Case Analysis: Bharti Airtel |
Bharti Airtel Limited is a major Indian telecommunications firm, with a particular focus on operating in the mobile services market. Founded in 1995, the company quickly tried to exploit growth opportunities arising from the liberalization of Indian telecommunication markets. The family owned business was soon able to generate profits and extend market shares. However, the pace of company growth challenges the firm in terms of being able to setup the necessary infrastructural elements, both within the firm as well as outside the firm. Therefore Bharti considers “reverse outsourcing” of IT infrastructure and network setup and maintenance to well-established firms from developed
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Ironically for Bharti, a mobile telecommunication company, network services and Information Technology (IT) architecture is not a core competency. Bharti’s primary core competency is operational superiority. They leveraged this focus to obtain licenses in 15 of 23 circles in India and created a diverse portfolio consisting of three strategic businesses:Mobile Services (64% or revenues), Long Distance, Group Data, and Enterprise (30% of revenue), and Broadband and Telephone Services (16% of revenue). In addition to operational superiority, this family run business, which strongly embraces the Indian work culture, also strives for industry dominance in pricing, product innovation, Value Added Services (VAS), and marketing. As an early entry into the Indian telecommunication industry, Bharti was able to develop name recognition amongst the public, but also developed agreements with vendors to utilize their products as transmission platforms for their service. These competencies translated to a 25% market share of the total Indian mobile market. Insourcing Requirement to Succeed To be successful in the highly competitive Indian telecommunication mobile market Bharti needs to stay ahead of its competitors by quickly adapting and expanding their network infrastructure to meet current technologies and support a customer base that is growing 100% per year. This rapidly growing customer base will force base station growth from 5,000 in 2004 to 40,000 stations by 2007.