market share of bharti airtel
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D E H R A D U N
m s
PROJECT REPORT
ON
MARKET SHARE OF BHARTI AIRTEL
SUBMITTED IN PARTIAL FULFILMENT OF THERQUIREMENT OF THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION IN
UTTARAKHAND TECHNICALUNIVERSITY, DEHRADUN
SUBMITTED BY: SUBMITTED TO:
------------------ ------------------
ROHIT PANT Ms. GARGIMBA 3ND SEM.
MB06029
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CERTIFICATE
I have the pleasure in certifying that Mr. /Ms. ROHIT PANT is a bonafidestudent ofMBA 3RD Semester of the Masters Degree in BusinessAdministration of Institute of Management Studies, Dehradun under ClassID No.MB06029.
He has completed his/her Summer Training Project work entitledMARKET SHARE OF BHARTI AIRTEL LTD. under my guidance.
I certify that this is his original effort and has not been copied from any othersource. This project has also not been submitted in any other university forthe purpose of award of any degree.
This project fulfills the requirement of the curriculum prescribed byUttarakhand Technical University, Dehradun for the said course.
Signature:
Name of the Guide
Date
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TABLE OF CONTENTS PAG
E
NO.
Acknowledgement 06
Executive Summary 07
Company Profile 09
Vision & Mission of Bharti Airtel.. 12
Service offered by Bharti
Airtel.13
Segregation of telecom sector 15
Market Players. 16
Fixed Line
Operators17
Subscriber base
Fixed line market
Fixed line v/s mobile
present trends
Future Challenges
Operators & their service
area...19
Cellure mobile Services in India.. 22
Industry Growth
Drivers..22
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Evolution Of Wireless Communication in
India..23
Road to 3G
Fight over 3G Spectrum In India
Market Share of Mobile... 26
prepaid v/s Postpaid
GSM. 28
GSM Share
Market Development Since 2001
ARPU
Expansion of GSM Operators
CDMA.. 40
Market Share Of CDMA/WLL
Internet. 43
ITES.. 50
Classification
SWOT Analysis Of Indian ites Sector
Threats Faced By Industry
Research Methodology. 65
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Elements Of Research
data collection
Sources Of data Collection
Analysis & Findings. 69
Recommendations. 78
Conclusion. 79
Annexure
.80
Bibliography.. 82
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ACKNOWLEDGEMENT
I take this opportunity to express my profound and sincere gratitude to Uttarakhand
Technical University for providing me with the opportunity to explore the corridors of
the Corporate World and gather invaluable information & practical experience via such
summer training project in Marketing.I take the privilege of offering deep sense of gratitude and indebtedness to Ms. Chitra for
providing me help to prepare this project report and his valuable inspiration to carry out
this project.
I express my sincere gratitude to my company guide Mr.Gitesh Taneja (Zonalmanager
Marketing)for his guidance during the course of my training. His sound advice has been
well taken by me and it is largely due to his patience that I was able to accomplish my
target. He has been most accommodating and supportive and has made my experience a
pleasant one.
I would like to thank all my colleagues and faculty members at I.M.S. for their valuable
suggestions and constant encouragement.
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EXECUTIVE SUMMARY
The project undertaken by me at Airtel as part of Summer Training Program provided me
an opportunity to understand the Mobile Services Segment and to gain an insight into the
various strategies employed to cater this segment of the industry.
The Mobile Services segment stands at the cusp of a new opportunity. This sector is
booming in India as the companies today are starting to operate globally thereby have an
increasing IT and Telecom needs. It provides a lot of opportunity for the telecom
companies to delve into this sector and find out the desired potential market.
Working from the office in Dehradun from 20th June 2007 to 30th august 2007, I have
learnt about the various aspects of Telecom sector in India and abroad. This project was a
practical experience as I learned who the different players in the market are and what is
their market share vis--vis airtel.
As a part of the project the following activities were done during the ten week summer
training project at Airtel Mobile Services:
Worked with marketing department of Airtel at Dehradun for developing a
Marketing Intelligence Repository, posted on the intranet which has beenintroduced by the company to facilitate sharing of information among the
marketing team with ease.
Prepared Questionnaire so as to find out the visibility index of airtel at
different circle.
Prepared a database of Airtel so that company could analyse data and take
corrective measures so as to enhance the visibility share of airtel in the
market.
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Analyzed Small and Medium retailers segment in Dehradun zone according
to a research conducted by us, and prepared a presentation on the Small,
Medium retailers and distributors individually.
To map the potential for growth of telecom services in the Dehradun
Segment the following activities were done
o Collected data from secondary sources like magazines, Newspaper
Articles etc. depicting figures for the past, Trends that the market has
shown and also the expected market and forecast results.
o Collected data from previous researches conducted by Airtel and other
agencies like IMRB, Frost and Sullivan, Ernest and Young etc.
o Collected primary data from survey conducted by us in Dehradun
circle which included Haridwar, Saharanpur, Roorkee, Rishikesh,
Kotdwar, Deobandh, Chutmalpur.
The survey was conducted in Dehradun Zone with main emphasis on learning about the
market visibility share of airtel and with respect to other competitors and with a wider
motive to educate the retailer about the various aspect of airtel and how can they increase
their sales and income by following some simple
Guidelines. Moreover the added advantage was that the make a buffer between
distributor and company and between retailer and company. The survey not only helped
in gaining an insight into the market share of airtel but also helped in giving personalattention to retailers problem. The survey was done in Dehradun Zone which included
areas like Haridwar, Saharanpur, Rishikesh, Kotdwar, Deobandh, Chutmalpur, and
Dehradun off course. The survey was also conducted in outer areas of different places so
as to gain full knowledge of the market. The survey was done on exactly 3000 retailers to
gain the first hand report on market.
The project has been a great experience for me as an individual and provided me an
opportunity to work in team on a practical project; thereby it acted as a platform for me to
gather first hand experience for exploring the corridors of the corporate world.
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About the company
Bharti Airtel is one of India's leading private sector providers of telecommunications
services based on an aggregate of 44,676,197 customers as of June 30, 2007, consisting
of 42,703,938 GSM mobile and 1,972,259 broadband & telephone customers. The
company is the largest GSM mobile service provider in the country, based on the number
of customers; it has an all India footprint, with mobile operations in all the 23-telecom
circles of India. The company also provides broadband & telephone services in 94 cities.
The company complements its mobile, broadband & telephone services with national and
international long distance services. For international connectivity to the east, the
company has a submarine cable landing station at Chennai, which connects the
submarine cable - Network i-2-i, connecting Chennai and Singapore. For international
connectivity to the west, it is a member of the South East Asia-Middle East-Western
Europe 4 (SEA-ME-WE-4) consortiums along with 15 otsher global telecom operators,
and has commissioned the fourth generation cable system. SEA-ME-WE-4 supports
telephone, Internet, multimedia and various other broadband and data. The company
provides reliable end-to-end data and enterprise solutions to the top corporate customers
by leveraging its nationwide fiber optic backbone, last mile connectivity in mobile and
broadband & telephone services, VSATs, ISP and international bandwidth access through
the gateways and landing station.
Few Key Milestones
Date of Incorporation July 07, 1995
First private operator to offer fixed line telephony June 04, 1998
Became a public limited company in India February 18, 2002
First Telecom Company to have an all India mobile footprint
(Presence in all 23 telecom circles in India) March 30, 2005
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Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti
Group has a diverse business portfolio and has created global brands in the
telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail
Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully
launched an international venture with EL Rothschild Group to export fresh agri products
exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance
Company Ltd under a joint venture with AXA, world leader in financial protection and
wealth management.
Airtel comes to you from Bharti Airtel Limited, Indias largest integrated and the first
private telecom services provider with a footprint in all the 23 telecom circles. Bharti
Airtel since its inception has been at the forefront of technology and has steered the
course of the telecom sector in the country with its world class products and services. The
businesses at Bharti Airtel have been structured into three individual strategic business
units (SBUs) - mobile services, broadband & telephone services (B&T) & enterpriseservices. The mobile business provides mobile & fixed wireless services using GSM
technology across 23 telecom circles while the B&T business offers broadband &
telephone services in 94 cities. The Enterprise services provide end-to-end telecom
solutions to corporate customers and national & international long distance services to
carriers. All these services are provided under the Airtel brand.
Bharti Enterprises is one of Indias leading business groups with interests in telecom, agri
business, insurance and retail. Bharti has been a pioneering force in the telecom sector
with many firsts and innovations to its credit. Bharti Airtel Limited, a group company, is
one of Indias leading private sector providers of telecommunications services spanning
mobile, fixed line, broadband and enterprise services. Bharti Airtel was recently ranked
amongst the top 10 best performing companies in the world in the Business Week IT 100
list and emerged as The Second most trusted Brand' in the most trusted Brand 2007
survey conducted by The Economic Times (ET) Brand Equity.
Bharti Airtel is structured into three strategic business units - Mobile services,
Broadband & Telephone (B&T) services and Enterprise services. The mobile business
provides mobile & fixed wireless services using GSM technology across 23 telecom
circles. The B&T business provides broadband & telephone services in 94 cities. The
Enterprise services provide end-to-end telecom solutions to corporate customers and
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national & international long distance services to carriers. All these services are provided
under the Airtel brand. Airtel's high-speed optic fiber network currently spans over
40,000 kms covering all the major cities in the country. The company has two
international landing stations in Chennai that connects two submarine cable systems - i2i
to Singapore and SEA-ME-WE-4 to Europe
MOBILE SERVICES:
Bharti Airtel offers GSM mobile services in all the 23-telecom circles of India and is the
largest mobile service provider in the country, based on the number of customers.
ENTERPRISE SERVICES (corporate):
The group focuses on delivering telecommunications services as an integrated offering
including mobile, broadband & telephone, national and international long distance anddata connectivity services to corporate, small and medium scale enterprises.
BROADBAND & TELEPHONE SERVICES:
The group offers high speed broadband internet with a best in class network. WithLandline services in 94 cities we help you stay in touch with your friends & family andthe world.
ENTERPRISE SERVISES(Carrier services):
The Company compliments its mobile and broadband & telephone services with nationaland international long distance services. It has over 35,016 route kilometers of optic fiberon its national long distance network. For international connectivity to east, it has asubmarine cable landing station at. For international connectivity to the west, theCompany is a member of the South East Asia-Middle East-Western Europe 4 (SEA-ME-WE-4) consortiums along with 15 other global telecom operators.
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Vision of Bharti Airtel Ltd.
MISSIONWe will meet global standards for telecom services that delight customer through
Customer service focus
Empowered employees
Innovative services
Cost efficiency
Our Vision
By 2010 Airtel will be the most admired brand in India:
Loved by more customers
Targeted by top talent
Benchmarked by more business.
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Services Offered by Bharti airtel ltd.
Telephone Services
NSD/ISD Services
Computerized Trunk Services
Pay Phones
National & International Leased Lines Circuits
Telex
Telegraph Services (Manual & Automatic)
X-25 based Packet Switched Data Network (INET)
Gateway Packet Switched Data Services (GPSS)
Gateway Electronic Data Interchange Service (GEDIS)
Gateway E-Mail and Store & Forward FAX Service (GEMS-400)
Concert Packet Service (CPS)
Satellite-based Remote Area Business Message Network
Electronic Mail
Voice Mail Audio-Text
Radio Paging
Cellular Mobile Telephone
Public Mobile Radio Trunked Service
Video-Tex
Video Conferencing
V-SAT
Internet
ISDN
INMARSAT Mobile Service INMARSAT Data Service
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SEGREGATION OF TELECOM SECTOR
The telecom sector has been one of the fastest growing sectors in the Indian economy
in the last 2 years. This has been witnessed due to string competition that has broughtdown tariffs as well as simplification of policy environment that has promoted
healthy competition among various players. Due to this reason telecom density in the
country has risen to 20.52% in FY07 compared to 3.64% in FY01.The telecom sector
is basically divided into three categories which are:
a) Basic fixed line
b) Cellular services
c) Internet
A)Basic Fixed Line: Until 1996 India was a pure fixed line market
TELECOM STATISTICS
Source: TRAI
June2007
DEC 05 Dec 06 June07
Total subscribers 92.76 mn 94.92 mn 225.01 mn.
Tele- density 8.80% 10.80% 20.52%
Fixed line 45.15 mn 55.15 mn 60.23 mn
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The players
The fixed line segment was a monopoly sector controlled by govt. until 1996, but after
sector was opened for the private players, there are now 6 private players and 2 states
owned.
SOURCE:COAI
BSNL & MTNL are 2 state owned companies & rests 6 BHARTI AIRTEL, TATATELE
SERVICES, SHYAM TELECOM, HFCL, RELIANCE & HUTCH are all private
players. Where BSNL holds the major share of the market. Then comes Private Sectors
Company BHARTI AIRTEL which holds a major part of market. Both these companies
have a big subscriber base. HUTCH, RELIANCE & MTNL comes one after another.
BSNLMTNL
Bharti (Touch tel)
Tata telecomShyam Telecom
HFCLRelianceHutchIdea
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Fixed line operator subscriber base
BSNL with a subscriber base of 34,862,000 is on the first position & then comes
another govt. holding MTNL which has a subscriber base of 4,475,000 .Then
Bharti airtel is the private sectors biggest telecommunication company with a
subscriber base of 609,047 subscribers.
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Fixed line market share
BSNL the public sector giant totally funded by government have majority market
share of 86 % in fixed line telephony.
It operates in all over India except Delhi and Mumbai where MTNL operates.
With the entry of more and more private players in the fixed line telephony, thecompetition is becoming fierce; as a result operators are now focusing upon
offering various services to the consumers along with their fixed line connections.
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Operators & Their Service Area
OPERATORS SERVICE AREAS
BSNL All over India
MTNL Delhi ad Mumbai
Reliance Gujarat, Haryana, Punjab, Delhi, WB, UP (E)
Bharti Delhi, M.P.
Shyam Rajasthan
Tata Delhi, Gujarat, Maharashtra, Tamil Nadu, AP
HFCL Infotel Only in Punjab
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Fixed VS Mobile
The difference between the numbers of fixed line and mobile subscribers is fast
narrowing.
In Delhi, Punjab and Haryana mobile users have crossed over fixed line users already.
This is because of Low tariff structures offered by mobile operators which are attracting
consumers to switch over to mobile phone subscriptions.
This trend has a two way side effect on fixed line telephony
fixed line operators are finding it hard to reduce consumer churn
Their ARPU has taken a big leap downwards
Reduced mobile tariffs could be explained as the most prominent reason for increased
mobile subscriber base. Various facilities like sms, mms, and games etc acts as a majorvariant to attract customers.
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Present Trends
Intense consumer shift towards mobile services
Low call tariffs
SMS over fixed line is available
Due to the major shift of customers from fixed to mobile services there is a
fluctuating ARPU
Low subscriber additions
Private operators like Bharti is increasing its market share constantly.
Future challenges
To provide more data services on fixed line
To reduce customers turn towards mobile service.
To provide more facilities to the customers.
To add more number of customers.
To add more number of services to give competition to the Cellure mobile
services.
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B) Cellular mobile services in India
Cellular mobile services, started in 1995, are amongst the fastest growing segment. After
a slow start, this sector grew at compound annual growth rate of more than 70 per cent in
FY2000 and FY2001 and is expected to reach a size of nearly 90m by FY08.The cellular
telephony segment has emerged as the fastest growing segment in the Indian telecom
industry.
In fact, the segment achieved a landmark in FY03 when, for the first time, more cellular
subscribers were added than fixed line subscribers.
Industry growth drivers
As India has a vast geographic expanse therefore this act as a catalyst to boost mobility,
As there is a major scope of penetration in many parts of India especially rural India.
Fall in tariffs has fueled the wireless segment since 2002.
The gap of call costs between fixed and wireless services has narrowed as a result
Customers have become more convinced to subscribe to wireless connections
Nationwide roaming facilities on GSP has also attracted the customers
SMS facility
Internet
Reduced cost of handsets (affordability factor)
Customs duties have been reduced from 10% to 5%
In remote areas where providing fixed line connections was difficult, wireless
Did the magic
CDMA fixed wireless gave customers 3 in one advantage Mobility, internet
And messaging.
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Evolution of Wireless communications in
India
From 1996 3G licenses were issued for GSM mobiles. After then in 1990-2000 SMS
facility was started .In the year 2002-03 the GPRS & MMS facilities were started which
gave a new competition in the telecom sector. Then there was a great change take place
in the form of CDMA mobiles which came into existence in the year 2003.In the year
2004 onwards
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Road to 3G in India
GPRS is widely offered by major operators. BPL was the first operator to Launch GPRS
in India, followed by Airtel, Hutch and Idea. Hutch, Airtel and Idea, are providing EDGE
Networks
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Fight over 3G spectrums in India
India's CDMA mobile operators' application for a new band of airwaves for 3G
services has angered the GSM camp in the country. Reliance and Tata have
requested the government to allocate them spectrum in the 1900 MHz band.
GSM operators Bharti, Hutch, Idea, Bharat Sanchar Nigam Ltd and Mahanagar
Telephone Nigam are opposing the proposal, saying it would Interfere with their
current mobile phone service and also block their migration to 3G services. The
companies, through the Cellular Operators' Association of India (COAI), have
also asked the government to reserve the radio frequency specifically for offering 3G
services and not to allocate it to CDMA operators.
GSM operators need the 1900 band when they migrate to 3G UMTS networks. In
a submission made to the Telecom Regulatory Authority of India by COAI, "The
allocation of the PCS 1900 band would not only result in a major interference to
the services offered by operators using GSM technology but also block the
progress of 30 million subscribers to 3G."
Interfere happens when the uplink for the 1900 band clash with the downlink in
the 1800 band, which is allocated to GSM services. While the downlink for the
1900 band interferes with the IMT 2000, which is the uplink mode for 1920-1980
MHz paired with 2110 to 2170 MHz (the core band identified by the ITU for 3G
services).
CDMA operators are allowed to offer services using spectrum in the 1800 MHz
band but is seeking for the 1900 band instead. They say equipment
for 1800 MHz is either not freely available or is very expensive and with the
exception of South Korea most countries are deploying next generation CDMA
services in 1900 MHz. In addition they said they are willing to share the band
with GSM operators.
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The GSM camp argues that a number of firms make equipment and handsets for
the 1800 band. More importantly, 3G equipment for GSM is available only for the
1900 band and nowhere else.
Market share of mobile
When we talk about the market share of mobile companies then BHARTI AIRTEL is the
biggest company with a market share of 20.62% in 2005 July but now the percentage has
been raise up to 31%.then comes government owned BSNL 18.30%in 2005 July & in
July 2007 this percentage is also raised to 20. %. After then VODAPHONE HUTCH
comes with a increased percentage of ..% in July 2007.
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Prepaid vs. Postpaid Subscribers
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GSM (Global System for Mobile
Communication)
GSM was first introduced in 1995 and is one of the fastest growing markets in theworld.
There are 35 networks on 900 MHz, 11 on 1800 MHz Technology.
The digital mobile communication standard GSM (Global System for Mobile
Communication) is deployed in India, using the 900 MHz and 1800 MHz
frequency bands.
The Indian telecommunication market is divided into 24 circles, with up to four
GSM licenses being awarded in each. There are also four metropolitan (metro)
districts: Mumbai, New Delhi, Chennai and Calcutta.
Globally the GSM subscribers continue to grow at a rapid pace. At the end of
March'06 there were 1.79 billion GSM subscribers constituting nearly 75% of the total cellular market.
In FY-06, 476 million cellular subscribers were added, out of which GSM
additions were 424 million constituting nearly 90% of the total additions.
GSM added over 100 million new subscribers in only three months, thus
averaging over 1 million net additions every day throughout the whole of 2005.
The world beating performance pushed the number of GSM subscribers to over
1.56 billion by end September 2005.
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GSM operators
:
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s
Source: India infoline.com
GSM Market share
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Bharti Tele-Ventures led the way, adding 1.12mn customers in the quarter, contributing
close to 30% to the overall additions for the quarter. Bharti came up with new schemes
and also ventured into 3 new circles during the quarter.
CIRCLEWISE BREAK UP OF SUBSCRIBERS
City/Circle OperatorsJan'2006 Feb'2006 Mar'2006
Metros
Delhi
Bharti Tele-Ventures
1895680 2014989 2074987
Hutchison Essar1742136 1777191 1879226
MTNL
742647 790476 936146
IDEA
832183 848852 866966
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MumbaiBPL Mobile
1334272 1337104 1337589
Hutchison Max1838818 1898911 2003469
MTNL
888027 929334 1005009
Bharti Tele-Ventures
1135954 1222193 1232502
ChennaiAircel Cellular Ltd
677815 685409 712291
Bharti Tele-Ventures610968 632540 669065
Hutchison Essar
375328 414343 436405
BSNL
509118 513415 578191
KolkataBharti Tele-Ventures
604661 609471 643291
Hutchison Telecom869113 937127 1004531
BSNL
403538 412023 430646
Reliable Internet19191 30255 49551
All Metros Total14479449 15053633 15859874
A' CircleMaharashtra
BPL Cellular683651 708799 733754
IDEA 1631574 1693966 1782041
Bharti Tele-Ventures1211226 1235589 1313923
BSNL
1056053 1056053 1134249
Gujarat Fascel 2012797 2174113 2257450
IDEA 914163 965773 1025265
Bharti Tele-Ventures 791524 830306 859423
BSNL827750 827750 899205
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A.P. IDEA 850858 882131 934541
Bharti Tele-Ventures 1534879 1732271 1808121
Hutchison Essar 756395 800145 848296
BSNL 1053728 1118355 1246499
Karnataka
Bharti Tele-Ventures
2001370 2003825 2132204
Spice Comm 366263 398711 432067
Hutchison Essar 964612 1013723 1088763
BSNL 1112005 1194488 1284887
T.N. BPL Cellular 467216 483406 500242
Aircel Limited 1602380 1637342 1684267
BSNL 1339658 1405839 1465000
Bharti Tele-Ventures 698659 814558 902352
A' Circle Total 21876761 22977143 24332549
B' CircleKerala Idea Mobile Comm. 768101 783096 796354
BPL Cellular 431102 443120 463700
Bharti Cellular 529444 571328 610772
BSNL 1425438 1518117 1604180
Punjab Spice Comm. 1351215 1421560 1501341
Bharti Tele-Ventures 1542103 1637866 1678683
BSNL 383020 371299 371756
Hutchison Essar 605837 634342 658923
Haryana Idea Mobile Comm. 273456 291179 311602
Aircel Digilink 344998 372456 373801
Bharti Cellular 384948 396666 423387
BSNL 482490 481805 485783
U.P.(W) Ideal Mobile Comm. 813111 858609 920697
Bharti Tele Ventures 519132 525770 549369
BSNL 892797 914086 943776
Hutchison Essar 501369 561391 613413
U.P.(E) Aircel Digilink 1209445 1289843 1392498
BSNL 1581512 1588530 1609488
Bharti Tele-Ventures 543207 553730 639234
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Escorts Telecomm. 148 246
Rajasthan Aircel Digilink 527136 559914 601292
Bharti Hexacoms 918233 1020315 1023163
BSNL 953830 1018085 1099415
Escorts Telecomm. 121 162
M.P. IDEA 649095 681128 728520
Reliance Telecom 500159 513292 529146
Bharti Tele-Ventures403769 436231 503297
BSNL 387966 389821 471839
W.B. & A&N Reliance Telecom 227410 239388 260760
BSNL 583060 655055 716634
Bharti Tele-Ventures 291642 299662 309234
Hutchison Telecom 417158 462205 505245
Dishnet Wireless 7522 14390 27709
B' Circle Total 20449705 21504548 22725419
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C' CircleH.P. Bharti Tele-Ventures 332955 343460 357382
Reliance Telecom 62030 62578 63027
BSNL 210166 212796 220134
Escorts Telecomm. 21 39
Bihar Reliance Telecom 502281 503642 510396
BSNL 782889 869675 927557
Bharti Tele-Ventures 665241 743333 907913
Orissa Reliance Telecom 179906 189821 203759
BSNL 476399 524522 560644
Bharti Tele-Ventures 364527 402053 457734
Dishnet Wireless 19469 21700 35537
Assam Reliance Telecom 185053 192056 205672
BSNL
308346 336824 377038
Bharti Tele-Ventures 129156 144466 180405
Dishnet Wireless 34992 47667 68808
N.E. Reliance Telecom 53818 69091 81717
Bharti Tele-Ventures 22999 28360 41553
BSNL 176853 191074 227365
Dishnet Wireless 36427 49364 57388
Jammu & Kashmir BSNL 426384 461294 504483
Bharti Tele-Ventures 240893 251092 261214
DIshnet Wireless 2445 8337 25714
C' Circle Total 5213229 5653226 6275479
All India Total 62019144 65188550 69193321
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Wireless Subscribers Growth GSM
The subscriber growth saw a phenomenal increase from 2002 onwards. This was mainly
due to lowered call tariffs and full scale implementation of SMS services all over India.
December 2002, where India touched the 10 million mark could be defined as a
milestone for Indian wireless industry. Subscriber growth continued from 2002-03.
Two main elements for this phenomenal growth are
1. Lowered call tariffs
2. Free incoming calls
Consumers who were once reluctant to subscribe to mobile subscriptions founded
feasible and convenient to avail as now there was hardly any difference between the
monthly bills compared to fixed line, and mobility was definitely a crucial element.
The above phenomenon in India is taking shape because of the presence of huge middle
class population. On an estimate there are some 300 to 350 million people belonging to
this group in India. Unlike a car or a television set (where one is enough in the family)
with the lowered call tariffs it became possible even for family members to own a mobilephone each.
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Market Developments since 2001
India is a vast country with over 3000 Kms of distance from north to south and similarly
from east to west. Covering this huge scope of land became a challenging task for the
operators, as a result many failed and vanished from the business because the industry
demanded huge capital investments and some of them were of course unable to do so.
The above scenario triggered two situations:
Smaller operators sold their licenses to big players
The bigger players seeing an opportunity to expand, acquired smaller operators
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ARPU
The Average Revenue per User (ARPU) of GSM operators is steadily declining. This
trend of declining ARPUs and increasing revenues is purely because of the rising
subscriber base. With more customers going mobile, they are spending less on talk time.
However, the subscriber base expanded, leading to revenue increase for the operators.
Declining due to a sharp fall in tariffs.
Average Revenues per User (ARPU) declines yoy.
Average revenue per user is an important parameter in determining the profitability of
operators. The ARPUs of the private GSM operators dropped 21% yoy from Rs 479 per
subscriber in Q3 FY04 to Rs 396 per subscriber in Q3 FY05. ARPU also fell by 1.51%
yoy. Thus; the affordability of services for subscribers was further enhanced during the
year, which in turn fuelled subscriber growth.
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During the days when incoming was not free, operator ARPU was almost twice as that of
today. Despite of offering various data services over their networks, operators have been
unable to uplift the ARPU. This shows that India still is mainly a voice market.
On an estimate 80% of operator revenues are voice based and the remaining 20%
Constitute of all the data traffic.
In such a scenario, operators have a big challenge not only to introduce more and more
attractive content but also to see that they add new subscribers on the basis of content not
voice. This however will be a big challenging task for Indian operators as promoting data
services where roughly 45% of the population is still completely illiterate. To add to the
complexity is the language scenario in India. There are 18 languages and 844 dialects and
offering streamlined data services in all of these languages are by no means a simple task.
The average revenue per user (ARPU) of mobile telephone companies is on the declineand India has one of the lowest ARPU in the world.
According to information available with the Telecom Regulatory Authority of India
(Trai), (Nov 06).
Country ARPU MOU
India $11 309
China $10 261
US $57 619
Canada $39 344
Korea $35 316
Columbia $11 --
In terms of revenue per minute,
India ranks the lowest with $0.04. China also has the same average revenue per minute of
$0.04.
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Expansion Strategy of GSM Operators
Operators are constantly seeking to consolidate their standing in the market. Indian
telecom regulations limit the number of operators in each circle to four but it does not
limit operators acquiring each other. Airtel and Hutch have been very active in these
mergers and acquisition activity. Hutchison Telecom (Hutch) recently acquired Aircel
which operated in state of Tamil Nadu .Similarly; Airtel acquired Hexacoms licenses for
states of Rajasthan and few northeastern states.
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CDMA
CDMA was started in March 2003. There was a big debate in India just before the
launch of CDMA services that will it succeed or not? Recent trends reveal that
CDMA is here to stay, but that doesn't mean that it is going to overpower GSM.
Nationwide roaming helped to boost subscribe base, option of connecting to
internet using a simple data cable proved as a catalyst in promoting CDMA
services in India.
The call tariffs over CDMA were initially lower as compared to GSM but today
CDMA and GSM call tariffs are moreover same.
Reliance Infocomm was the first private operator to start with the CDMA services
in India. However, BSNL and MTNL offered CDMA before Reliance but they
were unable to tap subscribers. Reliances strategic alliance with LG and
Samsung to offer their handsets along with their subscriptions proved to be a
catalyst in the process.
Tata Indicom which was the second private operator to offer CDMA services
initially failed to attract consumers but since early 2004, it has revived its strategy
and has been able to gain some market share.
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Net Additions Of the total subscribers added in Q3 FY05, Reliance contributed over
85%. Reliance added over 1mn customers for the quarter ended December 31, 2006.
Operators WLL/CDMA
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Market Share
By year-end 2005, there will be some 2 billion cellular mobile subscriptions
worldwide, cementing the mobile phones position as the most rapidly-growing
and widely-adopted technology of all time.
Cellular mobile will remain the dominant mobile and wireless technology in
2005.
By the end of the year, there will be nearly 2 billion subscriptions worldwide.
Voice will continue to be the primary source of cellular mobile revenues,
typically accounting for more than 80 percent of total revenue. Price competition
will drive voice margins down, but overall demand will continue to grow
strongly. As a result, 2G networks will increasingly become cash cows capable of
generating EBITDA margins of 45 percent or more. Additionally, a significant
minority of voice customers will take a second 2G subscription for data for
instance, a mobile e-mail device creating a strong likelihood of mobile
penetration surpassing 100 percent in some markets. This will have a real and
immediate impact on average revenue per user, making 2005 a very positive year
for 2G. Dozens of 3G networks will go live in 2005. Customer interest will
initially generally be low due to poor handset performance, disappointing network
quality and a lack of compelling benefits. However, mobile operators have faced
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this same situation several times before whenever their network technologies
have changed and skepticism will turn to optimism by year-end. Indeed, before
The year is over, operators and equipment vendors will likely be delivering a 3G
experience that is comparable to 2G. And by 2006, 3G handsets, networks and
services will in many cases be noticeably superior to their 2G forebears.
On both platforms, messaging will continue to be the primary source of non-voice
revenue growth. Chat, instant messaging and other emerging services will grow
substantially, taking up the slack as SMS growth declines. Beyond 2G and 3G,
many operators will continue spreading their bets adopting new technologies in
rapid succession to the detriment of their customers and shareholders. WiFi
hotspots will be a prime example, with numerous companies fighting to expand
their share of a declining market.
Meanwhile, the most compelling and lucrative mobile content will likely continue
to be ring tones (already a $2 billion industry), wallpaper, and other simple forms
of personalization and self-expression.
c) Internet
Internet made its entry in India in the year 1995 when VSNL (Videsh Sanchar
Nigam Limited) started with dial-up connections. The first five years of internetin India could be defined as an incubatory stage where speeds were limited to
maximum of 64 Kbps ISDN. Initially and even today most of the home users used
to access internet over 28.8 K and 56 K modems.
Using internet over phone connection with a modem has two disadvantages, first
the phone line is blocked and then one is subjected to pay the regular call charges.
This syndrome still exists today with the home users but they still prefer using
internet through 28.8 K-56 K modems at home. This situation means that there is
a huge potential for broadband service providers to attract customers for their
services but only at prices which are affordable. Always on connectivity will help
users (both home and corporate users) to keep their phone lines free and avoid call
charges.
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Broadband is a collective term for a group of technologies that enable high-speed
Internet access, at speeds of up to two megabits per second (Mbps). That is up to
40-times faster than the conventional dial-up medium.
In India, the broadband push has only just begun with DSL, cable and wireless
options. Traditional dial-up access is being augmented and in some cases replaced
by new, more robust access media. To put India on the growth track, 20 million
broadband users and 40 million Internet subscribers are being targeted by 2010.
The estimated broadband connections in India grew by a whopping 236 percent in
2004 over 2003. But the penetration of broadband is abysmal - 4 users to every
10,000 people and so is the quality of broadband available here.
Other countries in the Asia-Pacific region had much better broadband penetration,
with the entire region seeing the number of users leap 50 Percent during the year.
There were 6.2 crores broadband users across the region by December 2006
compared to 4.1 crores in 2005.
Thailand was the fastest growing market with a growth of more than 1,000
percent, while, the others - Malaysia, China, and Australia - at least doubled in
growth.
China, despite having a huge broadband user base and the biggest broadband
market in the region with above 21 million connections, continued to convert dial-
up customers to broadband, growing by another 100 percent. However, the overallpenetration rate there too remained low.
Despite the growth seen in 2006 the broadband penetration divide between Asian
countries is more extreme than anywhere else in the world and getting more so, It
is not just a matter of the penetration of the services, but the access speeds on
offer vary widely too.
Provider: techtree news staff
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Industry Developments
There is a big way to go for the Indian internet industry still. Although it has been almost
10 years since internet came to India there has been less progress on the bandwidth front.
Cyber cafes initially chose 64 Kbps ISDN connection to run multiple PCs. Today these
cyber cafes are opting for either smart wireless or DSL broadband.
Home users in metropolitan cities have chosen between regular 56 K modem connections
Or internet over cable TV.
Cyber caf business is not doing well at least in metropolitan cities because the home
users which used to visit their cafes earlier to access internet now have option to access
internet either over cable TV connection or through smart wireless or subscribe to a 64
Kbps always on connection (not over phone line)
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Access modes
Out of the entire dial-up segment almost 80% are home users. The rest 20% is shared by
small businesses. In a small internet population of 6 million subscribers majority of the
market share is still with the dial-up connections. Today 55% internet users use net
through DIAL UP connections. 17% through LEASED LINES, 10% through ISDN,
other 10% through DSL & rest 8% through other ways.
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Major ISPs in India
Applogic Broadband Bharti BT BSES Telecom
BSNL Capital Cyberwave Internet
Dishnet DSL Hathway Cable In2Cable
India Online Ipeaks Landsat
MTNL Primus Reliance
Satyam Infoway Sigma Online Spectranet
Tata Indicom Touchtel Wipro Net
Zeenext
48
http://broadband.org.in/isp/index.asp?showISP/451D4696/6449/4D03/903A/9A800706BCA8http://broadband.org.in/isp/index.asp?showISP/468CFF9E/45BF/48BD/88BB/F397BC6D38A7http://broadband.org.in/isp/index.asp?showISP/7DA9A7DA/1EA8/41D7/8D42/B6FD896E2118http://broadband.org.in/isp/index.asp?showISP/9F027BF4/01DE/41BF/8392/472F99597DDFhttp://broadband.org.in/isp/index.asp?showISP/71BCC774/3952/4CCB/8A9C/1569C66FE1CChttp://broadband.org.in/isp/index.asp?showISP/6FB94F19/0E9D/4405/A454/0D7FF9F51026http://broadband.org.in/isp/index.asp?showISP/EB1080B1/2CD3/46A2/91C3/89E64A699EB7http://broadband.org.in/isp/index.asp?showISP/D701A803/131F/4794/ACC1/9DCC68ECF837http://broadband.org.in/isp/index.asp?showISP/A8E24E0D/4E42/45D4/916A/59D1F5EE4B78http://broadband.org.in/isp/index.asp?showISP/9BFE7956/3283/49D4/9BEC/4C2E72CA31E8http://broadband.org.in/isp/index.asp?showISP/A686F4D8/1F00/44C2/8A33/F1A0C4B53E4Fhttp://broadband.org.in/isp/index.asp?showISP/8E102B58/62D9/4B1A/ABC1/8F58C1210E44http://broadband.org.in/isp/index.asp?showISP/C359636E/43E0/48FD/9943/DB24F7C4EFA0http://broadband.org.in/isp/index.asp?showISP/C93D5557/AF19/481B/869A/F1024584BFF5http://broadband.org.in/isp/index.asp?showISP/EB364EF7/3B4D/4D2D/8935/C214ADB262CBhttp://broadband.org.in/isp/index.asp?showISP/A90AE470/8E47/4EBC/8934/EEE7728A5BC5http://broadband.org.in/isp/index.asp?showISP/3C534ABA/FB84/4A8D/BD11/1DAEE906469Fhttp://broadband.org.in/isp/index.asp?showISP/8EF26628/16AC/456F/962C/5A13BE1E6AF0http://broadband.org.in/isp/index.asp?showISP/1D089A9F/724C/48C7/A798/8036FB6025F0http://broadband.org.in/isp/index.asp?showISP/59AC2935/9D7D/4E83/955F/DE7E19AB7E51http://broadband.org.in/isp/index.asp?showISP/50E4B5EF/5054/4E18/9470/D36C915B3203http://broadband.org.in/isp/index.asp?showISP/C341D941/4ECE/4EA3/913F/D6788D8162EBhttp://broadband.org.in/isp/index.asp?showISP/451D4696/6449/4D03/903A/9A800706BCA8http://broadband.org.in/isp/index.asp?showISP/468CFF9E/45BF/48BD/88BB/F397BC6D38A7http://broadband.org.in/isp/index.asp?showISP/7DA9A7DA/1EA8/41D7/8D42/B6FD896E2118http://broadband.org.in/isp/index.asp?showISP/9F027BF4/01DE/41BF/8392/472F99597DDFhttp://broadband.org.in/isp/index.asp?showISP/71BCC774/3952/4CCB/8A9C/1569C66FE1CChttp://broadband.org.in/isp/index.asp?showISP/6FB94F19/0E9D/4405/A454/0D7FF9F51026http://broadband.org.in/isp/index.asp?showISP/EB1080B1/2CD3/46A2/91C3/89E64A699EB7http://broadband.org.in/isp/index.asp?showISP/D701A803/131F/4794/ACC1/9DCC68ECF837http://broadband.org.in/isp/index.asp?showISP/A8E24E0D/4E42/45D4/916A/59D1F5EE4B78http://broadband.org.in/isp/index.asp?showISP/9BFE7956/3283/49D4/9BEC/4C2E72CA31E8http://broadband.org.in/isp/index.asp?showISP/A686F4D8/1F00/44C2/8A33/F1A0C4B53E4Fhttp://broadband.org.in/isp/index.asp?showISP/8E102B58/62D9/4B1A/ABC1/8F58C1210E44http://broadband.org.in/isp/index.asp?showISP/C359636E/43E0/48FD/9943/DB24F7C4EFA0http://broadband.org.in/isp/index.asp?showISP/C93D5557/AF19/481B/869A/F1024584BFF5http://broadband.org.in/isp/index.asp?showISP/EB364EF7/3B4D/4D2D/8935/C214ADB262CBhttp://broadband.org.in/isp/index.asp?showISP/A90AE470/8E47/4EBC/8934/EEE7728A5BC5http://broadband.org.in/isp/index.asp?showISP/3C534ABA/FB84/4A8D/BD11/1DAEE906469Fhttp://broadband.org.in/isp/index.asp?showISP/8EF26628/16AC/456F/962C/5A13BE1E6AF0http://broadband.org.in/isp/index.asp?showISP/1D089A9F/724C/48C7/A798/8036FB6025F0http://broadband.org.in/isp/index.asp?showISP/59AC2935/9D7D/4E83/955F/DE7E19AB7E51http://broadband.org.in/isp/index.asp?showISP/50E4B5EF/5054/4E18/9470/D36C915B3203http://broadband.org.in/isp/index.asp?showISP/C341D941/4ECE/4EA3/913F/D6788D8162EB -
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Market Share of Leading ISPs
In the ISP market BSNL the public sector giant totally funded by government is
leading the market with a market share of 25% which is followed by another government
holding MTNL with a market share of 17%. Then comes private sectors company SIFY
LTD with its market share of 17%.
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Crux: Number of users is continuously increasing
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ITES.What actually it means?
ITES means IT-enabled services. It is that sector of Information Technology (IT)
Industry which aims at providing various services, through the use of IT. ITES sector
includes services ranging from call centers, claims processing, medical transcription, e-
CRM, SCM to back-office operations such as accounting, data processing, and data
mining.
In other words Information Technology-Enabled Services, or ITES, involve business
processes and services that extensively utilize components of information communication
technology (*ICT) such as software, hardware and the Internet. As opposed to the
manufacturing industry where products are physically visible, the raw materials in the
ITES industry are data, information and knowledge. The industry is often referred to as aknowledge-based industry; as such, the products and services provided are less
tangible.
The following are not included in the definition of ITES, despite these enterprises
use of ICT: any manufacturing; local branches of global businesses (e.g. banks); and
virtual businesses that exist only on the Internet.
It is also important to note that although the term IT Enabled Services leads with the
phrase IT, many business processes within this sector would not be classified as
technology businesses. Financial accounting services, for example, are typical
administrative functions that fall within ITES but are not within the technology sector
(like software), although accounting back offices utilize IT tools such as high-end
accounting databases.
The Indian IT-enabled outsourcing market has its roots in the mid-1990s when companies
such as American Express, British Airways and GE Capital setup captive units for
customer support and transaction processing services. Independent BPO vendors began
emerging in the late 1990s, and in the recent
Months, IT services companies have also made a foray into the IT-enabled outsourcing
realm.
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Over the past decade, India has emerged as a preferred location for organizations
planning to outsource a variety of services ranging from call centers and other customer
interaction services, insurance claims processing, payroll processing, medical
transcription, e-CRM and SCM, to back-office operations such as accounting, data
processing, and data mining.
* ICT, Information & Communications Technology: Electronic means of capturing,
storing and communicating information. Modern ICT generally includes telephones, fax,
photocopiers, computer hardware and software, and the Internet (e-mail and Web).
According to Nasscom, the following areas come under the ambit of IT-Enabled
Services:
Customer Interaction Services (including call centers).
BPO/Back office operations/revenue accounting/data entry/data conversion
(including finance and accounting)/HR services
Medical Transcription/translation services
Legal databases
Digital Content development
Engineering and Design services
Support Centers
Payroll/HR services
Website services
Data Digitization/GIS and Online education
Network consultancy and management
Other services including data search and market research
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Classification of ITES
IT enabled services can be classified mainly on the basis of level of complexities in
service offered and required expertise. Mckinsey has done the classification on fourbroad parameters.
Service factory is back-end off-shore processing (indirectly to customers)
Process Exportspecializes in processing payroll, general accounting etc.
(indirectly to customers)
Service line aggregates specialize in a group of related processes like payroll and
benefits (directly to customers)
Bundled services providers offers combined IT outsourcing and BPO. (directly to
customers)
Globally there are four types of IT-enabled services vendors who differ by origin and
focus
In-house/captive centers
Spin-offs
Focused BPO providers
Broad based services providers
While in-house providers account for the bulk of the activity at present, the services
provided by the other three are growing rapidly.
Two broad categories are clearly visible in the current vendor landscape.
In-house providers -Out locate business processes to low cost, high skill offshore
locations (e.g. India,Ireland,philippiness)using multiple models(e.g. global hubs,
regional centers)and outsource the non-core processes to third party vendors.
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Third party providers -Offers distinct value proposition to customers in terms of
services offered and are rapidly growing in scale.
Indian ITES companies are also undertaking projects in the following areas and
segmented along similar lines:
Customer care :This includes database marketing, customer analytics,
telesales/telemarketing, inbound call centers, Web sales and marketing, sales and
marketing administration
Finance: This covers billing services, accounting transactions, tax consulting and
compliance, risk management, financial reporting and financial analysis.
Human resources :Areas such as administration, education and training, recruiting
and staffing, payroll services, hiring administration, records management are
covered here
Payment services :These include credit/debit card services, cheque processing,
transaction processing
Administration :This covers tax processing, claims processing, asset management,
document management, transcription and translation
Content development :This area includes engineering, design, animation, network
consultancy and management and biotech research
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India's comparative position
Ireland, Canada, Brazil, Mexico, China, Philippines and Malaysia are some of the other
attractive locations for the ITES industry. Ireland has the advantage of good
infrastructure and a vast pool of graduates. However, these graduates have several other
job options available to them resulting in shrinkage of the labour pool available to the
ITES industry. This has led to import of significant talent into Ireland, which in turn has
lowered the country's labour cost advantage. Canada has low economic and political
risks. Moreover, real estate prices and salaries are low compared to the US, though they
are high compared to India. Canada is ideal for complex businesses that require proximity
to the US. BP, Amoco, Siemens and Compaq have chosen Canada for their BPO
operations. Mexico and Brazil also have the advantage of proximity to the US along with
low labour costs. Moreover, Brazil has invested heavily in IT and telecom. Mexico'sadditional strength is its Spanish language skills. AOL-Time Warner, Federal Express,
Shell and Computer Sciences Corporation have BPO units in Mexico.
Among the Asian countries, Malaysia is facing scarcity of skilled workforce resulting in
rising labour cost. China and Philippines can emerge as serious competitors to India in
the long-run as both have large number of graduates for the ITES industry. However,
Philippines would need to improve on its infrastructure base to build a sizeable ITES
industry. The country lags behind in infrastructure like access to networks and fiber optic
backbones, which has resulted in high cost bandwidth. Some of the companies that have
BPO operation in Philippines are AOL-Time Warner, Barnes & Nobel Online, Federal
Express, Caltex, AIG, Amex, Citibank and Procter & Gamble. China's greatest strength is
low labour cost. However, insufficient proficiency in English language is a major hurdle
for the country. The country is actively encouraging English speaking in its schools and
colleges to counter this problem. Some of the Companies that have chosen China for their
BPO operations are Microsoft and HSBC.
India with its vast pool of cheap graduates and proficiency in English speaking is well
positioned as an ITES destination. With the liberalization of telecom sector, the country
has also scored to some extent on the infrastructure front. However, India should not
focus on cost advantage alone. The Indian industry should focus on better Productivity,
superior management practices and project management.
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SWOT analysis on Indian ITES sector
Strengths:
a) Highly skilled, English-speaking workforce.
b) Cheaper workforce than their Western counterparts. According to Nasscom, The
wage difference is as high as 70-80 percent when compared to their Western
counterparts.
c) Lower attrition rates than in the West.
d) Dedicated workforce aiming at making a long-term career in the field.
e) Round-the-clock advantage for Western companies due to the huge time
difference.
f) Lower response time with efficient and effective service.
Weaknesses:
a) Recent months have seen a rise in the level of attrition rates among
ITES workers who are quitting their jobs to pursue higher studies. Of late workers
have shown a tendency not to pursue ITES as a full-time career.
b) The cost of telecom and network infrastructure is much higher in
India than in the US.
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Opportunities:
a) To work closely with associations like Nasscom to portray India as the most
favored ITES destination in the world.
b) Indian ITES companies should work closely with Western governments and
assuage their concerns and issues.c) India can be branded as a quality ITES destination rather than a low-cost
destination.
Threats:a) The anti-outsourcing legislation in the US state of New Jersey. Three more states
in the United States are planning legislation against outsourcing Connecticut,
Missouri and Wisconsin.
b) Workers in British Telecom have protested against outsourcing of work to Indian
BPO companies.
c) Other ITES destinations such as China, Philippines and South Africa could have
an edge on the cost factor
Source: Express Computer
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Important ITeS cities in India
Key Indian citiesCity Focus Prominent firms Employees
Delhi
(includes
Gurgaon and
Noida)
Call centres,
transaction processing,
chip design, software
GE, American Express,
STMicroelectronics, Wipro
Spectramind, Convergys, Daksh,
ExL
73,000
Mumbai Financial research,
back office, software
TCS, MphasiS, i-flex, Morgan
Stanley, Citigroup
62,050
Bangalore Chip design, software,
boi-informatics, call
centres, IT consulting,
tax processing
Infosys, Wipro, Intel, IBM, SAP,
SAS, Dell, Tisco, TI, Motorola,
HP, Oracle, Yaho, AOL, E & Y,
Accenture
109,500
Hyderabad Software, back office,
product design
HSBC, Satyam, Microsoft 36,500
Chennai Software, transaction
processing, animation
Cognizant, World Bank, Standard
Chartered, Polaris, EDS,
Pentamedia
51,100
Kolkata Consulting, software PwC, IBM, ITC Infotech, TCS 7,300
Pune Call centres, chip
design, embedded
software
MsourcE, C-DAC, Persistent
Systems, Zensar
7,300
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Top ITES companies
Rank Company
1. EXL Services.com (I) Pvt. Ltd.
2. Daksh eServices Pvt. Ltd.
3. GTL Ltd.
4. Spectramind
5. Datamatics Technologies Ltd.
6. Tracmail India Pvt. Ltd.
7. Brigade Corporation
8. Epicenter Technologies Pvt Ltd
9. Firstring
10. 24/7 Customer
Source: Nasscom
"Super Nine" Indian ITES Destinations
RANKING OF INDIAN ITESCITIES
CITY RANKHYDERABAD 1
KOCHI 2CHENNAI 3KOLKATA 4
AHMEDABAD 5BANGALORE 6MUMBAI 7NCR 8PUNE 9
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The top nine cities include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Kochi,
Mumbai (including Navi Mumbai), Pune and NCR (Delhi, Noida and Gurgaon). The
cities are assessed on factors such as manpower availability, real estate, telecom
infrastructure, policy initiatives, power infrastructure, city perception and entrepreneurialhistory.
About 90% of all ITES companies in India are concentrated in nine major cities while
others have not been able to attract more than two companies each. A large number of
ITES companies being based in Mumbai, NCR and Bangalore, these cities are facing
increasing competition from other cities. Cities such as Hyderabad and Kochi are
emerging as attractive ITES destinations primarily due to rapid improvements in
infrastructure (power, international bandwidth and urban transportation) and lower
manpower costs due to lower cost of living and lack of alternative employment
opportunities in these cities.
According to NASSCOM, the ITES industry in India is experiencing the third wave of
growth; both in terms of geographical areas of operation and services offered In the first
phase, the industry was dominated by captive centers of large multinationals such as GE,
American Express, and Swiss Air who set up operations in leading metros of the country
such as Delhi and Mumbai
In the second phase, the growth of the industry attracted numerous entrepreneurs(in many cases, employees of multinationals who quit their jobs to set up theirown ITES ventures) again in and around Delhi (NCR) and Mumbai (includingNavi Mumbai)
The third phase of growth has been more geographically dispersed - with newlocations emerging such as Hyderabad, Pune, Bangalore, Chennai, and morerecently, Kochi.
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The growth has been driven by three factors: The desire by state governments to attract entrepreneurship, which resulted in the
former offering attractive policy environments and incentives The rapid improvement in key infrastructure such as power, telecom bandwidth,
and real estate in newer locations The need for ITES companies to lower operating costs (especially employee
costs, and transportation
Hyderabad has emerged as the most competitive city for ITES. Chennai, Kochi and
Kolkata too rank highly in their infrastructure offerings, policy incentives, and low cost
manpower availability though not at the same level as Hyderabad. On the other hand,
Ahmedabad, which ranks highly on availability of low cost manpower, loses out on
competitiveness as a result of weaker policy incentives and infrastructure availability.
Bangalore, Mumbai, NCR and Pune ranked low in infrastructure availability, policy
support and availability of low-cost manpower.
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In recent years, the IT-Enabled Services (ITES) sector has
posted the highest growth among all the segments in India's
growing software and services marketplace, reaching
revenue of Rs.1215900 crores in 2004-05. The industry,
which has grown almost five-fold since 2000, recorded a
CAGR of 28 percent for the 2000-05 periods. The ITES
industry's contribution to the nation's GDP rose from 1.2percent in 1997-98 to touch 3.5 percent in 2003-04. With a
growth of around 31 percent during 2004-05, the sector has
about 4.1 percent of the GDP.
According to a study conducted by Nasscom, this growth is in line with overall global
industry trends, and is likely to continue over the next few years. In the ITES sector, the
captive units of global corporations continue to dominate the scene. The share of captives
Growth of ITES Industry
Year US$ mn
2000 565
2001 930
2002 1,495
2003 2,300
2004 3600
Estimated growth
2008 21000-24000
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in ITES exports for 2005-06 is estimated to be 56 per cent. The disparity in growth rates
of large Indian third party vendors (TPVs) and other players in the industry are also
significant. While large Indian players have grown exponentially over the past 2 years,
other players within the industry have registered a CAGR of 13 per cent over the 2-year
period
.
Business intelligence major International Data Corporation (IDC) has predicted that the
IT-enabled services market globally will account for revenues of US$ 1.2 trillion by
2006. With growth projected at 11 percent annually, the ITES segment will be one of themost significant business opportunities for the Indian software and services industry.
.
Propellers for growth
The Global market for ITES sector is expected to be around US $ 611 billion by 2005
and India is expected to capture at least 10% of it. Lots of people, with basic education
and a mastery over English-this is Indias strength points out an industry expert. This is
why China and Philippines have not been able to dominate the ITES market; though they
have cheap labour, they are not yet fluent in English. Thus the Indian ITES industry
remains buoyant, at least till China catches up. Currently employing about 106,000
people in India, the ITES industry is estimated to give employment to more than one
million people by 2008.
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Threats faced by the Industry
Global Backlash
The industry is facing an unprecedented backlash globally against the outsourcing of
work to India. Protests in USA, UK and Australia are already rising at an alarming rate.
E-Funds, a US based corporation has even been forced to transfer some jobs from itsMumbai operations back to the US because of huge protests.
Threat from Other markets: Markets like China, Philippines and Ireland with cheap and
skilled labour pose a large threat to the Indian ITES sector
Lack of Expansion
The industry soon faces risks like continuously expanding the pool of talent and
education. Lack of fluency in European languages like French, Spanish, Italian i.e.
languages other than English, is Indias weak point.
Watch Out For
Banking and insurance is likely to provide the maximum opportunity to the ITES
industry due to a high cost base and a large number of processes which can be
outsourced.
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ITES: Expanding opportunities
Today India and Ireland surpass all other competitors in terms of employment, number of
companies sourcing ITES and the spectrum of verticals and services lines they offer. The
Indian ITES Industry is also expected to account for 37% of the total IT software and
Services export market in India by 2008.
Off shoring opportunities for Indian ITES players exist both across a wide range of
processes as well as across multiple verticals. Banking and insurance are likely to provide
the maximum opportunity driven by the high cost base and high extent of offshorable
processes in these verticals. In addition, six other verticals - telecom, retailing, utilities,
automotive, computer and pharmaceuticals, also offer immense growth potential.
ITES opportunities by 2008
Service Lines $billion
HR 3.5 4
Customer Care 8 - 8.5
Payment services 3 - 3.5
Content development and
others2.5 3
Administration 1.5 2
Finance 2.5 3
Total 21 24
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RESEARCH METHODOLOGY
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ELEMENTS OF MARKETING RESEARCH
These are the main components of marketing research:
PRODUCT RESEARCH: - It includes the study of product strength and
weakness, product line decisions etc.
MARKETING RESEARCH : - It includes nature and size of market,
location, distribution of consumer with respect to income, profession, education etc.
SALES RESEARCH:-It includes the study of regional variation in sales,
fixation of sales methods, incentives etc.
ADVERTISING RESEARCH : - It is concerned with the selection of
effective and appropriate media and methods to measure its effectiveness.
BUSINESS ECONOMIC RESEARCH: - These deals with out-put analysis,
forecasting, price and profit analysis, break even chart etc...
The success or failure of any research report depends upon the methodology
used for collecting information and data. The research design of the report is
exploratory and investigative. The exploratory research design study is usually
characterized by a hypothesis was developed about the problem. An effort
was made together with detailed information that would help the researches
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to formulate specific question with the help of primary and secondary data.
Grand amount of flexibility and on ad-box variability. No detailed and definite
DATA COLLECTION
The success of research project depends critically on data. In any marketing
research program data collection is very important. Data collection is an integral part of
marketing information system.
A) PRIMARY DATA:-Information, which has to be gathered for the first time, is Called Primary Data.
TOOLS USED FOR COLLECTING PRIMARY DATA:
(i) Open ended questionnaire and interviews.
(ii) Detailed discussions with the senior executives and departments.
B) SECONDARY DATA:-
Data, which are already assembled, are called secondary data:-
TOOLS FOR COLLECTING SECONDARY DATA:
(i) Organization annual report.
(ii) Different report and periodicals of soft drinks association.
(iii) The economic times.
(iv) Magazines.
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To get accurate information different types of functions were performed. The most
important limitations, which come on, the way of investigations was lack of time.
The data were available on certain aspects but sufficient date and satisfactory progress
report could not be made available. However, the major difficulty was that it was not
possible to visit the corporate plant at Bombay. Although a cherished desire persisted
above mentioned constraint hindered the progress of this project.
SAMPLE SIZE & AREA OF WORK
The methodology used to analyze the project is mainly based on survey method through
questionnaire and direct contact with different retailers and distributors. For survey I have
taken the sample Size of 3000 retailers of whole Dehradun Zone Which Includes
Haridwar, Saharanpur, Rishikesh, Kotdwar, Chutmalpur, and Deoband.
SOURCES OF DATA COLLECTION
The data are collected from Both Primary and Secondary Sources.
Primary Data: Primary data has been collected on the basis:
Direct interview with retailers and Distributors of Dehradun
Gather information through Questionnaire
Through telephonic conversation
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Secondary Data:
Internet sites
Magazines
Newspaper
ANALYSIS AND FINDINGS
In analysis & findings we have done a market survey of Saharanpur city where we meetthe distributor as well as the respective retailers .We made a questionnaire for thissurvey so as to identify the problems of the retailers & the market share/ visibility indexof Bharti Airtel ltd. We prepared a database of Airtel so that company could analyze dataand take corrective measures so as to enhance the visibility share of airtel in the market.In Saharanpur the market is good & there is a great competition for Airtel in the marketby other competitors. In Saharanpur Vodaphone Essar group is giving great competitionto us by their active sales & promotional scheme. They are regularly going to thoseRemote areas & outer areas of Saharanpur city where our F.S.E go once in a blue moon.They are increasing their customer base by installing new towers .As network increasescustomers also increases.
From last 4 to 5 months the standard of services provided by Airtel is decreasing day-by-day. By this the customer base of Airtel is decreasing. Our sale is increasing or we aregetting profit is only because of some of good schemes.
The P.O.S distribution system is not good. many retailers complained for delay in p.o.sdistribution. Some places are those where he field sales executives dont come on theirdesignated days. We had issued the boards but there are issued on paper only. They arenot at their designated places.
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PROBLEMS RELATED TO GLOWSIGN BOARD
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problems related to glow sign board
14% 14%
48%
10% 9%5%
0%
10%
20%
30%
40%
50%
60%
have g.s.b gsb provided
but not
found
require g.s.b not enough
space for
g.s.b
g.s.b with
wrong
names
gsb does
not work
problems
percentages
hare
In Saharanpur city only 14% retailers have glow sign boards.14% retailers have glowsign boards but when we reached to the shop we dont find any glow sign boardtheir.48% retailers required glow sign boards & they have already applied for glow signboards but yet not received. 10% retailers in the city dont have enough space for glowsign boards.9% boards are of wrong name boards for which retailers are regularly complaining but no
response results.5% boards are not in working condition means tube is fused, board isdepreciated etc.
PROBLEMS RELATED TO P.O.S MATERIAL
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PROBLEM RELATED TO P.O.S MATERIAL
60%
18% 22%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
pos tim ely provided pos not tim ely provided pos not provided
PROBLEM
Series3
Series2
Series1
Problems related to point of sale material (p.o.s) is that only 60% retailers receive P.O.Smaterial in time .it means rest 40% dont not receive the p.o.s material in time or they
dont receive the material. This shows that we are not covering the rest 40% retailers,which are also a big part. This affects our sale very much & our competitors areencashing this opportunity. As per our survey is concerned 18% retailer do not receiveP.O.S material in time & 22% dont get the material.
PROBLEMS RELATED TO CLAIMS
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issues related to claims
30.75%
69.25%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%70.00%
80.00%
Persons having claims No claims
claims
percentage
Series1
In problems related to claims 30.75% retailers says that they have pending claims withthe company. As per the survey is a concerned 69.25% retailer dont have claims? InSaharanpur city problem related to claim is a big issue. Retailers have pending claims
with the company & with old distributor. They dont know who will settle their claimseither company or by the distributors.
PROBLEMS RELATED TO NETWORK
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Problem related to network
90%
8% 2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Network coverage area No Network area low signals
Network Problem
ercentage
Series1
In problems related to network 90% area of the Saharanpur city is covered by thenetwork of Airtel. In some areas of Saharanpur only 2% areas have low signals. In theouter areas of Saharanpur city 8% areas have no network coverage. So the numbers ofcustomers are very few in those areas. The network of airtel in the city is good. But insome areas the frequency of the tower is low so there is low signal problem.
LAPU STATUS
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LAPU
375
28 27
0
50
100
150
200
250
300
350
400
HAVE LAPU LAPU REQUIRED DON'T HAVE LAPU
LAPU STATUS
RETAILERS
Series1
In Saharanpur city out of 430 retailers only 375 retailers have lapu. 28 retailers required
lapu & they have applied for the lapu facility.27 retailers are those who dont have lapufacility.
PROBLEM RELATED WITH LAPU
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PROBLEM RELATED WITH LAPU
2% 2%
96%
0%
20%
40%
60%
80%
100%
120%
lapu reversal lapu lost no problem
PROBLEMS
PERCENTAGE
Series1
In problems related with lapu 2% retailers have problem of lapu reversal.2% retailershave lost but they dont receive the new one. Rest 96% retailers have no problem.
VISIBILITY INDEX
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VISIBILITY INDEX
AIRTEL
55%HUTCH
27%
IDEA9%
B.S.N.L
4%
TATA
5%
AIRTEL
HUTCH
IDEA
B.S.N.L
TATA
In visibility index we find that AIRTEL have a market visibility of 55% in the
Saharanpur city. HUTCH is the first biggest competitor of Airtel with a market visibilityof 27%.IDEA has a market visibility of 9% & comes on third stand. TATA is the fourthcompetitor of Airtel with a market visibility of 5%. Then comes government ownedB.S.N.L with a market visibility of 4%.All this shows that Airtel have got biggest part inthe market visibility.
MARKET SHARE
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MARKET SHARE
32%
16%23%
5%
10%
14%
AIRTEL
HUTCH
BSNL
TATA
IDEA
RELIANCE
Market share of AIRTEL in Saharanpur city is 32% then comes BSNL withmarket share of 23% .Hutch & reliance have 16% & 14% respectively.
IDEA has market share of 10% while TATA INDICOM has a market shareof 5%.
RECOMMENDATIONS
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1. The market position of airtel is very strong but it has not been capitalized properly
because of poor supervision of distributors .distributors should also keep in mind
the far flung areas and should cater it properly because rural markets are emerging
as great source of increasing volumes.
2. Distributors should keep manpower accordingly. There should be adequate
personnel to look after the market.
3. From management side, management should have a feedback system which can
link them directly to retailers. This will help them gaining confidence of retailers
and solving their problems.
4. Point of sales materials should be checked timely so that they can be maintained
accordingly.
5. Claims should be settled as early as possible because delay causes irritation in the
minds of retailers, which causes dissatisfaction on the part of retailers.
6. A regular comparative study of the market should be taken at regular intervalsbecause it will give insight information about our market share.
CONCLUSION
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After the Finding and analysis of the gathered information and data, at last I
have reached on the conclusion part of the Project. I have concluded this
project as...
1. Airtel is the most trusted brand & Majority of Airtel customers are notready to switch to any other service provider as they are completely satisfiedwith the products and services offered by it
. 2. Management is able to develop cordial relationship with retailers but theclaim settlement process is slow and not conducive to retailers.
3. Lack of sales force with distributors creates lots of unnecessary hackles.
4. Far flung areas are not managed properly.
5. Bifurcation of paper recharge and lapu creates lots of problems forRetailers.
Annexure
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QUESTIONNAIRE
Visibility index
Problem identification
1. General information:a. Retailers Name: ___________________________________
b. Name of the Retail Outlet ___________________________________c. Location & Phone No.
____________________________________d. Contact / Lapu No.
____________________________________
2. Does the retail outlet have all airtel promotional materials-
a. Glow sign board Yes [ ] No [ ]b. If yes then Working [ ] Not working [ ]
c. Size of the board ______________x_______________i. Problem ______________________________
3. Does the retail shop have Non-lit boards Yes [ ] No [ ]4. Have you assigned a proper / permanent place for Airtel promotional material?
Yes [ ] ___________x______________No [ ]
If yes, the place is:- a) Easy to locate [ ] b) Difficult to locate [ ] c) Not visible [ ]
5. Is the place P .O.S materials timely available? Yes [ ] No [ ]
6. Does the F.S.E & F.C.E. visits on their designated days?
Yes [ ] No [ ]
7. Do you receive stocks as per the order?Lapu [ ] Sim [ ] PRC [ ]
8. Brands available in your shop?
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Airtel [ ] Hutch [ ] Idea [ ]Tata Indicom [ ] Reliance [ ] BSNL [ ]
9. Number of Airtel connections sold by you per month? ___________
10. What is the monthly sale of Airtel recharge
a) Vouchers _____________ b) Lapoo_________________
11. Rank these companies on the basis of your monthly sale (1-6)Airtel [ ]Hutch [ ]Idea [ ]Reliance [ ]Tata Indicom [ ]Bsnl [ ]
12. Size of various glow sign boards available in the shop :-Airtel ____________x________________Hutch ____________x________________Idea ____________x________________Reliance ____________x________________Tata Indicom ____________x________________Bsnl ____________x________________
13. Rate the Airtel on the basis of your satisfaction level:-Very good [ ] Good [ ] Average [ ] Poor [ ]
14. Rate the distributor on the basis of your satisfaction level:-
Very good [ ] Good [ ] Average [ ] Poor [ ]
15. What are the problems faces by you?
______________________________________________________________________________________________
BIBLIOGRAPHY
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1) www.tdsat.com
2) www.nasscom.org
3) www.indiainfoline.com
4) www.airtel.in
5) www.bhartiteleventure.com
6) www.trai.gov.in
7) www.coai.com