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Telecommunication Industry
The era of telecommunication in India started from the year of 1851 with the initiative
from Government of India near the city of Calcutta now known as Kolkata. However the rapid
growth in telecom industry came into picture after the year of 2002-03 onwards as the more
number of service providers came into existence. Since 2002-03 there is rapid change in the
technology and increase in numbers of subscribers in the Indian telecom industry till now. The
following are the milestones in the Indian telecom industry.
1851 First operational land lines were laid by the government near Calcutta.
1881 Telephone services introduced in India.
1883 Merger with postal system.
1923 Formation of Indian radio Telegraph Company.
1932 Merger of ETC and IRT into Indian Radio and Cable Communication Company.
1947 Nationalization of all foreign telecommunication companies to form the posts,
telephone and telegraph, a monopoly run by the Governments ministry of
communications.
1985 Department of telecommunication established an exclusive provider of domestic
Long-distance services that would be its own regulator.
1986 Conversion of dot into two wholly government owned companies the VSNL for
International telecommunication and MTNL for services in metropolitan areas.
1997 Telecom regulatory authority created.
Indian Telecom Industry Features

Building a modern and efficient infrastructure ensuring greater competitive environment
Strengthening research and development for manufacturing, value added services.
Efficient and transparent spectrum management
To accelerate broadband penetration
Universal service to all uncovered areas including rural areas.
Enabling Indian telecom companies to become global players.
Global Business School | Strategic Management | 1
Major Players in Telecom Industry
Rank Operator Market Share %

1 Bharti Airtel 24.5%
2 Vodafone 19.8%
3 Idea Cellular 15.6%
4 Reliance Communications 14.6%
5 BSNL + MTNL 7.9%
6 TATA 6.9%
7 Aircel 5.5%
8 Uninor 3.6%
9 Others 1.6%
Total 100%
Market Growth

Indian telecom industry is characterized by a large subscriber base, substantial
Teledensity but low revenues per user (ARPU)
Wireless Subscribers (Million)

1000
900
800
700
600
500 934
400 852
300 636
200 427
287
100
0
2008 2009 2010 2011 2012
(Source: Indian Telecom Market Overview Report Nov

2012 Zinnov)
Wireline Subscribers (Millions)

45
40
35
30
25
20 39 38 36 34
15 31
10
5
0
2008 2009 2010 2011 2012

2012 Zinnov)

Revenue of Telecom Industry (USD Billion)
45
40
35
30
25
20 37.4 38.4
32 31.7 33.8
15
10
5
0
2008 2009 2010 2011 2012

2012 Zinnov)
Teledensity in India
90.00%
80.00%
70.00%
60.00%
50.00%
40.00% 73.90% 79.60%
30.00% 56.60%
20.00% 39.90%
28.30%
10.00%
0.00%
2008 2009 2010 2011 2012

2012 Zinnov)

Average Revenue Per User (USD)
7
3 5.9
2 3.8
2.6
1 2.1 1.9
0
2008 2009 2010 2011 2012
(Source: Indian Telecom Market Overview

Report Nov 2012 Zinnov)
Global Comparison of ARPU (USD)

50
45
40
35
30
25 46.5
20
15 32
10
5 8.3
0 1.9
US UK China India

2012 Zinnov)
More than 3-fold increase in subscribers since 2008

High Tele-density of 79.6% in 2012
64.4% of the current subscribers are urban
Indian Telecom ARPU is the lowest amongst the lowest in the world.
ARPU Spending on Voice (USD Bn)

2.5
1.5
1 2.04
1.5 1.44 1.27
0.5
0
2009 2010 2011 2012

2012 Zinnov)
rage Spending on MVAS (Mobile Value Added Service) in USD

0.6
0.4
0.2 0.39 0.48

0.31 0.34
0
2009 2010 2011 2012

2012 Zinnov)

ndian MVAS (Mobile Value Added Service) Market Size (USD B
8
7
6
5
4
6.8
3
5.1
2 4.3
3.1
1 1.9
0
2009 2010 2011 2012 2013 (E)

2012 Zinnov)

Revenue Share of MVAS Categories
Mobile App; 10%
Education; 7%
CRBT; 32%
Games; 8%
Health; 7%
News; 14% SMS Based; 17%

Governance; 5%

2012 Zinnov)
Telecom companies are also aggressively focusing on the fast growing data center market in
India
Data Center Market (USD bn)

7
6
5
4
3 5.8
2 4
1 2.6
1.7
0
2010 2011 2012 2013 (E)

2012 Zinnov)

Cost Components Cost Share
Competitors
Power 38%
Tata Communications
Maintenance 21%
Ctrls
Bandwidth 12%
NetMagic
Equipment 12%
Reliance IDC
Facility 10%
Airtel
Manpower 7%
Wipro
TOTAL 100
Sify

Cost Components
Manpower; 7%
Facility; 10%
Power ; 38%
Equipment; 12%
Bandwidth; 12%
Maintaince; 21%
Telecom Value Chain
GTL - Nokia- Bharti Airtel Company Facebook

Infrastructure Siemens Vodafone Outlet Rediff
Indus Towers Huawei Reliance Dealers
Tata Quippo Ericsson Idea Blackberry App stores
Core IT Requirements of Telecom Industry
Fault Management Finance & Partner Network Service Activation

Config. Management Accounting Management Revenue and Billing
Account Management HR Management
Performance Sales & Operation Supply Chain Customer Analytics
Management Planning Management Contacts Centers/Call
Security Facility Management Centers
DBMS3 Revenue Fraud
Management
PEST Analysis

Political Factors Economical Factors Socio Cultural Technological Factors
Factors
Consumer Money Supply Lifestyle Changes Total Government

Protection Law GDP Trends Career Spending For Research
Government Interest Rates Expectation & Development
Policy Consumer Focus of Technological
Inflation Rates
Antitrust Activism Efforts
Imports
Regulations Growth Rate Of New Products
Price Control
Protection Laws Population Internet Availability
Special
Incentives
Stability Of
Government
Economical Trends
Following are the Economical trends have huge impact on telecommunication Industry
Money Supply
GDP trends
Interest Rates

Inflation Rates
Imports
Price control
Money Supply (Investment from MNCs to Indian Telecommunication Industry)

The Russian government has picked up equity amounting to US$ 670 million-US$ 700
million in Sistema Shyam TeleServices Ltd (SSTL), a joint venture between Russia-based
telecom Sistema and Shyam Group in India. Sistema holds 56.68 percent stake in Sistema Shyam
Teleservice Ltd. Russian Government holds 17.14 percent stake in SSTL.
Norway-based telecom operator Telenor has bought a 60 per cent stake in Unitech
Wireless for US$ 1.23 billion.
Japanese telecom major NTT DoCoMo acquired a 27.31 per cent equity capital of Tata
Teleservices for about US$ 2.6 billion in November 2008.
Bahrain's Batelco has signed a deal to buy 49 per cent in Chennai-based S-Tel, a GSM
service provider, for US$ 225 million.
BSNL, India's leading telecom company in revenue terms, will put in about US$ 1.16
billion in its WiMax project.
After the cancellation of license of Uninor, Its partner Telenor has signed a partnership
agreement with an Lakshdeep Investment & Finance which will contribute 26% in the entity and
will allow Telenor to participate in the forth coming mobile license auction.
Indias GDP
Telecommunication is an enabler of business, an increase in the number of people using
phones results in an increase in GDP. The Gross Domestic Product (GDP) in India expanded to
5.5 percent in the second quarter of 2012 and Telecommunication industry has contributed 13.6
% to the total GDP.

Indias Interest Rate
Rising interest rates have had an adverse effect on telecommunication industry stock
prices. Interest rates rise, the cost of borrowing money rises affecting the telecommunication
Industries profit after tax (PAT). The Interest rate for the year 2012 has remained at 8%.
Imports
Mobile phones shipment to India during the first half of 2012 crossed 10 crore units,
registering a growth of 16.6% over the same period over the previous years, according to Cyber
Media Research (CMR). High number of mobile phones will result in high number of
consumption of mobile simcards which will again result in increase revenue and growth for the
Industry.
India Stock Market (Sensex)
Stocks in India had a positive performance during the last year. India Stock Market
(Sensex) rallied 900 points or 4.61 percent during the last one year.

Price war in Telecommunication Industry
As competition has mounted, the companies' share prices have taken a hit, with market
leaders Bharti Airtel sliding -31.91 percent, Idea Cellular falling -11.57 percent and Reliance
Communications tumbling -28.86 percent in the past one year.
Bharti Airtel
Idea Cellular

Reliance Communication
Technological Factors

Following are the Technological factor trends that have huge impact on
telecommunication Industry
Total Government spending for Research & Development
Focus of Technological efforts
New Products
Internet availability
Total Government spending for Research & Development

Clearing the differences in sec 10AA of the SEZ Act and the union ministers reiteration
on the significance of SEZs will help the Indian telecommunications industry to take forward its
SEZ plans throughout the country.The enhanced deduction from 150-200% is also a positive step
on R&D investment to boost the R&D segment in the country. The estimated budget for telecom
for the year 2009-10 was Rs 16,731 crore, and the revised one was Rs 16,099 crore, for the year
2010.
Focus of Technological efforts

Most Indian service Providers are focusing on 4G technologies to enhance data Rate as
100 Mbs for single users which eventually helping TRAI to generate more revenue .
New Products
Smart Phones (Android OS 4.0, iPhone, Windows) Galaxy Tabs , HSDPA Modem, Black
berry Application are helping service providers to attract more subscribers eventually increase in
market share.
Internet Availability
BSNL, RCOM, Airtel are providing DSL services to rural and urban areas in India. These
services include IPTV, high-definition TV, 3-D TV, video-on-demand, bandwidth-on-demand and
videoconferencing. The service was built on Gigabit passive optical network (GPON) technology
by using Optical N/W.
Political Factors

Following Political Factors have huge impact on telecommunication Industry
Consumer Protection Law
Government Policy
Antitrust Regulations
Protection Laws
Special Incentives
Stability of government
Consumer Protection Law

On September 2009, The Supreme Court stated that Telecommunication complaints
cannot be filed in Consumer Courts, as there is a special provision in Indian Telegraph Act,
Clause 7B. Hence all the Telephone complaints are considered into arbitration rather than
Consumer Courts with the help of Consumer Protection Act.
The customer faced many difficulties by this law as the arbitration was handled by the
Department of Telecom, which was difficult to approach and follow the rules by the customers.
According to the Department of Telecommunication for the past one year there were no
complaints by the customers.
On February 2012, The Supreme Court re-established the Consumer Protection Court
where in The Consumer Protection Act was an additional facility not an alternative one, wherein
the consumer can approach the Consumer Court.
All the Telecom players are licenses not the Telecom Authorities, Hence the Arbitration is
optional for the consumers.
Antitrust Regulations

Is an attempt to shift focus from curbing monopolies to promoting competition. Antitrust
laws are helping in Strategic policing on anti-competition market practices and trends in Indian
telecommunication industry.
2G spectrum scam by Telecommunication ministry

2G licenses issued to private telecom players at throwaway prices in 2008. Spectrum
scam has cost the government Rs. 1.76 lakh crore.
Government Stability and Incentives

Indian Governments stability from last 10 yrs has really helped telecommunication
industry to grow with rapid pace . TRAI had asked the stakeholders to give inputs on various
aspects including barriers in the growth of telecom equipment manufacturing in India; incentive
schemes which can enhance design and development of telecom products; factors affecting the
competitiveness of Indian manufacturers; and methods to boost research and development to
increase telecom related intellectual property from India.
Socio - Cultural Trends:

Lifestyle Changes
Career expectation
Consumer activism
Growth rate of population
Lifestyle Changes
Lifestyle Changes
Fast-changing lifestyles are forcing telecom companies to enlarge the breadth and depth
of their services. Value-added services, such as music downloads, video-on-demand and online
games are gaining currently in India.
Career Expectation
It is predicted that Employment growth in the various occupations in the
telecommunications industry is expected to increase by 7% every year. Indian engineers witness
a huge demand in the International Telecommunication Industry, as they are considered to be
icons of high-tech executives, telecomm technicians, installers, mechanical engineers, telecomm
marketers and desktop support people in Telecomm companies all around the world.
Consumer activism
According to telecom consultant and consumer activist S N Aggarwal, in June, calls
related to telecom hassles touched a high of 39%. The National Consumer Helpline received
1,136 calls with telecom woes, out of a total of 2,914 in June.
Growth rate of population

Indian business model of being profitable despite having the lowest tariff in the world
due to large Telecom density. The big driving factor for the confidence in the growth in telecom
sector is the youth population in India. With around 40% youth population for whom
communication needs are as essential as food and water, this is a huge potential market.

Porters Five Force
Analysis
Threat to New Entrants
Declining ARPU
Access to Optical Fiber
Network
Threat of New Entrants Regulatory Charges
FDI Spectrum Cost
Investment Cost Restriction of operators in
a region
Bargaining power of Rivalry among Existing Players

Suppliers Excessive Competition Threat from Substitutes
FDI Price War Gmail/yahoo mail
Mobile handset Market Share of Competitors Skype
Suppliers MNP Facebook
Different types of Exit Barriers Crowd Call
products Presence of Competitors Way2sms
Spectrum Cost
Bargaining power of Buyers

Customers switching costs
Buyers ability to
backward intergradations
Buyers Information
Product differention
Competition between
Buyers

Threat of New Entrants
FDI
At present 74% to 100% FDI is permitted for various telecom services. 100% FDI is
permitted in the area of telecom equipments manufacturing and provision of IT enabled services.
This has made telecom one of the major sectors attracting FDI in flows in India. The main
Objective of the TRAI to have so much FDI is to encourage competition in the telecom sector
together with better quality and affordable prices in order to meet the objectives of New Telecom
Policy, 1999.
Investment Cost
The cost of active equipment is estimated to be 40 percent of the telecom operator's total
capex, while the balance is accounted for by passive infrastructure. (For example, Bharti has
invested close to Rs. 230 billion to create the cellular infrastructure with 45,000 towers across
the country). Typically, a ground based tower costs Rs. 25-30 lakh. A roof-based tower can be
built for Rs.13-14 lakh. Additionally, cost of maintaining one tower is estimated at Rs. 60,000-
65,000 per month. However, if a telecom service provider decides to rent the passive network
from a tower company than the telecom service provider in that case would need to pay monthly
rent of Rs. 40,000 per tower for passive network and operating expenses close to Rs. 40,000-
45,000 for active network. Furthermore, tower sharing among telecom service providers is just
25% as compared to 90% in the west and some operators are not even willing to share towers.
However, with the recent announcement made by BSNL about leasing its towers which will help
both the older and newer players to penetrate into new markets. Tower sharing makes the
telecom industry moderately attractive for the new players and investors.

Threat to New Entrants
Declining ARPU (Average Revenue per User)

The market is attracting new class of consumers which are mostly rural and their ARPU
is well below Rs 250/- (probably Rs 150 175/-). So, managing bottom-lines at such low levels
of revenue per user will prove to be a challenge for new entrants
Access to Optical Fiber Network

The largest optical fiber has been built by the incumbent operator BSNL who is also the
long distance operator. The private sector players such as Bharti and Reliance have also
constructed optical fiber cable network connecting mainly cities and towns but their presence is
very limited in the rural areas and difficult terrains. Hence it is fairly difficult for new entrants to
lay down optical fiber connecting remote places as well.
Regulatory Charges
The regulatory charges in the telecom sector have a complicated structure because
multiple levies impede the smooth implementation of telecom projects in India. Given the
continuously-declining ARPUs, and the extremely-low tariffs, sustaining the current growth rates
of the industry requires urgent attention towards rationalizing the convoluted tax structure in the
sector.
TRAI has recommended to the DoT committee to phase out the multiple levies in this
sector with a single levy in a phased manner. Further with regard to license fees, which currently
stand at 6%-10% of total revenue, TRAI has suggested that it be reduced at a uniform rate of 6%
across all licenses.

Spectrum Cost
India's highest decision-making body (The Cabinet) fixed the base price for a 5
megahertz (MHz) chunk of radio waves in the 1,800 MHz frequency band at a staggering Rs
14,000 crore. The 1,800 MHz frequency is used by operators who use GSM technology, which
includes most incumbents and a few new players. Players like Sistema, who operate on the
competing CDMA platform, will have to pay even higher to get in: Rs 18,200 crore for 5 MHz in
the 800 MHz band. There is absolutely no rationale to fix the base prices of the auction at such
astronomical levels even if the payout is staggered over 12 years. Federation of Indian Chambers
of Commerce and Industry (FICCI) has criticized the reserve price set by the cabinet for 2G
auction saying it will result in high tariff. The industry body called it anti-consumer.
Restriction of operators in a particular region

The Government has a policy of awarding licenses to only 3-4 operators to carry out
business in a particular circle or region which also acts as a deterrent for a new company which
is trying to enter the industry.

Threat of New Entrants
Threat of New Entrants is low in the Telecom Industry, If any company wants to enter the
Telecom Industry they need to have high amount of capital, and then the companies have to pay
the Spectrum cost in order to carry out their operations. Later only 3-4 operators are allowed to
operate in a circle. With Declining ARPU and Regulatory charges adding more worries to the
new entrants to enter the industry, Threat of New Entrant in Telecommunication sector
remains low.

H ig
h
L o
w Rivalry among Existing Players
Excessive Competition
Another major concern that has come to the forefront in the recent past has been
heightened competitive intensity in the industry that has correspondingly fuelled the price war
between industry players. The Indian wireless market is one of the worlds most competitive
markets, with 12 operators across 23 wireless circles and 6 to 8 competing operators in each
circle Eventually, the competition in the industry is expected to intensify further with the entry of
new players, both domestic as well as foreign players. With the competitive intensity of the
industry already at such high levels new operators might find it difficult to gather significant
Global Business School | Strategic Management 27

share in Indian telecom market. While the new players may benefit from a faster network rollout
through tower sharing, they will face challenges in terms of high subscriber acquisition costs and
lower ARPU customers.
List of Players in the Industry

Rank Operator Market Share %
1 Bharti Airtel 24.5%
2 Vodafone 19.8%
3 Idea Cellular 15.6%
4 Reliance Communications 14.6%
5 BSNL + MTNL 7.9%
6 TATA 6.9%
7 Aircel 5.5%
8 Uninor 3.6%
9 Others 1.6%
Total 100%
(source: bric-spotlight-report-india-
telecom-november-2011)
The high growth rates encouraged the government to allow even more service providers
to enter the industry. In 2008, the Indian government awarded licenses to several new companies,
opening up an opportunity for global companies to gain a foothold in the market. Telenor of
Norway, Sistema of Russia, and Etisalat of the UAE quickly acquired majority control of new
license holders and launched services. To grab market share, the new entrants launched their
services at attractive price points. When the more established players responded with price cuts
of their own, it blew up into a full-fledged price war. The growth in subscriber additions slowed,
the profit margins of even the most established companies in the industry declined and losses
piled up for the new companies. Stock prices of telecom companies, which were investor
favorites for several years, started to underperform.
In 2010, the government invited applications from existing service providers for licensing
additional telecom spectrum for providing high-end 3G services. In a deviation from its earlier
Minimum Full for

practice of fixed pricing Talktime offered
airwave spectrum, by decided
the government the toCompanies
give out the new
licenses on the basis of a competitive auction. The prices quoted by the bidders were several
Tariffs (Minimum Full Talktime)
times higher than the fixed price granted previously by the government for older licenses,
including just a year before in 2009.
Aircel 200
Vodafone 250
Relaince 150
Tata Docomo 200

Price War
The ever-increasing competitive intensity in the sector, with licenses and spectrum in
Airtel 250
several circles allotted to newer operators, is also a concern and could lead to unrealistic pricing
levels to grab subscribers. The pricing strategy of per second billing already has taken the price
IDEA 200
war between telecom operators to the next level. The intensifying price war could put significant
downward pressure on the industry revenue growth. Further, the ongoing price war and the
BSNL 220
concomitant decline in telecom traffic could raise the entry barrier for new companies.

(source: easymobilerecharge.com)
Market Share of Competitors

The Indian telecom Market for the month of July 2012 ended with a subscriber base of
913.49 million. The overall mobile telecom density stood at 75.21% (Urban 157.11%, Rural
39.54%). The Urban to Rural Ratio was 63.37% to 36.63%. Active mobile subscriber base in
June 2012 was 695.82 million which increased to over 698.08 million active subscribers in July
2012. Hence, Indias wireless telecom market has shown a positive growth.
In July 2012, about 4.98 million subscribers submitted Mobile Number Portability
(MNP) requests which are about 0.55% of the total mobile subscriber base in India.

(source www.boneless.in)
Bharti Airtel has strengthened its leadership position with 24.5% market share in India.
Idea has largest proportion of active mobile users at 92.80% followed by Bharti Airtel
(90.46%) and Vodafone (89.16%)
Top 5 players in Indian wireless telecom industry accounts for 82.3% market share in
terms of active subscriber base.
Reliance subscriber base experienced 13.25% decline as the company disconnects 20.48
million inactive customers from its network.
MNP (Mobile Number Portability)

From the above chart its clear that Idea is the leader in terms of MNP with 36,01,099,
closely followed by Airtel with 34,56,655 with third place going to Vodafone with 26,80,438.
According to TRAI; Uninor, Airtel, Idea and Vodafone were the biggest subscriber loser for
the month of August 2012.
Uninor lost 23,83,031

Airtel 19,02,683
Idea 16,46,783
Vodafone 15,59,538
The decline in the user base of the country is due to large scale
disconnections of non active subscribers by many operators.
(Source - http://telecomtalk.info/india-mobile-subscriber-base-declines-august2012-
gsms-biggies-airtel-idea-cellular-vodafone-losses/100942/)
Exit Barriers

Telecom is a capital intensive sector with sunk costs. The production of an additional
minute of wireless call costs virtually nothing, most of the cost being upfront investment in
expensive equipment deployment.
But in India exiting the Telecom industry is quite easy there are no restrictions in India as
per the Indian Telecom regulator (TRAI) but the entry fees paid by them will not be refundable.
Operators intending to exit the business can surrender their license giving at least 60 days notice.
TRAI directs licenses to maintain the Quality of Service (QOS) even during the period when
notice for surrender of license is pending.
Spectrum/Infrastructure can be traded/sold to other players in the industry.

Compensation is also paid, if the Regulator or the Government is responsible for the
failure.
Improved labor and Forex laws help the companies to release the employees easily
Presence of Competitors in each Region

With 3-4 players operating in same region, cut throat competition can be seen seen
among the competitors.
3G Network Map of India
(Source: http://sharepress.org/3g-
circles-in-india.html)
Rivalry among existing players

In the traditional economic model, Competition drives profit to zero, but players in the
telecom industry strive for competitive advantage. The number of business units operating within
a particular industry indicates the rivalry among them. If the number of business operating
companies in a particular industry is small it means that the rivalry among them will also be low.
But in case of Telecom industry with 10-12 players operating in the industry the rivalry is very
high. Each operator is trying to grab the maximum market share with unrealistic pricing to grab
the customers and they even try to woo the customers of other operators into their network with
Mobile Number Portability. Hence Rivalry among Existing players is very high in
telecommunication industry.
H ig
h
L o
w
Bargaining power of Buyers

Customer Switching Costs
The cost of new connection is very low, or one can say new connections are available for
free. Moreover, with the introduction of mobile number portability switching has become all the
more easier. Some operators have estimated the charges can be as low as Rs. 20. The TRAI
statistics for May 2010 shows subscriber switching capacity of 20% with a yearly growth rate of
12.75%. This factor gives new entrant and investors a reason to entry this industry.
Buyers' ability to backward intergradations
Not much intermediaries between the producer and the consumers. High Investment
required for backward integration which is less likely to occur. Hence no backward
integration in this case.
Information to Buyers

With large scale print and video advertising, and Big celebrities like Anushka Sharma
(Reliance), Abhishek Bachan (IDEA), Ranbir Kapoor (Tata Docomo), A.R Rahman (Airtel)
buyers are well informed about the latest updates of the products with better offerings in
Urban as well as in Rural areas. The official websites of the players in the industry also play a
major role in keeping the buyers informed.

Product differentiation
Airtel, Reliance, Idea and all other companies have similar prices for similar
products and less likely for anyone to maintain product differentiation and hence buyers
have the option to switch over.

1GB Data Packs of various Companies
TATA Docomo
BSNL
Aircel
IDEA
Vodafone
Relaince
Airtel
0 50 100 150 200 250 300
(source:
http://im.tech2.in.com/gallery/2012/may/3gplans_311641209465.jpg)
Competition between buyers

The individual buyers don't have any competition among themselves but Big
Organizations like IT or banks do have. Enterprise customers generate major part of the
revenues for any telecom companies like Reliance, Airtel or Idea which means higher buyer
power. But this is not significant for those who deal with individual customers

Bargaining Power of Buyers
The power of buyers is the impact which customers have on any industry. In case of
Telecom industry Bargaining Power of Customers is high with low switching cost customers can
switch from one operator to another. Also there is a little product differentiation between
operators, If one operator introduces a new scheme then within few days the same kind of
scheme is offered by rival operator. With companies providing information to buyer through
advertising and keeping them up to date. Bargaining Power of Buyers is high in
Telecommunication Industry.
H ig
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L o
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Bargaining Power of Suppliers
FDI
For manufacture of Telecom Equipments - FDI up to 100% is allowed through automatic
entry route. Attracting more foreign investments and providing excellent opportunities for
domestic as well as foreigners in manufacturing sector.
No industrial license is required for setting up manufacturing units for telecom equipments.
The last few years saw many renowned telecom companies setting up their manufacturing base
in India.
Nokia and Nokia Siemens Networks have set up their manufacturing plant in Chennai.
Ericsson has set up GSM radio Base Station Manufacturing facility in Jaipur.
Motorola, Foxconn has set up large manufacturing plants in Chennai. Elcoteq has set up
handset manufacturing facilities in Bangalore.
LG Electronics has set up plant of manufacturing GSM mobile phones near Pune.
Ericsson has launched their R&D Centre in Chennai. Flextronics has set up an SEZ in
Chennai.
A large number of companies like Alcatel, Cisco have shown interest in setting up their
R&D centers in India.

As far as telecom industry is concerned, its a service based industry which is intangible,
Therefore the role of suppliers will be very minimum. Some of the suppliers are
Mobile Handset Suppliers: There are many handset suppliers in the market, some of
them are Nokia, Samsung, Sony, Spice, Micromax, Karbonn etc.
Company Market Share

Nokia 38.2%
Samsung 25.3%
Micromax 6.3%
Blackberry 4.7%
Karbonn 4.3%
HTC 3.0%
Spice 2.5%
LG 2.5%
Hwawei 2.4%
GFive 2.1%
Others 8.7%
Market Share of Mobile handset Companies in India

45
40 38.2
35
30 25.3
25
20
15
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10 6.3 4.7 4.3 3 2.5 2.5
5 2.4 2.1
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Market Share of Mobile Handset Companies in India
Revenue generated by various Companies through operations in India

Company Revenue in Revenue in Change in % Change in

2010-11 2011-12 Revenue Revenue
Nokia 12929 11925 -1004 -8.41%
Samsung 5720 7891 2171 27.5%
Micrmax 2289 1978 -311 -15.72%
Blackberry 1950 1460 -490 -33.56%
Karbonn 1004 1327 323 24.34%
HTC 450 923 473 51.24%
Spice 920 790 -130 -16.45%
LG 1834 780 -1054 -135.12%
Hwawei 626 750 124 16.53%
GFive 1326 670 -656 -97.91%
Graphical Representation of the above data
Chart Title
2500
2000
1500
1000
Axis Title 500
0
ax
i
n
ia
we
on
ic
ok
Sp
wa
rb
N
ro
-500
Ka
H
ic
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-1000
-1500
(
(source - http://timesofindia.indiatimes.com/tech/itslideshow/14804339.cms)
Optic fiber and Aluminum - other Suppliers in the industry are Optic fiber and
Aluminum.

Companies producing different types of Telecom products
(source:
http://dir.indiamart.com/industry/telecom-products.html)
Software Companies - Software assistance, where players can have edge over others.
The major software providers are TCS, Infosys, Wipro and Satyam. Big players like
Reliance and Tata have their own software solution department.
Spectrum Cost

In order to opearate or provide services in any of the circles in the country, a service
provider has to have a licence which is provided by the Department of Telecommunication
(DoT) at the time of auction.
Although the reserve price for auction is already has been set by the Cabinet before the
auction takes place. The DoT(Licence Provider) or the Supplier in our case has No or little
power. Reasons being:
Players in the market wont bid if the reserve price set is too high. In case of 2012 2G
auction the reserve price which was set by the Cabinet was at staggering 14000Cr, which
was too high according to the experts in the market. The reserve price of 2G was 4 times
higher than the 2010 3G reserve price.
High Spectrum cost will attract less numbers of bidders. No of Companies participated in
2G auction 2012 were:-
1. Airtel
2. Idea
3. Vodafone
4. Videocon
5. Telewings Communication
2008 (2G Spectrum Auction)

If the Telecom Minister is corrupt like A. Raja who dished out specctrum in 2008 auction,
when he provided the licenses for a mere 1,659 crore when the price proposed to the telecom
companies was a minimum of Rs 3,622.2 crore for every unit of 2G Spectrum. This will weaken
the supplier power because of the corrupt officals.
2010 (3G Specturm Auction)

In 2010, 3G auction Government kept a reserve price of 3500 for four 3G licenses and
expected to generate 25000 crore from the auction.
The 3G licences were auctioned in a highly competitative bidding. The Government
earned a revenue of whooping Rs 67,719 crore from the auction.
Reasons for such unexpected revenue?

Low reserve price.
More number of players participated in the auction
1. Airtel
2. Aircel
3. Idea
4. Reliance
5. S Tel
6. Tata
7. Vodafone
Apart from the above state owned BSNL and MTNL were also awarded licence, although
they did not participated in the auction. Both these state-owned operators were given a head start
by the government in the 3G space by allotting the required 3G spectrum, on the condition that
each would pay an amount which would be equivalent to the highest bid in the respective service
areas as and when the 3G auctions took place. BSNL paid the Indian government Rs10,187
crores for spectrum in all 20 circles it operates in. State-owned MTNL provides 3G services in
the other 2 circles - Delhi and Mumbai.
The auction took place over 34 days and consisted of 183 rounds of bidding. The most
expensive telecom circle was Delhi at a price of Rs3316.94 crore per operator. The five most
expensive circles were Delhi, Mumbai, Karnataka, Tamil Nadu and Andhra Pradesh. They
accounted for 65.56% of the total bids.

Table Showing Circles won by various companies during 2010 3G Spectrum
(source -
http://en.wikipedia.org/wiki/Indian_Telecom_Spectrum_Auction)

2012 (2G Specturm Auction)
The auction took place for just 2 days and consisted 14 rounds. The bids received were
worth Rs 9,407 crore far lower than the target of 28,000 crore. Out of 144 circles of spectrum on
offer, 101 got bids. Delhi, Mumbai, Karnataka and Rajasthan circles did not receive any bids.
Players which participated in the auction were Airtel,Idea,Vodafone,Videocon and Teleswings
Communication
Table Showing Circles won by various companies during 2012 2G Spectrum
(source -
http://en.wikipedia.org/wiki/Indian_Telecom_Spectrum_Auction)

Overall, from the above we can conclude that Although spectrum cost is decided by the
Cabinet/TRAI the bidding which takes place at the time of auction lies in the interest of the
market players. If there, are more number of competitiors and the bidding is likely to be
competitive. The exixting market players are more likely to be aggressive and more focused
about their bids.
Therefore, Spectrum cost will provide a little or No Bargaining to suppliers as its fully
driven by the bidders in the auction.

b
A
C
m
p
S
w
fclsL
toF
vu
R
H
an
erB
igh
y
P
Model showing how Low Cost Spectrum can provide High Bargaining power
to Suppliers

Bargaining Power of Suppliers
Similar to buyer power, Suppliers also exert pressure on companies. The main raw
materials for the telecom industry are the telecom equipments, telecom tools, telecommunication
products, circuit breaker, electric cables etc. With thousands of companies producing these kinds
of products within India and Mobile Handsets companies having No or little impact on Telecom
players. Spectrum Cost is the only thing that the companies need to worry about, keeping
Bargaining Power of Suppliers at low.
H ig
h
L o
w
Threat of Subsitutes

Threat from subsitutes is relatively very low as they dont provide the mobility as the cell
phones or telecom providers do. Above are the few examples.
Yahoomail: Yahoo mail offers free email with unlimited mail & photo storage, includes spam &
virus protection, chat & free text sms from your inbox
Gmail: 10+ GB of storage, less spam, and mobile access. Gmail is email that's intuitive,
efficient, and useful. And maybe even fun.
Facebook: Facebook is a social utility that connects people with friends and others who work,
study and live around them. People use Facebook to keep up with friends and relatives.
Way2sms: India's First web to mobile Free SMS site, wherein messages can be send to any
network free of cost.
Crowd Call: Crowd Call is basically a new and secured concept for conferencing your
friends or business clients right from your smart phone. With Crowd Call you get 10
free calls/day to call over 40 countries worldwide. There is no time limit for any call 1
call can be as long as you want and the person you are going to call does not need to
have any app installed in his phone, he just needs to have a valid phone number and he

can be invited into conference. The only thing you need is an iPhone or Android
device installed with the Crowd Call app and rest part is covered by crowd call itself,
the other party do not need to have any app installed but just a regular number and
they receive your call right by your own number. You get 10 free calls per day which
you can use to call over 40 countries, on iPhone at a time you can select 2 person to
call together and after the call is connected you can again minimize the call and call
another two persons and merge call together for free 5person conference call.
Threat of Subsitutes
Threat from subsitutes is relatively very low as they dont provide the mobility as the cell
phones or telecom providers do. For instance if a person who wants to speak to any person would
make use of cell phone rather than logging into his skype account and making call from there.
Therefore Threat of Subsitutes in telecom industry is very low.

H ig
h
L o
w
Bharti Airtel
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 fourth 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 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 network
base stations, microwave links, etc.is maintained by Ericsson, Nokia Siemens
Network and Huawei, and 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.
HISTORY

Sunil Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first in
India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the early
1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless
telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In 1995, Mittal
incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In
1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired
control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In
2000, Bharti acquired control of Skycell Communications, in Chennai.
In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went
public in 2002, and the company was listed on Bombay Stock Exchange and National Stock
Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel
brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In 2005, Bharti
extended its network to Andaman and Nicobar. This expansion allowed it to offer voice services
all across India. In 2009, Airtel launched its first international mobile network in Sri Lanka. In
2010, Airtel acquired the African operations of the Kuwait based Zain Telecom.In March 2012,
Airtel launched a mobile operation in Rwanda. Today, Airtel is the largest cellular service
provider in India and the third largest in the world.
Corporate structure
Airtel's initial corporate structure concentrated on the hierarchy of the operations inside
the company as a whole. The structure depicted the corresponding operation/region of different
in-charges and it didn't hold anyone responsible for each of its services. So, the company found it
better to restructure its corporate hierarchy. The transformed organizational structure has two
distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer)
and B2B (Business to Business) segments. Bharti Airtel's B2C business unit will
comprehensively service the retail consumers, homes and small offices, by combining the
erstwhile business units - Mobile, Telemedia, Digital TV, and other emerging businesses (like M-
commerce, M-health, M-advertising etc.). The B2C organization will consist of Consumer

Business and Market Operations. The organization has changed the style of the company as the
company do not have any brand logo till the time.
Mobile Services
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.
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 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, Ericsson 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. 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
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.
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. 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 fixed line services under a common brand airtel. As of September 2012, Airtel
provides Telemedia services to 3.3 million customers in 87 cities, of which 1.4 million have
subscribed to broadband/internet services.
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.
In May 2012, Airtel Broadband and some other Indian ISPs temporarily blocked file
sharing websites such as vimeo.com megavideo.com, thepiratebay.se etc. with out giving any
legal information to the customers. The block was due to a Madras High Court issued John Doe
order taken by Chennai-based Copyright Lab. In response to a petition filed by Vinay B, a
resident of Shimoga, Karnataka, the District Consumer Disputes Redressal Forum ordered Airtel
to pay 20,000 to the petitioner for "deficiency in internet service" thereby causing mental agony
to the complainant. By misinterpreting the Madras High Court order, Airtel blocked entire
websites. It is needless to say that the companys actions amount to deficiency in service as well
as unfair trade practice, said the forum
Chairmans speech of Bharti Airtel
At the industry level, telecom is in the midst of a tectonic shift. Data is clearly the future
of mobile telecom and Airtel is gearing itself up for this. New generation mobile technologies
with much faster data capabilities are steadily taking root, opening up mind-boggling
possibilities in new service areas like healthcare, banking, commerce and education.
During the year, Bharti Airtel led from the front as it systematically rolled out 3G
network, across India, making Airtel the most robust network in the country.

Airtel also launched 3G networks in seven African markets. Airtel Launch of 4G services
in April 2012 marked another watershed for the Indian telecom industry. This is the first
technology platform that India has launched simultaneously with its global release, helping move
the Indian telecom industry to a global standard.
Airtel Money was a distinctive service Launch for them during the year in India and
eight other African markets.
Besides being the first of its kind, M-commerce service offered by an operator in India, it
is also Indias first mobile- based service to offer instant money transfer.
Cancellation of several 2G licenses allotted to other telecom operators by the Hon'ble

Supreme Court was one such significant event. The issue of pricing of 2G spectrum in India is
however still hanging fire.
Airtel reconnecting with its prime target audience - the youth - with a path breaking brand
campaign in India Har Friend Zaroori Hai. The campaign had a universal appeal and
resonated deeply among the target segment.
The other major youth related theme that Airtel developed across all our operations was
that of sports. While it introduced Formula One in the Indian sub-continent, in Africa, Airtel
connected with youth through Airtel's Rising Stars program for football enthusiasts.
VISION
By 2015 Airtel will be the most loved brand, enriching the lives of millions.
Enriching lives means putting the customer at the heart of everything we do. We will
meet their needs based on our deep understanding of their ambitions, wherever they are. By
having this focus we will enrich our own lives and those of our other key stakeholders. Only
then will we be thought of as exciting, innovation, on their side and a truly world class company.
MISSION
Recruit & Maintain Caliber Working Staff
Provides Customer Specific Software Solution
Continues Improvement in Software Quality
Not remain as Only Software Solution Provider, but be as Continues Service Provider
To empower stakeholders in services and inventories to deal with associated
QUALITY POLICY
We will deliver error free service to our customer by doing our jobs right and first time
every time.
PORTER 5 Forces Model Analysis
Porter 5 Forces Model

Bargaining Power of Buyers (High) Low switching costs for buyers
Huge competition between the
existing players in the market.
Bargaining Power of Suppliers (Low) Large pool of suppliers in the
market
Have access to other countries
supply
Industry Rivalry (High) Players like Vodafone are big
competitor
Existing Players are also eating up

the market share
Threats of new Entrants (Low) Not easy to match Airtels
distribution network and marketing
know how
Threat of Substitutes (Low) Threat is less as substitutes have
less mobility
Hig
h
Low ISSUE PRIORITY MATRIX
BHARTI AIRTEL
Probable Impact on Corporation

HIGH MEDIUM LOW
Antitrust New Products Price control

Regulations
HIGH
Focus of Government Special Incentives

Technological Policy (b)
MEDIUM efforts
Government Protection Laws Protection Laws

Policy (a) (a) (b)
LOW
Antitrust Regulations (High High)

Bharti Airtel are in trouble ahead with Telecom Commission recommending that they
would have to give up the entire 900Mhz band of Spectrum(being used for 2G services, which
gives wider coverage) they hold when their licenses come up for renewal in 2014. In order to
continue operations, Bharti would have to compete with other players in fresh auction for this
band of spectrum. Bharti Airtel & Vodafone hold over of the superior 900 Mhz spectrum.
New Products (High Medium)
Airtel began taking preorders for Apples much awaited iPhone 5S ahead of its retail
debut on November 2nd 2012. iPhone supports Nano Simcard which will be available in all Airtel
Stores with effect from 2nd November 2012. Bharti will provide attractive tariff schemes and free
minutes for the iPhone. It will be a unique advantage to customer who opt to buy the gadget from
them, as Ebay & Olx.in are selling the iPhone in black market for 58000/- for 16GB and
1,06,000/- for 64GB where as Airtel will be providing the same Phone for 45000/- 16GB and
59,500/- for 64GB. Airtel has also come out with five monthly plans at discounted rates for its
post-paid customers buying iPhone 5.
Price control (High low)

Bharti Airtel will bid for 5 Circles, Bharti will not bid for circles where they are already
in comfortable position and will be instead planning to fill in gaps in their coverage. Airtel
deposited 102.75 crore in advance for the 2G auction indicating to bid in a maximum of 5
circles.
Focus of Technological Efforts (Medium High)

Airtel which had bagged the 4G spectrum in four telecom circles in Kolkata,
Maharashtra, Punjab and Karnataka has launched its 4G services in Kolkata and Bangalore and
enjoys the monopoly in this market. Other players are yet to launch 4G services in the market.
4G has 4 times more speed than 3G.
Government Policy (b) (Medium Medium)

Government has constituted a six member group to consider various issues arising out of
ban on bulk Short Messages Service (SMS) and Multimedia Message Service (MMS) because
the Government has received representation from association of the deaf and others opposing the
citing difficulties faced by them while communicating. If the TRAI lifts the ban on 100 SMS per

day then there will reduction in the revenue of the Airtel, as earlier Bharti used to charge
0.50ps/per SMS after 100 SMS/per day.
Special Incentives (Medium Low)

Telecom regulator TRAI approved a hike in processing fee for all mobile recharge
coupons priced above Rs 20/- but has left it unchanged for the vouchers below that. The
Authority has decided to increase the ceiling on Processing Fee on Top up vouchers to Rs 3/-
from Rs 2/- in respect of Top-up vouchers having maximum retail price of Rs 20/- and above.
The order will affect 90% of the prepaid users. Bharti telecom with its 20.67% market share will
generate more revenue from this decision.
Government Policy (a) (Low High)

As a result of the high base price of spectrum for the upcoming auctions, call rates will
rise by 30-40 percent. Base price of Rs 14,000 crore for 1800Mhz band and Rs 18,200 for 800
Mhz based on the recommendations made by sectoral regular TRAI. This will affect the market
share of Airtel as their tariffs are already priced high compare to its competitors and they face
huge competition in the 2G segment.
Protection Laws (a) (Low Medium)

Notices are to be issued to telecom firms asking them to stop 3G roaming service outside
their licensed area with immediate effect as the government was losing revenue because of their
agreements. Airtel who paid 12,295 crores for spectrum in 13 circles, the largest spender in 3G
auction in 2010 is likely to be impacted more than its competitors.

Protection Laws (Low Low)
Airtel faces the largest number of complaints among all the operators for rejecting MNP
requests by its subscribers. It has been accused of violating and deviating from compiling with
MNP regulations (denying the ID proof such as Aadhar Card and Voter ID)
EFAS of Airtel (Opportunity)
Opportunity Weights Rating Weighted Score Comments

Indias GDP 0.02 2 0.04 More number of people will opt
for mobile services if income
increases.
Imports 0.06 2 0.12 Increase in number of Mobile

phones will lead to increase in
subscribers.
Technological 0.16 3 0.48 Airtel operates in eleven 3G
Effort circles, with four 4G circles but
still huge market to cover.
New Products 0.09 3 0.27 Airtel has come up with iPhone
5S, 3G & 4G data card.
Internet 0.06 3 0.18 Airtel is present in Data card as
Availability well as broadband.
Lifestyle 0.10 2 0.20 Airtel keeps on coming with new
Changes campaign depending on the
changing lifestyle of the people.
The latest campaign Jo Tera Ha
voh Mera Hai
Growth Rate 0.04 3 0.12 Airtels market leadership will
of Population provide the benchmark to
capture new market.
EFAS of Airtel (Threats)
Threats Weights Rating Weighted Score Comments

FDI 0.06 3 0.18 Airtel can compete with the
foreign players on pricing and

service basis.
Price War 0.16 4 0.64 More number of players will
lead to high bargaining power of
the buyers.
Interest Rates 0.09 4 0.36 Airtels expansion/acquisition in
other countries will come at a
cost. If the cost of borrowing is
high. This will result in reduce
PAT.
Consumer 0.07 1 0.7 As Airtel has the highest number
Protection of consumer complaints,
Consumer Protection law may be
Law
a concerned.
2G Scam 0.09 2 0.18 Company name may come under
scam.
Total 1 3.41
Airtel's EFAS
2G Scam; 9% GDP; 2% Imports; 6%

Consumer Protection Law; 7%
Technological Effort; 16%
Interest Rate; 9%
New Products; 9%
Price War; 16%
Internet Avalability; 6%
FDI; 6% Growth Rate of population; 4% Lifestyle Changes; 10%

IFAS of Airtel (Strengths)
Strengths Weights Rating Weighted Score Comments

Market 0.12 4 0.48 With a market share of 24%,
Leader Market leadership is Airtels
major strength.
Strategic 0.1 3 0.30 Strategic shareholders provide
Stakeholders the much needed innovations
and ideas to survive in the
(Sony, Nokia,
market.
Erikson)
Brand Name 0.09 3 0.27 Being the oldest player in the
market for more than 15 years.
Airtel is duly recognized by its
Brand name.
Strong 0.1 3 0.30 Changing Advertising campaign
Advertising & according to market trends and
targeting the youths is the new
Celebrity
way Airtel has managed to hold
Brand the top position in telecom
Ambassador market.
Wide 0.1 3 0.30 Wide customer base brings in
Customer high revenue.
Base
Monopoly in 0.11 4 0.44 Presence of 4G in 2 out of 4
4G circles, while the other players
are yet planning to enter.
Presence in 0.07 3 0.21 Global business as Airtel is
more than 20 present in developing economies
of the world.
countries
Other Brands 0.05 2 0.10 Its a conglomerate with
likes Airtel TV presence in telephone devices
and the has market share of 14%
& Beetel
in the emerging DTH industry.
High ARPU 0.06 3 0.18 Airtel has a high ARPU
compared to its competitors in
the market.

IFAS of Airtel (Weakness)
Weakness Weights Rating Weighted Score Comments

Untapped 0.15 4 0.60 Mobile penetration is only half
Rural Market in India. Signaling possible
opportunity for Airtel.
Customer 0.05 3 0.15 Airtel has most number of
Complaints customer complaints, signaling
weak customer service provided
are higher
by the market leader.
according to
TRAI
Total 1 3.33

IFAS of Airtel
Customer Complaints; 5%
Market Leader; 12%
Untapped Rural Market; 15%
Strategic Stakeholders; 10%
High ARPU; 6%
Brand Name; 9%
Other Brands; 5%
Presence in more than 20 Countries; 7%

Strong Advertising; 10%
Monoploy in 4G; 11% Wide Customer Base; 10%
SFAS OF AIRTEL
Strategic Weights Rating Weigh Duration Comments
Factor ted
S M L
Score
Market 3 0.21 More number of people will opt
Leader 0.07 for mobile services if income
increases.
Strategic 0.09 3 0.27 Strategic shareholders provide the
Stakeholde much needed innovations and
ideas to survive in the market.
rs (Sony,
Nokia,
Erikson)
Monopoly 0.11 3 0.33 Presence of 4G in 2 out of 4
in 4G circles, while the other players are
yet planning to enter.
Untapped 0.15 4 0.60 Mobile penetration is only half in
Rural India. Signaling possible
opportunity for Airtel.
Market
Technologi 0.16 3 0.48 Airtel operates in eleven 3G
cal Effort circles, with four 4G circles but
still huge market to cover.
New 0.09 3 0.27 Airtel has come up with iPhone
Products 5S, 3G & 4G data card.
Lifestyle 0.08 2 0.16 Airtel keeps on coming with new
Changes campaign depending on the
changing lifestyle of the people.
The latest campaign Jo Tera Ha
voh Mera Hai
Price War 0.16 4 0.64 More number of players will lead
to high bargaining power of the
buyers.
Interest 0.09 4 0.36 Airtels expansion/acquisition in
Rates other countries will come at a cost.
If the cost of borrowing is high.
This will result in reduce PAT.
TOTAL 1.00 3.32

SFAS of Airtel
Interest Rates; 9% Market Leader; 7%
Strategic Shareholders; 9%
Price War; 16%
Monopoly in 4G; 11%
LifeStyle Changes; 8%
New Products; 9%
Technological efforts; 16%

TWOS of AIRTEL
STRENGTHS WEAKNESS
Internal Factor Analysis
IFAS Market Share Untapped Rural
Brand Name Market
Strategic Stakeholders Customer
Monopoly in 4G Complaints are
External Factor higher according to
Analysis TRAI
EFAS
Opportunities Strength/Opportunities Weakness/Opportun
ities
Untapped Rural
New Products / Brand Market /
Technological Effort Name
New Products Technological
New Products / 4G
Lifestyle Changes Efforts
Lifestyle Changes /
Customer
Strategic Shareholders
Complaints / New
Products
Threats Strength/Threats Weakness/Threats
Price War Market Share / Price War

Interest Rates Brand Name / FDI Untapped Rural
FDI Strategic Shareholders / Market / Price War
Interest Rates

STRENGTHS / OPPORTUNITIES
New Products / Brand Name

Bharti Airtel coming up with new products with the Brand Name would help their
products to move in the market very easily.
New Products / Monopoly in 4G

Airtels monopoly in 4G will help its 4G products to grab new market share.
Lifestyle Changes / Strategic Shareholders

Bhartis Strategic Shareholders (Nokia, Erikson) will provide the benchmark for Airtel in
order to adapt new strategies and to bring about changes according to the Lifestyle of the people.
STRENGTHS / THREATS
Market Share / Price War

Airtels huge market share will provide the base as it goes into Price War against its
counterparts. With high market share Airtel can generate economies of scale and thus can survive
in the market.
Brand Name / FDI

Bhartis Brand Image will help it to overcome the competition from Foreign players.
With Bharti understanding the behavior of the people in domestic market, it will certainly
provide an edge over the foreign companies entering the domestic market.

Strategic Shareholders / Interest Rates
Every company wants to expand or grow in one or the other way. Hence in order to
expand into different geographical locations companies will need capital. The same is with
Airtel, It will need capital or Debt in order to funds its growth strategies. Here the Strategic
Shareholders will help in getting the debt easily or at lower rates making expansion less cheaper
and fruitful.
(Note: In case of already listed Companies like Airtel, these Companies will go for Debt
financing rather than equity. As equity financing will be costly and will again generate more
number of shares, sending a negative signal among the shareholders and will also have a
effect on the share price of the company)
WEAKNESS / OPPORTUNITIES
Untapped Rural Market / Technological Effort

Airtels vast growth in technology with the introduction of 4G recently and strong footing
in 2G and 3G. Bharti will certainly look upon its Technology in order to grab rural market share.
Customer Complaints / New Products

Reduce Customer Complaints by readdressing them so that they will readily accept New
products.
WEAKNESS / THREATS
Untapped Rural Market / Price War

Bharti has to overcome its major weakness of Untapped Rural Market if they dont
other competitors will build on this weakness and will compete with Bharti on pricing.

BCG
Matrix
Of
Companies Market Share Industry Growth Quadrant
Bharti Airtel 20% 12% - 15% STARS
Bharti Infratel 40% 20% STARS
Bharti Reality Ltd - 30% QUESTION MARKS
Field Fresh Food 10% (UK) 30 % - 40% QUESTION MARKS
Beetel Teletech Ltd 30% 20% STARS
Bharti Walmart - 15 % 20 % QUESTION MARKS
Bharti Retail - 15 % 20 % QUESTION MARKS
Bharti AXA Life 1.3% 13% - 14% QUESTION MARKS
Insurance
AIRTEL
BCG Matrix of AIRTEL

STAR S
Q U E S T IO N M A R K S
DOGS
STAR S
C A SH C O W S
DOGS
C A SH C O W S

Airtels
Basic
Growth
Strategies

Concentration Horizonth Growth

H o r iz
o n ta l
D ir e c t t o G ro w
Hom e th
S a t e llit e
S e r v ic e
A f r ic O u ts o u
an r c in g
Adve Deal o p e ra ti
n tu re s ons
w it h
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Bharti Airtels outsourcing deal with Avaya & IBM.

The worlds 4th largest Telecom company by customers. Bharti Airtel has its IT
outsourcing deal with Avaya that covers all 20 countries where it offers mobile phones facilities.
Avaya will become Bhartis second partner after IBM (Airtel awarded a 10 year contract
estimated to be worth over $1.5 billion for managing its IT requirements in Africa to IBM. The
US firm also handles Bhartis IT requirements in India, Sri Lanka & Bangladesh under a 2004
deal which is estimated to be worth at least $4 billion) Under the 5 year deal Avaya will operate
and manage the IT requirements of all Bhartis Business Processing Solutions (BPO) partners
across to 80 locations.
Bhartis customer care operations in India are handled by:

Essar Group owned Aegis
Magas Dialog
Hinduja TMT
Kochar
Infotech
IBM Daksh
Mphasis
Teleperformance
First Source
Wipro
Bhartis African operations are handled by:
IBM
Tech Mahindra
Spanco

Bhartis deal with Google
Bhartis Airtel Broadband & Telephone Service, Indias largest private broadband and
telephone service provider & Google Inc, the worlds most popular search engine announced
plans to work together in bringing information web based services to Airtels community of
broadband internet customers.
As part of the agreement, Airtel will offer its broadband customers a world class portal
which will include
Google Search for web based queries.
Google Gmail will provide 2GB storage, spam filter & options of web access.
Google Talk instant messaging service for sending instant messages to friends & family
anytime, anywhere in world.
Google Docs & Spreadsheets so users can share and collaborate in real time
On Demand games, service and music download service.
Bharti Airtel and Google Incs join hands to work on Google Phone (Gphone)
GPhone is an operating system for mobile phones and not a mobile phone. Mobile
companies like Samsung and Motorola are likely to give orders for handsets specially pre-loaded
with the Gphone OS. Google said that Finnish giant Nokia is not their partner in this. The
Gphone that will power Googles mobile operating system has been is built on open source
Linux technology.
With the introduction of GPhone, it is expected that the users may start using cheaper
alternatives with ease that will be able to operate various other applications for connectivity and
content.

Bhartis African quest
On March 30, 2010, Mr. Sunil Bharti Mittal, Chairman and Managing Director of Bharti
Airtel and Mr. Asaad Al, Banwan, Chairman, Zain Group executed the definitive agreements at
Netherlands marking the transformation of Bharti Airtel into an emerging-market multinational.
The acquisition is the largest by an Indian company, second only to the USD 12 billion takeover
of Corus by Tata Steel in 2007.1 In the Indian telecom space, the deal is the second largest after
the USD 11.2 billion (approximately) Vodafone Hutchison transaction in 2007. Airtel will be
operating in 16 African countries.

(Source: http://www.techzim.co.zw/2011/07/africa%E2%80%99s-telecoms-titans-
airtel-africa/ )
Direct to Home Satellite Service
Airtel digital TV is an Indian direct broadcast satellite service provider owned and
operated by Bharti Airtel. Its satellite service, launched on 2008, transmits digital satellite
television and audio to households in India. It uses MPEG-4 digital compression with DVB-
S2 technology, transmitting using the satellites INSAT-4CR 74E and SES-7 108.2E. Airtel
Digital TV service was launched on 8 October 2008. As of 13 December 2012, Airtel has total
304 Channels and Services including 17 HD channels.
Its primary competitors are cable television and other DTH service providers Reliance
Big TV, DD Direct+, Dish TV, Tata Sky, Sun Direct, and Videocon D2H. It has a total
subscriber base of 7.1 million as of 31 December 2011.
(Source: http://www.bestmediainfo.com/2012/02/indias-dth-base-ends-2011-with-45-
million-subscribers/ )
Diversification Concentric

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Porters Generic Competitative Strategies of AIRTEL
Lower Cost Differentiation

Cost Leadership Differentiation
Bharti Airtel Beetel Teletech Ltd

Broad Target Comviva
Bharti Walmart
Bharti Retail
Bharti AXA General
Insurance
Cost Focus Focused Differentiation
Narrow Target Bharti Infratel Limited Field Fresh Foods Pvt Ltd
Jersey and Guernsey Centum Learning Limited
Indus Towers Bharti Softbank Holdings
Bharti Realty Limited
Bharti Airtel (Cost Leadership / Broad Target)

Bharti Airtel Limited is a leading integrated telecommunications company with
operations in 20 countries across Asia and Africa. Headquartered in New Delhi, India, the
company ranks amongst the top 4 mobile service providers globally in terms of subscribers. In
India, the company's product offerings include 2G, 3G and 4G services, fixed line, high speed
broadband through DSL, IPTV, DTH, enterprise services including national & international long
distance services to carriers. In the rest of the geographies, it offers 2G, 3G mobile services.
Bharti Airtel had over 253 million customers across its operations at the end of April 2012
Bharti Infratel Limited (Cost Focus / Narrow Target)

Bharti Infratel Limited is amongst Indias leading telecom tower infrastructure service
providers. The company deploys, owns and manages telecom towers infrastructure, for various
mobile operators across 18 states of India. It has a vast footprint of over 34,000+ towers and
holds a 42% stake in Indus Towers Ltd - a Joint Venture between Bharti Infratel, Vodafone India

& Aditya Birla Telecom that has the distinction of being the worlds largest tower company.
Bharti Realty Limited (Cost Focus / Narrow Target)

Bharti Realty Limited is a young, vibrant and dynamic realty company with expanding
interests in commercial, retail and residential real estate. It has grown from strength to strength,
constructing and managing over ten top of the line facilities for Bharti group companies and third
party clients. Spurred by its accomplished success and acquired expertise, Bharti Realty Limited
has now forayed into developing quality commercial real estate in the central business district
(CBD) areas of metropolitan cities, retail real estate in the up-market localities of metropolitan
cities and in a few prominent cities of Punjab, and high end residential real estate in the Delhi
NCR region, Mumbai and Bangalore.
FieldFresh Foods Pvt. Ltd (Focused Differentiation / Narrow Target)

FieldFresh Foods Pvt. Ltd, a joint venture company between Bharti Enterprises and Del
Monte Pacific Ltd. The company offers branded FieldFresh fruits & vegetables across India and
international markets, including Europe and the Middle East. The company produces markets
and distributes farm fresh products. FieldFresh Foods Pvt. Ltd, aims to become one of the most
trusted provider of premium quality fresh farm products, processed foods and beverages.
Beetel Teletech Limited (Differentiation / Broad Market)

Beetel is a leading global technology brand which offers a wide range of innovative
products in the mobile phones, IT peripherals and fixed line telephone segments. Leveraging its
consistent performance, distribution and marketing capabilities Beetel as a brand has achieved a
leading market share in the telecom and allied product segments.
With powerful distribution and marketing capabilities, Beetel distributes a host of iconic brands
like Blackberry, Apple, Avaya, Polycom, Samsung, Sanyo, Panasonic, Transcend, Iomega, Aastra
Telecom, RAD Data Comm, Actelis and Strontium. Its products and solutions are present
worldwide, spanning 35 countries in 5 continents.

Comviva (Cost Leadership / Broad Target)
Comviva is the global leader in providing mobile solutions beyond VAS. With an
extensive portfolio of solutions spanning VAS infrastructure, application delivery platforms and
customer-facing applications, Comviva enables mobile service providers to enrich mobile users
lives, whilst rationalizing costs, accelerating revenue growth and enhancing customer lifetime
value. Comvivas solutions are deployed by service providers in over 85 countries and power
services to more than 650 million mobile subscribers globally.
Jersey and Guernsey (Cost Focus / Narrow Target)

Jersey Airtel and Guernsey Airtel are subsidiaries of Bharti group and offer mobile
services on the islands of Jersey and Guernsey respectively in the Channel Islands (Europe). All
services are offered under the Airtel-Vodafone brand under a partnership to bring a range of
Vodafone global products together with other exciting services from Bharti to customers in
Jersey and Guernsey.
Centum Learning Limited (Focused Differentiation / Narrow Target)

Centum Learning Limited provides end-to-end learning and skill-building solutions that
enhance business performance to Bharti Group and several large corporate. Centum Learning has
received the Gold Award for "Excellence in Training" at the World HRD Congress, 2010 and has
been adjudged as one of the 'Top 15 Emerging Leaders in Training Outsourcing' 2009
Worldwide. Centum Learning provides industry oriented employability programmes through a
network of 130 Centum Learning Centers spread across 90 cities. It has also launched a new
education initiative, Centum U Institute of Management & Creative Studies which offers UG
and PG programmes in association with world renowned institutions.
Indus Towers (Cost Focus / Narrow Target)

Indus Towers, a JV between Vodafone India (42%), Bharti Group (42%) and Aditya Birla
Telecom Limited (16%) is Indias leading mobile towers company. The company, which operates
in 15 telecom circles across India, provides services to all telecom operators and other wireless

service providers such as broadcasters and broadband service providers on non-discriminatory
basis.
Bharti Retail (Cost Leadership / Broad Target)
Bharti Retail is a wholly owned subsidiary of Bharti Enterprises. The Company operates
Easyday neighborhood stores and compact hypermarket stores called Easyday Market. Bharti
Retail provides consumers a wide range of good quality products at affordable prices. Easyday
stores are a one stop shop that cater to every family's day-to-day needs. Merchandise at Easyday
Market stores include apparels, home furnishings, appliances, mobile phones, meat shop, general
merchandise, fruits and vegetables among others.
Bharti AXA General Insurance (Cost Leadership / Broad Target)

Bharti AXA General Insurance is a joint venture between Bharti Group and AXA Group.
The company is one of the fastest growing in the general insurance segment and is the first in the
industry to receive dual certifications of ISO 9001:2008 & 27001:2005 within the a year of
launching operations. The company offers an extensive product range for retail, rural and
commercial clients with cashless facilities in over 4000 hospitals and 1600 garages as well as
24/7 multi-modal claims registration.
Bharti Softbank Holdings (Focused Differentiation / Narrow Target)

Bharti Softbank Holdings Pvt. Ltd. ("BSB"), is a 50:50 joint venture between Bharti
Enterprises, one of Indias leading business groups and SOFTBANK CORP, parent corporation
for one of Japans leading internet company groups ("SoftBank"). The company BSB actively
focuses and participates in the growth of the mobile internet ecosystem in India with an emphasis
on three key areas: Social Media, Gaming and e-Commerce.
Bharti Wal-Mart (Cost Leadership / Broad Target)

Bharti Wal-Mart is a B2B joint venture between Bharti Enterprises and Walmart for
wholesale cash & carry and back-end supply chain management operations in India to serve
small retailers, manufacturers, institutions and farmers. The Company operates Cash & Carry
stores under the Best Price Modern Wholesale brand. A typical cash-and-carry store stands
between 50,000 and 100,000 square feet and sells a wide range of fresh, frozen and chilled foods,

fruits and vegetables, dry groceries, personal and home care, hotel and restaurant supplies,
clothing, office supplies and other general merchandise items.
Functional Strategies
Marketing
Special data plans for iPhone 5S.
Airtel customers in Africa to get free incoming calls while international roaming in India,
Sri Lanka and Bangladesh.
Airtel Intros Data Share Plan Share Your Airtel 3G Data to Two Friends or Three
Devices.
Airtel 4G LTE Services Launched in Pune.
Indias first 4G LTE Smartphone Huawei Ascend P1 LTE Launched with Bharti Airtel.
MARKETING MIX
Products
Airtel Connections Prepaid
Airtel Connections Postpaid
Airtel Data Cards
Airtel Blackberry phones
Airtel I phones
Airtel Digital TV
Price
Customer based pricing strategies.
Flexible pricing mechanism
Controlled by TRAI
Place
It was wide and extensive presence even in the remotest areas.

Airtel customer care touch points
Distributions like paan shops, grocery stores, chemists, outlet etc
Promotions
Large scale print video ad
Big celebrities like SRK and SACHIN are roped in to endorse the product because it.
In 2002 Airtel got it s signature tune from A.R.Rehman , this signature tune is the most
downloaded in India
Provides innovations such as bollywood movie premiers, music series such as ring back
tone and many more
Physical Evidence
People
Total employees 25616 as per Q3 2012
Dedicate and passionate workforce
One of the best customer support.
Have won 2nd best employer award in 2004.

Process
Process for services is very easy and customer can avail it very easily.
121 is the customer support number which can be dialed from anywhere in India.
Key Technology Partners of Airtel
Technology Partners (Software)

Savis
Ramco
VeriSign
Microsoft
Tally
VMware
Symantec
Customer Support
Partnerships with Business Process Outsourcing (BPO) companies to run their customer
care operations
Aegis
Mphasis
IBM
IT requirements
Partnerships with IT and software companies for technology infrastructure, and solutions,
such as billing, business intelligence, cloud services, and others
Infosys
HP
Wipro
Value Added Services

Partnerships with content generators, aggregators, and portals, for delivery of value added
services
Yahoo
Comviva
Google
OSS Solution Company

Prepaid Charging Telesoft
CRM ORACLE
Fraud Management Sube
Mediation Comptel
Order Provisioning Comverse
Inter Connect Billing Elite Core
Airtels HR Strategies
Young Turks
Average age of Airtel employee is just 206 years. This has helped the HR department to
mould the young entrants according to the company preference.
Strong Training Program

Unlike other companies Airtel allows its employee to decide their training needs and if
the employee does not know what his training needs are then there is no place for him in the
organization
Team Building Efforts

The younger professionals are circumspect to air their views, with better interaction with
the senior managers they play to begin a more pro active role in team building efforts
HR Committee
The HR steering committee (HRSC) of the company that has acted as the fulcrum of the
HRD efforts in the organization. HRS Consists of the CEO, the COO and all other functional

heads. The committee meets once a week to discuss various initiatives and the plan of action on
the same.
Learning
To encourage learning within the organization, the company has set up astute-of-the-art
learning centre. Here, employees can get logged on to customized training programmes
developed by British Telecom (BT).
Performance Measures
To measure the performance, the entire organization is measured on five performance
parameters: profitability, market share, brand saliency, customer satisfaction, and employee
satisfaction. Further, each employee is given individual targets that are linked to these five
parameters
Performance Bonus
Eventually, there are the performance-related bonuses that set the tone for these activities.
The company has 60 per cent of the employees are on variable pay structure, and that explains
the success Airtel has had in business and HRD.
Employee Satisfaction Survey

The HR Department also conducts an internal employee satisfaction survey called PACE
(Progressive Assessment of Culture and Environment), the inputs of which go into the company's
annual strategy.
Open House Session

The `open house' conducted between the departments and HR takes up individual
grievances. In the case of family group meetings, each HOD conducts meetings with his direct
reporters once a month, wherein issues other than those related to work are discussed.
Measurement Boards

``Measurement is indeed a key driver of business within Airtel. A philosophy of constant
monitoring has been established. `Measurement Boards' for every department are prominently
displayed where the performance indicators of the same are displayed graphically,''
Cross Functional Teams

The HR department also sets up cross-functional teams in times of product or service
launches. Such teams typically constitute high performers from each department, who
collectively make it happen
KRA
According to Airtel a employee can be effective if he knows what is expected of him.
Formal job description documents have been issued to all our employees that clearly mention the
`key result areas'. This goal setting has helped in communicating to each of our employees about
our experiences from them, and established role clarity.
Communication Forum
Some of the other key HR initiatives include the managers' communication forum, open
house, family group meetings, HR interface and HR intranet. To explain them, the managers'
communication forum, undertaken once a quarter, facilitates direct interaction of the employees
with the top management. They get to discuss issues relating to the performance of the previous
quarter, directions for the next quarter, an update on the regulatory environment and the key
initiatives for the period,

Present Business Strategy of Bharti Airtel
Segment Telecom market on several parameters Region Wise, Density of Area and
Income.
Strong focus on Urban & Rural Markets.
Use of Emotional-Moral appeal like Har Ek Friend Zaroori Hota Ha campaign as part
of promotion strategy to target youth
Network Coverage is the key factor for the companys success.
In case of existing Telecom market, Airtel is positioned as one of the premium brand
Moving from domestic Indian Telecom business to global business. Entering into Africa
and other developing economies.
Leveraging the brand value and creating innovation and being the initiator for the 3G and
4G segment in Indian telecom market.

Financial Analysis of Airtel
Profitability
ratios 2008 2009 2010 2011 2012
Operating
Profit Margin
32.98 35.25 39.08 38.74 41.4
(%)
Net Profit
24.23 22.74 26.47 20.29 13.77
Margin (%)
ROA (%) 106 145 96 115 130
EPS (Rs) 32.9 40.79 24.82 20.32 15.09
Asset
96.08 96.35 85.23 67.83 65.43
Turnover (%)
(Source:
moneycontrol.com)

Operating Margin %
45
40
35
30
25
Axis Title 20
15
10
5
0
2008 2009 2010 2011 2012

Net Profit Margin %
30
25
20
Axis Title 15
10
0
2008 2009 2010 2011 2012
ROA
160
140
120
100
Axis Title 80
60
40
20
0
2008 2009 2010 2011 2012

EPS
45
40
35
30
25
Axis Title
20
15
10
0
2008 2009 2010 2011 2012

Assest Turnover %
120
100
80
Axis Title 60
40
20
0
2008 2009 2010 2011 2012
Idea Cellular

Idea Cellular Limited was incorporated in 1995, and now ranks third in terms of all-India
wireless revenue market share at 13.6 per cent. Idea ranks second with 23.6 per cent revenue
market share in nine service areas where it holds 900 MHz spectrum and which derive about 41
per cent of the industrys all-India revenues (based on gross revenues for UAS and Mobile
licenses only, for March 2011 quarter, as released by TRAI).
The market positioning of Idea reflects the strength of its brand considering the fact that
Idea added 11 out of its total 22 service areas in the past four years. Today, it is a pan-India
player with commercial 2G operations in 22 service areas, and 3G in nine of these circles. Its
subscriber base has grown multifold, from 7.37 million in March 2006 to 89.5 million in March
2011.
Idea holds 16 per cent stake in Indus Towers, a joint venture with other telecom majors
Bharti Airtel and Vodafone. Indus Towers is the world's largest tower company with over one
lakh towers. In 2007, Idea was listed on the National Stock Exchange (NSE) and the Bombay
Stock Exchange (BSE).
The company now has its own NLD and ILD operations, and ISP license. Idea has a
network of over 70,000 cell sites covering the entire length and breadth of the country. The
company has over 3,000 service centers servicing Idea subscribers across the country. Ideas
service delivery platform is ISO 9001:2008 certified, making it the only operator in the country
to have this standard certification for all 22 service areas and the corporate office.
Idea has won numerous awards and is the only Indian GSM operator to win the prestigious GSM
Association Award consecutively in the best mobile technology category for the Best Billing and
Customer Care Solution both in 2006 and in 2007, even in the face of international competition.

Idea enjoys a market leadership position in many of its operational areas. It offers GPRS
on all its operating networks for all categories of subscribers, and was the first company in India
to commercially launch the next generation EDGE technology in Delhi in 2003. As a pioneer in
technology deployment, it has been at the forefront through the adoption of bio fuels to power its
base stations, and by employing satellite connectivity to reach inaccessible rural areas in Madhya
Pradesh.
Idea has been a leader in the introduction of value-added services, and there are many
firsts to its credit, including a voice portal 'Say Idea', Idea TV, voice chat and instant messenger.
Tariff plans have been customer-friendly, catering to the unique needs of different customer
segments, for instance the 'Women's Card' caters to the special needs of women on the move, and
'Youth Card' covers the emerging youth segment.
Idea was adjudged the Emerging Company of the Year by The Economic Timesand the
Most Customer Responsive Company in the Telecom sector, in the year 2010. Brand Idea has
won many accolades for its innovative communication. The What an Idea, Sirji ads have won
four Effies from 2008-2010, making it one of the Buzziest brands in the country.
In 2011 Brand Idea moved to the No. 4 position amongst all service brands in the 'Most
Trusted Brands Survey' conducted by Brand Equity, an Economic Timespublication.
Idea's biggest campaigns "Break the Language Barrier" and "No idea Get Idea" were ranked
globally as the best brand campaigns 2011 at MMA Global Awards and World Communication
Awards, London.
Idea won the advertising effectiveness awards with a Gold EFFIE for the "No idea Get
Idea" campaign and a Silver for the" Language Barrier" campaign.
In radio, Idea won six awards at the Golden Mikes Awards 2011 and was adjudged the
Advertiser of the Year. Besides, Idea has also won a series of Digital Awards, the biggest being
the Yahoo Big Chair where it won Gold.

Chairmans speech of Idea Cellular
The Idea Cellular Company, undeniably plays a critical role in the economic growth of
the country and in its journey towards inclusive growth.
For the year 2011-12, Idea has posted an impressive performance. It continues to grow its
revenues at almost twice the industry growth rate. During FY12 your Company''s annual revenue
growth stood at 26%. Idea is the third largest wireless operator in India, with a revenue market
share of 14.4% - up by 1.1% during the calendar year 2011.
Idea enjoys the pole position in terms of quality of subscribers in this industry.
Idea enjoys the pole position in terms of quality of subscribers in this industry. The ratio of VLR
(active) subscribers to reported subscribers is over 93%, the highest in the sector and
significantly higher compared to the industry average of 74%. Idea today the third largest Indian
wireless operator, in terms of total VLR subscribers.

Idea has maintained its leadership position in terms of net subscriber additions under
MNP facility. A net gain of around 2.9 million subscribers with a lowest port out ratio of 0.62
subscribers reflects the strong faith of over 113 million customers in Idea Companys quality of
network, better customer services, customer centric product offerings and superior brand
strength.
Idea won 3G Spectrum in 11 service areas and has entered into roaming arrangements
with other operators to offer 3G services in the remaining service areas. In 3G reach of Idea has
been extended to more than 3,000 towns and 10,000 villages in 20 service areas. This allows its
113 million subscribers to experience the world of faster internet with the speed of up to 21
Mbps, video calling, Mobile TV, Idea Mall applications store and many other futuristic services.
The service areas specific strategy has enabled Idea to focus and consolidate its position
in established service areas while following a calibrated approach in the new service areas. Idea
has improved its competitive standing in the Indian wireless market, acrossall parameters.
VISION
Is to be the fortune 200 by 2015, with revenues of 65 billion dollar and EBITDA target of
10 billion dollar.
MISSION
To deliver superior value to our customers, shareholders, employees and society.
VALUES
Integrity
Commitment
Passion

Speed
Seamlessness- boundryless in letter and spirit
PORTER 5 Forces Model Analysis
Porter 5 Forces Model

Bargaining Power of Buyers (High) Low switching costs for buyers
Huge competition between the
existing players in the market.
Bargaining Power of Suppliers (Low) Large pool of suppliers in the
market
Have access to other countries
supply
Industry Rivalry (High) Players like Airtel and Vodafone
are big competitor
Existing Players are also eating up
the market share
Threats of new Entrants (High) Not present in broadband, operating
style of New Entrant will be the
same as Ideas as they have less
number of towers.
Threat of Substitutes (Low) Threat is less as substitutes have
less mobility

Hig
h
Low
ISSUE PRIORITY MATRIX
IDEA CELLULAR
Probable Impact on Corporation

HIGH MEDIUM LOW

Antitrust Government GDP
Regulations Policy (c)
HIGH
Government Government Imports

Policy (a) Policy (d)
MEDIUM
Government New Products Government

Policy (b) Policy (b)
LOW
Antitrust Regulations (High High)

The Supreme Courts verdict on the 2G Scam to cancel all the 122 licenses issued in 2008
will affect more than just the companies whose licenses were cancelled. 9 licenses of Idea were
cancelled in the Supreme Court verdict. Idea will lose its service are in Punjab, Assam, Jammu &
Kashmir, Kolkata, North East, Orissa, West Bengal, Tamil Nadu(including Chennai)which will
adversely affect the growth of the company.

Government Policy (c) (High Medium)
Telecom Minister Kapil Sibal said mobile subscribers will not have to pay roaming
charges from next year, National Telecom policy 2012, approved in May aims to abolish roaming
charges and allow mobile phone subscribers to use same number across country without having
to pay extra charges on services once they are outside their telecom circle. The impact is
expected to be medium on Idea as its yet to enjoy the maximum market share in the industry.
Government Policy (a) (Medium High)

Idea Cellular has emerged as the most aggressive bidder for the upcoming 2G spectrum
auctions by depositing Rs 1,306.75 crores, the highest earnest money among all the potential
bidders. Idea will be bidding for the circles where its licenses were quashed by the Apex court
earlier this year. According to the sources Idea is likely to bid for 7 Circles.
Government Policy (b) (Low High)

Idea Cellular has been the biggest gainer of Mobile Number Portability service with a
addition of 3.22 million customers as on March 31st 2012 compared to Bhartis 1.2 Million.
Government Policy (d) (Medium Medium)

Government notices are likely to be issued to Telecom firms, asking them to stop 3G
roaming service outside their licensed area with immediate effect as the Government was losing
revenue because of their agreements. Idea being the 2 nd largest player in 3G market will tend to
have a medium affect as it covers 11 circles which are relatively low population compared to the
market leader Bharti Airtel.
Imports (Medium Low)

Mobile phone shipment to India during the first half of 2012 crossed 10 crore units,
registering a growth of 16.6 percent over the same period last year, according to Cyber Media
Research (CMR). The total shipment was recorded at 10.24 crores. Increase number of phones
will lead to increase number of subscribers and in this fast growing market companies like Idea
Cellular are bound to be benefited.

Government Policy (e) (Low Low)
As a result of the high base price of spectrum for the upcoming auctions, call rates will rise by
30-40 percent. Base price of Rs 14,000 crore for 1800Mhz band and Rs 18,200 for 800 Mhz
based on the recommendations made by sectoral regular TRAI. Idea cellular will be least
affected by this as it will look upon its competitors to make the move, as Idea is the only
Telecom company which has reported quarterly profits continuously and it keeps revising its
tariff plans circle to circle frequently
New Products (Low Medium)

Competition in the budget smart phones segment continues to heat up, as Idea Cellular
launches its Android Touch Phones, The device is already available at online retailers such as
Flipkart with a price of just above 5,000/-. The Idea Android Smart phones have been affordably
priced to ensure rapid uptake by both 2G users wishing to upgrade to 3G and existing 3G users.
Idea is also offering special introductory offer with these phones.
GDP (High Low)

Telecom market is expected to grow by 30-35 percent by 2016. Signaling an increase in
the GDP of the country. According to the reports, Idea Cellular is expected to make the most of
this opportunity as it tends to take the market share from Bharti Airtel by its aggressive 2G
bidding, Brand Image and Advertising efficiency.
EFAS of IDEA (Opportunity)
Opportunity Weights Rating Weighted Score Comments

Indias GDP 0.02 3 0.06 More number of people will opt
for mobile services if income
increases.

Imports 0.1 2 0.2 Increase in number of Mobile
phones will lead to increase in
subscribers.
Technologic 0.17 4 0.68 Idea has nine 3G circles and still
has to enter the 4G market.
al Effort
New 0.08 3 0.24 Idea fairly relies on 3G data card
and their mobile handsets.
Products
Internet 0.07 4 0.32 Idea is only present in Data cards
but not in broadband.
Availability
Lifestyle 0.08 3 0.24 Idea follows the same concept of
campaign What an Idea Sirji
Changes
Growth 0.08 3 0.24 Idea has grown in the recent
years, expanding its market
Rate of share to 14%.
Population
EFAS of idea (threats)
Threats Weights Rating Weighted Score Comments

FDI 0.05 2 0.10 Idea will have to compete with
foreign companies on pricing
point of view.

Price War 0.1 4 0.4 Market players would determine
the price.
Interest Rates 0.06 2 0.12 Idea will have least effect with
less aggressive expansion plans.
Consumer 0.02 1 0.02 Not so important as company
Protection practices fair trade practices.
Law
2G Scam 0.17 4 0.68 Ideas license were recently
cancelled by the Supreme Court
in 2G scam of 2008
Total 1 3.30
Idea's EFAS
GDP; 2%
Imports; 10%
2G Scam; 17%
Consumer Protection Law; 2%

Technological Effort; 17%
Interest Rate; 6%
Price War; 10%

New Products; 8%
FDI; 5% Internet Avalability; 7%
Growth Rate of population; 8% Lifestyle Changes; 8%
IFAS of IDEA (Strengths)

Strengths Weights Rating Weighted Score Comments
Flexible 0.1 3 0.30 Attractive 2G & 3G plans in
accordance with the customers.
Plans
Good 0.1 2 0.20 Strong advertising campaign in
2G & 3G.
Advertising
High Brand 0.12 4 0.48 Idea won back to back Best
Brand Campaign held in
Visibility London recently for its 3G
Population Campaign
Celebrity 0.08 3 0.24 Abhishek Bachan is the
ambassador of Idea for a quite a
Brand while now and has even won the
Ambassador Best Brand Ambassador of the
Year award.
Increase in 0.7 3 0.21 Idea continuous to grow its
revenue and its market share,
profits even in stiff competition.
Innovative 0.14 4 0.56 Idea has delivered many ground
breaking ideas/service in the
Services telecom service. The latest one
being Emergency Internet
Usage Service where a person
can enjoy uninterrupted internet
service with zero balance.
IFAS of idea (Weakness)
Weakness Weights Rating Weighted Score Comments

Untapped 0.17 4 0.68 Idea just like Airtel have huge
Rural Market market to cover.
Not present in 0.12 3 0.36 Ideas absence in broadband,
Broadband affects its revenue and the
market share.
Absence in 4G 0.1 2 0.20 Idea is again not present in 4G
Circles market as the future market
opportunities remains untapped.
Total 1 3.23
IFAS of Idea
Absence in 4G Circles; 10% Flexible Plans; 10%
Not Present in Broadband; 12% Good Advertising; 10%
High Brand Visibilty; 12%
Celebrity Brand Ambassador; 8%
Innovative Services; 14% Increase in Profits; 7%
SFAS OF IDEA
Strategic Weights Rating Weig Duration Comments
Factor hted
S M L
Score
Celebrity 0.08 3 0.24 Abhishek Bachan is the
Brand Ambassador of Idea
Brand for a quite a while now and
Ambassador has even won the Best
Brand Ambassador of the
Year award.
Flexible 0.10 3 0.30 Attractive 2G & 3G plans
in accordance with the
Plans customers.
High Brand 0.08 4 0.32 Idea won back to back
Best Brand Campaign
Visibility held in London recently for
its 3G Population
Campaign
Absence in 4G 0.12 2 0.24 Idea is again not present in
Circles 4G market as the future
market opportunities
remains untapped.
Untapped 0.13 4 0.52 Idea just like Airtel have
Rural Market huge market to cover.
Technologic 0.12 3 0.36 Idea has nine 3G circles

and still has to enter the 4G
al Effort market.
Lifestyle 0.08 2 0.16 Idea follows the same
concept of campaign
Changes What an Idea Sirji
2G Scam 0.13 4 0.52 Ideas license were recently
cancelled by the Supreme
Court in 2G scam of 2008
Interest Rates 0.06 2 0.12 Idea will have least effect
with less aggressive
expansion plans.
Price War 0.10 4 0.4 Market players would
determine the price.
TOTAL 1 3.18

SFAS of IDEA
Price War; 10% Celebrity Brand Ambassodar; 8%
Interest Rates; 6% Flexible Plans; 10%
2G Scam; 13% High Brand Visibilty; 8%
Absence in 4G; 12%

Lifestyle Changes; 8%
Technological Efforts; 12% Untapped Rural Market; 13%

TWOS of IDEA
STRENGTHS WEAKNESS
Internal Factor Analysis
IFAS High Brand Untapped Rural
Visibility Market
Innovative Services Not present in
Flexible Plans Broadband
Absence in 4G
External Factor Analysis Circles
EFAS
Opportunities Strength/Opportunitie Weakness/Opportunit
s ies
Innovative Services / Not present in

Growth Rate of Lifestyle Changes Broadband / Growth
Population High Brand Visibility / Rate of Population
Lifestyle Changes Growth Rate of Absence in 4G /
Population Lifestyle Changes
Threats Strength/Threats Weakness/Threats
Innovative Services /
Price War Price War Untapped Rural
2G Scam Flexible Plans / FDI Market / Price War
FDI High Brand Visibility /
2G Scam

STRENGTH / OPPORTUNITIES
Innovative Services / Lifestyle Changes

Ideas Innovative Services will help it to adjust according to the lifestyle changes of the
people, gaining more market share as they are used to do.
High Brand Visibility / Growth Rate of Population

Subsidiary of Aditya Birla Group Idea Cellular is well recognized due to its parent
company, Growing Rate of Population will lead to more number of subscribers were Idea will
look to tap this opportunity through its Brand Visibility.
STRENGTHS / THREATS
Innovative Services / Price War

Ideas Innovative Services will provide an edge over its competitors. Innovation is what
drives a companys growth in the market. This will also help it to fight with other players on
pricing basis.
Flexible Plans / FDI

74% FDI in Telecom Industry will allow foreign players to enter the market. Ideas
Flexible Plans will provide the base as it compete with foreign and domestic alliances.
High Brand Visibility / 2G Scam

Although Idea was under the 2G Scam of 2008, this would hardly affect the company as
Aditya Birla Group of Companies are known for their ethical and CSR activities for the society,
people will have utmost trust in brand like IDEA.

WEAKNESS / OPPORTUNITY
Not present in Broadband / Growth Rate of Population

Growing Rate of Population will provide the much needed opportunity to Idea for
growth, If Idea can come up with broadband service this will greatly impact its market share.
Absence in 4G / Lifestyle Changes

Lifestyle of Urban people keeps on changing frequently (example from 2G to 3G to 4G).
Absence of Idea in 4G circle will only hinder its growth as Bharti is the only player in 4G, who
will look to skim the market.
Weakness / Threats
Untapped Rural Market / Price War

Tapping Rural Market will provide Idea to compete on pricing basis. As this will generate
more number of subscribers which will in turn generate Economies of Scale.

BCG
Matrix
Of
IDEA
Companies Market Share Industry Growth Quadrant
Grasim Industries 21% 3% - 4% CASH COWS
Ltd
Ultra Tech Cement 20% 12% STARS
Aditya Birla - 3% CASH COWS
Chemicals Ltd
Aditya Birla Minacs - 14% QUESTION MARKS
Essel Mining & - 4% DOGS
Industries Ltd
Idea Cellular 14% 12% - 15% QUESTION MARKS
Aditya Birla Retail - 15 % 20 % QUESTION MARKS
Ltd
BCG Matrix of IDEA

STAR S
DOGS
STAR S
CASH CO W S
DOGS
CASH CO W S

IDEAs
Basic
Growth
Strategies

Concentration Horizontal Growth

H o r iz
o n ta l
O u ts o u rc i G ro w
n g o f IT th
b u s in e s s
t o IB M
T ie U p Acqui
w it h s a t io n
Real Deal of
N e tw o r s S p ic e
k w it h
Noki
a
Idea-Spice deal 4th largest M&A in India

The buyout of Spice Telecom by Idea Cellular is the fourth largest merger and acquisition
deal involving an Indian entity and may be a pre-cursor to more such transactions in the telecom
space. The countrys 3rd largest mobile operator in terms of subscribers, Idea Cellular acquired B
K Modi-owned Spice group's 40.8 per cent stake in Spice Communications.
Idea, IBM in Business Partnership

IBM and Idea Cellular Limited (Idea) have a 10-year business transformation partnership,
wherein IBM would integrate, innovate, and transform Idea's business processes and IT
infrastructure.
The deal, which has been designed on an innovative risk-reward revenue sharing model,
covers all of Idea's existing operations and potential new additions. It is learnt the 10-year
partnership size will be around $600 million to $800 million, depending upon Idea's business
revenues and circle expansion.
Nokia India announces carrier billing tie-ups with Idea

Nokia also announced a billing tie-up with Idea Cellular for Nokia Music as well as
Nokia Store. The tie-up will enable Idea customers to pay for apps bought via the Nokia store
and/ or renew their Nokia Music subscriptions using their prepaid or postpaid accounts. Nokia
Music subscriptions rate for Idea customers are the same as their Vodafone counterparts.
Real Networks and Idea Cellular Partner for Ringback Tone (RBT) Service in India
RealNetworks India Pvt. Limited, a wholly owned indirect subsidiary of RealNetworks,
Inc. (NASDAQ: RNWK), the US-based digital entertainment services company, is in a long-
term Ringback Tone (RBT) partnership with Idea Cellular. Idea Cellular is India's 3rd largest
mobile services operator with over 100 million subscribers.
Concentration
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Porters Generic Competitative Strategies of IDEA
Lower Cost Differentiation
Cost Leadership Differentiation
Aditya Birla Nuvo Grasim Industries Limited

Broad Target Hindalco Industries
Limited
UltraTech Cement
Limited
Idea Cellular Limited
Aditya Birla Retail
Limited
Cost Focus Focused Differentiation
Narrow Target Aditya Birla Chemicals Grasim Bhiwani Textiles

(India) Limited Limited
Aditya Birla Finance Aditya Birla Science and
Limited Technology Company
Aditya Birla Money Limited
Aditya Birla Insurance
Brokers
Aditya Birla Nuvo (Cost Leadership / Broad Market)

Aditya Birla Nuvo Limited (ABNL), a US$4.5 billion conglomerate by revenue size, is
part of Aditya Birla Group, a US$40 billion Indian multinational company. Having a market cap
of about US$2.5 billion as on 30th November 2012, ABNL is present across financial services,
telecom, fashion and lifestyle, IT-ITeS and manufacturing businesses. Powered by an intellectual
capital of over 65,000 employees, ABNL touches the lives of more than 120 million Indians.
Grasim Industries Limited (Differentiation / Broad Market)

Grasim Industries Limited is a global leader in viscose staple fibre and ranks among
India's largest private sector companies with a consolidated net revenue of Rs.216 billion and
consolidated net profit of Rs.22.8 billion (FY 2011).

Grasim Bhiwani Textiles Limited (Focused Differentiation / Narrow Market)
Grasim has a presence in fabrics and synthetic yarns through its subsidiary Grasim
Bhiwani Textiles Limited, which is well known for its branded suitings, Grasim and Graviera,
mainly in the polyestercellulosic branded menswear.
HINDALCO INDUSTRIES LIMITED (Cost Leadership / Broad Market)

Hindalco Industries Limited is a global leader in aluminium and copper. It is the world's
largest aluminium rolling company and one of the biggest producers of primary aluminium in
Asia. Its copper smelter is the world's largest custom smelter at a single location. Its consolidated
turnover of US$15.85 billion (Rs. 72,078 crore) places it in the Fortune 500 league.
ULTRATECH CEMENT LIMITED (Cost Leadership / Broad Market)

UltraTech Cement Limited and its subsidiaries have an annual capacity of 52 million
tonnes, making it among the top 10 producers of cement globally. UltraTech is also the largest
manufacturer of White Cement in India. The company manufactures and markets ordinary
portland cement, portland blast furnace slag cement, portland pozzalana cement, ready mix
concrete and building products and building solutions.
Aditya Birla Chemicals Ltd (Cost Focus / Narrow Market)

Aditya Birla Chemicals (India) Limited (formerly Bihar Caustic and Chemicals Limited)
was incorporated as a joint venture of the Aditya Birla Group and the Bihar State Industrial
Development Corporation. The unit was set up with the objective of catering to the caustic soda
requirements of Hindalco Industries Limited, and to contribute towards the economic
development of the backward region of Palamu district in Jharkhand.
Aditya Birla Finance Ltd (Cost Focus / Narrow Market)

Aditya Birla Finance (ABF) is one of India's leading non-banking financial companies
(NBFC). Incorporated in 1991, the company is one of the largest players in security based
lending and the pioneer of IPO Financing in India. ABF offers specialised solutions in areas of
capital market and corporate finance.

The Aditya Birla Science and Technology Company (Focused Differentiation / Narrow
Market)
The Aditya Birla Science and Technology Company (ABSTC) is the corporate research
and development centre for the Aditya Birla Group. Located in Taloja, just outside of Mumbai in
India, ABSTC supports the broad diversity of the Group's businesses through multi-disciplinary
teams of expert scientists and engineers who lead fundamental and applied research projects. The
company aims to be a world-class organisation that delivers innovative solutions, continuously
improves core competencies and executes effectively. The centre is supported by state-of-the-art
equipment set in a one-of-a-kind brand new technology-led environment.
Aditya Birla Money Ltd (Cost Focus / Narrow Market)

Aditya Birla Money is a single brand offering the combined products and services of
Aditya Birla Money Limited and Aditya Birla Money Mart Limited.
Aditya Birla Insurance Brokers (Cost Focus / Narrow Market)

Aditya Birla Insurance Brokers Limited (ABIB) is a leading composite general insurance
intermediary, licensed by the Insurance Regulatory and Development Authority of India (IRDA).
The company specialises in providing general insurance broking and risk management solutions
for corporates and individuals alike.
Idea Cellular Limited (Cost Leadership / Broad Market)

Idea Cellular Limited was incorporated in 1995, and now ranks third in terms of all-India
wireless revenue market share at 13.6 per cent
Aditya Birla Retail Limited (Cost Leadership / Broad Market)

The Group's foray into the retail sector began in December 2006 when it acquired
Trinethra, the chain of stores based in south India. May 2007 saw Aditya Birla Retail Limited
(ABRL) launch their own brand of stores called 'More.' ABRL's vision is "to consistently provide
the Indian consumer complete and differentiated shopping experiences and be amongst India's
top retailers while delivering superior returns to all stakeholders".

Functional Strategies
Marketing Strategies
Zero Balance, No Tension: Use Uninterrupted Mobile Internet, Courtesy Idea Cellular
IDEAs Special International Roaming Packs iRoam
Idea Cellular Introduces New 3G Android Smartphone Aurus for Rs.7190
MARKETING MIX
Product
Prepaid
Postpaid
VAS
Roaming
Business Offering
Place
Delhi
Andhra Pradesh
Gujarat
Maharashtra
Haryana
Kerala
Madhya Pradesh
Karnataka
Uttar Pradesh
Price
Differs for different service plans

Promotions
ATL :- TV commercials (Brand Ambassador : Abhishek Bacchan), title sponsors of
reality shows, partners of IPL
BTL :- Recently tied up with Yahoo for Mobile advertising, hoarding, bus banners,
events, bill boards
Physical Evidence
PEOPLE
Employees 6,481 (2010)
The Group has been adjudged 'The Best Employer in India and among the Top 20 in Asia'
by the Hewitt-Economic Times and Wall Street Journal Study 2007.
Process
Providing the easy accessibility for the end consumer to communicate to one another via
telephonic media.
They also provide the service of data browsing with help of 2G and 3G networks.

They also have the process of customer care service, where the end consumers call
directly talk to the CRM- Customer Relation Manager and get their problem solved.
Key Technology Partners of Idea
Customer Support
Partnerships with Business Process Outsourcing (BPO) companies to run their customer care
operations
Spanco
IT and Software Requirements

Partnerships with IT and software companies for technology infrastructure, and solutions,
such as billing, business intelligence, cloud services, and others
Atos
Sube
Value Added Services

Partnerships with content generators, aggregators, and portals, for delivery of value added
services
Axis bank
Mauj
Online Mobile
OSS Solution Company

Prepaid Charging Ericsson
CRM ORACLE
Fraud Management Sube
Mediation Comptel
Order Provisoning Comptel
Inter Connect Billing Elite Core
Business Intelligence Cognos

Hr Policy
Health check-up policy
Buy your car scheme
Credit card scheme
Corporate Club Membership
Company Car Policy
Company Leased Accommodation Policy
Employee Referral Policy
Employee Spouse Cellular Phone Policy
Employee Cellular Phone Connection Policy
Group Personal Accident Insurance
House Deposit Loan
House Rent Allowance Policy

Present Business Strategy of Idea Cellular
MNP: As TRAI has passed the regulations of Mobile Number portability, the followers
in the industry were likely to make the best utilization of it hence IDEA developed the
strategy of providing better tariff plans compared to other telecom players which resulted
in maximum number of subscribers opting for Idea Cellular.
Diverse Tariff Plans: A Product line with Vertical as well as Horizontal Spread in tariff
plans catering to the needs of every consumer.
Experiential Marketing: Reaching consumers through shops, college event campaigns

and influencing customers to adapt its services indirectly.
With helding the position in present circles: Development in their established market,
They have up with strategy of over investing in existing circles for the development of
better network coverage and tapping better rural market. 67% of net subscribers are
addition for Idea which comes from rural market.
Population Advantage: India with a population of 1.2 billion is an opportunity for Idea
to have much the market share. Hence they have come up with rampant advertisement for
whole population.
Outsourcing: Outsourcing its key IT requirements to companies like IBM.
Segment Indian Tea market on several parameters Region wise, demographic and
lifestyle.
Strong focus on Urban & Rural Markets

Profitability Analysis of Idea
Profitability
ratios 2008 2009 2010 2011 2012
Operating
Profit Margin
37.07 31.63 27.37 23.59 25.2
(%)
Net Profit
15.53 10.15 8.88 5.5 2.98
Margin (%)
ROA (%) 13.44 36.37 34.59 37.18 38.99
EPS (Rs) 3.96 3.23 3.19 2.56 1.74
Asset
66.78 52.22 65.89 66.98 83.52
Turnover (%)
(Source:
moneycontrol.com)
Operating Margin %
40
35
30
25
Axis Title 20
15
10
0
2008 2009 2010 2011 2012

Net Profit Margin %
18
16
14
12
10
Axis Title
8
0
2008 2009 2010 2011 2012

Return on Assets
45
40
35
30
25
Axis Title
20
15
10
0
2008 2009 2010 2011 2012
EPS
4.5
3.5
2.5
Axis Title
2
1.5
0.5
0
2008 2009 2010 2011 2012

Assest Turnover %
90
80
70
60
50
Axis Title
40
30
20
10
0
2008 2009 2010 2011 2012
Comparing the Current Market Position of Airtel and Idea
PARAMETERS Bharti Airtel Idea Cellular
Profitability Positive but declining Declining
Porter Analysis Profitable Less Profitable
Acquisitions Global Context Domestic Context
Core Competency Innovative and Public Integrity, Commitment,

Relationship Passion and Speed
Selling USP Airtel Tune Promotional Campaigns
BCG Matrix Analysis Stars Question Marks

Porters Generic Cost Leadership Cost Leadership
Strategy
EFAS 3.41 3.30
IFAS 3.33 3.23
SFAS 3.32 3.18
EPS 15.09 1.74
References:
www.moneycontrol.com
www.airtel.in
www.bharti.com
www.ideacellular.com
www.adityabirla.com
www.telecomtalk.com

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Telecommunication Industry

Indian Telecom Industry Features

Rank Operator Market Share %

Global Business School | Strategic Management | 2

Wireless Subscribers (Million)

(Source: Indian Telecom Market Overview Report Nov

Wireline Subscribers (Millions)

(Source: Indian Telecom Market Overview Report Nov

Global Business School | Strategic Management | 3

(Source: Indian Telecom Market Overview Report Nov

(Source: Indian Telecom Market Overview Report Nov

Global Business School | Strategic Management | 4

(Source: Indian Telecom Market Overview

Global Comparison of ARPU (USD)

(Source: Indian Telecom Market Overview Report Nov

More than 3-fold increase in subscribers since 2008

ARPU Spending on Voice (USD Bn)

(Source: Indian Telecom Market Overview Report Nov

rage Spending on MVAS (Mobile Value Added Service) in USD

0.2 0.39 0.48

(Source: Indian Telecom Market Overview Report Nov

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(Source: Indian Telecom Market Overview Report Nov

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Mobile App; 10%

News; 14% SMS Based; 17%

(Source: Indian Telecom Market Overview Report Nov

Data Center Market (USD bn)

(Source: Indian Telecom Market Overview Report Nov

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Telecom Value Chain

GTL - Nokia- Bharti Airtel Company Facebook

Fault Management Finance & Partner Network Service Activation

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Consumer Money Supply Lifestyle Changes Total Government

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Money Supply (Investment from MNCs to Indian Telecommunication Industry)

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India Stock Market (Sensex)

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Total Government spending for Research & Development

Focus of Technological efforts

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Consumer Protection Law

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2G spectrum scam by Telecommunication ministry

Government Stability and Incentives

Socio - Cultural Trends:

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Growth rate of population

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Bargaining power of Rivalry among Existing Players

Bargaining power of Buyers

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Declining ARPU (Average Revenue per User)

Access to Optical Fiber Network

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Restriction of operators in a particular region

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