Professional Documents
Culture Documents
TO THE STUDY
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Need For 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
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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
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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.
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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.
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),
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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
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.
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
1982
FCC authorizes commercial cellular service for the USA
1987
Cellular telephone subscribers exceeded one million and the airways were crowded
1991
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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)
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
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
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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
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
Company
History
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.
First private operator to offer basic telephone services in Haryana Delhi Tamil Nadu and Karnataka
2003-2004
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.
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
Launch of ‘Airtel CallHome’ service, a calling card service for various countries aimed at the Indian diaspora.
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 Provides GSM mobile services in all the 22 telecom circles in India, and was the
Description 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 Rs. 369,615 million (year ended March 31, 2009-Audited)
Revenue Rs. 270,250 million (year ended March 31, 2008-Audited)
As per US GAAP Accounts
Proportionate Rs. 151,678 million (year ended March 31, 2009 - Audited)
EBITDA 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 Provides GSM mobile services in all the 22 telecom circles in India, and was the
Network first private operator to have an all India presence.
(A Bharti Enterprise)
Aravali Crescent,
1, Nelson Mandela Road,
Vasant Kunj, Phase II,
New Delhi – 110 070, India
Airtel Services
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Airtel services
Wireless services
• 2G/3G
• Rural Market
Telemedia Services
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• Fixed Line
• Broadband
• DTH(Media)
Enterprise Services
• Carriers
• Corporate
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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
o Newspapers
The Hindu
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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
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
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
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.
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.
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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
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
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Summary
• 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
• 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.
• 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.
Strengths
Weakness
• Price competition from BSNL and MTNL
• Untapped Rural Market
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Opportunities
Threats
• Competition from other cellular and mobile operators
• Saturation point in Basic telephony service
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Bibliography
Internet
www.airtel.in
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www.coai.in
www.wikipedi.org
www.wikinvest.com
www.hindustantimes.com
Magazines
News papers
The Hindu
Deccan chronicle
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