TEAM MEMBERS SAJA ANFAS SALMAN SHIRAS VIPIN

INDUSTRY PROFILE

Profile of Tele Phone Industry

y The Telecommunications industry is experiencing

rapid growth on a global scale.

y This is a direct consequence of technological

development and has in turn facilitated the application of new technologies and a consequent increase in economic activity.
y The telecommunications industry is a system of

switches and lines that interconnect to provide communication between multiple parties.

y The telecommunications industry includes  local, long distance,  cellular or digital telephone services or paging services,  internet services  a variety of competitive services. y All of the above operate through networks forming a

global telecommunications industry. Most telecommunications services begin and end with a local service provider.

y The local service provider maintains the local lines,

handles service and safety concerns and provides switches for interconnection with other telephone service providers.
y Within this sector, one of the greatest growth areas of

recent years has been the development of mobile or wireless telecommunications.

y Tele is a Greek word meaning far off so the purest definition is communications over a distance. In other word, telecommunications means anything that involves sending messages or signals. y The first land mobile services were introduced into the UK in the 1940s y The significant expansion of services offered to the general public, including the introduction of mobile phones began in the mid-1980s and rapidly attracted a small but significant number of subscribers. y Developments in the early 1990s, such as the introduction of digital networks and the entry of additional service providers into the market, fuelled further increases in the numbers of subscribers.

Technologies
Some of the technological developments that are 'out there' and could shape our futures.

Cable and satellite: looking for broadband y The digital cable and satellite television facilities now serving Britain could provide the backbone of a new broadband network carrying not just digital television feeds, but personal voice and data delivery as well. y Satellite provides another possibility, but existing home satellite terminals are one-way receiving devices only.

y Digital Subscriber Line (DSL): data direct down

phone lines y The Digital Subscriber Line (DSL) process uses digital technology to exploit the unused bandwidth on copper telephone lines for carrying a high-speed data stream. y If we were all connected using one of the DSL techniques, we would be living in a broadband world, where the Internet was really high speed - finally allowing some of the dreams to come true.

Future technology: an address for everything y The most important technical advance in data communication being developed currently may not be a technology - but a protocol. y Internet Protocol Version 6 (IPv6) has also been called 'next generation' internet.
y This will allow machines to start connecting with each other, assuming the economics work out. Sewing machines could download patterns from the Web. Fridges could report when they ran short of milk. Add voice or personal chip recognition into the mix and the future vision becomes one of devices that recognise who and where we are. y We will no longer have to seek information - rather it will present itself to us.

COMPANY PROFILE

y Bharti Tele-Ventures Limited, a part of Bharti

Enterprises, is India's leading provider of telecommunications services

y Head quarter is located in New Delhi, and, the address

is H-5/12, Qutub Ambience, Near Qutub Minar, Mehrauli Road, New Delhi-110030) with an aggregate of 18.62 million customers as of end of September '05, consisting of approximately 17.37 million mobile customers.

y The businesses at Bharti Tele-Ventures have been

structured into three individual Strategic Business Units (SBU s) - Mobile Services, Broadband & Telephone Services (B&T) & Enterprise Services.

y The mobile services group provides GSM mobile

services across India in 23 telecom circles, while the B&T business group provides broadband & telephone services in 15 circles.

y The Enterprise services group has two sub-units -

carriers (long distance services) and services to corporate. All these services are provided under the Airtel brands.
y Creating value for the customers, employees,

investors, partners, vendors and the society at large lies at the root of BTVL s fundamental business strategy.

y The core principles of trust and transparency have

come a long way in helping them develop and nurture long-term relationships with their key stakeholders.
y BTVL s performance exudes from their belief in and

commitment to the telecom sector; and translates into creating innovative exciting opportunities for one and all.

y Bharti Tele-Ventures Limited is recognized as a top 20

global IT company in Business Week s "Information Technology 100" listing and has also been adjudged as India s Second Best Employer by Hewitt Associates and declared as country s best managed company by Asia money.
y The company is the only operator to provide mobile

services in all the 23 circles in India.

y The company also provides telephone services and

Internet access over DSL in 15 circles.

y The company complements its mobile, broadband &

telephone services with national and international long distance services.

y The company also has a submarine cable landing

station at Chennai, which connects the submarine cable connecting Chennai and Singapore.

y The company provides reliable end-to-end data and

enterprise services to the corporate customers by leveraging its nationwide fibre optic backbone, last mile connectivity in fixed-line and mobile circles, VSATs, ISP and international bandwidth access through the gateways and landing station.

y Bharti Enterprises has been at the forefront of technology and has revolutionized telecommunications with its world-class products and services. y Established in 1985, y Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit, ranging from being the first mobile service in Delhi, - first private basic telephone service provider in the country, - first Indian company to provide comprehensive telecom services outside India in Seychelles - first private sector service provider to launch National long Distance Services in India.

y Bharti Teletech, the manufacturing arm of Bharti

Enterprises, with an installed capacity of 5 million telephone sets per annum, is India s leading manufacturer of high quality telephones.
y Bharti Infotrac is a fully owned subsidiary of

BhartiTeletec which is a group company of Bharti Enterprises, India s premier telecom services company. Bharti Infotrac leverages India s large pool of Englishspeaking graduates, a world-class delivery facility and the backing of one of India s leading groups to provide exceptional customer interaction services to its customers.

y Bharti s firm commitment to quality and customer

satisfaction is duly acknowledgement by the list of prestigious clients including Pfizer, Parke Davis, Wockhardt, Ranbaxy and Glaxo amongst others.
y Bharti also exports its capsules to overseas markets like

USA, Hong Kong, Malaysia, Thailand, Indonesia, Sri Lanka, Iran, Bangladesh, Syria and Cyprus.

y Bharti School of Telecommunication Technology &

Management is to facilitate advance study and research in telecommunications technology and management.
y Bharti is the first Indian Company to get a license to

provide comprehensive telecom services outside India, in the island country of Seychelles and hence develop the expertise to provide telecom services overseas.

y LONG DISTANCE BUSINESS  Offers long distance services on both the national as well as international segments.  First private national long distance operator to start services.  First private player to have an international cable landing station. y National Long Distance (NLD) Operations  25,000 Km of optical fibre laid with presence in 200 cities  Interconnect with all leading cellular operators, fixed line service providers, ISPs and VSNL  10 city managed frame relay/ATM network  24*7 Network Operating Centre  Operational Intelligent Network (IN) platform

y Mobile Services include the following:  GSM plain SIMs  GPRS  Biz Live SMS  Voice Portal  VAS  SMS-based Segment Specific Applns  SMS Directory  Field Image Transfer  Email to SMS  Information Broadcast  Pre Assigned Announcements

y AirTel Enterprise Services provides you connectivity where

you take your business our satellite services bring you the benefits of access in remote locations. Airtel Enterprise Services is a leading provider of broadband IP satellite services and DAMA/PAMA in India. Our solutions support audio, video and voice applications on demand. All this to help you run business at ease. Satellite Services include: PAMA/DAMA BIT Internet VPN Satellite based IPLCs redundancy reasons

y AirTel Enterprise Services is characterized by innovation.

We have pioneered a vast range of industry-leading, vertical-specific solutions. y Their solutions are totally technology-neutral and comprise a mix of transmission media and data technologies, completely designed to serve the customer s needs. y Manage Customized Integrated Solutions include: -GSM based call centre -MPLS Layer 2/3 VPN Service -Integrated WAN Solutions with hybrid media -IMVS

y y y y

BTVL s VISION By 2010 Airtel will be the most admired brand in India: Loved by more customers Targeted by top talent Benchmarked by more businesses.

y y y y y

MISSION They will meet global standards for telecom services that delight customers through: Customer service focus Empowered employees Innovative services Cost efficiency

y y y y y

VALUES Customer: We will be responsive to he needs of our customers People: We will trust and respect our employees Learning: We will continuously improve our servicescontinuously and expeditiously Community and Partners: We will be transparent and sensitive in our dealings with all stakeholders Benchmarked by more business

PARTNERS y The company has a strategic alliance with Sing Tel. The investment made by SingTel is one of the largest investments made in the world outside Singapore, in the company. y The company also has a strategic alliance with Vodafone. The investment made by Vodafone in Bharti is one of the largest single foreign investments made in the Indian telecom sector. y The company s mobile network equipment partners include Ericsson and Nokia.

MARKET SHARE

y Company Name: Bharti Airtel y Stock Price: Rs. 305 ($6.78) y Market Capital: Rs 1160 billion / $25 billion

GROWTH PROFILE
y Bharti is a value play based on the rural growth and the

rapid adoption of 3G in Tier 1 cities. y Bharti s penetration in Africa will add to the growth in spite of near term losses and integration delays in the Zain Africa acquisition. y The rural growth story in India is very compelling. The total number of rural subscribers have gone up to 600 million from 300 million in the past year.

y Bharti bagged Mumbai and New Delhi in the 3G spectrum

auction which will be one of the key growth drivers for the company in the future. ARPU (average rate per user per month) is the lowest in the world (~ $7) mainly due to absence of data packages in the country.
y Basic voice plans have resulted in price wars and reduction

in the per minute rate.

y Although there have been concerns about the Zain

Africa s acquisition, in the long term this move will prove to be a profitable.

Market share of Airtel compared to nearest rivals

Highlights of chairman s speech in AGM

Sunil Bharti Mittal Chairman and MD
y Plans for further strengthening their presence in

South Asian region. y After the companies successful foray into Sri Lanka last year, they entered the Bangladesh market during the year by acquiring a majority stake in Warid Telecom. y Brand Airtel has been well received in Sri Lanka, where the Company became the fastest growing telecom operator to cross one million customer mark within the first six months of operation

y The company will soon be launching the Airtel

brand in Bangladesh and Africa. y In the Indian market, 2009-10 revenues failed to show corresponding growth. Several new operators have entered the market y With 12-13 operators per circle, competition has reached a new peak. y Despite the unfavourable competitive scenario, Airtel consistent focus on rural penetration and affordability continued to deliver encouraging results in the domestic market

y With the completion of the auction for 3G and

BWA spectrum, telecom services in India are ready to take a big leap forward y Amidst stiff competition, The Company has won 3G spectrum in 13 circles for a total consideration of Rs 12,295.46 cr. y In the broadband wireless auction too Airtel have secured a strategic presence across select circles to experiment with new technologies.

y People and Partners will continue to play a central

role in Airtel future endeavours. Their role will be particularly critical in Africa. y Key to Airtel success there will lie on the companies ability to drive seamless knowledge and best practice sharing between Africa and South Asia. y I am confident the Airtel Africa Leadership Team will be able to transport the successful business model to the new environment. y Company is also keen on replicating our phenomenally successful relationships with our partners in the new markets.

y After extremely productive stints, Paul O`Sullivan,

Quah Kung Yang, Bashir Currimjee and Mauro Sentinell have retired from the Bharti Airtel Board. y I extend my sincere thanks to all of them for their valuable contributions during their tenure. y I also welcome on board our new members Tan Yong Choo and Lim Chuan Poh. I am pleased to inform you that Manoj Kohli is now spearheading the International Business Group as CEO (International) & Joint Managing Director. y Sanjay Kapoor has been elevated to the position of CEO (India & South Asia). I am confident that both Manoj and Sanjay will continue to drive our growth agenda with passion and commitment.

y Your Company is taking a giant step forward to

become a true global telecom powerhouse. It`s a challenge of a different nature. But it is also an opportunity of a lifetime. y We are eager to make the most of it. Like each one of you I too am looking forward to another exciting year ahead. Sunil Bharti Mittal Chairman and Managing Director

SWOT Analysis Bharti Airtel

Strengths
y Bharti Airtel has more than 65 million customers. It is

the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers.

Weaknesses
y An often cited original weakness is that when the

business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field.

y Until recently Airtel did not own its own towers y The fact that the Airtel has not pulled off a deal with

South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.

Opportunities
y The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian for Google. y Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions.

y Despite being forced to outsource much of its technical

operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices - for example replacing the Revenue-Per-Customer model with a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns.

y The company is investing in its operation in 120,000 to

160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.

y Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.

Threats
y Airtel and Vodafone seem to be having an on/off

relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors.
y The quickly changing pace of the global

telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008.

y This opened the door for talks between Reliance

Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market.
y Bharti Airtel could also be the target for the takeover

vision of other global telecommunications players that wish to move into the Indian market.

Pest analysis

Political
y Government and legal issues affecting how the

company operates  Regulation-Dominating brand  Infrastructure-first mover advantage  Banning of phone use in certain circumstances  Health issues-Health ministry.

Economic
y The factors influencing the purchasing power of

customers and company s cost of capital.  Cost of 3G licenses lowering down  Cost of calls being driven down  World wide recession both boon and bane

SOCIAL
y Demographic and cultural aspects of environment

which influence customer needs and market size.  Health issues.  Demographics.  Social Trends.  Mobile ettiquete  Saturation point  Technological

Technological
 Equipped with new technology  Fastest to launch new services  Serves high quality fixed line and broadband services  Strong NLD optical fibre network  E-commerce portal  Efficient customer care service.