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Group 7_IBS_Airtel Africa (1).pptx
1. Airtel in Africa
Presented by:
Asmita Padale (120)
Kumar Aditya (132)
Pooja Chandorkar (138)
Sunil Choudhury (159)
2. Africa Telecommunication Industry
Drivers
โข Reducing illiteracy rate
โข Consumer demand for faster
internet
โข Investment in
telecommunication
infrastructure
Challenges
โข Political instability
โข Policy uncertainty
โข Growing trend towards high
taxes and regulatory costs
Key Developments
โข MTN South Africa launched
m-money service
โข Regulator to auction
additional 5G spectrum in
December 2020
โข Rain launches standalone 5G
network in Cape Town
โข Comsol started 5G fixed-
wireless trials using spectrum
in the 28MHz band
South African Telco Market
Segment Development
Top Telecom companies
Subscriberโs base
3. External Environment Drivers and Global/Local Response Grid
No One
Size Fits
All works
16
Countries Different
rules and
regulations
Different
markets
Languages
and Culture
Government Factors
โข Many Government,
Many Rules
โข Forex Neutrality Clause
โข Uneasy Duty
Exemptions
โข Most of the Countries
havenโt signed Double
Taxation Avoidance
Treaty
โข Protected Economies
Competition
โข Little investment in
infrastructure of African
Operations
โข Other competitors
achieving good
subscribers base in less
investment
Cost Factors
Market Factors Other Factors
โข Growth of the regional
service providers
โข Centralization strategy is
difficult to achieve
โข Fragmented African
Market
โข Non-overlapping telco
footprint across many
countries
โข Led by many wholesalers
โข Landlocked nature of
countries
โข Relatively laid-back work
culture that disables the
deadline driven work
culture
โข Poor vendor eco-system
โข Language and cultural
barriers
โข Landlocked nature of
countries leading to the
increase in the cost due
to transportation by
roads
โข Tariffs and Taxes
Local/Global Responsiveness
Grid
(2.6, 4.2)
4. Value Chain Analysis
Primary Activities
It is important to develop strong relationships with suppliers
as their support is necessary to receive, store and distribute
the product
The importance of analyzing operational activities raises
when raw material arrives, and Airtel is ready to process the
raw material into the end product and launch it in the
market.
Some outbound logistics activities are material handling,
warehousing, scheduling, order processing, transporting and
delivering to the destination
At this stage, Airtel will highlight the benefits and differentiation
points of offered products to persuade the customers that its
offering is better than competitors
The pre-sale and post-sale services offered by the Airtel will
play an important role in developing customer loyalty. The
modern customers consider post-sale services as important as
marketing and promotional activities
INBOUND LOGISTICS
OUTBOUND LOGISTICS
OPERATIONS
SALES & MARKETING
SERVICES
5. Value Chain Analysis
Support Activities
FIRM
INFRASTRUCTURE
PROCUREMENT
TECHNOLOGY
DEVELOPMENT
HUMAN RESOURCE
MANAGEMENT
Airtel can control the
infrastructure activities or
commonly called overhead
costs to strengthen the
competitive positioning in
the market
โข Tower setup
โข IT infrastructure
โข Telecom equipment's,
Networking stations
and equipment's
โข ERP and various
software to assist in
operations
The effective HR management
can allow Airtel to reduce
competitive pressure based on
motivation, commitment and
skills of its workforce
โข Recruiting
โข Selecting
โข Training
โข Rewarding performance
management and other
personnel management
activities.
In a modern, technological
advanced era, almost all value
chain activities depend on
technological support-
โข Investing in R & D
โข Automation software
โข Technology-supported
customer service
โข Product design research
โข Data analytics.
The procurement in value
chain denotes the processes
involved-
โข High initial investment
required to setup up
physical distribution
towers and network
stations
โข Long term contract with
third parties are required.
โข Strong Supply Chain
Network is required to
enable continuous supply
of handsets and SIM
cards.
6. Telecom Network
Call Centres
Information
Technology
Outsourced
activities
It reduced has their costs considerably
and they were able to acquire more
customers and were able to pass on these
savings to the customers instead of the
shareholders and this increased their
customer base
Airtel was also able to differentiate themselves easily from the
rest in the market Being in a position where they reduced their
costs considerably, they had the opportunity to control the
market and introduce various initiatives
It also led to the organization saving in the wage
bill and re-investing most of its profits into their
businesses so as to improve their present
infrastructural roll out. Outsourcing has enabled
the company to focus more on its core areas of
boosting its distribution
The vendor ecosystem in Africa is poor. Airtel has
had to take all its vendor partners like IBM, Spanco,
Mahindra Tech from India who are building their
operations, entailing more time and costs
Unlike India, the distribution in Africa is
led by a few wholesalers whose
discounting game had pushed many
retailers into losses.
Outsourced Activities Performed by Airtel in Africa
7. Global Strategy Framework
Global Ambition Global Positioning Global Organisation Global Business system
In Africa, ARPUs are very high โ because call rates are high but it has kept
minute usage very low
Opportunity to evolve with a new viable model bring cost, tariff and increasing
subscribes can led to generation of huge revenue in the long run
GRI Index ๏ 30.07% GCI Index ๏ 39.30%
Regional Player
Global Ambition
100%
80%
60%
40%
0%
20%
100%
80%
60%
20% 40%
Airtel
*Based on 2018-19 Annual Report
8. Global Strategy Framework
Global Positioning
Global Ambition Global Positioning Global Organisation Global Business system
In Africa, Kenya โ Nairobi is the platform country for Airtel operations
Africa with 16 different countries is a complex market so Airtel need to have
different value proposition for different country
With the different value proposition for each country, Airtel Africa started
showing +ve results in just 18 months
9. Global Strategy Framework
Global
Organisation
Airtel has also created a new zonal structure that empowers the second rung leaders in
Africa.
In Africa, Airtel has created positions for 40 new zonal managers who are like
zone CEOs with profit and loss responsibilities
The operations which were earlier divided into four segments โ mobile, enterprise, digital
and telemedia โ will now focus on two sides โ consumer and enterprise
These are structured under two customer business units (CBU) with focus on
B2C (business to customer) and B2B (business to business) segments
The B2C unit will again be divided into two โ consumer business and market
operations.
Global Ambition Global Positioning Global Organisation Global Business system
10. Global Strategy Framework
Global Business
System
In Africa, Airtel faced difficulties in importing telecom equipment and also idea
of infrastructure sharing by telcos didnโt worked they started building it by their
won
In Africa, Airtel Outsourced key operation - telecom network, IT and call centers
โ to IBM, Ericsson, Nokia, Siemens, Spanco,
Mahindra Tech and others
Airtel launched a new channel partner programme for distribution and marketing
network
Airtel planned to invest $1.5 billion in network rollout
Global Ambition Global Positioning Global Organisation Global Business system
11. Changes in their competitive and business level strategies
Compete on Cost Advantages
Focus on Cost
Reduction
โข Airtelโs strategy of then grow subscribers through tariff cuts has helped offer better service & create a
large market in Africa.
โข This sustained tariff differential has led to shift in minute usage to Bharti in multiple-SIM markets like
Nigeria and Ghana.
โข With its better viable model Airtel could bring down costs, lower tariffs and grow subscribers while
maintaining profitability in Africa.
Customized
model in African
markets
Compete on Differentiated Advantages
โข Airtel launched customized packages in different markets, taking into account the traffic patterns and
network quality.
โข It launched a new channel partner programme to create a robust distribution and marketing network.
โข Airtel created a new zonal structure that empowers the second rung leaders in Africa.
12. Changes in their competitive and business level strategies
Local Adaption
Bridge Cultural
gap
โข Airtel moved its Africa headquarters to Nairobi (Kenya) from Bahrain. So with all key stakeholders at one
place, decisions became faster & its growth increased.
โข Appointed a local senior level management
โข Acquisition of Zain allowed Airtel to understand the local dynamics of business much better.
Replicate
domestic model
Global Standardisation
โข Airtel has outsourced key operations โ telecom network, IT and call centres โ to IBM, Ericsson, Nokia,
Siemens, Spanco, Tech Mahindra and others.
โข Implemented it schemes introduced in India, like the SIM swap scheme means a new SIM can be issued in
an hour & e-recharge plan
โข Restructuring of its operations to create synergies across various business segments.