Estimation for teledensity till 2010 was 45% , Wireline subscriber base declined from 35.57 Million in September-2010 to 35.19 Million at the end of Novenber-2010., India added 18.84 million telecom subscribers registering a growth of 2.61% in the month of October 2010 (over September).
Number portability is launched by jan 2011, licence for 3g is issued in 2010,
1.Total Broadband subscriber base has increased from 10.29 million in September-2010 to 10.52 million in October-2010, there by showing a growth of 2.24%. 2. the new National Broadband Plan which is in the works and aims to get 160 million broadband subscribers by 2014,
Cellular Services address the communication needs and staying connected. Hence a necessity There is no substitute that can replace it completely.
What they are doing in retail for last 4 years. What to put in Cash Cow. Bharti Infratel The Company has entered into a joint venture agreement with Vodafone Essar Limited (Vodafone) and Idea Cellular Limited (Idea) to form an independent tower company (“Indus Towers Limited” or “Indus Tower”) to provide passive infrastructure services in 16 circles of India. The Company and Vodafone will hold approximately 42% each in Indus Tower and the balance 16% will be held by Idea. Pursuant to the aforesaid agreement, Bharti Infratel Limited has subscribed 50,000 equity shares of Rs. 10 each in Indus Towers Limited on December 17, 2007 for an aggregate value of Rs. 500 thousand. For this purpose, Bharti Infratel Ventures Limited has been incorporated as a wholly owned subsidiary of Bharti Infratel Ltd. The telecom passive infrastructure will be transferred to Bharti Infratel Ventures for ultimate merger in Indus Towers Limited. The Company’s 61,984,721 mobile customers accounted for a 23.8% of wireless (GSM + CDMA) market share as on March 31, 2008. The revenues from the mobile services for the financial year were Rs. 218,697 mn., a growth of 55% over the revenues in the previous financial year. The mobile services business contributed 80% to the consolidated revenues. Telemedia Services During the year, the Broadband and Telephone Services business was renamed as Telemedia Services in line with the Company’s growing focus on new media solutions and foray into IPTV and DTH businesses. 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, excepting for DTH which will be an all India offering. 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. The business also provides value added services such as intelligent network Passive Infrastructure Services The undertaking relating to the entire assets and liabilities of telecom passive infrastructure was transferred from Bharti Airtel Limited to Bharti Infratel Limited pursuant to a scheme of arrangement sanctioned by the Honble High Court of Delhi. Bharti Infratel provides passive infrastructure services on a non-discriminatory basis to all telecom operators in India. Bharti Infratel deploys, owns and manages passive infrastructure on an all India basis. The Company has approximately 52,000 towers as on March 31, 2008, of which approx 30,000 towers will be transferred to Indus Towers Ltd (a Joint Venture between Bharti Infratel, Vodafone and Idea Cellular) for 16 circles.
Go-ahead to the CDMA technology INDIA Private players were allowed in Value Added Services National Telecom Policy (NTP) was formulated 1992 1994 1997 Independent regulator, TRAI, was established NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime 1999 2000 2002 BSNL was established by DoT ILD services was opened to competition Internet telephony initiated Reduction of licence fees 2003 Calling Party Pays (CPP) was implemented Unified Access Licensing (UASL) regime was introduced Reference Interconnect order was issued 2004 Intra-circle merger guidelines were established Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010 2005 FDI limit was increased from 49 to 74 percent Attempted to boost Rural telephony 2006 Number portability was proposed (pending) Decision on 3G services (awaited) 2007 Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry. ILD – International Long Distance Evolution GROUP 7
EVOLUTION <ul><li>In 1992, Bharti entered the cellular market by launching services in Delhi. </li></ul><ul><li>Soon extended to other places. </li></ul><ul><li>Cellular showrooms in 1995. </li></ul><ul><li>Value added services in 1997. </li></ul>
VALUE ADDED SERVICES <ul><li>STD/ISD </li></ul><ul><li>CALL LINE IDENTIFICATION </li></ul><ul><li>CALL WAIT/HOLD/DIVERT </li></ul><ul><li>VOICE MAIL </li></ul><ul><li>CALL CONFERENCE </li></ul><ul><li>AIRTEL ROAMING </li></ul><ul><li>32K SIM CARD </li></ul>
CONTINUED……. <ul><li>RINGTONES AND LOGOS </li></ul><ul><li>TEXT MESSAGING </li></ul><ul><li>VERNACULAR SMS </li></ul><ul><li>SMS GAMES </li></ul><ul><li>MOBILE MESSENGER </li></ul><ul><li>MOBILE CHAT </li></ul><ul><li>TRAFFIC AND WEATHER UPDATE </li></ul>
<ul><li>28 % Urban Population </li></ul><ul><li>Rapid Urbanization </li></ul><ul><li>Rising Income level </li></ul><ul><li>50% of the Indian population is below the age of 25, according to the CIA FACTBOOK. </li></ul><ul><li>The average age of an Indian is 33. </li></ul>Changing Demographics Source: Mckinsey Report
LIVE EVERY MOMENT <ul><li>Give Airtel a younger look. </li></ul><ul><li>To attract the youth. </li></ul><ul><li>The logo symbolized friendliness, energy and innovation. </li></ul>
1. Threat from Competition Wireless Market – Top 4 garnering 75% market share GROUP 7 HIGH
Competitor Analysis GROUP 7 Best OP Margins & Net Profit Margins among Peers Source: CMIE November 2008 OP Margin Net Margin Company Sep-07 Sep-08 Sep-072 Sep-083 Bharti 43.00% 38.00% 26.40% 19.30% Rcom 37.90% 31.60% 23.90% 13.20% IDEA 32.80% 26.60% 14.10% 6.50% MTNL 23.70% 22.90% 7.00% 6.80%
AMOU & ARPU Stats Minutes of Usage per Month – Mobile Services ARPU* in India – 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. The declining ARPU implies that India Inc. is tapping a large market at the bottom of the pyramid by reducing tariffs; thereby, enhancing affordability. GROUP 7
2. Customer Bargaining Power <ul><li>Lack of differentiation among Service Providers </li></ul><ul><li>Cut throat Competition </li></ul><ul><li>Low Switching Costs </li></ul><ul><li>Number Portability will have –Ve Impact </li></ul><ul><li>Businesses & Consumers </li></ul>GROUP 7 HIGH
4. Threat of Substitutes <ul><li>Landline </li></ul><ul><li>CDMA </li></ul><ul><li>Video Conferencing </li></ul><ul><li>VOIP - Skype, Gtalk, Yahoo Messenger </li></ul><ul><li>e-Mail & Social Networking Websites </li></ul>GROUP 7 BROADBAND SERVICES DIMINISHING MARKET HIGH
5. Threat of New Entrants <ul><li>Huge License Fees to be paid upfront & High gestation period </li></ul><ul><li>Entry of MVNOs & WiMAX operators </li></ul><ul><li>Spectrum Availability & Regulatory Issues </li></ul><ul><li>Infrastructure Setup Cost - High </li></ul><ul><li>Rapidly changing technology </li></ul>GROUP 7 LOW
SWOT <ul><li>Strengths </li></ul><ul><li>Largest Telecom Player in India - ~80Mn, 22.6% </li></ul><ul><li>Strategic Alliance with other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel </li></ul><ul><li>Pan India Presence </li></ul><ul><li>Strong Financials </li></ul><ul><li>Weakness </li></ul><ul><li>Outsourcing of Core Systems </li></ul><ul><li>Lack of emerging market investment opportunity </li></ul>Source: CMIE Report NOV 08 GROUP 7
SWOT <ul><li>Opportunities </li></ul><ul><li>Bharti Infratel – Cutting Down cost in Rural area </li></ul><ul><li>Match Box Strategy – Scale of Penetration </li></ul><ul><li>Current Tele-Density – 30.6 is still low among developing countries </li></ul><ul><li>Low Broadband Penetration, Rural Telephoney </li></ul><ul><li>Threats </li></ul><ul><li>India centric – Major revenues from India </li></ul><ul><li>Falling ARPU & AMOU </li></ul><ul><li>Intense Competition & Shortage of Bandwidth </li></ul>GROUP 7
BCG Matrix for Bharti Airtel LOW HIGH HIGH LOW GROUP 7 Mobile Services DTH & IPTV Broad Band