Case Bharti Airtel

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Case Bharti Airtel

  1. 1. STRATEGIC OUTSOURCING @ BHARTI AIRTEL SECTION B - GROUP 9 PIRAMANAYAGAM M. 12/262 BADRINATH GM 12/260 SAURABH KUMAR 12/261 MURALIKRISHNA BATCHALA 12/248 RICHIE GIFTSON PAUL J 12/265
  2. 2. Time line - Bharti Airtel
  3. 3. Operations and services
  4. 4. Future Plan of Airtel <ul><li>Indian Telcom market growth rate – 17% pa </li></ul><ul><li>In 2003, 1.5 mn additions of mobile user / month </li></ul><ul><li>By 2007, Bharti is expected to have </li></ul><ul><ul><li>GSM service in 5161 towns </li></ul></ul><ul><li>For that, </li></ul><ul><ul><li>Required growth of 100 news towns per month </li></ul></ul><ul><ul><li>Need to hire 2000 to 3000 people </li></ul></ul>
  5. 5. What they require ?
  6. 6. Core Competency <ul><li>Operational Excellence </li></ul><ul><ul><li>Entire network management and intricacies related to call management </li></ul></ul><ul><ul><li>Involves efficient management of network instruments </li></ul></ul><ul><ul><li>Their bread and butter </li></ul></ul><ul><ul><li>Good service to customers </li></ul></ul><ul><ul><li>Helps in providing lower cost to customers </li></ul></ul>
  7. 7. Proposed Outsourcing deal
  8. 8. Proposed Outsourcing deal
  9. 9. Governing Mechanism <ul><li>Trust the vendors but verify them </li></ul><ul><li>Process </li></ul><ul><ul><li>Monitor them continuously </li></ul></ul><ul><ul><li>Updating with latest R&D inputs </li></ul></ul><ul><ul><li>Defined conflict resolution mechanism </li></ul></ul><ul><ul><li>Defined reasons for contract termination </li></ul></ul>
  10. 10. Advantages <ul><li>Uncertainties in capital expenditures kept low </li></ul><ul><li>Transferring equipment investment risk to vendor </li></ul><ul><li>Pay for use and avoid excess capacity wastage </li></ul><ul><li>Lower Human resources cost due to their transfer to vendor companies </li></ul><ul><li>High bargaining power for Bharti, due to high competition between service providers </li></ul>
  11. 11. Problems of Outsourcing <ul><li>More the outsourcing core business – more the dependency on vendors </li></ul><ul><li>Limitation of Bharti to use creative new application – IBM deal would limit them to their applications </li></ul><ul><li>Inertia from existing employees to transfers </li></ul><ul><li>Transfer of network assets built by Bharti </li></ul>
  12. 12. Vendor Concerns <ul><li>Unused capacity will earn nothing, but necessary for operations </li></ul><ul><li>Inability to increase prices to cover the increased risk </li></ul><ul><li>Absorbing Bharthi employees </li></ul><ul><li>Uncertainty in growth of Bharti </li></ul>
  13. 13. Why Outsourcing <ul><li>Bharthi should go for outsourcing </li></ul><ul><ul><li>Huge capital expenditure needed to help growing customer base </li></ul></ul><ul><ul><li>Rapidly changing trends in telecom industry leads to quicker obsolescence of equipments </li></ul></ul><ul><ul><li>Keep the IT applications that are used to tackle competition in-house </li></ul></ul><ul><ul><li>Risk diversified by involving three vendors instead on one </li></ul></ul><ul><ul><li>Proper governing mechanism should be in place </li></ul></ul>
  14. 14. <ul><li> Thank You </li></ul>

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