Introduction to Asian Business
October, 18th, 2012
Bharti Airtel is a telecom company in India; so far the largest integrated Telecom Company in India. Also, it is the third largest in-country mobile network service provider, the fifth largest mobile telecom company in the world. Bharti Airtel also operates outside India, namely Sri Lanka, and Bangladesh in Asia, and in some countries in Africa. The company actively engages in its expansion into Africa, currently 20 countries included in the Airtel network. So far Airtel has about 178.6 million subscribers in India, Bangladesh, and Sri Lanka combined. 48.4 million subscribers in Africa. Airtel operates in 20 countries in the world.
Bharti was founded as a manufacturer of bicycle parts in 1976, according to their website. They also offer services in finance, retail operations, and foods. In this paper, the focus will be their most successful and biggest operation, their mobile network service. The Airtel mobile network started its operations in 1983, beginning with an agreement with Germany’s Siemens to manufacture push-button telephone models for the Indian market. Ever since, Airtel has a unique way of operating its business. They outsource most of their operations to different companies; with the exceptions of marketing, sales and finance. Their network based operations, for instance, are maintained mainly by Ericsson, Nokia Siemens Network and Huawei, their business support by IBM, and their transmission towers by its subsidiary company called Bharti Infratel Ltd. In India. This allows Airtel to provide very low rates for calling, which is especially important in a market in which the majority of people are relatively poor, such as India. Right now 3G network is widely available in 200 cities through its own network and in 500 cities through intra-circle roaming arrangements with other operators. Indian Market
India is the second largest country in the world according to index mundi. 64.9% of the population is the working age, between 15 to 64. Literacy rate is 61%. India is mixed with a lot of different cultures, languages, and religion. The mobile network market is expected to grow as the country becomes rich and the population grows. Revenue streams
The call rate is competitive, being only 0.02 cents per minute. This is because of its outsourcing operations, where Airtel pays each company by the minute for its maintenance and installation, and no payment upfront. Also, the company actively engages in the acquisition of licenses from the Indian government. In 2010, Airtel obtained 3G licenses to implement 3G network in 13 circles for 2.32 billion US dollars. In India, telecom companies are required to obtain licenses for each circle in the market to implement mobile network within the circle. The company also has an agreement to provide 3G outside of the circles with Vodafone in Gujarat. This in total makes the Airtel 3G network possible in 15 out of 22 circles in India. The maintenance and the installation of transmission towers are done by Ericsson, Nokia Siemens, and Huawei. They maintain 3G HSPA* network in the circles that are acquired by Airtel. The company was allowed to implement 4G(LTE) network in three circles in India. in 2012 they launched 4G network service using TD-LTE technology in Kolkata, Karnataka, Punjab, and Maharashtra. Bharti Airtel acquired 49% stake in Qualcomm Asia Pacific in India, intending to expand its 4G network within its own market. According to the contract, Airtel will assume the complete ownership for the company til 2014, with certain limitations and its operation being solely for commercial. "This partnership will combine the strength of Bharti's national telecom footprint and Qualcomm's technological leadership in the LTE TDD (4G) space. With a broadband ready network across India, Bharti is well positioned to lead the next phase of Indian's telecom revolution," says Bharti Airtel Chairman...
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