AIRTEL

INTRODUCTION (Company overview)

Bharti Airtel Ltd was incorporated on the 7th of July, 1995 as a Public Limited Company & one of the first companies to enter the Telecom Services business in India. As on date, Airtel provides mobile services in all the 22 telecom circles in India, Sri Lanka and Bangladesh. It was the first private operator to have an all India presence. Airtel provides Telemedia services (fixed line and broadband services through DSL) in 89 cities in India, DTH and IPTV services also. Sunil Bharti Mittal, the founder-chairman of Airtel, began his journey manufacturing spare parts for bicycles in the late 1970s. His strong entrepreneurial instincts gave him a unique flair for sensing new business opportunities. In the early years, Bharti Airtel Ltd established itself as a supplier of basic telecom equipment. Mr. Sunil Mittal jumped at the opportunity provided when the government opened up the sector and allowed private players to provide telecom services. Bharti Airtel Ltd accepted every opportunity provided by this new policy to evolve into India's largest telecommunications company and one of India's most respected brands. Airtel was launched in 1995 in Delhi and is today present in all of Indias 22 telecom circles. Airtel had gross revenues of Rs. 396,150 million1 (for year ended March 31, 2010-Audited) & a customer base of 131 Millon2 customers as of 31st March 2010. OUR BRAND Airtel was born free, a force unleashed into the market with a relentless and unwavering determination to succeed. A spirit charged with energy, creativity and a team driven to seize the day with an ambition to become the most admired telecom service provider globally. Airtel, in just ten years of operations, rose to the pinnacle of achievement and continues to lead. As India's leading telecommunications company, Airtel brand has played the role of a major catalyst in India's reforms, contributing to its economic resurgence. Today we touch people's lives with our Mobile services, Telemedia services, to connecting India's leading 1000+ corporates. We also connect Indians living in USA, UK and Canada with our callhome service.

VISION AND PROMISE 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." Airtel is a fully integrated telecom player offering end to end solutions: Wireless Services o 2G/3G o Rural Market o Sri Lanka o Bangladesh Telemedia Services o Fixed Line o Broadband o IPTV DTH (Direct-To-Home) Media Enterprise Services o Carriers o Corporate Passive Infrastructure Services

MARKETING STRATERGY ASSESMENT

Network expansion
BAL focused on expanding its network coverage all over the country before other players could expand on a big scale. In February 2008, it announced an annual investment plan of US $ 2 billion to expand its network over the next 3 years. This was substantially higher than its average annual investment plans of US$ 1.5 billion. BAL planned to add an additional 30,000 base stations to its existing 40,000 base stations for the fiscal year 2007 and thereby cover 70% of the country. Nearly 50 to 60% of the future expansion was to be in the rural areas. BAL also planned to cover 97% of the country by 2010.

In July 2007, BAL entered into a memorandum of understanding (MOU) with leading telecommunications solutions company Nokia Siemens Networks (NSN) for an end-to-end network expansion across all of BALs mobile, fixed, and intelligent network platforms. As part of the MOU, which was worth US$ 900 million, NSN was to expand BALs GSM network in 8 circles under a two-year project. It was one of the largest GSM expansion deals in India. BALs main aim of expanding its GSM network under the MOU with NSN was to increase its footprint in rural areas and increase its overall network capacity to face competition from the new players. Commenting on this major expansion deal, Kohli said, The expansion and integration exercise across mobile and fixed networks will help us in augmenting our service delivery capacity. As part of the deal, NSN was to also deploy 1.8 million next generation network ports across BALs national long distance and international long distance networks. Targeting All Segments On the value added services (VAS) front, BAL planned to launch new cutting edge VAS such as Mobile Payment Services and Mobile Money Transfer Services. BAL also planned to roll out complete mobile commerce (mcommerce) services which would facilitate services like online purchases with handsets. BAL entered into a tie-up with Nokia in 2007 to offer entry-level handsets to its customers. BAL was to offer Nokia handsets bundled with its connections at subsidized prices. This tie-up was aimed at countering the selfbranded handsets offered by Bharti Airtel such as Vodafone and Tata and also to facilitate its expansion in the rural areas. As part of the tie-up, the two companies were also to combine their advertising and marketing initiatives to tap the lower segments of the market. BAL also did away with the practice of using a single marketing strategy to target all the customers. It categorized the customers based on ARPU and adaptability to new VAS and technologies. High-end customers were segmented into a separate category called funsters. Industry experts said that as the mobile telecom market matured in India, the days of using a single marketing strategy for the whole mobile market were over and proper segmentation of the market would be the key for better targeting. BAL planned to focus its marketing efforts on these tech savvy heavy VAS users who were generally in the age group of 18-35 years. To improve its revenues and deal with the steadily falling ARPUs, BAL decided to get into tie-ups with leading manufacturers of high-end hand-held devices such as High Tech Computer 12

Corporation (HTC) and Research in Motion Ltd (RIM). Through these tie-ups, it offered products like the HTC Touch and the BlackBerry, which provided features such as push email, document support, and touch screen interface. These products were aimed at high-end corporate users whose ARPUs were high. BAL hoped to increase its falling ARPUs through a slew of such high-end offers. BAL also reduced its overall tariffs to woo its low-end users. On January 15, 2008, BAL reduced its tariffs to Re. 1 (around 2 cents) for its lifetime prepaid users -- a reduction of 50% when compared to the previous rate of Rs. 2 per minute. It even reduced the fixed charges for lifetime validity for prepaid subscribers to Rs. 495 from Rs. 999. BAL also introduced a number of postpaid plans like the Airtel Supersaver-399 which provided users with free talk time equal to the value of monthly rental paid by them. This brought the effective recurring monthly rental charges to zero. BAL aimed at removing the entry barriers and reducing the recurring maintenance charges for consumers so as to create a whole new customer base to feed its growth. The reduction in the tariffs and the lowering of the fixed and recurring charges were intended to increase the user base by further expanding the market. Analysts said that reduction in the entry as well as monthly recurring charges was the key to expanding in the rural markets. BAL also started new advertising campaigns to reposition the Airtel brand. Wooing the Rural Masses Analysts felt that increasing rural penetration was a very challenging task. Not only did the telecom companies have to contend with low ARPUs as most of the people living in rural areas had low incomes, but they also had to face other challenges like getting power connections and supply and having to build more and higher towers as population density in rural areas was low. This only added to the costs. India being a diverse country, there were various languages and dialects with some even not having alphabets and this made targeting the groups speaking these languages or dialects and providing mobile services to them that much tougher. In what analysts saw as another innovative approach to rural markets, BAL started to tie up with shop owners in remote areas of India and bundled information on issues important to the rural population (such as weather, crop yield, fertilizers, etc.) with the mobile phone. It also began providing economical plans (with handset bundling) to rural people to increase uptake. Our next 50 million will largely come from rural India as our plan is to reach 5,200 census towns and over five lakh (500,000) villages, covering 96 per cent of the Indian population, said Kohli.

In 2008, BAL launched a joint venture company, IFFCO Kisan Sanchar Limited (IKSL) with Indian Farmers Fertilizer Cooperative Ltd (IFFCO) to provide VAS and voice services to farmers throughout India. In addition to the low tariff of Rs.0.50 per minute between IFFCO members, it planned to offer economical handsets bundled with the mobile connection. The VAS platform was to broadcast 5 free voice messages daily on mandi prices, farming techniques, weather forecasts, diary farming, animal husbandry, rural health initiatives, fertilizers, etc. The farmers would also have access to a dedicated helpline manned by experts in various fields to answer 13

their queries. BAL said that the initiative would help in the development of the community as well as the rural economy.

Differentiation strategy
BAL had focused on differentiating itself in the Indian telecom market by ensuring customer delight and a cost-effective business model a business model of being profitable despite having the lowest tariff in the world. Building a Strong Brand Right from its early days, the company focused on building a strong brand through innovation in sales, marketing, and customer service. BAL adopted some innovative promotional strategies for its products. It enrolled celebrities as its brand ambassadors to take mobile services to the masses. It initially used Indian cricket star Sachin Tendulkar to promote its services. It also made Hindi film actors Shahrukh Khan and Kareena Kapoor its brand ambassadors to promote its products and services. The promotion of BALs services by Shahrukh Khan proved very successful, especially for its erstwhile prepaid mobile services brand Magic. BAL later used Shahrukh Khan in its ads for the launch of many of its other services. It also got noted Indian music director AR Rahman to compose special ring tones for its Airtel brand. Campaigns such as Express Yourself launched in 2003 went a long way in making Airtel a big brand in India. By the mid-2000s, the company had gone on to become one of the biggest advertisers in India, with total expenditure on marketing, distribution, and advertising of Rs. 12.55 billion (Rs.4.02 billion on advertising alone) in 2006-07.

Business model innovation

BAL also focused on remaining a lean organization. It was one of the first telecom companies to outsource its network deployment (to Ericsson and Nokia), IT services (to IBM), and customer contact centers (to IBM Daksh / HTMT). It utilized different payment models from revenue per share to cost per all, depending on what worked for the parties involved. According to analysts, this helped the company save on capital expenditures and lower its operational expenses. According to management consulting firm Oliver Wyman, BALs operating expenses as a share of revenue had declined 8% annually since 2003.28 Analysts felt that this had helped BAL in offering customers its services at low cost and also to focus on its core business while handling any changes in consumer demand in a flexible way. With the price of calls per minute becoming lower by the day, it became important for the company to control costs if it wanted to invest in building a sustainable business. We were seeing people laugh at us, saying how can you give away your lifeline to vendors? We were very clear that the technology was not something we need to focus on.

Technology is something we buy to sell to the customers. Ericsson, Nokia, and IBM do technology for a living, so lets give it to them because they know best. It has made the business model of Bharti very, very sustainable, said Mittal. In addition to this, analysts felt that the company had negotiated the challenges posed by new entrants into the mobile phone market rather deftly. Competing with BSNL in the early 2000s was particularly tough. After entering the mobile phone market, BSNL introduced free incoming calls for its mobile phone users. This was a first in the Indian telecom market. BSNL also made use of its then strong fixed line user base -- 14

incoming calls made to its mobile phone users from its fixed line users were free. Private players like BAL, on the other hand, could not afford to provide free incoming calls to customers as they had to pay interconnection charges. But BAL later lobbied heavily through the COAI to get the GoI to reduce the interconnection charges and made the incoming calls free across all Bharti Airtel and the services offered.

New advertising strategy

Since branding played an important role in telecom, BAL also started a new advertising campaign to reposition the Airtel brand. From early 2007, it began to roll out some new promotional campaigns, one of the important ones being the Kuch Bandhan atoot hote hain *Some bonds are unbreakable+ campaign launched in March 2007. The campaign stressed the wide coverage that the nationwide mobile network of BAL provided. The advertisement featured a divided family reuniting after a gap of 22 years. The ad depicted a young man, who comes to his ancestral village to meet his grandparents for the first time. His father had left the village 22 years ago apparently due to some differences with his father, never to return. The grandfather refuses to talk to the boy first but relents later after speaking to his son on the mobile phone with BALs network. Not being purely emotional like its earlier Express Yourself campaign, the new advertisement campaign highlighted the capabilities of BALs mobile telecom network. BAL launched another major advertising campaign in December 2007 called Barriers break when people talk. The theme of the new advertisement was that communication dissolved boundaries and barriers broke down when people started communicating. The advertisement was shot in Morocco and the characters in it spoke a French dialect. The ad was based upon the story of two boys separated by border fencing. When one of the boys starts playing with a football it falls on the other side of the fence. Hearing the sound, the boy on the other side of the fence comes out of his house. The first boy persuades him to kick the ball over the border fence. Eventually, the two boys crawl under the fence and start playing football with each other. No celebrities were used in the film and the two protagonists in the advertisement were picked up from the streets of Morocco. This new advertising campaign from BAL was considered one of the most creative advertising campaigns in the Indian telecom sector. Marketing experts said that the main aim of this new advertisement campaign was to bring iconic status to its Airtel brand. As BAL was expanding into foreign telecom markets, the ad

campaign also aimed at projecting Airtel as a global brand. The campaign aimed to achieve this by making the advertisement in a foreign land. The need to project Airtel as a global brand was felt more urgently as it had to face competition from global brands such as Vodafone, they said. BALs various initiatives helped it attain a dominant position in the market (Refer to Table below for the top mobile telecom Bharti Airtel in India as on 31st Jan 2008). According to a report published by management consulting firm Oliver Wyman, BAL had been the best performing communications, media, and technology (CMT) company for five years (2001-2005), in terms of Shareholder Performance Index. In 2007, a leading business magazine Business Week ranked BAL third in their ranking of infotech companies in terms of shareholder return. Top Mobile Telecom Bharti Airtel in India from M Rajendran, The Great War, www.businessworld.com, February 15, 2008. In addition to fuelling high growth, Airtels marketing strategy and its business model attracted the admiration of many industry experts. In 2007, it was recognized as the Best Indian Emerging Market Carrier in the prestigious Telecom Asia Awards 2007. In 2005 and 2006 too, it received awards such as the Best Indian Carrier at the Telecom Asia Awards 2006 and the 2005 Indian Mobile Operator of the Year by Asian MobileNews. In 2006, in the Frost and Sullivan Asia Pacific ICT 2006 awards, BAL bagged the awards for Wireless Service Provider and the Competitive Service Provider of the Year, while its CMD, Mittal, won the CEO of the Year award. Its business model too attracted the attention of industry experts and competitors. In 2005 and 2006, this model received three awards from Asias leading IT management magazine MIS Asia - MIS Asia IT Excellence Award for Best Change Management in 2005; the MIS Asia IT Excellence Award for Best Bottom Line IT in 2006; and the MIS Asia IT Excellence Award for Best Knowledge Management in 2006. In 2006, it also received the Nasscom IT Innovation Award for the Business Model Innovation. Besides, BAL had been ranked among the top innovative infotech companies by BusinessWeek magazine since 2004. For instance, in 2006 and 2007, it was ranked 10th and 14th respectively in the list of top 100 infotech companies, ahead of many illustrious infotech firms. 16 For his contribution to the development of the Indian telecom sector, Mittal was awarded the GSM Association Chairmans Award 2008, the highest honor in the global telecom sector. Analysts felt that he had built up BAL from scratch with a business model that had become the benchmark for emerging markets. They felt

that the BAL business model had generated a lot of interest among competitors and MNCs venturing into the emerging markets had a lot to learn from it. Some of its competitors, particularly the Indian ones, had even started imitating this model.

PEST ANALYSIS- EXTERNAL ANALYSIS

Political
Regulations Political Opposition to participation by the private players Govt support to promote FDI in Telecom sector Banning of Phone Use in Certain Circumstances

Technology
Equipped with New Technology Rapid Industrial growth rate induced by emerging technologies. Strong Fibre Optic Network Utiilization of E- Commerce facilities Efficient Customer Care Services

Economic
Cost of calls Being Driven Down Worldwide Recession- Both Boon & Bane Middle class consumer base growing due to accelerated economic growth Untapped markets in emerging Economies New Opportunity

Socio-Cultural
High End Phones becoming status symbol Due to Intimate family bonding in Indian Culture, there is need to remain connected Tech Savvy Generation

AIRTEL Strength & Weakness

STRENGTHS WEAKNESSES
Outsourcing of Core Systems Lagging behind in Exploring market Investment opportunity

INTERNAL EXTERNAL

Valuable Business Partners Techno & Financial Strong Brand Image First Mover Advantage Single Private Leading Indian Telecom Company Enthusiastic & Innovative Business Development team Marketing Driven Low Cost Model Blessed with Directional Visionary - S.N. Mittal Massive Economies of scale from large subscriber base

OPPORTUNITIES
Tele-Density 30.6% Low among Developing Countries
Low Broadband Penetration Falling ARPU

THREATS
Intense Competition From Nearest Competitor Shortage of Bandwidth New Players Entering Indian telecom sector Uncertain Economic Condition

Untapped Rural Market

Bharti Infratel Cutting Down cost in Rural area

Growing Globally
First Indian Sponsor to signed Manchester United

Competitor Analysis

Competitor Analysis
40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% Bharti Rcom IDEA MTNL

OP Margin

Net Margin Sep-072 Sep-083

Best OP Margins & Net Profit Margins among Peers

Company

Sep-07

Sep-08

Bharti Rcom
IDEA MTNL

43.00% 37.90%
32.80% 23.70%

38.00% 31.60%
26.60% 22.90%

26.40% 23.90%
14.10% 7.00%

19.30% 13.20%
6.50% 6.80%

Source: CMIE November 2008

Competitor Market Share Threat HIGH

LATEST MOVES FORAY INTO NEW TECHNOLOGY

The next generation 3G services were another area on which BAL decided to focus so as to retain its dominant position in the Indian mobile telecom services market. It also planned to start the next generation 3G mobile services as and when GoI declared its policy and allotted the spectrum. Analysts said that 3G could help BAL to increase its revenues in view of its steadily falling ARPU and that 3G could also be a new growth engine in saturated circles like the big metros. Mittal said, Bharti wants to be an early player in 3G and as and when the auction for spectrum is announced, Bharti will participate in the process. Bharti Airtel participated in the 3G spectrum action announced by the GoI in May 2010 and won the highest no. of circles won by any single operator thirteen. The cost was however a stupendous Rs. 12,290 crores. The thirteen 3G licenses bagged by Bharti Airtel cover 59% of India's cellular subscribers and 61% of revenues this is the maximum 3G coverage any telecom operator has managed. Data released by sector regulator TRAI reveal that regions where Bharti has bagged 3G spectrum contributes about 70% of its revenues. Put simply, Bharti Airtel has protected a big chunk of its 2G footprint. Heres another way to look at how well Bharti has defended its fortress in the nine circles where Bharti has lost the license, its average revenue per user (ARPU) is 15-20% lower than the national ARPU. In other words, Bharti has defended its most lucrative markets.

But theres one glitch in these nine circles (where Bharti has lost the license), Bharti is still among the top three. That position may now erode as customers may switch to rivals who have won 3G spectrum in these circles. Industry watchers say its 3G bid is equivalent to six months of its revenues in these 13 zones the lowest in the industry. Moreover, its total bid amount is only 12% of its current market cap, easily the least amongst all listed telecom companies who were successful in the auctions. In metro markets, about 10% subscribers account for about 35-40% of revenues. A large number of them would already have 3Genabled handsets that will enable incumbents such as Bharti to quickly transition these subscribers to its 3G network. This will allow for a quick build-up of traffic on its 3G network and allow Bharti to extract the cost efficiencies of a 3G network, research analysts Srinivas Rao and Amyn Pirami at Deutsche Bank said in a note on Wednesday. Bharti executives point out that large parts of its networks are already 3G-ready as the telco had begun upgrading its networks over the last 24-months a step that will enable it to deploy 3G speedily and with minimum capex. What strategy can Bharti Airtel take to break-even on 3G? Bharti Airtel needs to be very careful in the selection of its strategy options as the stakes are very high now. BAL needs to work with the other ecosystem players to ensure that the total cost of ownership is as low as possible and that the relevant content is available to attract users 19

to 3G. Here are some of the actions that can be taken by Bharti Airtel to breakeven faster than what most of the analysts think: 1. Replicate Minute Factory Model: The Bharti Airtel have been innovative in bringing the costs down in 2G by changing the measurement metrics from ARPU to margins per minute. They have considered their business as a Minute Factory where minutes are sold at a certain price and there is a cost to the minutes. As long as the realized rate per minute is higher than cost per minute by 30-35%, they are okay. Their entire effort has been to bring down the cost of minutes and have looked at network outsourcing, lower tariffs among host of other things. Even in 3G, Indian Bharti Airtel would need to follow the same Minute Factory Model in their efforts to attract higher number of 3G users. However, this action is likely to result in lower ARPU which would in turn mean higher 3G users required to break-even. 2. Indirect bundling of handsets/ Upgrade schemes with handset vendors: Handset bundling in India is not very strong as the ARPU levels are low which means that the handsets costs cannot be recovered even in two years time. Also, BAL has focused on keeping the costs low and hence has not indulged in any kind of handset subsidy. However, this should not prevent them from looking at innovative ways of indirect handset bundling. They should be willing to offer network minutes for free in return for tie-ups with handsets companies. BAL should tie up with handset vendors to upgrade the handsets of its subscribers who are on the verge of replacing their handsets by proactively targeting subscribers with over 18 months old handsets. Studies have shown that after upgrading their handsets, the users tend to experiment more with mobile services resulting in higher ARPU. Handset vendors should also work with BAL to keep the aspiration levels high as well as keep the 3G handset prices low. Bharti Airtel should now decide to focus on music & videos and other VAS and the handset capability needs to be changed accordingly. 3. Focus on Non Voice Devices: Bharti Airtel should aggressively focus on non voice devices like data cards, net books and other devices needing connectivity. This would ensure higher revenues and faster break-even. In the coming years, the popularity of net-books, eBook readers and handheld tablets is bound to increase and hence the need for connectivity. 4. Ensure fair Revenue share: For the success of 3G, it is important to have the right content and Value Added Services (VAS) / applications for the users. The ecosystem would be more vibrant if all the players get a fair revenue share. Fair revenue share would ensure higher developer interest in developing new

applications. Unlike the other markets, the revenue share in India is heavily skewed in favor of telcos, which needs to change for quality content to be developed and mobilized. Once the users begin to shift to 3G, the 2G network would get decongested and Bharti Airtel would be able to offer GPRS/EDGE plans on 2G network to their subscribers, which is difficult to offer now due to network clogging. Subscribers should first experience internet and then would demand better speeds. Hence, GPRS can be a good stepping stone to complete 3G transition. It is therefore important for the Bharti Airtel to continue to focus on increasing GPRS penetration. 20

PRESENT OUTLOOK
On 9th June, rating agency Standard & Poor's lowered Bharti Airtel's credit rating, in view of its concerns regarding Zain deal, 3G spectrum and BWA spectrum funding. S&P lowered Bharti's long-term corporate credit rating to 'BB+' from 'BBB-' but said the outlook is stable. ICRA has also assigned a negative outlook to the long term ratings on 24th June. However, both the rating agencies maintain a stable outlook on the company from market position perspective. What has got both the rating agencies worried? One look at the debt burden on the company and the reason for the concern is clear. The debt funding for Zain is around $9 billion or Rs 42,000 crores at current exchange rates. Add to that, funding required for 3G auction is Rs 12,290 crores & for Broadband Wireless Access (BWA) Spectrum auction is Rs. 3,314 crores; additionally the debt on the books of BAL ending March is over Rs 1,200 crore. While the acquisition would enable Bharti Airtel to benefit by way of diversification into under-penetrated African markets which present scope for future growth, the company`s ability to successfully implement its low cost business model in these markets would be critical for its future profitability. ICRA is also concerned with the heightened competitive environment in the domestic telecom business at a time when company`s funding requirements for acquiring third generation (3G) and broadband wireless access (BWA) spectrum and related capital expenditure are expected to remain high. The company has acquired 3G licenses in 13 circles for Rs 122.95 billion and BWA licenses in 4 circles for Rs 33.14 billion. Though in the long run, 3G and BWA licenses would aid to enhance the data revenues of the company and provide it with a differentiating tool for retaining and acquiring high average revenue per user (ARPU) customers however in the short to medium term it would further impact the financial profile of the company. Bharti Airtel is committed to deleverage its balance sheet and is planning to raise around Rs 90

billion in its infrastructure subsidiary - Indus Towers - in the next two quarters. ICRA would closely monitor this development. The other rating sensitivity factors are ability of the management to integrate Zain`s operations with the Indian entity, steps taken by the management to augment Zain`s profitability and rationalize its capital expenditure; initiatives to build up significant 3G subscriber base in Indian entity and augment its data and value added services revenues. Notwithstanding the business challenges and increased leverage, the ratings derive comfort from Bharti Airtel`s integrated telecommunications operations, pan-India network presence, market leadership position in the domestic mobile services market, its strong free cash flow from operations and Singapore Telecommunications 30.5% effective ownership in the company, all of which speak highly about the company.

BHARTI AIRTELS INTERNATIONAL BUSINESS EXPANSION STRATERGY Bharti Airtel's Strategy Africa
Bharti Airtel announces strategic partnership to drive world class customer service across Africa THE East African region is set to benefit from a major partnership aimed at driving world class customer service across the African continent. Bharti Airtel, the owners and current operators of Zain mobile phone services announced her strategic partners in Lagos, Nigeria on Monday. Through the African Business Process Outsourcing (BPO) sector which promises to deliver economic growth to many countries across the continent, Bharti Airtel selected IBM (NYSE:IBM); Tech Mahindra and Spanco as partners to drive world class customer service across 16 African countries. An agreement is expected to be finalized soon. Under the agreement; Bharti Airtel, will outsource core customer service functions like call centres and back office as it prepares for significant growth in the region. The mobile telecommunications operator currently has over 40 million

customers across its African operations and is targeting to achieve 100 million by 2013. The selection of world class partners like IBM, Tech Mahindra and Spanco will enable Bharti Airtels mobile customers to enjoy world class customer service with the partners introducing quality best practices based on their experiences of working with international organisations in the telecommunications, banking, finance, insurance and retail sectors. The widespread adoption of the BPO model by Bharti Airtel across its operations will also have tangible benefits for development of the sector in each country, create additional job opportunities and develop local talent. The partners will provide services in each market which will sustain and build skills, capabilities and resources The outsourcing of customer service operations will play a key role in making Bharti Airtel competitive in Africa as it focuses on making mobile communications affordable and available to everyone across its 16 markets of operation. Our partnership with IBM, Tech Mahindra and Spanco is aimed at redefining and providing a world class and seamless customer experience in all 16 countries, Manoj Kohli, CEO (International) and Joint Managing Director, Bharti Airtel, said during the ceremony. He said further that, the BPO model has significant benefits for Bharti Airtels customers in the countries of operation and their economies. Partnering with world class organisations on such a massive scale therefore, will galvanise the BPO sector in Africa and be a catalyst for growth in the sector, These partnerships will offer career enhancement opportunities to our team in this specialist field as they will now get exposure to global best practices and the latest technologies, he added. This is the second major partnership announcement from Bharti Airtel on the African subcontinent. In September this year, Bharti

selected IBM to build and manage IT systems to power the mobile communications network across 16 African countries. "IBM's strategic relationship with Bharti Airtel illustrates its focus on emerging markets like Africa," said John Lutz, general manager, IBM Managed Business Process Services. "IBM's business process outsourcing unit helps clients manage functions like customer care so that they are able to channel critical resources to essential growth activities such as product design and marketing." According to a Deloitte report for the GSMA, the mobile communications industry association, less than 40 percent of Africans has access to a mobile phone. However, demand is growing at an average rate of 25 percent annually, and a 10 percent rise in mobile penetration could increase gross domestic product by 1.2 percent in developing markets. Vineet Nayyar, Vice Chairman, Tech Mahindra, said: Practically, there are three major benefits to Bharti Airtel from outsourcing its customer service functions. It can scale quickly to manage its expected growth, customers will receive first class service to global standards, and each market will benefit from talent training and development. By seeding the African BPO market with these three world class partnerships, Bharti Airtel is effectively kick-starting the onshore business process outsourcing sector across Africa. The three partners collectively employ over 90,000 people for providing BPO services in more than 100 countries. Kapil Puri, Chairman & Managing Director, Spanco, said: Bharti Airtel was the pioneer of adopting the BPO model across all its areas of operations in India. The experience and success that it achieved created a whole new sector in the country that is now regarded as the global centre of excellence for outsourcing. Bhartis vision is to replicate that success in Africa, not only for the benefit of its customers, but also to create an entire industry in Africa as a centre of BPO excellence. With its advantages of time zone location, multi-lingual fluency especially in English and

French, operational cost and robust network infrastructure, Africa can grow as a world class off-shoring destination for global organisations. Currently over 4,000 people are employed in Africa supporting Bharti Airtels customer service operations. Going forward the number of people employed in managing Bharti Airtels customer service functions will increase as Bharti Airtel expands its network and customer base. Bharti Airtel has operations in Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Seychelles, Sierra Leone, Tanzania, Uganda and Zambia. Bharti Airtel Limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. Bharti Airtel has been ranked among the six best performing technology companies in the world by BusinessWeek. Bharti Airtel had over 188million customers across its operations at the end of August 2010. Tech Mahindra is part of the US $7.1 billion Mahindra Group, in partnership with British Telecommunications plc (BT), the worlds leading communications service provider. Focused primarily on the telecommunications industry, Tech Mahindra is a leading global systems integrator and business transformation consulting organization. The company recently expanded its IT portfolio by acquiring the leading global business and information technology services company, Mahindra Satyam. Spanco is in the business of creating technology infrastructure to help drive governance efficiency across key sectors like government, power, transport and telecom. Spanco has a formidable presence in the BPO space spread over four continents catering to India, US/Europe, Middle East and African Markets. Spanco Ltd. is a public listed company and certified to ISO 9001:2008 and CMMI level 3.

IBM is the world's largest information technology company. It is a leader in developing computer servers, software, storage devices and microchips. It also fields a large business consulting division. The company has operations in more than 60 countries. It has a major presence in New York with headquarters in Armonk, research facility in Yorktown Heights, and a massive chip-making facility in Fishkill. IBM is a world leader in research and development and number of corporate patents received annually. In 2009, IBM reported revenues of $95.8 billion, down from $103.6 billion the previous year, and record net income of $13.4 billion.

Ogilvy Africa BV creates Team Airtel to provide integrated marketing solutions for Airtel across Africa
Bharti Airtel Limited (Airtel) today announced that it has appointed Ogilvy Africa BV (Ogilvy Africa) as its marketing services partner for Africa. This follows the completion of Airtels acquisition of Zain Groups mobile operations in 15 countries across Africa on 8th June 2010. Ogilvy Africa, part of WPP, the world leader in marketing communications services, has set up a specialist Pan-African business unit, Team Airtel, which will be exclusively dedicated to Airtel across the continent with its existing network of offices, delivering integrated marketing services advertising, media buying, market research and public relations. Team Airtel will also include The Brand Union who will be responsible for brand migration, Millward Brown for market research, Hill & Knowlton & Ogilvy PR for all public relations across all markets. The appointment continues and extends Ogilvy Africas existing relationship with the network, which has previously been responsible for planning and media buying for Zain across Africa. Ogilvy Africa will partner with Airtel to guide its long-term brand building across the continent and will provide overall creative direction and media planning and buying for Airtels African businesses and executing campaigns in each of its markets on the continent. Mr. Manoj Kholi, CEO of Bharti Airtel International, said We are delighted

to be partnering Ogilvy Africa in our endeavour to take the Airtel brand deep into the heart of every market we operate in. Given their breadth and depth to support Airtel right across the African continent, we believe we have the right partner to successfully take forward our brand strategy. Miles Young, global CEO, Ogilvy Group, said, It is a huge honour for us to support Airtel with its ambitious growth plans for Africa. Through the acquisition of Zains assets in Africa, Airtel has a very strong platform on which to build. Team Airtels role will be to bring the Airtel brand to life in every one of its African markets, and we have brought together a very strong integrated marketing team which is dedicated to this task. This deal represents a further significant step forward for Ogilvy and Scangroup in Africa. Simon Bolton, global CEO, The Brand Union said, "The Brand Union, using its network across Africa, India and London are proud to have played a significant role in 'Team Airtel' and now look forward to the opportunity to work with Airtel to create what will undoubtedly become one of the World's leading brands in the industry." Tech Mahindra partners Airtel in seven African countries Tech Mahindra, a leading Indian IT outsourcing company with global footprints, has started customer care services in seven African countries as a partner of telecom giant Bharti Airtel. "We see Africa as a growing developing continent and opportunities really do exist in Africa," Rahul Sabharwal, Tech Mahindra's vice president for Africa said in Accra. "The continent has become of strategic importance to us because of the growth that we see and Tech Mahindra wants to be part of the continent's development process," he said. Sabharwal added that the decision to expand operations in Africa was taken after the company had partnered leading telecom operators including MTN and Multilinks in Nigeria over a two-year period.

The countries in which Tech Mahindra will provide customer care services for Bharti Airtel, the telecom giant with operations in 16 African countries, includes the Republic of Congo, Democratic Republic of Congo, Gabon, Ghana, Malawi and Nigeria. Since February, the company had been operating a contact centre and a back office for Airtel in Ghana. "Tech Mahindra's entry into the country is likely to put a lot of focus on Ghana and this would lead to generating more employment for the people," Pushkar Gokhale, Tech Mahindra's country head, told IANS. "We started with 100 people when we opened, but after six months we have increased the number to 300," he added. Earlier this year, in a statement to mark the company's two years of operations in Nigeria, Sujit Baksi, president for corporate affairs and business service group, said that Tech Mahindra has recruited over 1,000 local employees in Nigeria. "It is our strategy to nurture local talent for effectively executing our BPO operations," he said. He said the company had also put into operation a programme to reduce its expatriate headcount over a period of two years in Nigeria in order to develop the workforce locally to run the operations. "With its telecom domain expertise and global experience over two decades, Tech Mahindra is committed to offering the best in the industry services to telecom operators leading to enhanced experience for the end consumers in Nigeria and the Africa continent as whole," said Krishna Gopal, vice president, sales and global alliances.

Airtel operates in the following countries: Country Site Remarks

Bangladesh

bd.airtel.com

Airtel Bangladesh had about 5.1 million customers at the end of June 2011.[8] Airtel Burkina Faso is the dominant player with 1,433,000 customers representing 50% market share.[9] Airtel Chad is the no. 1 operator with 69% market share.[9] Airtel is the market leader with almost 5 million customers at the end of 2010. Airtel Gabon has 829,000 customers and its market share stood at 61%.[10] Airtel Ghana had about 1.76 million customers at the end of 2010.[11]

Burkina Faso

africa.airtel.com/burkina

Chad

africa.airtel.com/chad

Democratic Republic of the Congo

africa.airtel.com/drc

Gabon

africa.airtel.com/gabon

Ghana

africa.airtel.com/ghana

India

airtel.in

Airtel is the market leader with almost 152.5 million customers at the end of 2010.[12] Airtel Kenya is the second largest operator and has 4 million customers.[13]

Kenya

africa.airtel.com/kenya

Madagascar

Airtel holds second place in the mobile telecom market in Madagascar, has a africa.airtel.com/madagascar 39% market share and over 1.4 million customers.[9] Airtel Malawi is the market leader with a market share of 72%.[9] Airtel Niger is the market leader with a 68% market share.[9]

Malawi

africa.airtel.com/malawi

Niger

africa.airtel.com/niger

Nigeria

ng.airtel.com

Republic of the Congo

africa.airtel.com/congob

Airtel Congo is the market leader with a 55% market share.[9] On 8 September 2011, Airtel announced that it had been awarded a licence by the Rwanda Utilities Regulatory Agency to operate 2G and 3G GSM mobile services in Rwanda.[14]

Rwanda

Seychelles

Airtel is the leading comprehensive telecommunications services providers africa.airtel.com/seychelles with over 55% market share of mobile market in Seychelles.[15] africa.airtel.com/sierra Airtel Lanka commenced operations on 12 January 2009. It had about 1.8 million mobile customers at the

Sierra Leone

Sri Lanka

airtel.lk

end of 2010.[16] Airtel Tanzania is the market leader with a 38% market share.[9] Airtel Uganda stands as the no. 2 operator with a market share of 38%.[9]

Tanzania

africa.airtel.com/tanzania

Uganda

africa.airtel.com/uganda

Zambia

africa.airtel.com/zambia Airtel operates in the Channel Islands under the brand name AirtelVodafone through an agreement with Vodafone.

Channel Islands : and Guernsey

Jersey

airtel-vodafone.je

ECONOMICS ANALYSIS ACQUISITION AND MERGERS

MTN In May 2008, it emerged that Bharti Airtel was exploring the possibility of buying the MTN GROUP, a South Africa-based telecommunications company with coverage in 21 countries in Africa and the Middle East. The FINANCIAL TIMES reported that Bharti was considering offering US$45 billion for a 100% stake in MTN, which would be the largest overseas acquisition ever by an Indian firm. However, both sides emphasize the tentative nature of the talks, while THE ECONOMIST

magazine noted, "If anything, Bharti would be marrying ," as MTN has more subscribers, higher revenues and broader geographic coverage. However, the talks fell apart as MTN group tried to reverse the negotiations by making Bharti almost a subsidiary of the new company. In May 2009, Bharti Airtel again confirmed that it is in Talks with MTN and companies have now agreed discuss the potential transaction exclusively by 31 July 2009. Bharti Airtel said in a statement "Bharti Airtel Ltd is pleased to announce that it has renewed its effort for a significant partnership with MTN Group". Talks eventually ended without agreement, due to the South African government opposition. Zain In March 2010, Bharti struck a deal to buy the Kuwait firm's mobile operations in 15 African countries, in India's second biggest overseas acquisition after Tata Steel's $13 billion buy of Corus in 2007. Bharti Airtel completed its $9 billion acquisition of African operations from Kuwait's Zain, making the firm the world's No. 5 wireless carrier by subscribers.Airtel has reported that its revenues for the fourth quarter of 2010 grew by 53% to US$3.2 billion compared to the previous year, newly acquired Zain Africa division contributed US$911 million to the total.However, net profits dropped by 41% from US$470 million last year to US$291 million this year due to a US$188 million increase in radio spectrum charges in India and an increase of US$106 million in debt interest. Telecom Seychelles On August 11, 2010, Bharti Airtel announced that it would acquire 100% stake in Telecom Seychelles for US$62 million taking its global presence to 19 countries. Telecom Seychelles began operations in 1998 and operates 3G, Fixed Line, ship to shore services satellite telephony, among value added services like VSAT and Gateways for International Traffic across the Seychelles under the Airtel brand. The company has over 57% share of the mobile market of Seychelles. Airtel announced plans to invest US$10 million in its fixed and mobile telecoms network in the Seychelles over three years , whilst also participating in the Seychelles East Africa submarine cable (SEAS) project. The US$34 million SEAS project is aimed at

improving the Seychelles global connectivity by building a 2,000 km undersea high speed link to Dar es Salaam in Tanzania. BSNL Added 3.0 Million Users & has a Total of 78.1 Million Users Vodafone Added 3.12 Million Users & has a Total of 121.16 Million Users IDEA Added 2.8 Million Users & has a Total of 78.8 Million Users Aircel has Added 1.2 Million Users & has a Total of 48.7 Million Users Loop Added 19,250 & has a Total of 3.0 Million Users MTNL Added 37,110 & has a Total of 5.09 Million Users S Tel Added 2,01,396 & has a Total of 2.06 Million Users Uninor Added 2.44 Million Users Total of 16.19 Million Users Videocon Added 1.12 Million Users & has a Total of 6.74 Million Users
16.19 5.09 2.06 3 78.1 48.7 6.74 BSNL vodafone Idea AIRCEL loop Mtnl 78.8 121.16 S Tel Unisor Videocon

Sales

OVERALL RANKING FOR AIRTEL ? RANK 1 2 3 4 5 Retailers 2 12 16 6 4

overall ranking of Aircel

4 15%

5 10%

1 5% 2 30% 1 2 3 4 5

3 40%

Interpretation- This data shows that the overall performance of AIRCEL in retailers is good with 40% respondent

COMPETITION OVERVIEW Major Players There are three types of players in telecom services: State owned companies (BSNL and MTNL) Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular, BPL Mobile, Spice Communications) MERGERS & ACQUISITIONS

CHALLENGES AND OPPORTUNITIES 4.1 Opportunities The telecom sector has been one of the fastest growing sectors in the Indian economy in past 4 years. This has been witnessed due to strong competition that has brought down tariffs as well as simplification of policy environment that has promoted healthy competition among various players.. The mobile sector alone has been growing rapidly and has emerged as the fastest growing market in the whole worlds. Currently of a size nearing 70 million (GSM and CDMA), this sector is expected to reach a size of nearly 200 million subscribers by financial year 2008. The government has eased the rules regarding inter circle and intra circle mergers. This has led to a slew of mergers and acquisitions in the recent past. Also as the sector is moving closer to maturity, further consolidation is a reality and this will lead to the survival of more profitable players in this segment In order to further promote the use of Internet in the country the government is taking proactive steps to develop this sector with the help of the various players in this segment. For this purpose, the use of broadband technology is being mooted and this will go a long way in improving the productivity of the Indian economy as well as turn out to be the next big opportunity for telecom companies after the mobile communications segment Non-voice services and VAS are the gold mines. The big takeoff is expected with the rollout of 3G services in early 2007, once the spectrum issues are sorted out. Internet users base fast reaching near the English speaking population base. Local language and content required for further growth Infrastructure equipment cost is down to a fraction of what prevailed just a few years ago. Operators can plan better expansion plan now Increased viability for the operators to expand to semi-urban and rural markets, hence, accelerate growth further

Its not without reason that India is tipped to be the worlds third-larges economy by 2050! No wonder if it happens much earlier Investors can look to capture the gains of the Indian telecom boom and diversify their operations outside developed economies that are marked by saturated telecom markets and lower GDP growth rates. At a time when global telecom majors are struggling to cope with their losses and the rollout of 3G networks, which has been a non-starter for close to a year now; India, with its telecom success story, represents an attractive and lucrative destinations for investment.

QAM
Aircel, the GSM mobile operators subscriber base has now crossed 50 million subscribers Aircel added 1.2 million subscribers in November 2010 and its Total subscriber base at the end of November 2010 was 48.7 Millio

Research objective-:
To analyze the AIRCEL market in gzd & collecting retailers feedback on AIRCEL.

Research design-:
The method of data collection is doing survey from telecom retailers of Noida by a questionnaire It is a statistical study required for quick results. The research environment was the field setting as the method of study was analyzing the data collected by conducting a survey Sampling process-: Target market-: The target population was the telecom retailers of Noida region which is choose sectorwise . Type of the sample is the Random sample is taken for the collection of the primary data .

Sampling procedure-:
Sample size- 40 Instrumental used- : Collection of database-: Primary data-: questionnaire. Secondry data-: Through Net Through magazines Data is collected through survey of retail stores of telecom by filling a

Through news paper, we are looking at a portfolio of over 60,000 within the next two years. No player with less than 60,000 will be able to survive in the market. He added, You need such numbers to cover about 70% of the country's geographical area.

Cellular service provider aircel is betting big on its information technology, as the company treads into new telecom circles and plans to double its subscriber base to 30 million by end of this year. Ashwani Mishra Chennai-based mobile services provider Aircel is eagerly awaiting the start of the second season of the Indian Premier League (IPL) which begins this April. Not only because it is the lead sponsor for the Chennai Super Kings but also because it would be the time when the telecom provider would start opera

Questionaire
1) How would you rate following operator in network? a) Aircel 1______2 ______3______4______5______

b) Airtel

1______2_______3______4______5______

c) Vodafone

1______2_______3______4______5______

d) Reliance

1______2_______3______4______5_______

d) Idea

1______2______3_______4______5______

2) How would you rate following operator in trade communication (dealer scheme etc)? a) Aircel 1______2 ______3______4______5______

b) Airtel

1______2_______3______4______5______

c) Vodafone

1______2_______3______4______5______

d) Reliance

1______2_______3______4______5_______

d) Idea

1______2______3_______4______5______

3) How many customer queries you get on daily basis for Aircel? a) 1-5 b) 5-10 c) 10-15 d) 15-20 e) more than 20

4) How would you rate following operator in claim settlement?

a) Aircel

1______2 ______3______4______5______

b) Airtel

1______2_______3______4______5______

c) Vodafone

1______2_______3______4______5______

d) Reliance

1______2_______3______4______5_______

d) Idea

1______2______3_______4______5______

5) How would you rate Aircel in distribution service (FOS visit etc) a) 1 b) 2 c) 3 d) 4 e) 5

6) How would you rate following operator for customers/dealers problem resolution?

a) Aircel

1______2 ______3______4______5______

b) Airtel

1______2_______3______4______5______

c) Vodafone

1______2_______3______4______5______

d) Reliance

1______2_______3______4______5______

d) Idea

1______2______3_______4______5_____

7) No. of sim connection sold last one month? a) Aircel b) Vodafone c) Airtel d) Reliance e) Idea __________ __________ __________ __________ __________

8) What is the average activation time taken by distributor to activate a new customer? a. Aircel __________ b. Vodafone c. Airtel d. Reliance e. Idea __________ __________ __________ __________

9) Any suggestion you would like to give for Aircel?

______________________________________________________________________________ __________________________________________________________________ 10) Give overall ranking for Aircel? a)- 1 b)- 2 c)- 3 d)- 4 e)- 5

IN RANKING_ _ _ _ _ _

1 For ______ Poor

2 For ______ Average

3 For ______ Good

4 For______ Very good

5 For ______ Excellent

NETWORK
Sample size -: 40 retailers

Interpretation-: This data shows that Airtel is having first rank in network as it has rating of 4.93 on the rating scale of 5, and Aircel has got the 4 position with a rating of 3.79 on the rating scale of 5.

5
4.5 4 3.5 3 2.5 3.79

4.71

4.93

3.81 3.16

2
1.5 1 0.5 0 AIRCEL VODA AIRTEL REL IDEA
As its a new company so network has been a big problem but still the company is trying its best to solve the problem. The tower are been installed at a rapid speed.

As compared to its competitors aircel stands 4th in the network (airtel, voda, idea, reliance gsm). Its not going to take long when the network of aircel limited will be giving the competition to the No. 1 network in Delhi & NCR i.e. airtel. The reason being that its about to install 1200 tower in Delhi & NCR within 3 months.

How would you rate following operator in trade communication (dealer scheme etc)?
3.98

4 3.9 3.8 3.7 3.8

3.72
3.67

3.61
3.6

3.5
3.4 AIRCEL VODA AIRTEL REL IDEA

TRADE COMMUNICATION
Sample size -: 40 retailers Interpretation-: This data shows that Reliance GSM is having first rank in trade communication as it has rating of 3.98 on the rating scale of 5, and Aircel has got the 5 position with a rating of 3.61 on the rating scale of 5.

 Retailers schemes are not lucrative from new brand prospective Retailers want some more claim schemes like Reliance GSM,Airtel If some good scheme provided to them they can give good business

No. of sim connection sold last one month?

AIRCEL VODAFONE AIRTEL RELIANCE IDEA

314 439 586 502 251

Sim sold in last month

idea 12% reliance 24%

aircel 15% aircel vodafone vodafone 21% airtel 28% airtel reliance idea

RECOMMENDATIONS

1. There lies a good opportunity to work with retailers or a mediator between Aircel & retailers and find the retailers thinking about these operator 2. Airtel is the market leader in telecom sector and Aircel is having 4th these operator.. position in

3. Respondents feel that the areas where Aircel should improve are Network and claim settlement. 4. Aircel should improve its network as network coverage has emerged as the prime problem after data analysis . 5. Sign board of Aircel should be distributed to each retailers 6. FOS visit should be on daily basis 7. Salesmen should be trained regarding offers & scheme 8. Margin to dealer should be increased in comparison to other telecom operator

9. SIM activation time should be reduced 10. E-TOP UP no . should be provided to those selling Aircel sim. retailers who are interesting to

11. As per the data analysis the glow sign board are not properly distributed. Its very important for any company to do its branding properly because it might just make the retailers totally not interested in selling the product. Company should also order the distributors to keep a check that the posters are properly distributed in the market because it is seen that pop are not distributed properly even though the company is providing distributors with enough pop.

Aircel, the GSM mobile operators subscriber base has now crossed 50 million subscribers

Aircel added 1.2 million subscribers in November 2010 and its Total subscriber base at the end of November 2010 was 48.7 Millio