IBS_final_v2.pptx
- 1. International Business Strategy Airtel in Africa Group 5 L Anand Rao 22KA M Sai Surya Girish 23KA Manish Yadav 24KA Megha Sharma 25KA Mohit H Deshmukh 26KA
- 2. Africa - Mobile Market • One of the fastest growing economic zone in the world • 444 Million mobile subscribers in 2017 and expected to grow to 634 Million by 2025. • Mobile broadband connections to grow from 38% in 2017 to 87% by 2025. Median age in Africa excepted to be 19.8 by 2020 Bharti Airtel Limited 2
- 3. Airtel in Africa Key partners : IBM, Ericsson, Nokia, Siemens, Spanco, Tech Mahindra Resources Customer base Quality Management Operations Telecom Insurance Home-crisis ARPU decrease, tariff cuts,3G debt Complexity Underestimated level of complexity & unrealistic targets Low Investment Airtel had to carry the burden of development . No Centralization 16 countries, regulators, languages, markets & cultures Value Proposition • Mobile Commerce • Broadband • Wireless Networks • Conferencing • Digital TV Customer Segments • High value unlimited plan -General Populace • Priority customer services Revenue Model • Broadband & DTH expansion • GTM reinve ntion, accelerate SMEs • Payments Bank, Music & TV services Cost Structure • Infrastructure • Maintenance • Currency flux • Lobbying
- 4. SWOT Analysis OPPORTUNITIES (+) THREATS (–) STRENGTHS (+) WEAKNESSES (–) S W O T • Airtel’s operation strength developed in India. • Airtel’s experience in outsourcing operations. • Large user base throughout Africa built by Zain. • Experienced personnel from India and former employees from Zain. • Extremely diverse market unlike India. • Cultural difference in the employee behavior • Difficulty in finding vendors unlike India as a result Airtel had to take vendors along. • Poor infrastructure and management practices under Zain • Large African market facing huge technical issues in telecom. • New market for Airtel given saturation of Indian market • High existing call rates which airtel can bring down. • Kenyan government had been talking about building a BPO business. • Poor and costly logistics in land-locked countries. • Airtel’s India operations facing problems, putting more pressure on Airtel Africa. • Legislative hindrances in trades leading to increased costs. • Not a lot of competitors to share infrastructure with as they do in India.
- 5. Demand conditions • Recurring problem of congested network and call drops • High issuance of time of new SIM due to theft of handsets • High ARPU’s because of high call rates Related & support industries • Poor Vendor eco system • High Congestion in Call Centers • No established BPO business • Landlocked nature of countries increased the transportation cost Firm strategy • Outsourced key operations (Telecom network, IT & Call centres) • Channel partner program to deal issue of retailer losses led by discounting game of Wholesalers Factor conditions • Different African culture causing complex problems • Laidback Work culture as against deadline driven • Working Hours due to safety concerns after 6:30 PM Structure • Decentralized structure owing to 16 different countries, markets, languages & culture • Footprint of Telcos do not overlap across countries Rivalry • At least a third of African operators do not make money Government • Fragmented market with many governments & rules • Forex neutrality clause in place (Imports cannot exceed exports) • Not ease of Duty exemptions • Cost and logistics implications due to Double taxation Porter’s extended diamond
- 6. SERVICE • Rationalized tariff rates in almost all its markets in Africa • Introduced e-recharge • technical assistance for any query INBOUND LOGISTICS • Procuring and storing SIM cards from production facility • Software & technical assistance • Gadgets and capital equipment OPERATIONS • Developing & customising SIMs • Customizing s/w • Maintaining service levels • Maintaining operation and network time to time MARKETING & SALES • Distribution & marketing networks were being overhauled • Improving & enhancing their service • Making good relations with customers of b2b & b2c TECHNOLOGY HUMAN RESOURCES PROCUREMENT INFRASTRUCT URE • Long and enduring partnerships and tie ups with partner firms and agencies. • Outsourcing the activities eventually helping in reduction of cost and improving services • Solid production network for continuous supply of sims • Security Unit to ensure security and privacy to network users • Technological experts to keep transforming and enhancing the operations • Hiring IT savvy workforce, telecom operators and technological experts • Created positions for 40 new zonal managers who are like zone CEOs with profit and loss responsibilities • Well-trained customer relationship managers to deal with direct customers • B2B marketers to widen the network • Network Tower set up, IT infrastructure, telecom gadgets and gears, networking offices and various IT/IS installations to provide services OUTBOUND LOGISTICS • Distributing sim cards from plant/firm to various distributors and retailers • GSM and CDMA services Value chain analysis
- 7. YIP’s framework Position of parent company Finances Bharti Airtel Limited 10 Work force Operations •Leading Telecom Company in India •5th biggest mobile phone carrier by subscribers • Present in Sri Lanka & Bangladesh • 16 African countries •Running into debt due to spectrum buying • Falling profits in India • Zain Africa acquisition costed $9 million • Huge expenses incurred for infrastructure setup •Significant work force in India • Restructuring didn’t affect many jobs •3000 Ex-Zain staff moved to roles of new partners • Deadline driven work culture from India can’t be replicated •Spanned over 4 segments, i.e. mobile, enterprise, digital, telemedia
- 8. YIP’s framework Markets • Increased competitive intensity in Indian market with 9 operators in each circle • Request to share infrastructure with competitors in Africa Competitive • Significant spectrum cost set by the Govt, leading to increased debt • Lobbying with Gov. of Africa is Required Government • ARPUs have been falling, dropped 12% in 4th Qtr 2011 • High Setup Costs • Cost can be lowered by outsourcing as done in India by Airtel (Vendor Costs) Cost Industry globalization drivers • Growth peaking in India, specially in Tier1 Cities • Requirement of low call drops by customers globally • Lower Tariff are expected by all customers Global Strategy livers Global Market participation •Telecom services •Value added services Global Products •India, Sri Lanka, Bangladesh and 16 different African countries Global location of activities •Bringing in new technologies like 3G in Africa will provide Airtel advantage over competitors •The investment by Airtel has increased to $575m in Africa Competitive moves Global Marketing • Pioneer in India • Also present in Sri Lanka & Bangladesh • Now entered in 16 different African countries • Standardized marketing activities across countries
- 9. Business Divisions Impact of Restructuring Before, four operational segments in Africa: Mobile Services Airtel Telemedia Enterprise Services Media Services Restructured Airtel Africa Two Customer Business Units: B2B : Emerging businesses – M- Health, M-Commerce B2C : Mobile, Telemedia, Digital Services B2c further split into consumer business and market operations • The restructuring will enable the company to create synergies across various business segments • Minimal impact on employees • Major employee movement in marketing and sales segment of each BU • B2C strategy and focus on customer experience, product and service innovation (including data, VAS, new products/services) and build an ecosystem around the B2C services. • The second segment of B2C — market operations group will lead the ‘go-to- market’ strategy and complement the consumer business segment. • opportunity to improve its own operation. • The B2B business unit will continue its focus on serving large corporate and carriers through Bharti Airtel’s wide portfolio of telecommunication solutions. • Customers are at the core of business • proactively creating an integrated customer centric organization Employee Impact Strategy for Better Synergy B2C B2B
- 10. Global Business System • Pioneer in Indian Mobile Telecom. • Core Competencies: Outsourcing, Cost Efficiency, Shared Infrastructure. • Penetrated Indian Market by 97% to become Market Leader • Aim to Build an affordable Telecom Service for a group of emerging countries Global Organization Enriching Lives through Transforming Communication • Dead Line Driven Work Culture • Speed- Time to Market • Squeezing out Inefficiencies Global Positioning A viable low cost model targeting growth profitably. • Choice Of Countries: Emerging Countries • Value Proposition: Low-Cost Adaptive Niche Global Ambition To be globally admired as inclusive telecom services that delight customers. • Leveraging Innovation, • Cost Efficiency • Customer Servicing Focus Global Strategy Framework - Airtel
- 11. Cost advantage It involves cost reduction Airtel strategy includes reducing the tariff rates and increasing its subscribers. This sustained tariff differential has led to shift in minute usage to Bharti in multiple-SIM markets like Nigeria and Ghana Differential Advantage launching customized packages in different markets, taking into account the traffic patterns and network quality. Improvement in the marketing network by launching a new channel partner program and also taking care of the distribution and the services Having a different business model for African countries Improving network quality Airtel created a Zonal structure Product and Technology Innovation Lesotho and South Africa are the only African countries where 5G is commercially available, but the services are extremely limited. Airtel is about to launch its 5G network in Africa which will be beneficial for the people as it is present in almost 15 African countries Artel Broadband has improved, it should find a way to reach the poor people in Africa at a affordable cost Local adaptation: In India Airtel is one of the popular networks so as to do the same in Africa, cultural gaps has to be reduced Moving its headquarter to Kenya, making decision process faster as there is presence of the stakeholders in Kenya Job opportunities can be created Help through the Zain acquisition which occurred in 2010 and it was second largest player Global Standardization Airtel has outsourced key operations like telecom network, IT and call center's to IBM, Ericsson, Nokia, Siemens, Spanco, Mahindra Tech and others Boost customer conversion through Sim-Swap Scheme where the consumer can get new sim in an hour Upgrade to 4G using Airtel app Restructuring of business activities Following Reorganization in Africa as well Competitive and Business Strategy
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