Bharti Airtel Limited and the Indian Telecom Sector


Bharti Airtel Limited and the Indian Telecom Sector
Case Code: BSTR300
Case Length: 21 Pages
Period: 2005-2008
Pub Date: 2009
Teaching Note: Available
 Price: Rs.400
Organization: Bharti Airtel Ltd.
Industry: Telecom, Broadband
Countries: India; Global
Themes: Growth Strategy, Globalization
Bharti Airtel Limited and the Indian Telecom Sector
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

In the 2000s, telecommunications (telecom) company Bharti Airtel Limited (BAL) was the market leader in the Indian telecom market. It had established itself as the leader in the market by differentiating itself with its focus on building a strong brand through innovation in sales, marketing, and customer service, and an innovative cost effective business model. Analysts also credited BAL with negotiating the regulatory hurdles in this emerging market and competition very effectively. This enabled it to become profitable despite the Indian telecom market having the lowest tariffs in the world.

Some analysts opined that BAL's unique business model had become the benchmark for emerging markets. Mobile telephony in India was experiencing the fastest growth in the world and India was already one of the leading markets in terms of mobile subscriber base. Despite Average Revenue per User (ARPU) figures in the country being quite low compared to many other markets, it was viewed as an attractive market as mobile penetration of the market, particularly in the huge rural areas in India, was still low. With the developing market in the West reaching high levels of saturation (70% in US and 100% in some European markets), many global telecom operators were looking at emerging markets for their growth and this made India a prime target market for these firms. The market in India was also expected to witness many changes with the introduction of new technologies and mobile number portability.

Since 2007, BAL had been facing serious threats to its leadership position. On the one hand, there was the onslaught from global players such as Vodafone and Virgin Mobile, and on the other, the threat from established Indian companies such as Reliance Communications Ltd., Tata Teleservices Ltd., and the state-owned Bharat Sanchar Nigam Ltd (BSNL). Moreover, the market was expected to witness the entry of some more Indian and foreign companies. BAL had responded to investing heavily in expanding its network, technology, and marketing. It was trying to cover all segments of the population -from the tech-savvy youth population who coveted the latest value-added services (VAS) to the Bottom of the Pyramid (BoP) segment who would be satisfied with a low-cost offering.

In early 2008, BAL, which still dominated the Indian telecom market and was the world's tenth largest telecom company, was also readying itself to replicate its success story in some other emerging markets.

Issues

The case is structured to achieve the following teaching objectives

  • Understand how Bharti Airtel Ltd. tapped the opportunities in the Indian telecom sector and established itself as the market leader
  • Analyze the booming telecom sector in India that was experiencing high growth rates, with special emphasis on the competitive landscape in the sector
  • Understand the opportunities that emerging markets such as India offer to global business enterprises
  • Understand the issues and challenges faced by organizations operating in emerging markets

Contents

Keywords

Industry analysis, Competition, Growth strategy, Market leader strategy, Business model innovation, Globalization, Emerging market, Base of the pyramid, Promotion, Airtel , Vodafone, India, Telecom

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