Bharti Airtel Limited

Bharti Airtel Limited
Bharti Airtel Limited - SWOT Analysis

Bharti Airtel Limited (Bharti Airtel or 'the company') is a provider of telecommunications
services. Market position and robust network infrastructure are the company’s major
strengths, whereas low liquidity position could be a cause for concern. Positive outlook for
global telecommunications market and mobile 5G commercialization market are likely to offer
growth opportunities to the company. However, fragility of network and collocation services,
competition pressures, and changes in telecommunications technology could affect its
business operations.
Bharti Airtel Limited- Strengths
Strengths - Market position

Bharti Airtel has a strong market position in the telecommunications industry. The company's
significant market position substantiated with its customer base ensures stable revenues. It
also allows the company to launch new products and services and the customer base
provides a substantial base for the consumption of the company's products and services. The
company is a leading global telecommunications company. In FY2020, the company has its
presence across 18 countries across Africa and Asia. Bharti Airtel owned 570 MHz in 2300
MHz band, 566.1 MHz in 1800 MHz band, 22.5 Mhz in 800 MHz band, 232.8 Mhz in 900 MHz
band and 340 MHz spectrum in 2100 MHz band. Bharti Airtel is one of the largest private
home broadband player in India with 2.4 million customers and 16.6 million digital TV
subscribers in India.
Strengths - Robust network infrastructure

The company has robust network infrastructure with broad coverage capability. The
company's robust infrastructure coupled with continuous focus on enhancing network
capabilities enables it to effectively serve its customer base. In FY2020, the company had
503,883 mobile broadband base stations; 304,907 Rkms optic fiber network; and 194,409
network towers. The company also offers digital TV and IPTV services in India. The company
has businesses in 14 countries in Africa and provides. In FY2020, the company had network
coverage across 50 countries and 5 continents and deployed 65 Global PoPs (Point of
presence). The Tower infrastructure operated more than 95,372 telecom towers, of which
42,053 were company owned and remaining were owned by Indus Towers. It also operates
tower services in 22 telecom circles in India. Its optical fiber network is spread over India,
which offers 85 HD channels, seven international channels, and four interactive services on
its Direct-To-Home (DTH) platform. It provides network coverage in 111 cities in India..
Bharti Airtel Limited - Weaknesses
Weaknesses - Low liquidity position

Bharti Airtel’s liquidity position declined in the review year. At the end of FY2020, the current
ratio of the company was 0.6. This was due to 41.4% increase in its current liabilities from
INR930,134 million in FY2019 to INR1,314,876 million in FY2019, resulting from increase in
deferred revenue, provisions, and - current maturities of long-term borrowings. Low liquidity
may place the company at a disadvantage, while it funds any potential opportunities arising in
the market.
Bharti Airtel Limited- Opportunities
Opportunities - Positive outlook for global telecommunications market

The company stands to benefit from the positive outlook for global telecommunications
market. According to in-house research, the global telecommunications market is forecasted
to grow at a CAGR of 2.4% during 2019-2024 to reach US$1,356 billion in 2024 from
Published: 28 Aug 2020 Page 1

Extracted: 21 Dec 2020
US$1,204.2 billion in 2019. Wireless is the largest segment of the global telecommunication
services market, accounting for 63.5% of the market's total value, followed by Fixed-line
segment with 36.5%. Geographically Asia-Pacific accounts for 41.6% of the global
telecommunication services market value, followed by US with 25.8%, Europe with 20.8%,
the Middle East with 2.4%, and Rest of the World with 9.5%. Thus, global telecommunications
market provides incremental growth opportunities for the company in the coming years.
Opportunities - Mobile 5G commercialization market

The adoption of mobile 5G services will be augmented by the increasing demand for mobile
data connectivity at higher speeds, mainly owing to mobile video consumption,
communication services and the development of the IoT industry. According to in-house
research, the global mobile 5G subscription is expected to reach 806.9 million, which account
for 8.1% of the mobile subscriptions worldwide. Asia-Pacific will remain the biggest mobile 5G
market in absolute terms, with 447.7 million estimated subscriptions by 2023. North America
will report the highest adoption rates in terms of the population (51.3%), followed by Europe
(12.8%), Asia-Pacific (10.4%), Latin America (5.7%) and Middle East and North Africa (1.0%).
The mobile 5G service is estimated to generate revenue of US$196.1 billion globally by 2023,
accounting for 19.4% of mobile service revenue worldwide. In mobile 5G services, North
America will make the biggest contribution to revenue, at 35.7% in 2023, followed by Asia-
Pacific (20.2%), and Europe (12.3%). In Latin America, Middle East and North Africa, the
share of mobile 5G service revenue in each region’s mobile service revenue will remain at
single digits through 2023. The company is investing in upgrading its existing 4G base
stations with 5G capabilities. The rising demand for high speed data has escalated the need
for 5G services in one of the world’s largest telecom markets.
Bharti Airtel Limited - Threats
Threats - Competition pressures

The company operates in an intensely competitive Indian telecoms market with seven
national players. This is too high compared to global standards. Additionally, the Indian
customers are highly price sensitive and consequently the telecom service providers have
limited pricing power. The telecommunications market is highly competitive and includes
several players including Idea Cellular, Bharat Sanchar Nigam, Vodafone, Tata Teleservices
and Reliance Communications. Also, the presence of several competitors intensifies the
competition for the spectrum auction. This may increase the costs to buy the spectrum which
may further pressurize margins. The company's African operations also witnessed severe
competition. The competitive pressures in Indian and African markets could affect the market
share and pressurize the company's margins.
Threats - Fragility of network and collocation services

The company’s success depends on its ability to provide high quality and reliable products
and services. Any cause of human error, natural disaster, extreme temperature or other
unanticipated problems could affect the ability of its provision of services to the customers.
Any problems in analyzing and applying data could interrupt the services. The services are
also prone to unauthorized access, system viruses, and other disruptive problems caused by
customers, employees and others. Resolving network failures and security problems could
also cause interruptions, failure or delay in the services.
Threats - Changes in telecommunications technology

The telecommunications industry is subject to rapid changes in technology, and, to compete
effectively, the company must continually introduce new products and services that achieve
market acceptance. The IT enabled communication equipment industry is characterized by
fast technological changes, evolving industry standards, changing market conditions and
frequent new product and service introductions and enhancements. The introduction of
products using new technologies or the adoption of new industry standards can make the

existing products or products under development obsolete or unmarketable. In order to

remain competitive and in order to increase its sales, the company needs to adapt to the
rapidly changing business environment.
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Bharti Airtel Limited - SWOT Analysis

Bharti Airtel Limited- Strengths

Strengths - Market position

Strengths - Robust network infrastructure

Bharti Airtel Limited - Weaknesses

Weaknesses - Low liquidity position

Bharti Airtel Limited- Opportunities

Opportunities - Positive outlook for global telecommunications market

Published: 28 Aug 2020 Page 1

Opportunities - Mobile 5G commercialization market

Bharti Airtel Limited - Threats

Threats - Competition pressures

Threats - Fragility of network and collocation services

Threats - Changes in telecommunications technology

Published: 28 Aug 2020 Page 2

existing products or products under development obsolete or unmarketable. In order to

All Rights Reserved.

This information has been extracted from MarketLine by a registered user

No part of this publication may be reproduced, stored in a retrieval system or

Published: 28 Aug 2020 Page 3

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