Airtel - Marketing Insights

Marketing
Planning
Project

Airtel – A Study and Perspective

Submitted By:-
12P139 – Ishpreet Singh
12P140 – J Abhinav
12P141 – Karan Jaidka
12P142 – Kshitij Agrawal
12P143 – Kshitij Ahuja
12P144 – Ladlee Rathore

Group 4 – Section C –
PGPM 2012-14

Acknowledgements

We, as Group 4 of Section C, would collectively like to thank Dr. Kanwal Kapil, who for his in-
depth analysis of various topics in Marketing Planning, arise in all of us a genuine curiosity and
interest in the subject. We would also like to express our gratitude to him for arranging
numerous industry experts to come and speak to us. Through these guest sessions, we got a
first-hand perspective of how the theoretical concepts of Marketing Planning are applied in the
industry. Lastly, we thank the Almighty for guiding us through the implementation of this
project.

Group 4 – Section C Page | i

Executive Summary

Bharti Airtel Ltd. started operations in 1995 and has steadily grown to be the most dominant
Telecom player in India today. Along the way, it has encountered numerous difficulties and
challenges, strong competition and various regulatory road-blocks. How Bharti Airtel managed
to be the No. 1 in the Indian Telecom space is an interesting journey in itself and the same has
been analyzed and presented in this report.

The report presented is done in the form of a narrative to show and describe how Bharti Airtel
Ltd. grew, expanded and dominated the industry in its journey of over 17 years.

The objectives of this study include:-

 To analyse Bharti Airtel’s strategies through various mechanisms like SWOT and PEST analysis
 To apply the Porter’s 5 Forces model to Airtel
 To conduct a survey and study the consumer behaviour of a small sample of college going
students and analyse their perceptions and expectations of Airtel
 To study how Airtel branded and re-branded itself
 To study the Segmentation and Positioning strategies adopted by Airtel
 To analyse the various strategies implemented by Airtel and to give an outlook as to where we
see Airtel in the near future

Group 4 – Section C Page | ii

Table of Contents

Title Page No.

Acknowledgements i
Executive Summary ii
SECTION 1 1

The Indian Telecom Sector 2

Bharti Airtel Ltd. 4
SWOT Analysis 5

PEST Analysis 8
SECTION 2 10
Porter Analysis 11

Consumer Behavior Analysis 14
SECTION 3 18

Segmentation 19
Branding 22

Positioning, Other Strategies and Outlook 28
Conclusion 32

Bibliography 33

Group 4 – Section C Page | iii

SECTION 1

Group 4 – Section C Page | 1

The Indian Telecom Sector

India's telecommunication network is the third largest in the world on the basis of its customer
base and it has one of the lowest tariffs in the world enabled by the hyper-competition in its
market. Major sectors of the Indian telecommunication industry are telephony, internet and
broadcasting. The Telephonic network in the country, employs an extensive system of network
elements such as digital telephone exchanges, mobile switching centers, media gateways and
signaling gateways at the core, interconnected by a wide variety of transmission systems using
media, such as optical fiber or Microwave radio relay.

The Indian telecom industry underwent significant market liberalization in the 1990s, and it has
now become one of the most competitive telecom markets in the world. India has the world's
second-largest mobile phone user base with over 929.37 million users as of May 2012. It has
the world's third-largest Internet user-base with over 121 million as of December 2011.

The industry is expected to reach a size of 344,921 crore (US$62.43 billion) by 2012 at a growth
rate of over 26 per cent, and generate employment opportunities for about 10 million people
during the same period. According to analysts, the sector would create direct employment for
2.8 million people and for 7 million indirectly. The total revenue of the Indian telecom sector
grew by 7% to 283,207 crore (US$51.26 billion) for 2010–11 financial year, while revenues from
telecom equipment segment stood at 117,039 crore (US$21.18 billion).

Telecommunication has supported the socioeconomic development of India and has played a
significant role to narrow down the rural-urban digital divide to some extent.

Figure 1 - Market share of major operators in India (February, 2012). Source: Wikipedia


The telecom sector in India is undergoing a major change with regards to growth drivers.
Revenue from voice is

going to stabilize and with recent 20% hike in price by major telecom companies, the tariff war
over call rates may be coming to an end. As the telecom industry is showing signs of slowing
down in terms of subscriber growth, companies are looking at other revenue streams to
supplement their core services. Telecom operators are focusing on innovative m-VAS services
such as m-commerce, m-health, and m-education.


Bharti Airtel Ltd.

Bharti Airtel Ltd., commonly known as Airtel, was incorporated on the 7th of July, 1995 as a
Public Limited Company and one of the first companies to enter the Telecom Services business
in India. It is the largest Indian telecommunications company and it operates in more than 20
countries across South Asia and Africa offering 2G, 3G and 4G services. It is the largest cellular
service provider in India, with 200 million subscribers as of 9th August 2012.

In the early years, Bharti Airtel Ltd established itself as a supplier of basic telecom equipment.
Mr. Sunil Mittal jumped at the opportunity provided when the government opened up the
sector and allowed private players to provide telecom services. Bharti Airtel Ltd accepted every
opportunity provided by this new policy to evolve into India's largest telecommunications
company and one of India's most respected brands. It is considered to be the first mobile firm
in the world to outsource everything except marketing, sales and financial operations.

Airtel now offers a variety of services to its consumers including 4G services in select cities,
Airtel Money, Telemedia, Mobile data services, enterprise business solutions, etc. Airtel globally
rebranded itself in 2010 and it now follows the ‘One Network’ strategy across all Airtel
operating countries.


SWOT Analysis

Figure 2 – SWOT Matrix of Airtel


Strengths

Bharti Airtel continues to be the largest telecommunications company and the market leader in
India and in some countries in Africa. Having been established in 1995, it enjoyed the early
mover advantage in India and was able to quickly make full use of the government’s
liberalization policies to firmly establish itself in India. Airtel offers the most expansive roaming
network, letting you roam anywhere in India with its Pan-India presence, and trot across the
globe with International Roaming spread in over 240 networks. Airtel’s subscriber base
continues to grow and it had reached 220.9 million users in March, 2011. Airtel also boasts of
having the maximum number of active customers (~92%), the highest in the industry.

Since Airtel outsources all its operations except Sales, Marketing and Finance, it has established
strong strategic alliances with Ericsson, Nokia, Huawei and IBM for its technological operations.
Many consider this outsourcing strategy to be a masterpiece. Airtel’s ‘match box strategy’ in
rural areas helped them to penetrate deep in the rural sectors. Bharti Airtel has its presence in
more than 300000+ rural areas. Airtel has always taken an initiative in promoting its services
with advertising campaigns that strike a chord with the consumer. Hence, it enjoys a very high
brand recognition and awareness among Indians. Its services continue to be excellent.

Weaknesses

Some analysts see Airtel’s outsourcing strategy as a weak point as they believe that Airtel is not
able to cater to its own technical needs. In recent times, Airtel has not been performing very
well. It reported lower than expected earnings in the 1 st quarter of FY 13. This hit investor
sentiment and the stock witnessed heavy selling, which saw it plummet to a 6 year low on the
bourses. All these factors led to the downgrading of the stock, from “stable” to “negative”.
Airtel has also been witnessing a steady decline in its ARPUs.

Opportunities

India continues to be the largest growing market in the world and provides ample opportunities
for telecom majors to expand services, especially in rural areas. Bharti Airtel has the
opportunity of attracting subscribers of other telecom service providers through the Mobile
Number Portability (MNP) recently, as the company has a reputation of providing excellent
services. The telemedia services provide a huge opportunity to Airtel to foray into different
telemedia services and expand and diversify its services. Airtel has a huge presence in India and
Africa. It can continue to expand in Africa, buy penetrating its market further. Airtel should also
look into expanding in other regions like Latin America and South-East Asia, as these markets


provide a huge opportunity for Airtel to stamp its global presence. The new greenfield
operators have not been successful in acquiring a decent revenue and customer market share,
in spite of offering lower prices. This may lead to an opportunity for the bigger players like
Bharti to acquire these businesses in the future.

Threats

Airtel has witnessed steadily decreasing market share. Though it still enjoys the numero uno
position in India, it does so only marginally. The increasing number of competitors in the Indian
telecom market have continuously been eating into Airtel’s initial significant market share of
over 40% to reduce it to a mere 19% in 2012. Mobile Number Portability is a double-edged
sword and though it brings Airtel new customers, it also allows existing Airtel users to switch to
other networks, which would always remain a significant threat. Intense competition from new
entrants triggering Price war in a decreasing ARPU environment is another major threat. The
regulatory environment in India continues to be laden with risks and highly uncertain, with new
policies and regulations being meted out, which do not necessarily work to the benefit of Airtel.


PEST Analysis

Figure 3 – PEST Analysis of Bharti Airtel

Political

The Indian political scenario and regulations from TRAI are the most significant aspects which
would affect Airtel. The recent 2G scam and the subsequent regulations passed by TRAI were
points of debate. For example, the reserve price for the auction proposed by the telecom
regulator should be reduced by at least 80%, felt CEOs of Airtel and other operators. Following
TRAI's controversial spectrum recommendation, Fitch has revised the outlook of Airtel to
“negative” from “stable” due to adverse regulatory environment in India and risks involved in
its African operation.

Regulatory risk is high for the Indian telecom industry compared with other markets in Asia
Pacific. Fitch believes that an evolving regulatory framework, regular policy changes and
cancellation of 2G licenses by India's Supreme Court in February 2012 could change the
industry structure in 2012 and negatively affect Bharti's free cash flow generation. Regulatory
risks for Airtel include a one-time charge for excess spectrum, spectrum reframing and
imposition of high spectrum renewal fees as recommended by TRAI.


Economic

Airtel enjoys a very large consumer base in India and Africa, and this continues to be the driver
of revenues for Bharti Airtel. Expanding more into the rural market will provide Airtel with more
such opportunities to increase revenues and market shares. Airtel's African operations
contributed about 20 percent to both its consolidated revenue and EBITDA during the first nine
months of FY12.

The telecom sector is also considered to be one of the major sectors which provide direct
employment which indirectly helps in economic growth of India. Also, increasing investments in
this sector by means of Foreign Direct Investment (FDI) ensures that there are enough
economic stimuli for Airtel and the industry as a whole. FDI to a limit of about 74% is permitted
in this sector.

Social

Airtel has been very successful in branding itself as “a brand for successful people”. It has
consistently come up with advertising campaigns which emotionally affect the Indian
consumers. Earlier, Airtel focused on its plans and tariffs, but now, it advertises in such a way
that the user associates emotions and values with Airtel. The “Express Yourself” campaign, the
“Barriers Break when People Talk” campaign, and the more recent “Har Ek Friend Zaroori Hota
Hai” campaigns are excellent examples of how Airtel managed to brand itself in all socio-
economic classes. The Airtel tune became a rage amongst Indians and it has become the most
downloaded ringtone.

The rising Indian middle class and higher incomes at their disposals have also ushered in good
returns for companies like Airtel.

Technological

Bharti Airtel is the first wireless service provider which supplies roaming services, international
and long distance communication services and Value Added Services. Bharti Airtel has a high-
speed optic fiber network. Airtel is the first mobile telephony company to outsource everything
except its marketing, sales and financial operations. Airtel outsourced their IT processes to IBM,
entire network operations to Ericsson and Siemens along with Alcatel Lucent recently and the
transmission towers to another company. This has worked in its favor as Airtel can concentrate
on other parameters and new innovations in its services, such as venturing into telemedia
services, new options like Airtel Money, broadband and 3G/4G services, etc. Airtel also builds
on providing value and efficient services to its customers.


SECTION 2


Porter Analysis

Figure 4 – Porter 5 Forces Model

Industry competitors

Figure 5 - Market share of major operators in India (February, 2012). Source: Wikipedia


Even though Airtel leads the market, there is cut throat competition with top 4 players
occupying more than 75% of the market. Among new players, Aircel and Uninor have achieved
significant recognition.

The industry is a capital intensive industry with high fixed cost due to specialized equipment,
spectrum cost, etc. This raises the exit barrier for an existing player to a very high level.
Tariffs have declined significantly due to many players; price parallelism (the practice of varying
prices in a similar way and at the same time as competitors) is a common phenomenon of the
industry.

With the introduction of mobile number portability, companies have had to compromise with
their profits. Innovative schemes such as life time validity, caller tunes, etc. are easily imitated
by others so there is virtually no time to gain any significant advantage.

Average Revenue per User (ARPU) has declined due to low tariffs but at the same time, it has
increased the affordability by reaching till the bottom of the pyramid, hence revenues keep on
increasing.

Bargaining powers of suppliers

 Network Equipment - Few suppliers are there (Nokia Siemens, Ericsson, etc.) and since
demand is huge, powers are high.

 Tower Providers- High powers with a very few players (Indus towers)

 Handset Providers- Many players are there today- Nokia, Samsung, Sony, HTC, etc. their
power is less since they are already competing with each other.

 Call Centre Outsourcing- Mphasis, Aegis BPO, etc.

Bargaining powers of buyers

Consumers have immense bargaining powers since-

 Switching cost is low, moreover, number portability has made changing the operator easier
and a lot quicker


 New connections are coming up with attractive schemes which force existing players to
adopt them too, this result in lack of differentiation in the service provider.

 Need for differentiation has led to need specific plans- this has become very popular e.g.
STD plans, night calling, ISD, etc.

Threat of substitutes

 Skype, emailing, Yahoo, Gtalk, etc.
 Social networking- Facebook, etc.
 Video conferencing

None of the above poses a real threat in the current scenario mainly due to availability and
infrastructure issues.

Threat of new entrants

 With FDI upto 74%, foreign players have chipped in, e.g. Maxis communications launched
Aircel in Tamil Nadu; Uninor formed by JV between Telenor and Unitech, etc.

 Due to restrictive govt. policies, spectrum allocation is limited which can be made available
to new players.

However, setting up afresh entails huge infrastructure as well as spectrum costs; also for a new
player, creating brand image is also a humungous task.


Consumer Behavior Analysis

In a random survey we wanted to know which mobile connection is used the most in our friend
circle. We saw that the most prominent mobile connection used is Airtel with an approximately
56% market share followed by Vodafone with a distant 32% share.

We next asked them to rate the services of Airtel on a scale of 5. The factors they considered
were network availability, customer service, tariff plans etc. Majority of the customers rated
the services of Airtel as good giving it a rating of 3.


73% of the users prefer prepaid to a postpaid connection.

As the number of internet users is increasing we wanted to see if the subscribers prefer 2G or
3G. We saw that more users prefer 2G internet services despite their lower speeds. One reason
could be the high cost of the 3G services that Airtel offers.


Of the various additional plans offered by Airtel, 58% of the users consider their SMS pack to be
the most useful followed by the internet plan and the STD plan.

88% of the subscribers considered that the availability of network was the most important
factor on which a mobile connection is decided. 70% users wanted low cost plans. Customer
service and value added services also affected the decision of the users.


Majority of the customers associated Airtel with its latest campaign - ‘Har ek friend zaroori hota hai’

Thus, from our survey, we can conclude that most consumers are pretty satisfied with the
services and schemes provided by Airtel and Airtel continues to be a favorite amongst the
youngsters and the Indian consumer in general. People are able to remember and relate to the
advertising campaigns of Airtel, even the older ones, which proves that Airtel’s advertisements
did strike the customers and they were able to relate with the brand more effectively. As a
result, their market share kept on increasing in the initial years.


SECTION 3


Segmentation

Due to diminishing marginal returns on its voice revenues, Airtel was forced to abandon its one
size fits all demographic segmentation. It came up with a strategy where it classified users into
different segments.

Segmentation can be defined as the process of dividing the market into customers with similar
interests into one segment

There are basically 4 levels of segmentation and Airtel segmented its market as:

1. Segment marketing: Here the target market is divided into different segments on the basis
of homogenous needs. Airtel has broadly divided the whole market into 2 categories –
prepaid and postpaid.
2. Niche Marketing: It can be defined as the marketer’s effort to position their product or
service in smaller markets that have similar attributes and have been neglected by other
marketers. AIRTEL launched its product blackberry in this category which particularly
focussed on the upper business class who have to be in touch with the world every time
3. Local marketing: In this segment companies have to focus on the requirements of the local
markets to be successful. Airtel is focussing on local marketing by their low tariff plans in
rural and even urban cities.
4. Individual Marketing: In this segmentation, companies focus on individual customers and
try to be in touch with them by phone calls, email etc. Airtel regularly calls its every
customer and tells them about its new features and schemes

Airtel segmented its consumer market on the basis of:-

1. Geographical segmentation: The market is divided into groups based on demographic
attributes such as localities, regions, cities, density etc. Airtel segments the market on the
basis of states, as they have different plans for different states. The different geographic
regions are handled independently and different campaigns are run according to the tastes and
preferences of people in each region.
2. Demographic segmentation: The market is divided into groups based on demographic
attributes like age, gender, income, occupation, religion, family life cycle etc
 Age and lifecycle: Recognizing that senior citizens have the need to keep in touch with
their children and relatives who may be located far away, Airtel came up with a senior
plan which offered a discount on one STD number and one local number. Besides,


subscribers of this plan would get special discounts for health check-ups and would have
a facility to club bills with that of their children
 Gender: The Company has also launched special packages to target the women. Airtel
had started the Ladies Special plan targeted at women and allowed subscriber to receive
special beauty and lifestyle tips, apart from subscriptions to cosmopolitan and
housekeeping magazines. The plan also offers women the option to club the monthly
bills with that of their spouses.
 Income: Airtel also segmented the market on the basis of income through their
corporate plans. They had started the corporate scheme on the basis of the higher
usage rate and higher income persons.
 Generation: Airtel had started ‘Friendz’ pre-paid connection, SMS plans and VAS like
hello tunes, which was targeted towards the 15-25 year age. This includes phone-to-
phone (P2P) recharge facility, enabling the consumer to transfer talk time and validity to
any Airtel prepaid subscriber. In addition comes the introduction of ‘Hot Spot’ tariffs
where Airtel Friendz customers can enjoy tariff discounts at pre-designated places
within the city

3. Psychographic segmentation: In this segmentation, marketers segment the market on the
basis of motivation, values, belief, lifestyle, personality etc

 Lifestyle: Airtel focused its attention on two groups in particular.

 The first group was known as "funsters" -- consumers aged between 18-35 years
old, who share a common trait -- a high adoption of VAS. Airtel believes that with
some targeted marketing, spending from this group can increase quite
significantly. The Telco has exclusive tie-ups with application providers like
Google and has identified music-on-demand as a key value proposition.
 The other segment of focus is the "achievers", who are the top five percent of
mobile users. While this segment isn't a high adopter of VAS, it contributes to
revenues nearly 10 times that of Airtel's ARPU.
 To enhance customer experience for this segment, Airtel has separate priority
relationship managers. It also partnered with HTC and Blackberry to offer high-
end handsets catering specifically for those customers who want to be in touch
with their peers or their subordinates, colleagues etc.

 Personality: Airtel last year had also started life Time Validity scheme for the persons
who are not financially strong and can’t afford the normal schemes


4. Behavioural segmentation: Organisations also divide the market on the basis of behaviour
that the customer shows towards the usage of products. Various variables for segmenting
market on the basis of purchase behaviour of customers are occasions, benefits, user
status, user rate, loyalty etc.
 Occasions: Airtel on the occasion of Independence day, introduced a recharge coupon
of Rs 1947 with two years validity for its Delhi and NCR prepaid customers
 Benefits: Airtel also provides various tangible and intangible benefits for its customers.
Like Airtel launched various tangible benefits like validity schemes for its customers and
intangible benefits like roaming, voice mail, fax mail, close user group etc.
 Usage rate: Airtel very often comes up with schemes like Get the talk time of 1111 on
the recharge on 1000 i.e. getting more talk time value for which customers are paying.


Branding

Advertising

The way telecom firms advertise, gives an approximate idea about the telecom trends.

The Indian Telecom Sector liberalized in 1994 after which the Indian cellular market witnessed a
surge in cellular services. By 2005, there were a total of 12 players in the market with the five
major players being Bharti Tele-Ventures Limited (Bharti), Bharat Sanchar Nigam Limited
(BSNL), Hutchinson-Essar Limited (Hutch), Idea Cellular Limited (Idea) and Reliance India Mobile
(RIM). Due to severe competition, BHARTI AIRTEL had to take new initiatives to woo customers.
Prominent among these were - celebrity endorsements, loyalty rewards, discount coupons,
business solutions and talk time schemes. As of date, AIRTEL has used the maximum number of
celebrities for advertisements. The list includes -Sachin, Shahrukh, Rehmaan, Saif Ali Khan,
Kareena Kapoor, Zaheer Khan, etc. The Youth segment and the business class segment were
considered most important by cellular industries of which the youth segment was the largest
and fastest growing.

Airtel sought the services of Sachin Tendulkar as he was the brand ambassador. One of the
most famous tunes for Airtel was given by A.R.Rehman with which people could easily connect
with the brand.

Airtel was the first company to target specific customers and it came out with advertising its
group card labeled as ‘Friendz’. In fact, until now, the market was treated as homogenous.
Airtel then announced Senior citizen cards targeted at those above 60. The “Friends card” is for
those who wish to restrict themselves to their group with low calling rates and some free
messages.

Airtel introduced its Airtel Live! The value added services were provided to customers to
generate more revenue. Hence, they introduced value added cards, which would help to
download ring tones and other fancy stuff.

Airtel ads were categorized by mostly as emotional ads. They had a differentiation point from
their competitors as well as innovative. But, on the other hand, people criticized that there is
no fun part in Airtel ads.

Initial Branding

Initially, the target group was elite professionals since tariff rates were high. Airtel positioned
itself as an inspirational and lifestyle brand. It was pitched not merely as a mobile service, but


as something that gave consumer a badge value. The Brand was developed to connote
leadership in network, innovations, offerings and services.

The taglines like "Airtel celebrates the spirit of leadership" and "The first choice of the corporate
leaders" emphasized that stance.

The ‘Leadership’ campaign was reportedly successful.

“Leadership” to “Touch Tomorrow”

Bharti decided to ‘humanize’ the brand ‘Airtel’ in 2000. It started with Bharti launching its new
‘Touch Tomorrow’ campaign which aimed at strengthening its relationship with its customers
and make the brand ‘softer’ to cater a wide variety of people across the society.

The advertising became two-pronged: a product-driven communication that showcased new
offerings like the Magic prepaid card, and an emotional communication to connect with
younger people.

“Touch Tomorrow” to “Live Every Moment”

Airtel came out with a new logo. The logo signified a strong, contemporary and confident
symbol for a brand that was always ahead of the rest. It had two solid, red rectangular forms
whose counter forms create an open doorway. Capital “A” showed leadership and red dot on
“i” showed innovation.

LIVE EVERY MOMENT


In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live every
moment": Rahman's signature tune for Airtel is, perhaps, the most downloaded ringtone in
India.

“Live every moment” to “Express Yourself”

Later, Airtel adopted the "Express yourself" positioning, the emotional angle was predominant
– it wanted to stand out in what was becoming a highly commoditized, crowded market.

EXPRESS YOURSELF

“Express Yourself” to “Har ek friend zaroori hota hai”

Airtel came up with a new logo. The new logo was supposed to give Airtel and the brand a more
"youthful and international" look.

The logo is a modern representation of the letter 'a' on a bright red background.

 The unique symbol is an interpretation of the ‘a’ in Airtel.
 The curved shape & the gentle highlights on the red colour make it warm & inviting,
almost as if it were a living object.
 The colour Red shows the heritage. It is the colour of energy & passion that expresses
the dynamism that has made Airtel the success it is today, in India, and now on the
global stage.
 The logo is called “The Wave”.


Taglines of Airtel

Power to keep in touch (1995)

Elite and premium brand

Touch tomorrow (1999)

With NTP99 ,prices could be dropped,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

Har ek friend zaroori hota hai (2011-2012)
Targets the youth with an evergreen theme of Friendship and its relevance

Figure 6 – Timeline depicting the various taglines of Airtel


Umbrella Branding

AIRTEL incorporated umbrella branding strategy, a marketing practice that involves selling
many related products under a single brand name.

It involves creating huge brand equity for a single brand, and thereafter leveraging that over
multiple products. On the flipside, bad reputation of any one product, may affect the equity of
all the other products using the same brand name.


Co-Branding

Airtel made partnership with brands, it formed an alliance to work together, creating marketing
synergy.

The object for this is to combine the strength of two brands, in order to increase the premium
consumers are willing to pay, to combine the different perceived properties associated with
these brands with a single product. Ultimately, co-branding helps both the partners as each
contributes some aspect of its brand (expertise, distribution, status, etc.) to create an offering
that neither could develop as effectively on their own.


Positioning, Other Strategies and Outlook

Bharti Airtel, in its mobile networks, initially during the mid-late 1990s positioned itself as a
brand for the elite. The high government tariff and the low awareness about mobile phones
among the masses, called for such a positioning. A mobile phone was a luxury affordable only
to the price insensitive customer in those days and Airtel rightly positioned themselves in this
segment.

Their tagline was “Power to Keep in touch” and it was a part of their motto to associate their
brand with leadership and an inspirational lifestyle. This was part of their “Leadership Series”
campaign.

As time progressed, in 1999-2000, the competition intensified and Essar almost caught up to
Bharti Airtel. It was during this period that through surveys conducted, Airtel realized that the
idea of Leadership itself was changing and also that people perceived Airtel as an efficient but
cold brand. These surveys further went on to show that in the mobile network industry,
customer service was of paramount importance and the existing consumer base was invaluable
as more and more people brought mobile phones only on the recommendations of friends and
family.

In August 2000, Bharti launched its new “Touch Tomorrow” campaign to humanize the brand.
The advertisements featured mobile users surrounded by caring family members. These ads
spanned across the print, electronic and outdoor media. They aimed to capture the SEC B
markets also as the mobile price and government tariff were reducing. This resulted in the
creation of a huge consumer base and they changed the logo to reflect their core values of
leadership, performance and dynamism. Special features like music download, SMS, permanent
GPRS were introduced at affordable prices.

In 2002, Airtel again repositioned its brand to “Live Every Moment” and changed their logo. It
was done to give the brand a young and international feel. Several celebrities like Sachin
Tendulkar and Shah Rukh Khan were roped in as brand ambassadors. All the wireless products
were replaced under the Airtel brand and the company began following a 2-tier architecture.
This repositioning and new advertising changed the way the consumer felt about the brand and
improved the reach.

From 2003-2009, the mobile market was predicted to grow even further and Airtel realized the
importance of targeting rural consumers. They repositioned their brand again to “Express
Yourself” in 2003 and came out with advertisements in regional languages and more powerful
emotional connect.


This was also the period where they came out with a whole wide variety of offers like STD
packs, roaming packs, and SMS packs etc., which were able to attract and retain the mass
markets. Their target market now included SEC C also and they had therefore positioned their
brand accordingly. They began emphasizing on the strength of their network and its functioning
in all areas, rural and urban without any glitches.

It was during this period that they also ran the “Breaking Barriers” campaign under the express
yourself campaign. It was a sign of the brand taking off globally and also to indicate that it had
the largest market presence in the Nation.

Airtel’s Key Competitive Advantage

For any telecom operator in the Indian market, the most important advantage is quick roll out
of coverage. Airtel has been very aggressive in increasing its coverage and hence they have
clearly maintained its position of leadership in the Indian market.

Airtel has made huge investments each year as company intends not only to expand its
footprint in the local market but it also has plans to expand its operations to a global scale. Its
foray into the Sri Lankan and the African market is a step towards the plan of expansion beyond
India.

Effective rollout of distribution

The company believes that effective distribution is the key to the success of gaining market
leadership. Bharti has a huge distribution network covering 672,297 outlets. RCOM distributes
through its own branded retail outlets, whereas Bharti uses the small retailers and the local
shops to retail its recharge coupons to customers. This significantly reduces costs in terms of
overhead expenses. This distribution strategy has been a success for Bharti and has enabled the
company to improve its penetration and add to its profits as well.

Selective strategy to focus on cities with high revenue potential

The Company used a selective strategy for this segment as it had to focus on the cities which
had a potential for generating high revenues. Further the selective strategy could have been
due to the higher cost and lower return ratios involved. The company’s focus was to go deeper
than wider.


Recent financial crisis

Bharti’s results showed that even after consistently losing its revenue share over the past
couple of years it had now regained some of its share. However, TRAI released some data which
suggested that Bharti had slipped on a year on year basis and this gain in its market share came
due to the restructuring of its operations in India and South Asia after it had faced a constant
decline in its profits.

Strategy during the crisis

It was during this period that Bharti made a move that was unprecedented in the telecom
industry which defied the industry trend. It became the first operator to increase call tariffs by
about 20% in the month of June. This was a move that was immediately followed by other
leading players. This signified Bharti’s position as the clear market leader. This purpose of this
hike was to address declining profitability in a cut-throat Indian telecom industry.

“Bharti seems to be getting more aggressive in acquiring new subscribers, going by the telecom
industry's subscriber addition figures for the month of January. It added 1.3 million subscribers
last month, after four successive months of relatively sluggish subscriber addition figures of less
than 1 million.” –– Voice & Data - CIOL Magazine

Future Outlook

The future outlook for Airtel depends on the following aspects:-

1) The entry of new players would pose a challenge to Airtel’s ability to sustain a fierce
competitive environment.
2) Success on the 3G services front.
3) Overseas expansion
4) Assistance in the form of diversification into new businesses under the Bharti Group.

India is set to witness entry of new players in the mobile services market. These players are
most likely to focus on the rural segment for their subscriber base.

The incumbent operator advantage should hold Bharti Airtel in good stead. The company is well
positioned to expand its network in the remote areas of the country. Also, while new entrants
will only be able to use a start-up spectrum of 4.4MHa, from having more spectrum in most of
the circles would work in Airtel’s favour.


When it comes to offering 3G services, Bharti, due to its association with SingTel has many
advantages. It is expected to bid for pan-India 3G licences and particularly for metro circles
where keeping a check on dwindling ARPUs is a major challenge.

Bharti is off late focussing on emerging markets for new acquisitions. Some time back it was in
the news for its proposed merger with South African MTN which did not work out ultimately.
But the company has made it clear many a time that it is on the lookout for an acquisition in the
global telecom sector.

Bharti Airtel is also expanding and diversifying into new businesses now. Addition of a
reasonable subscriber base to the company would happen as a result of Bharti offering services
like IPTV and DTH. These would also help Bharti Airtel to increase ARPU from its current
subscribers.

Significantly, Bharti’s tie-up with Wal-Mart is widely perceived to take it to the next level of
Corporate Growth and consolidate its position in the Indian and overseas markets.


Conclusion

From this exhaustive study on Bharti Airtel Ltd., we got to learn a lot about how Airtel
established itself a market leader in the Indian telecom space. The journey was not a bed of
roses for Airtel. They faced numerous stumbling roadblocks along the way and overcame most
of them. This is because they applied and adopted sound strategies relating to Outsourcing,
Marketing, Advertising, creating Customer Value and Satisfaction, Positioning, etc. The above
facts are proved through the survey we conducted which emphasizes the fact that Airtel
continues to be the most preferred telecom operator in our country, and also amongst the
youth.

Even though the growth of the company is stagnating in recent times, and the pressure from
competitors and regulatory bodies is always on the increase, new strategies and innovations,
acquisitions, penetration into international markets better schemes for customers should
ensure that Airtel keeps its nose above its strong competition. The prospects of Airtel continue
to remain strong because it is built around very strong fundamentals, and this growth should be
visible in the near future.


Bibliography

The following sources were referred to while making this report:-

1) Bharti Airtel website – http://www.airtel.in/
2) TRAI website – http://www.trai.gov.in/traiannualreport.asp
3) Manish Sinha, “Segmenting India’s Mobile Market” - www.imediaconnection.com/asia/
index.asp?listpage=25, Mar 18, 2008.
4) Our online survey - http://www.surveymonkey.com/s/WNXXDTX
5) Outsourcing - http://trak.in/tags/business/2010/09/20/bharti-airtel-outsourcing-africa-
business/
6) FDI in Telecom - http://ictps.blogspot.in/2012/04/fdi-in-telecom-sector-of-india-and.html
7) The Economic Times
8) The Hindu
9) Mint newspaper
10) Business Today
11) Harvard Business Case – Strategic Outsourcing at Bharti Airtel
12) Cisco’s Consumer Based Study on Airtel’s Rural Strategies
13) Bharti Airtel – Business News - http://www.moneycontrol.com/news/bhartiairtel/
business-BTV-6months-1.html#BA08
14) Wikipedia - http://en.wikipedia.org/wiki/Bharti_Airtel
15) Success starts weighing down Bharti Airtel,
www.livemint.com/2009/07/24000659/Success-starts-weighing-down-B.html
16) “Bharti Airtel: Nervousness all around”,
http://www.equitymaster.com/detail.asp?date=12/4/2009&story=2,
17) Positioning - http://www.icmrindia.org/free%20resources/casestudies/Airtel%20
positioning%20and%20repositioning.htm


Airtel - Marketing Insights

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