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Internship Program 2009: Initial Report

The document provides an overview of the Indian telecom industry and Bharti Airtel's strategies. It states that the Indian telecom industry is one of the fastest growing markets in the world, with a subscriber base expected to reach 500 million by 2010. It also discusses Bharti Airtel's cost leadership strategy of managing processes efficiently to offer lower prices, as well as their differentiation strategy of providing unique services and focusing on specific customer segments and geographic areas.

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Kirthika Thika
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49 views7 pages

Internship Program 2009: Initial Report

The document provides an overview of the Indian telecom industry and Bharti Airtel's strategies. It states that the Indian telecom industry is one of the fastest growing markets in the world, with a subscriber base expected to reach 500 million by 2010. It also discusses Bharti Airtel's cost leadership strategy of managing processes efficiently to offer lower prices, as well as their differentiation strategy of providing unique services and focusing on specific customer segments and geographic areas.

Uploaded by

Kirthika Thika
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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INITIAL REPORT

Internship Program 2009

Company: Vasani Enterprises

Company Guide: Mr. Jayesh Vasani

Submitted to: Mrs. Seema Sant

Submitted by: Mr. Kedar Pawaskar

Enrollment no: 8NBMM008


Indian Telecom Industry – Facts
 One of the fastest growing cellular markets in the world in
terms of number of subscriber additions – 19.35 million in 3
months (April to June 2008)

 Expected to reach total subscriber base of about 500 million


by 2010 (i.e., more than one phone for every household)

 Annual growth rate of the telecom subscribers – 47 percent


(2007–08)

 Fastest Growing Sector – CAGR 22% (2002-07)

 Second Largest Telecom Market

 Lowest tariff charges in the world

 Wireless Subscribers – 315.3 Mn

 Wireline Subscribers – 38.4 Mn

 Teledensity – 30.6

 23 Circles - 4 Categories ( Metro, A, B & C)

 Bharti Airtel – Largest player with presence in 23 Circles


PORTER'S GENERIC COMPETITIVE STRATEGIES
Cost Leadership Strategy
A firm gains cost leadership in an industry when its cost of
production is lower than that of its competitors. Airtel has gain
cost leadership by managing its processes and resources
efficiently and effectively. By bringing down its operational costs,
an Airtel has offer its products and services at lower prices. It has
also earn higher profits because either the profit margins are
greater or the sales volume has increased.

Operatio NET
nal MARGIN
margin
compan Sep 07 Sep08 Sep07 Sp08
y
Bharti 43% 38% 26.4% 19.30%
Rcom 37.90% 31.60% 23.90% 13.20%
IDEA 32.80% 26.60% 14.10% 6.50%
MTNL 23.70% 22.90% 7% 6.80%

A cost leadership strategy works well for Airtel in the event of a


price war in the industry. Since the firm is already working on a
low price strategy, it has reap profits while the competitors
( mtnl / reliance/ tata) are bound to make losses.
Differentiation Strategy
The differentiation strategy adopted by the firms needs to
possess sufficient skills and abilities to differentiate the product
from that of the competitors based on some attributes that allow
the consumers to perceive the product as different from that of
the competition. Firms that adopt the differentiation strategy
successfully have access to advanced scientific research, a highly
skilled labor force, effective customer communication strategies,
etc.

Airtel is providing free digital EPABX with free leased lines (no
connectivity charges).So the firm is providing latest EPABX to the
customer which is costing approx Rs 50,000.

1. Best service provider, good call center service esp. in local


languages, good service even in the remote areas, emphasis
on “barriers break when people speak”, new initiatives like
google search on airtel live, downloads etc

2. Long term HR strategy, Gallup Great Workplace Award, Both


internal developments as well as external hiring, development
programs with iims.

Focus Strategy
A firm pursuing a focus strategy tends to serve a specific segment
instead of catering to the entire market. This segment may be a
special group of customers, a specific geographic area, or a
particular product or service line. The customers will also be loyal
to the company and therefore, the entry of a new competitor into
that area becomes difficult.

Airtel is focusing on the customers who is having more than


Rs10000 monthly landline billing. Airtel is offering landline
services which consist of PRI (Primary Rated Interface). Airtel can
provide its service to a specific geographic area i.e. from Dahisar
to Churchgate in western region & Thane to Panvel in eastern
region
The above fig shows that revenue of Indian telecom
industry was around $20 billion in the year 2005-06. It
has shown tremendous growth of $42 billion in the year
2008-09.
As shown in the above figure the market share of fixed lines in India
was 86% as compared to only 14% of wireless lines in 2007-08.

The Company provides broadband (DSL) and telephone services


(fixed line) in 15 circles spanning over 94 cities across India. As
on March 31, 2008, the Company had 2,283,328 customers (a
growth of 22%), of which 34.8% (~795,000) were subscribing to
broadband / internet services. The Company’s strategy for
Telemedia business is to focus on the cities with high revenue
potential. The product offering in this segment includes supply
and installation of fixed-line telephones providing local, national
and international long distance voice connectivity and broadband
Internet access through DSL.

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