INTRODUCTION TO BHARTI AIRTEL

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. It is one of India’s leading private sector providers of telecommunications services with more than 10crores customers. 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.

Core values Empowering People - to do their best Being Flexible - to adapt to the changing environment and evolving customer needs

Making it Happen - by striving to change the status quo, innovate and energize new ideas with a strong passion and entrepreneurial spirit,

Openness and transparency - with an innate desire to do good

Creating Positive Impact – with a desire to create a meaningful difference in society.

Vision:

To build India's finest business conglomerate by 2020.

Mission

We will meet the mobile communication needs of our customers through:

Error- free service delivery  

Innovative products and services  

Cost efficiency 

 

Unified Messaging Solutions

Factsheet

Name Bharti Airtel Limited.

Business Description

Provides mobile, telemedia services (fixed line) and enterprise services (carriers & services to corporates)

Established July 07, 1995, as a Public Limited Company

Proportionate Revenue

Rs. 184,202 million (year ended March 31, 2007-Audited)Rs. 117,255 million (year ended March 31, 2006-Audited)As per Indian GAAP Accounts

Proportionate EBITDA

Rs. 74,407 million (year ended March 31, 2007-Audited)Rs. 42,250 million (year ended March 31, 2006-Audited)As per Indian GAAP Accounts

Shares in Issue 1,897,148,464 as at June 30, 2007

Listings The Stock Exchange, Mumbai (BSE)The National Stock Exchange of India Limited (NSE)

Market Capitalisation

Customer Base 64,370,434 GSM mobile and 2,319,509 telemedia customers (Status as at month ended April 30, 2008)

Operational Network Provides GSM mobile services in all the 23 telecom circles in India, and was the first private operator to have an all India presence.Provides telemedia services (fixed line) in 94 cities in India.

Organization Structure

As an outcome of a restructuring exercise conducted within the company; a new integrated organizational structure has emerged; with realigned roles, responsibilities and reporting relationships of Bharti’s key team players. With effect from March 01, 2006, this unified management structure of 'One Airtel' will enable continued improvement in the delivery of the Group’s strategic vision.

 

Bharti Airtel - Organization Structure

Awards and Recognitions in year 2007-08

Bharti Airtel has won the CNBC-TV18 India Business Leader Award for the Outstanding Company of the year, 2007

Bharti draws top honours at the NDTV Profit Business Leadership Awards 2007

Bharti Airtel Ranked 3rd on Shareholder Returns in BusinessWeek IT 100 List.

Sunil Bharti Mittal conferred Degree of Doctor of Science (Honoris Causa) by G. B. Pant University

Corporate Governance

Bharti Airtel Limited firmly believes in the principles of Corporate Governance and is committed to conduct its business in a manner, which will ensure sustainable, capital-efficient and long-term growth thereby maximising value for its shareholders, customers, employees and society at large. Company’s policies are in line with Corporate Governance guidelines prescribed under Listing Agreement/s with Stock Exchanges and the Company ensures that various disclosures requirements are complied in ‘letter and spirit’ for effective Corporate Governance. The Company is committed to maintain the highest standards of corporate governance and benchmarking industry best practices. The Company meet the standards of the Securities and Exchange Board of India’s Corporate Governance guidelines and have implemented all the stipulations prescribed. A detailed report on corporate governance pursuant to the requirements of Clause 49 of the Listing Agreement forms part of the Annual Report. A certificate from the auditors of the Company, Price Waterhouse, Chartered Accountants, confirming compliance of conditions of corporate governance as stipulated under the aforesaid Clause 49 is annexed to the Corporate Governance Report.

During the financial year 2003-04, your Company was assigned highest Governance and Value Creation (GVC) rating viz. ‘Level 1’ rating by CRISIL, which indicates that the company’s capability with respect to creating wealth for all its stakeholders is the highest, while adopting sound Corporate Governance practices.This rating was re-affirmed by CRISIL on April 20,2006.

At Bharti Airtel, Corporate Social Responsibility (CSR) encompasses much more than social outreach programs - is an integral part of the way the Company conducts its business. Employees of Bharti Airtel across the country support community based initiatives, individually or in groups. During the year, a large number of such initiatives were undertaken in e.g. the areas of education, the environment and sports promotion. The Company is strongly committed

to the principles of environment conservation and preservation. This is achieved by minimizing the consumption of energy and optimizing the use of material produced out of natural resources, both in offices and technical spaces. Special emphasis is laid on health, environmental and safety issues affecting the employees in particular and for the neighborhood and community in general. The Company has put in place a process for continuous monitoring andimprovement in these areas.Besides delivering its own programs and initiatives, Bharti Airtel works closely with Bharti Foundation, the leading Corporate Social Responsibility vehicle for the Bharti Group. Bharti Foundation believes in the power of education to bring about essential and critical growth in India and thus has a strong focus on education, which extends from elementary education to higher education.Bharti Foundation is in the process of building a large number of high-quality pre-primary and primary schools (Satya Bharti Schools) which will provide education that will allow the students easy mainstreaming, with special emphasis on the English language. Bharti Foundation’s programs further include Bharti Computer Centres, Bharti Libraries, the Bharti School of Telecommunication Technology & Management at IIT Delhi, Bharti Scholarships, Mid-day Meals and so on. In the year under review Bharti Foundation was awarded the coveted Golden Peacock Award for Corporate Social Responsibility in the NGO category in recognition of its education programs and plans.

SWOT Analysis Bharti AirtelStrengths

It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers.

Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world.

The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.

Weaknesses

An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start-up business had to outsource to industry experts in the field.

Until recently Airtel did not own its own towers, which was a particular strength of some of its competitors such as Hutchison Essar. Towers are important if your company wishes to provide wide coverage nationally.

Opportunities

The company possesses a customized version of the Google search engine which will enhance broadband services to customers. The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian for Google.

Despite being forced to outsource much of its technical operations in the early days, this allowed Airtel to work from its own blank sheet of paper, and to question industry approaches and practices - for example replacing the Revenue-Per-Customer model with a Revenue-Per-Minute model which is better suited to India, as the company moved into small and remote villages and towns.

The company is investing in its operation in 120,000 to 160,000 small villages every year. It sees that less well-off consumers may only be able to afford a few tens of Rupees per call, and also so that the business benefits are scalable - using its 'Matchbox' strategy.

Bharti Airtel is embarking on another joint venture with Vodafone Essar and Idea Cellular to create a new independent tower company called Indus Towers. This new business will control more than 60% of India's network towers. IPTV is another potential new service that could underpin the company's long-term strategy.

Threats

Airtel and Vodafone seem to be having an on/off relationship. Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors.

The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market.

MARKETING MANAGEMENT

People know about AIRTEL cellular service through

30 % Friends 70% Advertisements 5% Other Sources

Feature of AIRTEL forced people to use AIRTEL is

35% Advertisements 20% Connectivity 10%Schemes

35%Goodwill

People’s first choice of cellular service when they want to use mobile phone AIRTEL 45% HUTCH 30% IDEA 8% RELIANCE 10% TATA INDICOM 5% OTHERS 2%

Feature of AIRTEL is better than the people’s previous cellular service.

Advertisements 25% Connectivity 60% Schemes 15%

AIRTEL users in people’s phone book

Less than 30% : 15%

30% - 70% : 25%

More than 70% : 60%

Type of advertisement mostly like by people in AIRTEL is

Audio Visual : 85%

Print : 2%

Audio : 13%

Celebrity liked by people very much in AIRTEL

Sachin : 55% Shahrukh : 38%

Kareena : 2%

A. R. Rehman : 5%

People take benefits of schemes offered by AIRTEL

YES : 85%

NO : 13%

CAN’T SAY : 2%

People like most in AIRTEL is

NOKIA + AIRTEL : 86%

AIRTEL MAGIC : 5%

Postpaid services : 8%

AIRTEL Broadband : 1%

Service liked by people most in AIRTEL is

AIRTEL missed you service : 33%

Ring tones : 5%

Hello tunes : 22%

VOICE SMS : 40%

AIRTEL is #1 in India

Yes : 95%

No : 5%

Conclusion:

AIRTEL’s Advertising has a major impact its users. People like the schemes provided by airtel. AIRTEL had created a very good image in the mind of the new users of cellular service. AIRTEL has adopted a very good strategy by providing a new connection with NOKIA who is market leader in mobile sets, many new users buy Nokia sets and they get a free connection of AIRTEL. AIRTEL is successful in capturing the highest market share by adopting Celebrity Endorsement Strategy. A.R. Rehmaan’s tune for AIRTEL worked as free advertising for AIRTEL as another service user uses it too. Other celebrities like Shahrukh Khan (bollywood) and Sachin Tendulkar (Cricket) has also contributed very much in AIRTEL. Also the much talked about new voice sms service is been liked by its users provided advertisements by saif-kareena has popularized the same.

By virtue of its connectivity and advertising strategy AIRTEL is successful in grabbing the highest market share in India, but there are still some recommendations from my study point of view is that AIRTEL needs to make its network service more stronger than other service providers to dominate the market in future too.

FINANCIAL MANAGEMENT

Balance sheet  Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Sources of funds

Owner's fund

Equity share capital 1,897.91 1,895.93 1,893.88 1,853.37 1,853.37

Share application money 57.63 30.00 12.13 2.72 -

Preference share capital - - - - -

Reserves & surplus 18,283.82 9,515.21 5,437.42 2,675.38 2,971.49

Loan funds

Secured loans 52.42 266.45 2,863.37 3,959.88 1.36

Unsecured loans 6,517.92 5,044.36 1,932.92 1,034.41 625.00

Total 26,809.71 16,751.95 12,139.72 9,525.76 5,451.22

Uses of funds

Fixed assets

Gross block 28,115.65 26,509.93 17,951.74 13,240.63 31.84

Less : revaluation reserve 2.13 2.13 2.13 2.13 -

Less : accumulated depreciation 9,085.00 7,204.30 4,944.86 3,475.64 17.29

Net block 19,028.52 19,303.51 13,004.75 9,762.86 14.56

Capital work-in-progress 2,751.08 2,375.82 2,341.25 994.46 0.10

Investments 10,952.85 705.82 719.70 931.90 1,762.67

Net current assets

Current assets, loans & advances 8,439.38 5,406.81 3,338.88 2,486.31 3,688.36

Less : current liabilities & provisions 14,362.33 11,042.67 7,272.80 4,708.12 15.77

Total net current assets -5,922.95 -5,635.86 -3,933.92 -2,221.80 3,672.59

Miscellaneous expenses not written 0.20 2.66 7.94 58.35 1.30

Total 26,809.71 16,751.95 12,139.72 9,525.76 5,451.22

Ratios (Rs crore)

  Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05 Mar ' 04

Per share ratios 

Adjusted EPS (Rs)  34.08 21.20 10.60 6.29 -

Adjusted cash EPS (Rs)  52.16 34.34 18.84 12.66 0.03

Reported EPS (Rs)  32.90 21.27 10.62 6.53 -

Reported cash EPS (Rs)  50.99 34.41 18.86 12.90 0.03

Dividend per share    -   -   -   -   -

Operating profit per share (Rs)    56.16   38.28   21.32   16.17   0.14

Book value (excl rev res) per share (Rs)  106.34 60.17 38.67 24.12 26.03

Book value (incl rev res) per share (Rs.)    106.35   60.18   38.68   24.13   26.03

Net operating income per share (Rs)  135.73 94.16 59.45 43.93 0.33

Free reserves per share (Rs)    83.18   49.88   28.11   12.31   16.03

Profitability ratios 

Operating margin (%)    41.37   40.65   35.86   36.81   43.21

Gross profit margin (%)    29.08   27.47   23.14   24.29   37.06

Net profit margin (%)    23.99   22.46   17.80   14.83   0.58

Adjusted cash margin (%)    38.03   36.26   31.57   28.74   9.47

Adjusted return on net worth (%)    32.04   35.23   27.42   26.06   -

Reported return on net worth (%)    30.94   35.35   27.47   27.08   -

Return on long term funds (%)    28.52   29.83   21.28   20.41   0.42

Leverage ratios 

Long term debt / Equity    0.30   0.43   0.61   0.98   0.10

Total debt/equity    0.32   0.46   0.65   1.10   0.12

Owners fund as % of total source    75.43   68.24   60.45   47.55   88.50

Fixed assets turnover ratio    1.03   0.74   0.72   0.74   1.98

Liquidity ratios 

Current ratio    0.58   0.48   0.45   0.52   233.91

Current ratio (inc. st loans)    0.56   0.47   0.44   0.47   9.44

Quick ratio    0.55   0.47   0.44   0.48   233.91

Inventory turnover ratio    453.06   373.35   634.52   257.80   -

Payout ratios 

Dividend payout ratio (net profit)    -   -   -   -   -

Dividend payout ratio (cash profit)    -   -   -   -   -

Earning retention ratio    100.00   100.00   100.00   100.00   100.00

Cash earnings retention ratio    100.00   100.00   100.00   100.00   100.00

Coverage ratios 

Adjusted cash flow time total debt    0.66   0.81   1.34   2.13   104.71

Financial charges coverage ratio    27.77   26.09   17.22   9.52   1.28

Fin. charges cov.ratio (post tax)    25.60   24.13   16.08   8.54   1.29

Highlights for Full Year ended March 31, 2008 • Overall customer base crosses 6.4 crore. • Highest ever-net addition of 2.5 crore customers in a year. • Market leader with a market share of all India wireless subscribers at 23.8%(22.4% last year) • Total Revenues of Rs. 27,025 crore (up 46% Y-o-Y). • EBITDA of Rs. 11,372 crore (up 53% Y-o-Y). • Cash Profit of Rs. 11,137 crore (up 52% Y-o-Y). • Net Income of Rs. 6,701 crore (up 57% Y-o-Y).

Business and Financial Metrics

Total Revenue and Profit after Tax from 2003 to 2008 for Bharti Airtel[2]

In 2007/08, Bharti Airtel had total revenues of Rs. 270 billion, up 46.6% from Rs. 184 billion in

2006/07.[2] Its net profit was Rs. 64.0 billion, up 57.4% from Rs. 40.6 billion the previous year.[2] The company grew segment revenues by 54.9% in the Mobile Services segment, 27.2% in the

Telemedia Services segment, 25.3% in the Enterprise Services (Carriers) segment and 49.2% in

the Enterprise Services (Corporates) segment.[2] These increases were attributed to a 64.7%

increase in the company's subscriber base from 39.0 million in 2006/07 to 64.3 million in

2007/08.[2] As of 31 March 2008, Bharti Airtel's population coverage stood at 71% and its fiber

optics cable network was 73,787 route-kilometers.[2]

In the 3rd quarter of 2008/09, Bharti Airtel had total revenues of Rs. 96.3 billion, up 38.3%

from Rs. 69.6 billion in the 3rd quarter of 2007/08.[7] Its net profit wasRs. 21.6 billion, up 25.4%

from Rs. 17.2 billion the same quarter of the previous year.[7] The company grew segment

revenues by 41.5% in the Mobile Services segment, 15.8% in the Telemedia Services segment,

56.3% in the Enterprise Services (Carriers) segment and 23.8% in the Enterprise Services

(Corporates) segment.[7] Again, these increases were attributed to a 10.5% increase in the

company's subscriber base from 77.5 million in the 2nd quarter of 2008/09 to 85.7 million in the

3rd quarter of the same year.[7] As of 31 December 2008, Bharti Airtel's population coverage

stood at 79% and its fiber optics cable network was 90,205 route-kilometers.[7]

Annual Data[2] Units 2004 2005 2006 2007 2008

Total Customer Base 000s 7,141 11,842 20,926 39,013 64,268

Mobile Services 000s 6,504 10,984 19,579 37,141 61,985

Telemedia Services 000s 637 857 1,347 1,871 2,283

Based on Statement of Operations

Revenue Rs. million 50,369 81,558 116,641 184,202 270,122

EBITDA Rs. million 17,055 30,658 41,636 74,407 114,018

Cash Profit from Operations Rs. million 14,363 28,219 40,006 73,037 111,535

Earnings before Tax Rs. million 5,527 15,832 23,455 46,784 73,115

Net Profit Rs. million 5,387 12,116 20,279 40,621 63,954

Key Ratios

Return on Equity (ROE) % 12.00% 23.70% 32.00% 43.10% 38.50%

Earnings per Share (EPS) Rs. million 3.15 6.53 10.78 21.43 34.23

[]Key Operating Metrics

Source: Average Revenue Per User (ARPU) from June 2007 to December 2008 for Bharti

Airtel

The following metrics are used as indicators of the company's health.

Average revenue per user (ARPU)  per month is computed by dividing the company's

total revenues (excluding equipment sales) during a certain period by its average customers

in the same period and then dividing this result by the number of months in the period. A

higher ARPU is better for the company.

Churn  is calculated by dividing the total number of disconnections during a certain

period by the average customers in the same period and then dividing the result by the

number of months in the period. A lower churn is better for the company.

Minutes of usage (MoU)  is the duration (in minutes) for which a customer uses the

network. It is expressed over a period of one month. Higher MoU is better for the company.

Subscriber base  refers to the number of individuals that use or subscribe to Bharti

Airtel's services. A larger subscriber base is better for the company.

The table below shows key operating metrics for Bharti Airtel over the past 7 quarters.

Parameters UnitDec 2008

Sep 2008

Jun 2008

Mar 2008

Dec 2007

Sep 2007

Jun 2007

Customers 000s 88,270 79,988 71,777 64,268 57,341 50,950 44,676

Average Revenue Per User (ARPU)

Rs. 324 331 350 357 358 366 390

Minutes of Usage (MoU) Minutes 505 526 534 507 474 469 478

Post-Paid Voluntary Churn % 1.1% 1.1% 1.0% 1.0% 0.9% 1.1% 1.1%

Post-Paid Company-Initiated Churn

% 1.2% 1.4% 1.4% 1.5% 1.8% 2.1% 2.5%

Pre-Paid Churn % 2.9% 3.2% 3.8% 4.3% 3.9% 3.8% 4.0%

Business Segments

Segment Contribution to Total Revenue in 2007/08 for Bharti Airtel[2]

Bharti Airtel has 5 business segments:

(i) Mobile Services;

(ii) (ii) Telemedia Services;

(iii) (iii) Enterprise Services - Carriers;

(iv) (iv) Enterprise Services - Coprorates; and

(v) (v) Passive Infrastructure Services.

Mobile Services (69.7% of revenue, 71.3% of EBIT, 76.2% of net profit)

The Mobile Services segment provides prepaid and postpaid mobile and fixed wireless services

in all of India's 23 telecom circles. In 2007/08, revenue and EBITfrom this segment stood

at Rs. 218 billion and Rs. 59.3 billion respectively. Net profit rose 71.9% from Rs. 29.6 billion

in 2006/07 to Rs. 51.0 billion in 2007/08.

Telemedia Services (9.1% of revenue, 7.3% of EBIT, 7.6% of net profit)

The Telemedia Services segment provides fixed line telephone and broadband (DSL) services in

15 telecom circles across India. In 2007/08, revenue and EBIT from this segment stood

at Rs. 28.6 billion and Rs. 6.1 billion respectively.[8] Net profit rose 227% from Rs. 1.6 billion in

2006/07 to Rs. 5.1 billion in 2007/08.

Enterprise Services - Carriers (14.0% of revenue, 13.6% of EBIT, 16.7% of net profit)

The Enterprise Services - Carriers segment provides long distance voice and data services to

carrier customers and other Airtel segments. In 2007/08, revenue and EBIT from this segment

stood at Rs. 43.8 billion and Rs. 11.3 billion respectively.[8] Net profit rose slightly

from Rs. 11.1 billion in 2006/07 to Rs. 11.2 billion in 2007/08.[8]

Enterprise Services - Corporate (4.4% of revenue, 6.3% of EBIT, 5.9% of net profit)

The Enterprise Services - Corporate segment provides voice and data services to corporate and

SMEs. In 2007/08, revenue and EBIT from this segment stood at Rs. 13.9 billion and Rs. 5.2

billion respectively.[8] Net profit rose 89.0% from Rs. 2.1 billion in 2006/07 to Rs. 3.9 billion in

2007/08.[8]

Passive Infrastructure Services (1.9% of revenue 1.1% of EBIT, 1.1% of net profit)

In 2007/08, Bharti Airtel formed a joint venture with Vodafone Essar and Idea Cellular to

merge their respective passive infrastructure assets in 16telecom circles across India. A

subsidiary, Bharti Infratel, was set up to manage the company's assets in this joint venture and

provide passive infrastructure services to all telecom operators in India on a non-discriminatory

basis. In the same year, revenue and EBIT from this segment stood at Rs. 6.0 billion and Rs. 1.2

billion.[8] Net profit was Rs. 0.74 million.[8]

Shareholding Pattern

The Indian promoter, Bharti Telecom Ltd, holds 45.3% of the total shares of Bharti Airtel Ltd.[9] The foreign promoters, Pastel Ltd and Indian Continent Investment Ltd, hold 15.6% and 6.3%

respectively.[9] Private corporations that hold more than 1% of the total shares of Bharti Airtel

include the Life Insurance Corporation of India (3.4%) and Europacific Growth Fund (1.5%).

Shareholding Pattern of Bharti Airtel Ltd[10]

Entity Percentage

Bharti Telecom Ltd (Indian Promoter) 45.30%

Foreign Promoters 21.85%

Foreign Institutional Investors 21.99%

Banks, Financial Institutions and Insurance 3.50%

Mutual Funds 2.97%

Private Corporate Bodies 2.63%

General Public 1.04%

Non Resident Indians, Overseas Corporate Bodies and Foreign Others

0.56%

Others 0.16%

Market ShareBharti Airtel has a dominant market share across the GSM subscribers in the telecom sector.

Bharti Airtel's market share is facing competition since an aggressive entry strategy by the new

telecom operators is being pursued, as carried out by RCOM for its national GSM rollout.

GSM Market Share(%) - 2007/2008[26]

Nov 2007

Dec 2007

Jan 2008

Feb 2008

Mar 2008

Apr 2008

May 2008

Jun 2008

Jul 2008

Aug 2008

Sep 2008

Bharti Airtel 33.0 33.2 33.3 33.5 33.4 33.6 33.7 33.9 34.2 34.4 34.5

Vodafone 24.0 24.0 23.9 23.9 23.8 23.9 24.0 24.1 24.2 24.3 24.3

BSNL/MTNL 21.7 21.5 21.3 21.1 21.2 20.8 20.4 20.0 19.7 19.4 19.1

Idea 14.9 15.0 15.0 15.1 15.2 15.3 15.5 15.5 15.4 15.1 15.1

Others 6.4 6.4 6.5 6.4 6.4 6.4 6.5 6.5 6.6 6.7 6.9

Bharti Airtel has been able to sustain highest revenues across India in line with its sharp

increase in subscriber market share in 2008. Bharti’s biggest revenue market share gains came

from circles Rajasthan, Bihar, Andhra Pradesh, Karnataka and Tamil Nadu.

Revenue Market Share(%) - 2007/2008[41] Dec 2007 Mar 2008 Jun 2008 Sep 2008

Bharti Airtel 29.8 29.9 31.2 32.7

Vodafone Essar 18.5 19.1 19.7 19.6

Reliance Communications 15.0 13.9 13.5 12.4

BSNL 14.1 14.5 11.7 11.4

Idea 8.1 8.6 9.5 10.0

Others 14.4 14.0 14.4 13.8

OPERATIONS MANAGEMENT

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Easy Recharge Recharge your Airtel Prepaid Card electronically with value that suits your needs, starting from Rs. 10 till Rs. 10,000. You can also recharge your Airtel Prepaid while roaming anywhere in the country. Click here for Airtel Easy Charge options.

24-hour Recharge via ATMRecharge your Airtel Prepaid round-the-clock at your nearest ATM. Just walk up to your nearest

ATM, insert the ATM card and enter your ATM PIN number. Select 'Mobile Recharge / Bill Pay' from the main menu and follow the prompts to recharge your prepaid. This recharge option is available with all leading banks.

Internet Recharge You may log on to the Internet banking website of your bank and select the prepaid recharge option to recharge your Airtel prepaid. Many leading banks provide Internet based recharging.

The following recharge denominations are available nationally for recharge through Bank website or ATM.

Denomination Rs Calling value Rs Proc Fee Rs Service tax Rs Validity Days

50 43.33 2.0 4.67 30

100 88.66 2.0 9.34 30

200 179.32 2.0 18.68 30

300 269.99 2.0 28.01 30

500 451.31 2.0 46.69 30

1000 904.62 2.0 93.38 30

You can also recharge with Rs.99 Lifetime Prepaid Plan to enjoy Lifetime Validity. Free airtime of Rs.10 available with this recharge.

Validity Extension service

Trade your talk time to extend the validity of your prepaid. Dial *141*001# and then, press the call button. Your validity would be extended by 1 day for a charge of Rs.15. You can similarly extend your validity for 5, 10, 15 or 30 days.

Prepaid RoamingAirtel Prepaid comes preactivated with 'National Roaming', so you stay connected no matter wherever you are. You can also send or receive MMS, check your email and access other GPRS services while roaming in India as you would in your own city. While traveling abroad you can receive calls & send or receive SMS. 

Call management Services Call waiting, call hold, call divert and Caller Line Identification Presentation– all with your

Airtel prepaid connection.

Voice MailWhen your handset is switched off, or you’re too busy to answer the phone, Airtel Voicemail will answer your calls and record a message. The best part is that there's no extra monthly cost for setting up Voicemail - you just pay for the phone call when you use the service.

SMS (Short Messaging Service)Send messages quickly and easily using text, if it's too noisy to talk or you don't have much time. It's the way to share those interesting one-liners, important reminders and rib-tickling jokes, with anyone, anytime, anywhere in the world.

Subscription AlertsGet regular alerts on news, jokes, business, health and films on your Airtel mobile phone with Subscription Services. SMS <SUB NEWS> to 53333 for News, <SUB JOKE> for Jokes, <SUB BIZ> for Business News, <SUB SPO> for Sports Alerts & <SUB VAASTU> for Vaastu tips.

MMS (Multi-media Messaging Service): Jazz up your messages with pictures, images and video clippings, with MMS from Airtel! To activate MMS on your phone, SMS 'MMS' to 56465 and save service settings.

Hello Tunes Tired of that boring old ‘tring tring’ on your phone? Now when a friend calls, make them groove to the hottest new tracks burning up the music charts with Hello Tunes from Airtel! Choose from a library of over 80000 songs from more than 16 languages. Whats more, copy any Hello tune you like by simply pressing ‘*’ on your phone when the Hello Tune is playing on your friends phone. Click here for more information on Hello Tunes.

Reach us Anytime AnywhereIn case you need assistance, dial '121' - our toll-free number, accessible from anywhere in the country, even while roaming. You can also send us an SMS to 121 or mail us at 121@airtelindia.com. *In case of email, mention your mobile no. like, 9810012345, in the subject of the mail for a quicker response.

Postpaid Airtel ConnectionFeatures

Easy Billing  Easy Payment Options. Anytime, Anywhere.Credit LimitStrong Network CoverageLong Distance Calling FacilityWidest Roaming (National and International)

GPRS - Roaming

Enjoy a host of rich features only with Airtel e-bill. Register free on ‘My Airtel’ section and view your monthly bill with call details for last three months. Sort your calls between personal and official or analyze your usage, at the click of a button. To change your tariff plan call our IVR at 121 and leave a request, you can also send in your requests through email 121@airtelindia.com, log your request on My Airtel section of the website or SMS the change to 121You can choose from a host of convenient payment options only with Airtel. Walk into any Airtel relationship centre and make your payments by cash or credit card. Drop a cheque at any of the drop boxes for making payments or simply log on to My Airtel section and pay instantly through your credit card. You can also opt for easy payment options like.

Standing InstructionsYou can give us standing instructions to debit your credit card account for your monthly Airtel bills. All you have to do is fill the Standing Instruction Form and mail, fax it to us or drop it any of our relationship centres.

Electronic Clearing SystemFill an ECS form and mail fax it to us or drop it any of our relationship centres to directly debit your bank account for your monthly Airtel bill.

Pay while roamingAirtel has introduced 'Anywhere payment' that offers you the convenience of making payments while you roam. Walk in to any Airtel Relationship Centre in the country, make payments by cash or credit card and enjoy uninterrupted Airtel Services.

Error! Hyperlink reference not valid.Your pre-set credit limit mentioned on your monthly bill helps you keep your mobile charges in control, keeps track of your usage and ensures that your mobile phone is not misused. Should you exceed your credit limit, you will be informed via a voice or a non-voice message to make an interim payment and reduce your account balance below your credit limit. You may also choose to pay us an additional refundable deposit to enhance your credit limit or opt for our convenient payment method of Credit Card Standing instruction .

Error! Hyperlink reference not valid.Enjoy complete clarity when calling with Airtel .It offers you world class technology and

unbreakable network coverage that spans over 23 circles across the country.

Error! Hyperlink reference not valid.--Call long distance calls in India and Overseas with STD / ISD facility on your Airtel phone. Click here for more information on STD/ISD rates.

Error! Hyperlink reference not valid.--Airtel's roaming service allows you to stay connected and use your mobile phone to make or receive calls from almost anywhere in India and also over 160 countries, abroad. Click here for more information on Airtel Roaming.

Call management Services Call waiting, call hold, call divert and Caller Line Identification Presentation, help you do more with your Airtel Postpaid connection!

Conference callYou can hold a teleconference with 5 people simultaneously with Call Conferencing service from Airtel. In fact, you can set up a conference even when the other five are using a landline phone. To know more, call customer service at 121.

Missed call alertA missed call alert is a SMS that you will receive for all the calls that you missed. The SMS will detail the CLI and the time when the call was made. To activate, dial *135*2# then press the call button and wait for the request to be completed.

Voice MailWhen your handset is switched off, or you’re too busy to answer the phone, Airtel Voicemail will answer your calls and record a message. The best part is that there's no extra monthly cost for setting up Voicemail - you just pay for the phone call when you use the service.

SMS (Short Messaging Service)Send messages quickly and easily, using text, if it's too noisy to talk or you don't have much time.

MMS (Multi-media Messaging Service): Jazz up your messages with pictures, images and video clippings, with MMS from Airtel! To activate MMS on your phone, SMS 'MMS' to 56465 and save service settings.

GPRS (General Packet Radio Services)Log on to the internet, with GPRS that allows data transmission at a higher speed. Access e-mails and internet across Airtel's pan-India presence using 'Mobile Office' with your phone or a phone and laptop both.

Supply chain management at Airtel

 

Bharti Airtel understands the importance of partners to remain competitive in a dynamic business environment. As a step in that direction, the Supply Chain (SCM) function has been created with a mandate to develop partner relationships to maximize mutual opportunities for growth and profitability. The SCM organization has a central core team of supply chain subject mater experts and execution teams operating under different business divisions across the country. 

Supply Chain Philosophy

 

At the center of Bharti Airtel's Supply Chain Philosophy is partnership and collaboration. The Supply Chain characteristics have therefore been defined using the same approach, shown in the table below.

 Supply Chain Characteristics

Bharti Airtel Approach

 Number & Structure Fewer; Clustered  

 Procurement personnel Limited  

 Outsourcing Strategic  

 Nature of Interactions Cooperative, positive-sum 

 Relationship focus Mutually-beneficial  

 Relationship focus Performance  

 Contract length Long-term  

 Pricing practices Target costing  

 Price Changes Downward  

 Quality Designed-in  

 Delivery Smaller Quantities (JIT)  

 Inventory buffers Minimized, eliminated  

 Communication Extensive; multi-level  

 Communication Collaborative; two-way  

 Role in development Substantial  

 Production flexibility High  

 Technology sharing Extensive  

 Dedicated investments Substantial  

 Mutual commitment High  

 Governance Self-governing  

 Future Expectations Considerable  

HUMAN RESOURSE MANAGEMENT

Airtel’s HR Policy:

Airtel believes that one of the most important drivers of growth and success for any organization is its people. At Bharti Airtel, our ‘Mantra’ for employee delight focuses on 5 Ps –

People, Pride, Passion, Processes and Performance.

Bharti Airtel has been recognized among the Best Employers in the Country for two successive years – being 14th in 2003 & jumping ahead of several other large conglomerates to an enviable position of the 2nd Best Employer in the Country in 2004. This is a clear demonstration & acknowledgement of the robust, progressive, people as well as business aligned Human Resource practices, which the organization has developed and implemented remarkably in a very short span of time.

Bharti Airtel follows an “open door policy” to approach the management, which helps resolve issues with mutual agreements. It encourage people to stand up against any unfair treatment for which they have the Office of the Ombudsman, where employees can raise any issues regarding business and workplace conduct. Bharti ensures transparency through the various communication policies, strategies and plans. . Regular Employee Communication Forums provides a platform for the employees to raise issues that require resolution.

Its leaders strongly believe in facilitating and initiating activities that help employees manage their health and well-being. Company’s focus always remains to redefine leadership; we develop leaders who enable performance and inspire their people to unleash their potential.

Their people orientation reflects in our vision of being “targeted by top talent”, and a key aspect of our business focus “building a best-in-class leadership team that nurtures talent at every level.”

Employee friendly HR policies have been put in place, which amply reflect the organization’s concern for its people. Some typical examples of these policies and practices include a family-day at office, half day leave for birthdays, gifts for anniversaries, compulsory 10 days off, festival celebration with family, no official meetings on weekends, five day weeks, concierge services, call center engagement programs etc. These “care” policies and practices are applied across the organizational levels without any discrimination.

From self-management workshops to aerobics sessions, yoga classes to provision of relaxation/meditation rooms, we ensure that every employee keeps a check on his/her fitness. Tie-ups with leading health service organizations enable our employees to undertake periodical health check-ups depending upon their age. This facility is also extended to employee family members at discounted rates. The company provides Flexible Group Mediclaim insurance to all employees, covering all kinds of illnesses, accidents and hospital coverage for serious ailments. Apart from these specific engagements, we regularly organize health check up camps, eye check-up camps and stress management sessions. Some of our offices have opened gymnasiums/fitness facilities to ensure that the fitness fanatics do not have to worry about time constraints to remain fit. At many of our locations, we have hired psychologists who undertake personal counseling sessions for employees.

Bharti Airtel offers a flexible compensation structure to its employees wherein the employees have the flexibility to structure their fixed component of their compensation according to their requirements within the ambit of legislation.

  “Even a sweeper in the corporate office must understand that, if he does not keep the office clean, the visiting shareholders could question the company’s ability to manage a business if they cannot manage their premises well” -Mr. Akhil Gupta (HR- Airtel)

Our Performance Linked Incentive (PLI) schemes are linked with the variable component of our compensation structure. This component is linked to both the individual performance against his/ her set KRAs (Key Result Areas) and the overall performance of the business entity that an employee belongs to.Our leaders and managers understand the need to bring clarity to employees about how their roles, goals and actions align the realization of organization’s vision and goals.The mechanisms like Performance Management System (PMS) and Talent Management Process (TMP) are the key sources of identifying the training needs of the employees and check to competency levels for promotion.

The goal of human resource management is to help an organization to meet strategic goals by

attracting, and maintaining employees and also to manage them effectively.

The process involves carrying out a skills analysis of the existing workforce, carrying out manpower forecasting, and taking action to ensure that supply meets demand. This may include the development of training and retraining strategies. Through HRP an organization strives to have the right number & the right kind of people at the right place at the right time.

RECRUITMENT

Bharti Airtel Limited has moved to the Billion Dollar league and this is a testimony to the importance that they attach to our "people". Today, Bharti is a formidable player in the telecom business with unparalleled energy, passion and creativity unleashed by the talent pool within.Their Management Trainee program, christened Bharti Young Leaders' Program has been designed to provide young leaders an accelerated path to reach their career goals.

The Young Leaders Program, in its 5th year since inception, has successfully groomed young leaders of BA year on year. These employees have now gained senior positions at various locations within BA. Our Goal –

Nurture and create a pool of potential talent (Young Leaders) who can deliver superior business performance. 

Provide Young Leaders with a holistic understanding and exposure to the business and the organization. 

Facilitate Young Leaders in gaining insight into their own strengths, development areas, and provide opportunities for self development.

According to Edwin B. Flippo, “Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization”. Recruitment is the activity that links the employers and the job seekers.

Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist.

RECRUITMENT Process

Trends in Recruitment

1. OUTSOURCINGThe outsourcing firms help the organization by the initial screening of the candidates according to the needs of the organization and creating a suitable pool of talent for the final selection by the organization. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. In turn, the outsourcing firms or the intermediaries charge the organizations for their services.

2. POACHING/RAIDING

“Buying talent” (rather than developing it) is the latest mantra being followed by the organizations today. Poaching means employing a competent and experienced person already working with another reputed company in the same or different industry; the organization might be a competitor in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions, better than the current employer of the candidate. But it is seen as an unethical practice and not openly talked about. It has become a challenge for human resource managers to face and tackle poaching, as it weakens the

competitive strength of the firm.

3. E-RecruitmentMany big organizations use Internet as a source of recruitment. E- recruitment is the use of technology to assist the recruitment process. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements.

Top 5 Job Sites

1 www.naukri.com

2 www.monsterindia.com

3 www.clickjobs.com

4 www.jobstreet.com

5 in.jobs.yahoo.com

Recruitment through AIRTEL Website

Recruitment Process

The recruitment process is the basic procedure, however there are few changes in different departments, for e.g. IT dept & Customer Care dept cannot have same type of recruitment process as the abilities & skills required are different in different department. However the basic process is as following :

1. Prepare the organizational chart with the support of respective departments based on industry norms & projection of growth.

2. Co-ordinate with all departments for their manpower requirements.3. Create the job profile and person specification as per department requisition.4. Create the company profile for advertising the company to attract prospective candidates &

also for the consultants etc.

5. Follow internal or external methods of RecruitmentCommonly used External Methods

i. Co-ordinate with recruitment agencies & HR consultants e.g.. HEED Consultancy, ABC Consultancy etc

ii. Advertisements in print e.g.. Times Ascent, Hindustan Times etciii. Web - in own website or portals like naukri.com, monster.com etc.iv. Campus Recruitments

Commonly used Internal Methods (IJR – Internal Job Requirement)

i. Employees Referral ii. Transfer & Promotions

6. Application Scrutiny & Preliminary Screening .7. Shortlist for preliminary interview – telephonic, video conferencing, personal interview.8. Organizing further rounds of interview with department heads etc depending upon the position.9. Briefing company profile to potential candidates, convincing them about the organisational

strength & about their career path & Compensation.10. Providing offer letter to selected candidates & help them in joining formalities within the

organization.11. Induction, followed by training as required.12. Taking monthly/quarterly feedback from the department about the candidates who have joined.13. Organizing market survey of salaries, job opportunities etc.

MANAGEMENT OF TECHNOLOGY,

INNOVATION & CHANGE

Bharti Airtel Ltd is one of the largest mobile telecoms providers in India (26.5% market share). In August 2006 the company awarded Ericsson an extension to the existing contract of US$1bn to upgrade and develop its GSM/GPRS network.

The new three year services agreement will see Ericsson manage design, development and deployment of the network, including capacity and coverage, enabling the operator to expand in rural India and reach out to all the towns and cities across 15 regions.

Ericsson is a long-term partner of Bharti and manages more than 70% of the company's existing GSM/GPRS network within 15 of the 23 Indian telecoms regions. To meet increased demand for value-added services at that time Bharti required a Mobile Packet Backbone Network (M-PBN) and Ericsson was able to provide the technology, alongside enhanced data rates for GSM Evolution (EDGE) technology.

Following these earlier successes, Ericsson was optimistic of winning new orders from Bharti (previous orders obtained were worth US$650m in 2004 and 2005). Bharti’s ambition is to bring its network to every one of the 5,200 towns described as census towns by the Indian authorities by March 2007, an expansion of 1,000 over the present total.

Bharti hopes to achieve with Ericsson's expertise a competitive edge over its rivals – ultimately by having better coverage and eventually with more cost-effective technology in place.

GSM (Global System for Mobile communications: originally from Groupe Spécial Mobilemost popular standard for mobile phones in the world. Its promoter, the GSM Association, estimates that 80% of the global mobile market uses the standard GSM is used by over 3 billion people across more than 212 countries and territories. Its ubiquity makes international roaming very common betweenmobile phone operators, enabling subscribers to use their phones in many parts of the world. GSM differs from its predecessors in that both signaling and speech channels are digital, and thus is considered asecond generation (2G) mobile phone system. This has also meant that data communication was easy to build into the system.

The ubiquity of the GSM standard has been an advantage to both consumers (who benefit from the ability to roam and switch carriers without switching phones) and also to network operators (who can choose equipment from any of the many vendors implementing GSM). GSM also pioneered a low-cost (to the network carrier) alternative to voice calls, the Short message service (SMS, also called "text messaging"), which is now supported on other mobile standards as well. Another advantage is that the standard includes one worldwide Emergency telephone number,112makes it easier for international travellers to connect to emergency services without knowing the local emergency number.

Newer versions of the standard were backward-compatible with the original GSM phones. For example, Release '97 of the standard added packet data capabilities, by means of General Packet Radio Service (GPRS). Release '99 introduced higher speed data transmission using Enhanced Data Rates for GSM Evolution.

GSM services are a standard collection of applications and features available tophone subscribers all over the world.In order to gain access to GSM services, a user needs three things:

A subscription with a mobile phone operator. This is usually either a Pay As You Go arrangement, where all GSM services are paid for in advance (commercially called "prepaid"), or a Pay Monthly option where a bill is issued each month for line rental, normally paid for a month in advance, and for services used in the previous month (commercially called "postpaid").

A mobile phone which is GSM compliant and operates at the same frequency as the operator. Most phone companies sell phones from third-party manufacturers.

A SIM ("Subscriber Identity Module") card which is activated by the operator once the subscription is granted. After activation the card is then programmed with the subscriber's MSISDN ("Mobile Subscriber Integrated Services Digital Network Number")telephone number). Personal information such as contact numbers of friends and family can also be stored on the SIM by the subscriber.

Major agreements and alliances

During the year Bharti Airtel has entered into following major agreements and alliances:• With Microsoft to offer software and services for the Small and Medium Business (SMB) market in India. The partnership will start off by offering to Indian SMBs Microsoft solutions for Hosted Messaging and Collaboration. It will also offer other hosted applications like CRM, Accounting, ERP, Unified Communications and select Microsoft ISV applications;• With Google to offer search services on Airtel Mobile. As part of the agreement, Airtel will bring Google search to the Airtel Live mobile WAP portal. Google will also incorporate advertising through its Mobile Ads product on the Airtel Live mobile portal;• With Adani Group to connect Mundra Port and Special Economic Zone. This is a first-of-its-kind alliance with the Adani group for setting up the Telecommunications Network Infrastructure for its multi-sector Special Economic Zone (SEZ) located at Mundra port;• A three-year contract with Nokia at an estimated value of US$ 400 mn to expand its managed GSM/GPRS/EDGE networks in eight Airtel circles and deploy a pan India WAP solution across its networks;

• A three-year network expansion contract with Ericsson at an estimated value of USD 1 bn . The contract will enable Bharti Airtel to rapidly expand its mobile services footprint further and reach out to all towns and cities in 15 telecom circles in the country;• With Microsoft to offer Microsoft’s latest Windows Mobile 5.0 technology to its customer. With this agreement, Bharti Airtel has become the first Indian telecom company to offer Microsoft’s latest Mobile 5.0 technology to its customers;• With IBM to deliver India’s first ‘Service Delivery Platform’ (SDP). This platform will enable Airtel to deliver a suite of unique, innovative products, services and applications, to its over 39 million customers spanning mobile, landline and broadband services. Airtel is investing over USD 100 Million in this delivery platform.

Mergers & Acquisitions

• During the year, the Company has sold 2.36% of its investments in Forum I Aviation Limited which has resulted in reduction of its shareholding in the JVfrom 16.6% to 14.2%;• Pursuant to a rights issue made by Bharti Hexacom Limited (BHL) during the year, the Company subscribed to 43,750,000 shares of BHL for an aggregate consideration of Rs. 875 mn resulting in increase in its stake from 68.5% to 68.89%;• On 17 April 2007, the Hon’ble High Court of Delhi approved the amalgamation of Satcom Broadband Equipment Limited (SBEL) and Bharti Broadband Limited (BBL) into Bharti Airtel Limited. On completion of all procedural formalities, SBEL and BBL will stand dissolved (without the process of winding up) into Bharti Airtel Limited. The appointed date of the amalgamation is October 1, 2005;• At its meeting held on 26 April 2007, the Board approved the acquisition of 12,25,000 equity shares of Rs. 10 each of Bharti Aquanet Limited (“Aquanet”) comprising 49% of the equity from Singtel i2i Limited for the consolidated consideration of Rs. 154.5 mn. Post acquisition, Aquanet will become a wholly owned subsidiary of, and will be merged with Bharti airtel.