Telecom Warfare
The battle for Survival
The sequence of events……
 The ‘per-second-billing’ revolution by Tata
Docomo’s GSM service
 The introduction of 50p pulse flat by Rcom - a
wave of lowest tariff buzz in the country
enthralled every one
 A damage of Rs 35,000 crore to Bharti’s valuation
 RCom meanwhile witnessed its valuation declining
by 21 % at Rs 14,169 crore.
 Such a huge loss just a result to per sec and 50p
pulse. Did anybody imagined it????
Testing the pockets
Our listed telcos collectively lost Rs 54,000 cr
Idea lost Rs 3534 crore
MTNL lost Rs 522 crore
Tata Teleservices (Maha) Rs 531 crore
Tata Communication Rs 370 crore
Spice Communication Rs 227 crore
Industry Scenario
 The telecom subscriber base in India reached the
525.65 mn mark
 Overall Tele-density in India - 44.87 (Wireline-3.18)
 Fastest Growing Sector – CAGR 22% (2002-07)
 Second Largest Telecom Market - Lowest tariff
 Lack of Transparency in Spectrum & License
Allocation
Industry Scenario
 Difficult to differentiate service offerings or
customer service
 Huge License Fees to be paid upfront
 High gestation period
 Rapidly changing technology
 Infrastructure Setup Cost - High
Indian Telecom Market
Hyper competition…….???
 It occurs when technologies or offerings are so
new that standards and rules are in flux.
 This results in competitive advantages that
cannot be sustained.
 In response, companies must constantly compete
in price or quality, or innovate in supply chain
management, new value creation, or have
enough financial capital to outlast other
competitors.”
The Person
 Big Daddy of the industry
 Takes care of you where ever you go
 Most respected and classic personality
 Reliable and dependable family
member
 Visionary ,looking beyond the horizon
 Truly, a global Indian
9
Mission
“ We at Airtel always think in fresh and innovative
ways about the needs of our customers and how we
want them to feel. We deliver what we promise and
go out of our way to delight the customer with a
little bit more”
Bharti Airtel
 Largest Private Integrated Telecom Company in India
 3rd Largest Wireless Operator in the World
 Bharti Airtel formerly known as Bharti Tele-ventures
Limited (BTVL) is a JV between Singtel and Bharti
Telecom. (31.9 % stake)
GROUP 7
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Meaning behind the logo
Airtel logo is a strong ,contempory, a confident symbol
of a brand that is always ahead of the rest , always ‘Intouch’ and on customer’s side.
 It incorporates two solid, red rectangular forms whose
counter-form creates an open doorway.
 The title case lettering with its capital ‘A’ reinforces the
leadership position.
 The red dot cues in the focus on innovation.
Mile Stones of Bharti Airtel
• Bharti Airtel was established as Bharti Tele-Ventures, in 1995.
• The company offered its initial public offering in 2002.
• Vodafone acquired a 10% stake in Bharti Tele-Ventures for around $1.5 billion, in
2005.
• Bharti Tele-Ventures renamed itself to Bharti Airtel Limited, in 2006.
• Airtel launched its Iphone in august 2008.
• Airtel successfully tested 3G services in Delhi, Mumbai and Bangalore and are
waiting for the spectrum to be allocated.
• MTN -Bharti merger begins to take shape in June -09
• MTN Bharti deal called off in Sept -09
• Joins the pricing war at the end of November - 09
Express
Expressyourself
yourself
Integrated Telecom Company
Wireless Services
– 2G/3G
– VAS, Blackberry
Telemedia Services
– Fixed Line
– Broadband
– DTH / IPTV
Enterprise Services
– Carrier
– Corporate
Passive Infrastructure
– Bharti Infratel
– Indus Tower
GROUP 7
14
Price
Customer based pricing strategies.
Flexible pricing mechanism
Late adopter to price war
Finally changed to per second billing with
reduced roaming rates.
Investor Relations :- http://www.bhartiairtel.in
Place
• It has wide and extensive
presence even in the
remotest areas.(Pan India
coverage)
• Airtel Customer Care Touch
Points
• Distributors like
E.g. Paan shops, grocery
stores, chemists, outlet etc.
Promotion
• Large scale print and video advertising.
• Brand endorsers - Big celebrities like SRK Saif,
Kareena
• In 2002 Airtel got its Signature tune from A.R.
Rehman, this signature tune is the most
downloaded tune in India.
• Ads based on the
emotional connect
Tagline evolution
Power to keep in touch (1995)
Elite and premium brand
Touch tomorrow (1999)
Started looking from regional to pan india position
Live every moment (2002)
To catch some emotions and feelings ,brand of the masses
Express yourself (2003-2009)
To strengthen the emotional connect of customers ,wanted a fresh and contemporary
idea that built a brand their customers could identify with
Business Strength







Current market share - Market Leader
Pan India Network
Recognized Globally
Brand and corporate image
Focused Leadership
Managerial personal
Promotional effectiveness
22
Airtel – Strategy
MANTRA : Focus on Core Competencies and
Outsource the rest!
Product
Innovation




Ericssion – Networking
IBM – IT
Mphasis – call centre
Bharti Infratel – Tele Infra
Pricing
Core
Competencies
Marketing
and
Branding
VAS
Future Strategies
 Translate its expertise in Indian markets to other
emerging economies. This could call for acquisitions
globally.
 Bharti Airtel to invest US$ 126.5 million to ramp up its
networks in the Assam and Northeast circles
 Technology leadership is a must – Airtel must ensure
that its dependency on GSM technology does not
render it obsolete.
 Indian market inspite of being the worlds largest is
still not matured. Opportunities abound in the
hinterland which must be exploited.
Innovate. Stimulate. Liberate.
To be the most customer-focused mobile
service brand, continuously innovating to help
liberate our customers from the shackles of
time & space
Till about eight years ago, the corporate name
used to be the butt of many jokes.
???
BATATA!!
A three-way joint venture between the Birla
Group, Tata and AT&T, it was called the
Birla-AT&T-TATA
INORGANIC GROWTH STRATEGY
40.8 % STAKE
8 YEAR DEAL WITH IBM WORTH $19.2 MILLION
PRESENT STRATEGY
• Present in 21 of 22 circles, latest entry ASSAM
MAHARASHTRA
UTTAR PRADESH
HARYANA
• Special pricing/ tariffs for each circle during
entry
• From basic voice & Short Message Service
(SMS) services to high-end value added
services such as Mobile TV, Games etc - IDEA
is seen as an innovative, customer focused
brand
'Best celebrity endorsement award'
at NDTV Tech Life Awards
“I remember, I salute, I pledge”
Talk for India at Citizen’s Park on November 26.
• Idea is simultaneously conducting indoor
WiMAX trials in three cities - Pune, Bangalore
and Kochi.
• Eyes rural circles
• `cover gaps quickly'
Entered other circles in 2005
STATUS QUO
$10 billion - investment till 2011
Rs. 20 billion for 3G spectrum despite
economic slowdown.
4.65%
2.88%
NGN expertise of Maxis telecom in more mature markets
like Malaysia especially with 3G & WiMAX.
A special handset for senior citizens.
This will only have four buttons; one
each for the doctor and police with two
for calling two relatives
VAS & DATA SERVICES
• To be a nation wide player by end of 2009
• To acquire more number of subscribers
• To increase its tower numbers
•
•
•
•
3G
Data play, VAS
Roping in more partners
Banking on increasing
churn rate
• Focus on youth
BRAND PERSONALITY
Make the most of now
Vodafone
•
•
•
•
•
Cute
Friendly
Trend setter
Approachable
Youth student
Vodafone
•
•
•
•
•
•
Youth oriented Brand
Boy - girl
Quirky – Zoo Zoo
Friendly – Happy to help
Fun – Make the most of now
Hugely popular – 323 million subscribers
world wide
• Red: For the passion and spirit
• Rock Solid: dependable and empathetic
• Restless: always challenging to improve and
being funny.
• Glocal brand
Vodafone
Original Corporate Logo of
Vodafone before 1997
New Corporate Logo of
Vodafone as of 1997.
•It represents a quotation mark within a circle. With 'O' in the Vodafone
logotype being opening and closing quotation marks, suggesting
conversation. Its logo is a true representation of that belief - The start of a
new conversation, a trigger, a catalyst, a mark of true pioneering.
•The name Vodafone comes from Voice data fone, chosen by the company
to "reflect the provision of voice and data services over mobile phones.“
• Products and services offered by Vodafone
 Voice Mobile telecommunication services
 Mobile Text centre (Messaging Services – SMS, PXT and MMS)
 Data Services
 Fixed line
 Fixed line internet access
 Device (Handsets and Vodafone mobile connect)
Mr. Vittorio Colao of Italy is the new CEO of Vodafone after
Mr. Arun Sarin took retirement on 29th July, 2008. Mr.
Asim Ghosh is the CEO of Vodafone Essar, India
Rank
Brand
Sector
Trademark
Value /
Enterprise
Value(%)
39%
BrandScore
Brand Rating
94
AAA+
1
Coca-Cola
Beverages
2
Microsoft
Software
15%
91
AAA+
3
Citibank
Financial Services
13%
79
AA+
4
Wal-Mart
Retail
15%
55
A
5
IBM
Computers
23%
70
AA-
6
HSBC
Financial Services
14%
88
AAA
7
GE (General Electric)
Miscellaneous Manufactur
4%
77
AA+
8
Bank of America
Financial Services
12%
79
AA+
9
Hewlett-Packard
Computers
24%
77
AA+
10
Marlboro
Tobacco
14%
67
AA-
11
Vodafone
Telecommunications
17%
74
AA
12
Gillette
Cosmetics/Personal Care
12%
91
AAA+
13
Intel
Computers
22%
79
AA+
14
L'Oreal
Cosmetics/Personal Care
39%
77
AA+
15
Google
Internet
19%
90
AAA+
16
Toyota
Auto Manufacturers
9%
69
AA-
17
Nokia
Wireless Equipment
35%
89
AAA
18
McDonalds
Retail-Restaurants
36%
92
AAA+
19
Pepsi-Cola
Beverages
22%
74
AA
20
Dell
Computers
53%
89
AAA
• Product and services in India
– World calling card
– Post paid services
– Prepaid services
– Vodafone handy phone
– Vodafone PCO
Campaign s
•
•
•
•
•
•
9xm
IPL
24 hour 20th Sept 07
Puzzles
Inter circle
F& F
• Partner of Mc laren , England team & Uefa
formerly Man U
• Sometimes capable off resorting to crazy ad
campaigns
Challenges
• Amazing image not really translating to
increased subscribers
• Increase competition with similar offerings
• Lack of presence in Broadband , WLL market
BSNL
•
•
•
•
•
•
Boring
Dull
Slow to react
Mammoth
Resists change
Babu
Bsnl
• Known by many names for various avatars Cellone, Bfone and Dataone
now all known as BSNL
• Like s the Liril Girls Priety now Deepika
• Have a lot money Rs 10,000 Crore cash Reserves
• Was known to be very unreliable but now known as low cost alternative
• Have better Pan India presence than all other networks only present in
Mumbai & Delhi where you will find sister concern MTNL
• Also known as Mini Ratna esteemed in Indian PSU Sector
• Known to have had the best network in villages
• Used to have the best Std plans before all the new players came into the
market and started talking bout one paise
• Only 2 Co s provide 3g in India right now at affordable rates
BSNL
• Have a lot of advantages that rivals don t have
in terms of 3G one year lead @30 ps per min
for video call 50 ps Std
• Despite this no longer popular last year had a
market share of 17% this year 13.6 %
• BSNL is a confused personality with an
obsolete outlook that youth nowadays don’t
connect with , hence it has been looking for
foreign strategic partner with AT& T interested
Strategy
• To remain market leader in providing world class Telecom and IT
related services at affordable prices and to become a global
player.
•
•
•
•
•
•
•
Zain
Swan
Value added services
Tele infra
Quality of services
Technology
I- Phone
Products
•
BSNL LANDLINE
•
•
•
•
•
•
•
PHONE PLUS SERVICE
NEW TELEPHONE CONNECTION
PERMANENT CONNECTION
CONCESSION IN RENTALS
SHIFT OF TELEPHONE
TRANSFER OF TELEPHONE
TELEPHONE TARIFF
•
BSNL MOBILE
•
•
•
•
•
•
•
POSTPAID
PREPAID
UNIFIED MESSAGING
GPRS/WAP/MMS
DEMOs
TARIFF
SMS & BULK SMS
•
BSNL WLL
•
INTERNET SERVICES
NETWORK
• BROADBAND
• TYPES OF ACCESS
• WI-FI
• CO-LOCATION SERVICE
• BSNL WEB HOSTING
• INTERNET TARIFF
• DIAL UP INTERNET
• SMS& BULK SMS
BSNL BROADBAND
•
•
•
•
•
•
REGISTER ONLINE
TARIFF
CHECK USAGE
BSNL MANAGED NETWORK SERVICES
BSNL MPLS-VPN
ISDN
Bsnl
•
•
•
•
•
STRENGHTS
It has a competitive pricing policy.
BSNL has the support of Government
BSNL has a good Financial standing
BSNL maintains solid partnerships and is the go to person in the
industry in terms of infra
•
• WEAKNESSES:
• Although it is investing too much in R&D but its marketing skills are
below average.
• Although the industry is growing very fast ,at the same time it is
losing its customers as well because the competitors are eroding it s
market share
• Inability to convert it s advantages into strengths
•
•
•
•
•
•
•
•
OPPORTUNITIES:
It can retain its customers by improving its marketing skills.
Leverage on it s 3G advantage
The Group can strengthen and expedite research and
development in order to deliver products of top
international standards.
THREATS:
Price war
New competition
The other threat can be the market saturation in terms of
business opportunities available in the conventional
telecom business.
Rs.
HIGH COST
LOW VARIETY
HIGH VARIETY
VERY LOW
COST
Java enabled,
multimedia
ready
One time
membership
INCOMING
Outgoing
Calls at
10paise
15 SECONDS
PULSE RATE
VALUE
ADDED
SERVICES
Today.........We Have Mobiles coz of Reliance!!!!!!!!!!
by pratap on Jun 18, 2009 06:26 PM | Hide replies
Considering poor/middle class people
Reliance Produced Mobiles for Everyone...........
 today everyone have mobile just because of
.RELIANCE.........
 POOR people have mobile just because of
RELIANCE.........
 I and YOU keeps 2-3 mobiles just because of
RELIANCE.........
 Call rates are reducing day by day just because of
RELIANCE.........
 Other network has reduce the cost of sim and call rates
just because of RELIANCE.........
 Today a Rikshawala has Mobile just
because of RELIANCE.........
 OTHERWISE WE WILL BE TALKING 8.50
Rs./Min for Outgoing and 4.50 Rs/Min for
Incoming.
 There may be little bit bad network but one
who bring every hand Mobile
was......RELIANCE
Am i right or wrong???
1
External factor – Govt.’s Role
 74% as FDI cap in telecom sector
 Lack of effective guidance from the
govt
 The Govt. is as confused as ever
 State owned BSNL loses market
share (47% to 14%)
 Sam Pitroda, to the rescue of the 3G
auction
External factors
Govt. to garner Rs 35000 cr from the 3G
auction and set up dedicated OFC N/w for the
defense forces.
Falling Handset Prices.
11 digit mobile number – beyond 600mn
subscriber base.
External factors- 3G
3G - auction -January 14, 2010
3G subscribers in India is likely to touch 90
mn by 2013
WiMAX users are expected to reach 7 mn by
the end of 2011 (Gartner)
Google eyeing opportunities in the 3G.It might
participate in the auction.
External factors- MNP
To be launched in various phases from Jan,10
On payment of Rs19 the user retain his number
and switch to any other service provider.
Game changer – to take competition to a different
level
To increase the customer churning –
Low Switching Costs
The future
 Falling ARPU
 Intense Competition & Shortage of Bandwidth
 New Players coming in India – MTS, Uninor
 Increase in mobile presence – Payments, ads
 Consolidation in the industry ???
 See long-term potential – Rural and technology
Who will win?
 The Indian urban market is 80-90 % penetrated. The winner
would try to reach penetration levels of 70% in the rural
markets as well (rural tele density at 16%)
 Would build a strong and vast network. In the fight to reduce
tariffs the companies have to bear in mind the aspect of
network quality too.
 3G, Wimax…The ability to embrace new technologies fastest
will be of huge importance.
 Profitability…Irrespective of anything, the companies have to
ensure a positive balance sheet and generate cash-flow.
THANK YOU !!
GROUP 7
95