AIRTEL COMPANY PROFILE

PGPM-PTManagerial Economics

Group – 4

Analysts Anamika Kumari

Girish Goyal Malvika Naveen

Rohit Sahni

INDUSTRY OVERVIEW & ECONOMIC

ANALYSIS

Industry OverviewOverview

Telecommunication sector is globally recognized as one of the driving forces for overall economic development in a nation. Telecom is the prime support services needed for rapid growth and modernization of various sectors of the economy. Governments all over the world recognizes this fact and hence, has taken several major initiatives to provide a business friendly

environment for companies. In India, backbone of US $1.1 billion Smart City program is the telecom sector.

Growth Factor Connecting People to People (P2P) Connecting Machine to Machine (M2M) Hunger to move towards digitalization

In India, Industry is expected to witness the fastest growth because of government favorable policies and also 4G services now hitting the market.

Technology Advancement Increase in m-commerce Smart Phones

Market Segment Geography Demographic Psychographics

Benefits User rate

Customer Bargaining

Power

Supplier Bargain Power

Threat of New

Entrants

Threat of substitutes

Rivalry

Low High

Competition

Buyer Power

Substitute Products

Supplier Power

New Entrant Threat

Substitute Products

Porter’s 5-Force Model

Market Share (Revenue)

Market Share (Revenue & Subscriber)…

Growth of Telecom Industry is now more dependent on the Rural areas

Remote Home Automation

Utility Provider

ConvergenceSTB

Smart TV

Mobile

Camera

Netbook

Printer

Tablet

Fridge

Surveillance

Smart Meter

Connected Car

Connected

Healthcare

Connected Vending Machine

…

Contents Providers

Enterprise Customers

Smart Grid

Retail Customers

Future of Telecom Industry

COMPANY OVERVIEW

Bharti Airtel Limited (Airtel) is an Indian multinational telecommunications services company headquartered in New Delhi, India

Founded by Sunil Bharti Mittal in 1995

Airtel is Owned by Bharati Enterprise (52.7 %) & SingTel (32.5%)

19,564 Employees in India and South Asia & 5,130 Employees in Africa

Airtel provides GSM, 3G and 4G LTE mobile services, fixed line broadband and voice services depending upon the country of operation

It is the largest cellular service provider in India, with 230.66 million subscribers

Airtel is the largest mobile operator in South Asia and the third largest in the world with a 303 million subscriber base.

Company Overview

Leadership in India In 17 circles of the total 22 circles in

India with average RMS of 36.4% in these circles

Leadership in AfricaThrough organic as well as in-country

acquisitions we are #1 or #2 in 14markets in Africa

12%India and South Asia

revenue growth inFY 2014-15

6%African

revenue growth inFY 2014-15

Company - At a glance

Milestones

Business Overview

FINANCIAL ANALYSIS

Key Financial Analysis

Company Performance

Key Takeaways No 3 in Mobile operator globally with a total of 16% Market Share INR 920 Bn Global Revenues in FY 2014-15 Increase in Capex Productivity by 6%

India & South Asia – 11% YoYAfrica - 6% YoY

Mobile Services

13% YoYTele media

19% YoYDigital TV

6 % YoYAirtel Business

6% YoYTower

Infrastructure

SWOT ANALYSIS

SWOT Analysis

Present in 20 countries, India’s largest operator and third largest in the world

Strategically placed in growing economies with rising GDP, driving growths in mobile

Integrated service portfolio with dominant position in marketplace

Efficient utilization of operating and capital expenditures

Strengths Weaknesses Inadequate infrastructure in Indian and African rural regions pushing cost of operations. Integration in operations across continents Understanding evolving customer perceptions

in a multicultural and multi-lingual environment Increasing capital expenditure on state-of-the-

art network infrastructure

- Under-penetrated geographies: Africa and India

- Data explosion at its cusp with the proliferation of

Smartphones - Scalability on mobile: Mobiles act as a portal

to a new world of opportunities. - Large residual opportunity with bulk

investments in place

Large residual opportunity with bulk investments in Place - Political and economic uncertainties in Africa and India - Volatility in currencies - Higher than expected voice revenue

cannibalization led by potential competition, data profitability not completely covering the shortfall

Opportunities Threats

Risk Description of Risk Mitigation

1 Political instability and Government Relations

The Company operates in India, Bangladesh, Sri Lanka and 17 African countries. These countrieshave political instability, civil unrest and other social tensions. This put Airtel at the risk of frequent change in policy.

1. Proactively involve with key stakeholders in the societies in which it operates, and continuously assesses the impact of the changing political scenario.

2. The Company works hand in hand with other telecom operators in jointly representing the case for policy stability.

2 The Company’s strategy is to focus onthe growth opportunities in the emerging and developing markets. These markets are characterized by low to medium mobile penetration, low internet penetration and relatively lower per capita incomes, thus offering more growth potential. However, these countries are also more prone to economic uncertainties, such as capital controls, inflation, interest rates and currency fluctuations.

1. Presence across 20 countries diversified its risks and opportunities across markets.

2. Offering services including voice, data, Airtel Money and value-added services diversified product portfolio of Airtel a and hence minimized the risk.

3. To mitigate interest rate risks, the Company follows a prudent risk management policy, including hedging mechanisms to protect its cash flow.

Economic Uncertainties

3 Several regions, particularly rural and thehinterland, are handicapped by poor quality infrastructure, such as lack of proper roads, transport, power supply, housing, labour availability, banking and security, among others.This results in poor services to customers. This can result in lower growth rate or higher customer drop.

1. The Company’s philosophy is to share infrastructure with other operators, and enter into SLA-based outsourcing arrangements.

2. The disposal of towers in Africa to independent and well-established tower companies and long term lease arrangements with them will ensure high quality of assets and maintenance on the passive infrastructure.

Week Infrastructure

4 Issues Arising Out of Emerging Businesses and NewTechnologies

Evolving technologies (2G, 3G, 4G) result inchange in customer value propositions. The quality of internet experience, especially in a seamless manner and indoor environment has emerged as a key competitive parameter.This may result in impact on customer attrition and new customer acquisition.

1. Airtel’s strong strategic vendor relationships - especially in the areas of network technologies, IT, mobile money and a few other key VAS technologies help Airtel to keep pace with technology shifts and retain market leadership.

2. The potential risks of asset obsolescence are managed through leaner asset order pipeline.

Risk and Mitigation plan

Way Forward-Eco-System AnalysisApplications

NetworksDevices

Users Tomorrow3D Internet

Web Browsing

M-commerce

IPTV

Mobile -TV

Location - based

E-Learning

IMS

IP Core

3G

Computer

Camera Phones

Data-capable Phone

3.5GLTE

PDA

Business

Consumer

Network Computer

Increased Device Fragmentation

Smart Phones (iPhone, Gphone )

Machines

Teen/Youth

Enterprise

Consumer

Vertical Markets

SMEs

Gaming

Connectivity

Audio

Photos

Limited Public Wifi

One – Size Fits All

WLANIP

Cable

DSL

CircuitPhone

YesterdayVoice

FTTx PON

Today

Service Provider Network Kms

Towns Covered

Metros/Tier-I Cities

Other Cities/Town

Gram Panchayat

BSNL 6,14,755 28 K Panchayats      

Reliance 1,90,000 44      

Airtel 1,26,357 130      

Tatacom 40,000 0      

RailTel 37,720 600      

PowerGrid 21,652 110      

GAILTEL 13,000 200      

High Medium Low

Way Forward- Geography analysis

India: Incumbent with Growth Opportunity

ReferencesThanks and contact numbers

Way Forward

Way Forward