Kohli_Airtel

1

Summer Internship Report

2010

Submitted by:

AKHIL KOHLI

Under the guidance of:

MR. RAJAT DHAWAN

Deputy General Manager, AES

And

MR. SIMRAN VERMA

Regional Business Manager, AES

BHARTI AIRTEL LIMITED

==

May-June 2010

A report on

“Validation of Market Construct of The Accounts of Airtel Enterprise Services ”

At

Bharti Airtel Limited

Rajiv Gandhi Technology Park,

Chandigarh

Submitted in partial fulfillment of the requirement for MBA Degree

Submitted by:

Akhil Kohli, MBA (Batch: 2009-11)

Under the guidance of:

Internal Guide External Guide

Mr. Rajat Dhawan

Deputy General Manager - AES

Mr. Simran Verma

Regional Business Manager, AES

. Bharti Airtel Limited, Chandigarh.

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DECLARATION

I, Akhil Kohli, do hereby declare that the project “Validation of Market Construct of

The Accounts of Airtel Enterprise Services” is submitted in partial fulfillment of the

award of the Master Of Business Administration Degree of University Business School, Punjab

University, Chandigarh, has been carried out by me under the guidance and supervision of Prof.

………….., faculty of MBA Department, University Business School, Punjab University,

Chandigarh.

It has also not been submitted by me or anyone else for the award of any other degree or

diploma of this or any other institution earlier.

Akhil Kohli Faculty: ……….

Date:

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ACKNOWLEDGEMENT

I avail this opportunity to express my profound sense of sincere and deep gratitude to many

people who are responsible for the knowledge and experience I have gained during the project work.

I extend my overwhelming gratitude to ………………, faculty MBA, for her valuable

guidance and meticulous supervision during the preparation of this Project Report.

I have great pleasure in expressing my deep sense of gratitude to Mr. Rajat Dhawan

(Deputy General Manager - AES), Bharti Airtel Limited Chandigarh, for his valuable and prompt

guidance without which this project would not have been a successful one.

I would like to express my deep sense of gratitude to my Guide Mr. Simran Verma

(Regional Business Manager - AES) for his valuable help through the project work.

My hearty and inevitable thanks to all the respondents who helped me to bring out the project

in a successful manner. I would also like to extend my gratitude towards my parents, faculties and

friends who extended their wholehearted support towards the successful completion of this Project

Work.

Akhil Kohli

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EXECUTIVE SUMMARY

The project “Validation of Market Construct of The Accounts of Airtel Enterprise

Services” is an attempt to simulate the bottoms up construct which forms the basis of any sales and

marketing activity. The project involves a combination of field and office activities to identify the

revenue market share of primary accounts of Airtel Enterprise Services. The experience as corporate

sales trainee at AES Chandigarh contributed to some specific learning’s in excel, analyzing business

needs, business development in form of tender bidding process, competition presence in the upper

north region. The training helped learn the pre-sales, sales and after sales process of Airtel Enterprise

Services by working with regional account managers on day to day business activities.

The research methodology involved multiple techniques like the experiment technique, observation

technique, questionnaire technique and the experiential technique. The sampling method used was

convenience sampling as the accounts mainly comprised of Govt. & PSU and because of security

issues and appointment restrictions, this was the suitable method.

CERTIFICATE

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Problem Identification

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The project seeks to validate and ascertain the Market Construct of Airtel Enterprise Services key

accounts in the upper North region. The conclusion involved competition mapping and identifying

revenue market share and further giving suggestions to the department after analyzing the needs of

various accounts.

Project Objectives

Understanding the Airtel Enterprise Service product mapping across the primary accounts

in the upper north circle of Punjab and Haryana.

Acquaintance with the SIPOC business process.

Familiarity with the Airtel Enterprise Services Pre-sales Sales and after sales Procedures

Determine the Validation of Market Construct of The Accounts of Airtel Enterprise Services

Business Development and Business Analysis activities.

Location of the study

Bharti Airtel Limited, Plot No. 21, Rajiv Gandhi IT Park, Chandigarh.

Duration of study

Two Months (1st May- 31st June)

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Work Profile

Corporate Sales Trainee- The work mainly involved activities to indentify the telecommunication

prospects of the potential clients, fixing appointment with senior executives of respective

IT/Telecom Departments and identify their usage, needs and pain areas towards telecommunication

needs. This involved a combination of field as well as office job. Along with business analysis

activities like revenue growth presentations and business development activities like identifying

network locations of specific clients were carried out.

Methodology

The methodology of the investigation process that set out to obtain answer to the project involved

multiple activities.

The first methodology used is the collection of primary data of the account regional office

through company internal sources as well through company website. (Experiment Method)

The second methodology used is retrieving the clients prospective Capex through published

media reports, Annual balance sheets etc. (Observation method)

The third methodology used is a structured questionnaire (a copy of the same has been

given in annexure) to identify the telecom services and revenue figures from the respective

client IT Head by personal interviewing. (Questionnaire Technique)

The fourth methodology used is telephonic interview of accounts where entry access was not

feasible due to security issues. (Experiential Technique)

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Index

TABLE OF CONTENTS

Title

Chapter 1

1.1 Introduction

1.2 Industry Profile

1.3 Company Profile

Chapter 2

2.1 Research Methodology

2.2 Objectives of the Study

2.3 Need and Scope

2.4 Formulation of Hypothesis

2.5 Limitations of the study

Chapter 3

3.1 Analysis and Interpretation

Chapter 4

4.1 Findings

4.2 Suggestions

4.3 Conclusion

Bibliography

Appendix

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CHAPTER 1

Article I. REVIEW OF LITERATURE

Indian telecom market leader AIRTEL is among the top 5 global players in terms of subscriber base.

AIRTEL is the largest Telecom Service Provider in India and also has wide range of products and

services. This report focuses on the various products and services offered by Airtel Enterprise

Services. The following methods have been used for analysis:

1. Comparison: - Data such as revenue, profit, users and so on are compared with that of

previous year and also with competitors. Using this comparative evaluation of different

aspects of AIRTEL is done to understand things in a better way.

2. Graphs: - Use of pie charts and bar diagrams to interpret the available data has helped the

readers to easily understand the matter.

3. Flowcharts:- Process flowcharts have been used to understand the linkage of several steps

carried in business operation.

4. SWOT/ANSOFF: - Certain managerial tool such as SWOT analysis, ANSOFF analysis, 5

force model has also been done to understand the strong and weak points of its subsidiary.

This shows on which factors to concentrate upon and which factors to leave untouched. It

helps to understand the strategy that the company has adopted.

5. FINANCIAL ANALYSIS :- Going through various financial statements, BALANCE

SHEET, P&L Account, CASH FLOWS and analyzing the effect of deals on debt ratio

6. Pictorial Depiction: - For better understanding the core of the matter most of the facts and

figures have been depicted in pictorial form.

7. Key Trend / Outlook: - After understanding the current position of the business, Key Trend

and Outlook of the business is carried out to determine the path AIRTEL will follow in times

to come.

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INTRODUCTION TO THE INDUSTRY

Article II. Telecommunications Statistics in India

INDIA has one of the fastest growing telecom networks in the world with its high population and

development potential. Airtel, Idea, Reliance, BSNL, Aircel, Tata Teleservices, Vodafone, MTNL,

S.TEL., DB ETISALAT and Loop Mobile are other major operators in India. However, rural India

still lacks strong infrastructure. India's public sector telecom company BSNL is the 7th largest

telecom company in world.

Telephone System: The telecommunications system in India is the 4th largest in the world. The

country is divided into several zones, called circles (roughly along state boundaries). Government

and several private operators run local and long distance telephone services. It was thrown open to

private operators in the 1990s. Competition has caused prices to drop and calls across India are one

of the cheapest in the world. The rates are supposed to go down further with new measures to be

taken by the Information Ministry.

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Landlines: In India landline service is firstly run by BSNL/MTNL and after there are several other

private players too, such as Airtel, Reliance Infocomm, Tata Teleservices and Touchtel. Landlines

are facing stiff competition from mobile telephones. The competition has forced the landline services

to become more efficient. The landline network quality has improved and landline connections are

now usually available on demand, even in high density urban areas.

Mobile Cellular: The mobile service has start growth since 2000. The number of mobile phone

connections has crossed fixed-line connections in Sept 2004. Currently there are an estimated 159.12

million mobile phone users in India compared to 40.43 million fixed line subscribers. India primarily

follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800

MHz band. The dominant players are Aircel, Vodafone, Airtel, Tata Indicom, Tata Teleservices,

MTS, Uninor, Reliance Infocomm, Idea Cellular and BSNL/MTNL. There are many smaller players,

with operations in only a few states. International roaming agreements exist between most operators

and many foreign carriers. http://www.telecomindiaonline.com

Dialing System: On landlines system, intra circle calls are considered local calls while inter circle

are considered long distance calls. Government is now working to integrate the whole country in one

telecom circle. For long distance calls, you dial the area code prefixed with a zero (e.g. for Delhi,

you would dial 011-XXXX XXXX). For international calls, you would dial "00" or “+” and the

country code+area code+number. The country code for India is 91.

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Article III. Total Subscriber base in March 2010(Subscriber numbers is in million)

  Indian Telecom StatisticsTotal telephone subscriber base 621.28Tele-density 52.74%Fixed-line user base 36.96Wireless user base  (GSM+CDMA+WLL(F)) 584.32

Monthly additions        (Wireline + Wireless) 20.31

Monthly additions (Wireline) 0.00Monthly additions (Wireless) 20.31Broadband subscribers 8.75

Service Providers Subscriber Statistics(Subscriber numbers is in millions)

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Bharti Airtel; 124.61

Reliance Com + RTL; 99.41

Vodafone Essar; 97.22BSNL; 66.75

Tata Teleservices; 63.15

IDEA; 62.14

Aircel; 34.86 MTNL; 4.99 Uninor; 3.55

Sistema Shyam; 3.17Loop Mobile; 2.77

STel; 0.710000000000001HFCL Infotel;

0.327000000000006

Subscriber (Mn)

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http://www.dot.gov.in/

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Article IV. Telecommunications companies of India:

A

Aircel

B

BA Systems

Bharat Sanchar Nigam

Limited

Bharti Airtel

C

Comviva

E

Elina Networks

I

Idea Cellular

Indian Telephone

Industries

L

List of mobile network operators of India

Loop Mobile

M

MTS India

Mahanagar Telephone Nigam

O

OnMobile

R

Reliance Communications

S

S Tel

SMSCountry

S cont.

Sasken Network Engineering

Limited

Spice Digital

Spice Telecom

T

Tata DoCoMo

Tata Teleservices

Tulip Telecom

U

Uninor

V

Videocon Mobile Service

Vodafone Essar

Article V. Major Telecommunication Vendors globally: http://www.wikinvest.com/wiki/

These are the companies that offer local and long distance telephone and internet access to homes.

Verizon Communications (VZ)

AT&T (T)

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Sprint Nextel (S)

Alltel (AT)

Time Warner Telecom (TWTC)

Cablevision Systems (CVC)

Comcast (CMCSA)

China Mobile (Hong Kong) (CHL)

Qwest Communications International (Q)

Vodafone Air Touch Public Limited Company (VOD)

United States Cellular (USM)

Bharti Airtel (India)

Shaw Communications (SJR) (Canada)

Major Telecommunication Equipment and Network Providers globally:

These are the companies that build and maintain the telecommunications infrastructure. These

companies offer the means and the equipment to build fiber optic to WiMax networks.

Alcatel-Lucent (ALU)

Tellabs (TLAB)

BigBand Networks (BBND)

Corning (GLW)

Arris Group (ARRS)

American Tower (AMT)

ADC Telecommunications (ADCT)

Cisco Systems (CSCO)

Equinix (EQIX)

QUALCOMM (QCOM)

NETGEAR (NTGR)

Orbital Sciences (ORB)

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Communication Equipment Providers globally:

These companies provide the mobile phones and devices to use a telecommunications network.

Motorola (MOT)

Nokia (NOK)

Research in Motion (RIMM)

Samsung

Vonage Holdings (VG)

Sierra Wireless

Palm (PALM)

Sony-Ericsson

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COMPANY OVERVIEW:

Name Bharti Airtel Limited.

Business Description Provides GSM mobile services in all the 22 telecom circles

in India, and was the first private operator to have an all

India presence. Provides telemedia services (fixed line and

broadband services through DSL) in 95 cities in India.

Established July 07, 1995, as a Public Limited Company

Proportionate Revenue Rs. 396,150 million (year ended March 31, 2010-Audited)

Rs. 369,615 million (year ended March 31, 2009-Audited)

As per US GAAP Accounts

Proportionate EBITDA Rs. 160,268 million (year ended March 31, 2010 - Audited)

Rs. 151,678 million (year ended March 31, 2009 - Audited)

As per US GAAP Accounts

As per Indian GAAP Accounts

Shares in Issue 3,797,530,096 as at Mar 31, 2010

Listings The Stock Exchange, Mumbai (BSE) The National Stock

Exchange of India Limited (NSE)

Customer Base 127,619,314 GSM mobile and 3,066,858 Telemedia

Customers (status as on Mar 31, 2010)

Provides GSM mobile services in all the 22 telecom circles

in India, and was the first private operator to have an all

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Operational Network India presence. Provides telemedia services (fixed line) in

95 cities in India.

Registered Office Bharti Airtel Limited

Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj,

Phase II, New Delhi – 110 070, India Tel.No.: +91 11 4266

6400 Fax No.: +91 11 4166 6137

Key Features and Operational Areas

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Article VI. COMPANY BACKGROUND

Bharti Airtel formerly known as Bharti Tele-Ventures LTD (BTVL) is the largest cellular service

provider in India, with an aggregate of 130,686,172 customers as of March 31, 2010. With this,

Bharti is now the worlds third-largest, single-country mobile operator and fifth-largest integrated

telecom operator. It also offers fixed line services and broadband services. It offers its TELECOM

services under the Airtel brand and is headed by Sunil Bharti Mittal. The company also provides

telephone services and broadband Internet access (DSL) in top 95 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.

Its network operations are provided by Ericsson, business support by IBM and transmission towers

by another company. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by

subscriber base, behind China Mobile and China Unicom. In India, the company has a 24.6% share

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of the wireless services market, followed by 17.7% for Reliance Communications and 17.4% for

Vodafone Essar.

Section VI.01 New Subscribers added in 2009-10:

Month  Subscriber (Mn)April 2.39May 2.46June 2.56July 2.69

August 2.70September 2.70

October 2.72November 2.72December 2.73January 2.73February 2.73March 2.81

Total addition 31.94

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BUSINESS DIVISIONS

The businesses at Bharti Airtel have been structured into four individual strategic business units

(SBU's) - Mobile Services, Airtel Telemedia Services, Enterprise Services & Digital TV

Services. The mobile business provides mobile & fixed wireless services using GSM technology

across 23 telecom circles while the Airtel Telemedia Services business offers broadband &

telephone services in 95 cities and has recently launched a Direct-to-Home (DTH) service, Airtel

Digital TV. The company provides end-to-end data and enterprise services to the corporate

customers through its nationwide fiber optic backbone, last mile connectivity in fixed-line and

mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing

station.

Bharti Airtel - Organization Structure

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BUSINESS VERTICALS

I. Mobile Services – Airtel offers mobile services using GSM technology in India, Sri Lanka

and now in Bangladesh. It has the largest customer base in India in the wireless segment.

Airtel had 127,619,314 mobile customers with a Customer Market Share (CMS) of 21.8% in

India, as on March 31, 2010. They offer post-paid, pre-paid, roaming and value added

services through our extensive sales and distribution channel covering 1.47 million outlets.

The network is present in 5,091 census towns and 438,933 non-census towns and villages in

India, thus covering approximately 84.2% of the country’s population.

Airtel Sri Lanka has over a million customers, having a presence in 16 administrative

districts of Sri Lanka. The company has launched 3.5G services in the major towns and has

created a wide distribution network comprising of 23 distributors and 15,000 retailers across

the country.

Airtel has started telecom operations in Bangladesh with the acquisition of a 70% stake in

Warid Telecom, Bangladesh. It offers mobile services across 64 districts of Bangladesh with

a distribution network of 124 distributors and 34,000 retailers across the country, catering to

a sizeable customer base. Bangladesh, with a population of over 160 million and teledensity

of 32% is a very promising market for telecom services.

II. Telemedia Services – Airtel provides broadband (DSL), data and telephone services (fixed

line) in 89 cities with growing focus on the various data solutions for the Small & Medium

Business (SMB) segment. It had 3,066,858 customers of which 42.3% were subscribing to

broadband / internet services, as on March 31, 2010. Our product offerings in this segment

include installation of fixed-line telephones providing local, national and international long

distance voice connectivity and broadband Internet access through DSL.

III. Enterprise Services - Enterprise Services is India’s leading provider of communications

services to large Enterprise and Carrier customers. Airtel owns a state-of-the-art national and

international long distance network infrastructure, enabling it to provide connectivity

services both within India and connecting India to the world.

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The national long distance infrastructure comprises of 126,357 Route km’s of optical fibre,

with over 4,488 Points of Presence. There are over 1,700 Points of Interconnect (POIs) with

the local exchanges, providing a pan India reach. Airtel has made significant investments in

new submarine cable systems, extending to reach all across the globe with over 225,000

Route km’s, covering 50 countries across 5 Continents.

AES serves as the single point of contact for all telecommunication needs for corporate

customers by providing a full suite of communication services across data, voice, network

integration, and managed services.

IV. Digital TV Services - Airtel Digital TV has a base of over 2.5 million customers. The

distribution reach spans the length and breadth of the country. DTV Services are present in

all four regions across the country, available in over 5,000 towns and 15,000 villages. The

Distribution & Customer Service expertise helps to serve customers in even the most remote

parts of the country. This coupled with State of the art technology & constant product

innovation makes Airtel the first choice for any prospective customer, further substantiated

by the fact that Airtel Digital TV has been acquiring one out of every four new customer

additions in the DTH Industry in the last 3 quarters.

V. Passive Infrastructure Services – Bharti Infratel provides passive infrastructure services on

a non-discriminatory basis to all telecom operators in India. Bharti Infratel deploys, owns and

manages passive infrastructure in 11 circles of India. Infratel also holds 42% share in Indus

Towers (a Joint Venture between Bharti Infratel, Vodafone and Idea Cellular). Indus operates

in 16 circles (4 circles common with Infratel, 12 circles on exclusive basis).

Bharti Infratel has 30,568 towers in 11 circles, excluding the 35,066 towers in 12 circles for

which the right of use has been assigned to Indus with effect from January 1, 2009. Indus

Towers has a portfolio of 102,938 towers including the towers under right of use. IBM is our

strategic partner for all business and enterprise IT systems. Our contract with IBM caters to

technology evolution, scale, tariff changes and subscriber growth. There are more than 90

hardware, software and service providers serving us through IBM.

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Section VI.02 Subscriber base

The Airtel subscriber base according to COAI - Cellular Operators Association of India as of

January 2010 was:

Chennai - 4,656,675

Delhi - 1,822,208

Mumbai - 3,003,201

Kolkata - 2,746,100

Madhya Pradesh - 6,212,992

Gujarat - 5,112,601

Andhra Pradesh - 12,425,791

Karnataka - 12,153,094

Tamil Nadu - 8,033,771

Kerala - 3,076,728

Punjab - 4,581,187

Maharashtra - 6,518,134

Uttar Pradesh - 3,653,016

Uttar Pradesh East - 8,462,726

Rajasthan - 9,925,141

West Bengal & Andaman and Nicobar Islands - 5,070,213

Himachal Pradesh - 1,273,922

Bihar - 10,338,828

Orissa - 3,836,091

Assam - 2,194,310

North East. States - 1,357,383

Jammu and Kashmir - 1,804,047

The total is 131,714,243 or 32.86% of the total 404,349,733 GSM mobile connections in India till

December 2009; and presently the Number 1 operator in India.

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Article VII. SWOT Analysis:

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sPan India Footprint: Airtel offers the most expansive roaming network. Letting you roam anywhere in India with its Pan-India presence, and across the globe with International Roaming spread in over 240 networks.The only operator in India other than VSNL having International Submarine Cable: Airtel, the monopoly breaker shattered the Telecom monopoly in the International Long Distance space with the launch of International Submarine cable Network i2i jointly with Singapore Telecommunications Ltd. in the year 2002. This has brought a huge value to the IPLC customers, delivering them an option besides the incumbent carrier, to connect to the outside world.Leadership in fast growing cellular segment: Airtel is a globally recognized Market Leader with 24.6% share of the wireless services, also having a good market Brand Image and Strong Financials and with the ZAIN deal its presence extends to another 15 countries. Also its presence in Sri Lanka and Bangladesh is expandingOUTSOURCING is also considered to be a strength of AIRTEL as it helps it focus on other areasWOutsourcing of core system: Airtel outsources everything apart from there sales and marketing which means they provide huge business to others also, where they can make more margins.Price Competition from BSNL and MTNL: Airtel is tough competition from the operators like BSNL nd MTNL as these two operators are offering services at a low rate.Untapped Rural market: Although Airtel have strong presence throughout the country but still they are far away from the Indian rural part and generally this part is covered by BSNL so indirectly Airtel is losing revenue from the rural sector.

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OHuge Rural Unexplored Market: The cellular telephony market is presently expanding at a tele-density of 52.74% and there is still vast scope for Airtel to enter expand in this market. poised to gain a big market share in this segment when it expands cellular services into the rural areas.Usage of latest IPLC technology: Airtel Enterprise Services and SingTel jointly provide IPLCs on the Network i2i. The Landing Station in Singapore is managed by SingTel and by Airtel in Chennai (India). Latest Technology With Low Cost Advantage: The costs of introducing cellular services for Airtel are marginal in nature as it uses latest technology. Its footprint in 15 African Countries: With the ZAIN deal completed now, it has a great scope in Africa now with its vision to become largest player in Africa by 2105TCompetition from other Cellular Players: Intense Competition & Shortage of Bandwidth is already in place with the markets ever abuzz with several tariff reductions and announcement of attractive packages, trying to grab most of the ‘mind share’ of the ‘king’ - ‘the consumer’, whose benefits are increasing with passing of everyday. Also, there is a increase in the New Players entering the telecom industry.Falling ARPU: With competition increasing day by day the ARPU is decreasing due to reduction in tariffs.Uncertain Economic Condition: The introduction of new polices by TRAI put constraints on private players to expand as per there choice. Enterance of RIL into enterprise services: With Mukesh Ambani's reentry into telecom, his favourite sector and gain of all India bandwidth in BWA auctions through acquisition of Infotel Broadband servicessss, it poses a threat

Article VIII. ANSOFF MATRIX

The company should follow all four strategies depending on the demand and product as indicated in

the matrix. The company perhaps needs to focus more on the comparatively neglected area of

diversification.

MARKET PENETRATION: Airtel entered in broadband and fixed phone line market.

PRODUCT DEVELOPMENT: IPLC(Integrated Private Leased Line) products.

MARKET DEVELOPMENT: Airtel is now looking for overseas market. Latest deals

include the Bangladesh WARID TELECOM and Africa’s ZAIN. More such

opportunities should be followed. Aims at becoming leading market player by 2105.

DIVERSIFICATION: Airtel has now outsourcing some of its services like customer

services with IBM.

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ENTERED IN BROADBAND AND FIXED LINE MARKET IPLC PRODUCTS OUTSOURCING LOOKING FOR OVERSEAS Market PenetrationProduct DevelopmentDiversifi-cationMarket Development

Article IX. MARKETING STRATEGY- 5 FORCE MODEL

1. Threat from Competition (High)

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Threat from CompetitionCustomer Bargaining PowerThreat of SubstitutesSupplier Bargaining PowerThreat of New Entrants

2. Customer Bargaining power (High)

Lack of differentiation among Service Providers.

Cut throat Competition.

Low Switching Costs.

Businesses & Consumers.

3. Supplier Bargaining power (Low)

Outsourcing Deals: From vendors

Network outsourcing and Maintenance: Ericsson, Nokia Siemens Network

Information Technology: IBM

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Passive Infrastructure: Bharti Infratel, Indus Towers

Call Center Outsourcing: IBM Daksh, Mphasis, Hinduja TMT, Nortel

4 Threats of Substitutes (High)

Landline - Outdates

CDMA

Video Conferencing - Broadband services

VOIP - Skype, Gtalk, Yahoo Messenger

e-Mail & Social Networking Websites

5 Threat of new Entrants (Medium)

Huge License Fees to be paid upfront & High gestation period

Entry of TD-LTE & WiMAX operators

Spectrum Availability & Regulatory Issues

Infrastructure Setup Cost - High

Rapidly changing technology

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BHARTI AIRTEL FINANCIAL ANALYSIS:

Section IX.01 Comparison with Competitors

Balance Sheet ------------------- in Rs. Cr. -------------------

Bharti

AirtelReliance Comm Idea Cellular Tata Comm MTNL

Mar '09 Mar '09 Mar '09 Mar '09 Mar '09

Sources Of Funds

Total Share Capital 1,898.24 1,032.01 3,100.10 285.00 630.00

Equity Share Capital 1,898.24 1,032.01 3,100.10 285.00 630.00

Share Application Money 116.22 0.00 18.23 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves25,627.3

850,658.31 8,176.09 6,513.05 11,429.37

Revaluation Reserves 2.13 0.00 0.00 0.00 0.00

Net worth27,643.9

751,690.32 11,294.42 6,798.05 12,059.37

Secured Loans 51.73 3,000.00 5,564.93 1,288.82 0.00

Unsecured Loans 7,661.92 27,903.61 2,014.43 1,039.05 0.00

Total Debt 7,713.65 30,903.61 7,579.36 2,327.87 0.00

Total Liabilities35,357.6

282,593.93 18,873.78 9,125.92 12,059.37

Bharti

AirtelReliance Comm Idea Cellular Tata Comm MTNL

Mar '09 Mar '09 Mar '09 Mar '09 Mar '09

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Application Of Funds

Gross Block37,266.7

037,941.15 15,562.75 5,890.00 16,293.28

Less: Accum. Depreciation12,253.3

46,533.38 4,739.86 1,792.06 10,009.44

Net Block25,013.3

631,407.77 10,822.89 4,097.94 6,283.84

Capital Work in Progress 2,566.67 3,643.86 1,721.82 536.38 965.69

Investments11,777.7

631,364.75 4,928.81 2,723.67 465.09

Inventories 62.15 253.14 42.73 1.56 191.27

Sundry Debtors 2,550.05 1,482.22 329.59 1,342.22 782.47

Cash and Bank Balance 153.44 534.89 140.86 109.21 129.90

Total Current Assets 2,765.64 2,270.25 513.18 1,452.99 1,103.64

Loans and Advances 5,602.83 23,272.50 2,278.21 3,209.51 10,793.23

Fixed Deposits 2,098.16 0.26 2,203.57 263.16 4,672.90

Total CA, Loans & Advances10,466.6

325,543.01 4,994.96 4,925.66 16,569.77

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities13,832.4

95,774.74 3,496.04 2,869.12 6,130.67

Provisions 634.40 3,590.72 98.65 288.61 6,191.03

Total CL & Provisions14,466.8

99,365.46 3,594.69 3,157.73 12,321.70

Net Current Assets -4,000.26 16,177.55 1,400.27 1,767.93 4,248.07

Miscellaneous Expenses 0.09 0.00 0.00 0.00 96.69

Total Assets35,357.6

282,593.93 18,873.79 9,125.92 12,059.38

Contingent Liabilities 4,104.25 6,555.82 2,279.41 8,449.09 2,973.92

Book Value (Rs) 145.01 250.43 36.37 238.53 191.42

34

Source : Religare Technova

Section IX.02 Competitor Revenue

Last Price Market Cap.(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

Bharti Airtel 287.50 109,178.99 35,609.54 9,426.16 35,357.62

Reliance Comm 153.25 31,631.21 13,610.58 2,352.93 82,593.93

Idea Cellular 63.40 20,922.08 11,895.77 1,053.66 18,873.79

Tata Comm 259.70 7,401.45 3,749.43 515.95 9,125.92

MTNL 68.50 4,315.50 4,576.53 214.83 12,059.38

TataTeleservice 21.65 4,107.43 2,249.10 -298.01 2,743.96

Spice Comm 56.95 3,929.12 1,585.34 -1,015.22 1,875.94

Tulip Telecom 865.80 2,510.82 1,608.28 249.58 1,802.84

Nu Tek India 36.05 124.44 159.09 14.48 171.93

Goldstone Infra 27.75 100.12 45.61 6.27 110.56

Source: Religare Technova

ANALYZING FINANCIAL STATEMENTS

CURRENT RATIO -> CURRENT ASSETS/CURRENT LIABILITIES = 24947.88/14466.63 = 1.725

DEBT RATIO -> Debt/Equity = 0.28

INTEREST COVERAGE RATIO -> PBIT/Interest

35

Article X. Competitor Analysis:

Reliance Communications is an integrated communications service provider. It has established

a pan-India, next-generation, integrated (wireless and wireline), convergent (voice, data and

video) digital network that is capable of supporting services spanning the communications value

chain, covering over 20,000 towns and 450,000 villages. It is India’s second-largest wireless

operator by subscriber base and is only one of two operators along with Bharti to have coverage

in all 23 circles in India.Its subscriber base was 55 million as of September 2008. Reliance

Communications added a record 5 million subscribers in January 2009. During 2007-08 Reliance

Communications earned total revenue of INR 190.67 billion with EBITDA of INR 81.99 billion.

The net profit registered a 7.4% increase to INR 25.86 billion.

BSNL/MTNL the incumbent operator, is India’s third-largest wireless operator by subscriber

base and along with government-owned MTNL (incumbent in the key cities of Delhi and

Mumbai), provides wireless services in all 23 circles of India. As on March 31, 2008 BSNL

commanded a customer base of 31.55 million Wireline, 4.58 million CDMA-WLL and 54.21

million GSM Mobile subscribers. During 2007-08 MTNLs total income was INR 51.28 billion

and its net profit decreased by 12.7% to INR 4.06 billion.

Vodafone Essar is the second largest telecom company in India in terms of subscriber base of

Vodafone Essar. Previously Hutchison Essar provides 2G services based on 900 MHz and 1800

MHz digital GSM technology, offering voice and data services in 22 of the country's 23 license

areas. During 2007-08 Vodafone India earned gross revenue of INR 131.96 billion with

EBITDA of INR 43.31 billion. Its adjusted operating profit was INR 2.53 billion.

IDEA Cellular is a global system for mobile communications (GSM) Mobile Services operator.

The Company operates in two segments: mobility services and national long distance. It has

licenses to operate in 11 circles. With a customer base of over 17 million, IDEA Cellular covers

approximately 45% of India's population and over 50% of the potential telecom-market. During

36

2007-08 idea Cellular revenues stood at INR 67.37 billion up by 54% and EBITDA of INR 22.69

billion. Its net profit at INR 10.42 billion reflected a 108% growth.

Tata Communications is India's largest telecommunication company in international long

distance, enterprise data and internet services. During 2007-08 Tata communications earned

gross revenue of INR 82.63 billion and registered a net loss of INR 279.7 million.

Key Trends and Forces

Decreasing ARPU and net profit margin offset by increasing subscriber additions

The Indian wireless market has an average revenue per user (ARPU) of $6.8, one of the

lowest in the world. In the 3rd quarter of 2008/09, the company's Mobile Services segment

had an ARPU of $6.7 or Rs. 324, down 2.1% from the previous quarter and 9.5% from the

3rd quarter of 2007/08. In the same quarter, Bharti Airtel had a net profit margin of 22.4%,

down 1.3% from the previous quarter and 9.3% from the 3rd quarter of 2007/08. The

company's subscriber base, however, stood at 85.7 million, up 10.4% from the previous

quarter and 55.3% from the 3rd quarter of 2007/08. In other words, although the

company's ARPU and net profit margin have been decreasing, its total revenues and net

profit have been increasing due to its growing subscriber base. Bharti Airtel has also been

partnering with competitors to keep costs low, expand coverage and leverage larger

economies of scale. In 2007/08, the company formed a joint venture with Vodafone

Essar and Idea Cellular to merge their respective passive infrastructure assets and provide

related services to all Indian telecom operators on a non-discriminatory basis.

Average MoU could fall due to increasing rural demographic of new subscribers

Average minutes of usage (MoU) for the Indian wireless market is 449 minutes, one of the

highest in the world. In the 3rd quarter of 2008/09, the company's average MoU was 505

minutes, down 4.0% from the previous quarter, but up 6.5% from the 3rd quarter of 2007/08.

37

In the same quarter, Bharti Airtel increased population coverage from 77% to 79% with the

addition of 7 new census towns and 17,361 non-census towns and villages. Given that just

2% of India's rural population has access to mobile phones and that the company is adding

far more non-census towns and villages than census towns to its network, Bharti Airtel

expects 55.0% of its new subscribers to come from B and C telecom circles located primarily

in rural India. For low income subscribers, a mobile phone is often nothing more than a status

symbol where outgoing calls are made infrequently and incoming calls are free. As a result,

the addition of more rural subscribers could lower the company's average MoU.

Falling handset prices could increase wireless penetration rate in rural India

In 2007/08, the average selling price (ASP) of a mobile handset in India fell 38%

to Rs. 3,150. Buyers are also becoming accustomed to more choices at various price

points. With India's average annual per capita income of Rs. 25,000 and average spending of

4% of per capita income on communication-related expenses, Macquarie Research estimates

that handset prices need to fall to Rs. 1,000 in order to improve the rate of penetration in rural

India. Keeping in mind the launch of Motorola's $30 handset targeted at emerging markets

and that manufacturers like Nokia, Samsung, Motorola and Flextronics are all moving

production to India, handset prices are expected to fall. Given that Bharti Airtel expects

55.0% of its new subscribers to come from rurally-located B and C  telecom circles, falling

handset prices could increase the penetration rate of mobile devices in these areas.

New government policy to facilitate faster rollout of 3G spectrum

In the 2nd quarter of 2008/09, the Indian Department of Telecommunications announced a

new 3G policy which set the base price for access to the Indian 3G spectrum at  Rs.20.2

billion, allowed foreign players to participate in 3G spectrum auctions and imposed a

hoarding cess of 2.5% per quarter if awarded telcos failed to rollout 3G services. Third

generation wireless, or 3G, is a technology that enables high-speed wireless data transfer for

applications like mobile video, secure mobile e-commerce, location-based services and

mobile gaming. Using a 2.0G or 2.5G network, a 3 minute song takes between 6 and 9

minutes to download. Using a 3G network, however, the time taken is between 10 to 90

seconds. The launch of 3G services would enable the company to shift existing high-usage

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2G subscribers to the 3G spectrum, thus freeing up space for new subscribers in the 2G

spectrum.

Article XI. OUTLOOK FOR THE SECTOR

Going by the number of mobile phone subscribers, India has become the world’s fastest growing

region. With almost 5-6m subscribers added every month, the country is witnessing exciting times in

the telecom industry.

Additional spectrum to service providers

India is on the brink of full-fledged rollout of 3G and WiMAX services across the country. The

regulators and the government are in deep discussions on spectrum allocations. It’s decided to have

Additional spectrum to be allocated to service providers, based on their existing subscriber base.

This will provide the foundation for next generation mobile services in the country. However, as

TRAI proposing to hike spectrum charges from 4% to 5% of the revenues generated by the service

providers, mobile operators may have to shell out a higher percentage of their annual revenues

towards spectrum charges.

Service providers need to improve rural penetration

Out of the total population of about 1.136 billion in India, only about 28% live in urban areas and the

rest 72% live in rural areas. But however, only about 2% (16m) of the rural population has access to

mobile phones. It is a high time for the companies to invest in these rural areas, too. Driven by a

significant addition in rural telephony, overall population coverage in the country is expected to

increase from 65% to 80%.

Low ARPU: cause for concern

Despite the high penetration in urban areas, the ARPU is quite low, one of the lowest in the world

and continues to fall steadily. For operators, this is offset by increased subscription. However, profit

margins are decreasing and to stay in good shape operators will have to leverage on larger

39

economies of scale. One trend seen in this direction is the sharing of towers and base station location

sites among operators.

Mobile commerce to become the next big thing

Mobile commerce is expected to penetrate further. The urban customers will of course be introduced

to new services in this area. But its impact will be felt most distinctly in the rural areas, where it will

help strengthen the rural microfinance projects. Money transfer over the mobile and m-commerce

are tipped to be the next best thing to happen after SMS and Hello Tunes. This would enable

millions of Indians working abroad to easily transfer money to their families back in India via their

mobile phones.

Mobile number portability to become a reality soon

Indian mobile users will soon have the option to switch their service providers without changing

their mobile numbers. Number portability is a very important and effective tool for ensuring

competition in the telecom services market. Implementation of mobile number portability would

motivate and stimulate the service providers to constantly endeavour to further improve their quality

of service in order to retain existing customers and attain new subscribers.

Department Description- Airtel Enterprise Services

Data and IP Solutions

INTERNET ACCESS

1. Multi-homing Internet Service

40

Airtel’s dual Point of Presence (PoP) in multiple cities offers you uninterrupted data transfer and

connectivity on different types of last mile. Secondary PoPs in each city is connected to Internet

Gateway through different transmission routes, thus isolating them from the primary PoP. Hence the

network is redundant at all levels – last mile, network element (router/ switch), and connectivity to

Internet gateway on transmission level.

Specifications:

Bandwidth denomination 2Mbps to 155 Mbps and above

Sharing ratio 1:1 only

Router Cisco

Routing Trans-Pacific and Trans-Atlantic

41

Levels Of Operation

42

2. Managaged Internet Service

Airtel manages Internet from end-to-end for customers. All information is provided through

web-based reporting. Managed Internet services offers:

(i) Proactive monitoring and reporting:

In addition to web based reporting, Airtel proactively monitors network at

Enterprise Network Operation Centre (E-NOC). Any link breakage, threshold alarm levels on

latency, packet drops etc. are monitored 24X7 and requisite action is initiated immediately.

(ii) Configuration, proactive management and reporting:

Besides providing web based reporting and proactive monitoring, Airtel also offers

configuration and change management as part of the scope. The routers (CE) under this

service are under exclusive control (read and write) of Airtel Enterprise Network Operation

Centre.

Specifications:

Bandwidth denomination 2 Mbps to 155 Mbps and above

Sharing ratio 1:1 only

Router Cisco

Routing Trans-Pacific and Trans-Atlantic

3. Premium Enterprise Internet

Through extensive network infrastructure across Trans-Atlantic and Trans-Pacific routes,

Airtel offers an option to transfer traffic through the shortest path and lowest congestion

route. Best route selection is done dynamically on Airtel backbone and the traffic is routed

through the most appropriate path.

Specifications:

Bandwidth denomination 64Kbps to 155 Mbps and above

43

Sharing ratio 1:1 only

Routing Trans-Pacific and Trans-Atlantic

Local loop Leased Line, VSAT, Metro Ethernet, Radio

4. Internet Leased Port(ILP)

Airtel presents Corporate Internet Service for Business Users. It is a cost-effective premium

Internet offering designed to meet dedicated bandwidth requirements to support critical

business applications. This service extends various benefits to our corporate customers with

SLA commitments on Service Availability, Latency & Packet Drop etc. It is an ideal solution

to allow web access to your business applications. Internet services are offered in various

contention ratios to allow our customers to choose the service which suits them the most.

Key Internet offerings include:

1:1 Dedicated Internet Services

1: X Shared Internet Services

Satellite Services

Airtel’s Satellite services provide reliable network connectivity to run mission critical

applications. The solution supports voice, audio and video applications on-demand suiting

customers transmission requirements. This service is available both in India and abroad.

1. Global Satellite Service

Airtel’s customized Teleport solutions is based on point-to-point service from either an

Airtel provisioned teleport or from a customer premise, with data speeds ranging from 19.2

44

Kbps to 15+ Mbps. Airtel has a portfolio of services to take care of your diverse

requirements:

Voice and data terminations

Connectivity to land-locked countries with non-availability of fiber media termination

Video up-linking facilities for media companies in other countries

Disaster recovery services

2. Domestic Satellite Circuits

Get high speed broadband connectivity provided by Very Small Aperture Terminal (VSAT)

via wireless through satellites positioned in geosynchronous orbit. VSAT technology offers

connectivity without geographical or location constraints.

IPLC (International Priveate Leased Circuit)

An IPLC (international private leased circuit) is a point-to-point private line used by an

organization to communicate between geographically dispersed offices throughout the world.

An IPLC can be used for Internet access, business data exchange, video-conferencing, and

any other form of telecommunication. IPLC basically uses Layer 3 (Routing) to build a path

for the data to flow in the network. Data routing in an IPLC is done using complex route

lookups based on the destination IP address. The routing hardware finds the shortest path

between the source and destination IP addresses to send data. This can be a hardware

intensive task in times of heavy traffic leading to slower data traffic speeds. With hardware

becoming more powerful every day, this is not such a major issue.

Key Features & Benefits

Instant Connectivity:

The dedicated secure circuit ensures an instant connection to transmit data as often as you need.

Global Reach:

45

Airtel’s IPLC service provides wide reach globally, with diversified routes via digital terrestrial and

& satellite connectivity.

Efficient Connectivity:

The service provides a fast, efficient and virtually error free digital connection, which improves data

throughput and organizational productivity.

Flat Billing System:

The charges for our IPLC are based on connection speed, which are a fixed charge, irrespective of

usage. This makes it more cost effective on growing usage.

46

D) MULTIPROTOCOL LABEL SWITCHING (MPLS)

Multiprotocol Label Switching (MPLS) is a mechanism in high-performance telecommunications

networks which directs and carries data from one network node to the next. MPLS makes it easy to

create "virtual links" between distant nodes. It can encapsulate packets of various network protocols.

MPLS is a highly scalable, protocol agnostic, data-carrying mechanism. In an MPLS network, data

packets are assigned labels. Packet-forwarding decisions are made solely on the contents of this

label, without the need to examine the packet itself. This allows one to create end-to-end circuits

across any type of transport medium, using any protocol. MPLS operates at an OSI Model layer that

is generally considered to lie between traditional definitions of Layer 2 (Data Link Layer) and Layer

3 (Network Layer), and thus is often referred to as a "Layer 2.5" protocol.

47

1. Managed Private Leased Line

Managed private leased line is a unique pay-per-use IPLC service offered exclusively to

International BPOs. This service provides the facility to make inbound or outbound calls to

multiple international destinations over an end-to-end clear channel TDM connectivity. This

service allows you to move existing International BPOs from a conventional Capex driven to

a flexible Opex driven network environment. The added advantages are scalability and

reliability for international connectivity.

2. VPN in a Box

“VPN In A Box” is a MPLS based layer 3 VPN service offered to you in an all inclusive,

ready to deploy bundle. Service covers all aspects including assessment and validates

requirements, help you with optimized solution, network design, installation, configuration

and post sales maintenance support. In addition, all components required to deliver the

service (MPLS port, bandwidth, last mile connectivity & Customer premise equipment) are

part of the deliverable. Customers can choose from various bandwidth option (64 Kbps upto

90 Mbps) as per their current requirement thus paying for what they need and seamlessly

grow without having to worry about obsolescence of any components. Services are backed

with performance & availability service levels thereby ensuring quality and uptime of their

network.

E) NLD (National Long Distance)

NLD Leased Circuit is a dedicated point-to-point layer-1 connectivity at subscribed speed

between customer’s two locations with no connectivity to the PSTN at either ends.

48

F) Online Desktop

Now, back up your data in a safe and secure location. Access, edit and share this data from

anywhere in the world. Not only that, Get the latest and original software on a monthly rent,

without having to buy anything upfront.

How it works

What it helps you achieve

Store Data back up and security - No fear of losses. No fear of virus.

Share and Edit

Hassle free, no pen drive and no multiple updates.

Software as you want

Rental basis, original, latest and no hassle of installing.

Access Mobile

Access from anywhere, no laptop dependence

49

VOICE SOLUTIONS

1) Mobility Solutions

Fixed Cellular Terminals

Our Digital fixed cellular terminal (FCT) is a cost optimization solution that converts your

fixed line to mobile calls into mobile to mobile calls. Thus, saving up to 70% of your total

telecom spends.

2) BASE

50

BASE (BlackBerry Application Suite for Enterprise) is an innovative framework that helps you

develop and integrate enterprise applications like SAP, ERP , CRM etc. on your BlackBerry

smart phones.

BlackBerry smartphones can be used for Voice, Messaging, Push Mail, and Internet

Browsing and Business applications as well.

• BASE enables mobility of enterprise applications by providing information in the

hands of field personnel. It integrates applications such as SAP/ ERP and CRM, for

optimizing processes such as production planning, inventory management, and

logistics.

• BASE offers BlackBerry Enterprise Server (BES) with Mobile Data System (MDS)

feature to create easy- to-configure mobile applications through Airtel’s certified

Independent Software Vendors and Device Peripherals Manufacturers.

• BASE offers Integrated Voice, SMS, Push mail, Browsing and Enterprise

Applications all through single device.

51

• BASE extends BlackBerry Enterprise Server (BES) IT policies to control devices,

data and imposes security settings.

G) Fixed Line and Broadband

1) ISDN

Using our Integrated Services Digital Network (ISDN) you can provide digital transmission of voice

and data over your standard telephone copper lines. ISDN services offered are:

PRI (Primary rate interface)

Our ISDN PRI offers you 30 bearer channels and 2 data channels where each channel operates at

64kbps. Thus a 2048kbps line is formed which can be used for the following applications:

» High end voice communication

» Uses ISDN signalling

» High speed data transfer

» Leased line backup

52

BRI (Basic rate interface)

Our ISDN BRI offers you 2 bearer channels and one data channel, where each channel operates at

64kbps. Thus a 128kbps line is formed which can be used for the following applications

» Secured voice communication

» Uses ISDN signaling

» Data transfer

» Video conferencing

» High speed Internet access

53

2) Domestic Toll Free Service

Our Toll Free services provide your potential customers with a ‘free’ and convenient way to contact

your business. The charges for using a Toll Free number are paid by you instead of your potential

customers. Get the business advantage; our service is accessed by more than 200 million Airtel

subscribers. What’s more, fixed line and mobile subscribers of other service providers in India can

also dial the service.

3) ITFS (International Toll Free Service)

Airtel brings Premium International Toll Free Services, which provides dependable access through a

free phone number. It helps you extend your business across the world thrust your business ahead.

You are charged in the Indian currency, as compared to subscribing to international operators where

you pay in expensive foreign currency.

Airtel offers two types of Premium International Toll Free Services:

» Premium International Inbound Toll Free Service

» Premium International Outbound Toll Free Service

54

Organization Structure of Airtel Enterprise Services, Chandigarh

55

Mr. SANJAY KAPOOR(CEO, India & South Asia)Mr. RAJAN SWAROOP(Executive Director)Mr. SUKESH JAIN(COO, North and East)Mr. Harpreet Singh(DGM, Delhi & NCR Region)Mr. Ravi Ramaswami(DGM, East Region) Mr. Rajat Dhavan(DGM, Upper North)Mr. NAJIB KHAN(COO, South)Mr. Manoj Paul(COO, West)Mr. MILAN RAO(CEO, Enterprise Services)

SIPOC- BHARTI AIRTEL

There are 5 steps in the SIPOC process.

1. Supplier

2. Inputs

3. Process

4. Outputs

5. Customers

56

Supplier

Input Process Output Customer

OEM1-NORTEL

OEM2-CISCO

EV-NOKIA-SEMIENS

ERRICSON

ISV-IBM

3APP- AFFLE

CA- INDIA TIMES

ASP-INFY

Network Infrastruct

ure

Spectrums

Technology

Finance

Licenses

GSM Services

VAS

Fixed Lines

Broadband

DTH

IPTV

Public

Corporate

Businesses

SME’s

Institutes

Mktng plans and strategies

Deciding Technology

to be employed

Deciding vendors, OEM ecc

Deciding Mktng Process

STP

AES PRE SALES PROCESS

57

58

AES SALES PROCESS

59

Problem Identification

The project seeks to validate the key accounts of Airtel Enterprise Services in the states of Punjab

and Haryana. The conclusion provides competition mapping and identifies revenue market share by

retrieving the past, current, and future Capex (Capital Expenditure) towards telecommunication

needs of Airtel Enterprise Services by specific clientele.

Project Objectives

Understanding the Airtel Enterprise Service product mapping across the primary accounts

in the upper north circle of Punjab and Haryana.

Acquaintance with the SIPOC business process.

Familiarity with the Airtel Enterprise Services Pre-sales and Sales Procedures.

Determine the Revenue Market share of Airtel Enterprise Services key accounts in the

states of Punjab and Haryana.

Business Development and Business Analysis activities.

Location of the study

Airtel Private Limited, Plot No. 21, Rajiv Gandhi IT Park, Chandigarh.

Duration of study

Two Months (1st May- 31st June)

60

Work Profile

Corporate Sales Trainee- The work mainly involved activities to indentify the telecommunication

prospects of the potential clients, fixing appointment with senior executives of respective

IT/Telecom Departments and identify their past, current, and future Capex (Capital Expenditure)

towards telecommunication needs. This involved a combination of field as well as office job. Along

with business analysis activities like revenue growth presentations and business development

activities like identifying network locations of specific clients were carried out.

Methodology

The methodology of the investigation process that set out to obtain answer to the project involved

multiple activities.

The first methodology used is the collection of primary data of the account regional office

through company internal sources as well through company website. (Experiment Method)

The second methodology used is retrieving the clients prospective Capex through published

media reports, Annual balance sheets etc. (Observation method)

The third methodology used is a structured questionnaire (a copy of the same has been

given in annexure) to identify the telecom services and revenue figures from the respective

client IT Head by personal interviewing. (Questionnaire Technique)

The fourth methodology used is telephonic interview of accounts where entry access was not

feasible due to security issues. (Experiential Technique)

PROJECT DETAILS:

61

.1 RESEARCH METHEDOLOGY

Area of the study:The project was carried out in Chandigarh Area. The several head offices of key accounts located

in Chandigarh city, Panchkula (Haryana), Mohali (Punjab) were covered.

Research Design: Descriptive Research: Descriptive research includes survey and fact-findings enquire of

different kinds. The major purpose of descriptive research is description of the business needs and

their current statistics.

Data Collection: The study is based on the data collected through primary and secondary sources.

Primary Data: The first methodology used is a structured questionnaire (a copy of the same has been given

in annexure) to identify the telecom services and revenue figures from the respective client

IT Head by personal interviewing. (Questionnaire Technique)

The second methodology used is telephonic interview of accounts where entry access was

not feasible due to security issues. (Experiential Technique)

The third methodology used is the collection of primary data of the account regional office

through company internal sources as well through company website. (Experiment Method)

Secondary Data:

62

The methodology used to collect secondary data is by retrieving the clients prospective

Capex through published media reports, Annual balance sheets etc. (Observation method)

Sampling Design: The sampling design mainly consists of the sample taken for the study along with the

sample size, sample frame and sampling method.

Sample Size:

An exhaustive list of 40 Key accounts of the Airtel Enterprise Services Upper North

region was taken. From this list, Revenue Market Share of 30 accounts was identified. The

remaining was not completed due to security hassles. The accounts were distributed into different

verticals belonging to either one of Govt/PSU, ISP, ITES, Media, IT, M&D and BFSI etc.

Sampling Method:

Convenience sampling was used, based on the willingness and availability of the

respondents. The study was conducted on consumers with different type of business.

Research period

The time for the project was limited to 42 working days. (1st April to 31st May). Out of

this, 30 working days were spent for the collection, analysis and interpretation of data.

63

LIMITATIONS OF THE STUDY

Every attempt was made to obtain the error free and meaningful result but as nothing in this world is

100% perfect I believe that there will still the chance for error on account of following limitations-

(1) Method of data collection was through personal interview and therefore bias becomes a

major limitation.

(2) Owing to company security issue, some clients did not disclose the desired details.

(3) The behavior of the client while approaching them to disclose the details was unpredictable.

(4) The sample was restricted to 30 key clients, which may restrict the scope of project to

generalize the results for full northern region.

(5) Respondent’s unavailability created unexpected delays for appointment.

(6) Difficulty in taking appointment from top executives due to time constraints. Due to this all

the clients were not covered.

64

Analysis and Interpretation

Table showing distribution of primary operations carried out by

organization

Table 1

Primary Operation No. of respondents Percentage

Govt. and PSU 21 65.625

M & D (Manufacturing and

Distribution)

3 9.375

IT 1 3.125

ITES 3 9.375

ISP (Internet Service Provider) 3 9.375

BFSI 0 0

Services 1 3.125

Media 0 0

Total 32 100

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Chart 1

Govt. & PSU

M&D IT ITES ISP BFSI Services Media0

5

10

15

20

25

No. of Respondents

No. of Respondents

Interpretation:

The graph shows that almost 66% of the accounts belong to Govt. & PSU. This is one

of the major reason because of which the time taken to cover each account was

longer than normal duration, as the government account branches are located in

multiple locations. The second highest account share belongs to ITES which is 10.7%.

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Major type of services present in the region:

Data Services:

1) AIRTEL2) BSNL3) Tata VSNL4) Reliance5) HFCL Connect6) Sify7) Idea8) Spectranet9) Dishnet

Fixed Line Services:

1) AIRTEL2) BSNL3) Tata Indicom4) Reliance5) Connect6) Idea7) Sify (PRI lines)

Mobility:

1) AIRTEL2) Vodafone3) BSNL4) Tata Indicom5) Reliance6) Idea

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Table showing total revenue share of AIRTEL versus Others for Data Services

(2010-11 Outlay in Millions)

Table 1

Primary Service Total Outlay Airtel Others

Internet 57.356 12.975 44.381

NLD / DSL 4 4 0

Domestic MPLS 2.15 2.15 0

International MPLS 2 2 0

Ethernet IPLC 0 0 0

Managed IPLC 0 0 0

Data center/Collocation 16 16 0

Managed Services 0 0 0

VSAT 0 0 0

Audio Conference 0 0 0

Video Conference 0.85 0.85 0

Network Integration 4.5 4.5 0

Teleport 0 0 0

Total 86.856 42.475 44.381

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0.00

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20.00

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40.00

50.00

60.00

70.00

80.00

90.00

100.0086.86

42.48 44.38

2010-11 RMS For Data Services

Total Outlay Airtel Others

Reve

nue

In M

illio

ns

Interpretation:

This shows that Airtel accounts for almost 50% of the market share for data services which accounts for 86.856m (the data is only for the accounts covered, the actual amount might be much much more). So, this accounts for a larger part of revenues for Airtel

69

Table showing total revenue share of AIRTEL versus Others for Fixed Line

(2010-11 Outlay in Millions)

Table 1

Primary Service Total Outlay Airtel Others

Fixed Line Voice 72.861 1.823 72.128

DTFS 0 0 0

ITFS 0 0 0

HCC Domestic 0 0 0

HCC International 0 0 0

VoIP 0 0 0

Total 72.861 1.823 72.128

70

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.0072.86

1.82

72.13

2010-11 RMS For Fixed Line

Total Outlay Airtel Others

Reve

nue

In M

illio

ns

INTERPRETATION:

This shows that Airtel is very low on the fixed line services mainly

dominated by BSNL fixed line due to its cheap rates.

71

Table showing total revenue share of AIRTEL versus Others for Mobility

(2010-11 Outlay in Millions)

Table 1

Primary Service Total Outlay Airtel Others

COCP 36.576 8.16 27.624

EOEP N.A N.A N.A

Total 36.576 8.16 27.624

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00 36.58

8.16

27.62

2010-11 RMS For Mobility

Total Outlay Airtel Others

Reve

nue

In M

illio

ns

72

Interpretation:

As mobility has an immense competition, so it is not possible to maintain a very high market share.

73

Competitor Analysis

Airtel Enterprise Services share versus Competitor Share

AIRTEL Others0.00

10.00

20.00

30.00

40.00

50.00

60.00

11.49

35.50

22.48

44.38

53.45 53.26

Data Services Competition Share

2009-10 2010-11 2011-12

Reve

nue

In M

illio

n

Interpretation:

The mission of AIRTEL ENTERPRISE SERVICES is to gain more than 50% of the market share by next year and has been growing rapidly as can be seen from the graph

74

AIRTEL Others0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

1.46

57.70

1.82

72.13

2.19

86.55

Fixed Line Competition Share

2009-10 2010-11 2011-12

Reve

nue

In M

illio

n

Interpretation:

Airtel’s share in fixed line is not that a high and it concentrates more on the data services and has no such plan of expansion.

75

AIRTEL Others0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

6.53

22.10

8.16

27.62

9.79

33.15

Mobility Competition Share

2009-10 2010-11 2011-12

Reve

nue

In M

illio

n

Interpretation:

Competition in the mobility is the main reason for such a low share. Also with the 3G bids, Airtel has not been allotted the spectrum in Haryana, Punjab. So not much high expansion plans.

76

AIRTEL Others0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

200.00

19.47

115.31

32.46

144.13

65.43

172.96

Competition Share for Data, Fixed Line & Mobility

2009-10 2010-11 2011-12

Reve

nue

In M

illio

n

77

Article XII. FINDINGS

1. In most of the organization, Internet plays an important role in the day to day

activities.

2. A number of the organization preferred Airtel because of the quality of service

provided and also for the speed of data transmission.

3. The safety and security of Airtel network is rated very well by most of its customers

4. After sales service plays essential part of customer satisfaction. Most of the customers

have reported it excellent and very good.

5. The overall satisfaction level is very high among customers.

RECOMMENDATIONS

After the complete analysis of entire STUDY we put forward a set of recommendations which are a

follows:

Pricing : Depending on the market conditions / competition from cellular or WLL-mobile

service providers and also to suit local conditions, there should be flexible pricing

mechanism (either at central or local level).

Improvement In Technology : Airtel should immediately shift to third generation switches

by replacing its c-dot switches. This will improve the quality of service to desired level and

provide simultaneous integration with the nationwide network. The special distribution of the

transmission towers should be increased to avoid “no signal pockets”

78

Establishment Of Distribution Channels : Airtel should establish widespread and

conspicuous distribution to match that of the competitors. The distribution network shall

make the product visible and available at convenient locations.

Also Airtel can come with a package with service ( e.g. data and fixed line) with some

cost that can help it grow further.

OPPURTUNITIES –

I. Various institutions like IBS are coming to the tricity which can be thought of.

II. VOIP for IDS Infotech.

III. Corporate Internet for Punjab University, IDS Infotech, STARTUP Firms

IV. MPLS for Rakhra Technologies

V. MPLS for HSIDC

VI. Can provide VOIP to Conjoinix

Article XIII. CONCLUSION

From above the details I conclude that 70% Airtel users preferred to remain with Airtel. Also

good no. of users who were willing 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 customized to user needs. Moreover, opening of 3G services will make the

company scope to a different horizon. So, the future lies in prompt data services.

79

Article XIV. REFERENCES

WEB SITES

http://www.bhartiairtel.in .

http://capitaline.com .

www.pluggd.in .

www.analysismason.com .

www.payin2.com

www.ibef.org

www.shop.informatm.com

www.wikipedia.com/airtel

www.telecomfourm.com

MAGZINES:

Voice and Data.

Tele.net

Telecom ERA.

Telecom Asia.

REPORTS:

80

IMRB Research reports.

Investors presentation, Bharti Airtel Limited, November 2008

Analyst Report – Bharti Airtel, Assist C. Mehta Investments Intermediates Ltd.

Telecommunication Sector Report – March 2008, CRISIL.

Telecommunication Services, Indian Industry: A Monthly Review, CMIE – November 2008

ANNEXURE 1

Questionnaire

AIRTEL ENTERPRISE SERVICES QUESTIONNAIREAIRTEL ENTERPRISE SERVICES QUESTIONNAIRE

Dear Respondent,Dear Respondent,

I am doing a survey on the above mentioned topic and for that purpose I request you to kindly shareI am doing a survey on the above mentioned topic and for that purpose I request you to kindly share

some information on behalf of your enterprise which place emphasis on the current situation and mid-some information on behalf of your enterprise which place emphasis on the current situation and mid-

term future outlook.term future outlook. I assure you that the information collected will be used solely for the studyI assure you that the information collected will be used solely for the study

purposes and will be kept strictly confidential. Looking forward to your co-operation and support. purposes and will be kept strictly confidential. Looking forward to your co-operation and support.

Name of the organization : _____________________

Authorized Persons name and Contact No : _____________________

Type of the Business : ______________________

Do you have any immediate IT requirements? : ______________________

Which Service Providers services are used by your enterprise? **Please mention the bandwidth specifications.

81

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………

Article XV. Primary

Operations(Please tick box as appropriate)

Govt. and PSU

M & D (Manufacturing and Distribution)

ITES

ISP (Internet Service Provider)

BFSI

Services

Media

82

SERVICE IN USE

(Please tick box as appropriate)

DATA SERVICE

(Please complete only section A)

Internet

NLD / DSL

MPLS:

Domestic MPLS

International MPLS

IPLC:

Ethernet IPLC

Managed IPLC

Data center/Collocation

Managed Services

VSAT

Audio Conference

Video Conference

Teleport

Others

FIXED LINE SERVICE

(Please complete only section B)

Fixed Line Voice

DTFS

ITFS

HCC Domestic

HCC International

VoIP

(**KEY:

DTFS-Dedicated Toll Free Service

ITFS-International Toll Free Service

HCC-Hosting Contact Centre

VoIP-Voice Over Internet Protocol

MOBILITY

(Please complete only section C)

COCP

COEP

EOCP

EOEP

(**KEY:

COCP-Company owned Company paid

COEP-Company owned Employee paid

EOCP-Employee owned

Company paid

EOEP-Employee owned Employee paid)

Section A (DATA SERVICES):

S. No. SERVICE IN USE

Total Spend

Last Yr. 2008-09

(INR Mn.)

Total Spend

Curr Yr. 2009-10

(INR Mn.)

Projected Spend

next Yr. 2010-11

(INR Mn.)

AES Revenue Last Yr. 2008-09

(INR Mn.)

Expected AES

Revenue Curr Year 2009-10

(INR Mn.)

Projected AES

Revenue Next Year 2010-11

(INR Mn.)

Major Competitor

(name)

Major Competitor's

Revenue Curr Year 2009-10

(INR Mn.)1 Internet                2 NLD / DSL                

MPLS:                3 Domestic MPLS                4 International MPLS                

IPLC:                5 Ethernet IPLC                

83

6 Managed IPLC                

7Data center/Collocation                

8 Managed Services                9 VSAT                

10 Audio Conference                11 Video Conference                12 Teleport                13 Others                

Section B (FIXED LINE SERVICES):

S. No. SERVICE IN USE

Total Spend Last Yr. 2008-09

(INR Mn.)

Total Spend

Curr Yr. 2009-10

(INR Mn.)

Projected Spend

next Yr. 2010-11

(INR Mn.)

AES Revenue Last Yr. 2008-09

(INR Mn.)

Expected AES

Revenue Curr Year 2009-10

(INR Mn.)

Projected AES

Revenue Next Year 2010-11

(INR Mn.)

Major Competit

or (name)

Major Competitor's Revenue Curr Year 2009-10

(INR Mn.)1 Fixed Line Voice                2 DTFS                3 ITFS                4 HCC Domestic                5 HCC International                6 VoIP                

Section C (MOBILE SERVICES):

S. No. SERVICE IN USE

Total Spend

Last Yr. 2008-

09 (INR Mn.)

Total Spend

Curr Yr. 2009-10

(INR Mn.)

Projected Spend next Yr. 2010-11

(INR Mn.)

AES Revenue Last Yr. 2008-09

(INR Mn.)

Expected AES

Revenue Curr Year 2009-10

(INR Mn.)

Projected AES

Revenue Next Year 2010-11

(INR Mn.)

Major Competit

or (name)

Major Competitor's Revenue Curr Year 2009-10

(INR Mn.)1 COCP                2 COEP                3 EOCP                4 EOEP (Self Paid)                

84