SWOT Matrix for Bharti Airtel (Feb-2010)
| STRENGTHS |
| 38% YOY increase in customer base for mobile services |
| Market leader with 22.7% of market share for mobile services |
| Excellent Network Infrastructure with Pan-India Presence |
| Good partners/strategic investors who have prior experience with 3G offerings |
| Strong FCF/Flush with cash (Approx: US$ 180 Million) |
| Strong Partnerships with Technology vendors, Nokia, Alcatel Lucent, Huawei, IBM etc |
| Extensive channel partners & distribution network in India |
| Very High Brand Awareness and recognition |
| Strategic partnership with IFFCO for rural penetration |
| Decent growth @ 4.5% in Internet services. Bharti holds 3rd slot @ 8.24% market share, only behind BSNL and MTNL |
| Very good corporate governance practices |
| Good presence in Tele-media services in India (41.9% market share & 46.1% EBITDA) |
| Increase in Profit margin growth @ 48.8% in Corporate Enterprise Services |
| Very Good Internal Human Resource talent pools |
| WEAKNESSES |
| Decreasing profit margin in mobile services (35% in Q308 Vs 30% in Q309) |
| Very low financial leverage (Company debt almost NIL) |
| Increasing Operational Cost in Mobile Service offerings (81% revenue contribution Vs 62% Profit contribution |
| Decreasing ARPU in mobile services business (@$5.02/user month) |
| Very low penetration or acceptance of Value added services (Revenue contribution is @ 9%) |
| Increasing customer base are primarily from rural tier II circles |
| Less sharing factor in its networks thereby increasing the cost |
| India centric - Over 90% of revenues are from Indian Market |
| OPPORTUNITIES |
| Trai projects the next 100 million subscribers are from rural market. From 2009-2010, 57% of new subscriptions were from Urban markets whereas the rest 43% were from Rural markets |
| The tele-density in India is @ 44.72% with Urban density @ 103.20% whereas Rural density @ 19.95% |
| Total Internet Subscribers @ 15.24 million people with broadband subscribers @ 7.82 million |
| No of DTH subscribers in India is at 19.1 million, a paltry no comparing to 1 billion plus Indian Population |
| Year or Year % increase of Broad band subscribers from 2008-2009 FY stood at 41.7% |
| Increasing usage of Mobile passive networks by other service providers like FM stations, Broadband service providers etc |
| Increasing MOU of internet telephony from 118 million minutes to 120 million minutes and upcoming 3G & 4G auctions |
| Global recession with certain acquisition targets available at cheaper prices |
| THREATS |
| As per Trai's Recent reports, the ARPU for the GSM industry decreased @ 12.4% from Rs 164/user to 144 |
| Between Sept - Dec 09 quarter, Airtel lost Market share by almost 0.6% to other players |
| Increasing mobile subscriber base are primarily from Pre-paid customers @ 95.18% where ARPU is very low @ Rs 149/user compared to Post paid which stands @ 530/users |
| More Global telecom behemoths given 3G operating licenses in India |
| Intense competition from new entrants triggering Price war in an decreasing ARPU environment |
| Upcoming mobile no portability in a market where 96% of subscribers are Pre-Paid customers |
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