STRATEGIC

OUTSOURCING AT
BHARTI AIRTEL LIMITED
PRESENTED BY-
Sakshi Gupta (34
Sathi Pau! (3"
Shiti# Gupta (3$
Ba%kha &i' (()
Nikhi! Ra*at ()$
INTRODUCTION
Bharti Airtel Limited is a leading global telecommunications company with operations
in 20 countries across Asia and Africa.
Bharti Airtel becomes 4
th
largest mobile operator in the world.
Airtel is the largest provider of mobile telephony and 2
nd
largest provider of fixed
telephony in ndia! and is also a provider of broadband and subscription television
services.
"40# million subscribers as of $uly 20"0 %&odafone comes way behind at """ million
subscribers'
+i%st ,-.i!/ t/!/ph-01 2-,pa01 t- -uts-u%2/ /3/%1thi0' except mar(eting! sales
and finance

STRATEGIC OUTSOURCING
n )arch 2004! Bharti Airtel signed a deal with IBM for a "0*year partnership
arrangement for an +on demand, business transformation with payments
based on a predetermined percentage of Bharti-s revenues.
n $uly 2004! Bharti signed . successive deals with its telecom vendors
arranging for the transfer of the buildup and management of its telecm
networ( to vendors E%i2ss-04 N-kia and Si/,/0s.
Bharti-s arrangement with the telecom vendors was made on the basis of
installed erlang capacity and was structured in two parts*
". /he networ( design and installation
2. /he maintenance and running of the networ( once it was installed

0or networ( design and installation! Bharti would pay its vendors according
to the erlangs of capacity installed.
0or the second part of the agreement involving maintenance of the networ(!
the vendors established networ( operating centers %123s' capable of
monitoring activity in the networ(s and allowing for a rapid response once
problems has been identified.
0inancial penalties for underperformance as well as rewards for exceptional
performance were written into the agreement.
Bharti agreement with IBM was based on %/3/0u/ sha%i0'5 2ver a period
of "0 years! B) would design! build up! and maintain Bharti-s / networ(ing
exchange for a portion of revenues.

n order to arrive at a reliable estimate of Bharti-s earnings under the
agreement! B) conducted extensive analysis and loo(ed upon 2 (ey
factors*
(5 Th/ 0u,./% -6 Bha%ti su.s2%i./%s- /his factor was a ma4or input to
Bharti-s gross revenues as revenues

were a function of average revenue
per unit %A567' and the number of
subscribers.
)5 Th/ 0u,./% -6 Bha%ti /,p!-1//s7a'/0ts- t was also important as an
input to determine the cost of
maintaining Bharti-s / system.
B) also accepted an 8LA*based measurement system to monitor
performance.
IMPLEMENTATION
All sides expected some complications n implementation.
/he most challenging issue was the t%a0s6/% -6 p/%s-00/!.
/o allay the fears of transfer! all staff had provided with the option to return to
Bharti if they so wished. /he option remained available for a 2*year period
following the transfer in new organi9ations.
2ther issues included the 2-06!i2t ./t*//0 th/ 6u!6i!!,/0t -6 th/ t*-
8i66/%/0t -.9/2ti3/s -6 Bha%ti a08 3/08-%s and %/!at/8 t- ,at/%ia!
i,p-%ts5
ONE- YEAR LATER
/he most uni:ue feature of Bharti-s partnership with B) has been Bha%ti
0-t -0!1 ./0/6itt/8 6%-, '/tti0' a %-.ust IT p!at6-%, t- ha08!/ s2a!/
.ut a!s- 8%/* a !-t -6 3a!u/ 6%-, IBM /:p/%tis/ i0 /:pa08i0' its
.usi0/ss 2apa.i!iti/s a2%-ss th/ .-a%85
/he vendors are excited by the !a%'/ 3-!u,/ 2-,,it,/0t that Bharti was
willing to ma(e. 2n the other hand! Bharti had a p%/8i2ta.!/ 2-st ,-8/!5
/hus! Bharti Airtel is one of the few examples of a %/a! *i0-*i0 situati-0!
creating partnerships between Bharti and its vendors.
0ormer critics were now avid supporters! and the experimental pro4ect
became companywide.
/he vendors were very co*operative and effective in helping the staff
transition to the new organi9ations.

0or B)! the relationship with Bharti was a successful example of O0
D/,a08! the new model of customer relationship it wanted to implement.
As a next step of this experimental pro4ect of outsourcing! Bharti group trying
to get their telecom vendors to agree to a complete revenue*sharing
relationship.
SER&ICE LE&EL AGREEMENT
(SLA
8LA refers to a series of measures that the parties* Bharti and a vendor
agreed! would be used to monitor performance and set levels of
performance necessary to fulfill the conditions of the contract.
n this! if performance falls below the prescribed level! then the vendor
would be sub4ect to penalties. n some cases! rewards were also given if
performance exceeded expectations.
8LAs have been classified into 2 categories*
(5 C%iti2a! SLAs; /hese are defined to address business critical eventualities.
)5 +u02ti-0a! SLAs; /hese are defined for functional areas.