Company Analysis Report On Airtel

INTRODUCTION TO THE STUDY

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Need For the Study As a student of Business Administration a need is felt to understand the Overview of an Organization in its Financial, Marketing and Human resource Performance examining the overview of the above factors will help a student like me to gain insight in the Mission, Vision and Operational Goals and Strategies of Organization to perform well to the satisfaction of its stake holders.

Objectives of the Study The Indian communications scenario has transformed into a multiplayer, Multi product market with varied market size and segments. Within the basic phone service the value chain has split into domestic/local calls, long distance players, and international long distance players. Apart form having to cope with the change in structure and culture, Airtel has to gear itself to meet competition in various segments- Basic services, long distance, International Long Distance and Internet Service Provision. It has forayed into mobile service provision as well. Objectives are: What are strategies that Airtel is implementing to defend and increase the market share    

To know about the telecom industry. To know the present scenario of telecom industry. To know the factors affecting the growth of telecom industry. To analyze the Different statements of Balance sheet, Profit and loss account. Cash flow statement and HR Information

Scope of the study 2|Page

The Scope of Company analysis is limited to one company Bharti Airtel, to know its performance, by analyzing the secondary data from various sources and understanding them.

Limitations of the study The study is carried completely by considering data. As the study is carried completely relying on secondary sources no first hand Information have been gathered or collected from company officials relating to research.

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INDUSTRY PROFILE

A midst all the talk of slowdown in the Indian economy, telecom is one sector that has had a fairly good year in terms of subscriber additions and revenue growth in 2008.Mobile service companies 4|Page

have managed to add subscribers at the rate of eight million a month in 2008. This makes India the second fastest growth for mobile services in the world. However, even as this gives some reason to cheer for the telecom incumbents, there are a few trends in key metrics of the companies that suggest increasing pressure on margins. This is not the situation only this year the subscriber base of Indian telecom industry is increasing day –by-day and year –by – year. If we just have a glance on the Indian telecom industry it is divided into 23 circles spread allover the country with 9 Operators in the country. A large population, low telephony penetration levels, and a rise in consumers' income and spending owing to strong economic growth have helped make India the fastest-growing telecom market in the world. The first and largest operator is the state-owned incumbent BSNL, which is also the 7th largest telecom company in the world in terms of its number of subscribers. BSNL was created by corporatization of the erstwhile DTS (Department of Telecommunication Services), a government unit responsible for provision of telephony services. Subsequently, after the telecommunication policies were revised to allow private operators, companies such as Bharti Telecom, Tata Indicom, Vodafone, MTNL, Idea, Vodafone and BPL have entered the space as Major Operators in India. However, rural India still lacks strong infrastructure. In 2007, an article by Business week magazine reported that India's mobile phone market is the fastest growing in the world, with companies adding some 6 million new customers a month. The total number of telephones in the country crossed the 300 million mark on June 18 2008. The overall tele-density has increased to 36.98% in March 2009. In the wireless segment, 15.87 million subscribers have been added in March 2009. The total wireless subscribers (GSM, CDMA & WLL (F)) base is more than 391.76 million now. The wire line segment subscriber base stood at 38.22 million with a decline of 0.13 million in October 2008.

Growth of mobile technology 5|Page

India has become one of the fastest-growing mobile markets in the world. ]The mobile services were commercially launched in August 1995 in India. In the initial 5–6 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 millions. However, after the number of proactive initiatives taken by regulator and licensor, the monthly mobile subscriber additions increased to around 2 million per month in the year 2003-04 and 2004-05. Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in the early years because of the high price of hand sets as well as the high tariff structure of mobile telephones. The New Telecom Policy in 1999, the industry heralded several pro consumer initiatives. Mobile subscriber additions started picking up. The number of mobile phones added throughout the country in 2003 was 16 million, followed by 22 million in 2004, 32 million in 2005 and 65 million in 2006. The only country with more mobile phones than India with 246 million mobile phones is China – 408 million. India has opted for the use of both the GSM (global system for mobile communications) and CDMA (code-division multiple access) technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only. In 2005 alone 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market. In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year. In April 2008 the Indian Department of Telecom (DoT) has directed all mobile Phone service users to disconnect the usage of unbranded Chinese mobile phones that do not have International Mobile Equipment Identity (IMEI) numbers, because they pose a serious security risk to the country. Mobile network operators therefore planned to suspend the usage of around 30 million mobile phones (about 8 % of all mobiles in the country) by April 30.

Revenue and growth The total revenue in the telecom service sector was Rs. 86,720 crore in 2005-06 as against Rs. 71, 674 crore in 2004-2005, registering a growth of 21%. The total investment in the telecom services sector reached Rs. 200,660 crore in 2005-06, up from Rs. 178,831 crore in the previous fiscal. Telecommunication is the lifeline of the rapidly growing Information Technology industry. Internet subscriber base has risen to 6.94 million in 2005- 2006. Out of this 1.35 million were broadband connections. More than a billion people use the internet globally. Under the Bharat Nirman Programme, the Government of India will ensure that 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), 6|Page

will be connected. However doubts have been raised about what it would mean for the poor in the country. It is difficult to ascertain fully the employment potential of the telecom sector but the enormity of the opportunities can be gauged from the fact that there were 3.7 million Public Call Offices in December 2005 up from 2.3 million in December 2004. The value added services (VAS) market within the mobile industry in India has the potential to grow from $500 million in 2006 to a whopping $10 billion by 2009. On the other hand, in the mobile telephony space, Airtel controls 21.4% subscriber base followed by Reliance with 20.3%, BSNL with 18.6%, Vodafone with 14.7% subscriber base (as per June 2005 data). Following list shows the GSM subscriber figure till Jan 2009 1 Bharti Airtel -------------------88382758--------------------- 33.04% 2 Vodafone Essar---------------- 63340024 ----------------------23.68% 3 BSNL---------------------------- 42673357 ---------------------15.95% 4 IDEA ---------------------------40016153 ----------------------14.96% 5 Aircel--------------------------- 16761397---------------------- 6.27% 6 Reliance Telecom --------------10353841--------------------- 3.87% 8 MTNL--------------------------- 4003807 ------------------------1.50% 9 BPL------------------------------ 2007303----------------------- 0.75% The mobile service has seen phenomenal growth since 2000. In September 2004, the number of mobile phone connections has crossed fixed-line connections. Currently there are an estimated 201.29 million mobile phone users in India compared to 39.73 million fixed line subscribers. India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players are Airtel, Reliance Infocomm, Vodafone, Idea cellular and BSNL/MTNL. There are many smaller players, with operations in only a few states.

Origin of Cellular Telephony 7|Page

1947 Bell Laboratories introduced the idea of cellular communications with the police car technology. The basic concept of cellular phones began, when researchers looked at crude mobile (car) phones and realized that by using small cells (range of service area) with frequency reuse they could increase the traffic capacity of mobile phones substantially. However at that time, the technology to do so was nonexistent

1968 AT&T and Bell Labs proposed a cellular system to the FCC of many small, low-powered, broadcast towers, each covering a 'cell' a few miles in radius and collectively covering a larger area. Each tower would use only a few of the total frequencies allocated to the system. As the phones traveled across the area, calls would be passed from tower to tower.

1973 (April) The first call on a portable cell phone is made by Dr Martin Cooper, a former general manager for the systems division at Motorola, who is also considered the inventor of the first modern portable handset

1979 The first commercial cellular telephone system began operation in Tokyo

1982 FCC authorizes commercial cellular service for the USA

1987 Cellular telephone subscribers exceeded one million and the airways were crowded

1991 Commercial launch of cellular service based on GSM standard in Finland

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History of Cellular Telephony in India 1992 Telecommunication sector in India liberalized to bridge the gap through government spending & to provide additional resources for the nation’s telecom target. Private sector allowed participating.

1994 License for providing cellular mobile services granted by the government of India for the Metropolitan cites of Delhi, Mumbai, Kolkata & Chennai. Cellular mobile service to be duopoly (i.e. not more than two cellular mobile operators could be licensed in each telecom circle), under a fixed license fee regime for 10 years

1995(August) Kolkata became the first metro to have a cellular network

1997 Telecom Regulatory Authority of India is set up

1998 Annual foreign investment in telecom stands at Rs 17,756.4 million.

1999 FDI inflow into telecom sector falls by almost 90% to Rs. 2126.7 million. Tariff rebalancing exercise gets initiated

1999 National Telecom Policy is announced

2000 Amendment of TRAI Act FDI inflow drops further down to Rs 918 million

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Growth trends The burgeoning subscriber base and more stringent spectrum allocation regime creates a higher requirement of cell – sites or tower sites for operators, to allow greater re-use of the radio frequency allotted to operators. The Indian telecom industry continued on its high growth path with teledensity crossing the 22%mark. The customer base surpassed 260 million, making India the second larges mobile market in the world – ahead of the USA. The Industry has been adding more than 8 million customers a month, which is more than the monthly average of China’s telecom industry. In the fixed line segment, significant convergence is taking place, as is evident from the growth of broadband and IPTV services. India has become one of the fastest-growing mobile markets in the world. ]The mobile services were commercially launched in August 1995 in India. In the initial 5–6 years the average monthly subscribers additions were around 0.05 to 0.1 million only and the total mobile subscribers base in December 2002 stood at 10.5 millions. However, after the number of proactive initiatives taken by regulator and licensor, the monthly mobile subscriber additions increased to around 2 million per month in the year 2003-04 and 2004-05. Although mobile telephones followed the New Telecom Policy 1994, growth was tardy in the early years because of the high price of hand sets as well as the high tariff structure of mobile telephones. The New Telecom Policy in 1999, the industry heralded several pro consumer initiatives. Mobile subscriber additions started picking up. The number of mobile phones added throughout the country in 2003 was 16 million, followed by 22 million in 2004, 32 million in 2005 and 65 million in 2006. The only country with more mobile phones than India with 246 million mobile phones is China – 408 million. India has opted for the use of both the GSM (global system for mobile communications) and CDMA (code-division multiple access) technologies in the mobile sector. In addition to landline and mobile phones, some of the companies also provide the WLL service. The mobile tariffs in India have also become lowest in the world. A new mobile connection can be activated with a monthly commitment of US$0.15 only. In 2005 alone 32 million handsets were sold in India. The data reveals the real potential for growth of the Indian mobile market.

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In March 2008 the total GSM and CDMA mobile subscriber base in the country was 375 million, which represented a nearly 50% growth when compared with previous year. In April 2008 the Indian Department of Telecom (DoT) has directed all mobile Phone service users to disconnect the usage of unbranded Chinese mobile phones that do not have International Mobile Equipment Identity (IMEI) numbers, because they pose a serious security risk to the country. Mobile network operators therefore planned to suspend the usage of around 30 million mobile phones (about 8 % of all mobiles in the country) by April 30.

COMPANY PROFILE 11 | P a g e

Airtel was started by Mr.Sunil Bharti Mittal,a graduate from Ludhiana (PUNJAB).earlier he was owner of local telecom company Beetel. Afterwards he planned to expand his company at national level and the consequence is Airtel, what we see today. Bharti Airtel is India’s largest telecommunications company by subscriber base, which stood at 85.7 million in December 2008, and total revenues, which were Rs.270 billion in 2007/08. Airtel is one of Asia’s leading providers of telecommunication services with presence in all the 22 licensed jurisdictions (also known as Telecom Circles) in India, and in Srilanka. It served an aggregate of 96,649,487 customers as of March 31, 2009; of whom 93,923,248 subscribe to GSM services and 2,726,239 use Telemedia Services either for voice and/or broadband access delivered through DSL. It is the largest wireless service provider in the country, based on the number of subscribers as of March 31, 2009. It also offered an integrated suite of telecom solutions to our enterprise customers, in addition to providing long distance connectivity both nationally and internationally. It had recently forayed into media by launching our DTH and IPTV Services. All these services are rendered under a unified brand “Airtel”.The Company also deploys, owns and manages passive infrastructure pertaining to telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of Indus Towers Limited. Bharti Infratel and Indus Towers are the two top providers of passive infrastructure services in India. Sunil Bharti Mittal, the founder – chairman of Bharti Enterprises (who owns Airtel), is today, the most famous face of the telecom sector in India. He symbolizes the adage that success comes to those who dream big and then worked assiduously to deliver it. His strong entrepreneurial instincts gave him a unique flair for sensing new business opportunities. In the early years, Bharti established itself as a supplier of basic telecom equipment. His true calling came in the mid 1990s when the government opened up the sector and allowed private players to provide telecom services. Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management.

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Vision By 2010 Airtel will be the most admired brand in India: • Loved by more customers • Targeted by top talent • Benchmarked by more business.

Key Milestones     

Date of Incorporation-------------------------------------------------------------- July 07, 1995 First private operator to offer fixed line telephony---------------------------- June 04, 1998 Became a public limited company in India ------------------------------------ February 18, 2002 First telecom company to have an all India mobile footprint (Presence in all 23 telecom circles in India)------------------------------------ March 30, 2005

History

Company

Each year of Airtel’s existence has been marked by historic and far reaching milestones including many firsts, all to which have been stepping stones to their success and performance. A brief history of the Company’s major events is: 1995-96 Mobile services under the brand name ‘Airtel’ launched for the first time in Delhi and Himachal Pradesh

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1997-1998 The first private telecom service provider to obtain a license fro landline telephony in Madhya Pradesh Incorporation of Bharti BT VSAT Ltd. For providing VSAT solutions across India and Bharti BT Internet Ltd.

1999-2000 The larges private sector telecom operator in India after acquiring JT Mobile for providing cellular services in Punjab, Karnataka and Andhra Pradesh Acquires Skycell, Chennai and expands its south Indian foot print Singapore Telecommunications Ltd. (Sing Tel) acquires Telecom Italia’s equity stake in the Company. 2001-2002 India One, India’s first private sector national and international long distance service launched. Eastern foray through acquisition and new licenses for eight new circles across India. India’s first private submarine cable landing station in a joint venture with Singtel. Initial Public offering through India’s first 100% book-building issue. First private operator to offer basic telephone services in Haryana Delhi Tamil Nadu and Karnataka 2003-2004 Join the US $1 billion revenue club Strategic partnerships with IBM and Ericsson for outsourcing of the company’s core IT and network activities. Acquires a controlling stake in Hexacom, the leading mobile operator in Rajasthan and holding a license to offer services in the NorthEast. First private operator to launch mobile services in Jammu and Kashmir. Founding member of the Bridge Mobile Alliance, a consortium of seven leading mobile operators in the region. 2005-2006

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All-India foot print with the launch of mobile services in Assam. Becomes India’s largest intergrated private operator based on the total customer base 2006-2008 Profit crosses US $ billion. Receives license for providing 2G and 3G mobile services in Srilanka Launch of ‘Airtel CallHome’ service, a calling card service for various countries aimed at the Indian diaspora. Strategic partnership with Google, enabling search through mobile phones. Strategic tie-up with Microsoft and becomes the first telecom operator to offer Microsoft Windows Mobile 5.0 technology. Facility Based operator license in Singapore, enabling the company to operate international carrier facilities from Singapore. Joins international consortia of leading telecom companies to build 3 high bandwidth submarine cables AAG, I-ME-WE AND Unity. Receives US $ 1.275 billion investment from leading international investors in Bharti Infratel, a subsidiary established with the aim to provide passive infrastructure services to all mobile services operators in India

Board of directors Sunil Bharti Mittal ------------------ ---Chairman and Managing Director Manoj Kohli -----------------------------Joint Managing Director Akhil Gupta ------------------------------Non Executive Director Chua Sock Koong -----------------------Non Executive Director Paul O’Sullivan --------------------------Non Executive Director Quah Kung Yang ------------------------Non Executive Director Rajan Bharti Mittal ----------------------Non Executive Director Rakesh Bharti Mittal --------------------Non Executive Director Craig Ehrlish -----------------------------Independent Non Executive Director Ajay Lal ----------------------------------Independent Non Executive Director Arun Bharat Ram -----------------------Independent Non Executive Director Bashir Abdulla Currimjee -------------Independent Non Executive Director Mauro Sentinelli ------------------------Independent Non Executive Director N.Kumar ---------------------------------Independent Non Executive Director Nikesh Arora ----------------------------Independent Non Executive Director

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Pulak Chandan Prasad -----------------Independent Non Executive Director

Fact sheet

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Name

Bharti Airtel Limited.

Business Description

Provides GSM mobile services in all the 22 telecom circles in India, and was the first private operator to have an all India presence. Provides telemedia services (fixed line and broadband services through DSL) in 95 cities in India.

Established

July 07, 1995, as a Public Limited Company

Proportionate Revenue

Rs. 369,615 million (year ended March 31, 2009-Audited) Rs. 270,250 million (year ended March 31, 2008-Audited) As per US GAAP Accounts

Proportionate EBITDA

Rs. 151,678 million (year ended March 31, 2009 - Audited) Rs. 113,715 million (year ended March 31, 2008 - Audited) As per US GAAP Accounts

Shares in Issue

1,898,239,796 as at March 31, 2009

Listings

The Stock Exchange, Mumbai (BSE) The National Stock Exchange of India Limited (NSE)

Market Capitalisation Customer Base

93,923,248 GSM mobile and 2,726,239 Telemedia Customers (status as on March 31, 2009)

Operational Network

Provides GSM mobile services in all the 22 telecom circles in India, and was the first private operator to have an all India presence. Provides telemedia services (fixed line) in 95 cities in India.

Registered Office Bharti Airtel Limited (A Bharti Enterprise) Aravali Crescent, 1, Nelson Mandela Road, Vasant Kunj, Phase II, New Delhi – 110 070, India Tel.No.: +91 11 4266 6400 Fax No.: +91 11 4166 6137

Airtel Services 17 | P a g e

Airtel services Wireless services • •

2G/3G Rural Market

Telemedia Services

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• • •

Fixed Line Broadband DTH(Media)

Enterprise Services • •

Carriers Corporate

Passive Infrastructure Services

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Research Methodology Types of data The types of data that is used in this report is of secondary data from o Internet www.airtel.in www.coai.in www.wikipedi.org www.wikinvest.com www.hindustantimes.com o Magazines The Hindu – Survey of Indian industry – 2004, 2007, 2009. o Newspapers The Hindu 20 | P a g e

Deccan chronicle

Methodology used The methodology of this report was carried by observing and analyzing the data from different secondary sources. The study is carried by considering one company Bharti Airtel from telecom sector to know its performance, Competition are considered for the analysis.

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Analysis on Reports

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Data interpretation From the above balance sheet of 2006 & 2007 the major changes were found in the Particulars

Values for 2006

Values for 2007

Differenc e

(Increase /Decrease)

Percentage of change

Fixed assets Current assets Current Liabilities Net current assets Investments Share capital Secured loans Inventory Cash & Bank Balances

193056341

130068771

62987570

Increase

48.426

29542935

44454766

14911831

Increase

50.475

66991634

98446711

31455077

Increase

46.953

37448699

53991945

16543246

Increase

24.694

7196981 18938793

7058179

138802

18959342

Decrease Decrease

0.1085

28633707

2664475

Increase

90.69462

177444

478145

20549 2596923 2 300701

Decrease

169.462

3074285

7804605

4730320

Decrease

153.867

1.928

o The changes in the fixed assets were due to the capital work in progress it includes Capital advances of 2, 00,443 and the other reasons are fluctuations of foreign exchange rates, Buying computers. o The investments are done in the different areas like Government securities, Mutual funds and Debentures. o The changes in current assets were due to the Debit outstanding for period exceeds six months, Advances and loans given to subsidiary companies like Bharti comtel, Airtel (USA), Bharti Hexacom, Bharti Broadband Ltd. o The changes in current liabilities are due to the outstanding due of small scale industries undertaking’s, Advance received form customers is decreased and Advance Billing. o The change in the share capital is due to a) 1,516,390,970 Equity Shares issued as fully paid up bonus shares out of Share premium account. b) 20,088,445 Equity Shares are allotted as fully paid up upon the conversion of OCRD without payment being received in cash. c) 19,591,420 Equity shares are allotted as fully paid up on the conversion of FCCB’s d) 2,772,125 Equity Shares are allotted as fully paid up under the scheme of amalgamation without payments being received in cash. o The loans in above balance sheet were secured from banks as advances and also as term loans and vehicle loans o The inventory i.e. Stock – in-Trade was increased.

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Data Interpretation From the above Profit and loss statement of 2006 & 2007 the major changes were found in the Particulars

Values for 2006

Values for 2007

Difference

Increase/ Decrease

Percentage

Networking operating Cost of Sales of goods

11408836

19214108

7805272

Increase

674043

220849

-453194

Decrease

Personnel

11263414

7754523

-3508891

Decrease

Sales and Marketing

10691655

8013612

-2678043

Decrease

Amministrative and Others

16609713

11953078

-4656635

Decrease

Other income

618980

935600

316620

Increase

Finance expense

2558440

2256011

-302429

Decrease

68.41427 118 67.23517 639 31.15299 677 25.04797 433 28.03561 386 51.15189 505 11.82083 613

o The Expenditure was increased by 39.783 percent this is due to the inter connect charges, Installation, Power & fuel, Rent, Insurance , Repairs and Maintenance and also due to the Leased line Gate way charges, Increase in the cost of goods sold, Personnel expenditure like salaries, wages, Bonus & Provident fund contribution, Staff welfare and Recruitment and training. o The difference of Network operation is due to the Interconnect Charges and PSTN Rentals, Installation, Power and Fuel, Insurance, Internet Access and Bandwidth Charges. o The change in Personnel is due to the Salaries, wages and Bonus, Contribution of Provident and Other funds, Staff welfare Recruitment and Training. o The change in the sales in the marketing expenditure is because of the Advertisement and Marketing, Sales commission and Incentive, Sim card utilization.

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o The change in the administrative and other expenditure is due to Legal and professional, Rates and taxes, Power and Fuel, Travelling and conveyance rent, Insurance, Provision for doubtful debts and advances, Collection and recovery expenses.

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Data Interpretation From the above Balance sheet of 2007 & 2008 the major changes were found in the Particulars

Values for 2007

Values for 2008

Differenc e

Increase/ Decrease

Fixed assets

193056341

190306475

2749866

Decrease

Current assets

44454766

62510110

Current Liabilities

98446711

121100901

Net current assets

53991945

58590791

4598846

Increase

Investments

7058179

109528528

1024703 49

Increase

Secured loans

2664475

524244

2140231

Decrease

Inventory

478145

568607

90462

Increase

Share capital

18959342

18979074

19732

Increase

Cash and Bank Balances

7804605

5029390

2775215

Decrease

1805534 4 2265419 0

Increase Increase

Percentage 1.424385 22 40.61509 17 23.01162 70 8.517652 03 1451.795 83 80.32467 93 18.91936 54 0.104075 34 35.55868 61

o The changes that took place in fixed assets are due to the capital work in progress i.e. capital advances and it also includes goods in transit and also for the license fees for unified access service for long distance for 7 to 17 years and 14 years. o The increase in current assets includes Goods in transit Rs.23,408 and also Net of Provision for diminution in value Rs. 43,113 and also for Intrest Acquired on Investment and Advances in cash o The current liabilities are increased due to the advances to companies and also for Fringe benefits tax, warranty and wealth tax. o Investments in 2008 Increased due to the investment in Govt securities, Mutual funds, Debentures and Bonds and also in IFFCO Kissan Sanchar Ltd of 100,000 equity shares. o The changes in the share capital was due to a) 1,516,390,970 Equity Shares issued as fully paid up bonus shares out of Share Premium account. b) 20,088,445 Equity Shares are allotted as fully paid up upon the conversion of Optionally Convertible Redeemable Debentures without payment being received in cash. 29 | P a g e

c) 21,315,734 Equity Shares are allotted as fully paid up opon the conversion of Foreign Currency Convertible bonds. d) 2,722,125 Equity Shares are allotted as fully paid up under the scheme of amalgamation without payments being received in cash

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Data Interpretation From the above Profit and loss statement of 2007 & 2008 the major changes were found in the

Particulars

Values for 2007

Values for 2008

Differenc e

Profit before tax

46013712

69725423

Total Income

177944343

257035096

Expenditure

88958316

124349012

Profit after tax

40332265

62441922

Network Operating

19214108

33004746

Cost of goods sold

220849

338502

117653

Increase

Sales and Marketing

10691655

17849080

7157425

Increase

2371171 1 7909075 3 3539069 6 2210965 7 1379063 8

Increase/ Decrease Increase Increase Increase Increase Increase

Percentage 51.53183 686 44.44690 495 39.78345 993 54.81878 342 71.77350 101 53.27305 082 66.94403 252

o The Expenditure was increased by 45.064 percent this is due to the inter connect charges, Installation, Power & fuel, Rent, Insurance , Repairs and Maintenance and also due to the Leased line Gate way charges, Increase in the cost of goods sold, Personnel expenditure like salaries, wages, Bonus & Provident fund contribution, Staff welfare and Recruitment and training o The difference of Network operation is due to the Interconnect Charges and PSTN Rentals, Installation, Power and Fuel, Insurance, Internet Access and Bandwidth Charges. o The increase in the cost of goods sold is due to the opening stock addition of purchases, Internal issues. Net provision for diminution in value of 30,824 thousand. o The change in the sales in the marketing expenditure is because of the Advertisement and Marketing, Sales commission and Incentive, Sim card utilization.

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Revenue graph

Data Interpretation From the above graph for revenue of airtel the interpretations are a) There was a loss of Rs.2051million in the year 2003 and revenue was Rs. 30,554 million in the same year. b) Thereafter there is a gradual increase in the in both the revenue and profit year after year.

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HR Report o Bharti Airtel Limited (popularly known as Airtel) is the flagship company of The Bharti Enterprises. A telecom giant, it is the pioneer and the leading brand name in the private telecom service providers with its services spanning 94 cities. It is divided and organized in mobile services, Airtel telemedia services and enterprise services (corporate and carrier) services business divisions. Airtel values its human resources and its HR policies are aimed at targeting and retaining best talent in the industry. With the focus on the same, Airtel also has a Bharti Campus Recruitment Program to recruit young students from various elite campuses The key functions of the HR Committee include the followings: o Attraction and Retention strategies for employees. o Employees Development Strategies. o Compensation (including salaries and salary adjustments, incentives/benefits bonuses, stock options) and performance targets for the Chairman and Managing Director (CMD) and Joint Managing Directors (JMDs) Executive Directors. o All Human Resources related issue. o Other key issues / matters as may be referred by the Board or as may be necessary in view of Clause 49 of the Listing Agreement or any statutory provisions. o Measurement is indeed a key driver of business within Airtel. A philosophy of constant monitoring has been established. `Measurement Boards' for every department are prominently displayed where the performance indicators of the same are displayed graphically; Airtel's HR success was powered by a well defined rewards and recognition system. This was backed by a strong training programme. ``Unlike most other organizations, we let our employees decide their training needs. And if the individual does not know what his training needs are, then we don't need him,'' says Nayar. o To encourage learning within the organization, the company has set up a state-of-the-art learning centre. Here, employees can get logged on to customized training programmes developed by British Telecom (BT). Though the material is transmitted through the Internet, they are not accessible to anybody outside the organisation as the access is protected. Airtel also seeks to certify every employee on quality and IT. `` o Eventually, there are the performance-related bonuses that set the tone for these activities. Padhi informs us that 60 per cent of the employees are on a variable pay structure, and that explains the success Airtel has had in business and HRD. o The HR department also sets up cross-functional teams in times of product or service launches. ``Such teams typically constitute high performers from each department, who collectively make it happen,'' o To further HR interface, every member of the HR department has been assigned two departments each to discuss and sort out all HR, personnel and administration issues. ``The idea is to provide employees with a single window to the department,'' 34 | P a g e

Summary

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The company analysis has outlined a scenario of the Bharti Airtel. i.e, current

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scenario, future perspective, business development, retention of customers, Hr policies, study of different financial reports to know and understand the stand of the company

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Bharti Airtel speedy activity is one of its best attributes that has made it gain an international status across the world. It is always updated with the latest data and is highly competent. Quality remains the prime concern and is maintained strictly by the team.

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With such achievements, Bharti Airtel is still ruling the Indian telecom Industry and is aiming high to gain popularity and success around the world in brand building by making new discoveries everyday.

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Based on the above, observations can be made that it promises unprecedented and efficient control over the market. From the analysis on the reports the conclusions drawn were, there was a continuous increase in the share capital, Differed tax liability, unsecured loans, Stock options. The profits are transferred into reserves in surplus The company has invested the funds in fixed assets. The cost of sale of goods is been reduced by company with other expenditures but the sale of goods has been reduced. The profit is been increased due to the service revenue but not by the sale of goods.

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• • • •

Strengths • • • •

Very focused on telecom. Leader in fast growing cellular segment. Pan – India footprint. The only Indian operator, other than VSNL, that has an international submarine cable

Weakness • •

Price competition from BSNL and MTNL Untapped Rural Market 36 | P a g e

Opportunities • • •

Fast expanding Indian cellular market. Latest and low cost technology Huge market

Threats • •

Competition from other cellular and mobile operators Saturation point in Basic telephony service

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Bibliography

Internet  www.airtel.in 38 | P a g e

 www.coai.in  www.wikipedi.org  www.wikinvest.com  www.hindustantimes.com

Magazines  Survey of Indian Industry -2004  Survey of Indian Industry -2007  Survey of Indian Industry -2008

News papers  The Hindu  Deccan chronicle

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