The Business Model of Airtel - Diving deep into How exactly Airtel makes money

The success of a company is just the tip of the iceberg below which lies the business model of the company.

Hard work and dedication to the services, funds from other companies, and robust marketing strategies are some prominent factors that drive a company towards success, but the business model can be deemed as the base of the company, on which the business is built. The business model is nothing but a company’s plan to make a profit which is why it plays a major role in new and well-established companies as well.

With the world today that is encouraging more and more businesses to grow, only some manage to evolve to their full potential. One of such businesses that have stood up with their robust business model and have become a key player in the telecommunication industry is Airtel. Here, we will walk through their business model and how it helped the company carve a niche for itself.

Bharti Airtel: An Introduction
Business Model of Airtel
How does Airtel make money through its business model?
Airtel’s competition with other companies
FAQ

Bharti Airtel: An Introduction

Founder: Sunil Bharti Mittal

Year of inception: 1995

Bharti Airtel, also known as Airtel, is one of the leading multinational telecommunication service providers of India based out of New Delhi, India. It boasts of over 457 million subscribers, holds second place in India’s mobile networks and third place in the world’s mobile networks. Millward Brown and WPP plc have named Airtel as India’s second most valuable brand in their Brandz ranking. In addition to these, Airtel is the first-ever multinational telecommunication service to launch 4G in India.

Areas of Operation

Initially starting from India, Airtel has witnessed significant growth and is now successfully operating in around 18 countries, which includes South Asia, Africa, and the Channel Islands.

Key Products and Services

Over time Airtel has expanded as a company and has begun to offer a wide range of services that include 2G, 4G, 4G+ networks, fixed-line broadband, and voice services.

Here’s a quick rundown along with the main service belts that Airtel offers:

• Telemedia - Under the Telemedia segment Airtel offers broadband internet via DSL, leased internet lines, MPLS solutions, IPTV, and fixed-line telephone services. Their control over the Telemedia segment allows them to offer differentiated and converged solutions to customers.
• Television - Airtel is also associated with the provision of the direct television network or DTH (Direct-to-home) TV services across the nation with their Airtel digital TV.
• Mobile data - Airtel also provides BlackBerry services that work on push-on technology, USB modems, Airtel data cards, easy mail, and its own mobile application that helps its customers monitor all their services and packages bundled in on the app.
• Airtel business - Airtel Business comprises of six main products, which are, Cloud and managed services, digital signage, NLD/ILD connectivity, dongles for Wi-Fi, voice solutions, and conferencing solutions that serve a range of industry verticals including BFSI, IT/ITeS, manufacturing, hospitality, and government.
• Android Tablets - With a view to capitalize on the growing demands for cost-effective, portable devices, Airtel has launched its first 7-inch tablet running on the Android operating system in 2011 via Beetel Teletech Ltd.
• Mobile wallet service - Airtel offers the mobile wallet service which allows Airtel users to make payments for utility bills, goods, and services in addition to money transfers across networks. It is done using the airtel money app that runs on Android, iOS, and windows.

Target Audiences of Airtel

Being a telecommunication service provider the target audience of Airtel is really wide and is not influenced by age, gender, place of residence, income, social distinction, and any such factors. Airtel has an array of different services that attract both individuals and companies across varied industries.

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Business Model of Airtel

Airtel showcases an exemplary business model for others to follow irrespective of the industry that each belongs to. Airtel focuses mainly on two things: customer acquisition and servicing (retention) and business development or expansion. Their vision and mission clearly state that their ultimate goal is to be a globally admired telecom service and to mainly focus on customer satisfaction and provide them innovative services that tend to be cost-efficient products.

The other functions that include hardware, network management, backend applications (billing, etc.), and other services are outsourced. This business model has been pioneered by Airtel and inspires many newcomers in the game.

What is unique in the business model of Airtel?

As we have already mentioned, Airtel believes in outsourcing everything else apart from their marketing, sales, and finance operations and the 'minutes factory' model of low cost and high volumes.

Airtel is widely recognized as the pioneer of such a strategy, inspiring tens of thousands of other brands and entrepreneurs. The equipment of Airtel is also provided and maintained by other companies namely Ericsson, Huawei, and Nokia Networks; and US-based Amdocs provides Airtel with the IT support that the brand requires.

In its business model, Airtel has underlined some key points that they term as strategic business pillars for their businesses. These are:

1. Focus on Quality customers - Airtel aims to provide value for their customers along with the differentiated services that they provide.
2. Opening doors for new revenues - The brand is now helping its non-mobile wings like Airtel Business, Digital TV, and Broadband services to grow along with an eye to bring in new verticals.
3. Providing Top-of-the-line services - Airtel aims to bring in the best possible network quality to their customers with the help of cutting-edge infrastructure and advanced automation tools and technology.
4. Employee-centric culture - Along with investing huge on the digital talent, Airtel makes sure that it hands over significant roles to each of its employees and ensures they grow along with the firm.
5. Eco-friendly approach - Airtel advocates the reduction of overuse of resources and cutting down its operational expenses to the minimum with an eye on the environment.

Along with its basic strategies as Airtel business plan, it is working on future strategies, to retain its top position, such as bringing more innovation in its services, exploring new plans and products, providing valuable and quality services to its customers.

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How does Airtel make money through its business model?

Airtel makes money through all the products and services mentioned above. It uses a B2C model to derive income from its customers and a B2B model, registered under Airtel Business that helps startups and SMEs. Airtel stands out with its unique business model that aims to provide the customers with the best services at competitive prices.

It is to be remembered that Airtel is not one of the companies that have achieved fast growth but one that stands as a market leader purely because it has innovated things and earned its place. Furthermore, it is also one of the few telecommunications services providers that have realized the importance of value-added services (VAS) right away in the start, which further eased its way.

Airtel’s competition with other companies

Airtel snatched the market from Essar by providing services before them and holding the position until them with the help of high usage premium clients.

Telecommunication services mainly have two important characteristics which are quality and price of the service, with that said, Airtel makes sure that they establish service by giving high importance to the characteristics and being a high-quality service provider with a premium image.

Conclusion

Airtel has witnessed gradual growth and has emerged as a promising brand in the telecommunications sector with the help of a foolproof business model, a meticulous understanding of its key concepts, years of hard work, tireless efforts, and absolute dedication. Airtel success story surely is a huge inspiration to legions of other businesses across different domains.

FAQs

What is the revenue of Airtel?

The revenue of Airtel was ₹89,473 crore (US$13 billion) in 2020.

Who is the CEO of Airtel?

Gopal Vittal is the current CEO of Airtel.

What is the debt of Airtel?

In the financial year 2020, Bharti Airtel Limited reported a net debt of about 1188 billion Indian rupees.