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Ø Engaging with stakeholders
Ø Ensuring stakeholder sensitive policies and practices
Ø Undertaking programs for our employees, community and environment
Bharti Airtel sensitizes its employees towards CSR issues at various forums. We
feel that it is important that each employee should understand the importance of
environmental, social and economical aspects while taking business decisions. At
Bharti, each employee is sensitized towards CSR issues and thus operations at the
ground level are influenced. Such sensitization exercises have resulted in many
socially and environmentally sensitive decisions on the ground. For example,
Confidence Plan for hearing impaired people, covers noise-making DG sets at extra
cost, investing in consumer awareness campaigns to ensure safe use of mobile are
some examples of the above.
D. Subscriber base
The Airtel subscriber base according to TRAI - Telecom Regulatory Authority of
India as of February 2009[10] was:
* Chennai - 2,133,677
* Delhi - 4,671,177
* Mumbai - 2,791,963
* Kolkata - 2,456,896
* Madhya Pradesh - 7,690,609
* Gujarat - 3,981,660
* Andhra Pradesh - 8,892,353
* Karnataka - 9,820,812](https://image.slidesharecdn.com/telecomindustry-161219161223/75/Telecom-industry-14-2048.jpg)
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"Today churn level (movement of customers from one mobile service provider to
another) is low at about 5 per cent nationally. Customers are moving mainly because of
network related problems such as instability, call drops and congestion," he said. The
best way for Idea Cellular to enter the Tamil Nadu market would be by promoting its
stable and efficient networks
K. Subscriber base
Idea's subscriber base as of July 2009 according to the [4] is as follows
Ø Maharashtra and Goa - 8077848
Ø Madhya Pradesh and Chhattisgarh - 5677758
Ø Andhra Pradesh - 5528758
Ø Kerala - 4738070
Ø Gujarat - 4230479
Ø Uttar Pradesh (West) & Uttarakhand - 4602390
Ø Delhi - 2343017
Ø Haryana - 1701065
Ø Uttar Pradesh (East) - 2361070
Ø Rajasthan - 1603620
Ø Himachal Pradesh - 164571
Ø Mumbai - 1012152
Ø Bihar & Jharkhand - 1702584
Ø Tamilnadu - 225566
Ø Orissa - 164995
Ø Punjab (Spice) - 2566170
Ø Karnataka (Spice) - 1816711
Totalling to 48,516,824 or 14.90%(Approx.) of the total 325,701,124[2] mobile
connections in India.](https://image.slidesharecdn.com/telecomindustry-161219161223/75/Telecom-industry-27-2048.jpg)
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Telecom industry
- 1. Industry Analysis Telecom Industry Ravindra KRUPANIDHIBUSINESS SCHOOL Industry Analysis of Telecom Industry Prepared By: - Ravindra Singh Gohil 3rd Semester MBA KRUPANIDHI BUSINESS SCHOOL 1 Industry Analysis Telecom Industry
- 2. 2 Ch. Topic Page No. 1Introduction of Telecom Industry A. Introduction 3 B. General Introduction about Sector 4 C. Major Players 5 D. Market Share of Telecom Company in India 5 E. High Growth Rate in Resent Year 6 F. Problem of Telecom Industry 7 G. Future of Telecom Industry 7 H. 3G Technology in India 8 i. 3G Technology 9 ii. Existence of 3G Technology 9 iii. 3G Technology & Human Resources 10 iv. Mobile Interview 10 v. Conferences 10 vi. File Transfer 11 vii. E-Learning & M-Learning 11 2. Bharti Airtel 12 A. Profile of the Company 13 B. Vision & Promise 14 C. Corporate Responsibility 14 D. Subcriber Base 15 E. Award and Recognition 17 F. Balance Sheet 19 G. P&L Account 20 3. Idea Cellular 21 A. Origin of Origination 22 B. Brand Values 22 C. Brand Vision 22 D. Brand Mission 23 i. The India Footprint Idea 23 ii. The Technology Advantage Idea 23 iii. The customer Focus Idea 23 iv. The Employee Focus Idea 23 E. Current Growth & Development 23 F. Future of Origination 24 G. Award and Achievement 25 H. Business Focus 25 I. Product and Service 26 J. Company Strategy 27 K. Subscriber Base 28 L. Balance Sheet 29 M. P&L Account 30 4. Comparison 31 A. Number of Subscriber 31 B. Sales 32 C. Profit 33
- 3. 3 Telecom Industry A. INTRODUCTION Thisfirst chapter presents our introduction to the birth and growth of Indian Telecomm Industry, and the major player of Telecomm. The background will, presents current status of Telecomm Industry, problem associated with it and lastly the future of Telecomm Industry. B. General introduction about the sector. The telecom network in India is the fifth largest network in the world meeting up with global standards. Presently, the Indian telecom industry is currently slated to an estimated contribution of nearly 1% to India’s GDP. The Indian Telecommunications network with 110.01 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia.Today, it is the fastest growing market in the world and represents unique opportunities for U.S.companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in 2007. According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by 2007. The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY 2004-2005. In the last 3
- 4. 4 years, two outof every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5 million new subscribers per month by 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities,covering 2000 towns across the country. C. Major Players There are three types of players in telecom services: • State owned companies (BSNL and MTNL) • Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) • Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures, Escotel, Idea Cellular,BPL Mobile, Spice Communications, TATA Docomo) D. Market Share of the Telecom Company in India Current status of Telecomm Industry
- 5. 5 Telecommunications is oneof the prime support services needed for rapid growth and modernization of various sectors of the economy. It has become especially important in recent years because of enormous growth of Information Technology (IT) and its significant impact on the rest of the economy. India is perceived to have a special comparative advantage in IT and in IT-enabled services. However, sustaining this advantage depends critically on high quality telecommunication infrastructure. Keeping this in view, the focus of policy is vision of world class telecommunication facilities at reasonable rates. Provision of telecom services in rural areas would be another thrust area to attain the goal of accelerated economic development and social change. Although the telecom network has grown rapidly in recent years, its growth needs to be accelerated further in the Tenth Plan. The telecom sector in India has been witnessing a continuous process of reforms since 1991. With the opening of international long distance services and internet telephony from April, 2002, the process of liberalization and opening up the sector for competition is complete. Convergence of services is a major new emerging area and the telecom sector will have to address this in the Tenth Plan E. High Growth in Recent Years During 1997-2002 period, a record growth rate of telecom services was achieved in the country. The network (equipped capacity) grew at an average rate of about 22 per cent. Growth of both cellular mobile phones and fixed line phones has been equally impressive. While private sector concentrated in cellular mobile phones segment, the growth in the Government sector was primarily due to fixed line connections. Against the target of providing 237 lakh Direct Exchange Lines (DELs), about 240.55 lakh additional DELs have been provided during the Ninth Plan. The cellular network has grown from a small base of 3.40 lakh connections to 64.31 lakh connections by the Plan
- 6. 6 end. As aresult of this growth, the tele-density has nearly tripled from 1.57 at the beginning of the Ninth Plan to 4.4 as on March 31, 2002. F. Problem of Telecomm Industry The need to integrate ETL (Extract, Transform and Load), EAI (Enterprise Application Integration), DW, enterprise portals and BI is especially true for the much battered telecommunications industry. Whatever the political or business reasons, the fates have not been kind to telecom over the past several years. In order to turn their fortunes, many telecom companies are investing heavily in new technologies that will enable them to collect and make sense of the overabundance of data that resides in their organizations, thus turning that data into usable information. There's a wrench in the works, however. Over the past decade or so, countless vendors have touted their products as all- inclusive or comprehensive solutions to DW/BI problems. As a result, many organizations have sunk copious amounts of money into these panacea solutions. They have built specialized data warehouses, operational data stores, data marts and business intelligence applications on top of these data stores or legacy systems. I call it data mart anarchy. G. Future of Telecomm Industry By 2012, half of the 20 largest carriers will establish new lines of business outside telecom, such as media entertainment, advertising and managed services, and so more.Traditional telecom carriers can no longer rely on
- 7. 7 conventional competitive tacticssuch as price cuts, promotions and basic product bundling to maintain their edge in the consumer segment, warned Gartner. The research firm also said that non- traditional telecom players like Apple, Google and Nokia, which have a strong understanding of consumers, are adopting new business models that are forcing carriers to reassess their approach and service delivery. Faced with this competition, traditional telecom carriers will attempt to transform themselves by primarily exploiting content. “The players that will be amongst the successful 20 per cent will be the ones that provide a consumer-centric experience, for example, through interactive TV, where users will be able to chat online while watching their favourite TV programmes,". The telecom industry in 2012 will be very different from the one we know today. Developing strong partnership skills, focussing on customer user groups, embracing Internet services and starting to talk the language of Web 2.0 will enable the carriers to thrive well into the future. H. 3G Technology In India From the time of telegraphs Indian telecom sector has witnessed an immense growth and has diversified into various segments like, Fixed Line Telephony, mobile telephony, GSM, CDMA, WLL etc. The telecom industry is growing at a fast pace introducing newer technologies. Even the network operators and handset providers are also coming up with newer value added services and advanced technology cell phones with multimedia applications. Now it's time to welcome the much-awaited 3G Technology. Bharat Sanchar Nigam Limited is all set to launch the technology by December 2007. Not only the network providers but also the handset providers in India are waiting eagerly for the launch of 3G to earn very high revenues from the value added services provided by the technology.
- 8. 8 The technology isinitially being launched on CDMA platform. The technology is being tested over various platforms and cellular networks. i. 3G TECHNOLOGY 3G or Third Generation technology is a convergence of various Second Generation telecommunication systems. The technology is intended for SMARTPHONES - multimedia cell phones. Video broadcasting and other e-commerce services such as, stock transactions and e-learning will now be made possible much faster. It offers 3 Mbps speed for downloading, which is very high as compared to that of the 2G technology. The 3G technology provides for internet surfing, downloading, e-mail attachment downloading, audio-video conferencing, fax services and many other broadband applications. ii. EXISTENCE OF 3G TECHNOLOGY 3G Technology was implemented in Japan for the first time in the world. Today the technology is serving 25 countries over more than 60 networks having its existence in Asia, Europe and USA. Video conferencing has been a major factor in the success of the technology. CDMA2000 3G Subscribers Base Worldwide
- 9. 9 3G Subscribers Base(in millions) iii. 3G TECHNOLOGY & HUMAN RESOURCES Not only the media and entertainment but the business sector too has started utilizing the 3G applications worldwide. Video conferencing allows two individuals at a distance to interact in the same way as they could have done in person. The technology is being implemented at various functional level of the business such as, marketing, human resources, etc. iv. Mobile Interview In today's global scenario, the 3G technology will enable organizations and qualified candidates to have a telephonic interview in a modern way through video
- 10. 10 conferencing. Traditional telephonicinterview and personal interviews may be replaced by 3G voice and video conferencing. This will reduce the cost and save the time of both the organizations and the candidates. v. Conferences 3G technology provides for video conferencing which can help the Human Resource Department interact with their seniors at the time of urgency without wasting other resources. This can be very much helpful when the concerned person is out of state or country. vi. File Transfer With the advent of video and audio multimedia and a faster rate of downloading e-mail attachments, employees in an organization can request any urgent file or report they need to present to the clients. This will again reduce the burden on organization's resources and increase employee effectiveness. vii. e-learning & m-learning 3G technology provides for internet browsing that will help the employees to surf and learn using their 3G cell phones while traveling (m-learning) or from home. The organizations can schedule training modules for the employees of other branches through video conferences
- 11. Bharti AirtelBharti Airtel FounderAnd Chairman Sunil Bharti MIttal 11 Bharti Airtel.
- 12. 12 A. Profile ofthe Company Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group, has a diverse business portfolio and has created global brands in the telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully launched an international venture with EL Rothschild Group to export fresh agri products exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance Company Ltd under a joint venture with AXA, world leader in financial protection and wealth management. Airtel comes to you from Bharti Airtel Limited, India’s largest integrated and the first private telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel since its inception has been at the forefront of technology and has steered the course of the telecom sector in the country with its world class products and services. The businesses at Bharti Airtel have been structured into three individual strategic business units (SBU’s) - Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business provides mobile & fixed wireless services using GSM technology across 23 telecom circles while the Airtel Telemedia Services business offers broadband & telephone services in 95 cities and has recently launched India's best Direct-to-Home (DTH) service, Airtel digital TV. The Enterprise services provide end-to-end telecom solutions to corporate customers and national & international long distance services to carriers. All these services are provided under the Airtel brand.
- 13. 13 B. Vision &promise By 2010 Airtel will be the most admired brand in India: Loved by more customers Targeted by top talent Benchmarked by more businesses We at Airtel always think in fresh and innovative ways about the needs of our customers and how we want them to feel. We deliver what we promise and go out of our way to delight the customer with a little bit more C. Corporate Responsibility at Bharti Airtel At Bharti, CSR is a way of life. Each department and employee strives to be sensitive to the stakeholders and environment within their work context. Bharti encourages employees to take decisions and design business-linked processes that are sensitive to communities and environment. Corporate Social Responsibility (CSR) in Bharti encompasses much more than only social outreach programs. It is an integral part of the way Bharti conducts its business. The essence of Bharti’s commitment to Corporate Social Responsibility is embedded in the ‘Corporate Values’, which stem from its deepest held beliefs. These Values are: Ø To be responsive to the needs of our customers Ø To trust and respect our employees Ø To continuously improve our services – innovatively and expeditiously Ø To be transparent and sensitive in our dealings with all stakeholders We encourage our employees to take decisions and design business processes, keeping in mind the following: Ø Ethics, fairness and being correct Ø Meeting and going beyond compliances and legal requirements Ø Showing respect and sensitivity towards stakeholders and communities, and Ø Nurturing the environment We practice our CSR beliefs and commitments through a three-pronged approach:
- 14. 14 Ø Engaging withstakeholders Ø Ensuring stakeholder sensitive policies and practices Ø Undertaking programs for our employees, community and environment Bharti Airtel sensitizes its employees towards CSR issues at various forums. We feel that it is important that each employee should understand the importance of environmental, social and economical aspects while taking business decisions. At Bharti, each employee is sensitized towards CSR issues and thus operations at the ground level are influenced. Such sensitization exercises have resulted in many socially and environmentally sensitive decisions on the ground. For example, Confidence Plan for hearing impaired people, covers noise-making DG sets at extra cost, investing in consumer awareness campaigns to ensure safe use of mobile are some examples of the above. D. Subscriber base The Airtel subscriber base according to TRAI - Telecom Regulatory Authority of India as of February 2009[10] was: * Chennai - 2,133,677 * Delhi - 4,671,177 * Mumbai - 2,791,963 * Kolkata - 2,456,896 * Madhya Pradesh - 7,690,609 * Gujarat - 3,981,660 * Andhra Pradesh - 8,892,353 * Karnataka - 9,820,812
- 15. 15 * Tamil Nadu- 6,003,040 * Kerala - 2,169,633 * Punjab - 3,754,405 * Maharashtra - 6,248,906 * Uttar Pradesh (West) - 2,256,862 & (East) - 5,722,386 * Rajasthan - 6,704,274 * West Bengal & Andaman and Nicobar - 3,501,560 * Himachal Pradesh - 951,121 * Bihar - 7,152,245 * Orissa - 2,811,453 * Assam - 1,448,389 & Other North Eastern States - 890,054 * Jammu & Kashmir - 1,590,935 The total is 101,114,971 or 24.2% of the total 375,742,592 GSM + CDMA mobile connections in India till February 2009; and presently the Number 1 operator in India. In 2009 Airtel also launched in Sri Lanka. On the 9th of May,2009 Airtel signed a major deal with Manchester United Football Club. As a result of the deal, Airtel gets the rights to broadcast the matches played by the team to its customers.
- 16. 16 E. Awards andRecognitions For the Year 2008 - 2009 Ø ‘Appreciation Award’ for significant contribution towards Service tax (2008) – Department of Customs and Central Excise (Delhi Range), Govt of India Ø “Best Mobile Music, TV or Video Service” category for its Music-On- Demand service - GSMA Asia Mobile Awards 2008 Ø Buzziest Brands of the Year 2009 - afaqs “World’s 25 Most valuable Telecom Brands” - Brand Finance Plc 2008 Ø Ranked 3rd among India’s 500 most valuable companies – Business Today 2008 Ranked 8th among Top 50 most valuable (company) brands, 2008- Brand Finance Plc Ø Ranked 2nd among Top 500 profit earners- Business Today 2008. Best Practice Award in Business Process Improvement category – Technology Managers Forum, 2008 Ø Among ‘India’s Best Marketers’- Business Today 2008 ‘Ranked among 50 largest and most liquid companies in BRIC countries”- Dow Jones BRIC 50 2008 Ø “50 Best listed companies in Asia Pacific’- Forbes 2008 ‘Wireless Service Provider of the Year’ - Frost & Sullivan Asia Pacific ICT Awards 2008 Ø ‘Best Cellular Service Provider’ and ‘Best Broadband Service Provider’ - 2008 V&D 100 Awards Market Leadership awards in ‘Large Enterprise Telecom Services’, ‘Wholesale Data Services’ and ‘Mobile Services’ categories - Frost & Sullivan ICT Awards 2008 Ø “Ranked 21 among Best performing IT companies in the world” - 2008 BusinessWeek IT 100 “Best ISP in the Broadband Survey” - PC World,2008 Ø “Best Billing/Customer Care Solution” – GSM Mobile World Congress, 2008 “Most Admired Organization”, “Best National Mobile Operator”,
- 17. 17 “Best Internet andBroadband Operator”, “Best Ad Campaign” – Telecom Operator Awards, 2008 Ø Platinum Trusted Brand Award 2008 in the Mobile Service provider category - Reader’s Digest Asia Trusted Brands Survey. IT User Award 2008 in the Telecom vertical- Nasscom-CNBC TV 18 Ø Airtel is now a fully ISO 27001:2005 Certified Organization-certified by BSI: British Standards Institute Airtel conferred with "Retailer of the Year -Telecom Services" Award at the Asia Retail Congress 2009 Ø Sunil Bharti Mittal conferred the U.S.-India Business Council (USIBC) ‘Global Vision’ Award for 2008 Ø Sunil Bharti Mittal became the first Indian to join the Telecom Board of the International Telecommunication Union (ITU) Ø Sunil Bharti Mittal recognized as the “Telecom Person of the Year” by Tele.net Telecom Operator Awards, 2008 Ø Sunil Bharti Mittal joined the Board of Trustees of the Carnegie Endowment for International Peace
- 18. 18 F. Balance Sheet Mar' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Sources of funds Owner's fund Equity share capital 1,898.24 1,897.91 1,895.93 1,893.88 1,853.37 Share application money 116.22 57.63 30.00 12.13 2.72 Preference share capital - - - - - Reserves & surplus 25,627.38 18,283.82 9,515.21 5,437.42 2,675.38 Loan funds Secured loans 51.73 52.42 266.45 2,863.37 3,959.88 Unsecured loans 7,661.92 6,517.92 5,044.36 1,932.92 1,034.41 Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76 Uses of funds Fixed assets Gross block 37,266.70 28,115.65 26,509.93 17,951.74 13,240.63 Less : revaluation reserve 2.13 2.13 2.13 2.13 2.13 Less : accumulated depreciation 12,253.34 9,085.00 7,204.30 4,944.86 3,475.64 Net block 25,011.23 19,028.52 19,303.51 13,004.75 9,762.86 Capital work-in-progress 2,566.67 2,751.08 2,375.82 2,341.25 994.46 Investments 11,777.76 10,952.85 705.82 719.70 931.90 Net current assets Current assets, loans & advances 10,466.63 8,439.38 5,406.81 3,338.88 2,486.31 Less : current liabilities & provisions 14,466.89 14,362.33 11,042.67 7,272.80 4,708.12 Total net current assets -4,000.26 -5,922.95 -5,635.86 -3,933.92 -2,221.80 Miscellaneous expenses not written 0.09 0.20 2.66 7.94 58.35 Total 35,355.48 26,809.71 16,751.95 12,139.72 9,525.76 Notes: Book value of unquoted investments 9,898.56 9,379.62 580.43 476.52 460.83 Market value of quoted investments 1,887.76 1,574.29 125.85 243.99 472.71 Contingent liabilities 4,104.25 7,140.59 7,615.04 4,740.34 3,017.26 Number of equity sharesoutstanding (Lacs) 18982.40 18979.07 18959.34 18938.79 18533.67
- 19. 19 G. Profit lossaccount Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Income Operating income 34,048.32 25,761.11 17,851.61 11,259.12 8,142.44 Expenses Material consumed 12.41 33.85 22.08 67.40 72.10 Manufacturing expenses 8,627.13 7,339.01 5,017.27 3,299.73 2,365.51 Personnel expenses 1,397.54 1,297.88 1,076.95 734.20 475.86 Selling expenses 2,210.43 1,842.51 1,126.34 804.15 828.20 Adminstrative expenses 8,608.03 4,588.53 3,351.31 2,315.91 1,403.09 Expenses capitalised - - - - - Cost of sales 20,855.54 15,101.78 10,593.96 7,221.40 5,144.77 Operating profit 13,192.78 10,659.34 7,257.65 4,037.72 2,997.67 Other recurring income 235.99 266.91 101.70 40.75 18.93 Adjusted PBDIT 13,428.77 10,926.24 7,359.35 4,078.47 3,016.61 Financial expenses 434.16 393.43 282.07 236.81 317.00 Depreciation 3,206.28 3,166.58 2,353.30 1,432.34 1,019.36 Other write offs 178.82 266.07 137.80 127.39 161.34 Adjusted PBT 9,609.50 7,100.16 4,586.17 2,281.93 1,518.90 Tax charges 321.78 632.43 566.79 273.68 353.60 Adjusted PAT 9,287.72 6,467.73 4,019.39 2,008.25 1,165.30 Non recurring items -1,497.74 -162.87 3.92 -13.81 -1,726.88 Other non cash adjustments -46.15 -60.67 9.92 17.64 22.23 Reported net profit 7,743.84 6,244.19 4,033.23 2,012.08 -539.35 Earnigs before appropriation 19,541.05 11,778.12 5,489.61 1,225.65 -538.55 Equity dividend 379.65 - - - - Preference dividend - - - - - Dividend tax 64.52 - - - - Retained earnings 19,096.89 11,778.12 5,489.61 1,225.65 -538.55
- 20.
- 21. 21 A. .Origin ofthe Organization Idea Cellular has come a long way since it business origins in 1995 when it was incorporated as Birla Communications. From a single promoter owned company it struck joint venture and acquisition deals and even merged with other telcos to bring on board other partners and then eventually became a Birla Group company again in 2006. However, the journey included a number of twists and turns among those a particularly acrimonious split with another business group the Tatas who tended to put their eggs in two different baskets with their independent launch of CDMA-based telecom services. IDEA Cellular is a publicly listed company, having listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in March 2007. IDEA Cellular is a leading GSM mobile service operator with pan India licenses. With a customer base of over 43 million as on end March ’09, in 16 service areas, operations are soon expected to start in Tamil Nadu including Chennai; Kolkata & West Bengal, North East & Assam, and J&K. B. Brand Values:- Innovate. Stimulate. Liberate…… It is these brand values, which have made us a formidable player in the telecom industry. Innovations that stimulate the customer and liberate him from the shackles of time and space are the core of our brand. This is what we strive for. Nothing more, nothing less, nothing else. C. Brand Vision:- It goes without saying that the brand vision of idea mirrors the company’s vision. The brand mission statement is...... To be the most customer-focused mobile service brand,
- 22. continuously innovating tohelp liberate our customers from the shackles of time & space. i. The India footprint Idea Anywhere connectivity ii. The Technology Advantage Idea Tomorrow's technology to enrich today. iii. The Customer Focus Idea Make a single inter iv. The Employee Focu Nurture the roots that nurture our ideas. E. Current Growth & Development 08-DEC-08 The company has announced that WPC Wing of the Department of Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800 MHz band in respect of Kolkata Metro service area. 19-NOV-08 The company has tied up with Taiwan models in India targeted at the premium segment. continuously innovating to help liberate our customers from the shackles of time & D. Brand Mission:- The India footprint Idea Anywhere connectivity - bringing India closer. The Technology Advantage Idea Tomorrow's technology to enrich today. The Customer Focus Idea Make a single interaction a lasting relationship. The Employee Focus Idea Nurture the roots that nurture our ideas. Current Growth & Development The company has announced that WPC Wing of the Department of Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800 MHz band in respect of Kolkata Metro service area. The company has tied up with Taiwan-based HTC Corp to offer two touch phone models in India targeted at the premium segment. 22 continuously innovating to help liberate our customers from the shackles of time & The company has announced that WPC Wing of the Department of Telecommunications (DoT) has on Dec. 5, 2008 allotted 4.4 MHz Spectrum in 1800 o offer two touch phone
- 23. 23 30-SEP-08 The company hasan Aditya Birla group company, on Tuesday, September 30, formally launched its GSM service in the states of Bihar and Jharkhand, reports DNA. 30-JUL-08 Lazard India (P) on behalf of the company made an open offer to acquire 20% in Spice Communications at Rs 77.30 a share. 09-JUL-08 The company has acquired 2 million equity shares of Spice Communications on July 07, 2008 at an average market price of Rs 74.81 a share through open market. 22-APR-08 The Department of Telecommunications (DoT) on Apr. 22, 2008 allotted 4.4 MHz spectrum in 1800 MHz band in respect of Tamil Nadu Service Area including Chennai to Idea Cellular 24-JUL-07 On July 24, 2007, the board approved the formation of a wholly-owned subsidiary for possible transfer of passive infrastructure. F. Future Of Organisation Idea plans to have around 160 cell sites in the Himachal Pradesh Circle, 885 cell sites in the Rajasthan Circle, and 1,137 cell sites in the Uttar Pradesh (East) Circle . Idea Cellular plans to merge its eight subsidiaries with itself. The merger will help the company in improving its financial performance as well as rationalize the corporate structure.
- 24. 24 Network Cost toincrease due to coverage expansion At the end of Q1FY09, idea was present in 90,204 towns and villages as compared to 4`,520 towns and village a year ago. The company’s network cost has increase to 17.3% of revenues as against 16.5% in Q4FY08.We expect network and licence costs to move up as the company rolls out services in new circles (Bihar,Mumbai and Tamilnadu). G. Awards and Achievement Ø Buzziest Brands in India 2009 Idea voted 4th Buzziest Brand in India by afaqs Ø Golden Peacock Award 2008 Most Innovative Product & Services Ø Asian Mobile News Awards 2008 Mobile Operator of the Year – India Ø Asian Mobile News Awards 2007 India Operator of the Year Award Ø GSM Association Award Best Billing and Customer Care Solution - 2006 & 2007 H. Business Focus Idea Cellular, one of India leading mobile telephony service providers, will outsource some of its operations to global IT giant IBM in a 10-year $800 million deal. "The Indian unit of IBM will manage and support Idea's IT infrastructure and other services including billing and customer management on a revenue-sharing basis," Idea Cellular managing director Sanjeev Aga told a news conference here Wednesday.
- 25. 25 "We will harnessIBM's power to support Idea's explosive growth with robust best-in-the-class solutions. It will give us business focus, apart from containing costs," Aga said without giving any details on the cost savings. Idea Cellular, part of the Aditya Birla Group, is the country's fifth largest mobile service provider with a subscriber base of 13.6 million at the end of February. "IBM will bring its deep global expertise in business transformation and innovation to enable Idea to meet its customer value, business growth and productivity objectives," said IBM South Asia and India managing director Shanker Annaswamy. Asked if IBM would work with the London-based telecom major Vodafone that is acquiring Hutchinson's stake in Idea's competitor Hutch India, IBM's vice-president (communication sector for Asia-Pacific) Ramesh Awtaney said: "Globally, IBM has over 100 telecom clients big and small including Vodafone and Telstra of Australia. IBM is free to strike similar alliances in India." IBM can also work with Vodafone in India but we are yet to receive such an offer. As with Idea, IBM had in 2004 signed a 10-year, $750 million revenue-sharing deal with India's top mobile firm Bharti Airtel to manage its core IT infrastructure. "That deal is now estimated to have gone up to more than $1.5 billion, helped recent robust growth in Bharti's subscribers base and increasing revenue," an IBM official told IANS. I. Product and Services Ø Idea Cellular provides 3G services using digital GSM technology. We offer GSM voice and data services in all of the regions in which we currently operate.
- 26. 26 Ø In additionto basic mobile voice telephony services, we offer a wide range of value-added and data services. These include Voicemail, DUAL SIM card capabilities, Missed-call alerts, SMS, GPRS services and e-mail services. Ø It offers Pre- and Post-paid Voice, MMS and Internet Access Services. Ø The 13 circles where IDEA Cellular operates are further categorized into established and new service areas. Ø SMS based services to Voice based ones, the Idea range cuts across all modes of communication to ensure the BEST VALUE for your money Ø It provides downloading the latest ring tones or sharing the freshest of blonde jokes, be it checking the status of your cousin's train arrival time or arranging a pick up for your boss's delayed flight, Idea hands you the power to do it all. J. Company Strategy Idea Cellular plans to focus on its customer service and customer experience aspects to market itself in the Karnataka,Tamil Nadu telecom circle The company has applied for licences to operate in the telecom circles of Tamil Nadu, Karnataka and Punjab and is awaiting clearances. Mobile penetration in the Tamil Nadu telecom circle is about 80 per cent the highest in India — and would merit a different marketing strategy compared with other telecom circles. Though there is no detailed marketing strategy in place yet, the company plans to leverage its `top quality' network infrastructure thereby assuring better customer experience, he told Business Line on the sidelines of the company's road show, organised in connection with its upcoming initial public offering.
- 27. 27 "Today churn level(movement of customers from one mobile service provider to another) is low at about 5 per cent nationally. Customers are moving mainly because of network related problems such as instability, call drops and congestion," he said. The best way for Idea Cellular to enter the Tamil Nadu market would be by promoting its stable and efficient networks K. Subscriber base Idea's subscriber base as of July 2009 according to the [4] is as follows Ø Maharashtra and Goa - 8077848 Ø Madhya Pradesh and Chhattisgarh - 5677758 Ø Andhra Pradesh - 5528758 Ø Kerala - 4738070 Ø Gujarat - 4230479 Ø Uttar Pradesh (West) & Uttarakhand - 4602390 Ø Delhi - 2343017 Ø Haryana - 1701065 Ø Uttar Pradesh (East) - 2361070 Ø Rajasthan - 1603620 Ø Himachal Pradesh - 164571 Ø Mumbai - 1012152 Ø Bihar & Jharkhand - 1702584 Ø Tamilnadu - 225566 Ø Orissa - 164995 Ø Punjab (Spice) - 2566170 Ø Karnataka (Spice) - 1816711 Totalling to 48,516,824 or 14.90%(Approx.) of the total 325,701,124[2] mobile connections in India.
- 28. 28 L. Balance sheet Mar' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Sources of funds Owner's fund Equity share capital 2,635.36 2,592.86 2,259.53 2,742.53 2,742.53 Share application money 3.76 - - - - Preference share capital - - 483.00 - - Reserves & surplus 906.91 -413.71 - 1,574.00 - 1,695.74 -1,719.90 Loan funds Secured loans 5,454.43 3,539.77 1,470.75 1,692.75 1,506.41 Unsecured loans 1,060.33 710.74 1,444.85 1,005.28 757.13 Total 10,060.79 6,429.66 4,084.14 3,744.83 3,286.16 Uses of funds Fixed assets Gross block 12,791.22 8,229.61 3,975.11 3,577.49 3,275.36 Less : revaluation reserve - - - - - Less : accumulated depreciation 3,123.83 2,637.18 1,157.63 899.99 667.25 Net block 9,667.39 5,592.43 2,817.48 2,677.50 2,608.11 Capital work-in-progress 941.13 506.52 95.91 64.62 74.41 Investments 569.93 13.83 307.03 307.03 92.03 Net current assets Current assets, loans & advances 1,674.14 2,550.93 1,637.35 1,174.45 960.25 Less : current liabilities & provisions 2,791.81 2,234.05 773.63 478.76 448.64 Total net current assets -1,117.67 316.88 863.72 695.68 511.61 Miscellaneous expenses not written - - - - - Total 10,060.79 6,429.66 4,084.14 3,744.83 3,286.16 Notes: Book value of unquoted investments 569.93 13.83 307.03 - - Market value of quoted investments - - - - - Contingent liabilities 2,308.87 1,236.57 213.92 - - Number of equity sharesoutstanding (Lacs) 26353.61 25928.61 22595.27 27425.27 27425.27
- 29. 29 M. Profit lossaccount Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04 Income Operating income 6,719.99 4,366.40 2,007.07 1,625.42 1,165.52 Expenses Material consumed 0.01 5.26 0.04 0.03 0.09 Manufacturing expenses 2,867.83 1,497.78 664.27 172.26 139.11 Personnel expenses 332.88 251.43 115.08 103.36 70.56 Selling expenses 322.43 514.17 213.60 - - Adminstrative expenses 705.52 483.86 243.64 755.44 615.42 Expenses capitalised - -0.08 -0.04 - - Cost of sales 4,228.66 2,752.42 1,236.58 1,031.09 825.17 Operating profit 2,491.33 1,613.98 770.49 594.33 340.35 Other recurring income 88.43 20.32 3.71 9.67 15.18 Adjusted PBDIT 2,579.76 1,634.30 774.19 604.00 355.53 Financial expenses 695.85 478.26 308.25 255.04 253.56 Depreciation 756.85 563.67 262.88 237.78 200.34 Other write offs 119.91 108.14 84.66 84.49 108.54 Adjusted PBT 1,007.14 484.24 118.40 26.69 -206.91 Tax charges 72.50 6.99 2.90 - - Adjusted PAT 934.65 477.25 115.50 - - Non recurring items 95.74 7.32 1.49 - - Other non cash adjustments 13.97 5.23 8.61 -2.53 34.20 Reported net profit 1,044.36 489.79 125.60 24.16 -172.72 Earnigs before appropriation -1,406.49 -2,450.86 -1,673.84 -1,795.58 -1,819.74 Equity dividend - - - - - Preference dividend - - - - - Dividend tax - - - - - Retained earnings -1,406.49 -2,450.86 -1,673.84 -1,795.58 -1,819.74
- 30. Comparison A. No of Company Airtel Idea Reliance TATAIndicom Vodafone 0 10 20 30 40 50 60 70 80 90 No of Subscriber (Till February 2009) Comparison No of Subscriber (In Million) No of Subscriber (Till February 2009) 88.32 40.01 66.29 32.79 63.34 No of Subscriber (Till February 2009) No of Subscriber (Till February 2009) 30 (Till February 2009) No of Subscriber (Till
- 31. Company 2009 2008 Airtel34014.29 25703.51 Idea 9916.45 Reliance 13610.58 13416.19 TATA Indicom 3749.43 MTNL 4576.53 0 1000 2000 3000 4000 5000 6000 7000 8000 1 2 B. Sales 2008 2007 2006 25703.51 17794.43 11228.68 6719.99 2795.25 - 13416.19 11725.26 5951.70 3283.20 4040.22 3781.00 4728.75 4923.40 5560.99 3 4 5 Airtel Idea Reliance TATA Indicom MTNL 31 2005 7903.02 - - 3303.00 5565.42 TATA Indicom
- 32. Company 2009 Airtel 7743.84 Idea1008.21 Reliance 2352.93 TATA Indicom 515.95 MTNL 214.83 0 1000 2000 3000 4000 5000 6000 7000 8000 1 2 C. Profit 2008 2007 2006 6244.20 4033.22 2012.07 1044.39 277.72 - 2586.45 2408.85 1291.20 304.46 433.26 468.70 507.32 527.37 577.66 3 4 5 Airtel Idea Reliance TATA Indicom MTNL 32 2005 1210.68 - 5.65 756.40 946.05 TATA Indicom