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Bharti Airtel`s Broadband Surge during COVID-19

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Case Code: MKTG438
Case Length: 15 Pages
Period: 2018-20
Pub Date: 2021
Teaching Note: Available
Price: Rs.400
Organization : Bharti Airtel Limited
Industry : Diversified
Countries : India
Themes: Marketing Strategy, Brand Strategy
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Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about Bharti Airtel Limited (Airtel), India's second-largest wired broadband service provider (after state-owned operator Bharat Sanchar Nigam Limited (BSNL)), which saw the demand for home broadband surge during the COVID-19-induced lockdown in the country. In 2020, Airtel significantly consolidated its position in the Indian telecom market, amid intense competition from Reliance Jio Infocomm Limited for supremacy in the telecom market. One of the biggest contributing factors for Airtel’s growth was its rising average revenue per user (ARPU),which grew without impacting the number of subscribers. The ARPU of Airtel increased to Rs.154 in the fourth quarter of 2020, up from Rs.135 in the previous quarter. The Indian telecom industry saw a major shift from mobile broadband services to home broadband networks, especially because of the pandemic. The lockdown boosted the demand for home broadband as many people preferred to stay indoors and rely on the internet to carry out their day-to-day activities. On the home broadband front, Airtel saw a surge in the number of users and the consumption of data due to the culture of working and studying from home.

Airtel’s growth was attributed to the tariff hike during the end of 2019 and its focus on 4G and post-paid subscribers. The company shifted its strategy to become an ecosystem of digital services to stay relevant in the digitization era and win over quality customers across all the segments. An increase in market share, along with the rising ARPU of Airtel was the result of its well thought out strategy.

During the nation-wide lockdown across the country to contain the pandemic, more and more people started working from home using their home broadband connections, creating a huge demand for bandwidth. Airtel was determined to ensure a seamless network experience for its users. Its networks operated in the Business Continuity Planning (BCP) mode. At this time, Airtel increased its investments, upgraded the quality of its services, and accelerated network roll-outs to meet customers’ demand for uninterrupted broadband connectivity (retail and enterprise). Airtel provided affordable broadband plans and leveraged its partner services to deliver an integrated offer that covered unlimited data, connectivity, and entertainment. The impact of the pandemic and cheaper data tariff plans from Airtel wereexpected to help the company witness faster adoption of the broadband in India post pandemic.

But a few challenges remained. Airtel’s ARPU was still below the desired levels. At the same time, Jio had made huge investments in the 5G network, which could pose severe competition to Airtel. Further, Jio’s aggressive pricing strategy to attract customers could also be a challenge for Airtel.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand the reasons for the increase in the demand for broadband services in India during the COVID-19 pandemic.
  • Evaluate the strategies adopted by Airtel to cater to the increasing demand for broadband during the pandemic..
  • Evaluate the comparative advantage of Airtel’s broadband services. .
  • Analyze the post-pandemic challenges Airtel could face.

Contents

Keywords

Telecom industry;COVID-19 lockdown; Broadband service; Broadband network capacity; Business Continuity Planning; Data tariffs; ARPU; Pricing strategy; Rock bottom pricing; Premium tariff; Tariff war; Tariff discipline; Strategic acquisition

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