FT MBA TRIMESTER III 2017

Report on

Analysis of Bharti Tele-Ventures case

For internal assessment in

STRATEGIC MANAGEMENT
 Bharti Tele-Ventures Limited, part of the Bharti Enterprises group, is India's leading wireless
telecommunications provider, with a 25 per cent share of the national market, and market
share of as much as 50 percent or more in the group's target market. Bharti was first to
provide mobile services to India, the first to break the state monopoly in fixed line services,
and the first private sector long-distance operator. Arriving ahead of competitors had helped
Bharti establish leading market positions. Bharti Tele-Ventures is also one of the world's
fastest-growing mobile telephone companies, in part due to the rapid growth of the Indian
cellular market.

Porter 5 forces Model

Threat of
New Entrant
High initial capital investment
required

Bargaining power
Bargaining power
Rivalry of
Customers
Suppliers* Competitors
Low Purchase Power
Control of critical resource Growing industry
Atomized
Monopoly Increased competition
High Price Elasticity
Price war

Threat of
Substitutes
Internet
VOIP systems

*The Govt. of India which is the provider of licence and allocation spectrum is being
considered the supplier

Roadblocks:
Slow take-off: Most users would disconnect the call received on cell phones and call back on
the number through fixed line. This gave consumers the advantage to be able to reach out to
them anywhere however not paying for the same.
Third operator: The state owned fixed line operators (MTNL and BSNL) were allowed to
provide cellular services without a cellular licence. Owing to their huge infrastructure and
capital available they were able to offer rates 40%50% lower than the incumbent operators.

WLL-M Challenge: The Dot allowed fixed-service providers to offer limited mobility
service within their BTS license areas using Wireless Local Loop (WLL).Implementing
WLL-M there was no
impediment to WLL-M being used to provide full-range cellular service, the only limitations
to
WLL-M were regulatory ones that could be eliminated in the future.

Overcoming Challenges:
Bharti realised that the growing competition and uncertain landscape of the telecom industry
needed a well thought out strategy. It was clearly understood that to achieve economies of
scale and to be able to provide services at a competitive price was possible only through
expansion. After getting the licence for Delhi, Bharti bid for several other circles. Bharti was
able to launch services in Madhya Pradesh and Himachal. Though, Bharti wasnt very lucky
in getting bids for various circles initially but later with help of major financing from
companies like Warburg Pincus and SingTel was able to expand into other circles.

Recommendations:
New technologies, increasing consumer interest aid the market growth of telecom sector. A
telecommunication company keen on rapidly adopting new technologies, for example, would
highly benefit from investing in new active and passive networks, spectrum, fiber optics,
submarine cables.
Owing to the recent demonetisation, integrating payment options with call services will help
leverage the current situation, the moment they're introduced in the marketplace, especially if
they speed up service.