10. 10. -- Airtel is a market leader in the cellular network and they wanted a very fresh and contemporary idea to build a brand image which their customers could identify". Vision- By end of 2010 to be loved by more customers & Benchmark by more businesses. Mission-To provides Error free & cost effective service delivery with Innovative products & Services to the customers. Values- We will always put our customers first. We will always trust and respect each other. We will respect our associates as we respect each other. We will work together through a process of continuous improvement. COMPANY OVERVIEW • Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom. • In India Airtel is No. 1 by subscriber base and revenue. • Bharti Airtel formerly known as Bharti Tele-ventures Limited (BTVL) is a JV between Singtel and Bharti Telecom. • India’s First Telecom Company that provides telecom services in all the circles.
  11. 11. • The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. SUBSIDIARY COMPANIES • Bharti Hexacom • Bharti Comtel • Bharti Aquanet • Bharti Broadband • Bharti Infratel • Bharti Telemedia • Bharti Airtel (UK, USA, Canada, Hongkong, USA, Lanka) ORGANISATION STRUCTURE
  12. 12. CMD’s (Founder) Profile:- • Sunil Bharti Mittal • He started his career at a young age of 18 after graduating from Punjab University in India and then he founded Bharti. • Chairman & Managing Director since October 2001 • Age: 49 years
  13. 13. • Today, at 49, he heads a successful enterprise, amongst the top 5 in India, with a market capitalization of over US$ 40 billion and employing over 30,000 people. • He is an alumnus of Harvard Business School, USA. • He has been conferred one of the highest civilian award – Padma Bhushan. • He has been conferred the degree of Doctor of Science by the G B Pant University of Agriculture & Technology. FIGURES & FACTS • Total Wireless subscribers in India In June 09 & July 09 are 102,367,881 & 1, 05,177,635 respectively. • Total Wire line subscribers in India In June 09 & July 09 are 2,827,882 & 2,861,822 respectively. STRATEGIC BUSINESS UNIT OF AIRTEL
  14. 14. MARKET SHARE
  16. 16. COMPETITORS National Long Distance • BSNL, RELIANCE, VSNL, VODAPHONE, TATA, IDEA International Long Distance • VSNL, RELIANCE , BSNL BUSINESS PARTNERS Outsourcing Deals Vendors/Partners Features/Advantages Network outsourcing & Ericssion Ease in network planning maintenance Nokia siemens network Payments Linked to -Usage & Network quality - Service level agreement Informational technology IBM Pricing & payment as a % of Revenue Passive infrastructure Bharti Infratel Reduced capex spend Indus Towers Increase focus on sharing passive Infrastructure Call center outsourcing IBM Daksh Enhanced & Consistent customer experience Mphasis Common platform across Hinduja TMT the group Aegis BPO Nortel
  17. 17. Partners Role Service Partners/Vendors Role Mobile services Ericission & Nokia Network Equipments partners IBM Daksh Call center operations Mphasis Hinduja TMT Tele tech Telemedia & Enterprise Siemens Equipments suppliers services Nortel IT requirements IBM Group wide technology requirements Call center technology Nortel requirements OTHER ALLIANCE In 2007, Bharti Airtel has entered into following major agreements and alliances: • With Microsoft to offer software and services for the Small and Medium Business (SMB) market in India. • As part of the agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal. Google will also incorporate advertising through its Mobile Ads product on the Airtel Live mobile portal;
  18. 18. • A three-year contract with Nokia at an estimated value of US$ 400 mn to expand its managed GSM/ GPRS/EDGE networks in eight Airtel circles and deploy a pan India WAP solution across its networks; • The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. MARKETING MIX PRODUCTS • Airtel Connections Postpaid • Airtel Connections Prepaid • Airtel Data Cards • Airtel Blackberry phones * On 19 October 2004 Airtel announced the launch of a Blackberry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele- Ventures Limited and Research In Motion (RIM). • Airtel I Phones * As of 22 August 2008, the Apple iPhone 3G is available in India on Airtel and Vodafone. • Airtel Digital TV * On 9 October 2008, Airtel joined the DTH bandwagon in India with Airtel Digital TV, a Direct-to-Home Television service
  19. 19. SUBSCRIBER BASE • The Airtel subscriber base according to TRAI - Telecom Regulatory Authority of India as of February 2009 was: Delhi - 4,671,177 Mumbai - 2,791,963 Madhya Pradesh - 7,690,609 Gujarat - 3,981,660 Andhra Pradesh - 8,892,353 Karnataka - 9,820,812 Tamil Nadu - 6,003,040 PRICE  Customer based pricing strategies.  Flexible pricing mechanism  Controlled by TRAI. PLACE  It has wide and extensive presence even in the remotest areas  Airtel Customer Care Touch Points  Distributors like E.g. Paan shops, grocery stores, chemists, outlet etc.
  20. 20. PROMOTION  Large scale print and video advertising.  Big celebrities like SRK and Sachin are roped in to endorse the product because it .  In 2002 Airtel got its Signature tune from A.R. Rehman, this signature tune is the most downloaded tune in India.  Provides innovations such as Bollywood movie premiers, music services such as ring back tones & many more. PHYSICAL ENVIRONMENT
  21. 21. INNOVATION
  22. 22. VALUE CHAIN PROCESS Telecom process Detail Customer Importance- First they find the customer requirements. Technology- Latest change in telecom technology. Competitive position- Conduct SWOT Analysis of competitors Capable Suppliers- Suppliers capable of component design Start- Decide which service we are going to provide using which technology, who is our customers, Vendors & partners. CORPORATE CUSTOMERS  Hathway – Internet gateway. National Long distance services.  EFD Corporation -  Raymond  Bajaj Allianz  Mphasis  Wipro  IBM Daksh  Large Stock Broking Company
  23. 23. FINANCIAL ANALYSIS • Wireless Customer market share leadership at 24.7 %. • Total minutes on network carried in Q3 – 143 billion. • Total employee strength – 25,553. • Balance sheet strength : • Assets - $ 12 billion • Net Debt - $ 677 million • Net Debt to EBITDA – 0.21 times
  24. 24. Economies of scale and efficient working capital management helped boost profit margin
  25. 25. Company’s policy of retaining entire profits helps in keeping the D/E low despite surging loan book Better controls helped check bad debt losses
  26. 26. Economies of scale help reduce the percentage cost of advertisement expenditure Value Added Services (VAS)  VAS Contribution is 10.6 % of total revenue (for 2007-08).  VAS revenue is 2844 cr. In 2007-08. Composition of VAS Revenue (2007-08) Source-IMRB Reserch
  27. 27. AIRTEL REVENUE TELECOM SECTOR 2007-08 MARKETING ANALYSIS TARGET CUSTOMERS • Up market professionals • Entrepreneur with business plans • Low income mass category • Youth • Women and senior citizens by post paid connection
  29. 29. 2.Customer Bargaining Power  Lack of differentiation among Service Providers HIGH  Cut throat Competition  Low Switching Costs  Number Portability will have –Ve Impact  Businesses & Consumers
  30. 30. 3.Supplier Bargaining Power LOW 4. Threat of Substitutes.  Landline DIMINISHING MARKET  CDMA HIGH  Video Conferencing BROADBAND SERVICES  VOIP - Skype, Gtalk, Yahoo Messenger  e-Mail & Social Networking Websites GROUP 7 60
  31. 31. 5. Threat of New Entrant. LOW Huge License Fees to be paid upfront & High gestation period Entry of WiMAX operators Spectrum Availability & Regulatory Issues Infrastructure Setup Cost - High Rapidly changing technology GROUP 7 61 Strength Weakness • Outsourcing of core system • Market Leader • Network Coverage • Recognized Globally • Strong Brand Image • Strong New Business Development team • Strong Financials • Largest Telecom Player 22.6% Opportunities Threats • Low Broadband Penetration, Rural • Intense Competition & Shortage of • Bharti Infratel – Cutting Down cost in Bandwidth Rural area • New Players coming in India • Current Tele-Density – 30.6 is still low • Uncertain Economic Condition among developing countries
  32. 32. Bibliography • • • • •