Airtel s entry into African Markets

Contents
Why Airtel went International Why African Markets Market Evaluation Triadic Analysis Airtel Zain Collaboration Financial Analysis Suggestions

Why Airtel is going International ?

Saturation of Indian markets ( only some scope left in rural India ) High competition in India , price wars and Mobile Number Portability are hurting the Indian operators

Why African Markets

Penetration levels in African markets is quite less ( < 32%) Gets 70 Million subscribers by Zain s acquisition Opportunity in usage
India 450-500 minutes / user Africa 60-70 minutes / user

Respect for Indian companies is very high High projected future growth for Africa Moderate Competition ( only few players like MTN) Healthy Tariffs

Market Evaluation : Triadic Analysis

Market Attractiveness a) Teledensity b) Usage opportunity c) Data &3G

Market Decision 1.Low cost plans , deep penetration 2. Outsourcing Risk 1)Political Risk : a) Civil War b) Clearance from regulators 2) Financial :- Debt 3) Ownership dispute : Econet Nigeria unit 4) Overcoming business & cultural difference

Competitive Advantage 1. Management capability 2. Low cost advantage

Airtel-Zain mutual benefit

Airtel 1. Benefit from strong presence Zain has in Africa presence in 15 African countries 2. Has the capability of giving affordable service & having deep penetration 3. Low cost structure and tariff plans 4. Management capabilities and successful model Zain 1. Increase the profitability of Zain which was less earlier though average consumer spending was higher . Airtel has 50% higher ARPU 2. Culture and business acumen fitting the African culture 3. Widespread presence in 15 countries in Africa like Nigeria ,Uganda , Tanzania etc.

Financial Analysis
Bharti $ 6.32 Billion Total Revenues Net Income Customer Base Global Presence ARPU $1.67 Million 125.3 Million 5 Countries $3.14 Zain $6.17 Billion -$37 Million 71.8 Million 24 Countries $3

Comparable revenues Income of Airtel high, Zain in losses Zain has larger presence but lower penetration Airtel has higher Average Revenue Per User

Re- Branding

Suggestions
Replicate its domestic model in African markets Does not loose focus on home turf while eyeing new geographies Focus on cost reduction .
This will reduce their costs and help them to pass savings to customers and increase their customer base.

Still lot of opportunity in domestic markets Unending opportunity with advent of technology like 3G ,4G and so on

Unveiled a new logo to make the next big leap in a bid to attain new brand identity and present itself as single and unified face to customers. However, this huge one-time re-branding exercise has come at a cost of Rs.3.4 billion to the telecom major

Outsourcing Model

Focus on Marketing & Sales Outsource operations

Bridge Cultural gap Not frequent changes in Branding exercise

Local top management in Africa Understanding local needs well

People use to brand properties like old Logo Re-branding a costly exercise