1. Course Title: International Management
Faculty: Professor Apalak Khatua
XLRI PGCBM – 26 | Group No. 10 | Word Count = 1000
Group Details[SMSID & Name]:
2229402 (AnuragaJha);2229260 (HaimaHaldar);2229534 (MritunjoyMukherjee);
2229375 (BalasubramanianRajagopal); 2229266 (SandeepKumar) &2229317 (MohitDhawan)
ORGANIZATION | AIRTEL
Executive summary for Airtel global expansion:
Airtel’s global expansion began with bilateral agreement of Airtel and Mobilink of Pakistan
in 2004; followed by MoU with South-East Asia, Middle East and Western Europe telecom
operators. The company acquired Tekelec’s switching systemto lay undersea cable system in
2005.
By 2008, Bharti Airtel was rapidly gaining market share through its innovative market strategy
& customer centricity, however what was missing in the success story was limited overseas
experience. It started operating in Sri Lanka in January 2009 and acquired Warid Telecom to
expand in Bangladesh soon after. The CAGE framework was effectively put to use whereby
the difference between countries was analyzed & it made sense to start with neighboring
countries which were culturally similar & geographically close. In order to fortify its presence
globally, Airtel penetrated in African market through an acquisition of Zain Africa, which was
the African segment of the larger Zain Group. It had previously tried to enter into the African
continent through MTN deal which did not materialize.
Critical Analysis of Zain Africa’s acquisition | 2010
A highly overvalued valuation, worth USD 10.7 Billion happened on March 30th 2010. It was
an offer which the commercially drained Zain could not refuse. Mr. Sunil Bharti Mittal had
always eyed Africa as a destination where telecom revolution was just around the corner &
hence moved along his vision.
Ignoring for a moment - the financial scheme of things, there were other challenges that the
M&A faced:
Challenges:
1. Cultural misfit and communication barriers
2. Lack of political stability in the African subcontinent
3. Regulatory compliance –
a. Pending arbitration regarding ownership of Zain Nigeria and also the objections
raised by the government of Congo in the line of contravention of the terms of the
license by Zain Congo.

2. Course Title: International Management
Faculty: Professor Apalak Khatua
XLRI PGCBM – 26 | Group No. 10 | Word Count = 1000
Group Details[SMSID & Name]:
2229402 (AnuragaJha);2229260 (HaimaHaldar);2229534 (MritunjoyMukherjee);
2229375 (BalasubramanianRajagopal); 2229266 (SandeepKumar) &2229317 (MohitDhawan)
b. The Government of Republic of Congo stated that “they have not been informed
of the Bharti Airtel deal results and does the deal is a clear violation of the law in
our country”.
c. The Government of Gabon raised regulatory objections which the deal did not
comply.
However the deal was extremely significant as it helped in:
1. Geographical expansion - Exploiting the untapped African market
2. Master stroke - Gaining access to 15 different territories with a single transaction
[which excluded Sudan and Morocco]
3. Confidence in replication the Indian strategy of the “Minutes Factory Model” [Low
cost high volume] and a highly effective matchbox distribution mechanism [A shop
that sells matchbox should sell Airtel minutes through recharges]
Conclusion & View Point:
If you look at today’s environment closely we see that the mergers and acquisitions is one of the
primary methods of global expansion whereby the acquiring firm gets more control over the
acquired firm, however at times it becomes difficult to pass the regulatory hurdles of the
territories, adapting to the cultural & socio-economic environment etc.
Joint ventures provide quick method of expansion since it is easier to bypass regulatory
compliance & Govt. policies , however the downside is that the partners get decision strapped &
face issues specifically when one of the companies have an aggressive growth strategy.
Airtel later collaborated through joint ventures too – Airtel – Vodafone deal or the Airtel Ericson
deal which proved viable options to reach out to new markets & geographies.
Model’s that resemble Airtel’s global business expansion:
Businesses replicate some framework when expanding globally. The popular ones are:
 Uppsala: Business expansion that involves export to culturally and geographically
close market to gradual expansion into distant countries.
 GMT: Predicts viability of trade possibility between two economies vis-a-vis economic
distance and geographic distance between nations.

3. Course Title: International Management
Faculty: Professor Apalak Khatua
XLRI PGCBM – 26 | Group No. 10 | Word Count = 1000
Group Details[SMSID & Name]:
2229402 (AnuragaJha);2229260 (HaimaHaldar);2229534 (MritunjoyMukherjee);
2229375 (BalasubramanianRajagopal); 2229266 (SandeepKumar) &2229317 (MohitDhawan)
 CAGE: Model given by Pankaj Ghemawat. Gives the choice to do distance analysis at
country level as well as at industry level by adjusting to the Culture, Administrative,
Geographical and Economic distance aspect for each industry.
Below figure illustrate how Airtel’s business expansion has replicated some of the above model.
Ghemawat’s ADDING value score card & it’s Usefulness in Airtel’s Global Strategy for
success:
Used to identify the factors which will measure the levers through which a strategy can create
value and analyze alternative strategies, providing insight into how global value can be created
by use of factors like Adding Value, Decreasing costs, Differentiating or increasing Willingness
to Pay, Improving Industry Attractiveness, Normalising Risks and Generating Knowledge.
Strategy following the GMT model & expansion style follows Uppsala & CAGE.
TelesysteminMauritius(2003),
Mobilinkin Pakistan(2004),
MoU withSouthEast Asia-Middle
East & WesternEurope.
2010-2012 enteredBangladesh
and Srilanka.
Airtel got first mover benefit in comparison
to other Indian telecom players.
2011, entered Africanmarket
aftermuch legal glitches.
Expansion to this region helped Airtel to
access theuntapped possibilities in African
subcontinent.
Risk taking proposition, provided in the
beginning many African national governments
boycotted Airteland Zain’s tie up.
Expansiontogeographicallydistantcountries.
Strategicexpansionwithbenefitoffirstmover.

4. Course Title: International Management
Faculty: Professor Apalak Khatua
XLRI PGCBM – 26 | Group No. 10 | Word Count = 1000
Group Details[SMSID & Name]:
2229402 (AnuragaJha);2229260 (HaimaHaldar);2229534 (MritunjoyMukherjee);
2229375 (BalasubramanianRajagopal); 2229266 (SandeepKumar) &2229317 (MohitDhawan)
Airtel’s business expansion strategy has fulfilled all the parameter of ADDING framework. In
following ways:
 It has the credit of being first Telecom Company that entered into JV with Pakistan’s
telecom company; and of ‘first mover’ through its presence in Bangladesh, Srilanka,
Mauritius.
 The success of expansion into African subcontinent is remarkable provided the initial
challenge due to African nation’s Govt. reservation.
 Airtel built market base in Africa through introduction of world’s first intercontinental
roaming facility, which would offer free incoming calls to African businessmen, tourists
and students while travelling in India, Sri Lanka and Bangladesh.
 It also played part in the larger economic and social development by heavily investing
into educational promotion and social development in African countries. Airtel cited that
this is a strategy “to promote primary education in the country as part of its corporate
social responsibility”. This is also an example of “Reverse Innovation” in terms, that it
is not MNC from developed countries that can be part in social development of another
developing nation.
Thus from ADDING value score card’s perspective Airtel’s global expansion has been holistic.
THANK YOU
References:
1. Airtel wiki and corporate website
2. Articles from Economic Times
3. Professor notes and class teachings