Group - VI
Bharti Group - Overview
• Asia’s leading integrated telecom services provider• Largest Telecom player in India with 24% market
share• Indian telecom subscriber increasing by 8-9 mn
/month on average with total around 400mn currently
• Structured into four strategic business units - Mobile, Telemedia , Enterprise and Digital TV
Performance
Heading FY’05 FY’ 06 FY’ 07 FY’ 08 FY’ 09
Net Revenue from Operations 7944.19 11290.58 17887.99 25939.37 34155.03
Net Profit/Loss Before Tax 1564.27 2285.8 4601.37 6972.54 8161.53
Group Companies
Bharti AirTel Bharti Teletech Telecom Seychelles Comviva Tech Ltd
FieldFresh Food Bharti Retail Bharti AXA General Insurance
Bharti AXA Life Insurance
Bharti AXA Investment Managers
Centum Learning Ltd
Jursey Airtel Guernsey Airtel
Bharti Foundation Bharti Realty Bharti Infratel
Mobile services
•Growth rates were down from the previous quarter•Reason is increased competition and tariff wars.•India's telecom regulator, Telecom Regulatory Authority of India (TRAI), has reported a decline in ARPU (average revenue per user) and utilization by consumers across service providers from the first quarter of this year
Fixed Line
Rising affordability of mobile services
Fixed lines decline as mobile use surges
Impact of new entrants in 2G and 3G
DTH
•The DTH market which began commercial operations in 2003 has been able to acquire over 12 Million subscribers during the past five years
Market share of Airtel DTH is the lowest. The major reason for this may be the late entry of Airtel into the market which is in 2008
35%
20%17%
16%
8% 4%
Market Share
DD DTH
Dish TV
Tata Sky
Sun DTH
Big DTH
Airtel DTH
Broadband
Competition with BSNL
•Airtel was one of the first telecom providers to bring broadband connection to India
Bharti Retail
Bharti Retail Ltd. is a wholly owned subsidiary of Bharti Enterprises
Tie up with Wall Mart
The companies would open 10 - 15 cash-and-carry facilities over 7 years and would employ 5,000 people. Each store would occupy 50,000-100,000 square feet.
Joint partnership in agri company FieldFresh
Bharti AXA Life Insurance Company
Offers a range of life insurance and wealth management products
74:26 joint venture between Bharti Enterprises and AXA
Accrued a loss of Rs.15.5 Crores in the 2009
Accrued a loss of Rs.15.5 Crores in the 2009
Accrued a loss of Rs.15.5 Crores in the 2009
Contribution of Revenue
Segment Revenue FY Comparison
Rs. Million FY08 FY09 %Change
Mobile 217861 303601 39%
Telemedia 28484 33517 18
Enterprise - Corporate 13217 16945 28
Others 2431 42489 1648
Passive Infrastructure Services 6023 3611 -40
Sub total Revenue 311186 468100 50
Less Intersegment Eliminations 40936 98485 141
Total Revenue 270250 369615 37
Strategy of Bharti Group
Concentration on Core Competencies
Acquisition Strategy
Company has acquisition strategy to extend its fixed and cellular footprint from north and central India to south India.Global presence like in Srilanka ,Seychelles .Attempt to acquire MTN to to gain entry through a company already operating in 21 African nations.
Bharti's strength is brand management, people management and customer management
Bharti Group-BCG MatrixSBU Major
CompetitorsMarket Share of RMS Log
TransferMarket Growth (Approx)
Revenue(in Rs. Cr)
SBU Competitor
Airtel Reliance Teleservices
23.65% 18.3% 1.29 1.462 7% 36,962
Airtel DTH DD Direct 4% 35% 0.115 -.942 38.9% 25694
Bharti Broadband
BSNL Broadband
3.62% 54% 0.067 -1.173 16% 36291
Bharti AXA LIC 1.1% 62.45% 0.018 -1.754 33% 362
Bharti Retail
Pantaloon 0.07% 54.6% 0.0013 -2.892 35% 236
Bharti Group-BCG Matrix
-4-3-2-1012
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Market Growth (Approx)
Airtel
Airtel Broadband
Airtel DTH
Bharti Retail
Bharti AXA
SWOT Analysis
Strength Over 100mn users Largest Service provider in India Strong Pan India presence Strategic alliance with Syntel, Nokia
and Sony gives them access to best global technologies
Weakness Till recently did not own mobile
towers Failure of MTN deal will signal no
real market investment Data services not delivering on its
high expectations
Opportunities Strategic partenership with Blackberry Focus on expanding business in rural
areas Tie up with other companies in “Indus
Towers”
Threats Presence of close and strong
competitors Increasing comeptition from GSM &
CDMA Potential entry of global players
Growth Areas: • Airtel looking at rural marketing as long term growth segment• Gearing up to increase revenue share from VAS (Value Added Services) and
applications• Value Added Services
Growth Limiters :• Reaching Industry Limit – Teledensity expected to reach 51% by 2012• Very high competition, especially on pricing front• Falling Margins• Failure of MTN deal
Recommendations
• This over reliance on few sectors should be reduced through more focus on growth potential sectors like Insurance and Retail
• It should also go for a very aggressive growth in Latin American and African markets
• Bharti should use its strength of large network to promote its other SBUs like insurance, DTH and broadband
• Improving the quality of DTH and changing its brand name • To develop core competency in segments like fixed lines telephones and
broadband.