Comparison between Airtel And Reliance

Communications
Bharti Airtel Limited (BSE: 532454 ) formerly known as Bharti Tele-
Ventures LTD (BTVL) is an Indian company offering telcommunication services
in 19 countries.It the largest cellular service provider in India, with more than 140
million subscriptions as of July2010.[2] Bharti Airtel is the world's third largest,
single-country mobile operator and fifth largest telecom operator in the world with
a subscriber base of over 180 million.[3] It also offers fixed line services and
broadband 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 this Cisco Gold Certification. To earn Gold Certification,
Bharti Airtel had to meet rigorous standards for networking competency, service,
support and customer satisfaction set forth byCisco.[4] The company also provides
land-line telephone services and broadband Internet access (DSL) in over 96 cities
in India. 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.It
is known for being the first mobile phone company in the world to outsource
everything exceptmarketing and sales and finance. Its network (base stations,
microwave links, etc.) is maintained by Ericsson and Nokia Siemens Network,[5]
business support by IBM and transmission towers by another company.[6]
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. This enables the
company to provide pan-India phone call rates of Rs. 1/minute (U$0.02/minute).[7]
During the last financial year [2009-10], Bharti has roped in a strategic partner
Alcatel-Lucent to manage the network infrastructure for the Telemedia
Business.The company is structured into four strategic business units - Mobile,
Telemedia, Enterprise and Digital TV. The mobile business offers services in 18
countries across the Indian Subcontinent
and Africa.
Reliance Communications (BSE: 532712 ), formerly known as Reliance
Infocomm, along with Reliance Telecom and Flag Telecom, is part of Reliance
Communications Ventures (RCoVL).Reliance Communications Limited founded
by the late Shri Dhirubhai H Ambani (1932–2002) is the flagship company of the
Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani
Group currently has a net worth in excess of Rs. 64,000 crore (US$ 13.6
billion), cash flows of Rs. 13,000 crore (US$ 2.8 billion), net profit of Rs. 8,400
crore (US$ 1.8 billion).The Equity Shares of RCOM are listed on Bombay Stock
Exchange Limited and National Stock Exchange Limited. The Global Depository
Receipts and Foreign Currency Convertible Bonds are listed on Luxembourg Stock
Exchange and Singapore Stock Exchange respectively.

Reliance Communications is India's truly integrated telecommunications

service provider. TheCompany has a customer base of 105 million[1] including
over 2.5 million individual overseas retail customers. It ranks among the Top 5
Telecom companies [2] in the world by number of customers in a single country.
Reliance Communications corporate clientele includes 2,100 Indian and
multinational corporations, and over 800 global, regional and domestic carriers. A
pan-India, next generation, integrated (wireless and wireline), convergent (voice,
data and video) digital network that is capable of supporting best-of-class services
spanning the entire communications value chain,covering over 24,000 towns and
600,000 villages has been established by Reliance Communications. Reliance
Communications owns and operates the next generation IP enabled connectivity
infrastructure<,ref>"The world's largest next generation IP enabled connectivity
infrastructure" .Retrieved 2010-04-14.</ref> comprising over 190,000
kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the
Asia Pacific region.

Main Subsidiaries
Reliance Telecommunication Limited (RTL)
In July 2007, the company announced it is buying US-based managed ethernet and
application delivery services company Yipes Enterprise Services for a cash amount
of Rs. 1200 crore rupees (equivalent of USD 300 million). The deal was
announced of the overseas acquisition, the Reliance group has amalgamated the
United States-based Flag Telecom for $210 million[roughly Rs 950 crore (Rs 9.50
billion)].RTL operates in Madhya Pradesh, West Bengal, Himachal Pradesh,
Orissa, Bihar, Assam, Kolkata and Northeast offering GSM services.[3]
Reliance Globalcom RGL owns the worlds largest private undersea cable
system[4] spanning 65,000 km seamlessly integrated with Reliance
Communications over 110,000 km of domestic optic fiber provides a
robust Global Service Delivery Platform connecting 40 key business markets in
India, the MiddleEast, Asia, Europe, and the U.S.
Reliance Communications (RCOM) recorded a disappointing 21.6% yoy
growth in Top-line in 2QFY2009. Sequentially, Top-line growth came in at
5.9%. The disappointing performance at the Top-line level was on account of
a subdued performance recorded by the company’s key Wireless Business
Unit. This business grew by just 16.5% yoy (5.3% qoq). This was the case
even as the company’s mobile subscriber base grew by an impressive
54.3% yoy and by over 10% qoq to 56.0mn. Quarterly net adds crossed 5mn
for the first time (5.3mn), the highest-ever in any quarter for RCOM. Clearly,
the chief culprit this quarter, as was the case in 1QFY2009 as well, was the
significant fall in average revenues per user (ARPUs), which declined by a
significant 25.6% yoy and by 4.8% qoq to Rs271 per user per month (gross)
v/s Rs364 in 2QFY2008 and Rs284 in 1QFY2009.
As regards the company’s other business segments, the Global Business
(long-distance services, carrier-related services and bandwidth capacity
sales) grew by 28.5% yoy (10.8% qoq), aided by a 30% yoy growth in total
minutes of usage (MoUs, 17.2% qoq). However, this included Rs91cr
received from an arbitration case against Tata Communications (erstwhile
VSNL). Nonetheless, this was partially negated on account of expenses
related to the Vanco acquisition. The Broadband Business clocked a robust
37.8% yoy growth during 2QFY2009, powered by an excellent 59% yoy
increase in Access Lines, which crossed 1.25mn. Sequentially also, the
growth was impressive at 7.5%, with Access Lines growing by nearly 11%.

During 2QFY2009, RCOM recorded yet another disappointing performance

after the poor performance in 1QFY2009. The company’s Top-line clocked a
disappointing 21.6% yoy growth (5.9% qoq). The subdued performance of its
Wireless Business unit was again the main reason behind the under-performance
on the Top-line front. Wireless Revenues grew by a mere 16.5% yoy, the slowest
in several quarters, while on a sequential basis, the growth was 5.3%. Thus, again,
despite the robust 54.3% yoy growth in RCOM’s mobile subscriber base (10.4%
qoq), Wireless Revenue growth trailed subscriber growth by a fairly
significant margin. The company now has 56.0mn mobile subscribers, implying
quarterly net adds of over 5mn (5.3mn), the first time it has been able to achieve
this. Of the total, 46.8mn customers are CDMA subscribers, while 9.2mn
subscribers are GSM subscribers. As was the case in 1QFY2009, the crash in
ARPUs was the key factor that slowed Top-line growth for the Wireless Business.
ARPUs fell by as much as 25.6% yoy (4.8% qoq) to Rs271. This figure is an all-
time low for RCOM and widens the gap further between the company and key
competitor, Bharti Airtel. In fact, in 2QFY2009, the latter’s gross ARPUs
were at a fairly significant 22.2% premium to those of RCOM. On the Revenue
front, the difference is even starker. Bharti Airtel’s Mobile Business revenues were
higher by as much as 68% as compared with RCOM this quarter, reflecting the
significantly better quality of users of Airtel and the latter’s ability to drive higher
usage to justify the fall in RPMs.
Conclusion et driven by volume!

Airtel – Strategy
Mantra: Focus on Core Competencies and Outsource the rest!
• Partner with leading players in telecommunication across the globe.

• Managed to work with the best of domain specialists globally and

emerge as a world class entity.

• Operational contracts with marquee vendors and strategic investors

ranging from private equity investorsto global telecom giants.

Reliance –Strategy
Mantra : To reduce the cost to the customer focusing on a market driven by
volume.

• Reliance is a convergent play between the manufacturing and

services businesses
• A combination of the energy chain and the information and
communication businesses
• A company at the crossroads of the old and new economy
• Reliance’s superior operational and financial performance reflec ts
its global competitiveness, prudent business strategies, and
ability to maintain profitability through business cycles
• Reliance is committed to a conservative financial framework, and
a consistent endeavor to maximise overall shareholder value.