Poornima Modified BAVFS -Airtel

download Poornima Modified BAVFS -Airtel

of 18

Transcript of Poornima Modified BAVFS -Airtel

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    1/18

    1

    INSTITUTE OF MANAGEMENT TECHNOLOGY,NAGPUR

    BHARTIAIRTEL

    BAVFS

    8/25/2010

    SECTIONABC1

    POORNIMAY.K.2009149

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    2/18

    2

    Contents

    Strategy Analysis

    Financial Analysis

    Prospective Analysis

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    3/18

    3

    STRATEGYANALYSIS

    Bharti irtel Ltd.is one of siasleading integratedtelecom services providers with

    operations in 9 countries across sia and frica. he company is structured into

    fourstrategic business units - Mobile, elemedia, Enterpriseand Digital V.

    he mobile business offersservicesi n ndia, Sri Lanka, Bangladeshand frica. he

    elemedia business provides broadband, P V andtelephoneservicesin 89 ndian

    cities. he Digital V business provides Direct-to-Home V services across ndia.

    he Enterprise business provides end-to-end telecom solutions to corporate

    customers and national and international long distance services to telecom

    companies. irtels minute factory was producing nearly 2 bn minutesaday, lastyear.

    SBU evenues ( s Mn) SubscriberBase (Mn)

    Mobile (excluding frica) 3257 7 31.61

    elemedia 34194 3.07

    Enterprise Services 84386

    Digital V 2.5

    Bha

    ti Ai

    tel

    Mobile Se

    vices

    Revenues - 32571.7 c

    Subsc

    ibe

    base-

    13.16 c

    Telemedia

    Revenues - 3419.4 c

    Subsc

    ibe

    base - .307

    c

    Ente

    p

    ise Se

    vices

    Revenues - 8438.6c

    Di

    ital TV

    Subsc

    ibe

    base - .25c

    Formatted: Font: (Default) +Headings, 12 pFont color: Black, Expanded by 0.25 pt, Kern

    14 pt

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    4/18

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    5/18

    5

    y Postpaid

    y Int rnationa Ca ing

    y Devicesand Mobi e Internetconnection

    y Wireless Internet

    Airtelis presentin 2 circlesin India andin 16 co ntriesin A rica

    Airtel o ns 0 o Warid Telecom in Bang lades t ro gh a jointventure. Bharti

    Airtel Limited illtake managementcontrol o thecompan andits board , and ill

    relaunch thecompan 'sservicesunderits o n Airtel brand.

    I DI :

    Degree of actual and potential competition:

    Thetele-densityin India has gro n to 56 rom a negligible 4 adecadeago. The

    Indian mobile industry s annual revenue is around US $ 2 billion ith the

    subscriber base o 630 million. The customer base is increasing at 15-20 million

    every month.

    The price that consumers are illing to pay or basic call and text service is

    decreasing rapidly and regularly, hence price orms a major dimension o

    compe

    tition in the

    industry

    Rivalry among existing firms:

    There is intense competition among the existing irms or expanding subscriber

    base, especially in circles (especia lly Metros) here the ARPU (Average Revenue

    Per Minute) andthe MOU (Minutes o Usage) are high.

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    6/18

    6

    Price ars happen every ew months and as a result o this, India has the lowest

    tariffs and ARPUs. Serviceinnovationsareprimari lyin AS ( alueadded Services)

    andpriceledandarecompetitivelysold.itis priceelasticin nature.

    Concentration and balance of competitors:

    The competition has been intense in the last 2 quarters with a number of new

    entrantsin the marketandtheseentrants have been aggressivelycapturing the new

    customers at the bottom of the APRU pyramidwho want the basicvoice and SMS

    servicesat lowrates.

    Subscriber basefor majorcompetitorsacross India:

    30%

    24%15%

    15%

    9%

    3%

    1%

    1%1% 1% 0%

    0%

    Total Subscriber Figures - July '10

    Bharti

    irtel

    Vodafone Essar

    IDE

    BSNL

    ircel

    * eliance

    eleco

    NL

    Loop obile

    Uninor

    Videocon

    Stel

    Forma

    ed

    Fon

    (Defaul

    ) +Headings, 12 p

    Fon

    color

    Black, Expanded by 0.25 p

    , Kern14 p

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    7/18

    7

    Sl.No.

    Name ofCompany

    Total SubFigures- July'10

    MarketShare -July '10

    Total SubFigures - July'0

    MarketShare -July '0

    increase

    insubscribersover lastyear

    increase inmarket shareoverlastyear

    1 Bharti Airtel 13, 2,20, 2 29.74 10,51,77,635.00 32.25% 32.37 -7.78

    2odafone

    Essar11,14,65,260 23.81% 7,86,80,291.00 24.12% 41.67 -1.30

    3 IDEA 7,07,48,936 15.11% 4,85,16,824.00 14.88% 39.54 1.60

    4 BSNL 6,80,65,817 14.54% 5,07,00,367.00 15.55% 40.29 -6.46

    5 Aircel 4,32,96,659 9.25% 2,31,01,900.00 7.08% 87.42 30.58

    6*RelianceTelecom

    1,63,11,206 3.48% 1,32,81,225.00 4.07% 22.81 -14.43

    8 MTNL 49,47,938 1.06% 43,32,631.00 1.33% 110.50 -20.43

    9 Loop Mobile 29,47,228 0.63% 23,50,537.00 0.72% -99.10 -12.64

    7 Uninor 68,73,798 1.47%NewEntrant

    10 ideocon 27,77,396 0.59%NewEntrant

    11 Stel 14,23,043 0.30%New

    Entrant12 Etisalat 30,023 0.01%

    NewEntrant

    All India 46,81,08,186 32,61,41,410.00 43.53

    !

    7.78 " 1.3

    1.6

    "

    6.46

    30.58

    !

    14.43

    "

    20.43

    !

    12.64

    "

    30

    ! 20

    "

    10

    0

    10

    20

    30

    40

    % increase in market share over lastyear

    % increase in mar#

    et share over

    last year

    Forma$ $

    ed%

    Fon& '

    (Defaul&

    ) +Headings, 12 p

    Fon&

    color'

    Black, Expanded by 0.25 p&

    , Kern

    14 p&

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    8/18

    8

    Airtel Subscriber base byregion:

    City/Circle May'2010 Jun'2010 Jul'2010 % Sharein July '10

    Delhi 6204025 64,91,381 6802779 35

    Mumbai 3109236 31,63,526 3185027 17.66

    Chennai 2704067 27,96,432 2856044 30

    Kolkata 2844709 28,74,419 2897038 23.47

    Maharashtra 6701424 67,90,940 7117832 22.97

    Gujarat 5760204 57,90,032 5794875 21.65

    A.P. 13547616 1,38,45,579 14089766 41.23

    Karnataka 13209270 1,34,06,397 13418999 48.61

    T.N. 8423702 85,74,807 8642745 23.1

    The Price wars:

    Telecom revenueswere increasing at 30 to 40% per year for the mobile operator.

    The growth ofthevoiceanddata numbersfell to only 3.6%. Thisisadramaticfall in

    revenuesfor the mobile operator. The reason forthisis increasedcompetition, call

    rates at 1paisa per second. So thevoice segment is completely commoditized. The

    average RPU has decreased dra matically. The new operators are offering calls per

    minute at relatively very low prices. This has changed the game and has brought

    down revenuesdramatically.

    The price war among operators was sparked when one of the country s largest

    mobile

    carrie

    rs, Rel

    iance

    , cut pre-

    paid rate

    s by up to 60%

    , re

    ducing the

    cost of aone-minute national call from INR2.49 to INR0.99. It was further fuelled by Tata

    Docomos one paisa persecond proposition.As Airtelstrivedto match thesewith a

    decreasein ARPU, itfacedless ARPUsandsaw,which inevitablyleadtoadeclinein

    its profitability . The pricewars might be furtherexacerbated by the MNP (Mobile

    Number Portability) which isscheduledto roll outfrom October 31 st.

    Not justthevoicecalls, but SMS servicesand Internet ratesalso sawadeclinewith

    south major Aircel being thefirstto offer GPRS at Rs.5aday andthiswasfollowed

    by Airtel. Airtel , being a major player has neverinitiated pricecuts, buthasfollowed

    the strategy of matching price cuts initiated by newentrants in markets to protect

    its share. Yet, it has lost a little in terms of the emerging highly price sensitive

    customers (mainly from semi-urban and rural markets) to the price based new

    entrantcompetitors.

    However, the 3G spectrum auction and the acquisition of Wireless broadband

    licenses have seen operators including Airtel , shell out huge sum. This has led to a

    lull in the price drops and a tariff rationalisation might be on the cards. However,

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    9/18

    9

    though the 3G tariffwould be high forearlyadopters, a5% orso penetration would

    not help operators recover their investments and so another price war might

    emergewith a rationalisation of 3G tariffs. There has been some speculation thatthe countrys smaller players may not be able to survive a pricewar aswell as the

    larger operators.

    Degree of differentiation & switching costs:

    In the earlier business model of the mobile industry, the SIM costs and the initial

    costscreatedswitching costs. Also, withoutnumber portability , thelarger operators

    who signedup asubstantialsubscriber baseearliercouldsustain a price premium.

    But the price wars and number portability approval by the Government have

    eroded this advantage. With SIMm card costs coming to zero and number

    portability in the offing, operators have no option but to match the price cuts ofcompetitors low price being the key attempt at differentiation by the new

    entrants. The bestway forward in differentiating their service for large operators

    such as Airtel is through AS ( alue Added Services) and this is an area (coupled

    with 3G) that Airtelisapparentlyfocusing on.

    VAS Value Added Services & 3G :

    Mobile value-added services (m-VAS) is the ability offor cellular operators and

    service providers to charge a premium price for the services (beyond voice

    conversation) they offer to their subscribers (mobile users). Airtel has been at the

    forefrontof mVAS contentand offers.

    mVAS industrysize-5000 crores.

    Theyear on year growth o f mobileVAS is25% andthisyear, the growth isexpected

    to be not less than 20%. MobileVAS revenue isexpected to touch Rs 14,500 crore

    byDecember2010, a hefty22 .3% jump from the Rs 11,860 crorerevenueestimated

    attheend of June2010. Indian MobileVAS revenueistoday valuedat .4 billion and

    it is projected to touch $ 4 billion in the next5years . As of now, 70% ofVAS users

    belong to urban India while the balance 30% come from rural India. There are

    Oover 375 million mobile subscribers in India , out of which 8-10% of the total

    mobile subscribers are expected to be GPRS (General Packet Radio Services)

    subscribersaswell.

    As per TRAI predictions, mobile VAS revenue growth contributing to

    telecommunication industryis expectedto grow to 30% in next5-7years , which is

    way beyondthecurrentcontribution of 10-12%. Mob ileVAS in India is projectedto

    be 1 billion USD marketby2010.

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    10/18

    10

    Revenuefrom VAS Valued Added Services, which includesVoice Mail Service, Call

    Management, Airtel Talkies and othervalue added services like Hello Tunes, Music

    on Demand and Airtel Live contributed to approximately 11 .6% of the totalrevenues.

    The non-voice business madea greatercontribution to Airtelsrevenuewhich bo des

    well for future prospects. In India Operators retain 60% of the VAS revenue,

    whereastheaggregator gets25% and 15% goesto thecontentownerandthistrend

    is goodfor Airtelasitlooksto expanding its VAS portfolio.

    The high and mid customer segment as per SEC grid contribute to only 40% of the

    total mobile customer base in India . Balance 60% low end segment are using the

    lowcosthandsetswhich do notsupporttheVAS . Even in the midsegment, itis only

    theyouth segmentwhich drivestheVAS marketgrowth in India .

    For Airtel, this youth, which is its target and the bulk of its subscriber base, is thekey driver of subscriber growth andwith music and games orientedVAS, Airtel is

    likelyto geta greatershare oftheVAS revenues.

    Another advantagefor Airtelisthattherevenue marketsharedivided bycustomer

    market share is highest for Airtel . Thus, theearly adopters of 3G andVAS services

    are a part of the Airtel subscriber base and they can be expected to driver the

    growth.

    Company Average Revenue Average Subscibers Revenue/Customers

    Aircel 259.6707667 2,82,58,084 91.89%

    Loop 40.4885 25,72,409 157.40%

    Idea 860.6938778 5,42,48,044 158.66%

    Vodafone 1366.538789 8,71,24,003 156.85%

    91.89%

    157.40% 158.66% 156.85%

    177.32%

    92.19%

    Aircel Loop Idea Vodafone Airtel Reliance

    Reve ue/Customers

    Revenue/(

    ustomers

    Forma) )

    ed0

    Fon1 2

    (Defaul1

    ) +Headings, 12 p

    Fon1

    color2

    Black, Expanded by 0.25 p1

    , Kern

    14 p1

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    11/18

    11

    Airtel 2033.59695 11,46,87,724 177.32%

    Reliance 135.8888889 1,47,40,535 92.19%

    One of the major leap Bharti Airtel took thisyear in theVAS fieldwas launching of

    the App Store. Thelaunch ofthisservice hasextendedthereach ofapp storesto all

    the basic phone users from the current smart phone users. It supports over 550

    devices across all major operating systems making it a totally device agnostic

    platform. It has seen over 2.5 mn downloads within just first month of its launch

    with bulk of these customers coming from tier II cities. Airtel also launched m-

    bazaar, a utilitarian & livel ihoo d enhancing service, it brid ges the information

    divide, enabling the mobileuserto getclassified on the go.Be it jobs, matrimonial,

    realestate or buying & sell ing goods. Overall 4 mn consumersareusing this service.

    The 3G services which are expected to drive the growth in VAS are slated to be

    launched by September by Airtel. Sanjay Kapoor, President-Mobile Services, Bharti

    Airtel, informed that the core network is already 3G ready while content,

    application and IT is getting p reparedfortherolloutin September.

    Airtel haswon 3G spectrum in 13 circlesforatotalconsideration ofRs 12,295.46 cr

    andthisis comparativelya huge 3G footprintin India .

    Mobile Network Quality:

    Anotherkeyarea ofdifferentiation is Mobile Networkquality . With theinception of

    high quality voice, data and video services through 3G the strain on the existing

    mobile infrastructure will increase considerably. Even with the currentpredominantly voice service, In an independent survey on the GSM and CDMA

    mobile services in India , the Mobile Network Quality emerged as the most

    important consideration for India s GSM and CDMA Mobile service users when it

    comesto selecting a Service Provider.

    The Telecom sectorin India hasascarcity ofspectrum andthe hypercompetition in

    the sector has resulted in networks whose performance has not kept up with

    demand.Nielsens Mobile Consumer Insights survey, which indicates that network

    satisfaction, is driving overall satisfaction with services, offered by the Service

    Providers.

    Airtel scores here with its core strategy of passive infrastructure setup and its

    strategy of outsourcing all such installations. The number of towers is a key to

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    12/18

    12

    better networkquality . Thesametelecom towercan beused by multiplecompanies

    for distributing the signals. Companies have already started to share their

    infrastructure to bear with the tower investment pains. Indus Towers, a joint

    venture ofVodafone (42%), Bharti Airtel (42%) and IDEA (16%) isfastgrowing and

    already has morethan 1,00,000 Towersup andrunning andclaiming itselfto bethe

    Worlds largest Tower company by installation units. This ensures that Airtels

    network quality , especially in view of 3G services is on parwith any player in the

    mobile industry and yet keeps its tower installation costs low (each tower costs

    aboutRs.2crores).

    Rural markets:

    A key growth area for Airtel in India is the rural market. In rural India , the

    teledensity is just about 15-20% and has huge growth potential. Rural India which

    probably accounts for more than 60% of the new customers is still under 20%

    penetrated. Airtel currently has ~22% market share in rural India . Airtels youth

    focusisa greatassetto itastheyouth arethe primary driversfor mobileservicesin

    therural market.

    The mobile owning youth population in rural India in 2010 is 94.6 million and the

    revenuefrom them isabout$2060 millions (projected) .

    Some Airteltacticsin rural India

    Airtel tied up with Iffco to reach out to farmerswhile Idea has an agreementwith

    Reuters Market Light to provide information to farmers. Airtel gets access to Iffco

    membersandsendsthem updates on agriculture, weatherandrelatedinformation .

    About99% ofAirtelscommunication to ruralcustomersisin their nativela nguage.

    CanopyDeployment: An Airtel initiative , it allows every rural distributor to have

    one canopy. This is a service centre and shop that can be dismantled and set up at

    every basetransceiverstation . Thiscatersto customerswho are on the periphery of

    thesiteandarefarawayfrom the main town.

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    13/18

    13

    AFRICA:

    The African ain acquisition is aimed at making Airtel the most loved brand in

    Africa by 2015. Bharti Airtel Africa has 36 MN customerswith an ARPU of $7.4 /

    Month [Rs 333].Bhartiand ain Africatogetherwould haverevenues of US$ 13 bn,

    EBITDA of US$ 5 bn. It is among the top three operators in terms of geographical

    coverageandwill beamong thetop 5 operatorsin terms ofsubscriber base

    ain Africa presented a significant opportunity for Airtel to deploy surplus cash.

    Bhartiwill start generating free cash flow (FCF) from FY12E (high capex in FY11E

    on accountof3G outgo) .

    ~500 mn population, ~35% teledensity, strong GDP growth and low competitive

    intensity made ain Africa a preferred target. On an average, three-five operators

    are present in African countries where ain is operating, far less than the 14 in

    India faced by Airtel.

    ain Africas tariff stood at US$ 0.07 per minute, which is roughly 6.5times that of

    Bharti Airtel in India . The managementseems confident of replicating its minute

    factory model. Bhartiintendsto replicateits outsourcing and passive-infrastructure

    sharing model in the African continent and it expects to rationalise the opex and

    capexsignificantly. This has been successfullyimplementedin India .

    The management is confident that African marketwill show usageelasticity . MOU

    for ain Africa is in downwards of 100 minutes per subscriber per month, against

    Bhartis figure of 446 minutes (3QFY10). The management cited example of Sri

    Lankan market, where Bharti has rolled out green-field operations and has

    witnessedelasticityimpact.

    The integration of ain Africawith Bhartiwill happen within six months of closing

    thetransaction. Regulatoryapprovalsareexpectedto come on time.

    Airtel has five 3G licenses in the 15 countries it operates in Africa. Airtel offers its services in 16 African countries now- Burkina Faso, Chad, Democratic Republic of

    the Congo, Republic ofthe Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger,

    Nigeria , Seychelles, Sierra Leone, Tanzania, U gandaand ambia .

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    14/18

    14

    Airtel in Burkina Faso is the dominant player with 1,433,000 customers representing

    50% market share. A pioneer in the Chadian telecom industry, Airtel in Chad is the no. 1

    operator with 69% market share. The rapidly growing mobile sector in Gabon grew by

    16.5 percent from 2007 to 2008 according to statistics from the Bank of Central African

    States. Airtel in Gabon has 829,000 customers and its market share stood at 61%.

    Airtel in Ghana has over 1 million customers. Airtel Kenya customers stand at 2,418,000

    million with 17% market share. Airtel holds second place in the mobile telecom market

    in Madagascar, has a 39% market share and over 1.4 million customers. Airtel in Malawi

    is the market leader with a market share of 72%. Airtel in Niger is the market leader with

    a 68% market share.

    Airtel in Congo is the market leader with a 55% market share.

    Airtel is the leading comprehensive telecommunications services providers with over

    55% market share of mobile market in Seychelles.

    Airtel in Tanzania is the market leader with a 38% market share. Airtel in Uganda stands

    as the no. 2 operator with a market share of 38%.

    The teledensity of Africa is about 30% and the market is rapidly growing. With its

    position as no.1 or 2 in most African markets, Airtel is poised to make the most of the

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    Market s are i terms of# subscribers

    Mar 3 et share

    Forma4 4 ed5 Fon 6 7 (Defaul 6 ) +Headings, 12 pFon

    6

    color7

    Black, Expanded by 0.25 p6

    , Kern

    14 p 6

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    15/18

    15

    African mobile boom. Also, the ARPUs in Africa are higher than India and consequently

    the market is more profitable.

    WIRELESS, TELEMEDIA & DI ITAL TV

    SERVICES:

    The Telemedia business provides broadband, IPTV and telephone services in 89

    Indian cities. The Telemedia business provides services in 89 Indian cities and

    consists of tw

    o brands.

    Airtel

    Broadband prov

    ide

    s broadband and IPTV

    se

    rv

    ice

    s.

    Airtel provides both capped as well as unlimited download plans. The maximum

    speed available for home users is 16Mbps. Airtel Fixed Linewhich provides fixed

    line services. Airtel has about 3.15 million wireline customers, ofwhich 42.6% are

    broadband/internet subscribers as of August 2010. Until September 18, 2004,

    Bharti provided fixed-line telephony and broadband services under the Touchtel

    brand. Bharti now providesall telecom services including fixed-lineservicesunder

    acommon brand "Airtel".

    TheDigital TV business provides Direct-to-Home (DTH) TV services across India

    under the brand name AirtelDigital TV. It started services on 9 October 2008 and

    hasabout32.44 million customersas ofAugust2010 .

    Broadband penetration in India is one ofthelowest- 0.63% (7.40 mn)

    Keystatsfor Airtel

    Wireless Customer marketshareleadership at23.5%.

    Total minutes on networkcarriedin Q2 164 billion.

    Largestprivate operator having presencein thevoice , broadband , IPTVanddata.

    Voice (wire-line) andData (DSL) Presencein 95top cities ofIndia .

    TargetSegment: Retailand Small and Medium Enterprises.

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    16/18

    16

    Customer base: 2.9 million

    Broadband (DSL with speeds>256 kbps) penetration at41% ofcustomer base.

    Average ARPU $ 20.6 per month.

    Segmentcontributing to 9% ofoverallrevenues ofthecompany.

    EBITDA margin ofover 42.9%.

    Digital TVindustryexpand by9 mn customers, almostequalto the numbersit grew

    by in the preceding five years. AirtelDigital TV today caters to customers in over

    5,000 townsandthousands ofvillages. Ithasacustomershare ofover25% amongst

    newcustomersadded, in a highlycompetitive marketwith as manyassix paid DTHplayers. In ashortspan o f20 months of operations, it has gained marketleadership

    in acquiring newcustomersin eleven outofnineteen stateclusters.

    SUMMARISI :KEY PROFIT DRIVERS:

    The key growth and profit driver for Airtel are the mobile services in India

    and Africa.

    In India , the high-end customers and the rural youth are the key target

    audience. The high-end customers are expected to be the early adopters of

    3G enabled mVAS services, thus driving up APRUs. The rural youth are

    expected to identifywith the youth, music andentertainment positioning of

    Airtel and drive the MOUs (minutes of usage) and the subscriber base the

    most important success and chased metric in the industry currently. The

    market in India has a teledensity of 45% and only about 15-20% in rural

    India . Theyarealso high growth markets.

    Thevoicerevenues howeveraredriven verylowdueto thecommoditisation

    of voice calls through a number of new entrants who use price as a

    differentiation factor to grab subscriber base (highly pricesensitive market)

    and due to excess capacity in the urban markets. The licensing and

    regulations such as 3G spectrum auctions and MNP (mobile number

    portability) are key to the profits in this industry and Airtel is favourably

    poisedto facethese.

    Forma8 8

    ed9

    Fon@ A

    (Defaul@

    ) +Headings, 12 p

    Fon@

    colorA

    Black, Expanded by 0.25 p@

    FormaB B

    edC

    Lis@

    Paragraph, Bulle@

    ed + Level

    +D

    ligned a@ A

    0.25" + Inden@

    a@ A

    0.5"

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    17/18

    17

    The network quality , afunction oftheinfrastructureisafavourable recipient

    of the Airtel strategy of passive infrastructure deployment. The African

    market is poised to a similar growth trajectory and the market is less

    competitive.

    Thereisadistinctmatch between thecompanysvision

    By2010 Airtelwill bethe mostadmired brandin India: Loved by morecustomers

    It is one of the largest brands and itsvision of leading the African market by 2015

    seemsto have begusverywell.

    The intense competitiveness of the Indian telecom markets would be

    important. If Airtel continues to deal with this successfully (and it has in

    place the requisite resources - infrastructure and the 3Gg & broadband

    licenses), it couldwell achieve its growth visi on profitably and sustainably.

    The allied services of telemedia , enterprise and DTH might seem to

    cannibalise, butin thelong run could onlyadd to the Airtel profitsasthecore

    industriesare growing andany one of them could beafuture profitdriver

    leaving Airtelwith very opportunityto capita lise on this.

    On the whole Airtel s operational strategy, its competitive positioning and

    the M&A and passive infrastructure strategy coupledwith its resources are

    profitdriversandwould help thecompanyachieve high sustainable profits.

    Keystatsfor Airtel

    Wireless Customer marketshareleadership at23.5%.

    Total minutes on networkcarriedin Q2 164 billion.

    Largestprivate operator having presencein thevoice , broadband , IPTVanddata.

    Voice (wire-line) andData (DSL) Presencein 95top cities ofIndia .

    TargetSegment: Retailand Smalland Medium Enterprises.

    Customer base: 2.9 million

    Broadband (DSL with speeds>256 kbps) penetration at41% ofcustomer base.

    FormaE E

    edF

    FonG H

    (DefaulG

    ) +Headings, 12 p

    FonG

    colorH

    Black, Expanded by 0.25 pG

    FormaI I edP LisG Paragraph, BulleG ed + Level+

    Q

    ligned aG H

    0.25" + IndenG

    aG H

    0.5"

  • 8/8/2019 Poornima Modified BAVFS -Airtel

    18/18

    18

    Average ARPU $ 20.6 per month.

    Segmentcontributing to 9% ofoverallrevenues ofthecompany.

    EBITDA margin ofover 42.9%.