Having achieved 100 million customers in the Indian market, Sunil Mittal is betting big on the MTN deal to create a Global Conglomerate, says Surbhi Chawla
The Indian telecom industry – reckoned as one of country’s burgeoning sunrise sector continues to leapfrog with 10-11 million subscribers being added every month all through the year gone by. And it comes as no surprise that Bharti Airtel continues to be the undisputed leader of the telecom pack by standing tall with 105.18 million subscribers as its share till July 2009 (according to COAI). While the world was battling with the economic turmoil with most companies witnessing massive erosions in their market capitalisation, Airtel has been seemingly untouched. Its market capitalisation in fact increased yoy to Rs.1,559 billion (as on August 18, 2009) compared to Rs.1,454.55 billion a year ago. Key growth indicators, revenues and net profits too have amplified by 36.77% and 26.40% in FY 2008-09.
However, given the tough economic conditions, achieving such figures has certainly been strenuous for Airtel, with Sunil Mittal demanding that the company be measured vis a vis the investments it has made (Rs. 700 million) in hard infrastructure rather than just cash flows (which are still in the negative) and profits. Add to it the fact that the landscape of the Indian telecom industry has transformed dramatically in the last two years making it increasingly competitive with a slew of new operators like Aircel coming in.
Even the existing operators like Vodafone Essar Ltd., Idea Cellular Ltd, et al, have started expanding the number of operated circles. This in the background of the ever existing and bloodying price war that all operators have played from time to time; a war that resulted in pressure on the Average Revenue Per User (ARPU). Airtel, for its bit to maintain the flow of subscribers, expanded its reach in the rural segment to tap the customers that lie at the metaphorical middle and bottom of the pyramid and ensured that it’s revenues were not impacted as it was backing on value added services (VAS).
The Indian telecom industry – reckoned as one of country’s burgeoning sunrise sector continues to leapfrog with 10-11 million subscribers being added every month all through the year gone by. And it comes as no surprise that Bharti Airtel continues to be the undisputed leader of the telecom pack by standing tall with 105.18 million subscribers as its share till July 2009 (according to COAI). While the world was battling with the economic turmoil with most companies witnessing massive erosions in their market capitalisation, Airtel has been seemingly untouched. Its market capitalisation in fact increased yoy to Rs.1,559 billion (as on August 18, 2009) compared to Rs.1,454.55 billion a year ago. Key growth indicators, revenues and net profits too have amplified by 36.77% and 26.40% in FY 2008-09.
However, given the tough economic conditions, achieving such figures has certainly been strenuous for Airtel, with Sunil Mittal demanding that the company be measured vis a vis the investments it has made (Rs. 700 million) in hard infrastructure rather than just cash flows (which are still in the negative) and profits. Add to it the fact that the landscape of the Indian telecom industry has transformed dramatically in the last two years making it increasingly competitive with a slew of new operators like Aircel coming in.
Even the existing operators like Vodafone Essar Ltd., Idea Cellular Ltd, et al, have started expanding the number of operated circles. This in the background of the ever existing and bloodying price war that all operators have played from time to time; a war that resulted in pressure on the Average Revenue Per User (ARPU). Airtel, for its bit to maintain the flow of subscribers, expanded its reach in the rural segment to tap the customers that lie at the metaphorical middle and bottom of the pyramid and ensured that it’s revenues were not impacted as it was backing on value added services (VAS).
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
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An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
