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Company Overview

 Bharti Airtel is India’s largest mobile operator with presence in all 23 of India’s circles. The operator is divided into three business units — mobile services, broadband and telephone services, and enterprise services. The operator’s enterprise unit is divided into carriers and corporate business units. The carrier unit offers data and voice wholesale services, while the corporate business units supply data and telecommunications needs for corporate and SMEs.

 

Corporate Structure

 Although Bharti Airtel is majority owned by the Bharti Group, SingTel owns a strategic 32.2% stake in it. Following Vodafone’s acquisition of a majority 67.0% stake in Hutchison Essar in early 2007, the UK-based operator sold a 4.99% stake to the Bharti Group, although the group has given Singapore’s Temasek Holdings, parent company of SingTel, the option to acquire the stake.

 Mobile Services

 Through its GSM 900 and 1800 networks, Bharti offers wireless services. The network covered 5,092 census towns and 440,023 non-census towns and villages across India, covering 84.3% of the country’s population, as of June 2010. This is encouraging in that there still remains plenty of opportunity for further growth, especially in rural India. Bharti hopes to cover 95% of India’s population by the end of the decade.

Bharti claims that it will be in a position to launch 3G services ‘within a few months’ of receiving a 3G licence. However, it is understood that the operator will need to invest about US$1bn to upgrade to UMTS. It has already launched its SongCatcher next generation service, which is the country’s first mobile music service.

Bharti launched eight mobile feature handsets in September 2010 through its subsidiary Beetel Teletech. Bharti aims to become one of India’s top five vendors in the next three years. The handsets will feature functions mobile payments, dual-SIM capability and the subscribers will receive free calls and SMS services due to a tie up with Indian social networking site Ibibo.

 

Bharti Airtel launched 3G services in one telecoms circle in January 2011 and plans to commence commercial services in the remaining 12 by March 2011. The operator also aims to roll out the services in 1,500 cities across the country by end-March 2012. The operator is also reportedly in talks with other licence holders to roll out its 3G services in the remaining 10 circles through its roaming offerings.

 

Domestic Fixed Network Services

 Bharti also provides broadband (DSL) and fixed telephony services in 95 cities; it aims to supply broadband and telephone business wherever there is high enough revenue potential. Fixed-line telephony services include local, national and international long-distance connectivity.

 In January 2009, Bharti Airtel launched an IPTV service, Airtel Digital TV Interactive, based on Carrier Ethernet and MPEG-4 technology. In the process, Bharti also became a triple-play service provider, having launched a DTH service in October 2008. Bharti Airtel previously announced plans to enter India’s IPTV (with the help of UTStarcom) and DTH markets in October 2007.

By launching IPTV, Bharti has put itself in direct competition with BSNL and MTNL, with both state-owned operators having already launched IPTV services in select cities, such as Pune and Delhi. Bharti’s major rival, Reliance Communications, also has targets for IPTV services.

The operator boosted its broadband speeds in September 2009, for customers of its IPTV service in Delhi, Gurgaon and Noida. Magic@home Freedom offers broadband speeds of 1Mbps with capacity of 1MB at a cost of INR1899 per month, while Magic@home Turbo offers broadband speeds of 512Kbps, which doubles broadband speeds to 1Mbps at night and charges INR1499 per month.

 

International Operations

 As well as growing its domestic market, Bharti has an international strategy, as illustrated by its launch of commercial 2G and 3G mobile services in Sri Lanka, where it is set to become the South Asian country’s fifth operator. The operator will invest US$150mn towards its network roll-out, but will avoid some northern and eastern districts of the country for security reasons. It is confident that it can make a mark in Sri Lanka, where penetration is about the 30% figure. Bharti Airtel aims to continue its investment in the region and is hoping to launch networks in due course in Bhutan, Nepal, Bangladesh and the Maldives, but it has ruled out entering Pakistan.

 Airtel is currently executing an agreement with Malaysia’s Global Transit, Google, KDDI of Japan, Singapore’s Pacnet and SingTel to build a high bandwidth undersea fibre-optic cable linking Asia with the US. Through Airtel’s CallHome service, the operator already connects 2.5mn expats in the US back to India. Bharti also has an agreement with eight carriers — Etisalat, France Télécom, Ogero (Lebanon), PTCL, STC, Telecom Egypt, TIS Sparkle of Italy and VSNL — to build a fibre-optic submarine cable stretching from India to France via the Middle East.

 

The operator launched global wholesale services in August 2009, providing international operators with access to its fibre network, spanning 50 countries. It spent US$500mn on boosting cable capacity and PoPs. Its wholesale portfolio includes MPLS, ethernet IP and IPLC services.

In September 2010, Bharti launched its Global Data portfolio in Thailand and Malaysia as part of its global expansion strategy and to serve the growing bandwidth demands of customers in the region.

In November 2010, Bharti Airtel rebranded its operations in 19 countries across Asia and Africa and the unveiling of the new identity airtel, coincides with the group’s 200mn subscriber milestone.

 Strategy

 A central element of Bharti Airtel’s strategy involves the continuation of network investments, in order to ensure that it is able to serve its rapidly expanding customer base. In support of this strategy, Bharti has established a major outsourcing

relationship with IBM, which gives IBM full control and ownership of Bharti’s IT infrastructure and associated processes. The relationship with IBM enables Bharti to focus its energies on growing, serving and retaining its customer base.

 Another element of Bharti’s strategy has been its drive to become a converged services provider, with the ability to cater for all the communications needs of its customers. In August 2008, Manoj Kohli, joint managing director and CEO of Bharti Airtel, described Bharti’s ‘three-screen strategy’, by which it aims to give consumers a uniform and consistent experience. The three-screen strategy refers to the consumer accessing TV at home through Bharti’s IPTV and DTH offerings, the mobile phone in the car through the company’s mobile telephone services, and content on the PCs through Airtel’s broadband services. Kohli has also indicated that, in the long term, Bharti is interested in the possibility of entering the digital cinema business (a fourth screen). The operator is also looking beyond the telecoms sector, expanding its Global

Data portfolio in South East Asia.

 Meanwhile, Bharti continues to invest in other emerging markets and sees this expansion as a way of supplementing its domestic activities. Bharti has ambitious plans in neighbouring Sri Lanka and also states that it sees Africa as representing a huge opportunity.

 

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