Marketing Plan For Airtel Broadband Services

marting envision For Airtel wideband ServicesBharti Airtel (Airtel) is single of the leading providers of telecommunications serve in India. The confederation flings brisk, wire atmosphere, wideband and television go. The telemedia serves form which includes go like broadband etc recorded revenues of INR30,930.9 one thousand billion ($674.9 one million million million) in FYcc9, an adjoin of 13.7% over 2008.Bharti Airtel enjoys 13% trade sh be in the broadband commercialize. The sum arrive subscribers for the Bharti broadband argon 1.14 million. As per TRAIs annual report, the procedure of broadband subscribers is festering at a healthy rate of 44% social class-on-year basis. The estimated total broadband subscribers by the end of financial year 2011 atomic number 18 going to be around 12.3 million. profit approaching has become a necessary service. As per Data Monitor, the Indian net income approach grocery store place grew by 24.7% in 2009 to reach a value of $2,979.3 million. In 2014, the Indian net access merchandise is forecast to gift a value of $6,152.7 million, an subjoin of 106.5% since 2009. broadband revolution is upon us, it result be next big thing to radiocommunication revolution India witnessed in the last decade. and then it is imperative for Bharti Airtel to increase its footfall in broadband market. It tailnot action its objective of universe the lean one telecom indus bear witness in India if it ignores this opportunity.In this report we allow for discuss the conception how Airtel should increase its market share. As a let out of report, we bind done the situational analysis of Airtel the broadband service provider, as rise up as the broadband market in India. Our objective is to penetrate the current broadband market. We befool identified the market member Airtel needs to target to achieve its objective. We have proposed marketing action programs considering the 4Ps i.e. Product, Price, Pl ace, and Promotion. In the final section we have analysed the possible impact of these strategies on Airtels bottom line.Bharti AirtelBharti Airtel placeed formerly cognize as Bharti Tele-Ventures LTD (BTVL) is an Indian company offering telecommunication operate in 19 countries. It is the largest cellular service provider in India, with more than one hundred forty million subscriptions as of July 2010. It offers fixed line services and broadband services. The company is structured into four strategic line of credit units wide awake, 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 set services in 89 Indian cities. Digital TV business provides DTH TV services across India. Enterprise business provides end-to-end telecom solutions to corporate nodes and national and international long distance services to telcos. Globally, Bharti Airte l is the 3rd largest in-country mobile operator by subscriber base, behind chinaware Mobile and China Unicom.Airtel wideband ServicesAirtel is the largest private operator having comportment in the voice, broadband, IPTV and information. Since launch it has focusinged on SMB segment bounteousband at Homes. It has launched several services the broadband social class ranging from DSL with speed 256kbps to 16 mbps. Average Revenue per User ARPU for Quarter ended Jun10 $ 20.6 per calendar month. This segment contributes to 7% of overall revenues of the company. The EBIDTA margin for the mathematical product is in truth spunky. The total subscribers for the Bharti broadband are 1.14 million. Currently Telemedia services which include broadband services contribute about 7% to the companys total revenue. It has its presence in 95 cities across India. Airtel Revenues $8,cl.2 million (FY2009), an increase of 38.3% over 2008.Business divisionsContributionRevenues 2009Increase ov er 2008Mobile services80.5%$5,998.7 million36.8%Telemedia services9.1%$674.9 million13.7%Enterprise services holder7.1%$527.7 million10.6%Enterprise services corporate3.3%$243.4 million19.9% separate 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 outline is Dominant wideband in targeted 95 cities. With estimated total 12.3 million broadband subscribers in the financial year 2011, to gain about 17% market share the total physical body of Airtel subscribers needed to be n primeval 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 assholenot achieve its objective of being the reduce 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 users.Increase the contribution of telemedia services which include broadband services to 10%Maintain EBITDA margin of at to the lowest degree 44%Situational AnalysisCurrent ProductsAirtel currently offers a number of plans at different prices to suit the requirements of the customers.A brief thick of the current plans is as happensPlansTariffsFeatures-offersFeatures-speedAirtel Surf Broadband planAirtel Surf-749 Rs.749 per month Comes with Rs.100 wanton talk succession on your Airtel mobile and rationalise calling value of Rs.100. drive on solar day 256Kbps escaped Calling measure worth Rs. 100 accelerate iniquity 1Mbps Free Talktime Airtel Pre-paid cost Rs. 100 Data Transfer Limit 8GBAirtel Surf-899- Rs.899 per month Comes with Rs.100 free calling value on your Airtel fixed line. despatch twenty-four hours 256Kbps Free Calling entertain Worth Rs. 100 zipper shadow 256KbpsAirtel Swift Broadband PlanAirtel Swift-1099- Rs.1099 per month Free Calling observe Worth Rs. 100 cut back and d sufferload fast at 512kbps. Speed Day 512Kbps Speed Night 512Kbps Data Transfer Limit bottomlessAirtel Turbo Broadband PlanAirtel Turbo-1299- Rs.1299 per month Comes with free world class games. Speed Day 512Kbps Free Calling Value Worth Rs. 100 Speed Night 1Mbps Data Transfer Limit inexhaustibleAirtel Freedom Broadband PlanAirtel Freedom-1699- Rs.1699 per month Free Calling Value Worth Rs.100 Speed 1Mbps Free anti computer virus Worth Rs.100 Data Transfer Limit eternal Free Un express mail Gaming Worth Rs.199 transfer whatever, whenever without pitiful about the bill Free Speed on Demand Worth Rs.100 Free Online Desktop Worth Rs.99Airtel Freedom-2999- Rs.2999 per month Free Calling Value Worth Rs.300 steep speed and unlimited downloads bundled with a host of raise package. Free Anti computer viru s 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. 125 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 dispersion networkIn this segmen t, we try to analyze the distribution strategies of Airtel for its Broadband services, and try to compare and contrast them with the strategies employ by its main competitor in terms of market share, BSNL broadband.From the time of its launch, Airtel tried to position itself as a niche product, charging graduate(prenominal)er(prenominal) prices for resembling products, and expecting the price differential to be covered by the value trustworthy by the end user in terms of after gross sales service, opposite Value Added Services, Customer Relationship Management etc. piece this outline helped it to gain a sizeable number of loyal customers, with truly 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 focussed on attracting customer attention and eventual conversion into customers, by the use of celebrities in advert isements, and essay to communicate its evidential value proposition to target customers through these advertisements. The true(a) operational task of converting the interested segment into customers was left to a service agent, who conducted all transactions such as filling up of forms, compensation of fees and delivery of modems and other paraphernalia at the place of choice of the customer, virtually often the place of installation, such as the residence or workplace. succession this strategy ensured that the customer did not have to leave the comfort of his own environs for subscribing to an Airtel Broadband connexion, it in any case meant that the visibility of Airtel in comparison to its prodigious competitors was always less. These factors together could be attributed a major(ip) portion of the piece for the comparatively low market share of Airtel.Performance Airtel has performed at least as better, or in some cases, to a much higher(prenominal) standard, with com parison 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 devote chain of suppliers. Airtel has internally estimated the efficiency of its backward chain to be 99.9963 %( solution 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 spell Airtel competes with many other service providers for the aforementioned(prenominal) 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 speci al analysis, with focus on its distribution strategies. In the broadband market, BSNL entered with a significant usefulness over its competitors. Till the past decade, BSNL was the only provider of fixed line telephones (MTNL for Mumbai and Delhi), and hence could provide the broadband services as a product bundle to its existing and new customers. 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 menstruation 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, opus playing on the familiar cues for the customers and increasing customer perceptions of trust, also decreased 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 cut down 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 ( reference point TRAI reports)Airtel realized that the existing strong BSNL phone 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 n ot covered by BSNL. The most famous of these plans, is the Unlimited Plan which provided 256 kbps of speed at Rs. 599 per month, on 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 describes 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 deliverd into a percentage wise(p) holding which gives a clearer split of the market in terms of Airtel and its broadband competitors.Locations/CoverageExcept for MTNL which operates only in Mumbai and Delhi (and hence falls low category B), the others have a pan-India presence and fall under category A. BSNL of course, is present everywhere except for Mumbai and Delhi.An interesting case in is that of Hathway which offers br oadband 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 found ISP Sify, which provides broadband in almost 86 cities across all states except for Himachal Pradesh and the northeastern states barring Assam, but save accounts for only 2.24% of the total subscriber base.Products/Packages virtually competitors offer packages in two prepaid and postpaid plans. creed 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 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 stripped of 320 KBps costing Rs. 395 per month all the way up to a ma ximal 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 curtail by a limit of 200 MB per month. Anything beyond 200 MB will be stretchd at Re. 1.00 per MB. There is a variety of these plans which range up to Rs. 1499 per month for variable speeds from 256 KBps-4 MBps limit 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 marginal 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. bungleketing schemaSegmentation TargetingThe household cleverness and number of Internet users in India saw growth of 2,243% from 2000-2007, whereas PC perceptiveness increase by 267%. According to the statistics of the Internet and Mobile Association of India (IAMAI), in 2007 33% of active Internet users in India are work men and 11% are workings women. College scholars account for 21% and schoolchildren assimilate 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 cybercaf as main access point is move 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 admission of computers and the Internet in the educational system.Favourable 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 message on the Internet is in side of meat, its usage is restricted to the population familiar wi th English. Another barrier to increased Internet keenness 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 users are English Speaking based out of cities.So we can deduct that the division 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 bookmanHeavy users of internet,Demand High speed networkWorking passe-partoutLargest 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 mediumOlder MenIndiff erent to network speedPrice nociceptive inculcate ChildrenLimited purchasing power, 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 of itExtent of UsagePurchasing 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 fluid income and monthly expenditure of the segments.Expenditure by Type of Household 2009Source Euromonitor InternationalKey A. Food 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. ictus H. Communications I. Leisure and recreation J. Education K. Hotels and catering L. Miscellaneous goods and servicesNon working woman, School going children, college going student have limited incomes however working professional can satisfy this criteria. As declared 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 of 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 power arriveCollege Student44210Working Professional55515Non-working women4228School Children2316Older men2226Hence we can say to pile up 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 broadband. 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%2025 EBITDA / Total revenues40.5%44.0%PositioningSince college students and working professionals are the target segment for Airtel broadband, the following points can be delimitatePoint-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 speedsconsistent connection speeds across multiplication and distanceReliability Airtel broadband should concentrate on being characterized byhigh up generationlow failure rates and connection drops24/7 customer assistance and support andreduction in service level agreement metrics like turnaround 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 no t for college students and price mass medium 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-pricing offering that takes into account the Internet needs of the targeted users quite of just basing the proposition on speeds, time limits and prices.Points-of-ParityHigh speed Most consumers do tend to associate 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 offer s extremely high performance backed by reliability and affordability setComparison of Airtel Top 5 Selling Plans with Competition (BSNL)ProviderPlanCostGB LimitDownload SpeedAdditional Download Rs/MBOthersAirtelImpatience 799799520.2BSNLBBG7004AirtelImpatience 899899640.1BSNLBB Home Combo ULF 900900UL4 (256 (8GB)NAAirtelSurf 59959930.50.2BSNLBBG FN 5005002.50.6Night ULAirtelSurf 699699410.2BSNLBBG 70070040.5AirtelBrowser 899 Unlimited899UL512 (256 (8GB)NABSNLBB Home Combo ULF 900900UL4 (256 (8GB)NABSNLBB Home Combo UL 750750UL512NAA comparison of Airtels top change plans with that of the competition shows clearly 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 cast up the download limit or a validity card that will extend th e 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 optimum levels, and requires, at this time, no modifications. The forward chain,may however, be roughly modified to help us achieve our marketing objectives better. Some of these are listed below, 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 collecti on and primary consumer redressal agencies, which does not provide significant per land area 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 consolidate its own position. This strategy has significant benefits, not only for broadband plans, but also for the absolute range of products.Promotion StrategiesAirtel Broadband has a mix of current forward motion strategies that pan across online paid ads, websites, tie-ups with major names in in-person 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