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Top10: 2 - Bharti: Mobile Warrior

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VoicenData Bureau
New Update

Bharti Airtel ended the FY 2005-06 with a revenue of Rs

11,663 crore, as against Rs 8,003 crore in the previous fiscal, a growth of

around 46%. The net profit stood at Rs 2,258 crore, up 51% over FY 2004-05. The

cash profit for the year was Rs 4,095 crore, up 46% from last year. 

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The total customer base of Bharti grew 77% to about 20.9 mn

during FY 2005-06. Bharti continued to maintain its leadership position in

mobile services, with a market share of 21.5% as on March 31, 2006.Â

The company's subscriber base grew 8.6 mn during the year under review.

BHARTI





Area of operation: Mobile

Services, Fixed Lines/Broadband and Internet Services, ILD, and DLD




Address: Bharti Airtel Limited, Qutab Ambience, Mehrauli Road, New
Delhi - 110 030



Phone: +91-11-4166
6000




Fax: +91-
11-4166

6011/12

On the wireless front, Bharti's subscriber base stood at

19.5 mn, up from 10.9 mn in FY 2004-05. Out of this, a good 82.7% were pre-paid

customers. Thanks to fall in tariff, the ARPU declined by 12% to reach Rs 442.

Non-voice revenue was 10.7% of the total revenue, while SMS formed 6.8%. With

the launch of its mobile service in Assam, Bharti became the first private

service provider to have its footprints in all 23 circles of the country.

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The total fixed line and broadband services subscriber base

grew by 57% to reach 1.3 mn and broadband comprised a mere 0.3 mn. This figure

also includes a majority of 128 kbps customers, which according to the Broadband

Policy definition does qualify to be broadband service. The ARPU from fixed and

broadband services continues to be more than double the mobile ARPU. It stood at

1,063, showing a decline of 14% over the previous year.

HIGHLIGHTS

  • Started services in

    the 23rd circle, thus becoming a pan-India player

  • Continues to lead

    mobile services with a market share of 21.5%

  • Vodafone invested

    approx Rs 6,700 crore to acquire 10% stake in Bharti Airtel

Bharti underwent major restructuring, aimed at aligning its

entire telecom business. Manoj Kohli was given the role to lead the unified

management structure of Bharti Airtel, the newly created entity. The year was

also significant for the company, as it joined hands with IBM to offer managed

services to enterprises in India. The companies agreed to jointly develop and

market IT and telecom solutions for the Indian enterprise market under the

'Joint-Go-To-Market Program'. The initiative is aimed at helping customers

achieve continuous access to their enterprise information and critical business

processes. The first phase will see the launch of managed hosting, business

resiliency, and continuity services. The services are targeted at BFSI,

manufacturing, and the government.

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Bharti also launched one lakh 'Easy Music' shop

allowing subscribers to download songs of their choice. The company also

expanded its BlackBerry product portfolio, targeted at high-end enterprise

customers. Delhi did Bharti proud by becoming the first metro to have 2 mn

mobile customers.

'The best of

Bharti is yet to come'

Bharti has come a

long way. How would you rate its performance over the years?



Our performance has been gratifying over these years. The 10-year-old

company has become the island of excellence in the Indian economy. It is

the island of entrepreneurship and passion.

It has been

institutionalized into a long-term, sustainable leadership brand. We think

we have just started the journey, but the best of Bharti is still to come.

President



Manoj Kohli

What's going to be

your next growth strategy?



We have adopted a new vision of being the most admired brand by 2010.

It would be a brand that is loved by customers, targeted by top talent,

and be a benchmark for business. We have initiated huge transformation.

There are certain areas where change would be seen in the coming

days-customer service, an ethical work culture with no place for

bureaucracy, hierarchy, and politics, and more importantly unique business

model. As we move into the future, we will make our business model more

unique and healthier.

What were the

challenges that the company has faced after completing a decade of

operations in the country?



Though there were numerous challenges, but we have been successful.

The first big challenge was the regulatory challenge, second was a market

challenge. Till 1999, the market was not growing and later on when it

started growing, there was intense competition. There are seven market

players, but we are still leading. Third was financial challenge. We

emerged as a company that had no capital and today, we have achieved the

status of top 5-6 companies with good financial health.

What is going to be

your growth strategy?



Retail and distribution would be a very important strategy for Airtel.

We call it a 'Matchbox' project. This simply means that Airtel service

will be as easily available as a matchbox. We have about 900 exclusive

showrooms and 4,000 multi-brand retail outlets across the country right

now. In the next 12-18 months we will add another 300 exclusive showrooms

and retail outlets will also increase it by 30-40%. All these retail shops

will be based on franchisee model, as we don't have any strategy to own

these outlets.

What is your rural

strategy?



We have divided the rural market into three parts. The priority is top

100 towns, which has more than 60% telecom revenues. In the remaining

5,000 towns, small and medium services would be launched by March 2007. We

have a strong rural strategy for third category towns. Our initial

experience in 80,000 villages has been quiet positive.

What kind of

investment have you planned for the next generation services?



We have capex of Rs 2 bn, of which two-third would be spent on mobile

and the rest in other non-mobile services. At this stage, we will like to

invest as much as possible for growth. As soon as the government announces

its spectrum policy, we will be ready to launch our 3G trials. We are

looking at metros for the first phase.

In a major development with long-term financial

repercussions, Vodafone entered into an agreement with Bharti marking the entry

of the world's largest telco in India. Vodafone offered to invest

approximately Rs 6,700 crore to acquire around 10% stake in Bharti, thus

becoming the single largest investor in the country so far. With this, Warburg

Pincus made a complete exit from Bharti.

If everything goes according to the plan and spectrum

allocation issue is sorted out, Bharti would launch its 3G services in 2007. The

other new service in the pipeline is IPTV, the trials for which are currently

on.

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