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MGT542 – Competitive Strategy

Assignment 5: Case Analysis of Strategic Outsourcing at Bharti Airtel


Ltd.
By Group 4: Khimji Ramdas
Submitted to: Dr. Abrar Ali Saiyed
Date: 31st January 2019

Name Roll No.


Kaushal Shah AU1814012
Shrushti Shah AU1814032
Pankti Thakore AU1814033
Disha Tulsani AU1814052

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Q-1) Activities put under ‘Product Innovation’, ‘Customer Relationship’ and ‘Infrastructure
Management’

The activities that the Bharti Airtel put under the

1) Product innovation
 They were originally into the telecom industry but then with the change in trends and
introduction and the boom of mobile industry they also started providing services for the
same.
 They introduced the optic fiber cables for the long distance and international calls. They
also provided data and voice-line services to the business customers.
 They moved or upgraded from 2G services to 3G services technologies.
 Billing option of post-paid and prepaid services with Blackberry service centers was
available
 Video Conferencing, Facts and data transmission and other services like joke, games,
news and astrology were also provided through their network.
 They provided end-to-end service, broadband, long distance, video conferencing
according to the customers’ requirements.

2) Customer Relationship
 Bharti Airtel understood their market segment and their purchasing power and provided
the services accordingly. For instance they provided $10 service at $4.
 They also provided DSL to homes and business, WIFI, VPN (virtual private network)
and video surveillance.
 They introduced Mobile number portability (MNP)

3) Infrastructure Management
 To plan expand the market telecom circle by building 40,000 new base station from
5000 base stations.
 They participated into i2i undersea cable system in a joint venture with SingTel. This
enhanced their capacity and they constructed SEA-ME-WE4. (Singapore France
Submarine Station)

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 With their mobile network they connected 1400 towns with GSM technology.
 They had problems with the scalability of the IT network.

Q-2) Out of 2 outsourcing proposal should be taken and why?

The 2 proposals that Bharti Airtel has are as follows:

First to collaborate with the equipment vendors

Nokia, Siemens and Ericsson are the vendors of the company and they plan to handover the
hardware deal to these vendor. These vendors have to build-up, maintain and service the telecom
network equipment. Their payment is agreed on the basis of ‘erlangs’ used by the Bharti Airtel
excluding the unused capacity of the network. The ownership of these shall stay with company
and it is supposed to be the contract of 3 years under mutual agreement.
The advantages of this proposal are:
 The payment terms are such that if they do not provide agreed quality of the network than
they would be charged penalties and other wise reward for the better performance.
 Capital Finance that is the major problem for Bharti Airtel shall be financed by the
vendors’
 The maintenance burden shall be shifted from their head.
 Revenue growth by 17%
The Challenges of this proposal are:
 The core-competencies that they have is no longer under their head and would transfer to
the vendors. And so they would be dependent more on the vendors for the thing that they
are specialized in.
 Threat of competition shall be the major threat and also the system time-lag shall be a
major issue.

Second Proposal is to collaborate with IBM for the software deals


IBM will develop, supply and maintain and manage all the IT software for Bharti Airtel and the
revenues shall be shared on a five year contract basis.
The advantages are:

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 New software shall be accessible which shall provide competitive edge over others.
 So operational working shall be performed smoothly.
 IBM being the MNC, company can get advantage and get benefit of the knowledge that
IBM has.
 The growth potential is high in this market and so this shall be an opportunity for the
company.
The challenges of this proposal are:
 Total of 1070 employees shall be brain-drained which shall effect the human potential of
the company.
 The cost of switching shall be really high for the company at the later stage.
 There shall be a cultural shock and change in business environment and eventually they
employees will suffer.

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