case bharti airtel
DESCRIPTION
TRANSCRIPT
STRATEGIC OUTSOURCING
@BHARTI AIRTEL
SECTION B - GROUP 9PIRAMANAYAGAM M. 12/262BADRINATH GM 12/260 SAURABH KUMAR 12/261MURALIKRISHNA BATCHALA 12/248RICHIE GIFTSON PAUL J 12/265
Time line - Bharti Airtel
Operations and services
Future Plan of Airtel
Indian Telcom market growth rate – 17% pa
In 2003, 1.5 mn additions of mobile user / month
By 2007, Bharti is expected to have GSM service in 5161 towns
For that, Required growth of 100 news towns per
month Need to hire 2000 to 3000 people
What they require ?
Core Competency
Operational Excellence Entire network management and intricacies
related to call management Involves efficient management of network
instruments Their bread and butter Good service to customers Helps in providing lower cost to customers
Proposed Outsourcing deal
Proposed Outsourcing deal
Governing Mechanism
Trust the vendors but verify them Process
Monitor them continuously Updating with latest R&D inputs Defined conflict resolution mechanism Defined reasons for contract termination
Advantages
Uncertainties in capital expenditures kept low
Transferring equipment investment risk to vendor
Pay for use and avoid excess capacity wastage
Lower Human resources cost due to their transfer to vendor companies
High bargaining power for Bharti, due to high competition between service providers
Problems of Outsourcing
More the outsourcing core business – more the dependency on vendors
Limitation of Bharti to use creative new application – IBM deal would limit them to their applications
Inertia from existing employees to transfers
Transfer of network assets built by Bharti
Vendor Concerns
Unused capacity will earn nothing, but necessary for operations
Inability to increase prices to cover the increased risk
Absorbing Bharthi employees Uncertainty in growth of Bharti
Why Outsourcing
Bharthi should go for outsourcing Huge capital expenditure needed to help
growing customer base Rapidly changing trends in telecom industry
leads to quicker obsolescence of equipments Keep the IT applications that are used to tackle
competition in-house Risk diversified by involving three vendors
instead on one Proper governing mechanism should be in
place
Thank You