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PRESENTATION BY Group 5:Kinny Jain Nikhil SarafDionysiaMichalopoulouRajinder Pal Singh1HIGHLIGHTS OF THIS PRESENTATION: Airtel Background External Analysis Macro-Environmental Analysis: PEST ANALYSIS Micro-Environmental Analysis:PORTERS 5 FORCES [ ILC, SGA] Opportunities and Threats Internal Analysis Resource AuditUNIQUE RESOURCES Core Competencies:PORTERS VALUE CHAIN FRAMEWORK Strengths and Weaknesses Organisational Purpose:AIRTEL MISSION STATEMENT EVALUATION

Competitive Strategy Analysis:PORTERS GENERIC FRAMEWORK Development Strategy Analysis:ANSOFFS PRODUCT/ MARKET FRAMEWORK

Conclusions and Recommendations

PART APART BPART C2Go-ahead to the CDMA technologyINDIA Private players were allowed in Value Added ServicesNational Telecom Policy (NTP) was formulated199219941997Independent regulator, TRAI, was establishedNTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime199920002002BSNL was established by DoTILD services was opened to competitionInternet telephony initiatedReduction of licence fees2003Calling Party Pays (CPP) was implementedUnified Access Licensing (UASL) regime was introducedReference Interconnect order was issued2004Intra-circle merger guidelines were establishedBroadband policy 2004 was formulatedtargeting 20 million subscribers by 20102005FDI limit was increased from 49 to 74 percentAttempted to boost Rural telephony2006Number portability was proposed (pending) Decision on 3G services (awaited)2007Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.Evolution of Telecom In India3INTRODUCTION Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.It is one of Indias leading private sector providers of telecommunications services with more than 110 million customers. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBUs) - Mobile Services, Airtel Telemedia Services & Enterprise Services. Core values Empowering People - to do their best Being Flexible - to adapt to the changing environment and evolving customer needs Making it Happen - by striving to change the status quo, innovate & energize new ideas with a strong passion & entrepreneurial spirit, Openness and transparency - with an innate desire to do good Creating Positive Impact with a desire to create a meaningful difference in society.4National Coverage

Investor Relations :- http://www.bhartiairtel.in

5Integrated Telecom CompanyMobile / Wireless Services

2G / 3GRural Market

Telemedia Services

Fixed LineBroadbandDTHEnterprise Services

CarrierCorporate

Passive Infrastructure

Bharti InfratelIndus Tower66PESTPEST ANALYSIS- EXTERNAL ANALYSIS Political

RegulationsPolitical Opposition to participation by the private players Govt support to promote FDI in Telecom sectorBanning of Phone Use in Certain Circumstances

Technology

Equipped with New TechnologyRapid Industrial growth rate induced by emerging technologies.Strong Fibre Optic NetworkUtiilization of E- Commerce facilitiesEfficient Customer Care Services

Socio-Cultural

High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture, there is need to remain connectedTech Savvy Generation

EconomicCost of calls Being Driven Down Worldwide Recession- Both Boon & BaneMiddle class consumer base growing due to accelerated economic growthUntapped markets in emerging Economies - New Opportunity

8PORTER 5 FORCES

INDUSTRY LIFE CYSLCE

STRATEGIC GROUP ANALYSISPorters 5 Forces101. Threat from Competition

Wireless Market Top 4 garnering 75% market shareHIGH11

Competitor Market Share Threat HIGH122. Customer Bargaining PowerLack of differentiation among Service ProvidersCut throat CompetitionLow Switching CostsNumber Portability will have Ve ImpactBusinesses & ConsumersHIGH

Customers & Market Share133. Suppliers Bargaining Power

LOW144. Threat of SubstitutesLandlineCDMA

Video Conferencing

VOIP - Skype, Gtalk, Yahoo Messengere-Mail & Social Networking WebsitesBROADBAND SERVICESDIMINISHING MARKETHIGH155. Threat of New EntrantsHuge License Fees to be paid upfront & High gestation periodEntry of MVNOs & WiMAX operatorsSpectrum Availability & Regulatory IssuesInfrastructure Setup Cost - HighRapidly changing technology

LOW16

AIRTELTELECOMMUNICATION INDUSTRY LIFE CYCLEJohnson , Scholes & Whittington : Pg. 68, 200817TELECOMMUNICATION INDUSTRY LIFE CYCLETelecom Industry is in its mature growth stage.

Significant achievements have happened in this sector.

In 2009 February, there was a rise in subscriber base by 13.25 million.

Total subscriber base was 375 million in 2009. A hike by 50%.

This shows the changes in the consumption pattern among the middle class.

AIRTEL18STRATEGIC GROUP ANALYSISCompetitor AnalysisOP MarginNet MarginCompanySep-07Sep-08Sep-072Sep-083Bharti43.00%38.00%26.40%19.30%Rcom37.90%31.60%23.90%13.20%IDEA32.80%26.60%14.10%6.50%MTNL23.70%22.90%7.00%6.80%Best OP Margins & Net Profit Margins among PeersSource: CMIE November 200820AMOU & ARPU Stats

Minutes of Usage per Month Mobile ServicesARPU* in India Mobile ServicesDespite a low tele-density of approximately 30.5% 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.

21Strategic Group AnalysisPRODUCT RANGE

Narrow Broad

NATIONAL GLOBALGEOGRAPHICAL SCOPEBSNL, MTNL 15.00 %Other 5%Airtel 25%10 %Reliance 18%Vodafone 17%TATA 9.3%IDEA 9.6%VIRGIN -0.5%22INTERAL ANALYSIS

RESOURCE AUDIT AND PROCESS VALUE CHAINHuman resourceswell defined rewards and recognition system Young team - Average age is 26years Employees decide their training needs.A state-of-the-art learning centre and training practices adopted from British TelecomPACE (Progressive Assessment of Culture and Environment) feedback taken from employees used for companys strategyPhysicalOver 110 million customersReceived license to provide 2G ad 3G in Sri LankaFirst Telecom operator in India to offer MS Windows Mobile 5.0Strong Distribution channel.

FinancialProfit crosses US$1 bnFixed asset (09) $ 7,986,254,556Dividend offered for 2008-09 is 20% of the face value of each shareReceived US$1.275 bn investment from international investors in Bharti Infratel.Ability to raise fundsIntangibleStrategic partnership with Google.Goodwill & ReputationFacility based Operator license in Singapore.

AIRTEL Resource audit (unique resources) Internal Analysis24Supporting ActivitiesPrimary ActivitiesFirm infrastructure - CRM tools, MIS, ERP, Networking Equipment, Telecom equipment for coverage and signal strength, IT InfrastructureHR management - IT skilled work force, Telecom engineers, SCM specialists Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 employees in Mobile services, Owned retail staffing and training.

Technology development - Creating a 3G enabled network, mChek - Launching M commerce by tie ups with banks and credit cards.Procurement - Established a SCM network to acquire networking & Telecom tools, Maintain long term relation with suppliers to provide handsets & servicesMARGINMARGIN25Primary Activities - AnalysisInputMarketing & SalesProcessOutputPost SaleNetwork InfrastructureNokia-Siemens, CISCO , INTEL

Software and content providerIBM, INFY TCS, AFFLE, On Mobile, India Times, Hungama Mobile, Mauj , One 97 IMI MOBILE. FinanceLicenses Strong Channel Distribution

Market Innovators

Trend SettersUnique advertising strategy Emotional values & HumorGSM Services

VAS

Fixed Lines

BroadbandPublic

Corporate

Businesses

SMEs

InstitutesInfrastructure DevelopmentNetwork IntegrationCompetitivePositionCapableSupplierStartValue Chain Analysis Conclusions & Recommendations

Inbound LogisticsOperationsOutputMarketing & PlanningPost SaleValue Chain Outcome - 37% PM Aero mobile, MATE, GPS tracking device for B2B M-commercewide network coverage as they own their network infrastructureAndroid platform based HTC mobile unique marketing strategy, low STD rates Trend settersBill payments and Indian rail tickets using m commerceSWOT

SUMMATION OF EXTERNAL & INTERNAL ENVIRONMENT ANALYSISAIRTEL Strength & WeaknessSTRENGTHSWEAKNESSESOPPORTUNITIESTHREATS

INTERNALEXTERNAL Tele-Density 30.6% Low among Developing Countries

Low Broadband Penetration

Untapped Rural Market

Bharti Infratel Cutting Down cost in Rural area

Growing Globally

First Indian Sponsor to signed Manchester United Falling ARPU

Intense Competition From Nearest Competitor

Shortage of Bandwidth

New Players Entering Indian telecom sector

Uncertain Economic Condition

Valuable Business Partners Techno & Financial

Strong Brand Image First Mover Advantage Single Private Leading Indian Telecom Company

Enthusiastic & Innovative Business Development team

Marketing Driven Low Cost Model Blessed with Directional Visionary - S.N. Mittal

Massive Economies of scale from large subscriber base

Outsourcing of Core Systems

Lagging behind in Exploring market Investment opportunity

29NoNoYesYesNoYesNoYesYesAn evaluation matrix of the mission statementCustomerProduct / ServicesMarketsTechnologyConcern for survival, Growth ProfitabilityPhilosophySelf-ConceptConcern for Public ImageConcern for EmployeesAIRTEL ORGANISATIONAL PURPOSEVisionBy 2010 Airtel will be the most admired brand in India:Loved by more customersTargeted by top talentBenchmarked by more businesses

Mission Statement

We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more

30AnsOff Directional MatrixPRODUCTMARKETEXISTINGEXISTINGNEWNEWAIRTEL ANSOFF DIRECTIONAL MATRIXPRODUCT DEVELOPMENT

MATE Mobile Application Tool for Enterprise

M commerce mChek (Recharge Anywhere, Anytime)

Airtel Way Finder - GPS Service Blackberry

New Tech-Savvy Handset Options in Prepaid & Post Paid Schemes: HTC, BlackBerry, Apple iPhone

Lowered Overseas Call Rates Bahrain @ Rs 5.00/-

3G Network Awaiting for GOI Approval

AeroMobile Airtel in-flight connectivity on Emirates and Malaysian Airlines

Bridge Alliance Roaming in Asia Pacific RegionMARKET PENETRATION

The Airtel Advantage : 50 paisa / min Call on both National Long Distance Calls & Local calls

Value Added Services: Airtel Live, Hello Tunes, Astrology

Lowered National & International Roaming Tariff

Extensive & Increasing Sales & Distribution channel covering 1.27 million

Delhi Half Marathon 2nd Edition 28000 participants

Celebratory Endorsement - Top BollyWood & International Personality

Tie with major TV events KBC, India Got its Talent

MARKET DEVELOPMENT

3G Network Implementation in Sri Lanka

Airtel Vodafone Alliance: Debut in Europe through Channel Islands (Jersey & Guernsey) Low cost Calling Cards to India - UK, USA, Singapore etc.

MTN Airtel Alliance - South-South Cooperation **

Bhutans 2013 ICT Vision Gov of Bhutan & Airtel Alliance

DIVERSIFICATION

Bharti InfraTel & Indus Towers - Passive Infrastructure Provider

Bharti Teletech Landline & Telephone Equipment

Bharti Telemedia Services Broadband & Internet, DTH, IPTV

Airtel Tracking Services GPS Bharti Walmart Sipermarket Bharti Realtek Realty Business

32Ansoff Product / Market Framework110 million Mobile Customer Base 24% of wireless market

3rd largest single country mobile services operator

Sixth largest in-country integrated telecom operator in the world

33Poters Generic Matrix

Porters Generic StrategyDifferential StrategyCost LeadershipNarrow Market ScopeBroad Market ScopeUniqueness CompetencyLow CostCompetency

35Porters Generic Strategy (Cont.)AIRTELLOW

COSTUNIQUENESSBROAD MARKETNARROW MARKET36CONCLUSION AND RECOMMENDATIONSRefine your processes, strive for dominance and build a brandMR. Sunil Bharti Mittal

Airtel have done a good job by Improving their core competencies.Being the market leader & Especially in building a brand

We would recommend Bharti Airtel to continue with their good work and concentrate more on mobile services which is Bhartis cash cow, in its process of huge diversification.

Thank You

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