Report On Airtel & its StrategiesDocument Transcript
Internship Program 2009
Company: Vasani Enterprises
Company Guide: Mr. Jayesh Vasani
Submitted to: Mrs. Seema Sant
Submitted by: Mr. Kedar Pawaskar
Enrollment no: 8NBMM008
Indian Telecom Industry – Facts
One of the fastest growing cellular markets in the world in terms of number
of subscriber additions – 19.35 million in 3 months (April to June 2008)
Expected to reach total subscriber base of about 500 million by 2010 (i.e.,
more than one phone for every household)
Annual growth rate of the telecom subscribers – 47 percent (2007–08)
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)
Bharti Airtel – Largest player with presence in 23 Circles
PORTER'S GENERIC COMPETITIVE STRATEGIES
Cost Leadership Strategy
A firm gains cost leadership in an industry when its cost of production is lower
than that of its competitors. Airtel has gain cost leadership by managing its
processes and resources efficiently and effectively. By bringing down its
operational costs, an Airtel has offer its products and services at lower prices. It
has also earn higher profits because either the profit margins are greater or the
sales volume has increased.
The differentiation strategy adopted by the firms needs to possess sufficient skills
and abilities to differentiate the product from that of the competitors based on
some attributes that allow the consumers to perceive the product as different
from that of the competition. Firms that adopt the differentiation strategy
successfully have access to advanced scientific research, a highly skilled labor
force, effective customer communication strategies, etc.
Airtel is providing free digital EPABX with free leased lines (no connectivity
charges).So the firm is providing latest EPABX to the customer which is costing
approx Rs 50,000.
Best service provider, good call center service esp. in local languages, good
service even in the remote areas, emphasis on “barriers break when people
speak”, new initiatives like google search on airtel live, downloads etc
2. Long term HR strategy, Gallup Great Workplace Award, Both internal
developments as well as external hiring, development programs with iims.
A firm pursuing a focus strategy tends to serve a specific segment instead of
catering to the entire market. This segment may be a special group of customers,
a specific geographic area, or a particular product or service line. The customers
will also be loyal to the company and therefore, the entry of a new competitor
into that area becomes difficult.
Airtel is focusing on the customers who is having more than Rs10000 monthly
landline billing. Airtel is offering landline services which consist of PRI (Primary
Rated Interface). Airtel can provide its service to a specific geographic area i.e.
from Dahisar to Churchgate in western region & Thane to Panvel in eastern region
The above fig shows that revenue of Indian telecom industry was around
$20 billion in the year 2005-06. It has shown tremendous growth of $42
billion in the year 2008-09.
As shown in the above figure the market share of fixed lines in India was
86% as compared to only 14% of wireless lines in 2007-08.
The Company provides broadband (DSL) and telephone services (fixed line) in 15
circles spanning over 94 cities across India. As on March 31, 2008, the Company
had 2,283,328 customers (a growth of 22%), of which 34.8% (~795,000) were
subscribing to broadband / internet services. The Company’s strategy for
Telemedia business is to focus on the cities with high revenue potential. The
product offering in this segment includes supply and installation of fixed-line
telephones providing local, national and international long distance voice
connectivity and broadband Internet access through DSL.