Bharti Airtel: Company

Introduction

Bharti Airtel Limited, commonly known as Airtel, is an Indian telecommunications Services

Company headquartered at New Delhi, India. It operates in 20 countries across South Asia,
Africa and the Channel Islands. Airtel has GSM network in all countries in which it operates,
providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the world's
third largest mobile telecommunications company with over 261 million subscribers across 20
countries as of August 2012. It is the largest cellular service provider in India, with 183.61
million subscribers as of November 2012. Airtel is the third largest in-country mobile operator
by subscriber base, behind China Mobile and China Unicom.Airtel is the largest provider of
mobile telephony and second largest provider of fixed telephony in India, and is also a provider
of broadband and subscription television services. It offers its telecom services under the airtel
brand, and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service
provider to achieve Cisco Gold Certification.It also acts as a carrier for national and international
1

long distance communication services. The company has a submarine cable landing station at
Chennai, which connects the submarine cable connecting Chennai and Singapore.Airtel is
credited with pioneering the business strategy of outsourcing all of its business operations except
marketing, sales and finance and building the 'minutes factory' model of low cost and high
volumes. The strategy has since been copied by several operators. Its networkbase stations,
microwave links, etc.is maintained by Ericsson and Nokia Siemens Network whereas business
support is provided by IBM, and transmission towers are maintained by another company (Bharti
Infratel Ltd. in India). Ericsson agreed for the first time to be paid by the minute for installation
and maintenance of their equipment rather than being paid up front, which allowed Airtel to
provide low call rates of 1/minute (US$0.02/minute). During the last financial year (200910),
Bharti negotiated for its strategic partner Alcatel-Lucent to manage the network infrastructure for
the tele-media business. On 31 May 2012, Bharti Airtel awarded the three-year contract to
Alcatel-Lucent for setting up an Internet Protocol access network (mobile backhaul) across the
country. This would help consumers access internet at faster speed and high quality internet
browsing on mobile handsets.
Acquisitions and Mergers:
MTN Group
In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN
Group, a South Africa-based telecommunications company with operations in 21 countries in
Africa and the Middle East. The Financial Times reported that Bharti was considering offering
US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by
an Indian firm. However, both sides emphasize the tentative nature of the talks. The Economist
magazine noted, "If anything, Bharti would be marrying up," as MTN has more subscribers,
higher revenues and broader geographic coverage. However, the talks fell apart as MTN group
tried to reverse the negotiations by making Bharti almost a subsidiary of the new company.In
May 2009, Bharti Airtel confirmed that it was again in talks with MTN and both companies
agreed to discuss the potential transaction exclusively by 31 July 2009. Bharti Airtel said in a
statement "Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant
partnership with MTN Group". The exclusivity period was extended twice up to 30 September
2009. Talks eventually ended without agreement and on 30 September 2009, Bharti released a
2

statement saying that it had decided to disengage from discussions with the MTN Group when
the exclusivity period ended. Informa analyst Matthew Reed, noted that a reported factor in the
failure was South Africas worry that control of MTN, which is perceived as a national
champion, could pass into foreign hands. The South African government is MTNs biggest
shareholder. Bharti said in a statement regarding the failure, "We hope the South African
government will review its position in the future and allow both companies an opportunity to reengage".
Zain
In March 2010, Bharti struck a deal to buy the Zain's mobile operations in 15 African countries,
in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus in 2007.
Bharti Airtel completed its $10.7 billion acquisition of African operations from Kuwaiti firm,
making the Airtel the world's fifth largest wireless carrier by subscriber base. Airtel has reported
that its revenues for the fourth quarter of 2010 grew by 53% to US$3.2 billion compared to the
previous year, newly acquired Zain Africa division contributed US$911 million to the total.
However, net profits dropped by 41% from US$470 million in 2009 to US$291 million 2010 due
to a US$188 million increase in radio spectrum charges in India and an increase of
US$106 million in debt interest.

Telecom Seychelles
On August 11, 2010, Bharti Airtel announced that it would acquire 100% stake in Telecom
Seychelles for US$62 million taking its global presence to 19 countries. Telecom Seychelles
began operations in 1998 and operates 3G, Fixed Line, ship to shore services satellite telephony,
among value added services like VSAT and Gateways for International Traffic across the
Seychelles under the Airtel brand. The company has over 57% share of the mobile market of
Seychelles.Airtel announced plans to invest US$10 million in its fixed and mobile telecoms
network in the Seychelles over three years, whilst also participating in the Seychelles East Africa
submarine cable (SEAS) project. The US$34 million SEAS project is aimed at improving the
3

Seychelles global connectivity by building a 2,000 km undersea high speed link to Dar es
Salaam in Tanzania.

Bharti Airtel: Services Offered

Airtel operates in all telecom circles of India. Its network is present in 5,121 census towns and
457,053 non-census towns and villages, covering approximately 86.6% of the countrys
population as of September 2012.
Airtel is the 6th most valued brand according to an annual survey conducted by Brand Finance
and The Economic Times in 2010.
3G
On 18 May 2010, the 3G spectrum auction was completed and Airtel paid the Indian government
122.95 billion (US$2.24 billion) for spectrum in 13 circles, the most amount spent by an
operator in that auction. Airtel won 3G licences in 13 telecom circles of India: Delhi, Mumbai,
Andhra Pradesh, Karnataka, Tamil Nadu, Uttar Pradesh (East), Rajasthan, West Bengal,
Himachal Pradesh, Bihar, Assam, North East, and Jammu & Kashmir. Airtel also operates 3G
services in Maharashtra & Goa and Kolkata circles through an agreement with Vodafone and in
Gujarat through an agreement with Idea. This gives Airtel a 3G presence in 15 out of 22 circles
in India.On 20 September 2010, Bharti Airtel said that it had given contracts to Ericsson India,
Nokia Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing
3G services in the country. These vendors would plan, design, deploy and maintain 3GHSPA
(third generation, high speed packet access) networks in 13 telecom circles where the company
had won 3G licences. While Airtel awarded network contracts for seven 3G circles to Ericsson
India, NSN would manage networks in three circles. Chinese telecom equipment vendor Huawei
Technologies was introduced as the third partner for three circles.On 24 January 2011, Airtel
launched 3G services in Bangalore, Karnataka its largest circle by revenue. With this launch,
Airtel became the third private operator (fifth overall) to launch its 3G services in the country
following Tata Docomo and Reliance Communications. On 27 January 2011, Airtel launched 3G
in Chennai and Coimbatore in Tamil Nadu. On 27 July 2011, 3G services were launched in
Kerala's 3 largest cities - Kochi, Kozhikode and Thiruvananthapuram.Airtel 3G services are
available in 200 cities through its network and in 500 cities through intra-circle roaming

arrangements with other operators. Airtel had about 5.4 million 3G customers of which 4 million
are 3G data customers as of September 2012.

4G
On 19 May 2010, the broadband wireless access (BWA) or 4G spectrum auction in India ended.
Airtel paid

33.1436 billion (US$603.21 million) for spectrum in 4 circles: Maharashtra,

Karnataka, Punjab and Kolkata. The company was allocated 20 MHz of BWA spectrum in
2.3 GHz frequency band. Airtel's TD-LTE network is built and operated by ZTE in Kolkata,
Huawei in Karnataka, ZTE in Punjab and Nokia Siemens Networks in Maharashtra On 10 April
2012, Airtel launched 4G services using TD-LTE technology in Kolkata, becoming the first
company in India to offer 4G services. The Kolkata launch was followed by launches in
Bangalore (7 May 2012) and Pune (18 October 2012). It will launch services next in Chandigarh.
Airtel plans to provide voice services for its TD-LTE subscribers through its existing GSM
network, which would make it the only operator in India to combine voice with TD-LTE services
through GSM network. Airtel selected Nokia Siemens Networks to deploy its Circuit Switched
FallBack (CSFB) voice solution in Airtels TD-LTE network in Pune. With CSFB, the network
can transfer customers to GSM platform to make and receive voice calls while retaining the TDLTE network for data services. On 24 May 2012, Airtel announced an agreement to acquire a
49% stake in Qualcomm Asia Pacific (India). Qualcomm holds 4G spectrum and licenses in
Delhi, Haryana, Kerala and Mumbai. As per the agreement, by the end of 2014, Airtel will
assume full ownership and financial responsibility for 4G operations in these 4 circles.
Airtel had 3180 4G subscribers as of May 2012.

WiFi
Airtel has plans to launch WiFi services in India. It intends to start offering WiFi services in
Delhi NCR, Mumbai and Bangalore in initial phase. All plans will be on secure wireless
6

broadband internet with unlimited usage and will be session or time based. Users can use the
service by finding a hotspot, selecting 'airtel WiFi Zone', activating the voucher and then login to
start browsing.Airtel intends to partner with establishments to setup hotspots which will be
termed WiFi Hangout for an establishment owner and WiFi Partner for the cafe and restaurant
owners. Airtel WiFi Partners can offer services at zero investments and can earn commission on
every WiFi session sold.
Airtel Money
Airtel has started a new m-Commerce platform called Airtel Money in collaboration with Infosys
and SmartTrust (now Giesecke & Devrient). The platform was launched on April 5, 2012, at
Infosys' headquarters in Bangalore. Using Airtel Money, users can transfer money, pay bills and
perform other financial transactions directly on the mobile phone.
SmartDrive
SmartDrive is navigation app exclusive to Airtel customers. The app features voice-based turn by
turn navigation, real time information update on traffic, approximate time of the travel on the
basis of the traffic situation on the various routes and also lets users see their location on the map
and plan the journey accordingly. It also suggests the subscriber an alternate route in case of
traffic congestion on the normal route. According to Airtel, SmartDrive calculates the traffic on
the basis of the number of GPS devices used on a particular road, their average speed, as well as
historical trends of traffic on that route. SmartDrive also allows users to search for points of
interest like restaurants, theatres and shopping malls. The app also allows users to keep a record
of all trips they make when using voice navigation for later reference through the 'Trip Recorder'
feature, Wikipedia information of places for which information is available and the ability to add
frequently visited locations to favorites, in addition to weather information about the place.Airtel
will offer navigation at 10 per day or 99 per month. Live traffic will be cost 3 per day or 49
per month. Search and map viewer are available for free. The costs do not include data charges.
Airtel states in SmartDrive's FAQ that data is only used when the user performs searches or
calculates routes.The app is developed by Wisepilot, a mobile navigation solutions provider and
uses Navteq Maps for location and traffic info. It was launched on 12 September 2012. At the

time of launch, it was available only in Bangalore, Mumbai and NCR. Services are currently
available in Chennai. Service will be expanded to Pune and Hyderabad by December 2012.
Network Experience Centre
Airtel has a Network Experience Centre (NEC) which observes end to end customer experience,
in near real time, along with the standard network elements on Airtel's operations. The NEC is
located in in Manesar, Haryana and went live on 31 October 2012. It is the first such facility in
India and will be able to monitor Airtel's network performance across mobile, fixed line,
broadband, DTH, M-Commerce, enterprise services, International Cable Systems and internet
peering points from a single location. It will monitor all Airtel and partner NOCs. In case of an
emergency, the NEC will enable the operator to prioritize actions to restore normalcy and reduce
resolution time.The NEC houses a video wall with 3600 square feet of solid state LED screen to
monitor Airtel's telecom network. This is the world's biggest video wall for a telecom operator.
Each cube in this wall is 1.6mx1.2 m and there are 175 cubes arranged in a 25x7 matrix.The
clear span of the roof is 49 m x 18 m and the beams, which are fireproof and about 8 feet deep,
have been specially designed to hold the structure without columns. The NEC was designed
specifically to be used as a command center in case of national emergencies and natural
catastrophes. The facility is earthquake proof and also provides for a single control of command
and a fully redundant technology layout.
iPhone
The iPhone 3G was rolled out in India in 2008 by Airtel. However, high prices and contract
bonds discouraged consumers and it was not as successful as the iPhone is in other markets of
the world. Airtel introduced the iPhone 4 on 27 May 2011 and the iPhone 5 on 2 November
2012.
Telemedia
Under the Telemedia segment, Airtel provides broadband internet access through DSL, internet
leased lines as well as MPLS (multiprotocol label switching) solutions, as well as IPTV and
fixed line telephone services. Until 18 September 2004, Bharti provided fixed line telephony and
broadband services under the Touchtel brand. Bharti now provides all telecom services including
8

fixed line services under a common brand airtel. As of September 2012, Airtel provides
Telemedia services to 3.3 million customers in 87 cities. As on 30 November 2012, Airtel had
1.39 million broadband subscribers.Airtel Broadband provides broadband and IPTV services.
Airtel provides both capped as well as unlimited download plans. However, Airtel's unlimited
plans are subject to free usage policy (FUP), which reduces speed after the customer crosses a
certain data usage limit. In some plans, Airtel provides only 256kbit/s beyond FUP, which is
lower than the TRAI specified limit of half the subscriber's original speed.The maximum speed
available for home users is 16Mbit/s.

Bharti Airtel Rural Strategy Mobile Connected Life Experiences

Challenge/Opportunity
Bharti Airtel was faced with the challenge of profitably serving the rural areas of India. It is an
extremely daunting task due to a variety of factors: rural users' low incomes, a widely dispersed
population, and a less than ideal public infrastructure (i.e., roads, electricity, etc.). Specifically,
Bharti Airtel had to address the following conditions:

The incomes of Indian rural residents are significantly lower than urban residents. The
average revenue per user (ARPU) for rural residents was typically less than US$2

per month.
Besides deploying a scalable network, Bharti Airtel also needed to establish a costeffective marketing, sales, and distribution channel to provide service promotion

and customer support.

Counter to these challenges were the significant opportunity that the Indian rural market

represented and Bharti Airtel's unique ability to address it.

The future growth of the Indian mobile market is expected to be driven by rural
customers, which account for about 70 percent of the country's total population (1.1
billion people) with a teledensity of only 18.5 percent as of September 2009. Indian urban

mobile penetration is already over 100 percent.

Rural dwellers place a high value on communications. Contacting urban/overseas
relatives and friends often requires a long and sometimes treacherous trip to the nearest

town to reach a payphone.

Various studies (e.g., fishermen in the Indian state of Kerala and grain producers in
Niger) have shown that increased mobile service penetration in rural areas could have

tremendous socio-economic benefits for the rural population.

With its strong presence in the relatively untapped rural market (over 27 percent market
share as of September 2009), Bharti Airtel is well-placed to continue growth with its
focus on under-penetrated Indian regions with new revenue streams such 3G-enabled data
services and pay-TV.

10

Alliances/Partnerships
To extend its reach in India's rural markets, Bharti Airtel is focusing on innovative initiatives,
including efficient infrastructure deployments, expanding its distribution network via
partnerships, and customized content and tariffs.

Bharti Airtel has launched microfinancing agreements in collaboration with Nokia and
SKS Micro-finance. Under these partnerships, Bharti provides subsidized tariffs and
subscriber identity module (SIM) cards to rural users, Nokia provides subsidized

handsets, and SKS offers microfinancing.

To expand coverage into rural regions, Bharti Airtel is sharing passive infrastructure
services with Vodafone (42 percent ownership) and Idea (16 percent ownership) through
its joint venture, Indus Towers. Sharing the infrastructure cost and usage between

multiple operators has helped Bharti Airtel to reduce its operating and capital expenses.
Bharti Airtel also formed a joint venture with the Indian Farmers Fertilizer Cooperative
Limited (IFFCO). Its joint venture, IFFCO Kisan Sanchar, uses IFFCO's wide rural
presence (present in 80 percent of Indian villages) and appeal among the rural

agricultural community to market and distribute Bharti's products.

IFFCO Kisan Sanchar provides subsidized handsets and connections at competitive rates
in rural areas. It also helps Bharti Airtel to identify and acquire suitable locations for
deploying its cell sites. In addition, it offers tailored services including voice-based
updates on crop prices, farming techniques, rural health initiatives, and "help line"
services.

Strategy
Bharti Airtel first studies the commercial viability of a rural community (and the surrounding
villages) based on parameters such as source of livelihood, average income, and involvement in
frequent commercial transactions or travels. The company has developed a prioritized
deployment strategy based on the specified criteria. Qualifying villages are first to receive a base
station, which also caters to nearby communities. To help ensure efficient usage and profitability
for each of these base stations, Bharti Airtel tracks the revenue generated per base station
(instead of ARPU, which is considered less relevant in a rural context).

11

The following best practices have also been established:

Bharti Airtel has adopted the strategy of direct communications to market its value
proposition to rural customers. To make its services accessible, the company provides all
of its marketing content in local languages. Vans are used to cover rural areas with staff

who educate locals about mobile services and usage.

The company has developed a shared phone service called Public Call Offices (PCOs) in

rural regions to increase awareness about its brand and services.

Bharti Airtel Service Centers have been set up in villages to address customer queries and
complaints as well as act as sales and distribution points. These centers employ local

people and offer sales and customer services using local dialects.
Bharti Airtel has already established over 18,000 service centers in rural India, covering

over 400 languages and local dialects. The company plans to expand this network.
Success Factors/Metrics/Monetization
Bharti Airtel does not provide separate rural key performance indicators, but the

following results have been publicly announced:

As of April 2010, Bharti Airtel's network covered 440,000 villages in India, which,
together with its urban services, accounted for coverage of approximately 84 percent of

India's total population.

As of March 31, 2010, Bharti Airtel had added 9 million new customers to reach a total
of 128 million connections. Ovum estimates that rural users accounted for 60 percent of

the company's net subscriber adds in that quarter.

Despite Bharti Airetel's overall ARPU of just under $5, its mobile division's earnings
before interest, taxes, depreciation, and amortization (EBITDA) margin was
approximately 30 percent, and its earnings before interest and taxes (EBIT) margin was
approximately 19 percent, which indicate a healthy return on overall (including
significant rural) investments.

Bharti Airtel : Distribution

Channels
12

Airtel has a wide & effectively spread channel structure all over India. The channel structure is
simple and effective. Complications are kept out in order to make the overall process very
effective and efficient
The above figure illustrates the channel structure at a regional level. This has been generally
scaled down for better understanding of the structure.
TERRITOTY MANAGER
The distributors include one who handles 1) Provisioning 2) Documents 3) Operation back up 4)
Field sales executives.

13

SELECTION OF CHANNEL MEMBERS/DEALERS

Airtel follows a strict policy in selection of the dealers, and therefore it is necessary to fulfill the
following pre- requisites to be eligible to become a dealer:

The dealers should have a sound financial background. The financial capability of a

dealer is solely depended on the discretion of the company officials.

The dealers should have a good market reputation, since the dealers help the customers in

forming the first impression a customer has about the company.

The dealer should have a good previous track record, i.e of timely payments, no criminal

background etc.
The dealers should have good market penetration. The companys ability to gain
maximum customers in this era of competition solely depends on the penetration the

dealers have in the market.

The last criterion of dealers selection for Airtel is the area the dealers cover. This would
include different geographical areas which are covered by a dealer.

Responsibilities and functions of the dealers:

14

Airtel believes in Customer Loyalty and thus Airtel expects that their dealers apart from selling
paint products should perform the following functions for better customer relations
management:
Sales promotion through regular promotional schemes, road shows, campaigns etc. the
expenses incurred by the dealers is shared by the company only if these activities are for

promotion of the company and not of the dealer.

Recruitment- done under the guidance of certain Airtel officials
Training and development of manpower with company assistance
Servicing according to the size of orders
Customer relation management
Promote other products of the company

The dealer should be in regular touch with the customer, keep taking his feedback and ensure
maximum customer satisfaction. The dealer should also try and convince the customer to try
newer products of the company.

Issues of allocating territories:

Presently the territory are divided into circles like Delhi circle, Andhra Pradesh, Karnataka,
Chennai, Himachal Pradesh, Kolkatta Circle are to name a few. A multi dimensional marketing
and sales team builds both direct and indirect sales channels. Regional organizations are
responsible for the definition of the sales and marketing strategies, and plans for their respective
territories. Each region also provides significant inputs and reviews of the corporate strategic
sales, marketing and product direction. Bharti Airtel uses second degree and third degree
distribution network. These two systems are in place for altogether different markets. There is
confusion in the roles of the members of the channel. The territory and the degree of distribution
network are done only on the basis of whether the market is urban and rural. The distinction
between the same isnt clearly defined which is causing confusion among the channel. There are
differences between the offers that are offered to retailers in different areas. They vary based on
the territory. Allocation of a rural distributors or urban distributors is perplexing.

15

Channel Management at Bharti

Airtel:
16

Since Airtel has an intensive distribution network, proper channel management becomes an
indispensable part of the system. One of the major issues encountered in the channel
management is channel conflict. Channel conflict is behavior by a channel member that is in
opposition to its channel counterparts. It is opponent centered and direct, in which the goal or
object sought is controlled by the counterpart.
Channel conflicts, that mainly result from competing goals of the channel members, different
perceptions of reality, clashes over domains i.e. intra and multi-channel competition, roles
unclarity, expectations divergence, relationship disharmony etc. To avoid these conflicts, Airtel
has adopted a Second and Third Degree Distribution network
Second Degree distribution network:
Company makes invoice of SIMs, PEFs, GSM Pay Phones, RCVs of various denominations
chiefly Rs.10, Rs 30 and Rs. 60 to only Urban Distributors and Rural Super Distributors. Easy
balance is also transferred to only Urban Distributors (UDs) and Rural Supers (RS).
Urban distributors distribute the above items to retailers according to the demand and transfer
easy balance to retailer through FOS (Field Sales Officer) SIM. This is more suitable for the
urban market where demand is obscurely driven.
Third degree distribution network:
RS distributes the above items to Rural Distributors commonly known as RDs and transfers easy
balance into Rural Distributors SIM. Rural Distributor then distribute the above items among the
retailer according to the demand of it and transfer easy balance to retailer through FOS SIM from
easy balance of Distributor SIM. This three level distribution is used to reach to sub urban and
rural areas since there is lesser popular density and large geographical spread that has to be
catered to.
Innovations in Channel Management:

With the drastic improvement in technology, a centralized system can be set up in order
to reduce the number of channel members and the problems accompanying them. This
may lead to improvement in the communication among the channel members.

17

Reduction of the number of methods through which a retailer can recharge his SIM in
order to do recharge/ give service to the end customer. This method would help facilitate
better communication as well as improved monitoring of the business.

ISSUES OF CHANNEL CONFLICT:

Due to lack in channel innovation these are the conflicts that are arising in the channel. The
following also has a list of problems faced due to this conflict
Problem of service gap: Cases have been found where the retailer has run out of its
recharging balance and the balance has not been refilled by the distributor timely. This
may be caused because of the time lag or because of the no credit policy of the
distributor. This however leads to some loss to the company as the customer has to return
back without recharging. This also weakens the companys image in the eyes of the
customer as retailer here acts as the face of the company.
Competition: Due to large number of players, now the retailer has to keep competitor
products as well. However they are unwilling to make extra investment and reduce the
share of each existing company to accommodate the competitor products.
Non-availabilty of particular offers: There have been instances where the company has
announced new offers. However those are not available at the retailers outlet. This may
happen due to lag in information passage from the company to the retailer. This situation
is seen especially in the rural areas where number of retailers is less compared to urban
areas. This may lead to loss of potential customers and ultimately unrest among the
retailers.
Retailers selling SIM Cards at a cost lesser than the MRP: Big retailers who purchase
the SIM Cards in bulk sell the SIM Cards at a cost lower than the MRP. They use the
economy of scale achieved through bulk purchase, reduce money from their commission
and pass on the difference to the end customer. Thus they are able to sell the SIM Cards
at a lower cost then the competing retailer. This leads to unequal sell by the various
retailers.
Old SIM Cards not replaced in time: Once some offer is over, the SIM Cards which
hold that offer has to be taken back by the distributor and replaced by new SIM Cards.
However there have been instances where the distributor is late on completing this
18

activity. This leads to inventory accumulation at the retailers shop which the retailer
cannot sell.

AIRTEL`S ENTERPRISE SERVICES

The company is structured into four strategic business units - Mobile, Telemedia, Enterprise and
Digital TV. The mobile business offers services in India, Sri Lanka and Bangladesh. The
Telemedia business provides broadband, IPTV and telephone services in 94 Indian cities. The
Digital TV business provides Direct-to-Home TV services across India. The Enterprise business
provides end-to-end telecom solutions to corporate customers and national and international long
distance services to telcos. Bharti Airtel offers GSM mobile services in all the 23- telecom circles
19

of India and is the largest mobile service provider in the country, based on the number of
customers. The group offers high speed broadband internet with a best in class network. With
Landline services in 94 cities we help you stay in touch with your friends & family and the
world. Get world class entertainment with Indias best direct to home (DTH) service digital TV
in more than 150 cities Enterprise Services provides a broad portfolio of services to large
Enterprise and Carrier customers. This division comprises of the Carrier and Corporate business
unit. Enterprise Services is regarded as the trusted communications partner to India's leading
organizations, helping them to meet the challenges of growth. Discover the magical experience
of digital enterainment with Airtel. From DVD quality picture and sound,the best and widest
variety of channels and programmes to the best on-demand content on Airtel Live, your tv
viewing experience change forever with digital TV from Airtel!
Bharti Airtel crosses 100 million customers mark New Delhi, May 15, 2009: Bharti Airtel,
Asias leading Integrated Telecom services provider, today announced that it has crossed the 100
million customers mark. This milestone makes the company the 3rd largest single country
mobile services operator and sixth largest in- country integrated telecom operator in the world.
Bharti Airtel is structured into three strategic business units - Mobile services, Telemedia
services and Enterprise services. The mobile business offers services in India and Sri Lanka. The
Telemedia business provides broadband and telephone services in 95 cities, DTH services and
has recently forayed into the IPTV services. The Enterprise business provides end-to-end
telecom solutions to corporate customers and national and international long distance services to
carriers. All these services are provided under the Airtel brand. Airtels high-speed optic fibre
network currently spans over 101,337 Rkms covering all the major cities in the country. The
company has two international landing stations in Chennai that connects two submarine cable
systems - i2i to Singapore and SEA-ME-WE-4 to Europe.
OBJECTIVE: The objective of my project report is to study the reasons of distribution gap in
rural areas and effectiveness of distribution channel in rural areas of Ambah & Porsa.under this
project following points are covered.
Find out the reasons of less number of outlet in rural areas.
Convince the people about airtel schemes and services.
20

 To open new outlets where number of outlets are less than five.
Study the problems of rural retailers.
Convince the rural retailers to provide airtel services who does not provide airtel services.
Marketing strategy in Rural area: In the rural area we face mainly 3 types of customers:

Customers who dont know anything about product : These are the customers who are
willing to buy product or services but they are unknown to them. Although there is a less
percentage of this kind. To attract these customers the role of outlet store or R.D. is

crucial because they will buy what they get from shop.
Aware customers. This category holds the huge percentage. They are not bised with
product and firstly gather knowledge about all available products and services and then

take decision.
Customers showing extra knowledge..... This is the most difficult category to face. These
peoples have their own perception and they are bised towards the product or services. It is
difficult to change there mentality some times.

So in case of rural customer the role and responsibilities of the outlets is different. Sometimes old
relations and the popularity of the seller also plays role. The point is this Outlets are the
businessmen they want to earn money, so they will sell which give them more income. In rural
areas the customer is almost neutral and depend to the outlet, so providing extra benefit to them
will work in increasing subscriber base. The second category which interferes during selling
product or service is old customers. These are the free advertiser of the company, before selling
the product or service their opinion is taken by the seller so satisfaction of old customers is
essential.

FINDINGS:

People in rural areas are not aware about new schemes launched by distributor and

company.
Numbers of retailers are very less in these villages.
Rural distributor set target to retailers.if retailer doesnot sell five sim in a month then
distributor does not provide balance on lampoon sim.
21

Rural distributor doesnot go regularly in villages to provide balance and other services.
Rural distributor does not provide less than 500 Rs recharge on lapoo sim.
People buy small recharge voucher card in villages rather than e recharge. so shopkeeper

in villages sell recharge card while these shopkeepers are not retailer of airtel.
Shopkeepers sell the recharge voucher of Rs.10,25,50 for Rs 11,26,52 respectively .it
means they earn more than 10% on each card sell. while in e recharge they earn only

2.5%. so shopkeepers are not interested to become retailer.

Retailers in rural areas do not submit sim document in time. So company stop services on

sim so people do not buy sim from rural retailers.

Retailers in villages not provide latest scheme to customer. Retailers and customers are

not satisfied with network (signal problem).

We can hardly found posters and glow signboard of airtel at rural retailers shop in rural
areas. Due to less advertisement of schemes in villages the retailers and customers do

not get aware of the new scheme of airtel on time.

Distributors of airtel do not provide any discount to the retailers on purchase.
Two or more rural distributors are working in some areas.
Mostly retailers of rural areas are not well educated so they find difficulty in e recharge.
There are more demands of life time plan but due to congestion in the network,

customers of rural areas do not want to buy it.

Retailers do not get the claim on time.
Retailers do not receive posters, pamphlets, signboard and other accessories related with

new schemes on time.

Rural distributor does not collect documents and other papers on time from retailers.
Distributors provide the balance and recharge voucher to retailers only on cash payment

while distributor of urban areas provide credit facility to retailers.

Another revelation was that customer seemed very peeved with the amounts they had to
pay for local and STD calls. One of the biggest problem in rural areas is low
ARPU.people are not investing money on mobile

22

Suggestions:
The following suggestions are made for Bharti Airtel to increase its customer :
First of all Airtel must improve the efficiency of the network to cater the customer base in
rural areas.
Airtel and its Distributors should advertise the running schemes in villages.
Airtel should properly provide the promotional material and other accessories to the
retailers on time.
Airtel should focus on providing the attractive and competitive tariff plans.
Retailers helpline no. should be improved more so that retailers can take the advantage
of it.
Distributors should provide discount and to the retailers on the bulk purchase so that
retailers can be motivated to sell. There should not be area conflict among the
distributors.
Enhance the relationship between Retailers & Distributor in area to gain the retailers
confidence.
23

 Distributors should take care that the field boys cover all shops (including new shops) in
the market.
As every company is eying towards the rural subscribers competition is increasing constantly.
The only way to cross this is to ensure more reliability and faith in company brand. This can be
done by several ways
To make the brand more reliable and to raise faith on brand company can go for CSR
(Corporate Social Responsibility). As building Bus Stops, by supplying water tanks
(Water is the biggest problem in rural areas in summers), by opening Pyaus, give
signboard near the schools etc.
Plantation is a good idea as this will help protecting environment and a level on tree
guard is the effective advertisement of the company. This type of plantation can also be
done in villages connecting roads.
Low awareness about new product and service is the most difficult problem in rural areas.
People have no knowledge about the new schemes. To make it known to every one some steps
can be taken
Make sure that the R.D.s are trying to show the information on the display boards.
(A display board can be given to every R.D. and big outlets so that they can write
AAJ KA OFFER. Company is doing work in this direction but in ground level
idea is not working because they are not made aware about the benefits of it.)
There is a mentality of rural subscriber that the person who can repair their mobile
phones is the best for getting recharges. Company can invite this kind of
mechanics for training sessions. This will help to increase customers in rural
market.
Any scheme given to the retailers is made available to them in no time so
sometimes they are unable to be beneficial. If they will make known one day
before they get advantage. This is a bigger problem in the rural area because due
to shortage of electricity rural population cannot attracted by electronic
advertisement, so to attract the rural population strong advertisement is strongly
needed.

24

 Advertising is strongly needed in rural areas because in rural area Jo Dikhta Hai
Wo Bikta Hai mentality is still working. (This thing is come in front of me in
case of FMCG products. Shopkeepers told me that several time they face the
problem as Mughe Amitabh Bachchan wala tel chahia, mughe Salman ki
undergarments chahia etc.)

Conclusions:

Bharti Airtels Distribution Network is primarily based on Wholesalers who are carefully
selected on the basis of market penetration. This leads to a limited market as they are not

able to approach newer subscribers especially among the younger lot.

Airtel has also lost a lot of ground to Vodafone which is the leading brand among the
youth who prefer it due to its cheaper call rates, innovative schemes and better

accessibility.
Airtel also charges a relatively larger amount for Internet Usage which is creating a dent
in their appeal to the youth who are primary Internet-savvy and use it more often than
not.However; their recent advertisements have helped them appeal to a wider spectrum of

students.
Their recent foray into the rural market, however looks promising as they attempt to
capture a huge segment of that market. With the recent re-organization which led to
Mr.Manoj Kohli being made the Leader at helm, they are stepping into a new direction.

25

Bibliography:

Marketing Channel Management by Russell W. Mccalley

Marketing Channels by Annie T. Couglan
www.airtel.com
www.tmcnet.com
www.gtms-inc.com
http://www.ossnewsreview.com/telecom-oss/advanced-sales-and-distribution-channelmanagement-stimulates-growth/

26