A STUDY OF BHARTI AIRTEL LIMITED AND BIHAR TELECOM CIRCLE

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Pi nn acle Re sea rc h Jour na ls 1 http ://w w w .p in na cle jour na ls. com

A STUDY OF BHARTI AIRTEL LIMITED AND BIHAR TELECOM

CIRCLE

AMOD PRAKASH SINGH* *Surajkund Colony,

Gorakhpur, U. P.

ABSTRACT

Bharti Airtel Ltd. is the Fifth largest telecom operator in the world with nearly 207.8 Mn subscribers, headed by Mr. Sunil Bharti Mittal. It is the largest cellular service provider in India with 152.5 Mn subscribers. It is the third largest “in-country” mobile operator, by subscriber base. It operates in 19 countries across South Asia, Africa and the Channel Islands, provides 2G or 3G (GSM) services depending upon the country of operation.

This report gives a broad understanding of Telecommunication in India, focusing on Mobile communication. It focuses on Bharti Airtel Limited, its performance across various circles and provides a broader comparison of various operators in Bihar Telecom Circle.

This report also advocates the fact that the study conducted has limitations. Some of the limitations include:

 Telecom Market is too vast and it is not possible cover each and every retailer or customer in this short span of time.

 A thorough research is not possible due to money constrains.

KEYWORDS: Telecom Circles, Operator, Telidencity, Subscribers.

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1. INTRODUCTION 1.1 TELECOMMUNICATION

Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages, lung-blown horns, loud whistles, etc. In the modern age of electricity and electronics, telecommunications now also includes the use of electrical devices such as telegraphs, telephones, and teletypes, the use of radio and microwave communications, as well as fiber optics and their associated electronics, plus the use of the orbiting satellites and the Internet.

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1.2 TELECOMMUNICATION INDUSTRY IN INDIA

India has the fastest growing telecom network in the world with its high population and development potential. Airtel , Idea, Reliance, BSNL, Aircel, Tata, Vodafone, MTNL, and Loop Mobile are other major operators in India. However, rural India still lacks strong infrastructure. India's public sector telecom company BSNL is the 7th largest telecom company in world. Telephony introduced in India in 1882. The telecommunications system in India is the 2nd largest in the world. The country is divided into several zones, called circles (roughly along state boundaries). Government and several private operators run local and long distance telephone services. It was thrown open to private operators in the 1990s. Competition has caused prices to drop and calls across India are one of the cheapest in the world.

The total number of telephones in the country stands at nearly 861.48 million, while the overall tele-density has increased to 72.08% as on April 30, 2011. The total wireless (GSM, CDMA & WLL (F)) subscribers’ base is nearly 826.93 million as of Apr 2011. India primarily follows the GSM mobile system, in the 900 MHz band. Recent operators also operate in the 1800 MHz band. The dominant players are Aircel, Vodafone, Airtel, Tata Indicom, Tata ,MTS, Uninor, Reliance, Idea Cellular and BSNL/MTNL. There are many smaller players, with operations in only a few states. International roaming agreements exist between most operators and many foreign carriers.

2. TELECOM STATISTICS

(As of April 2011, TRAI)

1. Telephone Subscribers (Wireless and Landline): 861.48 million

2. Land Lines: 34.55 million

3. Cell phones: 826.93 million

4. Monthly Cell phone Addition: 15.34 million

5. Teledensity: 72.08 %

6. Annual Cell phone Addition: 227.27 million (Mar 2010 - 2011)

7. Projected Teledensity: 1.159 billion, 75% of population by 2013.

India is divided into 22 telecom circles as: Assam, Andhra Pradesh, Bihar, Delhi & NCR, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra & Goa, Mumbai, North East (Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, & Tripura), Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (East), Uttar Pradesh (West) and West Bengal.

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And various Operators in these circles are:

TABLE 1.1 SERVICE PROVIDERS IN INDIAN TELECOM INDUSTRY Rank Operator Subscriber (in MN)

1 Airtel 162.20 2 Reliance 137.71 3 Vodafone 134.56 4 BSNL 91.83 5 Idea 89.50 6 Tata 89.13 7 Aircel 54.84 8 Uninor 22.79 9 MTS 10.05 10 Videocon 7.10 11 MTNL 5.47 12 Loop Mobile 3.09 13 S Tel 2.82 14 Ping Mobile 1.46 15 Cheers Mobile 0.96

(As per “Highlights of Telecom Subscription Data as on 31st March 2011”, Published by TRAI)

3. BHARTI AIRTEL LTD.

Bharti Airtel Limited commonly known as Airtel, is an Indian telecommunications company that operates in 19 countries across South Asia, Africa and the Channel Islands, headed by Mr. Sunil Bharti Mittal. Airtel is the fifth largest telecom operator in the world with over 207.8 million subscribers across 19 countries at the end of 2010. It is the largest cellular service provider in India, with over 152.5 million subscribers at the end of 2010. Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.

It is known for being the first mobile phone company in the world to outsource everything except marketing and sales and finance. Its network (base stations, microwave links, etc.) are maintained by Ericsson, Nokia Siemens Network and Huawei., business support by IBM and transmission towers by another company Bharti Infratel Ltd. in India

3.1 WORLDWIDE PRESENCE

Airtel’s area of operations includes:

A. THE INDIAN SUBCONTINENT

1 Airtel Bangla, in Bangladesh (Had about 3.2 million customers )

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3 Airtel Sri Lanka, in Sri Lanka (Had about 1.8 million mobile customers)

B. AFRICA

Airtel Africa operates in 16 African countries

(Burkina Faso, Chad, Democratic Republic of the Congo, Republic of the Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Seychelles, Sierra Leone, Tanzania, Uganda, Zambia.)

C. The British Crown Dependency islands of Jersey and Guernsey, under the brand name

Airtel-Vodafone, through an agreement with Vodafone.

3.2 AIRTEL BIHAR

Bihar is a state in eastern India. It lies mid-way between West Bengal in the east and Uttar Pradesh in the west. It is bounded by the country of Nepal to the north and by Jharkhand to the south. It is the 12th largest state in terms of geographical size at 94,163 km² and 3rd largest by population. Close to 85% of the population lives in villages. Almost 58% of the people of Bihar are below the age of 25, which is the highest proportion in India.

STATISTICS

 Mobile Subscriber base of Bihar increased by 44.8% during Financial Year 2011, to reach 53.5 million.

 Bihar’s growth rate is considerably higher than National Average of 38.9%, being 44.8% i.e. 5.9% more, making it one of the top 5, fastest growing mobile telecom market in India.

 Active wireless subscriber base in Bihar is 72.2% resulting in 38.7 million active mobile users

 By March 2011, Bihar is 5th

largest wireless telecom market in India accounting for 6.7% of total active subscriber base

 Wireless telecom tele-density of Bihar circle is 39.1% while active mobile tele-density is 28.3% indicating huge untapped potential market.

TABLE 1.2 MAJOR PLAYERS OF BIHAR WIRELESS TELECOM CIRCLE (AS PER MARCH-2011)

Player Total Subscribers Rank % Active Active Subscribers Rank Airtel 1,51,37,040 1 96.7% 1,46,37,518 1

Vodafone 50,11,319 5 83.7% 41,93,937 3

Reliance 83,35,277 2 62.8% 52,35,387 2

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Pi nn acle Re sea rc h Jour na ls 5 http ://w w w .p in na cle jour na ls. com Tata 52,15,597 4 44.4% 23,15,647 7 Aircel 45,39,136 6 55.7% 25,27,845 6 BSNL 59,80,257 3 60.0% 35,85,164 5 Others 48,23,237 47.5% 22,91,243 Total 5,35,41,241 72.2% 3,86,62,130

3.3 AIRTEL‘S PERFORMANCE OVER VARIOUS CIRCLES IN INDIA

Based on number of subscribers:

Airtel has a subscriber base of 15.13 million in Bihar.

FIGURE 1: SUBSCRIBER BASE OF AIRTEL IN VARIOUS TELECOM CIRCLES IN INDIA

Based on revenue generated:

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FIGURE 2: REVENUE GENERATED BY AIRTEL IN DIFFERENT CIRCLES ACROSS INDIA (IN CR.)

3.4 AIRTEL IN BIHAR CIRCLE

 In Bihar wireless telecom market, Airtel leads with 28.3% share in terms of total subscriber base followed by Reliance (15.6%), BSNL (11.2%), Tata (9.7%), Vodafone (9.4%), Aircel (8.5%) and Idea (8.4%)

 Airtel leads market share in terms of active subscriber base as 96.7% of its mobile subscribers are active.

 As a result, Airtel leads Bihar wireless market with 37.9% share followed by Reliance (13.5%) and Vodafone (10.8%)

 Airtel’s dominance is such that the gap between market shares of top 2 players (Bharti and Reliance) is 24.3%

 Top 5 players accounts for 81.5% of Bihar’s active mobile subscriber base indicating strong competition from other smaller players

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FIGURE 3: PERCENTAGE SHARE OF ACTIVE CUSTOMERS OF VARIOUS OPERATORS (IN BIHAR CIRCLE)

3.5 AIRTEL’S COMPARISON WITH OTHER OPERATORS IN BIHAR CIRCLE

Based on number of subscribers:

Subscriber base of Airtel in Bihar Circle is around 15.13 million, followed by Reliance, BSNL,Tata and Vodafone.

FIGURE 4: SUBSCRIBER BASE OF VARIOUS TELECOM OPERATORS IN BIHAR TELECOM CIRCLE (IN MN.)

37.90% 10.80% 13.50% 10% 6% 6.50% 9.30% 5.90% Airtel Vodafone Reliance Idea Tata Aircel BSNL Others

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Based on revenue generated:

Airtel generates revenue of more than 580 Cr. (Per Quarter) in Bihar Telecom Circle, followed by Vodafone, Idea and Tata which is Five times more than its nearest competitor i.e. Vodafone.

FIGURE 5: REVENUES GENERATED BY VARIOUS OPERATORS IN BIHAR TELECOM CIRCLE (IN CR.)

4. CONCLUSION

Ever year 227.27 million new mobile subscribers are added to the Indian Telecom Market. So in this emerging market, competition level among the existing services provides and new players will necessarily intensify the competition. New products and new schemes are being offered by the telecom service providers every now and then. The need for large information capacity has grown tremendously due to the demand of real time information. Telecommunication has now become a major information transmission system and telecom has undoubtedly emerged as one of the most important industry in India. Indian telecom companies are putting in their best to rope in major telecom operators of the world e.g. Vodafone, MTN etc. Acquisitions and mergers are in process and future will be only for those companies who have an edge over others in the field. Service provided, better quality of network, better offers and schemes, affordable cost, etc. are the basics needed to stand in this competition. In this process of competition it is assumed that only those companies will survive who adopt suitable market strategy and technology innovation and up-gradation to suit the aspiration and demand of the consumer.

Airtel is the market leader in Bihar telecom market. It captures largest market in Bihar due to its Exceptional network coverage, quality service and brand image. It’s working on new customer acquisition as well as retention of the existing ones; this will help it strengthen its position in the

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market. But due to increasing competition it is facing tough fight from competitors. Other operators are bringing in new and innovative plans and schemes. Airtel must act accordingly to keep up its lead over other operators.

5. REFERENCES

A. WEB BASED RETRIEVALS

1. Mobile India growth statistics details figures

(http://www.indiastat.com/05/biharstat/telecommunication/28/mobile/169/stats.aspx) Retrieved on: 11-06-2011

2. Mobile Operator Wise Subscriber Data For Bihar | Unwireindia | (http://www.unwireindia.com/search/mobile-operator-wise-subscriber-data-for-bihar) Retrieved on: 11-06-2011

3. COAI :: Cellular Operators Association of India (http://www.coai.com/statistics.php)

Retrieved on: 11-06-2011

4. Communications in India - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Communications_in_India) Retrieved on: 11-06-2011

5. India Cellular (Mobile phone subscribers in India, Market Share mobile subscribers) (http://www.india-cellular.com/Cellular-Subscribers.htm)

6. Telecom Subscription Data as on 31st December 2010 | Unwireindia |

(http://www.unwireindia.com/rohit/telecom/telecom-subscription-data-as-on-31st-december-2010)

B. ARTICLES STUDIED

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(Published by: Telecom Regulatory Authority of India, Press Release No. 13/2011,New Delhi, 4th March 2011)

8. Muhammad Asif Khan, An Empirical Assessment of Service Quality of Cellular Mobile Telephone Operators in Pakistan, Canadian Center of Science and Technology, Vol. 6, No. 10; October 2010, 164-177

9. Rajkumar Paulrajan and Harish Rajkumar, Service Quality and Customers Preference of Cellular Mobile Service Providers, Journal of Technology Management & Innovation © Universidad Alberto Hurtado, Facultad de Economía y Negocios, J. Technol. Manag Innov. 2011, Volume 6, Issue 1

C. OTHERS

10. Annual Report 2009-2010

(Published by: Telecom Regulatory Authority of India, Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg,(Old Minto Road), New Delhi-110002)

11. Highlights of Telecom Subscription Data as on 31st March 2011

(Published by: Telecom Regulatory Authority of India, Mahanagar Doorsanchar Bhawan, Jawahar Lal Nehru Marg,(Old Minto Road), New Delhi-110002)