Evaluating a firm’s External Environment: Bharti Airtel Limited
Current Indian Telecom industry/ General Environment: The telecom industry in India is less competitive as it has been dominated by key players like Airtel, Vodafone, Idea and Jio which was a successful launch recently. As a result, decisions taken by one company greatly influences decisions of others. The same was observed recently when Jio launched its inaugural offer and unlimited plan policies, which was a new move in the Indian market, Airtel and other service providers were forced to revise their policies. Governmental: The government is working strong to digitally connect the rural and remote regions in the country through its ‘Digital India Mission’. The telecom ministry of India increased the FDI which was seen by increased competition in the industry. Airtel recently formed a strategic alliance with Singapore Telecom Limited to accelerate its infrastructural development and upgrade to advanced technology. Economic: These factors cover growth, inflation, exchange rates and have a significant impact on business and strategic decisions. With the increased investments through FDI in telecom sector, there is enough economic potential to capture. Social: Airtel has always bought out schemes for all generations of customers and all income levels. Most of the Indian population lives in rural areas and Airtel’s expansion always intends to reduce this isolation. It has always come up with advertising campaigns which have emotional connect with the consumers. Technology: Airtel’s collaboration with international technology giants has always seen better infrastructure. It is the first cellular company to provide international roaming and value-added services. They have a high-speed optic fiber network and are working with Nokia to develop 5G services.
Industrial analysis: Rivalry: Indian telecom industry has witnessed immense competition and Airtel, not the only one involved in expansion through aggressive marketing. Every other operator is trying to get hold of maximum share of the market, as a result, there is a very less product differentiation. Substitutes: Landline services, VoIP services, Social networking sites and other messenger services can be threats to cellular services in whole, but any other cellular company providing CDMA services can be a potential substitute as Airtel does not hold the CDMA market. Entries: Entry into telecom industry could be tough because of high infrastructure, setup costs, Spectrum and regulatory issues. Suppliers: Airtel gets its network equipment’s providers like Nokia, Ericson, and Huwai. Network maintenance is outsourced to IBM and Alcatel. Its call center services and infrastructure are also outsourced. Due to high demand and limited suppliers, there is always high power with the suppliers. Buyers: Powers with buyers are low when compared to that of suppliers as there are a large number of users and they have to comply with the terms and conditions. But the competition is so high and there is no product differentiability customers might opt to port the number to a different cellular provider with better call rates.
Recommendations: Besides immense competition and given economic conditions Airtel has an edge over its competitors over brand image and network connectivity (Jio being the most talked and popular cellular provider in recent times has not got its own infrastructure, it uses infrastructure laid by other cellular providers). Airtel must do a lot of collaborations with international companies to work on the advancement of infrastructure, new technology to develop significant product differentiation. It must also work to tap customers dissatisfied with other services in rural areas.