INITIAL REPORT Internship Program 2009

Company: Vasani Enterprises Company Guide: Mr. Jayesh Vasani

Submitted to: Mrs. Seema Sant Submitted by: Mr. Kedar Pawaskar Enrollment no: 8NBMM008

Indian Telecom Industry Facts

One of the fastest growing cellular markets in the world in terms of number of subscriber additions 19.35 million in 3 months (April to June 2008)

Expected to reach total subscriber base of about 500 million by 2010 (i.e., more than one phone for every household)

Annual growth rate of the telecom subscribers 47 percent (200708)

Fastest Growing Sector CAGR 22% (2002-07) Second Largest Telecom Market Lowest tariff charges in the world Wireless Subscribers 315.3 Mn Wireline Subscribers 38.4 Mn Teledensity 30.6 23 Circles - 4 Categories ( Metro, A, B & C) Bharti Airtel Largest player with presence in 23 Circles

PORTER'S GENERIC COMPETITIVE STRATEGIES Cost Leadership Strategy A firm gains cost leadership in an industry when its cost of production is lower than that of its competitors. Airtel has gain cost leadership by managing its processes and resources efficiently and effectively. By bringing down its operational costs, an Airtel has offer its products and services at lower prices. It has also earn higher profits because either the profit margins are greater or the sales volume has increased. Operatio nal margin compan y Bharti Rcom IDEA MTNL NET MARGIN Sep 07 43% 37.90% 32.80% 23.70% Sep08 38% 31.60% 26.60% 22.90% Sep07 26.4% 23.90% 14.10% 7% Sp08 19.30% 13.20% 6.50% 6.80%

A cost leadership strategy works well for Airtel in the event of a price war in the industry. Since the firm is already working on a low price strategy, it has reap profits while the competitors ( mtnl / reliance/ tata) are bound to make losses.

Differentiation Strategy The differentiation strategy adopted by the firms needs to possess sufficient skills and abilities to differentiate the product from that of the competitors based on some attributes that allow the consumers to perceive the product as different from that of the competition. Firms that adopt the differentiation strategy successfully have access to advanced scientific research, a highly skilled labor force, effective customer communication strategies, etc. Airtel is providing free digital EPABX with free leased lines (no connectivity charges).So the firm is providing latest EPABX to the customer which is costing approx Rs 50,000.
1.

Best service provider, good call center service esp. in local languages, good service even in the remote areas, emphasis on barriers break when people speak, new initiatives like google search on airtel live, downloads etc

2. Long term HR strategy, Gallup Great Workplace Award, Both internal developments as well as external hiring, development programs with iims.

Focus Strategy A firm pursuing a focus strategy tends to serve a specific segment instead of catering to the entire market. This segment may be a special group of customers, a specific geographic area, or a particular product or service line. The customers will also be loyal to the company and therefore, the entry of a new competitor into that area becomes difficult. Airtel is focusing on the customers who is having more than Rs10000 monthly landline billing. Airtel is offering landline

services which consist of PRI (Primary Rated Interface). Airtel can provide its service to a specific geographic area i.e. from Dahisar to Churchgate in western region & Thane to Panvel in eastern region

The above fig shows that revenue of Indian telecom industry was around $20 billion in the year 2005-06. It has shown tremendous growth of $42 billion in the year 2008-09.

As shown in the above figure the market share of fixed lines in India was 86% as compared to only 14% of wireless lines in 2007-08.

The Company provides broadband (DSL) and telephone services (fixed line) in 15 circles spanning over 94 cities across India. As on March 31, 2008, the Company had 2,283,328 customers (a growth of 22%), of which 34.8% (~795,000) were subscribing to broadband / internet services. The Companys strategy for Telemedia business is to focus on the cities with high revenue potential. The product offering in this segment includes supply and installation of fixed-line telephones providing local, national and international long distance voice connectivity and broadband Internet access through DSL.