Airtel Money is a mobile-based money transfer service offered by Airtel in India. While it has seen great success in Africa, replicating this model in India has faced challenges. Key differences between India and Africa include infrastructure, banking services, and culture. Africans were more open to new mobile banking technologies, while Indians relied more on traditional banking. For Airtel to succeed in India, the document recommends strategies like mergers and acquisitions to expand markets, and working with regulators to learn from other markets and address India's unique barriers. The multi-step M&A process includes evaluating targets, conducting due diligence, and negotiating to achieve strategic and financial growth objectives.

1. AIRTEL MONEY: CAN THE AFRICAN SUCCESS BE
REPLICATED INDIA?
Mrigakshi Godse
HULT BUSINESS SCHOOL
MIB, DUBAI 2015-2016

2. What is Airtel Money?
Airtel Money, India’s foremost mobile-based facility that offers instant money transfers and
converts your phone into a safe and secure e-wallet that enables the registered subscribers to
send and receive money across networks, pay for their utilities, goods, cell phone, landline
and service bills using any Airtel GSM without the need of data or an internet connection.
The mobile service was available to the public with two options: The semi-closed wallet
option that allowed customers to load money onto their mobiles which could be used to make
payments and the full mobile wallet option wherein the customers could not only make
payments but also withdraw cash with the help of their phones. (AIRTEL MONEY: CAN
THE AFRICAN SUCCESS BE REPLICATED IN INDIA?1 , 2015) It authorized operators
to instantaneously top up airtime and also transfer their airtime to other users. It also let the
customers make instantaneous money transfers between their Airtel money accounts and any
other bank accounts across the country. (airtel for me, n.d.)
Socio-cultural and economic disparities and resemblances between India and Africa:
Shared histories, kindred ethics and intertwined philosophies, India and Africa are sisters
who belong to the same supercontinent. The historic liaison between India and Africa, has
been an unremitting process of socio-cultural and economic give-and-take since times
immemorial. To draw a comparison between the infrastructure and banking services of India
and Africa is arduous. While India has a strong banking infrastructure strictly monitored by
the directives, policies and guidelines drawn by the Reserve Bank of India, the African
government supervisors cooperated with money transfer service providers and drew
guidelines and protocols contrary to the case in India. India and Africa have a stark socio-
cultural contrast. Africa had a larger endowed and educated youth population compared to
India. As far as societal structure, monetary transactions and confidence on third parties was
concerned, the Indians relied on services provided by their banks. (AIRTEL MONEY: CAN

3. THE AFRICAN SUCCESS BE REPLICATED IN INDIA?1 , 2015)Africans on the other
hand warmed up to the new mobile banking technique and were more convivial to try novel
techniques than Indians who favored the old school way of banking. (Heeks, 2012)
Recommended strategy Airtel mCommerce Services Limited should concoct for India:
Deliberating the progressive impact of an innate mobile payment system in Africa, the RBI
should acknowledge the noteworthy externalities of the African M-PESA system and provide
incentives to the Indian Mobile Money Transfer, by proposing knowledge platforms for
lessons learnt from the other markets and design learning opportunities. (Heeks, 2012)
The African success story: Numerous factors played an important role in the success of the
M-PESA model which was launched in 2007 in Kenya and has grown leaps and bounds with
over 19.5 million m-money users i.e. almost 83 percent of the adult population transfer about
$UDS 8 Billion annually equivalent to 24 percent of the GDP. (KAVAYA, n.d.)Firstly,
favorable telecom ascendancy had an imperative role in the success of Airtel’s mobile fund
transfer. The alacrity of the African market was also instrumental in the success of the system
The ongoing backing from the government, investment in the country’s infrastructure,
liberalization of the mobile market, encouraging new developments in the society
amalgamated with a strong consumer demand drove the virtuous circle of success in the
African market. (Heeks, 2012)
Embryonic economies like India face myriad m-money weaknesses. Since 2005, the Reserve
Bank of India (RBI) has advocated that banks proliferate access to banking services for the
unbanked population using the mobile payment systems. With nearly 51 percent of the
population using a mobile phone, private partners in India developed mobile payment
systems modeled after the M-PESA system to upsurge fiscal outreach by providing credit and
withdrawal facilities to customers. However, culture-institutional factors, large rural

4. unbanked population owing to the low literacy rate and poverty, lower levels of customer
demands and access to existing financial services combined with an inflexible supervisory
regime accounted for the slack growth rate of the model in India. (Heeks, 2012)
Mergers and Acquisitions: Airtel Africa also embraced the Mergers and Acquisitions
strategy to enhance their performance in Africa and gain greater market share by driving in
country amalgamation and industry performance. They acquired the assets of Zain in the year
2010 and more recently consolidated the takeover of Yu mobile in Kenya and Warid
Telecom in Uganda and Congo Brazzaville to promote market share and consequently upturn
the revenue. (KAVAYA, n.d.) Airtel India has numerous competitors like BSNL, Vodafone
and Reliance. To elevate their market hold, Airtel can merge and acquire the provincial
footholds of the aforementioned to further strengthen their hold on the untapped Indian
market. (Suttle, n.d.). Although growth and expansion could be attained through in-house
leeway, Airtel Africa was aware that Mergers and Acquisitions were a faster medium to
attain their expansion and hence in order to further branch out in their own industry, they
concluded that internal growth was not the best option to gain a higher market share over
their competitors. (KAVAYA, n.d.)
Recommendations to execute the aforementioned strategy: The pros of Mergers and
Acquisitions frequently surpass those of other growth and expansion strategies and can
dramatically alter an organization’s position. It aids the company to:
Market expansion: Improve accessibility to customers in existing markets and enhance
access in new appealing markets. (hu consultancy, 2011)
Intensified competition in the market: Essentially altering the market position, by moving
the organization from a subservient market position to a more dominant market position. (hu
consultancy, 2011)

5. Barriers to entry: Creating impediments that preclude competitive entry in the market (hu
consultancy, 2011)
Improved operative efficacies: Reorganizing service delivery and operations to significantly
cut costs of delivering services. (hu consultancy, 2011)
Improved financial and credit position of the company: Enhancing the organization’s
financial performance and credit rating, thus increasing the revenue. (hu consultancy, 2011)
Steps to evaluate and initiate the process to execute a merger and acquisition include the
following sequential steps:
An assessment of the company: To accomplish the abovementioned strategies and financial
paybacks, Airtel India need to assess their current capabilities to pursue mergers and
acquisitions, and endow time, supplies and capital needed to create such capabilities, if
currently inadequate or absent. (hu consultancy, 2011)
Establish Growth Markets: Airtel India should commence the evaluation by identifying the
growth and expansion opportunities in current and new markets or a combination thereof. To
understand the prospective, the company must analyze the extensive data of the region and
the company they wish to merge/acquire. The prospective client, the demographics such as
the population, age, employment ratio, unemployment ratio, average income, local business,
performance and profitability, competition and costs, consumer spending power and
preferences etc. should be clear to the company. (hu consultancy, 2011)
Identify and categorize prospective Merger and Acquisition Candidates: The next step of
the acquisition process comprises of the proactive identification and categorization of
potential merger or acquisition candidates that could fit strategic and financial growth
policies in identified markets. It involves methodically categorizing prospective entities as

6. well as outside the box probabilities that could transpire based on research, management
experience and advice of consultants. (hu consultancy, 2011)
Assess Strategic Financial Position and Fit: At this stage subsequent doubts must be
resolved,
 Likely benefits the company attains by undertaking transaction with this acquisition
target.
 Risk assessment i.e. a bird’s eye view of the entire operation to be undertaken and
possible anomalies that could transpire.
 An understanding of how acquiring this target company is beneficial than the rest of
them. (hu consultancy, 2011)
Conduct Evaluation: This step involves assessing the overall value of the target, identifying
and evaluating alternatives for structuring the merger and selecting the structure that fits best
to enable the organization to accomplish its goal. To settle on a realistic valuation, range with
the help of discounted cash flow analysis, comparable publicly traded company analysis and
comparable transaction analysis. (hu consultancy, 2011)
Perform Due Diligence, Negotiate a Decisive Covenant, and Implement Transaction: Once
an agreement is acknowledged, heads of the acquiring organization must certify complete and
comprehensive due diligence review of the intended company in order to fully understand the
concerns, prospects, and risks accompanying the transaction. (hu consultancy, 2011)
Furthermore, in order to expand foothold in present/new markets, Mergers and Acquisitions
are a useful mean to grow worldwide by merging with prospective entities in particular
geographical markets and increase revenue as well as customer market share. (hu
consultancy, 2011)

7. Bibliography
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payments-and-transfer-money-across-india
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http://huconsultancy.com/7-steps-to-successful-merger-acquisition/
Heeks, R. (2012, November 24). ICTs for development. Retrieved July 3, 2016, from
ict4dblog.wordpress.com: https://ict4dblog.wordpress.com/2012/11/24/why-m-pesa-
outperforms-other-developing-country-mobile-money-schemes/
AIRTEL MONEY: CAN THE AFRICAN SUCCESS BE REPLICATED IN INDIA?1
(March 31, 2015).
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KAVAYA, M. (n.d.). STRATEGIES EMPLOYED BY AIRTEL AFRICA IN ENHANCING
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