BUSINESS STRATEGY

Members Roll No.

Moksha Turakhia 90
Rashmi Singh 65
Hitesh Bhatia 63
Akshay Sethuram 69
Bhavna Hariharan 73
Yogesh Ajwani 98
Group - 7
Introduction

Leading Provider of Telecom Services in India

Operations in India, Sri Lanka and Bangladesh
World’s second largest among emerging markets
market
Dec 31,2010 – 207.8m
Telemedia Services,Enterprise Solutions, DTH and
IPTV
Vision and Mission

VISION 2015 Mission

1)Loved by more customers “We at Airtel always think fresh
2) Enriching the lives of and innovative ways about the
millions needs of our customer s and how
we want them to feel. We deliver
VISION 2020 what we promise and go out of
our way to delight the customer
To build India’s finest with a little bit more”.
conglomerate by 2020
To support education of
underprivileged children
through the Bharti foundation.
Partners
Network Equipment
Mobile Services – Nokia, Siemens, Ericsson, Huawei
Telemedia & Long Distance Services - Nokia ,Siemens, Juniper, Cisco, Alcatel
Lucent, ECI, Tellabs
Information Technology – IBM
Call Centre Operations - IBM Daksh, Hinduja TMT, Teleperformance, Mphasis,
Firstsource & Aegis
Equity Partner {Strategic}- Singtel

Strategic Business Unit

Mobile Services
Telemedia Services
Enterprise Services
Fact sheet
Name Proportionate EBITDA
Bharti Airtel Limited Rs. 49,816 million ( ended December 31, 2010 –
Audited)
Business Description
Rs. 40,823 million ( ended December 31, 2009 –
Provides GSM mobile services in all the 22
telecom circles in India, Srilanka, Bangladesh Audited) 
and now in 16 Countries of Africa. As per IFRS Accounts
Provides telemedia services (fixed line and
broadband services through DSL) in 88 cities in Shares in issue
India.  3,797,530,096 as at December 31, 2010
Also offer suite of Enterprise solutions, DTH and
IPTV Services
Listings
Established The Stock Exchange, Mumbai (BSE)
July 07, 1995, as a Public Limited Company The National Stock Exchange of India Limited (NSE)

Proportionate revenue Customer base

Rs. 157,560 million (ended December 31, 2010-
India: 157,485,000 GSM mobile and 3,257,000
Audited)
Rs. 103,053 million ( ended December 31, Telemedia Customers. (status as on Dec 31, 2010)
2009-Audited)  Africa: 42,124,000 GSM mobile(status as on Dec
As per IFRS Accounts 2010)
Financial Facts
Established in July 07, 1995, as a
Public Limited Company
Largest GSM service provider in India
7thd largest wireless operator in the
world
Covers telecom circles in India, Sri
Lanka, Bangladesh and few countries
in Africa
Listed in the stock exchange, BSE,
NSE
Financial Facts

Customer Base of 207.8 million in India and 42,124,000

in Africa
199.6 million in India subscribe to GSM services
The company also deploys, owns and manages passive
infrastructure pertaining to telecom operations under its
subsidiary Bharti Infratel Limited
Telecom Sector - India
Market
Seventh largest in the world and the second 
Share largest among emerging economies
Classified into Fixed Line Telephony and mobile telephony
Vision 2020 document of the Planning Commission of India
Pestel
World’s second largest among emerging markets
Analysis
Penetration stands at 44.87% ie 525.65 million
India’s GSM subscriber base grew by 2.72 % in February ie: 14.7 million mobile phone
5 forces users 
model - Total GSM subscribers
Subscribers Added
Vodafone Airtel Idea BSNL

3G
Telecom operators invested close to $2.5 billion 2.51
2.7
Mobile subscribers increase by 15 million per month
5 Lakh crore investement in the next 5 yrs
1.5
Spectrum auction
3.2
Industrial Organization model
The I/O Model adopts an external perspective to explain that forces outside of
the organization have dominating influences on a firm's strategic actions and is
based on the following four assumptions:
The external Environment The general, industry, and competitive environments
impose pressures and constraints on firms and determines strategies that will
result in superior returns
Most firms competing in an industry or an industry segment control similar
sets of strategically-relevant resources and thus pursue similar strategies
Resources used to implement strategies are highly mobile across firms
Organizational decision-makers are assumed to be rational and committed to
acting only in the best interests of the firm
External Analysis
Market
Share POLITICAL

ECONOMICAL
Pestel
Analysis
SOCIAL

5 forces Technological
model

ENVIRONMENTAL

LEGAL
External Analysis
Political and Regulatory Issues
Market
Share Liberalisation of telecom industry in India:
1981: Prime Minister Indira Gandhi signed contracts with Alcatel CIT of France to merge with
the state owned Telecom Company (ITI)
Pestel Under the leadership of Rajiv Gandhi, PSUs were set up - Department of Telecommunications
Analysis
(DoT) , VSNL and MTNL
1994: P.N Rao led govt introduced national telecommunications policy [NTP] in which brought
5 forces changes in areas of: ownership, service and regulation of telecommunications infrastructure
model Successful in establishment of joint ventures between state owned telecom companies and
international players
Foreign firms were eligible to 49% of the total stake stating that MNCs were just involved in
technology transfer, and not policy making
Liberalization of long distance services
1995 govt. set up TRAI (Telecom Regulatory Authority of India) reducing interference of Govt
in deciding tariffs and policy making
1999: more reforms were made in liberalization policy
2002: TATA took 25% stake in VSNL
2000: Upto 74%-MNCs, reduction in services fees and call costs
External Analysis
Market
Economic
Share Economic growth, interest rates, exchange rates and the inflation
rate
8.40% GDP growth
Pestel Growth in the services and manufacturing sectors
Analysis

5 forces
model
External Analysis
Market
Share
Social
Includes cultural aspects, population growth rate, age
Pestel distribution, career attitudes etc. Trends in social
Analysis factors affect the demand for a product or a service
Lowest mobile penetration in the second most
5 forces
model populous country in the world
35 % population below 14 yrs of age - huge future
customer base
Urbanization is increasing leading to an increased
demand for connectivity
External Analysis
Market Technological
Share
Include technological and environmental aspects, such as R&D activity,
automation, technology incentives and the rate of technological change
Pestel RURAL
Analysis VAS TELEPHONY

VIRTUAL ENTERPRISE
PRIVATE TELECOM
5 forces NETWROK SERVICES
model

MANAGED GROWTH
SERVICES AVENUES

INFRASTUCTR
E SHARING

WIMAX 3G
External Analysis
Market
Share
Enviornmental
Includes weather, climate, and climate change, which
Pestel
may especially affect industries such as tourism, farming,
Analysis and insurance
Growing awareness of environmental factors make the
5 forces
model industries responsible for their activities
Radio frequency waves emitted from the mobile phones
harms body cells and damages the DNA
This is not yet proved that such changes were risk to
human health
External Analysis
Market
Share
Legal
Govt Launched Mobile Number Portability (MNP)
Pestel Govt is marketing 3-4 slots of spectrum across the
Analysis
nation
Govt fixed Rs 3,500 crore as reserve price for pan-India
5 forces
model spectrum
FDIs up to 74%
External Analysis
It uses concepts developed in Industrial Organization model to derive five forces
Market that determine the competitive intensity and therefore attractiveness of a market
Share
They consist of those forces close to a company that affect its ability to serve its
customers and make a profit
Pestel A change in any of the forces normally requires a company to re-assess the
Analysis marketplace

5 forces
model
External Analysis
Market
Share
Competitive Rivalry:
The telecom industry is a highly competitive one
Pestel Not much differentiation amongst competitors
Analysis
Cut throat competition amongst the players for gaining
market share and a higher competitive advantage
5 forces
model Aircel : 6.18%, Airtel : 22.11 %, Idea : 11.02%, Reliance
telecom limited : 17.63%, Tata teleservices limited :
11.2%, Sing Tel Private Limited : 0.13%, Etisalat DB
Telecom Private Limited, Videocon Telecommunications
Limited, Vodafone Essar Limited:17.25%
From the above figures the largest private players are
Airtel , Vodafone , Reliance and Tata
External Analysis
Market Competitive Rivalry:
Share
Airtel, Tata Indicom, Reliance mobile, BSNL and MTNL
Pestel
offer all the services such as mobile, wireless and
Analysis broadband as well as fixed line services
Airtel, Tata, Reliance and BSNL also provide digital TV
5 forces
model facilities. Thus, these are the major threats to Airtel
Most companies offering 3G licenses and mobile number
portability, the switching costs for customers are very
low, increasing the threat
Buyer’s inclined towards changing their brands only with
some value addition or if it is cost saving
Mobile service providers will have to build stronger
relationships with customers
External Analysis
Market Bargaining power of suppliers:
Share
Major players in the Indian telecom sector are Airtel,
Pestel
Reliance, Tata Indicom, Vodafone, Loop mobile, Idea,
Analysis Aircel, Tata Docomo, Videacon, Uninor etc.
The bargaining power increases if there is monopoly,
5 forces
model
greater security, better quality, threat of forward
integration by suppliers etc
In case of telecom industry being a services industry it is
intangible
So the role of suppliers almost negligible
Yet, minor role played by suppliers are:
Mobile and handset suppliers
Technology provided in the mobile phones
External Analysis
Market
Share
Bargaining power of Buyers:
For the telecom category the buyer’s bargaining power will
relatively be higher
Pestel
Analysis Not much of differentiation between services provided by various
telecom companies
5 forces
Lack of differentiation between Airtel, Tata Indicom, Reliance mobile
model and BSNL
All companies are also applying for their 3G licenses and offering
mobile number portability
In the current scenario switching costs do not pose as a threat to
increasing the bargaining power of buyers as the switching costs are
very low on account of the mobile number portability
Brand loyalty and price sensitivity of product but again on account
of mobile number portability the brand loyalty seems to dwindle
Thus buyers are strong and have an edge in the market
External Analysis
Market
Share
Threat of new entrants:
Threat is lower if there is higher entry level and it is higher if there is lower
entry level and great market potential. Govt policies can also be a hurdle.
Pestel
Analysis Low threat because:
Rapid changes in technology
High infrastructure and set up costs
5 forces
model Availability of 3G and other government licenses
Spectrum availability and Regulatory issues
Entry of MVNO’s and Wimax operators

High threat because:

Entry through 3G
Increasing FDI to 76% bringing foreign players in the Indian markets
New entrants are entering with huge capital because of market attractiveness
and great potential
External Analysis
Market
Share
Threat of substitutes:
Substitutes can vary according to size, quality, price etc
Pestel Factors can be switching costs, buyer’s inclination to the
Analysis
substitute etc
Major threats - CDMA phones, landlines, world phone,
5 forces
model video conferencing, Skype, emails, all the messengers
and social networking sites etc
Other mediums substitute a mobile phone easily now-a-
days, posing a great threat to Airtel
Lack of differentiation amongst existing players
Resource-based model
This model adopts an internal perspective to explain how a firm's unique internal resources and
capabilities serves as a basis for earning above average returns. The model is based on three
assumptions:
Each firm is a collection of unique resources and capabilities that provides the basis for its strategy and
is the primary source of firm’s returns
Over time, firms acquire different resources and develop different or unique capabilities. Firms
therefore are likely to adopt and implement different strategies in their attempts to achieve strategic
competitiveness
Resources may not be highly mobile across firms
To sum: according to this model a firm's resources and capabilities, found in its internal environment,
are more critical to determining the appropriateness of strategic actions, then the conditions of the
external environment

Internal resources and capabilities lead to a competitive advantage when they are: valuable, rare,
costly to imitate, and non-substitutable. When they meet this standard they become known as core
competencies or what the company is known for being good at. The organization's environment
consists of three components:
General Environment
Industry Envrionment
Competitor/Competitive Environment
Internal Analysis
SWOT
Analysis Strengths Weaknesses
Largest provider in India Start-up business had to
GE Model
Stakeholders with be outsourced
strategic alliances Towers
Coverage
BCG
Matrix SWOT
Analysis
Value Opportunities Threats
Chain Google tie- up
Airtel Vs. Vodafone
iPhone & Blackberry
Recession’s effect on
Resource
Investment in small villages
acquisitions
Audit IPTV
Internal Analysis
Business Strength
SWOT
Analysis
Strong Medium Weak 5.00
Attractive
High
Airtel Enterprise
Market Attractiveness

GE Model
Mobile
3.67
BCG
Medium

Matrix
Moderate
TeleMedia
Value
Attractive
Chain 2.33

Unattractive
Low

Resource
Audit

1.00
Low 5.00 3.67 2.33
Factors Underlying Market Attractiveness
Factors Weight Rating Value =
SWOT
Analysis (1 –5) (Weight * Rating)

Resource availability 0.20 3.5 0.7

GE Model
Overall market size 0.15 4 0.6

BCG Annual Market growth rate 0.20 4 0.8

Matrix
Profitability 0.15 4 0.6

Value
Chain Competitive intensity 0.10 4 0.4

Technological requirements 0.20 4.5 0.9

Resource
Audit
Total 1.0 4.0
Factors Underlying Market/Biz Strength

SWOT
Factors Weight Rating Value =
Analysis (1 –5) (Weight * Rating)

Market share 0.15 5 0.75

GE Model
New product development 0.10 3.5 0.35

BCG
Brand Image 0.10 4 0.40
Matrix
Sales force 0.15 3 0.45

Pricing 0.15 3 0.45

Value
Chain Distribution capacity 0.10 4.5 0.45

Product quality 0.10 4.5 0.45

Resource
Audit R&D Performance 0.15 3 0.45

Total 1.0 3.75

Internal Analysis
Stars ? – Question Mark
HIGH
SWOT
Analysis
Retail
Insurance
Mobile Services
Market Growth Rate

GE Model DTH & IPTV

Broad Band
BCG
Matrix
Cows Dogs
Value Fixed Line Services
Chain

Resource
LOW

Audit

HIGH Market Share LOW

Internal Analysis
Firm infrastructure - CRM tools, MIS, ERP, Networking Equipment, Telecom
SWOT Supporting Activities equipment for coverage and signal strength, IT Infrastructure
HR management - IT skilled work force, Telecom engineers, SCM specialists M
Analysis
Customer service & Telesales training, Franchisee management, 7,646 out of 23,789 A
employees in Mobile services, Owned retail staffing and training. R
Technology development - Creating a 3G enabled network, mChek - Launching M G
GE Model commerce by tie ups with banks and credit cards. I
Procurement - Established a SCM network to acquire networking & Telecom tools, N
Maintain long term relation with suppliers to provide handsets & services

BCG
Matrix

Value
Chain
M
A
R
Resource
Audit G
I
N

Primary Activities
Internal Analysis
Human resources Financial
SWOT well defined rewards and recognition Profit crosses US$1 bn
Analysis system Fixed asset (09) $ 7,986,254,556
Young team - Average age is 26years Dividend offered for 2008-09 is
Employees decide their training needs. 20% of the face value of each
GE Model A state-of-the-art learning centre and share
training practices adopted from British Received US$1.275 bn
Telecom investment from international
BCG PACE (Progressive Assessment of investors in Bharti Infratel.
Matrix Culture and Environment) feedback Ability to raise funds
taken from employees used for
company’s strategy
Value
Chain Physical Intangible
Over 110 million customers Strategic partnership with
Received license to provide 2G ad 3G in Google.
Resource Sri Lanka Goodwill & Reputation
Audit First Telecom operator in India to offer Facility based Operator license
MS Windows Mobile 5.0 in Singapore.
Strong Distribution channel.
The Rule of Three

Only three major players survive

Mid size companies either die or grow by M&A
70% of market share is dominated by Full line
generlist,20% by Specialist and rest by small
players
Being 22% of major market share Airtel is a
Leader but since it is not more than 40%-70%
Rule of three is not applicable
The Rule of Three cont…..
But being a leader it can acquire more market share to reach
The Rule of Three gradually may be after following strategies :
Go Global: The Right time of entry
Fast Follower
Search for newer market – Attract Customers
Penetrate in Rural and isolated market by different pricing
strategies.
Value Added Service (VAS)
Rolling out of advanced VAS has been possible due to
Technological advancement and hence creating higher value for
buyers and sellers.
Levels of strategy
Corporate level
Business level
Functional level
Corporate level

It is concerned with the overall purpose and scope of an organization

and how value will be added to the different business units of the
organization.
Corporate level
Growth
Airtel’s acquisition of Kuwaiti firm Zain's African assets to capture the 16
African countries
A $10.7-billion (Rs 49,700 crore) offer
Bharti enters a relatively untapped market
The acquisition takes Airtel past China’s Unicom, Sweden’s Telia Sonera,
and Germany’s T-Mobile
Airtel - world’s seventh-largest telecom service provider company by
subscribers
Bharti Airtel, January 2010 also acquired 70% stake in Warid
Telecom of Bangladesh 
for $300 million (about Rs 1,363 crore)
A subsidiary of the Dhabi Group, offers mobile telecom services with a
user base of over 2.9 million in Bangladesh
Corporate level
Integration
Business Challenge
Bharti Airtel had to maximize its future flexibility and growth potential
Need to develop new services to differentiate from competition
Strengthen its customer relationships

Solution
Bharti Airtel entered into a comprehensive 10-year agree-ment with IBM
To transform its Processes and take on the man­agement of its IT infrastructure
Standardized framework for Bharti Airtel to integrate its channels and cus­tomer-facing
processes
Enables a more seamless customer experi­ence, higher customer satisfaction and more
profitable growth

Key Benefits
Ability to process 1.5 million new customers per month
Outsourcing of technology enables Bharti Airtel to focus resources on growing the business
Optimization of business processes and infrastructure through flexible, standardized
integration framework
Corporate level
Diversification
BHARTI INFRATEL
Bharti Infratel is the one of the world’s largest ‘Telecom Passive Infrastructure’ providers
Benefits to the operator:
Reduced Capital Investment - as new infrastructure need not be created for them
Faster - as these towers have a large geographic footprint, and cover existing, high-revenue
Telecom circles
Operational efficiencies - as best practices adopted by the market leader automatically benefit
them too
Pioneer of the passive infrastructure sharing concept in India, and also the leaders with over
30,000 Towers across the circles they operate in
Bharti Infratel also has a 42% stake in Indus towers which was created as a Joint Venture
between Bharti Infratel, Vodafone and Idea to hive off the Towers business 12 circles
Bharti Realty Limited
Bharti Realty Limited is a young and dynamic realty company with expanding interests in
commercial, retail and residential real estate
It has constructed and managed over ten top of the line facilities for Bharti group companies
and third party clients
It has now forayed into developing quality commercial real estate in the central business
district (CBD) areas of metropolitan cities
Business level

It is about how to compete successfully in particular markets.

(Porter’s generic strategies)
 Business level
Focus
Focussing on the newly acquired African markets is very important for Airtel
Bharti Airtel is into a strategic partnership with IBM, Tech Mahindra and
Spanco to drive world class customer service across the 16 African countries
Outsource core customer service functions like call centres and back office to
its subscribers
The partnership also aims at igniting a rapid growth in the nascent African
Business Process (BPO) to deliver economic growth to many African countries
The partnership is also aimed at redefining and providing a world class and
seamless customer experience in all 16 African countries
Help creating additional jobs and will provide services in each market which
will sustain and build skills, capabilities and resources
Airtel will become more competitive in Africa as it focuses on making mobile
communications affordable and available to everyone
 Business level
Differentiation
Goodbye cash, hello airtel money!
India’s first mobile wallet service by a telecom operator- airtel money now
launched in Gurgaon
Now, airtel mobile customers can use the power of the ubiquitous mobile
platform to make payments the easier way
Airtel money gives mobile customers in India have another reason to join the
country’s largest network
Aimed at offering customers with an efficient alternative to cash transactions
Airtel money will provide millions of airtel customers across the country with a
convenient and secure way of making payments
The service will soon be launched across several other key cities in India
Use - Load cash, Pay bills & recharge, Shop & make payments
Airtel had recently announced a JV with State Bank of India to provide banking
and financial services to assist Indians in using the mobile platform
Business level

Cost leadership
This strategy involves the firm winning market share by appealing to
cost-conscious or price-sensitive customers
This is achieved by having the lowest prices in the target market
segment, or at least the lowest price to value ratio
In the case of Bharti Airtel the cost leadership strategy of prepaid and
postpaid mobile services are comparatively lower as compared to their
competition
The 3G service plans of Airtel is at par with any other service provider
To increase their market share in the future the price to value ratio of
the various 3G plans can catapult its market share by a huge margin
Functional level

They are concerned with the how the component parts of the
organization deliver effectively the corporate and business level
strategies in terms of resources, processes and people
FUNCTIONAL STRATEGY

HUMAN RESOURCE
Functional Strategy – Human Resources

Well defined rewards and recognition system

Employees decide training needs
State of the art learning centre and training practices
PACE(Progressive assessment of culture and
environment) feedback taken by employees
FUNCTIONAL STRATEGIES

MARKETING
Targeting

Elite
Up market professionals
Entrepreneur with business plans
Low income mass category
Youth
Women and senior citizens by post paid connection
Positioning and brand ambassadors

Taglines of brands
Power to keep in touch (1995)
•Saif and kareena for
Elite and premium brand
digital tv

•Sachin tendulkar and

Touch tomorrow (1999)
shahrukh khan
With NTP99 ,prices could be dropped,started looking from regional to pan india position

•A.r rahman
Live every moment (2002)

To catch some emotions and feelings,brand of the masses

•Saina nehwal the
latest entrant in the
airtel brandwagon
Express yourself (2003-2009)
To strengthen the emotional connect of customers,wanted a fresh and contemporary idea that built a brand their customers could
identify with
The First mover advantage

Electronic recharge
Hello tunes
Airtel Live!
Portfolio manager
Song catcher
Easy music
Black berry handsets
M-cheques
Rural strategies

Airtel follows “Match-box strategy”

The firm expands regularly in Bihar, piggybacking on 300
distributors and more than 50,000 retail outlets selling
Airtel prepaid cards
Covers over 4,00,000 villages and hopes to expand to
other 1,00,000 by 2009
Key Financial Ratios

Particulars Mar 2010 Mar 2009 Mar 2008 Mar 2007 Mar 2006

 ROA(%) 24.44   24.91   28.67   27.92   18.57  

 ROE(%) 29.42   32.46   39.53   43.06   34.12  

 ROCE(%) 28.46   27.63   33.77   33.81   23.27 

Total
Debt/Equity(x) 0.14   0.30   0.33   0.54   0.83  

EBIT
Growth(%) 27.76   16.77   50.68   94.21   34.49  

 PAT
Growth(%) 21.72   24.02   54.82   100.45   66.19  

 EPS
Growth(%) -39.15   23.99   54.66   100.23   62.63  
Recommendation
Pricing: Airtel should keep their Pricing flexible according to
market condition and competition
Improve in Technology: Airtel should concentrate on better
network Coverage to retain customers.
Untapped Rural Market: Large part of Indian Rural market is still
untapped therefore Airtel is required to bring that area under
mobility
VAS: Increase more VAS to increase more profitability
M&A: Merge and acquire Companies with market share less than
10 %, to gain more market share
References
ftp://ftp.software.ibm.com/software/solutions/pdfs/ODC03064-
USEN-00.pdf
http://allafrica.com/stories/201011010259.html
http://www.fonearena.com/blog/14528/the-9-telecom-
companies-who-bid-for-3g-auctions-in-india.html
http://www.airtel.in/wps/wcm/connect/About%20Bharti
%20Airtel/bharti+airtel/media+centre/bharti+airtel+news/mobile
/pg-goodbye-cash-hello-airtel-money
http://www.airtel.in/
Thank You