Bharti Airtel - Future Outlook and Fundamental Analysis

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  • Topic: Financial ratios, Financial ratio, Bharti Airtel
  • Pages : 10 (3165 words )
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  • Published : March 11, 2011
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About Company
Bharti Airtel Limited is a leading global telecommunications company with operations in 19 countries across Asia and Africa. The company offers mobile voice & data services, fixed line, high speed broadband, IPTV, DTH, turnkey telecom solutions for enterprises and national & international long distance services to carriers. Bharti Airtel has been ranked among the six best performing technology companies in the world by Business Week. Bharti Airtel had over 211 million customers across its operations at the end of January 2011. Management and Board of Directors

Name| Designation| Name| Designation|
Sunil Bharti Mittal| Chairman and Managing director| Manoj Kohli| Joint Managing Director & CEO| Ajay Lal| Non Executive Director| Akhil Gupta| Non Executive Director| Chua Sock Koong| Non Executive Director| Craig Edward Ehrlich| Non Executive Director| N Kumar| Non Executive Director| Nikesh Arora| Non Executive Director| Pulak Chandan Prasad| Non Executive Director| Rajan Bharti Mittal| Non Executive Director| Rakesh Bharti Mittal| Non Executive Director| Tan Yong Choo| Non Executive Director| Salim Ahmed Salim| Non.Exe.Independent Director| Lord Evan Mervyn Davies| Non.Exe.Independent Director| Hui Weng Cheong| Non.Exe.Independent Director| Tsun-yan Hsieh| Non.Exe.Independent Director|

Business Model
Airtel today, is probably one of the best run companies in the India. It is the largest telecom player in the country and has the advantage of both massive size and a very high-growth industry. The secret of Airtel’s success has been its model. Airtel focuses solely on two things – customer acquisition & servicing (retention) and business development/expansion. ALL other functions – hardware, network management, backend applications (billing etc), value added services and even telecom infrastructure – are outsourced. It was the first to give up network management to companies like NokiaSiemens and Ericsson, IT and backend applications to IBM, billing to someone else etc. It was also the first to divest its hard assets, i.e. – its telecom towers – to a separate company and lease them back themselves as well as monetize surplus bandwidth by selling to other operators. This was the ultimate act in putting the faith in the brand rather than in iron and steel. Market Share & Competitor Analysis

Bharti Airtel suffered the biggest market share decline during 2010 owing to the entry of new operators, followed by Reliance and Vodafone, according to full year subscriber numbers released by the Telecom Regulatory Authority of India (Trai). The biggest winner in the market share game was Uninor, which gained nearly 2%, followed by Videocon, which increased its market share by around 1%. The data, however, also showed that a large portion of subscribers, of the new operators, had bought their connections ‘to try out’ and did not use it regularly. From January 2010 to December 2010, the four incumbent GSM operators - Airtel, Vodafone, Idea and BSNL - saw their combined mobile market share decline around 3.4% percentage points, from 62.6% at the end of January to 59.2% at the end of December 2010. Bharti Airtel led the losses with a 2.1% percentage point loss to end the year at 20.3%. It was followed by Reliance, which lost 1% and Vodafone, which lost 0.75%. Losses for Idea Cellular were the least, at around 0.1%, while BSNL too managed to limit its losses to 0.4%. Tata was the only big operator that did not see a decline in its subscriber market share, primarily due to its blazing subscriber acquisition rates after launching its Tata DoCoMo GSM service. Its market share marginally increased from 11.1% to 11.2% even as its CDMA peer Reliance lost market share. Uninor, the biggest gainer, increased its market share from around 0.5% of the total wireless market to 2.5% of the market, followed by Videocon, which went from zero to 1% during the same period....
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