Vous êtes sur la page 1sur 36

DISTRIBUTION & SUPPLY CHAIN MANAGEMENT

8/30/2010

A REPORT
ON UNDERSTANDING DISTRIBUTION ISSUES
BHARTI WITH AIRTEL
AIRTEL

SUBMITTED TO: PROF. BHATTACHARYA

BY: PEARL KAVASMANECK

ROLL NO: 16-M-449 MMM – BATCH 1


THE AIRTEL DTH - DISTRIBUTION SYSTEM

Executive Summary

Over the years back as we all know cable TV was everywhere, but a few years back a new
technological revolution happened and direct to home satellite television came into existence. As
time moves on, the Telecom and DTH sector in India has developed with the availability of more
brands, better quality products and better service.

The objective of this report is to assess the Distribution methods and its effectiveness of Bharti
Airtel Services.

The data collected for this report involves the use of both primary and secondary data sources.
Primary data is based on the findings from the company personnel by having met them personally,
along with some the retailers and distributors of Mumbai, India. This data is further substantiated
by the use of appropriate secondary sources like internet and books.

After all the research and analysis work done during the course time of this project we came to the
conclusion that Tata Sky sales is more effective than that of Airtel DTH, but even then there is a
great room for improvement available for them.

SALES & DISTRIBUTION PROJECT Page 2


THE AIRTEL DTH - DISTRIBUTION SYSTEM

ACKNOWLEDGEMENT

I would like to express gratitude to all the dealers, distributors and the corporate officials of Bharti
Airtel for their kind support and assistance while furnishing the required information’s.

I would also like express gratitude and thanks to Prof. Bhattacharya for giving an opportunity
to work on this topic. The immense learning from this project will be indelible forever. It
gave a practical exposure to various topics related to Distribution methods and helped to
understand the subject in a better way.

SALES & DISTRIBUTION PROJECT Page 3


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 Methodology

Organisation identified for the study: Bharti Airtel Service

Business Sector Focused: Airtel Telecom and Airtel DTH

Objective:

 The main objective of the study can be divided into following heads:
To understand the Company profile, its Product Portfolio pan India and globally.
 To understanding of its position compared to its competitors.
 To gain understanding of its Distribution methods.
 To carry out a detailed study to know the logistics network, process flow, mode, costs,
monitoring systems, issues and problems.
 To identify solutions to the same.

SALES & DISTRIBUTION PROJECT Page 4


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 INTRODUCTION

1.1 Company Profile

Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service
provider in India, with more than 124 million subscriptions as of February 2010. With this, Bharti
is now the world's third-largest, single-country mobile operator and sixth-largest integrated
telecom operator. As per the latest development, post acquiring of ZAIN, Bharti has become the
5th largest telecom operator globally in terms of subscriber base. It is the 3rd largest in-country
mobile operator by subscriber base, behind China Mobile and China Unicom. In India, the
company has a 24.6% share of the wireless services market. It has all 23 circles of the country and
covers 87% of the current population. It is the largest Telecom Company listed on Indian Stock
Exchange.

1.2 Product Portfolio

The company is structured into four strategic business units - Mobile, Tele-Media, Enterprise and
Digital TV. The mobile business offers services in 18 countries across the Indian
Subcontinent and Africa. The four strategic business units is as follows:

SALES & DISTRIBUTION PROJECT Page 5


THE AIRTEL DTH - DISTRIBUTION SYSTEM

Mobile

Digital TV TeleMedia

Enterprise

Mobile: The mobile business offers services in India and Sri Lanka.

Tele media: The TeleMedia business provides broadband, IPTV and telephone services in 95
Indian cities.

Enterprise: The Enterprise business provides end-to-end telecom solutions to corporate customers
and national and international long-distance services to carriers.

Digital TV: The Digital TV business provides Direct-to-Home TV services across India.

All these services are provided under the Airtel brand. Airtel provides a host of voice and data
products and services, including high speed GPRS services. Airtel also offers a wide array of
‘postpaid’ and ‘prepaid’ mobile offers, with a range of tariff plans that target different segments.
A comprehensive range of value- added, customized services are part of the unique package from
Airtel. The company’s product reflects a desire to constantly innovate. Some of these are reflected
in the fact that Airtel was the first to develop a ‘single integrated billing system’. Airtel’s national
high-speed optic fiber network currently spans over 1,13,326 kilometers, covering all the major
cities in India. The company has two international landing stations in Chennai and Mumbai that
connect two submarine cable systems - i2i to Singapore and SEA-ME-WE-4 to Europe.

SALES & DISTRIBUTION PROJECT Page 6


THE AIRTEL DTH - DISTRIBUTION SYSTEM

The businesses at Bharti Airtel have been structured into three individual strategic business units.
All these services are provided under the Airtel brand. It includes:

1) Voice Services: Bharti Airtel became the first private fixed line service provider in India. It is
now promoted under the Airtel brand. Recently, the government opened the fixed line industry
to unlimited competition. Airtel has subsequently started providing fixed line services in the
four circles of Delhi, Haryana, M.P., Karnataka, Tamil Nadu & UP (West). Airtel Enterprise
services believe that, these circles have high telecommunications potential, especially for
carrying Voice & Data Traffic. These circles are strategically selected so as to provide synergies
with Airtel’s long-distance network and Airtel’s extensive mobile network.
2) Voice - Product Profile: Airtel Enterprise Services’ telephone services go beyond basic
telephony to offer users a whole host of value added services as well as premium add-ons. Few
of the value-added services offered are calling line identification, three party conferencing,
dynamic lock, hunting numbers, parallel ringing, etc. Airtel Enterprise Services and voice
services provide free dial –up internet access that is bundled along with telephone connection
from Airtel. It’s fast, reliable and gives unlimited internet access.
3) Mobile Service: In India, the company's mobile service is branded as Airtel. It has nationwide
presence and is the market leader with a market share of 30.07% (as of May 2010). Airtel’s
mobile foot print extends across the country in 21 telecom circles. Its service standards compare
with the very best in the world. It is one of the top 5 operators in the world, in terms of service
and subscriber base. The company has several firsts to its credit.
 The first to launch full roaming service on pre-paid in the country.
 The first one to launch 32K SIM card.
 The first in Asia to deploy the multi brand feature in a wireless network for efficient usage
of spectrum.
 The first to receive the ISO 9001:2000 certification from British Standards Institute.
4) Enterprise Services: Enterprise Services provide a broad portfolio of services to large
Enterprise and Carrier customers. This division comprises of the Carrier and Corporate business
unit. Enterprise Services is regarded as the trusted communications partner to India's leading
organizations, helping them to meet the challenges of growth.

SALES & DISTRIBUTION PROJECT Page 7


THE AIRTEL DTH - DISTRIBUTION SYSTEM

5) Satellite Services: Airtel Enterprise Services is a leading provider of broadband IP satellite


services and DAMA/PAMA services in India. Their solutions support audio, video and voice
applications on demand. The DTH service from Airtel, Direct to Home (DTH) enables viewers
to receive broadcast signals into their home via a satellite dish. Satellite services include
PAMA/DAMA, BIT- internet, VPN, Satellite based IPLC for redundancy reasons.
6) Managed Data & Internet Services: Airtel Enterprise Services provides a comprehensive
suite of data technologies which support all types of networks and ensure that their customers
can migrate their network in the future seamlessly. Managed Data & internet Services include
MPLS, ATM, FR, Internet, IPLC, Leased lines, Customized solutions, International Managed
Services, Metro Ethernet, etc.
7) Managed E-Business Services: Airtel Enterprise Services offers an internationally
benchmarked, carrier class hosting, storage and business continuity services. Managed e-
Business includes CO-lo: Dedicated and share, BCR services and Web hosting.

B2C AIRTEL BUSINESS

Passive
Mobile TeleMedia Digital TV Enterprise
Infrastructure
Services ServicesS A L E S &Services Services
DISTRIBUTION PROJECT
Services
Page 8
THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 GLOBAL SERVICE PORTFOLIO

SALES & DISTRIBUTION PROJECT Page 9


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 VISION 2020


1) To enrich the lives of customers.
2) The obsession is to win customers for life through an exceptional experience.
3) Multi-platform services in telecom, enterprise and digital television, unified under the brand
‘Airtel’.
4) Successfully unified operations across the globe under the umbrella of ‘Airtel’.
5) To be amongst the Top 100 of Most Valuable Global Brands List.
6) To be the No. 1 service brand in India.
7) One of the top 10 brands in Africa – within 3 years of operations there.

1.0 AIRTEL DTH


Parent: Bharti Airtel

Launch on: 9 Oct. 2008

Headquarters: Mumbai

Area served: All over India

CEO: Manoj Kohli

Brand Ambassador: Saif Ali Khan and Kareena Kapoor

Products: Direct broadcast satellite

Website: www.airtel.in/digitaltv

Slogan: “ Come Home to the Magic “

Present Situation: 21,000 outlets including ARC with11 mn subscriber

SALES & DISTRIBUTION PROJECT Page 10


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 WHAT IS DTH?

First
launched in 42% of Indian
India- homes
October, expected to
2003 by Dish be on DTH by
TV 2020

Indian DTH
market
expected to
42% of Indian
cross $5
homes
billion
expected to
revenues by
be on DTH by
2020, from
2020
$1.2 billion
in 2012

6 Big Players in the Indian


market

SALES & DISTRIBUTION PROJECT Page 11


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 AIRTEL COMPETITORS

SALES & DISTRIBUTION PROJECT Page 12


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 PERCEPTUAL MAP

High Picture Quality

Poor Good
Packaging of Packaging
Channels of Channels

Low Picture Quality

SALES & DISTRIBUTION PROJECT Page 13


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 AIRTEL DTH – POSITIONING


 Airtel has always targeted customers who value quality and service over price.
 With DTH also, they are not the cheapest in the industry. But, they value performance.

1.0 STRENGTHS FOR THE FUTURE


• High growth chances

• Foreign technology

• Standard product

• Active news, active cooking, active learning

• Language option

• Bargaining prices

• Advertising strategies

• Pricing

• Promotional activities

1.0 AIRTEL DTH KIT

SALES & DISTRIBUTION PROJECT Page 14


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 DISTRIBUTION CHANNEL


Airtel has a wide & effectively spread channel structure all over India. The channel structure is
simple and effective. Complications are kept out in order to make the overall process very effective
and efficient.

Distribution Channel

Under the Company

DSA
(Direct Selling Associates) CSA
(Corporate Selling Associates)
FSA
(Franchisee Selling Associates)/
ARC
(AIRTEL Relationship Centre)

The above figure illustrates the channel structure at a regional level. This has been generally scaled
down for better understanding of the structure.

TERRITOTY MANAGER

The distributors include one who handles:

1) Provisioning

2) Documents

3) Operation back up

4) Field sales executives.

SALES & DISTRIBUTION PROJECT Page 15


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.3 Selection Of Channel Members/Dealers

Airtel follows a strict policy in selection of the dealers, and therefore it is necessary to fulfill the
following pre- requisites to be eligible to become a dealer.

1) The dealers should have a sound financial background. The financial capability of a dealer is
solely dependent on the discretion of the company officials.

2) The dealers should have a good market reputation, since the dealers help the customers in
forming the first impression a customer has about the company.

3) The dealer should have a good previous track record, i.e. of timely payments, no criminal
background, etc.

4) The dealer should have good market penetration. The company’s ability to gain maximum
customers in this era of competition solely depends on the penetration the dealers have in the
market.

SALES & DISTRIBUTION PROJECT Page 16


THE AIRTEL DTH - DISTRIBUTION SYSTEM

5) The last criterion of dealer’s selection for Airtel is the area the dealers cover. This would include
different geographical areas which are covered by a dealer.

1.4 Chanel Management

Description of Channel Structure

4 LEVEL STRUCTURE - KITS 3 LEVEL STRUCTURE – RECHARGE

COMPANY COMPANY

WHOLESALER /
CNF
DISTRIBUTOR

WHOLESALER /
RETAILER
DISTRIBUTOR

RETAILER CONSUMER

CONSUMER

SALES & DISTRIBUTION PROJECT Page 17


THE AIRTEL DTH - DISTRIBUTION SYSTEM

Since Airtel has an intensive distribution network, proper channel management becomes an
indispensable part of the system. One of the major issues encountered in the channel management
is channel conflict. Channel conflict is behavior by a channel member that is in opposition to its
channel counterparts. It is opponent centered and direct, in which, the goal or object sought is
controlled by the counterpart.

Channel conflicts, that mainly result from competing goals of the channel members, different
perceptions of reality, clashes over domains i.e. intra and multi-channel competition, role
unclarity, expectations divergence, relationship disharmony, etc. To avoid these conflicts, Airtel
has adopted a Second and Third-Degree Distribution network.

1.4.1 Second Degree distribution network


Company makes invoice of SIMs, PEFs, GSM Pay Phones, RCVs of various denominations
chiefly Rs.10, Rs 30 and Rs. 60 to only Urban Distributors and Rural Super Distributors. Easy
balance is also transferred to only Urban Distributors (UDs) and Rural Supers (RS).
Urban distributors distribute the above items to retailers according to the demand and transfer easy
balance to retailer through FOS (Field Sales Officer) SIM. This is more suitable for the urban
market where demand is obscurely driven.

1.4.2 Third degree distribution network


RS distributes the above items to Rural Distributors commonly known as RDs and transfers easy
balance into Rural Distributors SIM. Rural Distributor then distribute the above items among the
retailer according to the demand of it and transfer easy balance to retailer through FOS SIM from
easy balance of Distributor SIM. This three-level distribution is used to reach to sub urban and
rural areas since there is lesser popular density and large geographical spread that has to be catered
to.

SALES & DISTRIBUTION PROJECT Page 18


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.5 Dealer Territories

Dealer Territories

 There are no specific dealer territories.

 Customer can choose any dealer.

 Dealers will have their own sales representatives.

 The activation of the box is done on Serial Number.

 The serial number are dealer specific.

• In Mumbai – there are 25 distributors (Partner Model) and 8458 dealers.

• 1,42,268 – pan India dealers.

1.5.1 Issues of Allocating Territories


 Presently the territories are divided into circles like Delhi, Andhra Pradesh, Karnataka, Chennai,
Himachal Pradesh, Kolkatta are to name a few. A multi-dimensional marketing and sales team
builds both, direct and indirect sales channels.
 Regional organizations are responsible for the definition of the sales and marketing strategies
and plans for their respective territories. Each region also provides significant inputs and
reviews of the corporate strategic sales, marketing and product direction.
 Bharti Airtel uses second degree and third-degree distribution network. These two systems are
in place for altogether different markets. There is however, a confusion in the roles of the
members of the channel.
 The territory and the degree of distribution network are done only on the basis of whether the
market is urban and rural. The distinction between the same isn’t clearly defined which is
causing confusion among the channels.

SALES & DISTRIBUTION PROJECT Page 19


THE AIRTEL DTH - DISTRIBUTION SYSTEM

 There are differences between the offers that are offered to retailers in different areas. They
vary based on the territory. Allocation of a rural distributors or urban distributors is perplexing.

SALES & DISTRIBUTION PROJECT Page 20


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.6 Margin Structure

 Margins / commission structure for kits.

• CNF Agent – Rs 150 – 5%

• Distributor / Wholesaler – Rs175 – 15%

• Retailer – Rs 650 - 200%

 Discount Structure for Recharge

• Distributor – 4.25%

• Wholesaler – 3%

• Retailer – No Discount

 Payment terms – CNF Agent – advance, all other any mode – 1 week.

 Other terms – Deposit of min Rs. 10 lacs / distributor.

1.7 Evaluation & Target Setting

 Dealer Scorecards / Targets setting – monthly.

 Dealer Evaluation Methods – daily and weekly.

 Short term and long-term evaluation with Parameters Used – both. Depending on past sales for
occasional schemes YOY data and 3 months average for next month.

 Dealer Audits – once in quarter. Focus on Documentation.

SALES & DISTRIBUTION PROJECT Page 21


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.8 Channel Support

Schemes and initiatives – special schemes.

 E.g. For new subscription of HD Set top box company offers price at normal price, i.e.
1550 HD box to be available at Rs 650.

 For yearly subscription of 156 channels, 3 HD channels are free for entire year.

Dealer development activities – providing knowledge to sales reps, improve store facilities.

Dealer motivation techniques – POP, Sign boards, training to Sales persons, Distributor
Conferences – Last conference took place in Malaysia.

SALES & DISTRIBUTION PROJECT Page 22


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.9 Responsibilities & Functions Of The Dealers

Airtel believes in “Customer Loyalty” and thus, Airtel expects that their dealers apart from selling
paint products should perform the following functions for better customer relations’ management.

1) Sales promotion through regular promotional schemes, road shows, campaigns, etc. The
expenses incurred by the dealers is shared by the company only if these activities are for promotion
of the company and not of the dealer.

2) Recruitment - done under the guidance of certain Airtel officials.

3) Training and development of manpower with company assistance.

4) Servicing according to order size.

5) Customer relation management.

6) Promote other products of the company.

The dealer should be in regular touch with the customer, keep taking his feedback and ensure
maximum customer satisfaction. The dealer should also try and convince the customer to try newer
products of the company.

1.10 Role of Sales Mangers / DAM / DDM

• To Evaluate Dealer Scorecards.

• Target setting to be done on monthly basis as there are new schemes for every month according
to current conditions.

• Develop Dealer Evaluation Methods – It is to be done Daily. Weekly basis is done in depth to
understand and to fill in the gaps.

• Both short term and long-term evaluation are done to make sure sales are achieved regularly.

SALES & DISTRIBUTION PROJECT Page 23


THE AIRTEL DTH - DISTRIBUTION SYSTEM

• The projection for every month is done depending on past sales of 3 months average sales and
in terms of occasions, it is done YOY.

• Dealer Audits – Once in quarter.

1.11 Physical Distribution / Logistics System

• Factors to set-up Logistics System – Infrastructure / Finance / Team Members / IT systems.

• Description of Physical Distribution / Logistics Structure:

WHOLESALER
CNF Agent RETAILER
/ DISTRIBUTOR

• Interaction / overlap of PD structure with Channel Structure – 2 different channels hence


avoided.

• Elements used in PD / Logistics:

 Transportation – CNF has their own vehicles for distribution of the Kits.

 Warehousing / Storage – Bhiwandi.

 Inventory Control – Weekly Basis.

1.12 Distribution Process

Elements used in PD / Logistics

• Order Execution / Processing system – Dealer Portal Systems.

 CNF Processing.

 Order received via portal.

 Serial Numbers are matched.

SALES & DISTRIBUTION PROJECT Page 24


THE AIRTEL DTH - DISTRIBUTION SYSTEM

 Allotted to distributors

 Acceptance by distributors after matching serial numbers.

• Packaging – It plays a major role to avoid damage to the kits. Generally, 1 Carton box has 25
nos. of kits.

• Use of IT systems in Logistics – Oracle based software is used by Airtel for order processing
as well as for service calls.

SALES & DISTRIBUTION PROJECT Page 25


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 ISSUES OF CHANNEL CONFLICT:


Due to lack in channel innovation these are the conflicts that are arising in the channel. The
following also has a list of problems faced due to this conflict:

1. Problem Of Service Gap: Cases have been found where the retailer has run out of its
recharging balance and the balance has not been refilled by the distributor timely. This may be
caused because of the time lag or because of the no credit policy of the distributor. This however
leads to some loss to the company as the customer has to return back without recharging. This
also weakens the company’s image in the eyes of the customer as retailer here acts as the face
of the company.
2. Competition: Due to large number of players, now the retailer has to keep competitor products
as well. However, they are unwilling to make extra investment and reduce the share of each
existing company to accommodate the competitor products.
3. Non-Availability Of Particular Offers: There have been instances where the company has
announced new offers. However, those are not available at the retailer’s outlet. This may happen
due to lag in information passage from the company to the retailer. This situation is seen
especially in the rural areas where number of retailers is less compared to urban areas. This may
lead to loss of potential customers and ultimately unrest among the retailers.
4. Retailers Selling SIM Cards at A Cost Lesser Than The MRP: Big retailers who purchase
the SIM Cards in bulk sell the SIM Cards at a cost lower than the MRP. They use the economy
of scale achieved through bulk purchase, reduce money from their commission and pass on the
difference to the end customer. Thus, they are able to sell the SIM Cards at a lower cost than
the competing retailer. This leads to unequal sale by various retailers.
5. Old SIM Cards Not Replaced in Time: Once some offer is over, the SIM Cards which hold
that offer has to be taken back by the distributor and replaced by new SIM Cards. However,
there have been instances where the distributor is late on completing this activity. This leads to
inventory accumulation at the retailer’s shop which the retailer cannot sell.

SALES & DISTRIBUTION PROJECT Page 26


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.13 Conflict Management

Issues Description Solutions

Problem of service Cases have been found where the retailer has run out To maintain proper
gap of its recharging balance and the balance has not balance to avoid
been refilled by the distributor timely such issue.

Competition: Due to large number of players, now the retailer has Provide better
to keep competitor products as well. service to retailers
and schemes to sell
our range of
products

Non - availability of There have been instances where the company has The offer has to be
particular offers announced new offers. However those are not communicated to
available at the retailer’s outlet. This may happen everyone by proper
due to lag in information passage from the company system and
to the retailer. Mostly in rural areas especially in rural
areas.

Retailers selling SIM Big retailers purchase the SIM Cards in bulk & sell There has to be
Cards less than MRP the SIM Cards at a cost lower than the MRP. capping on selling
price to avoid such
inter competition
between retailers.

Old SIM Cards not Once some offer is over, the SIM Cards which hold Such issue has to be
replaced in time that offer has to be taken back by the distributor and immediately
replaced by new SIM Cards addressed and
proper follow up
should take place to
provide service.

SALES & DISTRIBUTION PROJECT Page 27


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.14 Dealer Portal

SALES & DISTRIBUTION PROJECT Page 28


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.15 Airtel DTH Offers


1.16

SALES & DISTRIBUTION PROJECT Page 29


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.17 Plans & Offers

SALES & DISTRIBUTION PROJECT Page 30


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 INNOVATIONS IN CHANNEL MANAGEMENT:


 With the drastic improvement in technology, a centralized system can be set up in order to
reduce the number of channel members and the problems accompanying them. This may lead
to improvement in the communication among the channel members.
 Reduction of the number of methods through which a retailer can recharge his SIM in order
to do recharge/give service to the end customer. This method would help facilitate better
communication as well as improve monitoring of the business.

1.18 New Innovations in channels

• Use of Innovative / Emerging Channel Systems D.O.S.T. (door to door selling remote
location).

• Fixed salary.

• Incentives.

• IT systems in Channel Management – oracle, dealer portal, Online recharge and bookings.

SALES & DISTRIBUTION PROJECT Page 31


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 Modern Trade


• This is a modern distribution channel for expansion of business.

• There are 4 channel partners like- TMS, Mobile Bazaar, ARC & Airtel Exclusive Showrooms.

• ARC & AE - Comes under Retail’s own head which are employees of Airtel.

• For all information & every activity there are some FOS (Follow on Support) who maintains
gap between Retail’s own head & channel partners.

1.19 Modern Trade Distribution channel

• M.T. – Modern Trade, ARC – Airtel Relationship Centre

• TMS – The Mobile Store, AE – Airtel Exclusive Office

Airtel

M.T.

Mobile AE
TMS ARC
Bazar Office

1.20 Airtel Initiatives

One Airtel-
customers SALES & DISTRIBUTION PROJECT Page 32

using Airtel
THE AIRTEL DTH - DISTRIBUTION SYSTEM

Attitudinal
Attachment-
customers feel
that Airtel always
provides the best
service and they
do not want to
use any other
brand Creating an
Airtel family to
build a sense of
community-
through online
groups and
offline exercises
where Airtel users
are brought
together

SALES & DISTRIBUTION PROJECT Page 33


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 POTENTIAL REASONS FOR A CHANNEL CONFLICT IN


FUTURE:

1.21 Rural expansion may turn out to be margin dilutive

Rural expansion has not been margining dilutive so far despite aggressive rural network
Rollouts but maintaining operating margins would require a continued focus on managing
costs. While network costs are higher in rural areas, rural channels (marketing &
distribution costs, dealer commissions) are not expensive. This has helped in keeping costs
low and maintenance of margins for now.

1.22 The Impact of MNP

Introduction of Mobile number portability (MNP) is expected to be neutral to marginally


positive; management at Airtel is confident of maintaining/improving market share post-
MNP. Post-paid customer retention will be key (~6% of subscriber base generating ~20%
of revenues) through better value proposition and continued focus on QoS. Impact of MNP
may not be as significant for the prepaid segment (~94% of subscriber base) given the
existing low switching costs and already high churn rate in this segment. Thus, the
introduction of MNP can lead to a major change in the dynamics of the telecom industry
and will require a higher degree of co-ordination and communication between the channel
members. If one fails to do so, it might result in a channel conflict that will lead to a
substantial decrease in sales.

1.23 The Arrival of 3G Technology

Management does not expect the incremental capex for 3G to be substantial, given that it
will be an overlay on the existing 2G infrastructure. 3G rollout is expected to be phased;
metro/tier 1 locations are likely to be the initial potential markets for 3G. The introduction
of 3G technology will cause a major change in the dynamics of the telecom industry and

SALES & DISTRIBUTION PROJECT Page 34


THE AIRTEL DTH - DISTRIBUTION SYSTEM

might become a reason for channel conflicts unless cautious measures are taken to avoid
the same.

SALES & DISTRIBUTION PROJECT Page 35


THE AIRTEL DTH - DISTRIBUTION SYSTEM

1.0 REFERENCES
 Marketing Channel Management by Russell W. Mccalley
 Marketing Channels by Annie T. Couglan
 www.airtel.com
 www.tmcnet.com
 www.gtms-inc.com
 http://www.ossnewsreview.com/telecom-oss/advanced-sales-and-distribution-channel-
management-stimulates-growth/
 Distributors in Hyderabad and Chennai
 Ms. Shikha Solanki, Assistant Marketing Manager, Services Department, Airtel Office,
Okhla, New Delhi- 20
 Special Thanks To
 Mr. Madhubabu Jhammi, Regional Manager
 Mr. Vipul Dhorajiwala, Area Manager, Mumbai
 Raj Communication, Distributor, Mumbai

SALES & DISTRIBUTION PROJECT Page 36

Vous aimerez peut-être aussi