Airtel Swot Analysis

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Airtel Swot Analysis

Transcript of Airtel Swot Analysis

Page 2: Airtel Swot Analysis
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Industry :Telecommunications

Founded : 7 July 1995

Founder(s) : Sunil Bharti Mittal

Headquarters : New Delhi, India

Area served : South Asia, Africa and the Channel Islands

Key people : Sunil Bharti Mittal (Chairman) and (MD)

Revenue : $9.290 billion (2010)

Operating income :$2.313 billion (2010)

Profit : $2.079 billion (2010)

Total assets\ : $15.527 billion (2010)

Total equity :$9.491 billion (2010)

Employees :22,858 (June 2011)

Subsidiaries :Airtel Africa Airtel Digital TV Bharti Airtel Lanka Airtel Bangla

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• Bharti Airtel Limited , commonly known as Airtel, is an Indian telecommunications company that operates in 20 countries across South Asia, Africa and the Channel Islands. It operates a GSM network in all countries, providing 2G or 3G services depending upon the country of operation. Airtel is the largest provider of mobile telephony and second largest provider of fixed telephony in India, and is also a provider of broadband and subscription television services.

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History• Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an

agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market.

• In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises.

• By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to build a cellular phone network in Delhi.

• In 1995, Sunil Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh.

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Organisational Structure

• The organisational structure that existed till recently concentrated on the hierarchy of the operations(not services)inside the company as a whole.

• The structure depicts the corresponding operation/region of different in-charges and hence it didn't hold anyone responsible for each of its services. So, the company found it better to restructure its organisational chart and it came into implementation from 1 August.

• The transformed organisational structure will have two distinct Customer Business Units (CBU) with clear focus on B2C (Business to Customer) and B2B (Business to Business) segments

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Subscriber Base

• Bharti Airtel has about 230.8 million subscribers worldwide – 169.18 million in India, 46 million are in Africa, 4 million in Bangladesh and 1.8 million in Sri Lanka as of the end of June 2011.

• The numbers include mobile services subscribers in 19

countries and Indian Telemedia services and Digital services subscribers

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Joint Ventures

Airtel-Ericsson

As per a five-year managed services agreement signed recently, Ericsson will manage and optimize Airtel’s mobile networks in Africa. Ericsson will modernize and upgrade Airtel’s mobile networks in Africa with the latest technology including its multi standard RBS 6000 base station.As part of the modernization, Ericsson will also provide technology consulting, network planning & design and network deployment.Ericsson has been the managed services and network technology partner in the Asian operations

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Rebranding

On 18 November 2010, Airtel rebranded itself in India in the first

phase of a global rebranding strategy.

The company unveiled a new logo with 'airtel' written in lower case. Designed by London-based brand agency, Brand Union, the new logo is the letter 'a' in lowercase, with 'airtel' written in lowercase under the logo.

On 23 November 2010, Airtel's Africa operations were rebranded to 'airtel'. Sri Lanka followed on 28 November 2010 and on 20 December 2010, Warid Telecom rebranded to 'airtel' in Bangladesh.

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Sponsorship

• On 9 May 2009 Airtel signed a major deal with Manchester United Football Club. As a result of the deal, Airtel gets the rights to broadcast the matches played by the team to its customers.

• Bharti Airtel signed a five-year deal with ESPN Star Sports to become the title sponsor of the Champions League Twenty20 cricket tournament. But now the deal is terminated and Nokia is sponsoring Champions League Twenty20 cricket.

• Airtel, also signed a deal to be title sponsor the inaugural Formula One Indian Grand Prix during the 2011 season

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STRENGTHS• Bharti Airtel has more than 65 million customers (July 2008).

• It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers.

• Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance.

• The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.

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WEAKNESS

• An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field.

• Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally.

• The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.

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OPPORTUNITIES• The company possesses a customized version of the Google search engine which

will enhance broadband services to customers. • Global telecommunications and new technology brands see Airtel as a key strategic

player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions.

• Despite being forced to outsource much of its technical operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices .

• The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.

• Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers.

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THREATS

• Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors.

• The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008.

• Bharti Airtel could also be the target for the takeover vision of other global telecommunications players that wish to move into the Indian market.