BHARTI AIRTEL

(GSM MOBILE SERVICES)

STRATEGIC MANAGEMENT
TERM PAPER
Sumit Srivastava

Cohort 7

Learn Team 12 B

Company Background
Established in 1995 by Sunil Bharti Mittal, currently the
Chairman and MD of Airtel

Telecom giant Bharti Airtel is the flagship company of Bharti

Enterprise

Bharti Airtel Limited, (commonly known as Airtel), is Indias

largest integrated and the first private telecom services

provider with services in all the telecom circles

Bharti Airtel is structured into three strategic business units

- Mobile services, Telemedia services, Enterprise services and
Digital TV services*

The mobile business provides mobile & fixed wireless

services using GSM technology

* This study is based on the Airtel Mobile Services only

Target Market(s)
Airtel has two major customer segments (demographically)
in the mobile telephony services:

Students and young professionals who use the prepaid

services (use convenient recharge/load)

Premium and upper middle class customers, who value

time and have the paying capacity. They are mostly postpaid users (billed on a monthly basis)

Airtel has mobile services in all the telecom circles in India

(geographically). The concentration is mostly in urban and
sub-urban areas where mobile users are more)

Competition
Airtel is the market leader in GSM mobile services
Other key players along with the percentage market share
has been shown in the table and pie chart* below
Telecom
Company

No of
Subscribers

Bharti Airtel

171,846,824

Vodafone

144,144,031

BSNL; 15%

Aircel; 10%
Others; 8%

IDEA; 16%

IDEA

98,441,714
Bharti Airtel; 28%

BSNL

90,622,219

Aircel

59,191,661

Others

47,512,178

Vodafone; 24%

market share as of Aug 2011 (based on number of subscribers)

: http://investorzclub.blogspot.com/2011/04/telecom-companies-market-share.html

PEST Analysis/Factors
POLITICAL FACTORS

ECONOMIC FACTORS

Regulatory bodies DoT &

TRAI
Mobile number portability
introduced in January 2011
Lack of Transparency in
Spectrum & License
Allocation

Fastest Growing Sector

CAGR 22% (2002-07)
Tariff rates declining since
the year 2000
Declining ARPU but
increasing subscriber base

SOCIAL FACTORS
Customers notion
regarding brand and status
symbol
Cost factor is major
concern to customers
Likes and dislikes of a
teenager and adult not the
same

TECHNOLOGICAL
FACTORS
e-commerce portal
R&D driven industry
Introduction of newer
products/ services/ plans
3G, 4G and high speed
broadband in the market

Porters 5 Forces Analysis

Bargaining
power of
Buyers
HIGH
Threat of
New
Entrants
HIGH

Bargaining
power of
Suppliers
HIGH

Indust
ry
Rivalr
y
HIGH

Threat of
Substitute
s
HIGH

As per the Porters 5 forces study, the Indian

Telecom Industry is Highly Unattractive

Strategic Maps
High

PriceMedium

Low

Low

Medium

High

Call Quality
Airtel is good in quality but has relatively higher prices (hence lower
score)
BSNL has least price (being government division), but lacks the call
quality
Vodafone and Aircel are priced at similar level but differ in call quality

Strategic Maps
High

Price
Medium

Low
Low

Medium

High

Network Coverage
Airtel has substantial network coverage, but at a higher price
BSNL has highest network coverage and least price
Aircel has lowest network coverage and medium level price

Strategic Maps
High

Product Offerings
Medium

Low
Low

Medium

High

Brand Image
Airtel is considered the best brand with high no of
products/services/plans offered
BSNL lacks the brand image and is very low on the no of services/plans
offered
Idea and Aircel lie in the medium range, lower than Vodafone and Airtel

Strategic Maps
High

Customer Services
Medium

Low
Low

Medium

High

Reach / No of Outlets
Airtel and Vodafone provide the best customer services, with large no of
outlets
Idea has got higher reach than Aircel with similar customer service
BSNL is low on both customer service and reach

Key Success Factors

The key success factors for the industry are as below:
Price (Threshold)
Customer Services
Brand Image
Network Coverage
Call Quality
Reach/No of outlets
Product Offerings*
* This includes value added features like international roaming, international
calling, CUG services, BlackBerry and iPhone connection and services etc

Competitive Matrix
Key Success
Weighta
Vodafon
Airtel
IDEA BSNL Aircel
Factors
ge
e
Network Coverage
25%
8
7
7
9
4
Call Quality
25%
8
9
6
6
6
Product Offerings
15%
9
8
7
3
6
Brand Image
15%
9
8
6
4
6
Reach / No. of
10%
9
8
6
2
4
Outlets
Customer Service
5%
9
8
5
3
5
Price
5%
6
7
6
9
7
Score
100%
8.35
7.95
6.35
5.85
5.3
Market Share

28.09% 23.56% 16.09% 14.81% 9.68%

Network coverage and call quality are the most important factors in the
telecom market
The products/plans offered, along with the brand image also play an
important role for customers decision making process
Price is a threshold as similar prices are charged by all private players
(BSNL is Govt. owned)

Triangle Model
Vision / Mission

Key Success
Factors

Core
Competencies

Price
Customer Services
Brand Image
Network Coverage
Call Quality
Reach/No of outlets
Product Offerings

Value
Proposition
Quality, Value,
Consistency and
Reliability
Anywhere, Anytime

Sales & Promotions

Brand Image
Market Share
Resource availability
Product quality

Ladder Model

Sustainable
Comp.
1. Brand
Advantage
Image

1.
2.

Strategic
Comp.
1. Market
Competencies

Resources

1. Market
Share
2. Distribution
3. Brand

1. Network
Infrastructur
e
2. Distribution

Leader
2. Product
Innovation

Peripheral
Comp.
1. Customer
Service

Incompetency
1. Innovative
pricing

Distinctive
Comp.
Network
Coverage
Product
Offering

Threshold
Comp.

1. Basic voice
and data
services

2. Products &
VAS
3. R&D
capability

Comp.
1. Advantage
Market

Share
2. Distribution
system

Vision, Mission, Values

VISION

MISSION

VALUES

By 2015 Airtel willbe

the most loved
brand, enriching the
lives of millions

We at Airtel always
think in fresh and
innovative ways
about the needs of
our customers and
how we want them to
feel. We deliver what
we promise and go
out of our way to
delight the customer
with a little bit more

Empowering People
Being Flexible
Making it Happen
Openness and
transparency
Creating Positive
Impact

Long Term Objectives

STRATEGIC
1.

2.

3.

Continue market
Technical leadership
Enhancement:
and
Equip technically
stand
increase thetomarket
against competitors
(extension
share
of 3G to all 22 circles in India &
introduction of 4G in the top 10
cities)
Bottom of the pyramid:
Provide connectivity to in the
low income group in rural area
targeting a teledensity of more
than 50% is currently 33.8%
only
Increase Usage:
By value added services like mcommerce
(mobile
wallet),
Airtel can increase its ARPU by
20% from the current level of
Rs 194 per month

FINANCIAL

1.

2.

3.

Grow at higher than

industry rate and
create value for
shareholders
Increase
Market
Share:
Continue to grow at a higher
rate (42.1% in 2010-11) than
the industry growth rate (7%)
to maintain market leadership
Dividends for Shareholders:
Pay progressive dividends to
the
share
holders
(4,428
million INR in 2010-11)
Cash Reserves: Maintain cash
reserves to invest in R&D and
network development (cash
and cash equivalent in 2010-11
was 9,575 million INR). PPE
increased more than 9 folds in
2010-2011

New Key Success Factors

Key Success
Factors
R&D Performance

Weightag
Vodafo
Airtel
IDEA
e
ne
30%
9
8
7

BSNL

Aircel

Rural Market Focus

25%

Partnership

20%

Network Coverage

10%

Call Quality

10%

5%

100%

8.3

7.2

6.35

6.05

5.45

Product Offerings
Score

R&D
is required
to provide
bandwidth
data 15.00%
services to
high
Market
Share
*
higher
35.00%
25.00%
10.00%
8.00%

income group
Rural market still remains quite unexplored, which has huge potential
customer base
Partnership with mobile phone manufacturers can help in starting the
concept of contract based service plans (especially for lower income
This is thegroup)
expected market share based on the new key success factors

New Triangle Model

Vision / Mission

Key Success
Factors

Core
Competencies

R&D Performance
Rural Market Focus
Partnership
Network Coverage
Call Quality
Product Offerings

Technological
Capabilities
m-Commerce
Brand Image
Market Share
Product quality

Value
Proposition
Connecting people
across the country
with latest technology
and high quality
service in all states,
cities, towns and

Strategic Options
STRENGTHS

SWOT
Analysis
OPPORTUNITIES
O1 3G expansion
O2 4G introduction
O3 Low rural
penetration
O4 m Commerce

THREATS
T1 Increased
competition
T2 Regulatory Issues
T3 Vulnerability to
recession
T4 Mobile number

S1
S2
S3
S4
S5

WEAKNESSES

Current Market Share

Brand Image
R&D Capabilities
Distribution Network
Network Coverage

W1 Infrastructure issues
W2 Higher price

1-Pan India 3G
service(S1,S3,O1)
2-Introduce 4G in all tier 1
cities (S1, S2, S3, O2)
3-Rural sector with teledensity of only 33.8% (S1,
S4, O3)
4-Value added services
like mobile wallet and
international
SIM to
1 Improve time
etc(S2,S3,O4)
market to handle growing

1 Improve the
infrastructure in order to
support technical
enhancements (W1, O1,
O2)
2 Innovate to reduce
price for rural expansion
(W2, O3)
1 Reduce price to match
the competitors (T1, W1)
2 Maintain cordial
relation with the
government (T2)
3 Improve infrastructure
in order to retain
customers not to move

competition (S3, S5, T1)

2 Increase network
coverage to support MNP
(S5, T4)

Options Filter
Strategic
Options

3G Expansion
4G
Introduction
Rural
Penetration
Value Added
Services

Value
Long Term
Organizationa Mission / Total
Propositio
Objectives
l Capability
Values Score
n
30%

30%

30%

10%

8.7

6.0

7.3

8.1

Recommendations
SHORT TERM
1. 3G Expansion: The
3G services are
currently being offered
in the tier 1 cities.
They should be
extended to other
cities/towns as well
2. Value Added
Services: With the
current teledensity of
almost 75%, VAS like
the m-commerce and
international SIM
provide a way ahead
for mobile industry

LONG TERM

1. Rural Penetration:
The telecom rural
penetration at 33.8%
at end of March 31,
2011 offers huge
growth potential in
terms of both
customers and usage
2. 4G Introduction: The
upper segment
customers are looking
forward for high speed
data availability on the
move

rk
High Netwo
Coverage

Vision / Mission / Values

Industry
Industry
Success
Success
Factors
Factors

Brand Image

Core Competencies
Distribution Netw
ork

New Services like

m-commerce

Innovation in VA
S

Continuo
Continuo
us
us
Growth
Growth

Market
Leadership
Sustainable Growth

Company
Company
s
Strengths
&
&
Capabiliti
es

Value Proposition

Modern
Network Equ
ipments

High speed
s
data service

Technology
and R&D

Telecom House
Framework

Competitive Advantage

References
Bharti Airtel Annual Report 2010 2011
https://www.airtel.in
http://www.airtel.in/wps/wcm/connect/about+bharti+airtel/Bharti+
Airtel/Investor+Relations/Company+Profile/PG_Company_Profile?
countrytabs=1

http://investorzclub.blogspot.com/2011/04/telecom-companiesmarket-share.html

http://www.marketingteacher.com/swot/bharti-airtel-swot.html#
http://www.financialexpress.com/news/bharti-airtel-says-q4-indiaarpu-drops-12/786275/

THANK YOU!!