Malaviya National Institue of Technology Jaipur

2nd Semester Master of Business Administration (2010-2012)

Project Report
On Operations Management

Operations Strategy of Airtel

TABLE OF CONTENTS

Chapter 1
Introduction..3 1.1 Summary of Abstract..4 1.2 Objective.8 1.3 Methodology...9

Chapter 2
Company profile...10 History..11 Organizational Structure...13 Value Chain..14. SIPOC...16

Chapter 3
Marketing Strategy BCG Matrix... Porter Generic Matrix 5Force Model. SWOT Analysis.

INTRODUCTION
We are one of Indias leading providers of telecommunication services with a nationwide presence in all the 23 licensed jurisdictions (also known as Telecom Circles). We served an aggregate of 88,270,194 customers as of December 31, 2008; of who 85,650,733 subscribe to our GSM services and 2,619,461 use our Telemedia Services either for voice and/or broadband access delivered through DSL. We are the largest wireless service provider in the country, based on the number of subscribers as of December 31, 2008. We also offer an integrated suite of telecom solutions to our enterprise customers, in addition to providing long distance connectivity both nationally and internationally. We have recently forayed into media by launching our DTH and IPTV Services. All these services are rendered under a unified brand Airtel. The company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in India. Successful businesses have extensive knowledge about their customers and competitors. Getting accurate and specific information about your customers and competitors is a critical first step in market investigation and development of a marketing plan. Accurate market assessment and development of an effective plan is critical to the success of both new and existing businesses. The market impacts and directs all aspects of the company's activities and ultimately will lead to success or failure of the business. In developing a market plan, your primary functions are to understand the needs and desires of your customer select or develop a product or service that will meet customer needs, develop promotional material that will make the customer aware, and ensure product or service delivery.

ABSTRACT
This document is the Final Research Product for BITM, titled OVERVIEW OF TELECOM SERVICES INDUSTRY IN INDIA & ANALYSIS OF BHARTI AIRTEL.

ABOUT BHARTI AIRTEL

Bharti Airtel is Indias no.1 reliable network, serving at around 88 million voice & data user subscribers. The need of research study is to study about Bharti Airtel,

understanding its various strategies that keep it ahead of all other competitors like Vodaphone, Idea, Reliance etc.. This study is undergone through various steps of research project. The method used for the research project are- Group Discussion, internet browsing, different graphs & chart study etc. From this analysis we found that Bharti Airtel has the largest market share due to its calling plans, Tariff plans and other strategies. y Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. y Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL). y India's largest and world's third largest cellular service provider. y More than 88 million subscribers as of 31 December 2008. y Airtel provides mobile & fixed wireless services using GSM technology across 23 telecom circles. y Largest Telecom Company listed on Indian Stock Exchanges. y The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

The service strategies of Bharti Airtel arey y y y y y y y y y y y Best-in-class technology: World-class Installation & Customer Service Interactive VAS to Drive ARPU enhancement One Airtel Synergies for Distribution, Brand & IT Data Products: Internet, MPLS etc Integrated Solutions to Drive Share of wallet Strategic Alliances Indirect Channel to Drive Penetration Deeper & Not Wider: 94 Cities Vertical & Not Horizontal: Hi-Rise Network Enhancement to Deliver 8+ MBPS New Products & VAS to drive Flat, combo plans

CORE BUSINESS AREA

Mobile Services - We offer mobile services using GSM technology on 900MHz and 1800MHz bands, and are the largest wireless service provider in the country, based on the Number of customers. Our 85,650,733 mobile customers accounted for a market share of 24.7% of wireless market, as on December 31, 2008. We offer post-paid, pre-paid, roaming and value added services through our extensive sales and distribution channel covering 1,069,706 outlets. Our network is present in 5,057 census towns and 401,882 non-census towns and villages in India, thus covering approximately 79% of the countrys population. Our network operating centers, which monitor the health of our mobile network are located in Gurgaon, near Delhi, and Chennai.

Telemedia Services We provide broadband (DSL) and telephone services (fixed line) in 95 cities with growing focus on new media and entertainment solutions such as DTH and IPTV. We had 2,619,461 customers as on December 31, 2008 of which 37.9% were subscribing to broadband/internet services. Our product offerings in this segment include supply and installation of fixed-line telephones providing local, national and international 5

long distance voice connectivity and broadband Internet access through DSL. We also remain strongly committed to our focus on Small and Medium Business enterprises .We provide a range of customised Telecom/ IT solutions and aim to achieve revenue leadership in this rapidly growing segment of the ICT market. The strategy of our Telemedia business is to focus on cities with high revenue potential, except for DTH which is an all- India offering. Airtel digital TV is available to customers through 23,200 retail points in 120 cities across the country.

Enterprise Services - Enterprise Services provides a broad portfolio of services to large Enterprise and Carrier customers. This division comprises the Carrier and Corporate business units. Enterprise Services is regarded as the trusted communications partner to India's leading organizations, helping them to meet the challenges of growth.

Carriers Carrier business unit provides long distance wholesale voice and data services to carrier customers as well as to other business units of Airtel. It also offers virtual calling card services in the overseas markets. The business unit owns a state of the art national and international long distance network infrastructure enabling it to provide connectivity services both within India and connecting India to the world. The national long distance infrastructure comprises of 90,205 kms of optical fibre, over 1,500 MPLS and SDH POPs and over 1,250 POIs with the local exchanges, providing a pan India reach. The international infrastructure includes ownership of the i2i submarine cable system connecting Chennai to Singapore, consortium ownership of the SMW4 submarine cable system and investment in capacities across a number of diverse submarine cable systems across transatlantic and transpacific routes. In recent past we have announced investments in new cable systems such as Asia America Gateway (AAG), India Middle East and Western Europe (IMEWE), Unity North, EIG (Europe India Gateway) and Eastern Africa Submarine Cable System (EASSy).

Corporate This business unit delivers end to end telecom solutions to Indias large corporate. It serves as the single point of contact for all telecommunication needs for corporate customers in India by providing full suite of communication services across data, voice and managed services. It specializes in providing customized solutions to 6

address unique requirements of different industry verticals; BFSI, IT, ITeS, Manufacturing and distribution, media, education, telecom, Government and PSUs and retail among others. Backed by the alliances with leading technology companies worldwide and state of the art infrastructure, it offers complete range of telecom solutions. These solutions enable corporate to network their offices within India and across the globe, provide them infrastructure to run business critical applications and provide them means to connect with their customers, vendors and employees.

OBJECTIVE
The aim of this research project is to study about different strategies used, different products used by Bharti Airtel. It also includes Indian market study, Bharti Airtel Corporate Study, its financial & Industrial study. Under this research project following points are covered-

METHODOLOGY

 Viewing the mergers & acquisitions done by the company & predicting its strategy .

 Examine the research papers & annual reports published by the compan

 Analysing the information given by the company about their products ,available on company website

COMPANY PROFILE
 Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises.  Bharti Airtel, formerly known as Bharti Tele-Ventures Limited (BTVL).  India's largest and world's third largest cellular service provider.  More than 88 million subscribers as of 31 December 2008.  Airtel brand is headed by Sunil Bharti Mittal.  Airtel provides mobile & fixed wireless services using GSM technology across 23 telecom circles .

 Indias First Telecom Company that provides telecom services in all the circles.  The company also has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

 Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange of India Limited (NSE) .  Per Share price of Airtel in BSE is Rs 601.40 (5th march 2009)

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HISTORY

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ORGANIZATIONAL STRUCTURE

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VALUE CHAIN- BHARTI AIRTEL

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SIPOC- BHARTI AIRTEL

There are 5 steps in the SIPOC process. 1. Supplier 2. Inputs 3. Process 4. Outputs 5. Customers

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Telecom Process Detailed-

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MARKETING STRATEGY
Core Value Of Airtel
Performance Dynamism Leadership

Targeting
Elite Up market professionals Entrepreneur with business plans Low income mass category Youth Women and senior citizens by post paid connection

AdvertisementAirtel basically uses two appeal to connect to the users Emotional Humorous

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BCG MATRIX-

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PORTER GENERIC MODEL-

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5 FORCE MODEL-

Customer Bargaining Power

Threat of New Entrants

Threat from Competition

Threat of Substitutes

Supplier Bargaining Power

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1 .Threat from Competition

Wireless Market Top 4 garnering 75% market share

HIGH

2.Customer Bargaining Power

 Lack of differentiation among Service Providers  Cut throat Competition  Low Switching Costs  Number Portability will have Ve Impact  Businesses & Consumers

HIGH

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SWOT ANALYSISStrength
Market Leader Recognized Globally Strong Brand Image Strong New Business Development team Strong Financials Largest Telecom Player 22.6%

Weakness
Outsourcing of core system Network Coverage

Opportunities
Low Broadband Penetration, Rural Telephony Bharti Infratel Cutting Down cost in rural area Current Tele-Density 30.6 is still low among developing countries

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Threats
Falling ARPU Intense Competition & Shortage of Bandwidth New Players coming in India Uncertain Economic Condition

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REFERENCES
1. 2. 3. 4. 5. Voice & Data.(Dec-08) http://www.bhartiairtel.in http://capitaline.com Investors presentation, Bharti Airtel Limited, November 2008 Telecommunication Services, Indian Industry: A Monthly Review, CMIE November 2008 6. Analyst Report Bharti Airtel, Assist C. Mehta Investments Intermediates Ltd. 7. Telecommunication Sector Report March 2008, CRISIL

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