INTRODUCTION Type Public company

Traded as  Bhrati Airtel

Industry Telecommunications Founded 7 July 1995 Founders Sunil Bharti Mittal Headquarters Bharti Crescent, 1, nelson nilson mandela road, newDelhi Area served India & South Asia, Africa, and the channel islands Key people Sunil Bharti Mittal

(Chairman and MD)

Airtel • Bharti Airtel formely known as Bharti tele venture( BTVL)• It the largest mobile operator in south Asia & 3rd largest in the

world• It was foundedd on 7th july 1995 by Sunil Bharti Mittal• It is the largest service provider in india, with more than 261

million subscriber across 20 countries as of august 2012• Airtel has been voted as 2nd most trusted service provider of

the year 2008

AIRTEL IN BANGLADESH

Airtel formely known as a warid telecom.

It was founded on 2nd December 2010

Airtel Bangladesh has 7.97 million subscribers with 7.3% of market share.

On December 21, 2011, Airtel Bangladesh launched "Airtel Circle of Friends"

Subscriber baseBharti Airtel has about 230.8 million subscriber Worldwide.169.18 million in India46 million in Africa4million in Bangladesh1.8 million in Srilanka.

Bangladesh Mobile Operators Market Share

    Operators     Sep,2011   Sep,2012   Sep,2013     Sep,2014  

    Grameen Phone Ltd. (GP)     15.14   20.82   21.98     28.654  

                             

    Telecommunication sector Axiata   6.70 7.63 10.56   11.707  

    Limited                        

                       

    Sheba Telecom Ltd. (Banglalink)     6.02   10.14   12.13     18.107  

                             

    PBTL (Citycell)   1.32 1.74 1.97   1.907  

                       

    Teletalk Bangladesh Ltd. (Teletalk)     0.68   0.9   1.07     1.183  

                             

    Airtel Telecom International L.L.C   1.56 3.86 2.69   3.581  

    (Airtel)                        

                       

    Total     31.42   45.09   50.4     65.142  

                             

                             

                             

                             

PEST in Bangladesh

Threats to substitute

LEVEL:Positive

Negative

•Skype•Google talk•Wireless Internet•VOIP

•Size and concentration of suppliers relative to products(low)• Buyer’s switching cost (low)•Buyer’s information (high)

“I really don’t think they are adversely affecting the operators’ performance….. doesn’t have any significant impact on the market.”

- Raihan Islam, Former Head of Customer Acquisition, Airtel Bangladesh Limited

High

Low LEVEL

Bargaining power of suppliers

Bargaining power of the buyers

LEVEL:High

Low

•Similar products and services (High)•Lower switching cost (low)•Buyers information( High)

Rivalry among competitors• Concentration market share• Better value added services• Intensity of competitors-High

Threat of New Entrants

•High Sim card Tax•High License renewal fees•Limited spectrum availability • New entrants – by merging with existing operators

AFRICA STRATEGYIN TELECOMMUNICATIONS INDUSTRY

Why Africa?• Telecom Industry in developed markets has been saturated• Africa market: - Cellular and fixed-line telephone penetration rates are low, offering significant

customer and revenue growth potential. - Wages are low; many workers speak English, French along with the enormous

number of the available workforce.- Government policies attract FDI: improved environment, economic reform, private

sector encouragement and better FDI regulatory framework (allow profits to be repatriated freely or offer tax incentives etc…)

Country Site Market status

Burkina Faso

Airtel Burkina Faso 50% market share and dominant player with 1,433,000 customers .

Chad Airtel Chad No.1 operator with 69% share .

DR Congo Airtel DRC Market leader with 7million customers .

Gabon Airtel Gabon Market share 61%

Kenya Airtel Kenya 2nd largest operator with 7 million customers .

Niger Airtel Niger Market leader with 68% share .Seychelles

Airtel SeychellesAirtel is the leading comprehensive telecommunications services providers with over 55% market share of mobile market in Seychelles

Joint-venture

Acquisition

Medium($1,000-4,000)

Low(<$1,000)

License

Per capita income

FDI

High(>$4,000 )

Vodafone

Etisalat

Virgin

Vivendi

Orange

Airtel

AFRICA EXPANSION STRATEGY

STRATEGIES

Operates in 16 African Countries. Mode of entry: Acquisition Focus: Rebranding, improved network coverage, excellent customer care and range of products to chose from. CAPEX: Expand with lower capex and discussion with the government for utilizing USO fund for network. Partners: Looking for strategic partners and setting up of base in Nairobi. Telecom Population: Increase minutes of usage from 50-60 minutes to 250 minutes and increase the net density.

MACRO ENVIRONMENT

OF AFRICA

PPolitical factors: Many African countries are just out of the civil war. Corrupt previous governments have left behind them disorderly regulatory regimes. Governments tend to intervene in the industry.

TTechnological factors: 3G mobile services Expansion of GSM networks Upgrades in data transmissions due to rapid growth of ADSL and wireless broadband services.

SSocio-cultural factors: Women in sub-Saharan African countries contribute over 40% of the economic activity of most nations. The literacy of women is low. Increase in the use of mobile phones.

EEnvironmental factors: Stress on saving energy due to high energy consumption in the industry. New technologies for energy saving network towers and grids.

EEconomic: factors: 6% growth rate predicted in the sector for the year 2015-2018 in Africa. Very fertile market, with a significant increase in consumption of new technologies. Sensitive economical disparity depending on the regions of the continent Tremendous investment in the sector since 2007.

LLegal factors: Unified licensing introduced in 2006. Continuing liberalization of VOIP (Voice Over Internet Protocol). Privatization of national telecommunications services in the region is continuing with significant premiums over reserve prices being paid.

Telecommunications industryPorter’s Five Forces Model

Threat of new entrants

Threat of substitute products or

services

Bargaining power of suppliers

Bargaining power of

consumers

Competitive rivalry within an

Industry

HIGHHIGH

LOW /MODERATE

LOW

LOW

is the telecommunications industry attractive in Africa? Yes

Summary Africa strategies in telecom industry

• Target new emerging market• Takeovers• Direct marketing• Nation wide network coverage• Cheap pricing• Limited services• Colonial entry barriers• Rural area vs major cities

Possible benefits and problems of current strategy

• Integrate into an existing business that already knows the culture and how the country does business• Able to use partners’ network to offer its customers a range of service, which utilize ‘home’ network capabilities as well as extended coverage within Africa• Enable to meet their needs for unified communications, centralized customer care and services using local network.• Lower cost of operation• Benefiting from lower roaming charges • Powerful brand association

BENEFITS

PROBLEMS

• Cultural, administrative, geographical and economical distances (CAGE framework)• Increase in cost of integrating and management • Decreased corporate performance and services •

Potentially lowered industry innovation • Suppression of competing businesses • Decline in equity pricing and investment value

• Conflict for control and decision-making between Parent company & subsidiary• Governments’ support could decline (E.g: Vivendi and Morocan government)