Presented By:

Naveen pathak

• India: 2nd largest telecom market after China

• Revenue: 3rd quarter, FY-09/10, US$ 8.56 billion

• India’s Rural mobile phone user: 100 million

• Subscriber base: Sept. 2009- 509 million

• Wireless subscriber: 471.7 million, Wire line: 37.3 million

• Tele-density: Jun 2010- 47.89 per hundred

Telecom Industry

Go-ahead to the CDMA technology

IND

IA

Private players were allowed in Value Added Services

National Telecom Policy (NTP) was formulated

1992

1994

1997

Independent regulator, TRAI, was established

NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime

1999

2000

2002

BSNL was established by DoT

ILD services was opened to competition

Internet telephony initiated

Reduction of licence fees

2003

Calling Party Pays (CPP) was implemented

Unified Access Licensing (UASL) regime was introduced

Reference Interconnect order was issued

2004

Intra-circle merger guidelines were established

Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010

2005

FDI limit was increased from 49 to 74 percent

Attempted to boost Rural telephony

2006

Number portability was proposed (pending)

Decision on 3G services (awaited)

2007

Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.

Evolution of Telecom In India

Bharti Airtel

• Largest Private Integrated Telecom Company in India

• 3rd Largest Wireless Operator in the World

• Largest & Fastest Growing Wireless Operator in India

• Largest Telecom Company listed on Indian Stock Exchange

• Bharti Airtel – Operates its GSM mobile services in 23 telecom

circles and provides broadband and telephone services in 90 cities

• Airtel was the only corporate brand to be awarded the AAA rating

Market Share

GROUP 7

Major Players Market Share

Bharti Airtel 22%Reliance 17%

Vodaphone 15%BSNL 18%TTSL 9%Idea 9%

Aircel 5%MTNL 1%Spice 1%

Others 3%

Value

Herfindahl index 0.1623Concentration Ratio 0.1425

Operator’s Market Ratio

While the tariffs have decreased, the subscriber base

has exploded

7

Total Customer Base

Profit & Profit Margin

Total Revenue of Telecom Industry

Fast Grower

Product Life Cycle - Maturity

Porter’s 5 Forces

Threat of New Entrants: (Low)• High Fixed costs• Scarcity of resources• High cost of switching companies• Huge License Fees to be paid upfront and high

gestation period• Entry of MVNOs and WiMAX operators• Spectrum Availability and Regulatory issues• Infrastructure setup cost –high• Rapidly changing technology

Rivalry Among Existing Competitors: (High)– There are three types of major players in telecom services:

• State owned companies (BSNL and MTNL).• Private Indian owned companies (Reliance Infocomm,

TataTeleservices.• Foreign invested companies (Vodafone, Bharti Tele-

Ventures, IdeaCellular, Spice Communications).

Bargaining Power of Suppliers: (Low)• Service Industry – less suppliers / role of

suppliers are almost negligible

Bargaining Power of Buyer: (High)• Lack of differentiation among service providers• Cut throat competition• Low switching costs• Number portability will have negative impact

Threat of Substitutes: (High)• Broadband Services

SWOT Analysis

Strengths

• Largest Telecom Player in India

• Strategic Alliance with other stake

holders in Bharti Airtel include

Sony-Ericsson, Nokia - and Sing Tel

• Pan India Presence

• Strong brand value

Weakness

• Decreasing ARPU

• Relatively weak corporate

house

SWOT Analysis

Opportunities

• Expanding international

presence

• Low penetration rates

• New services

Threats

• Increasing competition

• Regulations

• Mobile Number Portability

by Jan 2011 – impact on

margins

Financial Snapshot - Ratios

21

• Liquidity Ratio

Ratio 2006 2007 2008 2009 2010

Quick Ratio 0.30 0.27 0.39 0.41 0.31

Current Ratio 0.37 0.34 0.54 0.67 0.68

• Efficiency Ratio

Ratio 2006 2007 2008 2009 2010

Debtors Turnover Ratio 12.57 14.31 12.28 12.78 15.30

Fixed Asset Turnover

Ratio

0.72 0.75 1.03 1 0.88

Total Assets Turnover

Ratio

1.15 1.27 1.09 1.06 0.93

• Leverage Ratio

Ratio 2006 2007 2008 2009 2010

Debt to Equity Ratio 0.65 0.46 0.32 0.28 0.14

• Coverage Ratio

Ratio 2006 2007 2008 2009 2010

Interest Coverage Ratio 12.8 23.25 34.4 39.53 100.47

• Profitability Ratio

Ratio 2006 2007 2008 2009 2010

Operating Margin Ratio 39.08 38.74 41.37 40.65 35.86

Net Profit Margin Ratio 26.36 22.58 23.99 22.46 17.8

Return on Assets Ratio 10.36 14.51 106.35 145.01 96.24

Recommendation

• Daily Moving Average – 306• EPS – 24.83• 3G services to be started before 31th Dec• Project partner with IBM in South Africa for

development network• Won bid for3g spectrum and huwai is their

partner

GROUP 7 28

THANK YOU !!