airtel finncial analysis & marketing strategy
DESCRIPTION
Various strategy of Airtel which makes it to remain No. 1 Company in India by Subscriber & Revenue.TRANSCRIPT
GRAND PROJECT REPORT
ON
BHARTI AIRTEL LIMITED
SUBMITTED BY;-
Piyush Gaur
CONTENTS
Executive Summary 3 Introduction 4-8 History Change in Brand Logo & Taglines Objectives 9 Mission Company Overview Subsidiary Company 10 Organisation Structure 10 Strategic Business Unit 12 Market Share of Airtel 12-14 Subscriber Trend & Growth Competitors Business Partners & Partners Role 14 Marketing Mix 16 Value Chain Strategy 19 Financial Analysis 20-25 Company's Revenue Company's Working Capital Analysis Company's Advertisement Expenditure Revenue from Value Added services Marketing Analysis 25-29 Porters generic Strategy BCG Matrix 5-Force Model SWOT Analysis Awards & Recognitions 30 Research Methodology 30
EXECUTIVE SUMMARY
This report on Bharti Airtel is done to find out certain objective regarding the strategic approach adopted by Airtel to stand strongly in the competitive Telecom market. Airtel marketing strategy analysis is done using various models like Porters generic Strategy, BCG Matrix, 5-Force Model & SWOT Analysis of Airtel etc.
Also the detailed study of Financial Position of Company is done to find out its position in Market. The study includes Revenue Analysis, Working Capital Analysis, Asset turnover ratio of Airtel, & its expenditure on Advertisement as a percentage of Sales in recent period.
The report gives information about how Airtel adjusted itself in changing market conditions, what are the various strategies it takes to become India’s 1st company by Subscriber & Revenue.
INTRODUCTION
Bharti Airtel Limited formerly known as Bharti Tele-Ventures LTD (BTVL) is an Indian company offering telecommunication services in 19 countries. It is the largest cellular service provider in India, with more than 141 million subscriptions as of August 2010. Bharti Airtel is the world's third largest, single-country mobile operator and fifth largest telecom operator in the world with a subscriber base of over 180 million. It also offers fixed line services and broadband services. It offers its telecom services under the Airtel brand and is headed by Sunil Bharti Mittal. Bharti Airtel is the first Indian telecom service provider to achieve this Cisco Gold Certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore.
HISTORY OF AIRTEL
• Bharti Cellular launched cellular services 'AIRTEL‘ in Delhi in 1995,Himachal Pradesh in 1997, Karnataka and Andhra Pradesh circles in 1999
• In 1998, Bharti Telenet obtained a license for providing fixed-line services in Madhya Pradesh circle and in the same year, Bharti Telecom and British Telecom formed a 51% : 49% joint venture
• In 1999, New York Life Insurance Fund acquired a 3% equity interest in Bharti Cellular.
• In 2001, Bharti Cellular entered into a joint venture, Bharti Aqua net, with SingTel for establishing a submarine cable landing station at Chennai.
• In 2002, Bharti Cellular entered into license agreements to provide cellular services in eight new circles.
• In 2002, Bharti Cellular Ties up with Secondary School Certification Board, Hyderabad, where Bharti will announce SSC results to its customers on their mobile phones.
• In the same year, 2002, ICICI Bank ties up with Bharti for pre-paid mobile cards via ATMs.
• In 2003, Bharti Group's cellular brand Airtel has unveiled free multimedia messaging services (MMS) for its customers. The company has also rolled out pan-India GPRS (General Packet Radio Services) for its corporate subscribers.
• Launches its `IndiaOne MeetXpress' audio-conferencing service(2003)
• Airtel provides SMS facilities to hearing impaired in Chennai(2003)
• In 2003, Airtel Subscribers exceed 3 million mark.
• In 2004, Bharti Cellular entered into license agreements to provide cellular services in 6 new circles including Uttar Pradesh (East), West Bengal & Andaman Nicobar, Orissa, Bihar and Jammu & Kashmir.
• Same year Airtel launches GPRS services for pre-paid customers.
Following are the reasons for change in Tagline of Airtel
'Power to keep in Touch‘
YEAR- 1995-1998
SIGNIFICANCE-
-- The tag line 'Power to keep in Touch' used in the brand promise was designed to make the user feel 'in control…powerful'
-- Positioned in premium category aimed at elite class of society.
-- Perception of aspiration and lifestyle brand
REASON FOR CHANGE-
-- Now, cellular service operators could drop their prices and target new customer segments.
-- As the category developed with prices going down sharply, Airtel began talking to a wider spectrum of potential users. This gives the birth to the new Tagline.
'Touch tomorrow‘
YEAR- 1999-2001
SIGNIFICANCE–
-- Airtel started talking to new segments by positively positioning and establishing itself as a brand that improved the quality of life.
-- New look and the feel of the brand tagline indicated the core values of the brand i.e. leadership, performance and dynamism.
REASON FOR CHANGE-
-- Airtel started to look from a regional level to pan India position
-- Rediffussion DY&R, which is the ad agency that took charge of revamping Airtel's brand image thought, To become a Indian leader, Airtel need to change its tagline
'Live Every Moment'
YEAR– 2002-2003
SIGNIFICANCE—
-- This was the first time A R Rehman had agreed to work for any brand, anywhere in the world. The music from the commercial became the most downloaded ring tone in the history of telecommunications.
-- Tagline denotes that each and every person in India live every moment (emotions, feelings etc.) of the life with Airtel.
REASONS FOR CHANGE–
-- Rediffussion DY&R, which is the ad agency that took charge of revamping Airtel's brand image again changed the tagline to give better tagline to Airtel which catches some emotional appeal.
'Express yourself‘
YEAR- 2003-2008…….
SIGNIFICANCE—
-- ‘Express yourself' was successfully launched taking the ownership of the entire space of communication and strengthening the emotional bond Airtel enjoys with its customers
-- The masterminds behind the 'Express Yourself' campaign are the joint vice-presidents: Mr. Prashant Godbole and Zarwan Patel.
-- Airtel is a market leader in the cellular network and they wanted a very fresh and contemporary idea to build a brand image which their customers could identify".
Vision- By end of 2010 to be loved by more customers & Benchmark by more businesses.
Mission-To provides Error free & cost effective service delivery with Innovative products & Services to the customers.
Values- We will always put our customers first. We will always trust and respect each other. We will respect our associates as we respect each other. We will work together through a process of continuous improvement.
COMPANY OVERVIEW
• Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.
• In India Airtel is No. 1 by subscriber base and revenue.
• Bharti Airtel formerly known as Bharti Tele-ventures Limited (BTVL) is a JV between Singtel and Bharti Telecom.
• India’s 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.
SUBSIDIARY COMPANIES
• Bharti Hexacom
• Bharti Comtel
• Bharti Aquanet
• Bharti Broadband
• Bharti Infratel
• Bharti Telemedia
• Bharti Airtel (UK, USA, Canada, Hongkong, USA, Lanka)
ORGANISATION STRUCTURE
CMD’s (Founder) Profile:-
• Sunil Bharti Mittal
• He started his career at a young age of 18 after graduating from Punjab University in India and then he founded Bharti.
• Chairman & Managing Director since October 2001
• Age: 49 years
• Today, at 49, he heads a successful enterprise, amongst the top 5 in India, with a market capitalization of over US$ 40 billion and employing over 30,000 people.
• He is an alumnus of Harvard Business School, USA.
• He has been conferred one of the highest civilian award – Padma Bhushan.
• He has been conferred the degree of Doctor of Science by the G B Pant University of Agriculture & Technology.
FIGURES & FACTS
• Total Wireless subscribers in India In June 09 & July 09 are 102,367,881 &
1, 05,177,635 respectively.
• Total Wire line subscribers in India In June 09 & July 09 are 2,827,882 & 2,861,822 respectively.
STRATEGIC BUSINESS UNIT OF AIRTEL
MARKET SHARE
SUBSCRIBER GROWTH
PREPAID & POSTPAID USERS
COMPETITORS
National Long Distance
• BSNL, RELIANCE, VSNL, VODAPHONE, TATA, IDEA
International Long Distance
• VSNL, RELIANCE , BSNL
BUSINESS PARTNERS
Outsourcing Deals Vendors/Partners Features/Advantages
Network outsourcing & maintenance
Ericssion
Nokia siemens network
Ease in network planning
Payments Linked to
-Usage & Network quality
- Service level agreement
Informational technology IBM Pricing & payment as a % of Revenue
Passive infrastructure Bharti Infratel
Indus Towers
Reduced capex spend
Increase focus on sharing passive Infrastructure
Call center outsourcing IBM Daksh
Mphasis
Hinduja TMT
Aegis BPO
Nortel
Enhanced & Consistent customer experience
Common platform across the group
Partners Role
Service Partners/Vendors Role
Mobile services Ericission & Nokia
IBM Daksh
Mphasis
Hinduja TMT
Tele tech
Network Equipments partners
Call center operations
Telemedia & Enterprise services
Siemens
Nortel
Equipments suppliers
IT requirements IBM
Nortel
Group wide technology requirements
Call center technology requirements
OTHER ALLIANCE
In 2007, Bharti Airtel has entered into following major agreements and alliances:
• With Microsoft to offer software and services for the Small and Medium Business (SMB) market in India.
• As part of the agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal. Google will also incorporate advertising through its Mobile Ads product on the Airtel Live mobile portal;
• A three-year contract with Nokia at an estimated value of US$ 400 mn to expand its managed GSM/ GPRS/EDGE networks in eight Airtel circles and deploy a pan India WAP solution across its networks;
• The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company.
MARKETING MIX
PRODUCTS
• Airtel Connections Postpaid
• Airtel Connections Prepaid
• Airtel Data Cards
• Airtel Blackberry phones
* On 19 October 2004 Airtel announced the launch of a Blackberry Wireless Solution in India. The launch is a result of a tie-up between Bharti Tele-
Ventures Limited and Research In Motion (RIM).
• Airtel I Phones
* As of 22 August 2008, the Apple iPhone 3G is available in India on Airtel and Vodafone.
• Airtel Digital TV
* On 9 October 2008, Airtel joined the DTH bandwagon in India with Airtel Digital TV, a Direct-to-Home Television service
SUBSCRIBER BASE
• The Airtel subscriber base according to TRAI - Telecom Regulatory Authority of India as of February 2009 was:
Delhi - 4,671,177
Mumbai - 2,791,963
Madhya Pradesh - 7,690,609
Gujarat - 3,981,660
Andhra Pradesh - 8,892,353
Karnataka - 9,820,812
Tamil Nadu - 6,003,040
PRICE
Customer based pricing strategies.
Flexible pricing mechanism
Controlled by TRAI.
PLACE
It has wide and extensive presence even in the remotest areas
Airtel Customer Care Touch Points
Distributors like
E.g. Paan shops, grocery stores, chemists, outlet etc.
PROMOTION
Large scale print and video advertising.
Big celebrities like SRK and Sachin are roped in to endorse the product because it .
In 2002 Airtel got its Signature tune from A.R. Rehman, this signature tune is the most downloaded tune in India.
Provides innovations such as Bollywood movie premiers, music services such as ring back tones & many more.
PHYSICAL ENVIRONMENT
INNOVATION
VALUE CHAIN PROCESS
Telecom process Detail
Customer Importance- First they find the customer requirements.
Technology- Latest change in telecom technology.
Competitive position- Conduct SWOT Analysis of competitors
Capable Suppliers- Suppliers capable of component design
Start- Decide which service we are going to provide using which technology, who is our customers, Vendors & partners.
CORPORATE CUSTOMERS
Hathway – Internet gateway. National Long distance services.
EFD Corporation -
Raymond
Bajaj Allianz
Mphasis
Wipro
IBM Daksh
Large Stock Broking Company
FINANCIAL ANALYSIS
• Wireless Customer market share leadership at 24.7 %.
• Total minutes on network carried in Q3 – 143 billion.
• Total employee strength – 25,553.
• Balance sheet strength :
• Assets - $ 12 billion
• Net Debt - $ 677 million
• Net Debt to EBITDA – 0.21 times
Economies of scale and efficient working capital management helped boost profit margin
Company’s policy of retaining entire profits helps in keeping the D/E low despite surging loan book
Better controls helped check bad debt losses
Economies of scale help reduce the percentage cost of advertisement expenditure
AIRTEL REVENUE TELECOM SECTOR 2007-08
MARKETING ANALYSIS
TARGET CUSTOMERS
• Up market professionals
• Entrepreneur with business plans
• Low income mass category
• Youth
• Women and senior citizens by post paid connection
PORTER GENERIC STRATEGY
NARROW MARKET E.g.: VERGIN MOBILE
BROAD MARKET E.g.: VODAFONE E.g.: AIRTEL
UNIQUENESS COMPETENCY LOW COST COMPETENCY
BCG Matrix of Bharti AIRTEL
MARKET GROWTH HIGH STAR- DTH & IPTV,
BROADBAND
?- RETAIL INSURANCE
MARKET GROWTH LOW COW- MOBILE SERVICES DOGS- FIXED LINE SERVICES
MARKET SHARE HIGH MARKET SHARE LOW
5-FORCE MODEL
Bibliography
• www.trai.gov.in
• www.airtel.in
• www.wikipedia.com/airtel/
• www.airtel-broadband.com
• www.google.com