bharti-airtel
Post on 24-Nov-2014
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Presented By:
Naveen pathak
• India: 2nd largest telecom market after China
• Revenue: 3rd quarter, FY-09/10, US$ 8.56 billion
• India’s Rural mobile phone user: 100 million
• Subscriber base: Sept. 2009- 509 million
• Wireless subscriber: 471.7 million, Wire line: 37.3 million
• Tele-density: Jun 2010- 47.89 per hundred
Telecom Industry
Go-ahead to the CDMA technology
IND
IA
Private players were allowed in Value Added Services
National Telecom Policy (NTP) was formulated
1992
1994
1997
Independent regulator, TRAI, was established
NTP-99 led to migration from high-cost fixed license fee to low-cost revenue sharing regime
1999
2000
2002
BSNL was established by DoT
ILD services was opened to competition
Internet telephony initiated
Reduction of licence fees
2003
Calling Party Pays (CPP) was implemented
Unified Access Licensing (UASL) regime was introduced
Reference Interconnect order was issued
2004
Intra-circle merger guidelines were established
Broadband policy 2004 was formulated—targeting 20 million subscribers by 2010
2005
FDI limit was increased from 49 to 74 percent
Attempted to boost Rural telephony
2006
Number portability was proposed (pending)
Decision on 3G services (awaited)
2007
Department of Telecommunication (DoT) is the main body formulating laws and various regulations for the Indian telecom industry.
Evolution of Telecom In India
Bharti Airtel
• Largest Private Integrated Telecom Company in India
• 3rd Largest Wireless Operator in the World
• Largest & Fastest Growing Wireless Operator in India
• Largest Telecom Company listed on Indian Stock Exchange
• Bharti Airtel – Operates its GSM mobile services in 23 telecom
circles and provides broadband and telephone services in 90 cities
• Airtel was the only corporate brand to be awarded the AAA rating
Market Share
GROUP 7
Major Players Market Share
Bharti Airtel 22%Reliance 17%
Vodaphone 15%BSNL 18%TTSL 9%Idea 9%
Aircel 5%MTNL 1%Spice 1%
Others 3%
Value
Herfindahl index 0.1623Concentration Ratio 0.1425
Operator’s Market Ratio
While the tariffs have decreased, the subscriber base
has exploded
7
Total Customer Base
Profit & Profit Margin
Total Revenue of Telecom Industry
Fast Grower
Product Life Cycle - Maturity
Porter’s 5 Forces
Threat of New Entrants: (Low)• High Fixed costs• Scarcity of resources• High cost of switching companies• Huge License Fees to be paid upfront and high
gestation period• Entry of MVNOs and WiMAX operators• Spectrum Availability and Regulatory issues• Infrastructure setup cost –high• Rapidly changing technology
Rivalry Among Existing Competitors: (High)– There are three types of major players in telecom services:
• State owned companies (BSNL and MTNL).• Private Indian owned companies (Reliance Infocomm,
TataTeleservices.• Foreign invested companies (Vodafone, Bharti Tele-
Ventures, IdeaCellular, Spice Communications).
Bargaining Power of Suppliers: (Low)• Service Industry – less suppliers / role of
suppliers are almost negligible
Bargaining Power of Buyer: (High)• Lack of differentiation among service providers• Cut throat competition• Low switching costs• Number portability will have negative impact
Threat of Substitutes: (High)• Broadband Services
SWOT Analysis
Strengths
• Largest Telecom Player in India
• Strategic Alliance with other stake
holders in Bharti Airtel include
Sony-Ericsson, Nokia - and Sing Tel
• Pan India Presence
• Strong brand value
Weakness
• Decreasing ARPU
• Relatively weak corporate
house
SWOT Analysis
Opportunities
• Expanding international
presence
• Low penetration rates
• New services
Threats
• Increasing competition
• Regulations
• Mobile Number Portability
by Jan 2011 – impact on
margins
Financial Snapshot - Ratios
21
• Liquidity Ratio
Ratio 2006 2007 2008 2009 2010
Quick Ratio 0.30 0.27 0.39 0.41 0.31
Current Ratio 0.37 0.34 0.54 0.67 0.68
• Efficiency Ratio
Ratio 2006 2007 2008 2009 2010
Debtors Turnover Ratio 12.57 14.31 12.28 12.78 15.30
Fixed Asset Turnover
Ratio
0.72 0.75 1.03 1 0.88
Total Assets Turnover
Ratio
1.15 1.27 1.09 1.06 0.93
• Leverage Ratio
Ratio 2006 2007 2008 2009 2010
Debt to Equity Ratio 0.65 0.46 0.32 0.28 0.14
• Coverage Ratio
Ratio 2006 2007 2008 2009 2010
Interest Coverage Ratio 12.8 23.25 34.4 39.53 100.47
• Profitability Ratio
Ratio 2006 2007 2008 2009 2010
Operating Margin Ratio 39.08 38.74 41.37 40.65 35.86
Net Profit Margin Ratio 26.36 22.58 23.99 22.46 17.8
Return on Assets Ratio 10.36 14.51 106.35 145.01 96.24
Recommendation
• Daily Moving Average – 306• EPS – 24.83• 3G services to be started before 31th Dec• Project partner with IBM in South Africa for
development network• Won bid for3g spectrum and huwai is their
partner
GROUP 7 28
THANK YOU !!
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