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Bharti Airtel


Bharti Airtel Limited, commonly known as Airtel, is an Indian telecommunications
Services Company headquartered at New Delhi, India. It operates in 20 countries across
South Asia, Africa and the Channel Islands. Airtel has GSM network in all countries,
providing 2G, 3G and 4G services depending upon the country of operation. Airtel is the
world's third largest mobile telecommunications company with over 261 million subscribers
across 20 countries as of August 2012. It is the largest cellular service provider in India, with
186.41 million subscribers as of October 2012. Airtel is the third largest in-country mobile
operator by subscriber base, behind China Mobile and China Unicom.
Airtel is the largest provider of mobile telephony and second largest provider of
Airtel is credited with pioneering the business strategy of outsourcing all of its business
operations except marketing, sales and finance and building the 'minutes factory' model of
low cost and high volumes. The strategy has since been copied by several operators. Its
networkbase stations, microwave links, etc.is maintained by Ericsson, Nokia Siemens
Network and Huawei, and business support is provided by IBM, and transmission towers are
maintained by another company (Bharti Infratel Ltd. in India). Ericsson agreed for the first
time to be paid by the minute for installation and maintenance of their equipment rather than
being paid up front, which allowed Airtel to provide low call rates of 1/minute
(US$0.02/minute). During the last financial year (200910), Bharti negotiated for its strategic
partner Alcatel-Lucent to manage the network infrastructure for the tele-media business. On
31 May 2012, Bharti Airtel awarded the three-year contract to Alcatel-Lucent for setting up
an Internet Protocol access network (mobile backhaul) across the country. This would help
consumers access internet at faster speed and high quality internet browsing on mobile
handsets.

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History
Sunil Bharti Mittal founded the Bharti Group. In 1983, Mittal was in an agreement with
Germany's Siemens to manufacture push-button telephone models for the Indian market. In
1986, Mittal incorporated Bharti Telecom Limited (BTL), and his company became the first
in India to offer push-button telephones, establishing the basis of Bharti Enterprises. By the
early 1990s, Sunil Mittal had also launched the country's first fax machines and its first
cordless telephones. In 1992, Mittal won a bid to build a cellular phone network in Delhi. In
1995, Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched
service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti
Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka
and Andhra Pradesh. In 2000, Bharti acquired control of Sky cell Communications, in
Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises
went public in 2002, and the company was listed on Bombay Stock Exchange and National
Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the
single Airtel brand. In 2004, Bharti acquired control of Hexacom and entered Rajasthan. In
2005, Bharti extended its network to Andaman and Nicobar. This expansion allowed it to
offer voice services all across India. In 2009, Airtel launched its first international mobile
network in Sri Lanka. In 2010, Airtel acquired the African operations of the Kuwait
based Zain Telecom.In March 2012; Airtel launched a mobile operation in Rwanda.
Airtel launched "Hello Tunes", a Caller ring back tone service (CRBT), in July 2004
becoming to the first operator in India to do so. The Airtel theme song, composed by A.R.
Rahman, was the most popular tune on that year.
On 26 February 2013, Airtel announced that it had deployed Ericssons Mobile Broadband
Charging (MBC) solution and completely modernized its prepaid services for its subscribers
in India. As a part of the deal, Ericssons multi service MBC suite allows prepaid customers
to have personalized profile based data charging plans. Prepaid customers will be able to
customize their data plans across mobility, fixed line and broadband by cross bundling across
multiple domains (2G, 3G, 4G/LTE & Wi-Fi). It will also offer flexible multi service
charging in geographical redundant mode, making Airtel the first operator to implement
geographical redundancy at such a large scale. In May 2013, Bharti Infotel paid Rs 50,000 as
compensation to a customer "for unfair trade practices". The customer alleged that the
company continued to aggressively demand payment despite customer requests for
disconnection of service.


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Vision
By 2020 Airtel will be the most admired brand in India:

Loved by more customers.

Targeted by top talent

Benchmarked by more business.






Mission


We will meet global standards for telecom services that delight customers through:

Customer Service Focus

Empowered Employees

Cost Efficiency

Unified Messaging Solutions

Innovative products and services

Error- free service delivery.





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ACHIEVEMENTS
First to launch Cellular service on November 1995.

First operator to revolutionaries the concept of retailing with the inauguration of
Airtel Connect (exclusive showrooms) in 1995.


First to introduce push button phone in India.

First to expand its network with the installation for second mobile switching center in
April, 1997 and the first to introduce the Intelligent Network Platform First to provide
Roaming to its subscribers by forming an association called World 1 Network.
First to provide roaming facility in USA. Enjoy the mobile roaming across 38 partner
networks & above 700 cities Moreover roam across international destinations in 119
countries including USA, Canada, and UK etc. with 284 partner networks.

BHARTI announces agreement with VODAFONE marking the entry of the World's
Largest Telecom Operator into India

Bharti Enterprises and AXA Asia Pacific Holdings Limited announce partnership for
a life insurance joint venture in India

Airtel Launches future factory - Centres of Innovation to in cuba tepioneering Mobile
Applications

16 states, 600 million people. Only India's leading mobile service offers you the truly
'freedom-packed' Prepaid!

It is also the first company to export its products to the USA.


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REVENUE ANALYSIS

Mobile/Cellular services

Cellular mobile service providers (CMSP) derive revenues by way of tariff charges
for outgoing calls made by subscribers on its network. So basically, the revenue for a CMSP
is simply a multiple of average revenue per subscriber per month (ARPU) and number
of subscribers.

Subscribers: Growth in a CMSP's subscriber base is dependent on several factors, the key
amongst them being:

Economic growth: With growth in the economy, and the consequent increase in
activity, it requires people to be in constant touch. Thus, with the tremendous growth
in economic activity in India there are more and more people subscribing to telecom
services, thus leading to growth in subscriber base for CMSPs.

Rising income level: As the real income levels in a society rise, more and more
people are able to afford usage of cellular phone and so the consumer does not feel the
pinch of rising telephone bill, thus having the propensity to talk more, thus leading to
higher MOUs for telecom services providers.

Affordability: The affordability is interplay of lower tariff charges and availability of
cheaper handsets. While lower handset costs make mobile more affordable at the
entry level thus allowing more people to be a part of the mobile community, lower
tariffs allow for an increased usage of telecom services, while not having such an
overbearing impact on telephone bills.


Fixed line services

The fixed (wire line) services are dominantly provided for BSNL and MTNL. Although this
had been a dominant mode of telecommunication in the past, it is fast being replaced with
mobile telephony, which has the advantage of connectivity on the move. The
fundamental business of a fixed line operator is almost similar to that of a CMSP, in terms of
ARPU and Subscriber base.

Internet/Broadband

The Internet services are provided either by telecom service providers or independent Internet
service providers (ISP) who deal exclusively in providing this service. There are two forms
of Internet that are currently popular - the dial-up connections and the broadband
connections. Apart from the usual - economic growth and rising income levels - the growth of
the Internet business is dependent upon:




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PC penetration: Internet penetration in India is currently at very low levels, as
compared to its developing peers. This is set to take off with the rise in
PC penetration, which will again be a consequence of affordability in terms of lower
PC costs and reduced cost of data transfer.

Parental encouragement: Unlike most products where children are targeted to drive
sales of consumer durables, in the case of computers, it is the parents who are going
all out to ensure that their child grows up to be a computer literate.

Enterprise services

These services are used by large and medium corporate for data transfer between their offices
and their suppliers' offices, which may be spread in a city, or a country, or even across
continents. Considering that this business takes care of data transfer needs of corporate, who
are not as 'affordability' conscious as the individuals, companies generally earn igher margins
on Enterprise services than they earn on any of the other three business lines. IT and BPO
sectors, whose business is so data dependent, are the major users of Enterprise services.

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COST ANALYSIS

The cost heads can be broken up into regulated and non-regulated costs. Entry fee, access
deficit charge and license fee are regulated. On the other hand, sales, general and
administrative (SG&A) and employee expenses are non-regulated in nature.

Entry fee: The companies providing national and international long distance (NLD and
ILD) services are required to pay a flat entry fee of Rs 25 m each (from earlier fees of
Rs 1,000 m and Rs 250 m respectively). These fees are to be paid to the central
government for obtaining a license for providing these services.

Access deficit charge: The government also collects from the cellular operators an
access deficit charge. The charge payable is 1.5% per cent of non-rural annual gross
revenue of the telecom service providers and the amount collected is used to subsidise
the telecom service provided by BSNL in rural areas.

License fees: Telecom companies are required to pay an annual license fee of 6%
of their AGR to the Government of India. Licenses offered to the telecom players are
for a limited period of time and these are required to be renewed on expiry.

SG&A expenses: Telecom companies incur expenditure in the form of advertisement
costs for enhancing their visibility and also to make their brand more appealing to the
consumers. Expenses are also incurred on customer acquisition and on maintenance
of telecom equipment and network.

Personnel expenditure: These are costs incurred for maintaining the staff
for executing the telecom companies' marketing strategies, for general administrative
purposes, for maintenance and repair of telecom infrastructure, and
customer relationship management in call centres








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KEY SUCCESS FACTORS

Airtel has its presence in all 23 circles of the Indian telecom industry. Some of its key success
factors are

Brand name

One Step Ahead

A market leader can stay as such only if it stays one step ahead of the rest. The
multidimensional expansion of Airtel through different theatres has made it a step ahead of its
nearest rival. This can only be executed through a stable and visionary management.

Business Process Outsourcing
Airtel follows the strategy of outsourcing the non-core activities and focus on the core. Airtel
is known for being the first mobile phone company in the world to outsource everything
except marketing and sales.

The firm outsources many of its most fundamental functions
andinfrastructures, including its information technology (IT) operations to IBM, Nortel andW
ipro; its communications networks to Ericsson and Nokia Siemens; and its contact centre
operations to Nortel and Wipro and recently with Cisco and Servion to provide hosted contact
centre services.

Innovations in VAS
Airtel has separate value added services for consumers, small business and businessenterprise
s. Airtels online desktop for airtel broadband users provides free online space for
storing , editing and sharing data and also free antivirus package, free software and updates
on rental basis for small businesses and this is one of the VAS which is not provided by other
service providers.

M-Commerce
Airtel has an idea of introducing m-commerce as one of its value added service. According to
its CEO Sanjay Kapoor there is an 80 to 85 per cent of the population which is still unbanked
and looking to do financial transactions using mobile technologies. By providing- commerce
Airtel plans to bring a revolution by making mobile phones work as ATM machines.

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Network
Airtel packs a punch when it comes to network coverage. The aims of Sunil Bharti Mittal
were to create a network which is clear even when in the basement. Airtel has done just that
and beyond.

Declining ARPU
With more than 10 million subscriber additions a month, the Telecom Sector continues to
maintain its growth momentum. Due to the entry of new players in the market a high level
of competition prevails and this has lead to a decrease in the Average Revenue per User.





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The "Value Added Services" provided from Airtel are:
1. Voice Mail service
This system is similar to the answering machine - if the user isnot able to answer a call for
some reason the caller can leave messages in the voice mail box which can be later retrieved
by the user.
2. Short Message Service
The short message service is like a two-way pager. It gives anoption of sending and
receiving text messages directly from one mobile phone to another without the intervention
of an operator
3. Mobile Fax 1 Data Service
This service helps the subscriber to send and receive Faxes,access E-mail, download
computer files from other systems and remotely log on to another computer and surf the
Internet.
4. Cash Card
The cash card is a pre-paid and pre-activated card which allows the buyers to buy air time in
advance. All it requires is the payment of an initial amount. This is a useful service for people
who travel to Delhi often and those who want to control the expenses on their calls.

5. Caller ID
Displays calling person's number.
6. Outgoing call restriction
To prevent or limit outgoing calls, for example, in peak
hours.Also possible to exclude one or several countries, or anygeographical region, to permit
only local calls, or to limit the outgoing calls to a listed number.
7. Call forward
Incoming calls can be forwarded to another fixed or mobilephone.Besides these some other
services provided by Airtel are - Call conferencing, Call broadcast et cetera.
It is in the operators -
Interest that they not only get manysubscribers but also get them to use the mobile facilityfre
quently. In the early stages getting increases to subscribe may be easier than getting them to
talk since they will find it costlier to use the mobile phone as compared to a conventional
phone [if is believed that initially cell phones would be used buy]

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8. Roaming Facility
Roaming facility is available while the subscriber is travelling. The billing is done in the
home network (Delhi). Roaming facility is available manually
* As well as semi-automatically. Once subscriber is In any other city or country, where a
GSM networks available, simply insert the SIM card of the local operator Into your handset
and start talking.
*Manual Roaming means a separate SIM card is provided for each city
**Semi-automatic roaming means one card has the facility for different cities.


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INDUSTRY LIFE CYCLE
Looking at the market condition and regulatory framework policies made by the government
the telecom industry appears to be in a growth stage this would be a long term look at the
lifecycle of the industry.
Untapped rural market:
Telecom has penetrated only 44.87% of the Indian market out of which rural marketconstitute
s only 15%. DoT has called for Private telecom operators for providing
wireless broadband in rural areas and the selected private telecom operator would be provide
dfinancial assistance through its Universal Service Obligation (USO) Fund.
Favourable Regulatory Environment:
The Governments Telecom Policy initiatives have been growth-
oriented and forwardlooking. Various incentives such as increase in foreign investment limits
up to 74%, implementation of the Unified Access Licensing Regime (UASL), availability of
the Universal Service Obligation (USO) fund for enabling expansion in rural areas and
introduction of MNP have led to the proliferation of mobile services in the country. TRAI has
slashed the termination fee paid by operators by 33%, which will help Telecom companies
reduce their Local as well as National Long Distance (NLD) tariffs by up to 20%.
Decreasing Cost of Subscription:
The fall in subscription costs and rising incomes has increased the affordability of mobile
services. The cost of life-time prepaid cards has fallen from Rs.999 to Rs. 99. The availability
of low denomination pre-paid vouchers, bundled offerings and other product innovations
have made mobile services affordable in semi-urban and rural markets
Technology and increasing subscriber base:
The Indian telecom industry with its intense competition is able to add minimum 10 million
customers every year. The 3G subscriber base is expected to reach 90 million by 2013 with
revenues touching Rs.80, 000 crs, and would account for 46% of the total wireless revenues.
Mobile Number Portability feature is to be provided very soon. Because of these factors the
industry appears to be in a growth stage



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BUSINESS MODEL OF AIRTEL
Airtel is probably one of the best run companies in the world (most definitely in India). It is
the largest telecom player in the country and has the advantage of both massive size and a
very high-growth industry. Its worth about $25 billion and growing fast. The secret of its
success has been its business model. Airtel focuses only and solely on two things: Customer
acquisition Servicing (Retention) and business development/expansion All other functions
i.e. hardware, network management, backend applications (billing etc.), value added services
and even telecom infrastructure are outsourced. Airtel pioneered this in the Telecom game.
In February 2004, Sunil Mittal, the CEO of Airtel took a bold step in outsourcing
itscellular network operations and network management to companies like NokiaSiemens and
Ericsson, IT and backend applications to IBM, billing to someone else etc.
Innovative Business Model:
Bharti Airtel Limited and IBM India Pvt. Ltd have established an Innovative Business Model
that is now setting new standards across industries around the world. In March, 2004, in what
became a globally historic, first of its kind deal, Bharti outsourced all of its IT to IBM.
Innovation Highlights:
The agreement was the largest ever IT deals in India and at the time of signing, was estimated
to be of an order of US$ 750 million in value.
AIRTEL PROPOSED BUSINESS MODEL

Airtel has already established itself as the leader in the market by differentiating itself with
its focus on building a strong brand through innovation in sales, marketing, and
customer service, and an innovative cost effective business model.

Bharti Airtel should partner with existing players in Africa to share infrastructure to reduce
operational costs for Zain. They should go for country level discussions for collaboration on
fibre optic sharing and tower sharing. Extension into smaller towns will be at lower capital
expenditure through sharing.

Airtel was among the first operators to start infrastructure sharing in India which has helped it
to sustain a low cost tariff business model. Hence, they should follow somewhat similar
strategy for Africa.

The idea is to engage with Tier two operators and form a new company and share Radio
Access Network (RAN) and related cost burdens. This move will help at achieving some
leverage against MTN the market leader in some of these geographies.

Airtel has proven that it will do whatever it takes to make Africa a success and will not
necessarily just replicate its Indian models but use innovation and leverage

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MARKETING STRATEGY ADOPTED BY BHARTI
Bharti has spent a considerable amount on advertising its mobile phone service,
Airtel. Besides print advertising, the company had put up large no of hoardings and kiosks in
and around Delhi. The objective behind designing a promotion campaign for the Airtel
services is to promote the brand awareness and to build brand preferences. It is trying to set
up a thematic campaign to build stronger brand equity for Airtel.
Since the cellular phone category itself is too restricted,
also the fact that a Cellular phone is a highinvolvement product, price doesn't qualify as a
n effectivedifferentiator. The image of the service provider counts a great deal. Given the Cell
phone category, it is the network efficiency and the quality of service that becomes important.
What now the buyer is looking at is to get the optimum price-performance package. This
also serves as an effective differentiator Brand awareness is Spread through the' campaigns
and brand preference through brand stature. Airtel's campaign in the capital began with a
series of 'teaser' hoardings across the city, bearing just the company's name and without
explaining what Airtel was. In the next phase the campaign associated
Airtel withCellular only thereafter was the Bharti Cellular connection brought up. Vans with
Airtel logos roamed the city, handing out brochures about the company and its services to all
consumers. About 50,000 direct callers were sent out. When the name
waswell entrenched in the Delhiitess mind, the Airtel campaignbegan to focus
on the utility of Cell phone. In the
first fourmonths alone Airtei's advertisement spend exceeded Rs. 4crores.As of today the
awareness level Is 60% unaided. This implies that if potential or knowledgeable consumers
are asked to name Cellular phone service provider that is on the top of his/her mind 60% of
them would name Airtel. As for aided it -is 100 %( by giving clues and hints etc.).Brand
strength of a product or the health of a brand is measured by the percentage score of the brand
on the above aided and the unaided tests.
The figures show that Airtel is a healthy and thriving brand. Every company has a goal,
which might comprise a sales target and a game plan with due regard to its competitor. Airtel
'campaign strategy is designed keeping in mind its marketing strategy. The tone, tenor and
the stance of the visual ads are designed to convey the image of a market leader in terms of
its market share. It tries to portray the image of being a "first mover every time" and that of a
"market leader".

The status of the product in terms of its life cycle has justreached the maturity stage in
India. It is still on the rising part of the product life cycle curve in the maturity stage. The
diagram on the left hand side shows the percentage of the users classified into heavy, medium
and low categories. The right hand side shows the revenue share earned from the three types
of users. Airtel, keeping in mind the importance of the customer
retention,values its heavy users the most and constantly indulges inservice innovation. But,
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since heavy users comprise only 15 -20% of the population the other segment cannot be
neglected. The population which has just realised the importance of cellular phones has to be
roped in. It is for this reason that the service provider offers a plethora of incentives and
discounts. Concerts like the "Freedom concert" are being organised by Airtel in order to
promote sales. The media channel is chosen with economy in mind. The target segment is not
very concrete but, there is
anattempt to focus on those who can afford. The printadvertisements and hoarding are placed
in those strategic areas which most likely to catch the attention of those who need a cellular
phone. The product promise (which might cost different1 higher)
is an important variable in determining the target audience.
Besides this, other promotional strategies that Airtel has adopted are .
(i)People who have booked Airtel services have been treated to exclusive premiers of
blockbuster movies. Airtel has tie-up with Lufthansa to offer customer bonus miles on the
German airlines frequent flier's programs.
(ii) There have been educational campaigns, imagecampaigns, pre launch advertisements, lau
nch advertisements, congratulatory advertisements,
promotional advertisements, attacking advertisements and tactical advertisements


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PROMOTIONAL STRATEGY

Airtel to Touch Tomorrow with a new brand vision

The Bharti Mobile promoted Airtel cellular service will go in for positioning
of its brand image.
The new brand ethos isportrayed in two distinct fashions - the tag line "Touch Tomorrow",
which underscores the leading theme for the new brand vision, followed by "The Good Life",
which underscores a more caring, more customer centric organization. Aimed at re-
engineering its image as just simply a cellular service provider to an all-out information
communications services provider, Touch Tomorrow is meant to embrace the new generation
of mobilecommunication services and the changing scope of customerneeds and aspirations
that come along with it The new communication is about a new dimension in the cellular
category that goes beyond the Internet, SMS, roaming, IVRS, etc. but which engulfs the
whole gamut of wireless digital broadband services that will constitute tomorrows cellular
services.
The new campaign is in two phases - the first of which will communicate overall brand
philosophy and the second products and services.
According to Mr. Jagdish Kini, Chief Operating Officer, BhartiMobile Limited, Karnataka "
We are adopting a new brand-platform - Touch Tomorrow - not only to reflect our corporate
ethos but also business strategy". The new identity will have the logo in Red, Black and
White colours along with lower case typography to convey warmth.
AirTelwill incorporate the latest branding in all of itscommunication and will soon be going i
n for an enhancedpromotional drive to establish the brand's presence.


LIFE TIME PLAN
PRE-PAID card users need not worry anymore about recharging their coupons every month.
Company has launched a plan that allows users to take a pre-paid connection with lifetime
validityfor a one time payment of Rs. 999. Subscribers availing themselves of this scheme
will also get full talk time for their charge coupon they purchase and also have the option to
buy Taiwanese manufactured Bird mobile handsets for as low as Rs.1, 399.
The move is aimed at stopping the churn in the pre-paidsubscriber base. Once a subscriber
takes this plan, he will always be an Airtel subscriber whether the mobile is being used or
not.
these Innovative Business Model three pan-Asia awards in the last two years including the
MIS Asia IT Excellence Award for Best Change Management in2005, the MIS Asia
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IT Excellence Award for Best Bottom Line IT in 2006 and the MIS Asia IT Excellence
Award for Best Knowledge Management in 2006.
IBM assumed responsibility for all of Bhartis IT systems, Applications, infrastructure,
operations and people with the agreement coming into force. The agreement entailed Bharti
paying IBM a percentage of its revenues, which directly linked IT cost to
business performance. The agreement construct was innovative not only from the
Perspective of the remuneration model for IBM, but also in terms of the Scope of the
delivery, which was comprehensive and included practically all of ITcurrent and future. It
made innovation all pervasive as IBM introduced changes in the area of processes; people
andsystems to usher in business transformation improve operational excellence andefficiency
and optimize performance. Having seen Airtel succeed with this, a number of the other
operators are now trying to follow in some way or the other. E.g. Hutch followed a similar
model by outsourcing their network operations to Nokia .It was also the first to divest its hard
assets, i.e. its telecom towers to a separate company and lease them back themselves as
well as monetize surplus bandwidth by selling to other operators. This was the ultimate act in
putting the faith in the brand rather than in iron and steel. Because of focus on customer
experience and on business development, Airtel has been not only the fastest growing but the
most innovative of operators. It has realized the importance of having access to the consumer
at all levels, and therefore is going from core mobile to landline internet, Digital TV (DTH)
and even digital cinema(theatres)It is also one of the few companies that have realized the
importance of value added services (VAS) early on in the game.

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MARKET SITUATION
At the time of launch
The first mover in the market was Airtel which launched itsservices in Delhi in Aug 1995
(Informal launch). Essar Cell phone followed by launching its services informally in Oct
95. At this point of time, the market was at a nascent stage, awareness level was low and both
operators independently tried to spread awareness and educate the
peopleOnce the networks were commercially launched, it became anumber game with a
multitude of schemes being offered to
woocustomers Initially the cellphone was perceived as a statussymbol and utility took a back
seat The target segment in Delhi were corporate and the high income group. The average
capacity installed was for 1.5 lakh subscribers. This coupled with the steep license fee paid to
DOT put pressure on the operators to break-even by rapidly expanding their markets. In the
first two years, this led to a number of schemes being offered and prices crashing.


COMPETITIVE SITUATION
Airtel launched its services before Essar and skimmed the market picking up the bulk of the
high usage premium clients. This is
a very competitive industry with the two companiesdifferentiating either on value-added
services or price. Airtel is perceived as the high quality provider and has a premium image.
Essar, on the other hand, is perceived as the lower end service provider. Airtel positions itself
as the market leader on the basis of the number of subscribers. Essar is trying to counter this
by emphasising on the reach of its network and the quality of its service. However, Essar is
somewhat not been very successful largely due to the inconsistency in advertising To
promote themselves, both the players have been dependent on tactical advertising However,
they have restrained from sing comparative advertising Hoardings have been a very popular
medium for carrying the advertisements Airtel has also been advertising on television using
the Bharti Telecom name.






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Market share



Private operators hold 88.02% of the wireless market share (based on subscriber base)
whereas BSNL and MTNL, the two PSU operators, hold only 11.98% market share.
The graphical representations of market shares and shares in net additions of all the service
providers during the month of April.
As per the TRAI data, by the end of April 2013, about 91.73 million subscribers have
submitted their requests to different service providers for porting their mobile number. In
MNP Zone-I (Northern & Western India) maximum number of requests have been received
in Rajasthan (8.80 million) followed by Gujarat (7.85 million) whereas in MNP Zone-II
(Southern & Eastern) maximum number of requests have been received in Karnataka (10.90
million) followed by Andhra Pradesh Service area (8.30 million).
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What is STP?

STP or segmentation targeting positioning is a marketing tool with the help of which
marketers differentiate, attract, retain and grow customer base for their respective products.

SEGMENTATION


Segmentation is the procedure that an organisation goes through to segregate the market into
different groups according to the different characteristics which might need different
products. The Marketer, groups various people into segments on the basis of
similar characteristics, tastes, perception etc. so that they will have a similar view/response to
a particular product launched specifically for each segment.
Market segmentation is a two-step process of: naming broad product markets, and
segmenting those markets in order to select target markets. Most segmentation efforts fail
because inexperienced marketers attempt to find one or two demographic characteristics to
segment a mass market. Generally, customer needs and behaviours do not fit nicely into one
or two demographic characteristics. This section of the report will outline Best Practices
related to segmenting our various product markets.

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Defining Generic and Product Markets
A market is a group of potential customers who have similar needs and are willing to
purchase goods or services to satisfy those needs. Good marketers focus on the customer and
develop marketing mixes for very specific target markets. On the other hand, poor marketers
focus on their products when defining markets, leading to missed opportunities and
questionable customer satisfaction. The point here is that a market is external to an
organization; it doesnt make sense to segment potential markets based on the features
contained in our products or services.
When narrowing down the mass market, it is helpful to think of two basic types of markets:
generic markets and product markets. A generic market is a market of customers with
generally similar needs, which organizations satisfy in a variety of ways. An example of a
generic market would be the transportation market for a city; buses, trains, cars, bicycles, and
walking, are all methods of getting around town.
Contrastingly, a product market is a market of customers with very similar needs. An
example of a product market would be for laptop computers, where customers have the
choice between products from Fujitsu, Dell, Apple, Lenovo, HP etc.
When evaluating potential market opportunities, we look for a definition that is broader than
our firms current product market, but not so broad that our firm cannot handle the demand if
it were generated. Work to establish a slightly broader definition for our current product
markets.
When defining our product market, there are four important aspects:
1. What - Product Type
2. To Meet Customer Needs
3. Who - Customer Segments
4. Where - Geographic Region
An example of a product market might be Financial Consulting services in Western parts of
India, where once we have defined our product markets, we are ready to continue the
segmentation process to identify potential target markets.

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Types of segmentation


1) Geographic variables:


A. Region of the world or country: East, West, South, North, Central, coastal, hilly, etc.
B. Country size/country size: Metropolitan Cities, small cities, towns.
C. Density of area: Urban, Semi-urban and Rural.
D. Climate: Hot, Cold, Humid, Rainy.


2) Demographic variables:-

A. Age
B. Gender
C. Family size
D. Education
E. Income
F. Occupation
G. Education
H. Socioeconomic status
I. Religion
J. Nationality
K. Language



3) Psychographic variables

A. Personality
B. Life style
C. Value
D. Attitude

4) Behavioural:
A. Website Visits
B. Responses to Marketing
C. Purchasing Methods
D. Association Memberships
E. Internet Usage
F. Social Media Groups
G. Collateral Views/Downloads



23

Following are 4 criteria that strong market segments have in common:
1. Homogeneous - customers in a market segment should be very similar in both their
segment dimensions and their likely response to a marketing mix.

2. Heterogeneous - customers in different market segments should be as divergent as
possible with other segments.

3. Economic Upside - the segment needs to be large enough, or predicted to grow
sufficiently, to be profitable.

4. Operational - the segment dimensions should be helpful for understanding &
identifying customers and making decisions regarding the marketing mix.

It is essential that market segments are operational. The whole point of segmenting is to assist
with better targeting, positioning, and decision-making; be sure that our segment dimensions
are extremely relevant.
Once we have established distinct market segments based on various dimensions, we are
ready to start targeting our potential customers. The next section of the report provides advice
pertaining the effective target marketing techniques.


24

Segmentation of Airtel

Segmentation is very important because of the better predictability of the target consumer
group and to design the proper marketing mix strategy.

On the basis of Geographic variables:-
Region wise
East Region (West Bengal, Assam, Arunachal Pradesh etc.)
West Region (Gujarat, Rajasthan, Maharashtra etc.)
South Region (Andhra Pradesh, Karnataka, Kerala etc.)
North Region (Punjab, Haryana, Himachal Pradesh etc.)
Central Region (Madhya Pradesh, Chhattisgarh, Jharkhandetc)

Density of area
Urban (Cities Such As Mumbai, Delhi, Pune, Jaipur etc.)
Semi-urban (Nasik, Aurangabad, Ahemad nagar etc.)
Rural (Baramati, Khed, Saswad etc)
On the basis Demographic variables:-
Age
From age group 18 to 35
As most of the people start using a mobile from the age of 18 sowe may make a segment of a
age group 18 to 35 as most of the will be students and remaining will be freshers working in
the industry. So they need SMS plans for chatting and they also need cheap calling rates. We
may provide the FRINDZ card to them

35 and above

As most of this group will be working and dont use mobile for
SMS and chatting. So this group needs only the calling facility at reasonable rate. This Group
may continue using the general plan.


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Income

Prepaid & post-paid

Generally the mobile service providers plan their marketing strategies according to the
prepaid market and post-paid market. So it is basically depends upon the income of the
consumer that whether he selects the prepaid or post-paid. Generally the consumers with low
income choose prepaid and consumers with high income choose post-paid.


On the basis of Behavioural variables


Brand Loyalty

We can also segment it on the basis of the loyal customers and on loyal customers of the
brand. We can provide various schemes and offers to the loyal customers to retain him with
our product.

Good use of marketing strategy is well represented by the example of Airtel in India. India is
the worlds fastest growing telecom market, and has one of the largest mobile phone
subscribers in the world. A slew of mobile services companies have cropped up, but Airtel
continues to remain a dominant player in the market with the maximum market share.
26



Airtel meticulously segments its market. Apart from the geographic segmentation, which
divides the Indian market into east, west, south, north and central regions, the market is also
segmented in each region on the basis of age and income. The different geographic regions
are handled independently and different campaigns are run according to the tastes and
preferences of people in each region. Under each region, age and income play an important
role in determining the extent of mobile usage.
Hence Airtel caters to two different categories each in age and income. It targets younger
population by providing them cheap call/msg rates at night and also cheap SMS plans, while
the elder population is targeted by plans for calls at reasonable rates. In the income
categories, the lower income people are targeted by offering them cheap and affordable
lifetime validity prepaid cards, that can be used for incoming calls; while the higher income
groups are targeted by offering them premium services like VAS(value added services),
GPRS plans and 3G technology.

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TARGETING

Targeting evaluates the attractiveness of each segment of its buying power, size, growth of
the market, competitiveness etc. Defending a target market requires market segmentation,
the process of pulling apart the entire market as a whole and separating it into manageable,
disparate units based on demographics. We then choose or come up with a particular
strategy or a product itself for each targeted segment.

Target marketing makes the promotion, pricing and distribution of the products or services in
a particular segment. Target marketing provides a focus to all marketing activities. Market
targeting means to choose ones target market.


PROCESS OF CHOOSING TARGET MARKET:

We must make sure that target market is not synonymous to segmentation. Segmentation is
just the first step of the target market. Target market follows different basis of
segmentation. We must view each segment as a distinct marketing opportunity and
continuously evaluate the worth of each segment (sales/profit potential).

Estimating whether the segment is:

Distinguishable.
Measurable
Sizable.
Accessible.
Growing.
Profitable
Compatible with the firms resources
Checking out if the firm has the differential advantage.
Distinctive capability for serving the selected segments.

At the end choose those segments which the most appropriate for the company.
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DECISIONS INVOLVED IN TARGETING STRATEGY INCLUDE

Which segments to targeting?
How many products to offer.
Which products to offer in which segments.

After evaluating different segments, the company can consider five patterns of
target market selection. They are:-

Single Segment concentration
We have brands in the market which concentrate only on one segment. For example, Zodiac
brand concentrates on formal wear for executives and professionals. Farm Equipment
Division of M&M concentrates on tractors.
Through concentrated marketing, the firm gains a strong knowledge of the segment
needs and achieves a strong market presence. But, a particular market's growth can
deteriorate or a competitor may invade the segment. For example, when Digital camera
technology took off, Kodak's market share started to fall gradually and they could not regain
their dominance as new competitors like Sony and Nikon had arrived.
Selective Specialization
A firm selects the number of segments, each objectively attractive and appropriate. There
may be little or no synergy among them but each promises to be a money-maker. For
example, Cadbury's advertising targets audience of a wide range with one select ad for each
segment.
Product Specialization: A microscope manufacturer makes different microscopes for different
customer groups such as University, Govt., Hospitals and commercial laboratories and builds
a strong reputation in that product area. The risk is that the product may be replaced by newer
technologies.
Market Specialization
A firm gains strong reputation in serving a customer group and becomes a channel for
additional products the customer group can use. For example, ITC first concentrated only on
tobacco related products, and later they moved into the field of FMCG and IT services. The
downside is that the customer group suffers budget cuts or shrink in size.
Full Market Coverage: The firm attempts to all customer groups will all the products that
might be needed. Only very less firms like Microsoft(Software), General Motors(Vehicle),
Dell(Electronics) etc. can undertake a full market coverage strategy.
They can cover the whole market via Undifferentiated Marketing, where the firm
ignores segment differences and Differentiated marketing, where the firm offers different
products for different segment.
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Targeting of Airtel

Airtel has targeted the premium and upper middle class. The motto behind this this only those
segments should be targeted who value time and have the paying capacity. During the
introduction stage there was a huge pressure to get consumers across to hook up with their
brand, because getting them to Airtel by their earlier brand and switching their brand loyalty
was too tough. Airtel marketers have been concentrating totally on the business executive
class but now that the basic viable volumes has been built up and prices have declined to a
certain extent they are planning to venture further field.

TARGETING AREAS

:Professionals by giving free calls in post-paid connections. Entrepreneur by giving various
plans in which they may get internal calling free. Youth with The FRIENDZ Scheme.
Targeting Students by introducing post-paid connection only for students and with zero
rentals.


30


POSITIONING

Positioning has come to mean the process by which marketers try to create an image or
identity or value in the minds of their target market for its product, brand, or organization.

Positioning involves on affecting the target. The example can be Apple Computer has chosen
itself as user-friendly computers. Thus, Apple advertising itself as a computer for non-
gigs.

Positioning of a product is a sum of the attributes which are normally described by the
customers. Describe its standing, target market, quality, strengths, weaknesses, prices and
any other values the product represents.

There are three types of positioning concept:


Functional position

Solve problems.

Provide benefits to customers.

Get favourable perception by investors (stock profile) and lenders.

Symbolic positions

Self-image enhancement.

Ego identification.

Belongingness and social meaningfulness.

Affective fulfilment.

Experiential positions

Provide sensory stimulation.

Provide cognitive stimulation


31

Product positioning process generally, the product positioning process
involves:

Defining the market in which the product or brand will compete (who the relevant
buyers are)

Identifying the attributes (also called dimensions) that define the product 'space'\


Collecting information from a sample of customers about their perceptions of each
product on the relevant attributes

Determine each product's share of mind


Determine each product's current location in the product space

Determine the target market's preferred combination of attributes (referred to as an
ideal vector)

Examine the fit between:

The position of your product

The position of the ideal vector



32

Approaches of positioning
The main approaches to positioning are
The product class approach.

The cultural symbol approach. - It is based on showing the cultural symbol which
helps stand out from other competitors. The example of this can be the MALBORO
brand.

Customer benefit approach- involves putting the brand behind the competitors. It can
be a single product which can solve many problems e.g. Procter & Gambles Head &
shoulder shampoo functions as anti-dandruff and anti-hair fall shampoo.

The price-quality approach- some brands have higher price to cover the cost of the
product and to give the customer message that this product is on a high level and
quality.


The competitor approach

To effectively understand repositioning, it is important to understand how ones brand
and those of competitors are perceived. This let identify how products are perceived by the
consumers. After that the company can attempt to move the brand in more desirable
directions by promoting other, certain points.

Targeting of Airtel

Airtel has targeted the premium and upper middle class. The motto behind this this only those
segments should be targeted who value time and have the paying capacity. During the
introduction stage there was a huge pressure to get consumers across to hook up with their
brand, because getting them to Airtel by their earlier brand and switching their brand loyalty
was too tough. Airtel marketers have been concentrating totally on the business executive
class but now that the basic viable volumes has been built up and prices have declined to a
certain extent they are planning to venture further field.

TARGETING AREAS

:Professionals by giving free calls in postpaid connections. Entrepreneur by giving various
plan in which they may get internal calling free. Youth with
the FRIENDZ Scheme.
Targeting Students by introducing postpaid connection only for students and with zero
rentals.


33

DISTRIBUTION
The company whose operations are concentrated in and around Delhi. It 27 Franchisees and
15 Distributors- They also have 8'instant access cash card counters- Each franchises or
distributor can have any number of dealers under him as long as the personas approved by the
Airtel authority.
Each franchise has to invest Rupees Ten Lakhs. To obtain a franchise and should employ an
officer recruited by Airtel. This person acts as a liaison between the company and the
franchises. The franchises can it any number of dealers as long as their territories do not
overlap. But unfortunately Airtel has not been very successful in controlling territorial
overlaps of dealers. The franchises can carry out his 1her own promotional strategy. For
this the Company contributes


75% of the money and the franchises contribute 25% of the money. The dealers under the
franchisee receive the same commission. The franchises and the dealer obtain the feedback
from the customers and they are sent through the liaison officer on a day-to-day basis to
Airtel. The dealer has to invest Rupees. One Lakh as an initial investment. The dealer of
Airtel is not allowed to provide any other operators' service. Target set for distributors and
the dealers is 100 -150 activations per month. Hence the dealers can also go for their own
promotions like banners and discounts on festivals etc. The dealer provides service
promptly. The consumer on providing the bill of purchase for the handset and proof of
residence has only to wait an hour before getting connected. The staffs of the dealers and the
franchisees are provided training by the Airtel personnel. The complaints encountered by the
franchisees and dealers are either handset being non-functional or the SIM Card not getting
activated. Anything more complicated is referred to the main Airtel office in Delhi.

Company
Franchisee
Dealer
Customer
Customer
Dealer
Distributor
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SWOT ANALYSIS

STRENGTHS
Cost advantage
Current leaders in quality service
Largest distribution network
Ability to constantly innovate
Highly skilled workforce
Entrepreneurial zeal
Airtels increased equity and market cap.


WEAKNESSES
To prove credibility
Price pressures
Need for Government support
Awareness
Sales and Marketing




35


OPPORTUNITIES

To sustain passion and commitment
Airtels market share increasing at other service providerexpense. Thus opportunity to
wipe it out.
Attain higher value services
Collaborative business needs to be explored
Vertical repeatable solutions.
Low penetration level in rural markets.


THREATS

Foreign investment
Global trends moving from GPS to WLL.
Lack of global parity in telecom tariff
Other competition



36

CONCLUSION

From above the details I conclude that 70% Airtel users preferred to remain with Airtel. Also
good no. of users who werewilling to switch from their respective subscribers showed interest
in Airtel. Hence, these statistics imply a bright future for the company. Also the company is
now providing more services like the door to door services which is you dial the Airtel
customer care and would like to send someone flowers the Airtel Company delivers those
flowers to the person concerned. Also Airtel is providing free text messaging service and free
voicemail service. Call conferencing is also another feature Airtel provides.

37

BIBLIOGRAPHY


http://www.ibef.org/industry/telecommunications.aspx
http://business.mapsofindia.com/india-industry/telecom.html
http://www.thehindubusinessline.com/2010/05/13/stories/2010051352981000.htm
http://www.equitymaster.com/research-it/sector-info/telecom
http://www.thinkdigit.com/Mobiles-PDAs/Telephone-subscriber-base-in-India-slips-
to_15272.html
http://www.scribd.com/doc/49246309/Marketing-Segmentation-Targeting-And-Positioning-
pf-AirTel
http://www.dnaindia.com/money/report_mukesh-cleans-out-bharti-s-fieldfresh-hires-almost-
70-people_104154