A Market Orientation Airtel Jammu

A Market Orientation June – July 2008 Bhisham Padha 45 MBA 07

In Debt & Acknowledgement Gagan Bakshi Manager, Acquisition “Our guide and mentor for the summer who facilitated this study at every leve==l”

Prof.B.C.Sharma Co-ordinator, Placement “For your kindness and encouragement in-addition to getting us to the company of our choice”

Prof.Keshav Sharma Director The Business School, University of Jammu

The Placement Team “We shall forever be indebted to all of you for giving us an opportunity to learn about business”

A sincere thanks to all the distributors and retailers of the Airtel® Brand.

June & July 2008 saw an unprecedented secular peoples movement and public uprise in the history of the country. The virtually complete bandh self-imposed and government imposed brought business to a standstill in the city for two months. The public protest manifested in different ways such as the “Jail Bharo Andolan” where more than 2,00,000 people participated defying curfew. Several hundred activists sustained injuries and some even attained martyrdom.

There was an approx 4000 Crore impact on local

Time Management

The World & GSM • There are 3,773,502,786 active GSM connections in the world as of 1 September 2008. • Global system for mobile communication (GSM) is a globally accepted standard for digital cellular communication. GSM is the name of a standardization group established in 1982 to create a common European mobile telephone standard that would

Number of Connections, GSM Source: Wireless Intelligence Inc

World Trends & The Immediate Future   First, the convergence of the mobile and internet worlds is fully underway and presents both great oppurtunities and significant technological and other challenges. 

Second, it is now clear that the mobile industry has considerable and positive impact on the social and economic well-being of individuals, businesses and nations. 

Thirdly, the pace of innovations and development in mobile is increasing, with the market demanding that effective soulutions at faster speeds and lower costs.

India Market

Telecom Sector • Telecoms markets are a typical indicator of economic growth and industrialization. • India is now the fastest growing market in the world. • Every month another 9 million people become mobile subscribers, making India second only to China in market size. • Informa Telecoms & Media estimates that today’s 242 million mobile subscriber base will have more than doubled to 582 million by 2013. India’s telecommunications revolution is a source of great wealth and employment. • More than 350 million people still live on less than a dollar a day, the international yardstick of extreme poverty, and 1 million die each year because of a lack of basic healthcare. • Rural teledensity is just 6% of the population.

Rural / Suburban Markets • With use of low ARPU business models, operators are beginning to address the rural communications market. According to Telecoms Regulatory Authority India (TRAI), rural mobile subscribers increased 18% in the first quarter of 2008 to 62 million, compared to a 1% fall in rural fixed lines to 11 million.

Sector Cntd India is the world’s second most populated country with a low mobile penetration of approx 15%. Can go upto 50% of the complete population. Approx 7.5% growth rate Strong telecom growth driven by low mobile penetration – low calling prices – strong economy – increasing disposable income Mobile share of growth expected to be over-proportionate Government has clear teledensity targets – 500m subscribers by 2010 – 20m broadband subscribers by 2010

India Summary India has a large, fast growing and under penetrated market with significant regulation by the Government. Classic business theory suggests the following strategic objectives for a market like India

1.Expand distribution and network coverage to capture market share 2.Drive a customer focused approach 3.Leverage Airtel products and services 4.Manage and lower costs to sustain

Domain Dashboard The Connections Basis

Number of connections (pre-paid/contract) Number of connections (by technology) Current rank by connections Market share of connections Growth rate of connections (quarterly/yearly) % of connections Market penetration Net additions Market share of net additions Gross additions Disconnections

Study Summary The telecommunication industry is a very complex one. It needs much time to understand the dynamics of the industry let alone coming out with suggestions and recommendations which are insightful or clever enough to change the way business is done.

Nevertheless, we believe that strong fundamentals and an attempt at understanding the basics of the telecommunication sector and its revenue model is inherent to understanding the Company’s role in the industry. We need to continually understand and study how our product is being used in the market and what consumers could possibly

Insight Gained We identified the key variables under the three operational basis heads of connections, operational and financials. In the future the study team will work on bringing an online version of the key variables. The development of a domain dashboard is an original document. India is a huge and complex market presently at 19% penetration with a customer base of approx 285 million people. Around 32% of the customer base is in the youth segment. Past : business present: FMCG future: commodity Pricing : advance pricing policy Cellular service is a Virtual Product with Real Time Pricing, unlike traditional goods the product is not tangible and could be safely classified as service. Increased competition from all quarters and government regulation is insuring that the business rapidly responds to market conditions.

Regulation : Number Portability, SMS Banning, Internal Security Operating Environment : of a business such as the sociopolitical stability of the J&K circle The business and industry is technology intensive and dependent. With a couple of Airtel’s critical business functions now outsourced, will any SLA's be affected in view of the current economic crisis of the economic world. This question needs to be deliberated.

Everyone uses the telephone the lower, middle and upper segments of the society, with a customer base of ~ 250 million soon, its not easy to group or classify consumers. Perhaps an attempt could be made using Business Intelligence software to arrive at eminent clusters, hence no matter what sample size you take or the way you design your questionnaire it would always have an inherent skewness. The entry of CDMA players in the local service area will impact Airtel’s customer base esp in the area of New Additions or Acquisition. To an extent the change is natural.

Company Profile •

Bharti Airtel is one of India's leading private sector providers of telecommunications services based on an aggregate of 71,777,448 customers as on June 30, 2008, consisting of 69,383,716 GSM mobile and 2,393,732 Bharti Telemedia subscribers.

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The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - mobile services, telemedia services (ATS) & enterprise services. The mobile services group provides GSM mobile services across India in 23 telecom circles, while the ATS business group provides broadband & telephone services in 94 cities. The enterprise services group has two sub-units - carriers (long distance services) and services to corporates. All these services are provided under the Airtel brand.

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Company shares are listed on The Stock Exchange, Mumbai (BSE)

Strategic Partners • The company has a strategic alliance with SingTel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. • The company’s mobile network equipment partners include Ericsson and Nokia. In the case of the broadband and telephone services and enterprise services (carriers), equipment suppliers include Siemens, Nortel, Corning, among others. The Company also has an information technology alliance with IBM for its group-wide information technology requirements and with Nortel for call center technology requirements. The call center operations for the mobile services have been outsourced to IBM Daksh, Hinduja TMT, Teletech & Mphasis.

Fact Sheet Name Bharti Airtel Limited Business Description Provides mobile, telemedia and enterprise services Established July 07, 1995 Revenue Rs 270,122 million (YE mar 31, 2008) Rs 184,202 million (YE mar 31,2008) Indian GAAP EBITDA Rs 114,018 million (YE mar 31,2008) Rs 74,407 million (YE Mar 31,2008) Indian GAAP Shares In Issue 1,898,020,804 on june 30, 2008. Listing BSE, NSE Market Cap Rs 1,391 billion | BSE Rs. 732.90 As on October 08, 2008-10-09 Customer base 69,383,716 GSM mobile and 2,393,732 telemedia customers Status as at June 30, 2008-10-09 Network Provides GSM mobile services in all the 23 telecom circles in In

Brand vision and promise By 2010 Airtel will be the most admired brand in India:   Loved by more customers Targeted by top talent Benchmarked by more businesses   “We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little

CSR & Environment

Responsibility These Values are:   • To be responsive to the needs of our customers • To trust and respect our employees • To continuously improve our services – innovatively and expeditiously • To be transparent and sensitive in our dealings with all stakeholders  We encourage our employees to take decisions and design business processes, keeping in mind the following:   • Ethics, fairness and being correct • Meeting and going beyond compliances and legal requirements

Competition • • • • • •

Competition BSNL Vodafone Tata Indicom Reliance Aircel

Mobile Market Share

Product • Total Cost Control • Pre activated STD/ISD without deposits or rentals • Strong Network coverage • Instant Balance and Validity Enquiry • Recharge your Airtel Prepaid • Prepaid Roaming • More with Airtel Prepaid • Reach us Anytime Anywhere

Market Research Deficiency of the formal approach to Marketing research. “Market research is not about designing a questionnaire and sampling and other things marketing research is about getting information and knowledge from the market and leveraging it for business”

Project under summer training:-(The Business School, UNIVERSITY OF JAMMU) Dear Retailer, the particular survey by the means of Questionnaire is organized to gather your viewpoint regarding different trade schemes of AIRTEL with reference to BSNL & AIRCEL. Name ________________ Lappu No._________________ Location_____________ 1. 2. 3. 4.

OUESTIONNAIRE Along with Airtelany other Franchises. (Yes/No) Which Company is the main behind your daily sale? A) Airtel B)BSNL C)Aircel Company that offers most attractive trade schemes. A) Airtel B)BSNL C)Aircel Best trade scheme of Airtel A)SimActivation B)LappuCommission C)Lappu SimOffers

D)Recharge Discounts E)Billing Offers 5. Best competitive trade schemes of other BSNL A)SimActivation B)LappuCommission D)Recharge Discounts

E)Billing Offers

F)Other C)Lappu SimOffers F)Other

Aircel A)SimActivation

B)LappuCommission

C)Lappu SimOffers

D)Recharge Discounts E)Billing Offers F)Other 6. Your level of awareness towards schemes of Airtel A)High B)Moderate C)Low D)Poor 7. Your level of satisfaction towards schemes of Airtel A)High B)Moderate C)Low D)Poor 8. Best scheme that your Airtel distributor provides you ______________________________________________________________ 9 Which Airtel trade shceme may increase your sale A)SimActivation B)LappuCommission C)Lappu SimOffers

Trade Schemes Trade Promotion Offered by the company or sometimes by the channel distributor also Introduced to earn interests of customers and the retailers Vary from market to market Examples:- Sim activation, lappu commission, lappu sim offers, recharge discounts, billing offers and others.

Findings POSITIVES: • • • • • •

Airtel is the leader in introducing its trade scheme Captured almost more than 65% of the market Sim Activation is regarded as the best trade scheme of Airtel Regular sms’s for the retailers awareness. 80% retailers are highly aware of these trade schemes. Highly agreed with Airtel than that of Bsnl, and that of Aircel

NEGATIVES: some dissatisfaction among retailers causes due to • Reduction in lappu commission • Distributors are not promissory to the retailers and sometimes they hide the related information • FOS behaviour is not seen good • Decrease the network range upto 1.5kms along the border regions of the rural market • Small inspection done by the company • Less security for the customers and the retailers also.

Thank You

Research Never Ends..