The Indian telecommunication sector has emerged as a strong growth engine for the Indian economy over the last decade, making it the second largest telecom market in the world. Key policies like the National Telecom Policy of 1999 led to privatization and increased competition in the sector. Major players like Bharti Airtel have utilized strategies like outsourcing and strategic partnerships to become the largest telecom provider in India with over 190 million subscribers as of 2013.

2. Overview
Indian telecommunication sector has emerged as a strong growth
engine for the Indian economy in the last decade.
• Second largest in the world after China with 897.02 million
subscribers.
• 6-7 million new subscribers are added every month.
• Government policies and regulatory framework implemented by
Telecom Regulatory Authority of India (TRAI).

3. Evolution of Telecom in INDIA
Private
players were
allowed in
Value Added
Services
Independent
regulator,
TRAI, was
established
1999
1994
1992
1997
National
Telecom
Policy (NTP)
was
formulated
BSNL was
establishe
d by DoT
2000
NTP-99 led to
migration from
high-cost fixed
license fee to
low-cost
revenue sharing
regime
Intra-circle
merger
ILD services
guidelines
was opened to
were
competition
Calling Party
Go-ahead Pays (CPP) was established
to the
implemented
CDMA
2002 technology
2003
2004
Internet
telephony
initiated
Reduction
of licence
fees
Number
portability was
Attempted proposed
to boost
(pending)
Rural
telephony
2006
Unified Access
Licensing (UASL)
regime was
introduced Broadband
Reference
Interconne
ct order
was issued
policy 2004
was
formulated
—targeting
20 million
subscribers
by 2010
2007
2005
FDI limit was
increased
from 49 to
74 percent
Decision
on 3G
services
(awaited)
Department of Telecommunication (DoT) is the main body formulating laws
and various regulations for the Indian telecom industry.

4. PEST Analysis
POLITICAL
ECONOMIC
• NTP – 99
• Establishment of BSNL
• Global revenues were USD
55 Billion.
• Expected growth rate:
11% PA.
• Cost of calls.
• Middle class consumer base
growing.
• Increase in disposable
income.
• Falling mobile phone
prices.
• Privatization of VSNL
• Increase in FDI limits from
49 % to 100 %.
• Mobile number
portability
• Transparency in spectrum
and license allocation.

5. PEST Analysis
SOCIAL
TECHNOLOGICAL
• Fast changing lifestyles.
• Demand for VAS and
Broadband services.
• New Technology
• Joint ventures.
• Employment opportunities.
• High End Phones becoming
status symbol culture.
• Indian Tech Savvy
Generation.
• Rapid Industrial growth.
• Strong Fiber Optic Network.
• Utilization of E- Commerce
facilities.
• Efficient Customer Care
Services.
•
•
•
GSM
CDMA
WLL
•
3G / 4G

6. Introduction to Bharti AIRTEL
Ltd.
Bharti Enterprises
190 mn customers
as of June 2013
Strategic business units (SBU’s)
Mobile Services
Airtel Tele-media Services &
Enterprise Services.
86.6%
83.82 mn
5,121 census towns and 457,053 non-census towns and villages

7. SWOT analysis
STRENGTHS
WEAKNESSES
• Strong Brand image, recognized globally
• Outsourcing
• Maximum customer base
• Network coverage and broadband penetration
• Strategy alliance with Sony erricson, Nokia,
Singtel.
• Lacking in market investment opportunity
• Low cost model
• Poor network in rural areas.
• Decreasing operating & profit margin.
OPPORTUNITIES
THREATS
• Wide scope for broadband & 4G penetration
• Falling ARPU
• Rural tele-density 40.66%
• Shortage of Bandwidth
• Strategic tie-ups with GOOGLE, APPLE, BB.
• Slower adaptation of Technology 3G / 4G
• Android market.
• Unhealthy relationship with Vodafone.
• Cutting down cost in rural market
• Africa acquisition.
• Digitalize TV.
• International players.

8. Core competencies
Product
Innovation
Pricing
CORE
COMPETENCIES
Marketing
and
Branding
VAS

9. 5C Analysis
Customers
Company
Competitors
Context
Collaborators

10. Revenue
Market share
Consumer
Market share
ARPU
AIRTEL
29.1%
22%
114.2
Reliance
8.2 %
17%
45.2
IDEA
15%
10%
114.9

11. Context
 Mobile / Wireless Services
• 2G / 3G
• Rural Market
 Telemedia Services
• Fixed Line
• Broadband
• DTH
 Enterprise Services
• Carrier
• Corporate
 Passive Infrastructure
• Bharti Infratel
• Indus Tower

12. Porter’s Five Force
Customer
Bargaining
Power
Threat of
New
Entrants
Threat from
Competition
Supplier
Bargaining
Power
Threat of
Substitutes

13. Competitors Analysis
OPERATOR
AIRTEL
RELIANCE
IDEA
HIGH
EBITDA margin analysis
1. 33.6% (FY11) to 35.9% (FY14)
2. cost saving initiatives like BPO, IT and Network management
outsourcing, passive infrastructure sharing, etc.
1. 29.5% (FY11)  31.9% (FY14) on account of reduced
network rollout costs.
1. 24.1% in (FY11)  27.7% (FY14), primarily on the back of
higher network utilization.
Strong Competition  tariffs and simplification of policy environment

14. Customer Bargaining Power
• Lack of differentiation among Service Providers
• Cut throat Competition
• Low Switching Costs
• Number Portability will have –Ve Impact
• Businesses & Consumers
HIGH

15. Threat of Substitutes
• Landline
• CDMA
HIGH
DIMINISHING MARKET
• Video Conferencing
• VOIP - Skype, Gtalk, Yahoo Messenger
• e-Mail & Social Networking Websites
BROADBAND
SERVICES

16. Buyers Bargaining Power
HIGH
• Buyers in Telecom industry
1. Individual
2. Enterprise Customers
Cheaper prices  Options  large bargaining leverage.
Buyers’ Price Sensitivity
Relative Bargaining Power
 Cost of product relative to total
cost (High)
 Size and concentration of buyers
relative to products (high)
 Product differentiation (High)
 Buyers’ switching cost (low) Rs. 20/ Buyers’ information (High)

17. Buyers Bargaining Power
HIGH
• Cost of product relative to total cost
• Telecom products ( e.g. Voice calls, 3g etc ) cost 100% of the
total cost of service and buyers are more sensible to pricing.
• Product differentiation
Airtel
----------Prepaid
MRP(Rs.) DATA USAGE
250 1 GB
450 2 GB
1 Rs./min 300-plan (std)
Relience
----------Prepaid
VALIDITY MRP(Rs.)
DATA USAGE
30 Days
255 1 GB
30 Days
449 2 GB
30 days 1 Rs./min (std) 330-plan
Idea
----------Prepaid
VALIDITY MRP(Rs.)
DATA USAGE
30 Days
250 1 GB
30 Days
450 2 GB
30 days 1 Rs./min (std) 330-plan
VALIDITY
30 Days
30 Days
30days
[Ref: http://im.tech2.in.com]

18. Suppliers Bargaining Power
LOW
There are two types of tower companies in India
1. Telecos owned tower companies
2. Independently telecom tower companies (ITTC)
Share
Others
3.20%
Aster Infrastructure Limited…
ITTC,
28%
Telecos
Owned
ITTC
Telecos
Owned,
72%
0.30%
India Telecom Infra Limited…
0.30%
Tower Vision India Limited…
0.90%
American Tower Company…
GTL Infrastructure Limited…
Bharti Infratel Limited (BIL)
Viom Networks Limited (Viom)
Reliance Infratel Limited (RITL)
Bharat Sanchar Nigam Limited…
Indus Towers Limited (ITL)
2.30%
Share
9.50%
9.70%
11.20%
15.20%
15.20%
32.20%

19. Suppliers Bargaining Power
LOW
Mobile Phone handsets
• Leading CDMA phone manufacturers are Samsung, Blackberry, ZTE,
Spice etc.
• Top 4 leading Mobile phone manufacturer(GSM & CDMA) in India (201112)
Company
Share
Nokia
39%
Samsung
17.2%
Micromax
6.9%
Black Berry
5.9%
• Bargaining power of suppliers are LESS.
• Little or no threat of Forward integration.

20. Threat of Entry
LOW
• Access to optical fibre network
• Declining ARPU
• Government and legal barriers
• Retaliation by established producers
FACTS
•
Bharti has invested close to Rs. 230 billion to create the cellular infrastructure with 45,000 towers
across the country.
•
Cost of maintaining one tower (active + passive) is estimated at Rs. 60,000-65,000 per month.

21. Threat of Entry
LOW
Capital Requirements
• The cost of active equipment is estimated to be 40 percent of the
telecom operator's total capex, while the balance is accounted for by
passive infrastructure.
• Bharti has invested close to Rs. 230 billion to create the cellular
infrastructure with 45,000 towers across the country. Typically, a ground
based tower costs Rs. 25-30 lakh. A roof-based tower can be built for
Rs.13-14 lakh.
• Cost of maintaining one tower (active + passive) is estimated at Rs.
60,000-65,000 per month.
• If tower is rented then monthly rent of Rs. 40,000-45,000 for active
network.
• The monthly outflow of a TSP would be close to Rs. 80,000-85,000 per
tower per month.
• However, the recent announcement made by BSNL about leasing its
towers will help both the older and newer players to penetrate into new
markets.
• This factor makes the telecom industry moderately attractive for the
new players and investors

22. Threat of Entry
LOW
Declining ARPU
• The market is maturing and new classes of consumers are mostly rural and
their ARPU is well below $5 (probably $3-3.5). So, managing bottom-lines at
such low levels of revenue per user will prove to be a challenge for new
entrant
Access To Optical Fibre Network
• The largest optical fibre has been built by the incumbent operator BSNL who
is also the long distance operator.
• The private sector players such as Bharti and Reliance have also constructed
optical fibre cable network connecting mainly cities and towns but their
presence is very limited in the rural areas and difficult terrains.
• It is fairly difficult and cost- ineffective for new entrants to lay down optical
fibre connecting remote places as well.

23. Threat of Entry
LOW
Government And Legal Barriers
• Private operators will have to enter into an arrangement with fixedservice providers within a circle for traffic between long-distance and
short-distance charging centres.
• Seven years time frame set for rollout of network, spread over four
phases. Any shortfall in network coverage would result in encashment and
forfeiture of bank guarantee of that phase.
• Private operators to pay one-time entry fee of Rs.25 million plus a
Financial Bank Guarantee (FBG) of Rs.200 million. The revenue sharing
agreement would be to the extent of 6%.
• Private operators allowed to set up landing facilities that access
submarine cables and use excess bandwidth available.
• No industrial license required for setting up manufacturing units for
telecom equipment.
• 100% Foreign Direct Investment (FDI) is allowed through automatic route
for manufacturing of telecom equipment's.
• Moderate threat entry based on Government Policies.

24. Value Chain Design
Value Chain Design is broadly classified into three components :
1. Insourcing / Outsourcing
2. Partner Selection
3. The Contractual Relationship like joint venture, long-term
contract, strategic alliance, equity participation, etc.

25. Insourcing / Outsourcing
• Inspired by C.K.Prahalad mantra
“Don’t do things that you are not good at “
• IT operations (Billing, CRM, enterprise solution) to IBM.
• Network Infrastructure management to Ericsson, Huawei
and Nokia-Siemens network.

26. Value Chain Design

27. SURVEY
• Which telecom company's service are you currently using ?
 AIRTEL (40%) & VODAFONE (35%)
• Which parameter do you look for while selecting a service provider ?
 Offers and Schemes & Customer Service
• What are the key factors/reasons for your association with the current
cellular service provider?
 Awareness of service provider (80%) & Advertisements (25%)
• Which company's advertisement you like the most?
 Vodafone (50%) & TATA Docomo (25%)

28. SURVEY
• What features attract you most in the above advertisement?
 Creativity (55%) & Humor (25%)
• Kindly assess the perceived value in terms of the tariffs / rentals for
the cellular services used by you.
 High (50%) & Moderate (40%)
• Are you satisfied with your current service provider?
 Yes (75%) & No (25%)
• Are you loyal to your current brand of mobile service provider?
 Continue with same service provider (60%) and Change over to
other company (25%)

29. VALUE ADDED SERVICES

30. WHAT IS VAS ?
Non-Core service
Beyond standard voice calls or text transmissions
Little or NO cost
Promotion of primary business
Provided by Mobile network operator or by a third party value-added
service provider (VASP), also called as Content Providers (CP).

31. MVAS SIMPLIFIED
COLLEGE KID
BUSINESS PROFESSIONAL
PLUMBER
FARMER
However, Mobile infotainment, gaming, social networking,
commerce and email are the killer applications.

32. Increasing Usage
“ MVAS market will reach $9.5 billion by
2015 ”
research conducted by Wipro technologies &
Internet & Mobile Association of India (IAMAI)
called Future Thought of Business : MVAS.
“ Basic informational mobile services are set
to decline in India. We have found that India’s
consumers will increasingly purchase enriched
and transformational education, health,
finance and entertainment services,”
said Ayan Mukerji, Senior Vice-President, Global
Head - Media and Telecom, Wipro Technologies.
Source : http://www.thehindubusinessline.com/industry-and-economy/info-tech/mobile-valueadded-services-market-will-touch-95-b-in-2-years/article4546790.ece

33. Increasing Usage
• mEntertainment : Localised vernacular content, on-demand music & video content
and live TV shows and events.
• mEducation : English language learning services, competitive examination preparation
solutions, tutor-on-call and vocational training.
• mHealth : Improve healthcare access and affordability, remote diagnostics, chronic
disease management and material care.
• mFinance : Extending financial services to remote areas, mobile wallet services etc.

34. Mobile VAS Activations In
India Down 60% Since June
2013

35. Factors driving vas
• Booming Economy
• Personalization of digital world and digital services
• Reduction in tariffs and CPP and CPHP initiations.
• Focus on movies and music (Entertainment).
• SMS contests like KBC, Indian Idol etc.
Need for differentiation is the major factor driving
MVAS.

36. Survey Report
• Sample size : 40
• Sample location : Hosur Village – Tamil Nadu, Koramangala – Bangalore
• Samsung Note 3, wave 2 and Micromax canvas are used as a
Status Symbol.
• Gaming is a major interest in rural & urban India.
• Issues
1. Unawareness, poor user interface due to language barrier
2. Login problems with applications due to unknown or unaware
Customization options
3. Feeding contact details and retrieving them correctly.

37. Anticipations
• Pictorial representation for commands and navigation
between pages.
• People who use low end phones do not expect any value
added services apart from calling, messaging, torch and
radio. However, youth aspire for high end phones.
• Urban people anticipate improvements in Medical &
Health applications. Satisfied with services in
Entertainment & Finance

38. Blooming ideas
• Imagining if prepaid cash would be available ? In order to
reach 58.36% of rural sector in India.
• Find your phone anywhere on earth ? Interact with it .
• Automatic data and contact storage which enables users
to access their contacts, photos and videos content
anytime, anywhere from any of their devices and share
them with any contact or group of contacts.

39. Prepaid Cash Transfer
• Instant service to transfer money.
• 58% unbanked rural sector.
• Low end phone users like laborers, government services.
• User  Retailer  User
• Lower money transfer cost
• Banking the Unbanked

40. Data management
Automatic data storage. Contacts, Memo, Messages.
Low end phones without GPRS, external memory
Advantageous incase of damage, theft.
Accessibility to other phones

41. Health Connect
• Application to provide medical assistance.
• Tracking current location and providing details regarding
nearest 24X7 medical stores, Hospitals and Diagnostic
centers.
• Visiting hours
• Availability of doctors to take appointments in major
Hospitals.
• First aid solutions.
• Emergency solutions.
• General medicinal information help.

42. Health Connect
• Audio and Video conferencing facilities in case
of emergency.
• Hospital Map.
• Online Reports
• Payment Solutions
• Saving TIME, MONEY & EFFORTS.

43. THANKS FOR YOUR PATIENCE 
Aditya Chirravuri
Vipul Agarkar