1. Bharti Airtel’s Indian activities onto Porters value chain.

The activities conducted by Airtel in India can be classified into Porters value chain as follows:
-Primary activities are related to physical creation, sale, maintenance and support of a product or a
service.

Human resource management - The most employees were reluctant of the idea of working in
African countries, so the company posted a group of 8 young leaders for a month-long assignment and
came with a positive feedback on their experience in order to attract the employees. This motivated
the employees to move to Africa. The company also gave additional pay benefits to them.

Hired operators and IT skilled employees in building CRM. Employed retail distributors and the
management training program for retail distributors to teach rural customers

Inbound logistics

 Bharti acquired mobile licenses for 15 out of India’s 23 circles and– Receive and stores cards,
stationery, banners and other promotional goods. (Most of their Sim cards were sold from
store sim cards were sold from retail outlets and gas stations)
 Personnel are well trained for overseeing the smooth transit of goods.

Outbound logistics

Airtel got into supplying (distribution) its sim cards via post office and other ventures. And also the
GSM and CDMA services.

Operations

 Bharti gave its IT operations, including supplying, installing and managing all the company’s
hardware and software to IBM.
 They also had a joint venture with competitors like Vodafone and Idea Cellular, in order to
reduce duplication and other costs.
 They decided to outsource based on 2 factors that is those who had better domain knowledge
and who enjoyed better economies of scale, so they outsourced the building and maintenance
of telecom networks to Nokia and Ericsson.

Marketing and Sales

 Bharti Airtel focused mainly on prepaid customers.

 Marketed airtel sim cards and recharge coupons through post offices in South India in a tie up
with department of posts.
 Matchbox strategy: Making airtel recharge cards available wherever match boxed could be
found through a partnership with state owned Indian oil. They made availability of sim card at
all Indian oil petrol refilling centre.
 Their distribution model was two layered at urban area and three layered at rural area to
outreach maximum number of customers. They provided promotional materials, collected
payments and resolved complaints. Bharti marketed its services in India’s remote villages.
 Company offered farmers airtel connections along with voice updated about crop diseases,
market prices etc. through a tie up with IFFC (Indian farmers fertilisers corporation). This is
to target the farmer class by customizing their needs and requirement. – Their focus was to
understand the market and providing highest customer satisfaction Service –The after sales
support is being handled by IBM Daksh, Mphasis and others.
Service

After sales support like complaints resolution, troubleshooting online and offline via call centres
(BPO) is outsourced to IBM Daksh, Mphasis and others.

2. Explain how Airtel India configured the value chain. 

Airtel recognized its primary and secondary activities. It distinguished the customer
relationship and brand building as its primary action and re-appropriating secondary
activities. Some of the auxiliary activities were -

 Network Management to Ericsson, Nokia and Siemens

These outsourcing partners deal with the current system, convey, and work new base
stations later. Around 800 people from Bharti were exchanged with the outsourcing
partners. The value of the 3-year contract was 725 million dollars. Bharti utilizes the
compensation per utilize model and the outsourcing partners is paid for the limit
utilized by Bharti and not on the limit introduced by the outsourcing partners. Bharti
has a system supervisory crew to deal with the interface with the outsourcing partners.
 IT Management to IBM
IBM deals with all IT managers for billing, area for IT support and so forth. Around
200 peoples from Bharti were transferred to IBM. The 750 million contracts were
marked for a 10-year time frame. Bharti utilizes income imparting model to IBM. As
incomes develop, Bharti shares a little level of income with IBM. Bharti has a seven-
part of architecture audit board, which guarantees that IBM decisions are adjusted to
the long-term objectives of Bharti. Customer service call centre to Hinduja TMT,
Mphasis, IBM Daksh and Teletech India these outsourcing partners set up around
6000 seats and have been overseeing customer service call centres for all customers
aside from corporate customers and high esteem customers. Bharti has around 1500
seats in house to keep up customer service for these high-end customers. Like this,
Bharti Airtel arranged the esteem chain.

 Redistributing tasks
1. Bharti gave its IT activities which included supplying, installing and managing
dealing with all the organization's hardware and software to IBM.
2. They contracted customer administration to business process outsourcing
firms IBM Daksh, Mphasis and others.
3. In request to reduce duplication and expenses, Bharti manufactured and dealt
with organization's telecom towers and transformed it into a different
organization Indus Towers by joining with competitors like Vodafone and
Idea Cellular Towers by joining with competitors like Vodafone and Idea
Cellular.
 Marketing, Production and deals

1. Expand creation of primary output, minutes by keeping edges every moment pretty
much consistent. Any cost investment funds accomplished would be passed onto the
customer by bringing down the tariffs which would expand the interest and would
permit Airtel go further into the market and achieve low pay customers. This would
likewise result in fast increment in minutes and therefore by and large edge.
2. Bharti concentrated on prepaid customers so as to get to the low-pay advertise.
3. In country zone they made a three-layer model of ‘super distributors’ though in urban
region they made a two-layer distribution model.
4. They prepared its rural distributors and retailers to encourage customers on working
versatile handsets as a large portion of them were first time phone customers.
5. Retailed in supermarkets, versatile handset and fix shops, phone stalls and other little
outlets the nation over.
6. In 2009, subsequently joined with Nokia, Bharti advanced into villages in marked
vans by bringing issues to light about the value of cell phones.
7. Partnership with Department of Post in Kerala and state claimed Indian Oil.
8. Airtel recharge cards were accessible wherever matchboxes could be found as it this
was called as matchbox technique.
9. To catch the Indian farmers, they offered farmers Airtel associations alongside voice
updates about crop diseases, advertise costs, market prices and other data by tied up
with the India Farmers Fertilizer Corporation and in this way boosting them to buy
cell phones.
10. The organization likewise tied up with SKS Microfinance which gave microloans in
the interiors of India which give free Airtel SIM cards to SKS members.
11. They helped customers as indicated by their financial condition by giving distinctive
taxes at a few costs consequently taking care of customer's concern.
 3. Did Airtel’s strategy of similar configuration of value chain in Africa
succeed? Justify your answer.

Value Chain of Bharti Airtel in Africa

Primary Activities
Inbound Logistics Operations Outbound Marketing and Service
Logistics Sales
In many African 120 mangers in New products Low mobile Innovation for
countries logistics the continent, 80 with benefits for tariffs. benefit for the
is a nightmare. expats from India, each customer customer.
45 from Zain’s segment. Easy mobile
No proper roads. headquarter. number Locally relevant
12.6 cents per portability. brand experience.
Materials Operating in 16 minute in Nigeria.
delivered via port African countries. Products for all Strong
take 15 -20 days. 1.2 cents per three screens. partnerships for
Outsourced the minute in Kenya. generating
In case of rainy company’s Airtel Money in superior value.
season, it takes network, IT and Sold services such ten African
two months. customer service as recharge or top- markets.
Operations. ups through
Increased costs retailers.
and time.

Poor flight
connections.

Basic raw
materials had to
be imported which
lead to higher
costs.
Administrative, Finance Human Resource Product and Procurement
and Infrastructure Management Technology
Development
Bharathi’s balance Limited pool of skilled Bharti transferred a Lack of strong
sheet is very strong and talent in Africa. little over 5,000 manufacturing industry
take up additional debt. employees from its and basic raw
African who were Networks, materials like steel and
Streamlined and skilled were rare and IT and Call Centre cement had to be
integrated backend expensive. operations to its imported.
functions partners.
like accounting, quality Indian expats were told Encouraging suppliers
assurance on a common to transfer their Bharti had outsourced to set up operations in
platform across Africa. knowledge to the network Africa in order to create
Africans. management to a supply chain
Outsourced company’s Ericsson, Nokia, and ecosystem.
network. Develop local talent Huawei.
and people IT to IBM, Cost of constructing a
development as a and call centres to IBM, tower in Africa is high.
component of Tech Mahindra, and
performance appraisal. Spanco, who set up Access to electricity is
operations in each low and poor
Bharti also country to serve infrastructure in Africa.
implemented buddy customers in local
programs between languages.
India and Africa.
Bharati Airtel focused
Partnership with on understanding
business schools and customers and the
other institutions to market place.
set up academies to
train fresh graduates in High-volume, low-cost
IT and Networks and telecom business
managers. model.

Competitive
compensation and
bonus strategy.

Secondary Activities

Bharti Airtel began to look for new opportunities as growth was reducing in India and finally
decided to venture into Africa. Africa with its vast population of over a billion people with
low per capita incomes. Africa mirrored India’s demographics. Africa’s real mobile
penetration was 30% and growing rapidly and high mobile tariffs in Africa combined with
low monthly minutes of use per customer indicated that there was room to grow the market
not just by increasing mobile penetration but also by intensifying usage.
After the acquisition of Zain Bharti’s leaders discovered that employee morale at Zain was
low,
work cultures between the two continents differed vastly and market share revenues and
EBITDA were falling every month. Infrastructure was poor, hardware and software
equipment were obsolete, access to equipment supplies was limited, skilled technicians were
in short supply, and the cost of doing business was turning out to be much higher than they
had anticipated.

So, Bharti initiated multiple transformations in Africa, including outsourcing active and
passive managed services (networks) for all of its 16 countries; outsourcing its IT and call
centre support to BPO firms for the first time in Africa; revamping its distribution network;
integrating its brand, and implementing a host of human resource-related initiatives in its new
operations.

It has been over a year and a half since the acquisition, and Bharti is leading in revenue
market share in 9 of 16 countries. Despite the challenges, by early 2012, Airtel Africa was
showing early signs of a turnaround. The cost of operations is still higher Bharati expected,
elasticity of demand could fail to kick in and competition could intensify. But the business
metrics are showing early signs of a turnaround.

Africa is the biggest bet Bharti has taken in its lifetime. They arrived in Africa in June 2010
with the vision to replicate the India model and achieve rapid fire success. However, the
diversity and complexity of 17 African nations is more daunting. There has been good
progress but a significant amount of transformations remains ahead.

We can see from Exhibit 1 that Airtel is the market leader in 5 African countries. From
Exhibit 2 we can see that in 2010 the gross revenue has gone up from capital expenditure as
the company’s costs were staying constant, despite expanding its network and that EBITDA
margins had increased from approximately 19% at the end of 2010, to close to 27% by late
2011.

There are various Socio-economic factors that are similar and the African Business Unit is
growing steadily but certain areas like Inbound Logistics, human resource, procurement
needs to be developed by the governments of Africa and the company might face problems in
the short term but as the African economies are predicted to grow in the long run, so we can
conclude that Airtel’s strategy of similar configuration of value chain in Africa is growing
steadily but it may take some time to succeed.