EMOBILE: the mobile broadband revolutionist - Huawei

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VOICE FROM OPERATORS Under our unique business model, we assume the roles of supervisor, planner, governor and quality control inspector. By partnering with strong global partners, we are able to successfully develop and focus on the core competence. the Indian telecom industry, the wireless subscriber base should grow from around 350 million in 2008 to 500 million in 2010. It is safe to say that India is the second largest market after China, but still a very large market with only a 61% projected penetration rate by 2012. The wireless revenue could be about USD37 billion in 2012. What are the key drivers for growth? The most important thing is an affordable tariff, which is about 1.5 cents/minute. That is why the MOU in India is about 513 minutes a month. Second, incomes are rising, not only in the urban areas, but also in the rural areas. Third, I can remember the handset price at the beginning was USD200. We now have handsets that are USD20. This is definitely a big trigger of growth. Fourth, rural economic prosperity is certainly going up. In India, close to half of the economy is rural, and it is a cash economy. The money doesn’t go through banks. We have covered about 400 thousand out of a total of 600 thousand villages. Fifth, the youth segment is going to develop. According to demographic analysis, young people are the highest percentage of the population in India. As many Asian countries are aging, the Indian population is becoming younger. The youth segment is important for all of the telecom operators in India. Finally, new technologies like 3G are going to be launched in India in 2009, providing another very good growth opportunity. The India telecom industry began taking off in 2003. During the last few months, we saw over 10 million net added subscribers per month in India. I don’t think any other countries in the world have achieved this kind of figure. It clearly shows that operators in India have rolled out the networks very swiftly and rolled out distribution close to customers, including their homes and offices. Innovation-Airtel’s key enabler India is the most competitive and a very hard-fought market in the telecom world. There are now about 11 to 12 players in every state. In October 2008, three international brands including NTT DoCoMo, Telenor and Etisalat entered India and heated up the competition. We at Bharti Airtel welcome competition, and believe we can actually become stronger as new competition enters the marketplace. Bharti Airtel continues to lead the market, and our leadership is due to our commitment to affordability for Indian customers. Offering world-class, innovative and world’s most affordable tariffs at 1.5 cents/minute, we have achieved more than 33% of the regular GSM market share in India. More than half of our new customers are coming from the villages. Unique business model Innovation was not a choice for us, innovation was a necessity for us. For achieving the lowest costs for the production of minutes in India, we need to have the lowest cost possible. We therefore launched in 2002 a unique business model featuring outsourcing the five big portions of our operations. First, we outsourced our network to leading international vendors. In the network partner selection, we began with a very innovative way of buying networks since we started in 2003. At that time, we were buying about 2,000 black boxes. We didn’t understand many of those black boxes as we are not technologists. But we understood customers, people, and the market. So we started buying lines and capacity from our partners. We paid the partners by every user capacity in terms of lines. We also had 3 Win-Win / FEB 2009
managed services managed by vendors. Today, I can say that those vendors have given us the power to rollout up to 3,000 towers per month. I think this innovative business model has been very successful. IT outsourcing is more innovative than network. IT is the backbone for any telecom company in the world, whether it is the billing system, IN system, or CRM system. So we went to IBM in 2003 and let them run our IT systems end to end. Now, all hardware, software, and services are handled by the IBM employees who work for Bharti Airtel. IBM tailored 65 platforms for us and we pay IBM a percentage of our top line and revenue. There is no linkage with how many new services, new software, or new hardware has come online in a month. It is just simply linked to the top line and we pay this amount to IBM. There is a short case project for IBM globally. Based on the project, IBM is getting many new contracts in the telecom sector across the globe. For customer service and call centers, we have five to six partners who are high quality global partners. We know that if every customer calls us each month, we will have 80 million calls a month. So we need very large capacity call centers. 70% of our present call centers are outsourced to our partners who are very high-quality global partners. 30% of the present call centers are being outsourced now and will be completed within the next six months or so. These partners focus on the output factor of the customers. If the customer satisfaction goes up, these partners get more fees from us. If it goes down, these partners have to suffer. By completely outsourcing the entire distribution of the company, we have built up the strongest distribution force in India. We have thousands of distributors and more than one million retail points in India. Our target is that by 2010, the number of retail points will reach close to 2 million. There is a match box distribution strategy in India–wherever a match is sold, Bharti Airtel’s services will also be sold. This will make our distribution the deepest in the world. We see that local retailer and local outlets are the best way to promote Bharti Airtel. Hence, we do not own the distribution of the company, including large showrooms with our exclusive Airtel Relationship Centres and other small showrooms that are not exclusively Airtel. Last but not least, the passive infrastructure is all open for sharing with other operators. I think it is very important that we collaborate when the competitive intensity is at a cut-throat level in India. With more operators sharing the infrastructure, the cost of our network operation actually is coming down steadily. A clear example is Indus Towers, where Bharti Airtel, Vodafone and Idea Cellular are the joint venture partners. I think in the coming few years, the average tendency will be that one tower is shared by 2-3 operators. In conclusion, under this unique business model, Bharti Airtel has assumed the roles of supervisor, planner, About Bharti Airtel Limited Bharti Airtel Limited, a group company of Bharti Enterprises, is Asia’s leading integrated telecom services provider with operations in India and Sri Lanka and has an aggregate of over 88 million customers as at the end of December 2008. Bharti Airtel Limited has been voted as India’s most innovative company, in a survey conducted by The Wall Street Journal. FEB 2009 / Win-Win 4
Page 1 and 2: Voice from Operators Perspective Ta
Page 3 and 4: 02/09 Initial issue Editorial Spons
Page 5 and 6: Tao of Business 25 AIS keeps Thaila
Page 7: Bharti Airtel is on a journey of ex
Page 11 and 12: We also focus on new business oppor
Page 13 and 14: EMOBILE the mobile broadband revolu
Page 15 and 16: Now aided by very small, briefcase-
Page 17 and 18: Perspective Huawei Views on Future
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Page 21 and 22: interesting video content on the In
Page 23 and 24: Tao of Business Inspiration from In
Page 25 and 26: The entire network solution is not
Page 27 and 28: In recent years, governments around
Page 29 and 30: ackyard,” one engineer said. Just
Page 31 and 32: As the largest and leading mobile o
Page 33 and 34: PCCW builds a CDMA broadband bridge
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Page 37 and 38: Managing the largest network expans
Page 39 and 40: and downlink. To remedy the situati
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Page 45 and 46: Few people are familiar with China
Page 47 and 48: MegaFon transforms and prepares for
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Page 51 and 52: MANIA In April 2008, Vodafone Roman
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