Bharti Airtel Limted & Indian Telecom

BHARTI AIRTEL LIMTED
& INDIAN TELECOM

Case study 2
GROWTH OF TELEDENSITY
25
25 23.5
20 18.5
15
9.11
10
5.11
5 2.89
0
2000 2002 2004 2006 2008 2009
SUBSCRIBER BASE : FIXED &
MOBILE
200 190
180
180
160
140
120
Mobile
100 Fixed
70 75
80 Series 3
60 52.2
42.84 46.19
38.43 33.7
40 26.75
20 6.54
1.88
0
2000 2002 2004 2005 2008 2009
 Bharti Airtel Limited, one of Asia’s leading
integrated telecom services providers with
operations in India and Sri Lanka.
 The company is structured into four strategic
business units - Mobile, Telemedia,
Enterprise and Digital TV
 The mobile business offers services in India
and Sri Lanka.
 The Telemedia business provides broadband,
IPTV and telephone services in 95 Indian
cities.
 The Digital TV business provides Direct-to-
Home TV services across India
 The Enterprise business provides end-to-end
telecom solutions to corporate customers and
national and international long distance
services to telcos.
 Provides GSM mobile services in all the 22
telecom circles in India, and was the first
private operator to have an all India presence.
Provides telemedia services (fixed line and
broadband services through DSL) in 95 cities in
India.
“Sunil has built an incredibly successful
business from scratch, one which has had a
truly transformational impact on our
industry, on the customers he serves and on
India’s economy. His brave and ambitious
strategies will continue to resonate across
the country, our industry and the business
community globally, becoming a benchmark
for emerging markets worldwide”
Craig Ehrlich , GSM Association Chairman in 2008

AIRTEL’S NET SALES & PAT
NET PAT % PAT
SALES INCREASE
2004-05 8142.44 1210.67 107%
2005-06 11259.12 2012.08 66%
2006-07 17851.61 4033.23 100%
2007-08 25761.11 6244.19 55%
2008--09 34048.32 7743.84 24%

KEY FINANCIAL RATIOS
2005 2006 2007 2008 2009
EPS 6.53 10.62 21.27 32.9 40.79
Dividend / 2.00
share
OPM % 36.81 35.86 40.65 41.37 38.74
Debt/equity 1.1 .65 .46 .32 .28
RNOW 26.06 27.42 35.23 32.04 33.74

2004 2005 2006 2007 2008 2009
ROCE 9.9 % 15.7 % 21.5 % 31 % 33.3% 30.5%
EARNING ESTIMATES
2010/2011
2009 2010 2011
PROFIT 7743.84 10012 11367

EPS
PE RATIO
HOW DOES THE COMPANY
STACK UP AGAINST IT PEERS?
Company Sales (rs cr.) PAT (rs cr.) Market Cap (rs
cr.)
Bharti Airtel Ltd. 34,048.32 7,743.84 107,697.43
Reliance 15,086.66 4,802.67 34,448.61
Communications
Ltd.
Idea Cellular Ltd. 6,719.99 1,044.36 15,174.97
Tata 3,749.43 515.95 10,888.43

Communications
Ltd.
Tata Teleservices 2,034.62 -159.60 4,714.53
(Maharashtra) Ltd.
`
share holding pattern
4.66
8.91
promotors
18.74 45.3 foreign promoters
foreign instn
others
financial instn
22.39
 AT&T - the former SBC merged with AT&T creating the new AT&T (USA)
 China Mobile - formerly China state-owned, now still state-controlled,
one of two mobile phone monopolies in the entire China.
 Vodafone - Britain's largest telecom operator.
 Verizon Communications - US-based telecom company formed after a
series of mergers.
 Telefonica - Multinational company with stakes in Dpain, Latin America
and Europe. Owns the O2 brand.
 Deutsche Telekom - German telecom company, also owns t-mobile.
 America Movil - Mexican operator controlled by the world's richest man -
Carlos Slim.
 NTT DoCoMo - One of Japan's telecom operators.
 France Telecom - One of France's telecom companies. Nippon
Telegraph & Telephone - Japan's second largest telecom operator.
SUBSCRIBERS' BASE FIXED &
MOBILE
5
4.5
4
3.5
3
2.5 Mobile subs
2 Fixed line subs
1.5 Column1
1
0.5
0
 Today, innovation is about much more than
new products. It is about reinventing
business processes and building entirely new
markets that meet untapped customer
needs. Most important, as the Internet and
globalization widen the pool of new ideas,
it's about selecting and executing the right
ideas and bringing them to market in record
time.
 In the 1990s, innovation was about technology
and control of quality and cost. Today, it's
about taking corporate organizations built for
efficiency and rewiring them for creativity and
growth. "There are a lot of different things
that fall under the rubric of innovation," says
Vijay Govindarajan, a professor at Dartmouth
College's Tuck School of Business and author of
Ten Rules for Strategic Innovators: From Idea
to Execution. "Innovation does not have to
have anything to do with technology."
 Toyota Motor Corp., which leapt 10 spots this
year to No. 4, is becoming a master of many as
well. The Japanese auto giant is best known for
an obsessive focus on innovating its
manufacturing processes. But thanks to the hot-
selling Prius, Toyota is earning even more respect
as a product innovator. It is also collaborating
more closely with suppliers to generate
innovation. Last year, Toyota launched its Value
Innovation strategy. Rather than work with
suppliers just to cut costs of individual parts, it is
delving further back in the design process to find
savings spanning entire vehicle systems

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BHARTI AIRTEL LIMTED

& INDIAN TELECOM

Craig Ehrlich , GSM Association Chairman in 2008

2004-05 8142.44 1210.67 107%

2005-06 11259.12 2012.08 66%

2006-07 17851.61 4033.23 100%

2007-08 25761.11 6244.19 55%

2008--09 34048.32 7743.84 24%

EPS 6.53 10.62 21.27 32.9 40.79

OPM % 36.81 35.86 40.65 41.37 38.74

Debt/equity 1.1 .65 .46 .32 .28

RNOW 26.06 27.42 35.23 32.04 33.74

2009 2010 2011

PROFIT 7743.84 10012 11367

Tata 3,749.43 515.95 10,888.43

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