Marketing Plan For Airtel Broadband Services

Marketing Plan For Airtel wideband ServicesBharti Airtel (Airtel) is one of the leading providers of telecommunications run in India. The company cracks rambling, wire line, wideband and tv set work. The telemedia serve division which includes services like wideband and so onrecorded revenues of INR30,930.9 jillion ($674.9 gazillion) in FY2009, an add-on of 13.7% over 2008.Bharti Airtel enjoys 13% commercialize parting in the broadband commercialise. The total subscribers for the Bharti broadband are 1.14 one thousand thousand. As per TRAIs annual study, the do of broadband subscribers is growing at a healthy rate of 44% year-on-year basis. The estimated total broadband subscribers by the end of financial year 2011 are going to be around 12.3 million. lucre access has become a necessary service. As per information Monitor, the Indian internet access market grew by 24.7% in 2009 to name a measure of $2,979.3 million. In 2014, the Indian internet access market is point to arrest a value of $6,152.7 million, an add-on of 106.5% since 2009. broadband revolution is upon us, it will be next big thing to Wireless revolution India witnessed in the digest decade.Hence it is imperative for Bharti Airtel to increase its footprint in broadband market. It layaboutnot achieve its heading of being the number one telecom industry in India if it ignores this opportunity.In this report we will discuss the plan how Airtel should increase its market share. As a part of report, we pose done the situational analysis of Airtel the broadband service provider, as well as the broadband market in India. Our objective is to penetrate the authorized broadband market. We have identified the market particle Airtel needs to stern to achieve its objective. We have proposed merchandise action programs considering the 4Ps i.e. Product, Price, Place, and Promotion. In the final section we have analysed the possible impact of these strategies on Airtels bottom lin e.Bharti AirtelBharti Airtel doed formerly cognize as Bharti Tele-Ventures LTD (BTVL) is an Indian company offering telecommunication services in 19 countries. It is the largest cellular service provider in India, with more than 140 million subscriptions as of July 2010. It offers fixed line services and broadband services. The company is structured into four strategic business units Mobile, Telemedia, Enterprise and Digital TV. The mobile business offers services in 18 countries across the Indian Subcontinent and Africa. Telemedia business provides broadband, IPTV and telephone services in 89 Indian cities. Digital TV business provides DTH TV services across India. Enterprise business provides end-to-end telecom solutions to corporate customers and national and international long distance services to telcos. Globally, Bharti Airtel is the 3rd largest in-country mobile operator by subscriber base, behind China Mobile and China Unicom.Airtel commodiousband ServicesAirtel is the l argest private operator having movement in the voice, broadband, IPTV and data. Since launch it has focused on SMB plane section Broadband at Homes. It has launched several services the broadband category ranging from DSL with pep pill 256kbps to 16 mbps. Average Revenue per User ARPU for Quarter ended Jun10 $ 20.6 per calendar month. This atom contributes to 7% of overall revenues of the company. The EBIDTA margin for the product is very high. The total subscribers for the Bharti broadband are 1.14 million. circulating(prenominal)ly Telemedia services which include broadband services contribute near 7% to the companys total revenue. It has its presence in 95 cities across India. Airtel Revenues $8,150.2 million (FY2009), an increase of 38.3% over 2008.Business divisionsContributionRevenues 2009Increase over 2008Mobile services80.5%$5,998.7 million36.8%Telemedia services9.1%$674.9 million13.7%Enterprise services carrier7.1%$527.7 million10.6%Enterprise services corporate3.3% $243.4 million19.9% opposite operations0.1%$7.9 million7.2%Others6.1%$453.9 million29.6%Purpose and MissionBharti Airtel recently announced in the Quarterly presentation to the investors there is strategy is Dominant Broadband in pited 95 cities. With estimated total 12.3 million broadband subscribers in the financial year 2011, to gain about 17% market share the total number of Airtel subscribers needed to be about 2 million.Currently BSNL is a market leader with above 60% market share. Hence it is imperative for Bharti to increase its footprint in broadband market. It cannot achieve its objective of being the number one telecom industry in India if it ignores this opportunity. In this report we will discuss the plan how Airtel should increase its market share.The marketing objectives can be summarized asIncrease total number of subscribers to 2 million by the end of 2011.Resulting in capturing the market share of around 17% for broadband drug users.Increase the contribution of telemedia services which include broadband services to 10%Maintain EBITDA margin of atleast 44%Situational AnalysisCurrent ProductsAirtel currently offers a number of plans at different prices to suit the requirements of the customers.A brief summary of the current plans is as followsPlansTariffsFeatures-offersFeatures-speedAirtel Surf Broadband planAirtel Surf-749 Rs.749 per month Comes with Rs. one C free talk prison term on your Airtel mobile and part with calling value of Rs.100. Speed Day 256Kbps Free Calling measure worthy Rs. 100 Speed Night 1Mbps Free Talktime Airtel Pre-paid expense Rs. 100 Data Transfer Limit 8GBAirtel Surf-899- Rs.899 per month Comes with Rs.100 free calling value on your Airtel fixed line. Speed Day 256Kbps Free Calling Value Worth Rs. 100 Speed Night 256KbpsAirtel Swift Broadband PlanAirtel Swift-1099- Rs.1099 per month Free Calling Value Worth Rs. 100 Browse and transfer loyal at 512kbps. Speed Day 512Kbps Speed Night 512Kbps Data Transfe r Limit unfathomableAirtel Turbo Broadband PlanAirtel Turbo-1299- Rs.1299 per month Comes with free world assort games. Speed Day 512Kbps Free Calling Value Worth Rs. 100 Speed Night 1Mbps Data Transfer Limit UnlimitedAirtel Freedom Broadband PlanAirtel Freedom-1699- Rs.1699 per month Free Calling Value Worth Rs.100 Speed 1Mbps Free Anti virus Worth Rs.100 Data Transfer Limit Unlimited Free Unlimited Gaming Worth Rs.199 Download whatever, whenever without worrying about the bill Free Speed on Demand Worth Rs.100 Free Online background knowledge Worth Rs.99Airtel Freedom-2999- Rs.2999 per month Free Calling Value Worth Rs.300 high gear speed and unlimited downloads bundled with a host of exciting package. Free Anti Virus Worth Rs.100 Speed 2Mbps Free Unlimited Gaming Worth Rs.199 Data Transfer Limit Unlimited Free Online Desktop Worth Rs.99Airtel Velocity Broadband PlanAirtel Velocity-8999- Rs.8999 per month No Free Calling Value Speed 50Mbps Free Anti Virus Worth Rs. one hun dred twenty-five Data Transfer Limit 200GB Free Unlimited Gaming Worth Rs. 199 Free Online Desktop Worth Rs. 99Airtel Velocity-7999- Rs.7999 per month No Free Calling Value Speed 30Mbps Free Anti Virus Worth Rs. 125 Data Transfer Limit 200GB Free Unlimited Gaming Worth Rs. 199 Free Online Desktop Worth Rs. 99Airtel Velocity-4999- Rs.49999 per month Free Calling Value Worth Rs. 300 Browse faster than ever before at 16Mbps. Free Anti Virus Worth Rs. 100 Speed 16Mbps Free Unlimited Gaming Worth Rs. 199 Data Transfer Limit 100GB Free Online Desktop Worth Rs. 99Airtel Broadband Value Combo 749 Plan Monthly Commitment Rs.749 Broadband Data Transfer Limit Unlimited Free Call Value Rs.150 Download Speed 256 KbpsCurrent distribution networkIn this segment, we try to analyze the distribution strategies of Airtel for its Broadband services, and try to compare and contrast them with the strategies employed by its main competitor in terms of market share, BSNL broadband.From the time of its la unch, Airtel tried to position itself as a niche product, charging higher prices for similar products, and expecting the price differential to be covered by the value received by the end user in terms of after sales service, other Value Added Services, Customer Relationship Management etc. While this strategy helped it to gain a sizeable number of loyal customers, with very high preference for the brand Airtel, in absolute terms of market share, it was limited to around 8% of the total broadband market in India, compared to the over 50 % of share commanded by BSNL Broadband.Airtel focused on cajoleing customer help and eventual conversion into customers, by the use of celebrities in advertisements, and trying to communicate its significant value proposition to target customers finished these advertisements. The actual operational lying-in of converting the interested segment into customers was left to a service agent, who conducted all transactions such as filling up of forms, payment of fees and delivery of modems and other supplement at the place of choice of the customer, most often the place of installation, such as the residence or workplace. While this strategy ensured that the customer did not have to leave the comfort of his own environs for subscribing to an Airtel Broadband connection, it also meant that the visibility of Airtel in comparison to its significant competitors was always less. These factors together could be attributed a major portion of the blame for the comparatively low market share of Airtel.Performance Airtel has performed at least as reform, or in some cases, to a much(prenominal) higher standard, with comparison to its competitors, with respect to its backward chain. Airtel sources its modems from Beetel for its Indian and other South Asian markets, which are supplied to its distributors at the state and regional levels, through a employ chain of suppliers. Airtel has internally estimated the efficiency of its backward c hain to be 99.9963 %( Source Company Data), which shows its high dedication and expertise in this area. The distribution to customers is primarily, as mentioned above, through sales representatives, who directly visit the place of installation, and form, to a very high extent, the public image of the company and its products and services, for the general consuming population.BSNL/MTNL While Airtel competes with many other service providers for the uniform market segment, BSNL as the major player and the one with the highest market share (on the basis of actual number of subscriber, BSNL has over 53% of the market share 2009), deserves a special analysis, with focus on its distribution strategies. In the broadband market, BSNL entered with a significant advantage over its competitors. Till the past decade, BSNL was the still provider of fixed line telephones (MTNL for Mumbai and Delhi), and hence could provide the broadband services as a product bundle to its real and new customer s. This made attracting existing customers from BSNL, a major issue for new entrants into the market, as consumers were unlikely to switch from phone numbers and connections, which they had held, in most cases for over a period of 5 -10 years. BSNL focused on distribution of its broadband services through existing telephone exchanges, and its existing network of linemen who were already well known in their neighborhoods. This strategy, bandage playing on the familiar cues for the customers and increasing customer perceptions of trust, also reduced distribution costs for BSNL and led to lower per consumer cost as compared to other consumers. Its modems were sourced from Huawei, a Chinese firm, which again reduced capital costs. However, this had a significant downside in terms of quality of service, with complaints being lodged against disruptions in broadband services at an average estimated rate of 6.3 per day per 1000 consumers within 6 months of launch of the service ( Source T RAI reports)Airtel realized that the existing strong BSNL telephony network, covering around 93 % of the urban fixed population, in 2000, was a major hindrance in its own growth, within one month of launch of its services, and tried to shift its marketing strategy accordingly, something which has been covered in detail in our analysis of Airtel marketing strategies. To give an overview, it has been established that Airtel launched a new bouquet of plans, immediately after launch, to attract the consumer surplus, by targeting the early adopters and pioneers, by providing services at differential prices, something that was not covered by BSNL. The most famous of these plans, is the Unlimited Plan which provided 256 kbps of speed at Rs. 599 per month, along with unlimited surfing and downloading. This product went on to revolutionize the market, with copycat products being launched by almost all competitors.Current CompetitorsThe TRAI report FY 2010 related to broadband services descri bes the following subscriber base statistics for the major players in the sector. The total size of the subscriber base for broadband in this time period stood at 8773096.These figures can be further translated into a percentage wise holding which gives a clearer split of the market in terms of Airtel and its broadband competitors.Locations/Coverage take away for MTNL which operates only in Mumbai and Delhi (and hence falls under category B), the others have a pan-India presence and fall under category A. BSNL of course, is present everywhere buy food for Mumbai and Delhi.An interesting case in is that of Hathway which offers broadband services only in Mumbai, New Delhi, Bangalore, Chennai, Hyderabad, Pune, Nashik, Ludhiana, Jalandhar, Mysore and Baroda but accounts for 3.5% of the subscriber base. In stark contrast is the Chennai based ISP Sify, which provides broadband in almost 86 cities across all states except for Himachal Pradesh and the northeastern states barring Assam, but still accounts for only 2.24% of the total subscriber base.Products/PackagesMost competitors offer packages in both pay and postpaid plans. Reliance and TATA offer wired as well as wireless connections, both are offered in prepaid and postpaid plans. A restriction could be placed on the amount of money of data downloaded in a plan or on the number of hours it could be used in a month, thereby making it a Limited plan. The opposite of this is the Unlimited plan.MTNL MTNLs package is called the MTNL Triband. It offers unlimited plans in speeds ranging from a minimum of 320 KBps be Rs. 395 per month all the way up to a maximum of 4 MBps costing Rs. 9999 per month.In the limited plans category, MTNL offers a basic plan for Rs. 49 per month for a variable speed from 256 KBps 2 MBps restricted by a limit of 200 MB per month. Anything beyond 200 MB will be charged at Re. 1.00 per MB. There is a diverseness of these plans which range up to Rs. 1499 per month for variable speeds from 2 56 KBps-4 MBps restricted by an 8 GB per month download limit and an additional charge at the rate of Re. 0.70 per MBBSNL BSNL offers plans to the home user ranging from variable speeds of 256 KBp-2 MBps at a minimum monthly charge of Rs 125 restricted to 150 MB data download per month up to 2 MBps for minimum charge of Rs. 3300 per month.Marketing StrategySegmentation TargetingThe household acuteness and number of Internet users in India saw growth of 2,243% from 2000-2007, whereas PC perspicacity increased by 267%. According to the statistics of the Internet and Mobile Association of India (IAMAI), in 2007 33% of alive(p) Internet users in India are working men and 11% are working women. College students account for 21% and schoolchildren make up 14% of active Internet users. Older men and non-working women account for the remaining 21%. According to the association, 16.8 million active Internet users in 30 cities access the Internet from cybercafs. However, the share of cyber caf as main access point is falling as more people have the ability to access the Internet from their offices. This could be due to an increase in the number of people working in the IT/ITES sector. Usage of the Internet in schools and colleges increased due to the introduction of computers and the Internet in the educational system. fortunate broadband policy and other initiatives by the IT and Telecom Ministry have encouraged Internet use by the masses. Internet usage is mainly prevalent in urban areas since, as most of the matter on the Internet is in English, its usage is restricted to the population familiar with English. Another barrier to increased Internet penetration is the exposure to using a PC. In the future, increased Internet penetration would depend on increased literacy, PC education and vernacular content on the Internet.Source IAMAIHence we can conclude that majority of the users of internet are College going students (21%) and working men (33%) and most of the us ers are English verbalise based out of cities.So we can deduct that the segmentation variables in our case would beAgeOccupationLocationAs Airtel broadband has its presence in 95 cities hence the location part of the segment is already in place. Lets analyze the various segmentsCollege Going StudentHeavy users of internet,Demand High speed networkWorking ProfessionalLargest in terms of market sizeHeavy usersDemand for high speed networkNon-working womenCasual users, time spend on internet is much less than time spend by college going student and working professionalIndifferent to network speedPrice SensitiveOlder MenIndifferent to network speedPrice SensitiveSchool ChildrenLimited purchasing position, generally provided by parentsAirtel wants to increase its market share hence criteria for evaluation before targeting the market segment should be in line with marketing objectives. Hence to increase market penetration it can look at each segment based onMarket Size fulfilment of Usa gePurchasing PowerAs market size is evident from the internet usage data provided by the IAMAI we can say Working professionals and college going student forms the majority of market share.For purchasing power we need to look at the average disposable income and monthly expenditure of the segments.Expenditure by Type of Household 2009Source Euromonitor InternationalKey A. viands and non-alcoholic beverages B. Alcoholic beverages and tobacco C. Clothing and footwear D. Housing E. Household goods and services F. Health goods and medical services G. Transport H. Communications I. Leisure and recreation J. learning K. Hotels and catering L. Miscellaneous goods and servicesNon working woman, School going children, college going student have limited incomes however working professional can run across this criteria. As stated by above graph and average household spends about 8-15% of their income on communications. However, given the couple with children also spends nearly same amount o f money on communications school going children can be indirectly targeted by targeting working professionalLets evaluate each market segment on these criteria by plotting a matrix and assigning grade points to each segment. (1 being lowest and 5 being highest)Evaluation CriteriaMarket SizeExtent of UsagePurchasing powerTotalCollege Student44210Working Professional55515Non-working women4228School Children2316Older men2226Hence we can say to meet our objectives we can target Working Professional and College going student.Sales objectivesLet us analyze these two segments on the basis of meeting our sales objectives.Objective Total Subscribers by 2011 = 2 millionCurrent Subscribers = 1.14 millionAdditional Subscribers to be added for the next year = 0.86 millionExpected Market sizeSegment20102011Net IncreaseCollege1.84172.5967970.755097Working Professional2.89414.0806811.186581Hence out of new added 1.94 million subscribers we need to target nearly 0.8 million subscribers to Airtel bro adband. This assumption is totally based on new addition. Switchers can make the total subscribers to go beyond the stated objectives.So Target Segments for the AirTel Broad Band are College Going students and Working Professionals.Connections forecastSubscribersBase (in millions)QE Mar2009QE Mar2010QE Jun 2010Y-on-YGrowthQE Jun 2011BroadbandConnections(=256 Kbpsdownload speed)6.228.778.96041%14.24(assuming 60% growth)Airtel Connections0.871.14011.1648(13% of market share)84%2.4208(17% of market share)Revenue forecast(in mn)Jun-09Jun10Y-on-YGrowthJun 11Total Revenue8,5518,9605%9408EBITDA3,4663,93814%4489EBIT1,7971,9106%2025EBITDA / Total revenues40.5%44.0%PositioningSince college students and working professionals are the target segment for Airtel broadband, the following points can be definedPoint-of-DifferenceAirtel should aim at being differentiated from its competitors on the following attributesHigh Performance Airtel should create a strong association between its offerings and high performance at the product/service level primarily by concentrating onproviding extremely fast speeds lucid connection speeds across times and distanceReliability Airtel broadband should concentrate on being characterized byhigh up timeslow mischance rates and connection drops24/7 customer assistance and support andreduction in service level agreement metrics like opposite times and problem resolution timesAffordability Airtel sells its product offerings at a higher price compared to its competitors. This will work for professionals who are well settled and have a steady source of income, but not for college students and price sensitive young professionals who are just a few years into their careers.Customization Airtel can do well to offer different propositions to different target segments based on an understanding of different needs that college students have from working professionals. This could translate into a better product-price offering that takes into account the Internet needs of the targeted users instead of just basing the proposition on speeds, time limits and prices.Points-of-ParityHigh speed Most consumers do tend to accessory the word broadband with always-on Internet connections that offer perceptibly higher speeds than narrow band or dial-up connections.Based on these points and the target segment, we can arrive at a positioning strategy that is built around its product-pricing mix as followsToCollege students and young working professionalsAirtel Broadband offersthe best broadband experience for every userAmongall broadband providersBecauseit offers extremely high performance backed by reliability and affordabilityPricingComparison of Airtel Top 5 Selling Plans with Competition (BSNL) supplierPlanCostGB LimitDownload SpeedAdditional Download Rs/MBOthersAirtelImpatience 799799520.2BSNLBBG7004AirtelImpatience 899899640.1BSNLBB Home Combo ULF 900900UL4 (256 (8GB)NAAirtelSurf 59959930.50.2BSNLBBG FN 5005002.50.6Night ULAirtelSurf 6996 99410.2BSNLBBG 70070040.5Airtel browser 899 Unlimited899UL512 (256 (8GB)NABSNLBB Home Combo ULF 900900UL4 (256 (8GB)NABSNLBB Home Combo UL 750750UL512NAA comparison of Airtels top selling plans with that of the rivalry shows intelligibly that the competition is available at a cheaper rate, on almost all the plans. However the difference is not much. Recommendation Airtel should go in for a competition pricing strategy.Other AvenuesBSNL Broadband also has the prepaid option. Just like a mobile phone, one can either buy a value card that will extend the download limit or a validity card that will extend the validity. It is easily possible for Airtel to match BSNL pricing in this regard. It would also benefit a number of sporadic and variable users of the Internet.Recommendations for Distribution StrategyBased on this analysis, we wish to recommend certain changes in the distribution strategy for Airtel broadband services. The backward chain is operating at optimum, or better than op timum levels, and requires, at this time, no modifications. The forward chain,may however, be moderately modified to help us achieve our marketing objectives better. Some of these are listed beneath, and detailed financial analysis, may be done, based on data annexed to this reportOpen new CSC centers Existing Customer Service Centres are calculated to be at a density of 1 per 9.63 sq. km of urban area, whereas for the same regions, BSNL has telephone exchanges, which provide a large boutique of services at 1per 4.81 sq. km.Diversify scope of CSC centers Current CSC centers have been reduced to bill collection and essential consumer redressal agencies, which does not provide significant per acreage returns. Other competitors of Airtel, especially in the GSM arena, such as Vodafone ( Vodafone Stores) and Reliance ( Reliance World), provide a wide variety of services and products at the same location. Airtel, due to its late adoption of this strategy, will have to primarily follow the trends set by the earlier entrants and try to merge its own position. This strategy has significant benefits, not only for broadband plans, but also for the entire range of products.Promotion StrategiesAirtel Broadband has a mix of current promotion strategies that pan across online paid ads, websites, tie-ups with major names in personal computer vendors, TV ads, print ads, cold calls. Some of them are cited belowAdvertisements on Google and FacebookOne of the promotion strategies used by Airtel is use of ads on Google and Facebook. One such advertisement is show belowThe advantage of such advertisements is that they reach out specifical