Project Report

On
“TELECOM INDUSTRY ANALYSIS”

Submitted to: Submitted By

Mrs. Indrish Kaur madan sharma
( Prof. Business Strategy)
 Certificate

This is to certify that Madangopalsharma,

student of Masters of Business Administration(MBA) at Faculty of Management Studies,
Manav Rachna International University have completed their project report titled
“ANALYSIS OF SERVICES STRATEGY” with reference to “Telecom
INDUSTRY” under my guidance and supervision. The work submitted is
genuine and authentic.

Mrs. INDRISH KAUR

Professor and Project Guide
 ACKNOWLEDGEMENT

Acknowledgement, which itself says that the time has come when a trainee in a project express
his sincere gratitude to all the members who helped him/her for sharing their experiences to
make this a successful project internship.

Sincerely We would like to thank Mrs. INDRISH KAUR, who acted as my guide for this project.
His invaluable guidance and support during the course program is highly appreciated. He shared
his remarkable experiences which result to end of successful closure of my project. The
theme/topic is suggested by him only.

Also, we would like to thank Manav Rachna International University, Faridabad, for his never
say no’ attitude, he also help me in improving my reports and project thesis. His guidance and
encouragement has showed the path for completion of my project successfully.
 INTRODUCTION

Company Profile

Name Bharti Airtel Limited.

Business Provides GSM mobile services in all the 22

Description telecom circles in India, Srilanka, Bangladesh and
now in 16 Countries of Africa.
Provides telemedia services (fixed line and
broadband services through DSL) in 88 cities in
India.
We also offer suite of Enterprise solutions, DTH
and IPTV Services

Established July 07, 1995, as a Public Limited Company

Proportionate Rs. 152,150 million (ended September 30, 2010-

Revenue Audited)
Rs. 103,785 million ( ended September 30, 2009-
Audited)
 As per IFRS Accounts

Proportionate Rs. 51,212 million ( ended September 30, 2010 -

EBITDA Audited)
Rs. 43,007 million ( ended September 30, 2009 -
Audited)
As per IFRS Accounts

Shares in Issue 3,797,530,096 as at September 30, 2010

Listings The Stock Exchange, Mumbai (BSE)

The National Stock Exchange of India Limited
(NSE)

Market
Capitalisation

Customer Base India: 147,626,000 GSM mobile and 3,216,000

Telemedia Customers.
(status as on September 30, 2010)
Africa: 40,082,000 GSM mobile.
(status as on September 30, 2010)

Operational Provides GSM mobile services in all the 22

Network telecom circles in India, Srilanka, Bangladesh and
now in 16 Countries of Africa.

Provides telemedia services (fixed line) in 88

cities in India.

Provides an integrated suite of Enterprise

solutions, in addition to providing long distance
connectivity both Nationally and Internationally.

We also offer DTH and IPTV Services.

Registered Bharti Airtel Limited

Office
(A Bharti Enterprise)

Bharti Crescent, 1 Nelson Mandela Road, Vasant

Kunj Phase II
 New Delhi - 110 070

Tel. No.: +91 11 4666 6100

Fax No.: +91 11 4666 6411

Airtel is one of world’s leading providers of telecommunication services with presence in all
the 22 licensed jurisdictions (also known as Telecom Circles) in India, and operations in
Srilanka, Bangladesh and in Africa. It served an aggregate of 194.8 million customers as of
September 30, 2010; of whom 187.7 million subscribe to our GSM services and 3.2 million
use our Telemedia Services either for voice or broadband access delivered through DSL. It is
the largest wireless service provider in India, based on the number of customers as of
September 30, 2010. It offer an integrated suite of telecom solutions to our enterprise
customers, in addition to providing long distance connectivity both nationally and
internationally. Company also offer DTH and IPTV Services. All these services are rendered
under a unified brand "Airtel".

The company also deploys, owns and manages passive infrastructure pertaining to telecom
operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus
Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive
infrastructure services in India.

Partners

Mobile Services Nokia Siemens, Ericsson, Huawei

Network
Equipment Telemedia & Long Nokia Siemens, Juniper, Cisco, Alcatel
Distance Services Lucent, ECI, Tellabs

Information Technology IBM

IBM Daksh, Hinduja TMT,

Call Centre Operations Teleperformance,
Mphasis, Firstsource & Aegis

Equity Partner {Strategic} Singtel

About airtel:-
Telecom gaint Bharti Airtel is the flagship company of Bharti Enterprise.
Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the frist private
telecom services provider in all the 23 telecom circles.

SBU’s:-
-Mobile service:-Bharti Airtel offers GSM mobile services in all the 23-telecom circles in
India & is the largest mobile service provider in the country, based on the number of
customers.

-Airtel telemedia services :-1)The group offers high speed internet with a best in class

network.

2)Landline services in 94 cities.

-Enterprise services:-1)Enterprise services provides a broad portfolio of services to large

enterprise and a carrier customers. This division comparises of the

carrier and corporate business unit.

2)Enterprise services is regarded as the trusted communications partner.

Taglin
Power to keep

Elite and p

Companies of Airtel

Touch tom
Airtel is a brand of telecommunication services in India operated by Bharti Airtel.

A brief introduction to each of its companies is given below:

1. Bharti Airtel Ltd

Bharti Airtel Ltd is India's leading provider of telecommunications services. The company
has 4 distinct Business divisions - Mobile & telephone services, broadband services, long
distance services and enterprise services.

2. Bharti TeleTech Ltd

Bharti TeleTech Ltd manufactures and exports world-class telecom equipment under the
brand 'Beetel'.

3. Telecom Seychelles Ltd

Telecom Seychelles Ltd provides telecom services in Seychelles, under the brand 'Airtel'.

VISION 2010:-
By 2010 Airtel will be the most admired brand in india:

1)Loved by more customers.

2)Targeted by top talent

3)Benchmarked by more businesses

VISION 2020:-
1)To build india’s finest conglomerate by 2020.

2)Supporting education of underprivileged children through Bharti foundation.

Strategic Intent:-

To create a conglomerate of the future by bringing about” big transformations through brave
actions”.

MISSION:-
“We at airtel always think fresh and innovative ways about the needs of our customer s and
how we want tem to feel. We deliver what we promise and go out of our way to delight the
customer with a little bit more”.
 Bharti Airtel (Mobile Services):-

1)Provides GSM services.

2)Market share of 23% in wireless segment.

3)Provides services in all 23 telecom circles.

4)3rd largest wireless operator in the world.

5) Around 76 million subscriber base.

Strategic Intent

Promise:
“We at Airtel always think in fresh and 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”.

Objectives of the Study

Airtel has set an ambitious target of doubling the subscriber base in next 2-3 years. Through
this study we will understand the strategic position, Strength, Weaknesses, Opportunities and
threats that will play a role in achieving Airtel’s target.

External Analysis
Indian Telecom Sector Analysis.
The Indian telecom Sector has seen a phenomenal growth and currently has close to 525 Million
telecom customers. Indian telecom market is World’s second largest market, second to only
China. However the penetration is one of the lowest in the world.

The India population stands close to 1.2 billion with increasing urbanization and relatively large
young population, which is a major driver for telecom sector. The current Telecom penetration
stands at 44.87% ie 525.65 mn telecom subs which is one of the lowest in the world. The growth
will come from expanding market as well as increased penetration, giving dual advantage.
Growth is expected in Broadband subscribers also as the penetration is just 0.63% 7.40 mn,
which is again the lowest in the world. Government has set a target to reach 20 mn broadband
subscribers by 2010.
India’s Competitive Advantage in Mobile Sector
The Porters Diamond Model below shows the Competitive Advantage of Indian Mobile Sector.
All Five factors namely Government; Firms Strategy, Structure and Rivalry; Factor Conditions;
Related and Supporting Industries and Demand Conditions are Favorable

PESTEL Analysis
Political and Regulatory Issues
Political factors are how and to what degree a government intervenes in the
economy. The unprecedented growth of the Indian telecom industry has been well supported by
the policy reforms. Some of the key Highlights are given belowRegime- Charges have been
rationalized
bile ability are given below:

January 2010
• Proposal to Waiver of License fees in Rural Areas
2009
• Regulatory on Quality of Services for Telecom Sector
• Interconnection Regulation for Broadcasting Sector
• Interconnection Usage Charge Regime-Charges have been rationalized
• Resale of International Private Leased Circuit (IPLC)
• GoM has been constitutes to decide the pricing of 3G Spectrum
2008
• Guidelines for 3G Spectrum Auction issued. Foreign Players allowed to bid.
• DoT issues 121 Letters of Intent (LoIs) for UAS licences
• Guidelines for Mobile Number Portability Services
• DoT allows active infrastructure sharing
2007
• Dual Technology Allowed
2006
• Number portability proposed
2005
• An attempt to boost rural telephony was made
• FDI limit was raised from 49 to 74 per cent
2004
• Intra-circle merger guidelines were established
• Broadband Policy 2004 was formulated to target 20 million internet users by 2010
• 2003
• Calling Party Pays (CPP) implemented
• Unified Access Licensing (UAL) regime established
• Reference interconnect order issued
2002
• ILD services unlocked to competition
• Go-ahead to CDMA technology
• Initiation of internet telephony in India
• Reduction of license fees
 • 2001
• Additional licenses in basic and cellular services
• Reduction of license fee
• Limited launch of CDMA WLL (M)
• Reduction of GSM cellular tariff
• Widening of service coverage by the then players
• Initiation of 3rd and 4th GSM operator networks

The above table from TRAI shows the impact of various regulations on the cost of
services and hence on the subscriber base between 1998 and 2007. The Mobile charges
in India are amongst the lowest in the World due to gradual reduction in the licensing
fees. clearly, the above regulations have helped the Sector to grow, develop and provide
quality service at affordable prices.

ECONOMIC
Economic factors include economic growth, interest rates, exchange rates and the inflation rate.
These factors have major impacts on how businesses operate and make decisions. It is
undisputed that India is a long term growth Story with decent levels of Inflation and GDP. India
is still posting a robust growth of 8 % GDP which is fuelled by the growth in the services and
manufacturing sectors. The telecom is said to contribute to the growth of Economy. And in
India’s case the telecom will continue to play an important role. Hence we foresee that the
Economic factors in India like Growing GDP and disposable income will help in Growth of the
Mobile industry.
SOCIAL
Social factors include the cultural aspects, population growth rate, age distribution, career
attitudes etc.. Trends in social factors affect the demand for a product or a service. Firstly, India
has favorable Social factors with one of the lowest mobile penetration in the second most
populous country in the world. Secondly, 35 % population is below 14 yrs of age which is a huge
future customer base. Thirdly, Urbanization is increasing leading to an increased demand for
connectivity. This also hints that growth in the rural industry can be a good impetus for Growth.

Clearly the Social Scenario is also in favor of the industry.

TECHNOLOGICAL
Technological factors include technological and environmental aspects, such as R&D activity,
automation, technology incentives and the rate of technological change. They can determine
barriers to entry, minimum efficient production level and influence outsourcing decisions.
Furthermore, technological shifts can affect costs, quality, and lead to innovation.

The Indian telecom sector offers unprecedented opportunities for foreign companies in various
areas, such as 3G , virtual private network, international long distance calls, value added
services, etc.

The above diagram shows various Technologies that will provide Growth Avenues in the Mobile
Industry.
3G Services – The New Buzz Word
In the conducive business environment, India Inc. awaits the rollout of
3G services. The global revenue for 3G is 60 per cent higher than that
of other services. India expects to replicate its 2G growth in 3G
services. The Indian market is well poised to leverage the 3G service
offerings in content categories such as sports, games and music.

Worldwide Interoperability for Microwave Access (WiMAX)- Bridge the Digital Divide
Infrastructure Sharing
Optimizing Costs In the midst of the telecom boom, common infrastructure will improve
coverage and quality of calls and reduce costs.
Active Infrastructure sharing has started in 2008 which enables sharing of Antenna systems,
Cables and transmission systems, Backhaul (core infrastructure with switches and networking).

Value Added Service (VAS)

Rolling out of advanced VAS has been possible due to Technological advancement and hence
creating higher value for buyers and sellers.
 Porters Generic St

Narrow
Market
PortersScope
Generic Strategy (C

BROAD MARKET
L
O Broad
Own Tower Infrastructure
W Market
Operator in 23 circles in
Scope
india
C Huge Distribution Network
O Differential
High Customer Base Stra
S
Huge Economy of scale
T Uniqueness
BCG Matrix for Bharti Airte

Stars

Mobile Services

Cows
 PRESENT COMPETITION

National Long Distance

• BSNL, RELIANCE, VSN

International Long Distance

• VSNL, RELIANCE , BS

168 channels,7 movie channels,21 audio channels

Price between Rs 2,490-3,990 (initial payment), Rs 100 for up to 85 channels, Rs
300 for 140 channels
USP: Free gaming portal, multilingual voice-overs coupled with astrological
services and customized sports.
TATA SKY

150 channels
Price: Rs 2,499 for initial installation; Rs 175 for 65 channels, Rs 310 for123
channels
USP : Interactive offering like quiz, story telling, broadcast like shrines and
cooking portals among other offerings

BIG TV

202 channels, 32 movie channels and 10 interactive channels

Price Rs 2,499 for initial installation, Rs 100 for bouquet of 44 channels, Rs 175
for a pack of 101 channels
USP: Movie channels on a monthly subscription, niche channels at low add-on
charges, USB port in the set-top box
SUN DIRECT

110 Channels(initially no Hindi channel)

Initial instalment of Rs.1999 with one year free subscription,Rs.75 per month
Add-ons such as the Hindi package, the kids’ package, or the English movie
package, which cost Rs 20-140 more.
USP: It’s not a rich man’s product. Low cost makes it easily available.

Prasar Bharti owned DTH service which is free to air service which just need an
initial installment to buy set top box.

Market Share of Various Players

PRICING STRATEGY

• No. of channels in the packages and value added services.

• Competitors prices in the market.
• Technology used in the digitalTV service.
• As per the current policy, the total foreign equity including
FDI/NRI/OCB/FII cannot exceed 49% and within this FDI component not
more than 20%,so price has to be kept high for overcoming cost of
expansion and thus price.
• Usage based.
• ARPU is increasing unlike the telecom sectors.
Prepaid and Postpaid user

PostPaid
LATEST 19.7mn
RESULT Q3 FY08/0
23%

Q3 FY 09

CUSTOMERS 88.27 MN

REVENUE $1,983 MN
Detailed Value Chain

NOKIA-SEMIENS NI
(network integrator) BHAR
ERRICSON INFR
(equipment vendor)

Generic Value Chain

CISCO AIR
(ORIGINAL EQUIPMENT (Service
MANUFACTURER2,
ROUTERs, SWITCH LEVEL)

N
INTEL (MV
I
(ORIGINAL EQUIPMENT II
MANUFACTURER1 ,
CHIP LEVEL)
SWOT Analysis Bharti Airtel
Strengths
• Bharti Airtel has more than 65 million customers (July 2008). It is the largest cellular
provider in India, and also supplies broadband and telephone services - as well as many
other telecommunications services to both domestic and corporate customers.
• Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with
whom they hold a strategic alliance. This means that the business has access to
knowledge and technology from other parts of the telecommunications world.
• The company has covered the entire Indian nation with its network. This has underpinned
its large and rising customer base.
Weaknesses
• An often cited original weakness is that when the business was started by Sunil Bharti
Mittal over 15 years ago, the business has little knowledge and experience of how a
cellular telephone system actually worked. So the start-up business had to outsource to
industry experts in the field.
• Until recently Airtel did not own its own towers, which was a particular strength of some
of its competitors such as Hutchison Essar. Towers are important if your company wishes
to provide wide coverage nationally.
• The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal
the lack of any real emerging market investment opportunity for the business once the
Indian market has become mature.
Opportunities
• The company possesses a customized version of the Google search engine which will
enhance broadband services to customers. The tie-up with Google can only enhance the
Airtel brand, and also provides advertising opportunities in Indian for Google.
• Global telecommunications and new technology brands see Airtel as a key strategic
player in the Indian market. The new iPhone will be launched in India via an Airtel
distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions.
• Despite being forced to outsource much of its technical operations in the early days, this
allowed Airtel to work from its own blank sheet of paper, and to question industry
approaches and practices - for example replacing the Revenue-Per-Customer model with
a Revenue-Per-Minute model which is better suited to India, as the company moved into
small and remote villages and towns.
• The company is investing in its operation in 120,000 to 160,000 small villages every
year. It sees that less well-off consumers may only be able to afford a few tens of Rupees
per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.
Evolution of Telecom
Department of Telecommunication(DoT) isthemai
variousregulationsfor theIndiantelecomindustry.

BSNLw
Independent establ
Privateplayers regulator, TRAI, byDoT
wereallowedin wasestablished

National Coverage
ValueAdded
Services

1994 1999

1992 1997

National Telecom
IN
D
A

NTP -99ledto
Policy(NTP)was
migrationfromhigh
formulated
costfixedlicensefee
tolow -costrevenue
sharingregime
Integrated Telecom Comp

 Mobile / Wireless Services

– 2G / 3G
1. Threat from
– Rural Market
Competiti

 Telemedia
Wireles Services
sMarket – Top 4 garnering75%ma

– Fixed Line
– Broadband
– DTH
2. Customer Bargaining

 Lack of differentiation among Se

 Cut throat Competition

3. Suppliers Bargaining
 Low Switching Costs
 Number Portability will have –V
 Businesses & Consumers
4. Threat of Substitutes

 Landline
DIMIN
 CDMA
5. Threat of New Entran
 Video Conferencing

 VOIP - Skype, Gtalk, Yahoo Me

 Huge
 e-Mail &License Fees to be
Social Networking p
Web
period

 Entry of MVNOs & WiMAX

TELECOMMUNICATION INDUS

TELECOMMUNICATION IN

Telecom Industry is in its mature growth

Competitor Analysis

Competitor Analysis
40.00%
35.00%
30.00%
25.00%

AMOU & ARPU Stats

20.00%
15.00%
10.00%
5.00%
0.00%
Bharti Rcom IDEA M

Minutesof Usage per Month– Mobile Services

USA 838
Best OP Margins &
India Net Profit461Margins
China
among
303
Peers

Russia 88
Strategic Group Analysis

Airt

AIRTEL Relia

BSNL,
Resource audit (unique re MTNL
15.00 %

10 %
Human resources
 well defined rewards and recognition syste
IDEA 9.6%
Other – 5%
 Young team - Average age is 26years
O
N
D
G
U
A
R
C
P
E
T

 Employees decide their training needs.

wN

A state-of-the-art learning centre and trainin

B
d
ro
a


practices adopted from British Telecom
 PACE (Progressive Assessment of Culture a
Environment) feedback taken from employe
used for company’s NAstrategy
TIONAL
 Firminfrastructure- CRM tools, MIS, ERP,
equipment for coverage and signal strength,
HRmanagement- IT skilled work force, Te
Customer service & Telesales training, Franch
employees in Mobile services, Owned retail

Technologydevelopment- Creating a 3G
commerce by tie ups with banks and credit
Primary Activities - Analysis
Procurement- Established a SCM network
A
g
e
v
s
c S
p
rtin
u
o

tools, Maintain long term relation with suppl

Inbound Logistics Operations Outbound
Network
Infrastructure 1. NETWORK 1. Sound Di
1. Equipment vendor INTEGRATION
2. Retail ne
2. Equipment 2. SYSTEM acrossIndia
Manufacturer - INTEGRATION prepaid and
Input 3.Process
Routers, Switchlevel O
paid service
3. Equipment INFRASTRUCTURAL 3. Online O
Manufacturer - Chip
Level DEVELOPMENT of VAS
Software and content 4. GSM SERVICES, 4. Update o
•Network
provider VAS , BASE
Infrastructure plan
Infrastructure
1. Software Vendor
Development
Nokia-
Value Chain Analysis –
Conclusions & Recommen

•wide
infrast
Inbound
Logistics
AIRTEL ANSOFF DIRECTI
Operations
PRO
EXISTING
Output
MARKET PENETRATION

“The Airtel Advantage” : 50 paisa / min Call on both Nat

E
Long Distance Calls & Local calls
X
Android
I platformbased HTC
Value Added Services: Airtel Live, Hello Tunes, Marke
Astrolo
mobile
S unique marketing
MT Lowered National & International Roaming Tariff & Plan
strategy
I , low STD rates –
AN
TrendExtensive
setters& Increasing Sales & Distribution channel cover
SCENARIO ANALYSIS