AbstractBharti AirtelLtd headquartered in New Delhi, India, is a global telecommunications companywith operations in 19 countries across Asia and Africa. The company ranksamongst the top four service providers, globally, in terms of number ofsubscribers, and top mobile service provider in India.
In India, the airtelproduct offerings include 2G, 3G and 4G wireless services, mobile commerce,fixed line services, high speed DSL broadband, IPTV, DTH, enterprise servicesincluding national and international long distance services . In the rest ofthe geographies, it offers 2G, 3G wireless services and mobile commerce.It holds major share of volume in telecom sector in India. But due to advent ofReliance Jio, It has to face some major challenges which resulted it itsdrastic reduction of profits in the form of huge missed profits. In this paperthe brand positioning, strategies adopted by the company and its SWOT analysisis discussed.Keywords: Telecommunications, Technology, Strategies, Brand positioning.Introduction Airtel is founded by Sunil Bharti Mittal in 1976.
Thecompany has grown from being a manufacturer of bicycle parts to one of the mostrespected and largest business groups inIndia which has created world-class businesses in telecom, insurance, retail,and foods. Bharti started its telecom services business by launching mobileservices in Delhi (India) in 1995. Since then it has emerged as one of the toptelecom companies in India, and is amongst the top three wireless operators inthe world.
Bharti Airtel, is one of the world’s leading providers oftelecommunication services with presence in 20 countries across Asia and Africa.Bharti Airtel offers GSM mobileservices in all the 22-telecom circles of India and is the largest mobileservice provider in the country, based on the number of customers.Thegroup offers high-speed broadband network and fixed line services in 87 cities.In the rest of thegeographies, it offers 2G, 3G and 4G wireless services and mobile commerce.Bharti Airtel had over 354 million customers across its operations at the endof March 2017.Over the years some ofbiggest renowed names in international business have partnered with Bharti.
Currently, Singtel, Qatar Foundation Endowment, IBM, Ericsson, Nokia Siemens ,Alcatel-Lucent and SK Telecom are key partners in telecom. AXA Group is thepartner for the insurance business and Del Monte Pacific for the processedfoods division. Brand positioningInyears 1995-1998 Airtel used the tag line “power to keep in touch”, which isaimed at elite class of the society. In years 1999-2001, it started talking tonew segments by positively positioning and establishing itself as a brand thatimproves the quality of life by introducing the line “Touch Tomorrow”.Inlate-2002, Bharti Cellular Ltd released a television commercial, which insteadof using the usual movie stars/sports celebrities, it chose A.R Rahman topromote its brand. The campaign attracted considerable media attention becausethis was the first time Rahman had agreed to do a television commercial. Bharticlaimed to have scored an impression in terms of getting Rahman to compose fiveexclusive music tunes downloadable as ring tones for Airtel users.
The television commercial was a part of thebrand repositioning and restructuring efforts for Airtel, as part of which,Bharti changed the brand’s tagline in early-2002 from ‘Touch Tomorrow’ to ‘LiveEvery Moment.’ The company also decided to undertake a brand building programand chosen the slogan ‘Unlimited Freedom’. Commenting on these changes, companysources said,”Airtel’s brand identity and campaign will now have a newyounger and international look and feel that builds on the earlierpositioning.”Later in July 2014, thecompany undertook a new campaign on July 25 on television and other mediaincluding print, digital and outdoor. “As large parts of India are graduatingtowards smartphones, we as an operator are positioning ourselves as the mostpreferred network for smartphones. That is where the next phase of growth willcome from.
This time, while the logo remains unchanged, we have tried to makethe look and feel of the brand more youthful, premium, and international, toinject some excitement around Airtel. This time around, our brief was to buildon Airtel’s brand, which stands for human connections and togetherness. Thebrand needed to be coherent across the business, consistent within thebusiness, stand out in a crowded market and make the brand more aspirational”says Mohit Beotra, Chief Brand Officer of Bharti Airtel. Strategiesadopted by airtelAirteluses mix of segmentation strategies to segment its offerings like basic call/SMS plans, prepaid / Post-paid plans, VAS– Data, caller tunes etc. Apart fromgeographically segmenting the market in East, West, North, South & central,the market is also segmented in each region on the basis of demographic variables like age, Income, Social groups.Different geographic regions are handled differently and independent campaignsare run according to the people in each region. Airtel has targeted by using different campaignsover the period of time i.
e. campaign like “Har Ek friend Jaruri hota hai” “Jotera hai wo mera hai” and recently launched campaign of “one touch internet.Airtel has been successful in top-of-the-mind recall amongst cellular phoneusers and is enjoying a leadership position in most markets.
After changingits logo it has repositioned itself as a Young and energetic internationalbrand. Under distributionstrategy in the marketing strategy ofAirtel, It has wide spread simple and effectivechannel structure. This consists of system of rural and urban distributorswho are allotted territories and service retailer who had shops at localmarket. Thedistribution network generally consists of Distributors, Field sales Executives,Urban and rural retailers and Customers.
There is another channel where Airtelexclusive stores are set up in popular areas ,which are franchises owned bydealers to serve not only for customer service but also as distribution centres.The other type of networkconsists of online trade where company’s own website and various other rechargesites such as freecharge, paytm etc to make online transactions. Strategiesplanned to improve performance 1 More high revenue (ARPU) customers · Grab increased share of 4G devices · Drive rapid data consumption, accelerate SIM consolidation and accelerate postpaid 2 More services per customer · Build the largest Payments Bank by creating differentiation · Accelerate Airtel homes through brilliant service bundling · Drive depth of product portfolio in B2B 3 Brilliant customer experience · Eliminate customer frustration across clusters · Deliver a world class network experience · Revamp our stores for improved growth and customer experience 4 Win with the Portfolio · Accelerate home broadband, B2B growth, and DTH · Drive new revenue streams through a combination of content, innovation & alliances 5 War on waste · Drive down cost through challenging the status quo · Accelerate active sharing, fiber and joint sourcing of bandwidth Setback for airtelOnSeptember 2016, Jio had officially launched its mobile network service, withinthe first month of commercial operations, Jio declared that it had acquired 16million subscribers. This is the fastest accumulation by any mobile networkoperator anywhere in the world. Jio crossed 50 million subscribers in 83 days since its launchand crossing 100 million subscribers on 22February 2017. By October 2017 it had about 130 million subscribers.Reliance Industries and three telecom companies – Bharti Airtel, IdeaCellular and Reliance Communication RCom have collectively lost Rs 22,522 croreof market capitalization in single day after RIL chairman Mukesh Ambani at the42nd annual general meeting announced the launch of RelianceJio offering customers free domestic voice calls and zero national roamingcharges. Before the official launch of Jio, in July,Airtel has already cut off its datatariffs to retain its customer base.
After its launch Bharti Airtel’srevenue fell 3 per cent to Rs 23,363.9 crore in the third quarter of FY 2016-17. Mobile data revenue dropped to Rs4,049 crore due to “free voice and data offering by a new operator”. Datarevenues at Rs 3,087 crore de-grew by 3 per cent. Mobile broadband customers increasedby 22 per cent.
The revenues on data contribute to 22.8 per cent of the company’smobile revenues in that year when compared to 23.1 per cent in thecorresponding quarter last year.
Among telecom stocks, Bharti Airtel, thelargest loser in terms of m-cap, lost Rs 8,455 crore m-cap at Rs 124,199 crore,the BSE data shows. The companyreported a 72% drop in quarterly profit on Tuesday, as free voice and dataservices offered by Reliance Jio Infocomm Ltd until 31 March affected rivalsand forced them to cut down tariffs to retain customers.Net profit fell to Rs 373.4 crore in the three months ended 31 March 2017from Rs 1,319.2 crore when compared to earlier year, the companysaid. This is the second straight decline in quarterly profit at thecountry’s largest telecom company. Profit fell 55% in the three months ended 31December.
Revenue of the company declined by 12% to Rs 21,934.6 crore in theMarch quarter of 2017. Earnings before interest, tax, depreciation andamortization, an indicator of operating profitability declined 13% to Rs7,992.8crore from Rs9,188.
1 crore a year ago. The company’s average monthly revenueper user fell sharply from Rs196 in the March quarter of previous year whencompared with Rs156 in 2017. Average data revenue per user declined to Rs162from Rs196.Data average revenue per user fell by 4.5% to Rs185 in the yearended 31 March 2017 from Rs194 in the previous year. The number of minutesspent on calls on its network, however, grew 13.4% in the full year. Inresponse, Bharti Airtel slashed capital expenditure to Rs 3,808.
2 crore in theMarch quarter, down 37.13% from Rs 6,057.4 crore in the previous year. For theyear ended 31 March, company’s net profit declined 37.
4% from last year to Rs3,800 crore. Revenue rose 1.1% to Rs 95,468 crore.Comeback effortsAssoon as Jio came up with its mind-blowing offers, Airtel left no stone unturned to win thecompetition by offering high-quality services. The company cited ‘predatorypricing’ when it reported a worse-than-expected 55% drop in quarterly profit on24 January.The introduction of jio 4g services acted as a catalyst for airteldata and 4g services. The stronger user adoption, positive network usagemonetized airtel its 4g network investments quickly. Bharti Airtel in November 2016, has awarded a $60 million (402crore) pan-India deal to Finnish gear maker Nokia to implementvoice-over-LTE calling technology.
“Airtel was piloting the technology in a fewareas and after successful testing, is now looking at a bigger launch by givinga pan-India contract for IMS (IP multimedia system) solution toNokia” sources said. The Industrywatchers said Airtel may be in an advantageous position if it launches VoLTEservices any time soon, considering that Jio hasn’t been able to properlypublicize the benefits of this technology due to the interconnection issue,which the 4G entrant claimed due to massive connectivity issue . Airtelused VoLTE as a complimentary service to its existing voice offering.
In caseVoLTE is not available in an area, Airtel users would be able to fall backwithin the network to lower technologies, which are 2G and 3G, industrywatchers say. The biggest telecom operatorin the country has announced that it will establish its own VoLTE serviceacross the country by March 2018. “BhartiAirtel will be focused on cost controls andcornering a majority share of all 4G devices entering the Indiamarket to its data network in a bid to stave off the stiff challenge posed bynew entrant Reliance Jio Infocomm”, the company’s managing director (India& South Asia), Gopal Vittal said. It started on an aggressive cost-optimisation drivethrough a mix of fibre-sharing and active-infrastructure sharing measures toimprove finances for effectively giving competition to Jio. Airtel hasannounced several new recharge packs for its prepaid customers ranging from Rs8 to Rs 399.It announced Rs 399 plan,which offers 1 GB data per day at 4G speed alongwith unlimited local and STD calls. The plan is to counter the Jio’s Rs 399plan which also offers unlimited local and STD calls along with 1 GB data perday for 84 daysAirtel Quarter 1 profit beats estimatesdespite falling 75% on Reliance Jio impact.
The better-than-expected Quarter 1 resultswas partly because of the eased pressure on Airtel after Reliance Jio startedcharging customers in April, after offering services for free for almost sixmonths.Presently Airtel teamed up with ericsson to work towards the development of 5Gtechnology. It recently entered into strategic alliance with SK telecom tobuild advance telecommunication network .SwotanalysisStrengths1. Airtel is the biggest mobile service provider inIndia.With about 870 million wireless subscriptions, India ranks second afterChina in the wireless market. Airtel has a 22.
2% share of that market.2. Airtel has been in the market formore than 18 years and thus has towers allover the country which is a major advantagebecause deployment of new technologies or increasing capacity at times requiressoftware and minimal hardware upgrade.
Having infrastructure already on theground makes that process much faster and smoother. Secondly, it is easier tocapture new customers if a telcomm company already has a network in place.3.
Airtel is among India’s most visible brandswhich is present in most parts of the nation through television, print andvarious other forms of advertising. 4. Bharti Airtel runs one of the better mobile networks’ inIndia. They have nationwide penetration and although there is no lack ofconsumer complaints regarding dropped calls and slow data against Airtel, itstill offers a higher quality telecom service experience as compared to mostother telcos.
The company has top notch stakeholders, namely Sony Ericsson, Nokia and singtel, and the recent one being Apple. Such strategic alliances boost the brand equity.Weakness1. Airtel, like all other serviceproviders in India, has been adversely affected by the extreme pricecompetition. The story is similar with data and 4G tariffs. As a result, thecompany has been reporting declining profits.
Outsourcing operations helped Airtel in lowering its cost. But on the other hand, they are running the risk of being dependent on some companies which may affect its operations. Although it’s been 4 years that Airtel has acquired Zain’s Africa business, but Airtel is still struggling to turn around the unit which was bought at a huge sum of 9 billion dollars. With its acquisitions turning out to bad investment, and credit being high and margins being low, Airtel group is under high debt. Opportunities Partnering with smart phone companies is going to be a smart strategy as far as MNP (mobile number portability in India) is concerned. This will ensure fixed cash flows in the future and a higher customer base. With high competition in the telecom industry & shrinking margins, venturing out in new markets and developing economies will prove fruitful for the company.
Value Added services is going to be future of the telecommunication industry & by specializing in this Airtel can differentiate itself in highly competitive market. With introduction of unique services, Airtel can avail higher margins. Although it is currently providing 3G & 4G services, but these services are limited to specific geographical locations. Expansion of these services to most of its regions will help the company get more margins and customers.
The whole wireless world is moving towards LTE (long term evolution or 4G). LTE for mobile broadband can be a good solution for India where fixed broadband penetration is otherwise low. Airtel has taken the lead with this version of LTE in 4 areas cities initially now expanded to 10 areas, but deployment needs to catch up pace. Despite a weak LTE ecosystem in India, Airtel should portray itself as the embracer of that technology .Threats:1. With the auction ofspectrum & change in the government policies on a regular basis, it is apotential threat to the stability & existence of this industry therebyaffecting the players.2. Price war in thehome market and declining margins due to this is adversely affecting theoverall business of the group.
3. Mobile Number Portabilitygives the customer independence to change the service provider while retainingthe number and as Airtel charges are premium over other service providers, itcan see slump in subscriber base in the next fiscal year with PAN India MNPapplicable from May 3rd 2015.ConclusionFor any company ups and downs are common in businessenvironnment. Prior to the advent of jio, airtel has been the market leaderwith highest share volume percentage. After the advent of new comer its notbeen a smooth sail for Airtel, even though it fought back the newchallenges. Even though the profits forthe company are lost drastically for few quarters, it managed to get impressivenumber of subscribers. It adapted to new changes and modified its preferences.It is working towards new technological advancements for the provision ofquality services towards consumers even though the process has been going inslower pace.References · https://wirelesstelecom.wordpress.com/2013/11/11/swot-analysis-of-indias-largest-mobile-telecom-operator-bharti-airtel· http://www.airtel.in/airtel-annual-report-2016-17/financial-highlights.html· http://www.livemint.com/Companies/Ycs6CjuVIWmvUDpzg52xuJ/Airtels-Q1-profit-falls-75-Rs367-crore.html· http://www.business-standard.com/article/markets/jio-impact-ril-three-telecom-companies-lost-rs-22-522-crore-m-cap-116090100648_1.html