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INTRODUCTION
Bharti Airtel Limited is Indian multinational telecommunications services company Incorporated on 7 July 1995, headquartered in Bharti Crescent, 1, Nelson Mandela Road, New Delhi in India. It business in 20 countries Like South Asia, Africa, and the Channel Islands. In India, the company's product offerings include 2G, 3G and 4G wireless services, mobile commerce, fixed line services, high speed DSL broadband, IPTV, DTH. Bharti Airtel is largest cellular service provider in India, with 229 million subscribers as of May 2015.Airtel is the largest mobile operator in South Asia and the fourth largest in the world with a 307 million subscriber base. Aortal was named India's second most valuable brand in the first ever Brandz ranking by Millward Brown and WPP plc... Bharti Airtel services under the Airtel brand and is governed by Sunil Bharti Mittal. Airtel is the 1st Indian telecom company to achieve Cisco Gold Certification. Bharti Airtel have done lot of work to achieve this certification. services, supports and customers satisfaction set by Cisco. Airtel is the first mobile phone company in the world to outsource everything except sales marketing and finance. Its networks (base stations, microwave links, etc.) is maintained by many companies like Nokia, Ericssion Siemens Network Huawei. Airtel business support by IBM and transmission towers by company like Bharti Infratel Ltd..The company also provides land-line telephone services and broadband Internet access (DSL) in over 96 cities in India. It also acts as a carrier for national and international long distance communication services. The company has a submarine cable landing station at Chennai, which connects the submarine cable connecting Chennai and Singapore. Airtel is listed in Bombay Stock exchange Limited (BSE) and National Stock Exchange of India Limited (NSE).
The company structured into diffrent strategic business units - Mobile, Digital Tv, Telemedia, Enterprise. Telemedia business provides broadband & phone services in 89 cities.Digital Tv business provides DTH Tv services in India. The Enterprise business gives end to end telecom solution to corporate customer and national and international long distance services to Telco’s.
Digital TV Services
“Airtel Digital TV” service Launched in October 2008 as fifth operator providing Direct-to-Home (DTH) services in India
First Company in India which provides real integration of all the three screens ex. mobile, television and computer enabling our customers to record their favourite Television programs through mobile and web
Subscriber base is 10.142 million subscribers.
Digital TV service Present across 639 districts in India.
Airtel Digital TV offers 470 channels including 30 HD channels, four international channels and three interactive services.
Airtel Digital TV offers High Definition (HD) Set Top Boxes and Digital TV Recorders with 3D capabilities delivering superior customer experience
Key Performance Indicators (Q1FY16)
Average ARPU of Rs 222 per month for quarter ended June 30, 2015.
COMPETITORS
• Airtel is the leader in mobile services in India.
• Other competitors along with the market share has been shown in the chart below.
BSNL, VODAFONE, RELIANCE, IDEA, AIRCEL
PORTER’s 5 Forces Analysis
Porter's five forces is a framework for industry analysis and business strategy development formed by Michael Porter of Harvard Business School in year 1979. It can be used to assess the attractiveness and market potential of a branch by evaluating the five important forces that determine competitive power in a business situation.
1. The intensity of rivalry among established companies within an industry
Airtel has strong competitor like BSNL, IDEA, RELIANCE, HUTCH (Vodafone). Initially, it had only fewer competitors but now this figure has crossed to more than ten. Many New companies are now in Market like Aircel, Tata Docomo,Videocon,Vodafone,Spice,Bpl,Tata Cdma All these companies are providing same services with the same capabilities and companies like Aircel,Tata,Reliance is providing at less rate.Operators increased its investment in last few years, they working hard to expand its network. The presence of strong competitors is major threat for its successful survival.
Price war is really very fierce in telecom industry. Price war in this industry has commoditized the market that branding has taken a backseat. New operators reducing their costs to get better position in the market and in turn the big players like Airtel, Vodafone also have to compete by introducing low tariff plans.
2. The Risk Of entry by potential Competitors.
Current telecom technologies need heavy investment so chances of success for new operators are less, But it is seen that few new operators like Tata Docomo, Aircel growing fastly and the growth is higher than the top companies.
The most common forms of entry barriers, except intrinsic physical or legal obstacles, are as follows:
• Distribution channels: These Channels providing a major determining factor. Distribution
• Channels are not loyal to any company. Competitors can easily access them and make out
• Work for them.
• Economies of scale: In these type of industries the economies of scale exists from the supplier side. Companies try to increase their subscriber base at drastic rate.
• Huge licence fee and high gestation period reduces the threat of new entrant and discourages investment in the telecom sector.
• Limited Spectrum: Again leads to high licence fee also restrict new players from entering into the market.
• Efficient Infrastructure and rapidly changing technology is the major factor which stops new player to enter into the telecom sector.
• New entrants are ready to enter huge capital considering the attractiveness of the market.
• Increase in FDI limits to 100 %( http://www.dot.gov.in/investment-promoti...cy-telecom) is bringing competition from foreign players. Huge investments are being made by the foreign companies to setup better infrastructure and getting latest technology into the country.
• MOBILE NUMBER PORTABILITY (MNP): Customer switching cost is very low, as cost of new connection is really low. And new connection offers more benefits to the customers.
3. The bargaining power of buyers
Subscriber is not purchase in bulk but still can easily go for better quality, coverage and rates. Subscribers’ position is strong. Airtel is the leading operator in number of subscribers. However, in term of net additions during the quarter (April 2015 to June 2015), Idea recorded the highest growth, Airtel is at 2nd position,
The following points influence the power of buyer:
Lack of differentiation among the service provider: As phone and data service does not vary much regardless of which companies are selling them.
Cut throat competition: Increase in new foreign and domestic companies. Buyer is getting benefit everywhere due to price war amongst the companies.
Customer is price sensitive: High level of competition among the companies, Every companies is offering low tariffs with best services
MOBILE NUMBER PORTABILITY: cost of changing is less from one operator to other without changing their number (Nation Wide MNP).
Companies providing various Schemes for new connections.
Availability of many companies in a state.
4. The bargaining power of suppliers
The advantage and disadvantage to all service providers is equal that may be in human resource or products.
Large number of suppliers (Call centre outsourcing): The industry has large number of suppliers like Aegis, Mphasis, IBM, and Hinduja, a lot of option. They try to choose the best option to deliver the value to the customers and to have a competitive advantage from their competitor.
Shared tower infrastructure: Technology has helped them to share the tower infrastructure. This basically helps them to reduce the initial investment a lot. (Bharti infratel, Indus tower)
Need of good engineers for research, for that they have to give high salary because of this reason companies does not hire more skilled engineers, which put the companies into weaker side.
The closeness of substitutes to an industry’s products.
Substitute Products are easily available .These products is a great threat for established companies. Because of substitute goods companies have to decline their rates.
The substitutes for telecom industries are as follows:
Products and services from non-traditional telecom industries is serious substitution threats. Cable Tv and Satellite operators now compete for buyers. The cable companies, with their own direct lines into homes, offer broadband services, and satellite links can substitute for high-speed business networking needs.
Wireless phones getting cheaper year by year over the last decade.
Video conferencing, Skype, Gtalk, Yahoo messenger, Whatsapp, Way2sms.com from these websites or app anyone can easily talk anywhere in the world with the help of Internet.
Talking through internet is very much cheaper as compare to calling from phone.
SWOT ANALYSIS
SWOT (Strengths, Weaknesses, Opportunities, and Threats ) is a framework for identifying and analyzing the internal and external factors that can have an impact on the viability of a project, product, place or person.
His framework is credited to Albert Humphrey, who tested the approach in 1960s and 1970s at the Stanford Research Institute (SRI). Developed for business and based on data from Fortune 500 companies, the SWOT analysis has been adopted by organizations of all types as an aid to making decisions.
STRENGHT
i. Biggest mobile service provider in India and third largest in the world: Mobile phone subscribers are Increasing subscriber day by day. Highest number of subscriber in India around 229 million .It covers around 24% of total subscribers in India.
ii. Good Infrastructure: As we all know that Airtel is the oldest telecom company, so the numbers of towers is high, is available all over the country, this the big advantage of Airtel. For new technology or increasing capacity at that times requires software and minimum hardware up gradation.
iii. Good Brand image: Airtel in India is a Big Brand. Airtel is doing advertisement through television, prints and others form of advertising mostly all parts of the India. Various celebrities endorse Airtel.
iv. Good Network and reliable: Airtel (along with Vodafone) have one of the best mobile networks in India. Airtel offer high quality of services as compare to other companies.
v. Strategic Alliance with other stakeholders in Bharti Airtel includes Nokia, Erission and Microsoft.
vi. Financial position of Bharti Airtel is too Strong.
WEAKNESS
1. High competition in the Market: As we all know that in India number of telecom companies is increasing, there are more than 10 companies available in India. These companies are providing cheaper rate tariff and all others plans. This is affecting Airtel Market.
2. Debt: According to Current financial report of Airtel, there is lot of borrowing, How can Airtel pay this debt, this is the Question?
3. Late starting of 3G and wireless technologies: Due to various political issues, regulatory problems and delayed spectrum auction .Airtel were late to start 3G services. 3G services launched by Airtel in early 2011. The tariffs were high as compare to 2G, speeds were not so good and customer acceptance of 3G was too slow. The company don’t have nationwide 3G license. 3G Services available in 13 out of 22 telecom service areas. Airtel’s(4G) network for mobile broadband is staring only in four cities in India.
OPPURTUNITIES
Untapped voice market: Despite of many customers in India, hundreds of millions people are without phone. According to TRAI around 12% of total connection in India is inactive. Airtel have to make strategy for this type of customers.
Revenue from 3G service: As per the Data only 5% revenue generate from 3G, Airtel have to work on this issue, and increase their revenue from 3G.
LTE (4G): Whole world is moving towards LTE. Airtel service is going to start in 4 cities, Airtel have to make good strategy for this segment.
THREATS
SPECTRUM AUCTION: TRAI and Government of India kept too high reserve price for 3g and LTE service. Airtel has spent 123 billion rupees for 3g services and their return is very slow. Bharti Airtel has acquired 111.6 MHz of spectrum across 900 MHz, 1800 MHz and 2100 MHz bands for a total consideration of Rs 29,130 crore in the just concluded spectrum auction. Of this, Rs 17,618 crore has been spent on renewal of existing spectrum, while the remaining Rs 11,512 crore has been spent on procuring new spectrum.( http://www.medianama2015/03/223-telecom-...n-results/)
Mobile Number Portability : MNP gives independence to customer to change the service provider while retaining the same number within the country. With similar tariffs across various telecom and satisfaction with the current service provider consumers are willing to change. The larger operators like Airtel, Vodafone are losing many customers to the newer companies who attract these customers with their offer.
Intense Competition: In the Telecom market is biggest threat for Bharti Airtel, as other companies are providing very cheap tariff as compare to Airtel, so people are switching to other companies.
ECONOMICAL
In telecom budget 2015(http://economictimes.indiatimes), raw materials for the manufacture of electronic hardware exempted from excise duty, which lowers the price of network equipment it gives benefit to major mobile services provider. Airtel can expand network coverage to rural areas at cheaper cost.
Tariff rate is declining from the year 2002. Indian Government announced per second tariff for the subscriber along with the per minute tariff plan. Per second plan is not beneficial for the operators. This could reduce the revenue from 10-15%.companies are struggling with the low Average Revenue Per user (ARPUs) because of high taxes (30 % of the gross revenue earned by companies goes as various taxes), levied by government will now struggle more with this new plan. To overcome this Airtel launched per minute plans and per second plan. As most of the customers make long duration calls so, per second call could not be beneficent for them with the new per min. plan.
The Indian mobile economy is growing rapidly and will contribute approximately US$ 400 billion to India’s gross domestic product (GDP), according to report prepared by GSMA in collaboration with BCG.
The total mobile services market revenue in India will reach US$ 29.8 billion in 2014 and is expected to touch US$ 37 billion in 2017, registering a compound annual growth rate (CAGR) of 5.2 per cent, according to research firm IDC.
It is also considered to be one of the major sectors which provide direct employment which indirectly helps in economic growth of India.
Social factor
Due to Family bonding in Indian culture, people always connected with their family members and relatives and friend. In India family bonding is very high.
Tech generation: This generation is tech based generation, most of the new generation people used mobile phone. Introduction of social sites like Facebook, Twitter, Whatsapp that makes new generation to stick to the mobile.
Status symbol: In 21st Era mobile phone is a status symbol. People use different types of mobile now a day. Mobile market is rapidly increase due to this consumer of Telecom Company is also increasing.
Technology factor
Increase in FDI(foreign direct Investment): FDI limit benefited inflow of latest technologies with improved infrastructure.AIRTEL is well established with best infrastructure so it can provide best services to the customers of urban and can expand its network in rural areas.
Introduction of MNP: mobile number portability allows the customer to retain their number, even switching of companies and circles. Subscribers can switch to another company if they are not satisfied with the existing company.
Introduction of 3G and LTE services: as the 3G and 4G service introduce data transmission capacity increases. Airtel already qualified for the bid for 4G service. Airtel is the 1st company in India to start 4G (LTE) services.
First cellular service who provide roaming service and value added services.