Bharti Vision

Excerpt from quote by Manoj Kohli (Chief Executive and joint MD, Bharti Airtel) in answer to the question of synergies between their businesses Our strategy is one of wallet share. Get the maximum wallet We are also planning that we should do similar bundling with retail and insurance, which are two big businesses with Bharti. This becomes One Bharti, where, if customers buy something from Easyday (Bharti Retails convenience stores..then they should get some benefit of telecom

That is our strategy on brandthat we have one brand.

Bharti Airtel Ltd.

Established July 07, 1995, as a Public Limited Company Shares Outstanding: 3,797,530,096 as at September 30, 2010 Market Capitalization: 122,166.54 (Rs CR) (Stock Price 321.7 ,BSE as on 6th March 2013
Shareholding
Promoter Group Indian Promoter Group Foreign Non Institutions Institutions

Bharti Airtel Growth

Telecom Market
Relatively large youth population - Telecom penetration c.73.3%(

rural-39% urban- 163%)

Sub number should go upto 1 Billion by 2015 Broadband penetration 1.2% (14.9 mn) Govt. target to reach 20 mn. Broadband subs by 2013

Telecom Market

Organisation Structure Bharti Airtel

Organisation Restructure: Bharti Airtel India operations

The corporate restructure coincides with the appointment of Gopal

Vittal as the new head of its India operations and will be applicable from March 1,2013
Instead of the current 3 regional hubs, the organization will now be

divided into 8 hub operations reporting to a newly created position of Director - Market Operations
Circle CEOs will report to a Hub CEO Ajai Puri, Operations Director North & East, has been appointed

as the Director - Market Operations for India and will report to Gopal Vittal, Jt MD and CEO Designate for India
Raghunath Mandava, currently Operations Director for West &

Distribution has been appointed Director - Customer Experience, reporting to Gopal Vittal
Najib Khan, CMO - Airtel Business, has been appointed as CEO

Homes and Office. In this role, Najib will be responsible for the Companys Telemedia business, the SMB vertical, LTE and Wi-Fi

Portfolio and Business Description

Product and Services portfolio Mobile services, Home phones, Broadband, Calling cards, DTH, IPTV, MPLS Services, Satellite services, Data transport solutions and conferencing services Business Description
Provides GSM mobile services in all the 22 telecom circles in India, Srilanka, Bangladesh and now in 16 countries of Africa. Provides telemedia services (fixed line and broadband services through DSL) in 87 cities in India. Provides an integrated suite of Enterprise solutions, in addition to providing long distance connectivity both Nationally and Internationally.

BCG Matrix of Bharti Telecom

Star Question Mark SBU Enterprise Services (Carriers and Corporates) Major contributor to revenue in just 4 years of coming SBU Passive Infra Good collaborations like Indus tower/ Untapped market)

Dog Cash Cow SBU Mobile services: Legacy of Bharti SBU Telemedia Services Significant fall in ARPU/ Other big players existing in the market

Bharti Airtel Focus

Strategy On Current Focuses

Smart sourcing for cost effectiveness by retaining only customer satisfaction

and marketing with themselves

Growth through acquisition
Acquired Zain to get foothold in developing markets of Africa to increase

revenue and customer base

JV with Aditya Birla Telecom & Vodafone for Bharti Infratel (mobile tower

infra.)
Airtel money for m commerce to bring about new channels for earnings Focus to increase rural penetration Partnership with strong global partners

Opportunities For Bharti Telecom

Upcoming 4g and Wimax technologies Increasing call rates Biddings for airwaves meeting with lukewarm response M commerce a high growth area, can develop new applications Applications which fuse the use of Airtel and Retail

Changing demographics of India

Indian Retail Sector

% of retail sector
Organized-5% Unorganized-95%

2015 $635 bn

2020 $850 bn

Retail sector stats

2010 $435 bn
15 10 5 0
% of GDP % of Work Force Annual Growth Rate

% values

Reasons For Growth In Organized Retail

Change in demographics (Median age of 24 years)

Increase in purchasing power of consumers

Availability and awareness about Brands Want for quality products Overall retail experience Increase in working population, constrained for time

Development of mall culture

Why did Bharti enter into retail sector?

Entrepreneurial

bent of Sunil Bharti Mittal

Bharti wanted 50% of revenue to come from non telecom sectors

Growth potential of the Retail sector

Easy to leverage the customer base and customer knowledge derived from the telecom business Declinig margins in telecom due to price war Experience in the service sector

Bharti Retail Structure

(Modes of engagement)
Bharti Enterprise

Bharti Retail Pvt. Ltd. (Subsidiary) Easy Day Store (Neighborhood stores)

BhartiWalmart (50-50 JV)

Field Fresh 50-50 JV

Easy Day Market

Easy Day Hyper (Hypermarkets)

Best Price (Wholesale cash and carry format)

Why JVs?
Entered retail in 2008 (recession period), therefore JV allows lesser investment and risk sharing No prior experience in retailing Walmart provides exceptional experience and capabilities in back end logistic Bharti Retail Pvt. Ltd. has stores working on EDLP model, which Walmart has mastered JV with Del Monte (Phillipines) provides access in processed food industry, in terms of operations and association with one of the top 10 brands in this product segment

Increase in product portfolio for retail stores

Why Walmart chose Bharti ?

Indian laws does not permit FDI in multi brand by non-domestic retailers. Thus,

this alliance will help Wal-Mart to enter fast growing retail sector.
Bharti served as a market leader in the telecom sector of India and also had an

experience of managing over 30,000 people.

Bharti had a long history of pitching in with foreign companies. Wal-Marts failure in Korea and Germany and their hardships in Japan made them

realise the need of a local partner in order to understand the peoples choices.
Bharti had a huge market capitalization of worth more than US $ 25 billion. Indian agricultural sourcing is highly disintegrated which requires understanding

of local market. WalMart could leverage on Bhartis experience in penetrating far flung areas for their telecom markets.

Competitors

% Sales
Pantaloons Retail Vishal Stores

Bharti Retail has approximately only 0.1% market share by sales

Revenue of 236 crores

Trent
Shoppers Stop Bharti Retail

Therefore provides huge

potential for growth Organized sector grew at 25% in 2011

Others

Expansion Plans
Reliance Investment of $6.7 bn with expected sales of $20bn by 2010 Bharti Group Investment of $7bn to create hundereds of stores and hyper malls Pantaloon Retail had an investment portfolio of $240 mn

Trent planned to grow from 7 star baars to 40 in 3 years in 2010 with investment of Rs 275 crore

Huge investment by each of the big player indicates that there is huge potential in the organized retail sector

Future Opportunities

Synergies Between Airtel & Retail

Leverage on their strong customer base and customer information of telecom to

grow in retail sector

Opportunities to increase retail footprint by giving talktime for their purchases Both have partnership with strong foreign players Both make use of same brand i.e. Bharti Both are service areas, and Bharti telecom can use its experience in customer satisfaction to advantage in retail Combining m commerce with retail