Bharti Airtel Limited is an Indian global telecommunications services company based in Delhi, India and operates in around 18 countries.
The third-largest mobile network operator in India and the second-largest mobile network operator in the world, Airtel offers GSM, 3G, 4G LTE, 4G+ mobile services, fixed-line broadband, and voice services depending upon the country of operation.
With a subscriber base of 293.79 million users, Airtel is named India’s 2nd most valuable brand.
Let’s check out the SWOT analysis of Airtel and understand what is it doing to sustain in the highly competitive telecom industry.
Strengths of Airtel
Let’s check out some of the main strengths of Airtel:
- Airtel is one of the leading telecommunication companies with a rich experience of more than 19 years in INDIA and African Sub-continent which provides telecom and broadband services. Its presence is in nearly 20 countries and is the 3rd largest telecom operator overseas.
- Indian Telcom which initially had eight players squeezed to three Bharti Airtel, Vodafone-Idea and Reliance Jio owing approximately equal share in the pie.
- With the formation of Indus tower & due to its venture with Idea-Vodafone, the infrastructure of Airtel has extended in all the country resulting in nationwide penetration with superior services.
- Having an alliance with brands like SONY Ericson, Singtel, Apple and NOKIA the brand equity has been boosted.
- Very Strong and trustworthy Dealer and Distributor’s network which helps in generating revenues from the market.
- Airtel is having a team of skilled people and guided with the vision of their CEO Mr. Mittal. The workforce is trained by and their skills are enlightened through regular training sessions which help to achieve the vision of the group.
- Diversification is one of the biggest strengths of Airtel – Airtel is building its strong BRAND portfolio by diversification, over the years Airtel has diversified into digital payments, IP TV services, DTH, securities, etc.
- Airtel has a successful track record over the years due to competition its revenues and profit margins have gone down but still, the cash flows are quite impressive over its competitors.
- Airtel recently introduced a seamless digital platform that bundles all its offerings under a single bill which acts as strength.
Weaknesses of Airtel
Let’s check out some of the major weaknesses of Airtel. Weaknesses form a big leg of the SWOT Analysis of Airtel.
- Average Revenue Per Unit (ARPU) is shrinking day by day due to competition in the limited market.
- Outsourcing of operations increased dependency on other companies
- Struggling to recover $9 billion invested in African sub-continent business, despite being a market where the Average Revenue Per Unit is good.
- The group is in heavy debt due to its acquisitions turning out to some bad investment, and debt being high with lower margins. Airtel does not have a very strong financial support system compared to its competitors.
- Changing Technology is increasing the cost of new infrastructure.
- New government policies and Regulatory frameworks ordered by the TRAI is a challenge
- The attrition rate in Airtel is very high compared to industry standards. The cost of training and development of employees is also a huge cost to the company.
Opportunities for Airtel
Opportunities of Airtel – let’s check out some!
- Due to the competition in the urban market and shirking profitability, they should focus on the untapped rural market as it will be a very good opportunity to increase their revenue.
- Collaborating with smartphone companies and providing schemes to hem will be a smart move. This will ensure fixed revenues in the future and with a higher customer base.
- Value-added services if the future of the industry and by the introduction of the services the ARPU will rise and attract customers who are capable to pay.
- The wireless world is moving towards LTE (long term evolution or 4G). LTE services for mobile broadband will be a good solution for India where fixed broadband penetration is low in the market. Airtel is leading with this version of LTE in metro cities, but deployment needs to catch up pace. Despite a weak LTE network in India they should work and embrace the services.
- With changing consumer needs and behavior, diversification is required into Ecommerce, payment banks, and new product categories.
- New taxation policies with a reduction in corporate taxes will significantly increase the profit margins.
- Investment in Broadband services and are in the task of bringing 5G to the end customers.
- Planning to introduce Customer 360, a database of all customer information, would be carried by Airtel.
Threats for Airtel
One of the major threats for Airtel is the heavy competition that it faces from JIO, which has managed to disrupt the telecom industry with its pricing strategy.
- An increase in the cost of technology and employees are affecting the profit margins.
- Cutthroat competition in the market with other players has affected the margins over the last 2-3 years.
- Competitors are paying higher margins to their Dealer/Distributor networks to increase their sales/revenues.
- Inappropriate services provided are upsetting customers and encourage them to shift to their competition via Mobile Number Portability.
- Diminishing the use of landlines in the region affecting the revenues as the users of wireless/smartphones has increased significantly.
This concludes the SWOT analysis of Airtel.
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