Bharti Airtel’s Growth Strategy :Acquisition of Zain 1

Bharti Airtel Limited is a global telecommunications company with its footprint in 21 countries across
Asia and Africa. Based out of New Delhi, India, Bharti ranks amongst the top 4 mobile service providers
globally in terms of subscribers. In India the company provides – wireless and fixed line services;
mobile commerce; high speed DSL broadband; IPTV; Direct to Home (DTH) services; and enterprise
services including national & international long distance services to carriers. In the rest of the
geographies, it offers 2G, 3G wireless services and mobile commerce. Bharti Airtel had over 307 million
customers across its operations at the end of November 2014. (See: http://www.airtel.in/about-
bharti/about-bharti-airtel)

Compared to its other Indian contemporaries, Bharti chose an aggressive growth strategy of expanding
outside India along with pursuing penetration growth in the domestic Indian market and arguably was
the first telecom service company of Indian origin to do so. In its inorganic global expansion strategy,
the company acquired Kuwait based Zain Telecom’s African business in 2010 for $10.7 billion (Rs.
48000 crores), which was the second biggest acquisition by any Indian company till that time. Bharti
was to paying $8.3 billion upfront and $700 million after a year. It also took over approximately $1.7
billion of Zain's debts as on December 31, 2009 (NDTV, nd). The African business was aimed to widen
Bharti's reach, hitherto restricted to Asia and Indian Ocean region with businesses in Sri Lanka,
Bangladesh and Seychelles.

Five years down the line the acquisitions are not looking very rosy and as a result the company
has “ signed a dealto sell 100 per cent of its operation in Burkina Faso and Sierra Leone to Orange SA
for around $900 million. (Rs 6030 crores), but its exclusive talks to sell its businesses in Chad and
Congo Brazzaville to the French company lapsed (ET Bureau, 2016). Airtel has been trying to sell its
operations in Burkina Faso, Chad, Congo Brazzaville and Sierra Leone, all Francophone or non-
English speaking markets in Africa, a continent where the company has been making losses since its
entry in 2010, which has been dragging the carrier’s consolidated financials (ET Bureau, 2016). The
company in 2016, had to sell the same assets which it thought most precious and acquired in 2010.,can
we the company one s

Airtel had always adopted various cutting edge strategies which enabled to be one step ahead of
competition. From acquiring regional operators in its early years, rebranding entire operations under one
umbrella to outsourcing activities to various corporations, Airtel always set standards in the industry.
Airtel built a smart “Minutes Factory” model2 aiming at low cost and high volume output. By

1
Written by Dr Ahindra Chakrabarti , Professor, Great Lakes Institute of Management ,Gurgaon and Dr. Venkatesh
Umashankar, Professor, Great Lakes Institute of Management, Gurgaon, India.

2
Airtel outsourced network planning and IT backbone – considered core to the business – and converted its fixed costs to
variable costs. Airtel was able to target millions of pre-paid customers that the subscriber-led model didn’t allow it to. This
allowed Airtel to invest a certain minimum amount to set up a network that can handle a threshold level of calls and then wait
for the usage to build. Only when usage started increasing did Bharti invest more in the network (Dharmakumar & Prasad,
2010).

1
 outsourcing daily operations and retaining core functions like finance, sales, marketing and
management, the brand built sustainable business model that worked wonders over a period of time for
the company.

In 2004, Airtel went on an overdrive with very innovative marketing ideas. . The collaboration with
world famous music composer A R Rahman brought out their theme song which was an instant hit
among subscribers. The tune went on to make a unique place in Airtel’s history. The company rebranded
itself in 2010 with a new logo and a new theme song to establish its global identity.

The Airtel Growth Story

At the end of 31st March 2015 customer base of the company was 324.37 million compared to 39.01
million in 2007 (Table-1). Mobile customers increased from 37.14 million in 2007 to 310.88 million in
2015. Growth rate of mobile customers during the period has registered a CAGR of 30.42 percent while
total customer base has registered a CAGR of 30.31 percent. Broadband & telephone services has
increased from 1871 thousand in 2007 to 3411 thousand in 2015. Digital service customer base
introduced during 2009 had grown from a base of 45 thousand to 10073 thousand in 2015.

Table-1: Services expansion of Airtel

Particulars Financial Year Ended March 31

2007 2008 2009 2010 2011 2012 2013 2014 2015
Total customer 39,012 64,268 97,593 137,01 220,878 251,646 271227 295948 324368
base (‘000) 3
Mobile services 37,141 61,985 94,462 131,34 211,919 241,148 259844 283580 310884
(‘000) 9
Broadband & 1,871 2,283 2,726 3,067 3,296 3,270 3283 3356 3411
Services (‘000)
Digital TV - - 405 2,297 5,663 7,228 8100 9012 10073
services (‘000)
(Source: Compiled by authors from various management presentation of the company)

Table-2: Performance Indicators: India

Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015
Total Subscribers (million ) 206 209 212 217 226
Voice Realization per minute (paisa) 37.16 38.08 37.69 37.67 36.22
Minutes on Network (million) 246843 270827 263905 267485 277869
Data Transfer (Billion megabytes) 47.7 55.6 67.7 77.3 86.6
(Source: Compiled by authors from various management presentation of the company)

Table-3: Performance Indicators: Africa

Q4-2014 Q1-2015 Q2-2015 Q3-2015 Q4-2015

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Total Subscribers (million) 28.2 28.3 29 30.4 31
Total Minutes (Billion) 69.4 69.1 71.4 74.6 76.3
Mobile Money (US$ million) 2200 2186 3345 2925 2892
Data Transfer (Billion megabytes) 6.11 6.54 8.06 9.48 11.25
ARPU (US$) 5.5 5.6 5.4 5.1 4.4
ARPM (USc) 4.1 4.1 3.9 3.6 3.2
(Source: Compiled by authors from various management presentation of the company)

Domestic operating environment

With the resurgence in the Indian economy, the mobile sector is poised to achieve a higher growth
trajectory, as even now, India is amongst the world's lowest telecom penetrated countries having an
overall teledensity of 79.9 percent,with the urban teledensity pegged at 149.7 percent and the rural
teledensity at 48.6 percent (TRAI, 2015).The existing customers are increasing their mobile telephoney
spends to access internet from their mobile. With optimum network investment, increased spectrum
portfolio, market place agility, customer centricity, high brand salience, rising free cash flows and a
strong balance sheet, the company had given a command performance in India – provided leadership.
As competition intensity declines, overcapacity phase is likely to come to an end and investments
started yielding returns, Airtel was optimistic of further consolidating its standing in the Indian wireless
market3. Early trends indicate that the mobile broadband era has arrived in India. With the number of
mobile users in India breaching the 1 bn mark (1.003 bn) in October 2015 (Trak.in, 2016), along with
the expected higher consumer internet adoption, India is all set to catapult to among the top 3 mobile
broadband markets in the world. Indian companies are well positioned to play a key role in the
emerging broadband market and are steadily transforming themselves to capture higher mobile data
share by acquiring additional spectrum, upgrading technology to 3G and 4G as well as building talent
capability of its employees and partners, as customers adapt to the emerging online lifestyle.

Box-1:Global Business of the Company4

Mobile Service across
20 countries
Telemedia Services
(Fixed line and broad
band)
Tower Infrastructure
Services
Digital TV
Airtel Business (Large
Enterprises & Careers)
The company has 310.9 million wireless subscribers globally. In 2014-15 1.23
trillion minutes of calls were made by consumers and over 333 petabytes of
data over the last year were transferred and the company has 172000 base
station sites.
3.4 million broadband & internet customers who were provides services
across 90 cities.
Bharti Infratel, a sister concern has 37,196 towers across 11 circles. The
company has 42% stake in Indus Tower which has 115942 towers across 15
circles. Current market capitalization of the company is US$11.65 billion.
Pan India DTH, 10.1 million subscribers – company is among top 3 players,
with a coverage across 639 districts.
Over 225,000 Rkms across 50 countries, 5 continents.

3
See Annexure – I.
4
Compiled from the Management Presentation of April 2015 available on the site of the company www.airtel.in
3
The African Dream

It took Sunil Bharti Mittal (Chairman and Group CEO, Bharti Enterprises) three attempts to enter Africa
and he did not walk into a park with his plan to buy Zain Telecom’s African business – he knew very
well it was a rough patch and he needed to be doubly cautious 5. The company felt telecom tariffs were
among the highest in the world in Africa. The opportunity was there to slash prices and increase market
size was enormous. Prior to the Zain acquisition, it looked as if Sunil Bharti Mittal’s play for MTN,
Africa’s largest mobile operator, was an act of great strategic choice. This proved to be a non-starterand
talks were aborted with reports estimating that Bharti spent around $5 million in the four months or so
that it was in talks with the South African telco for what might have been a $23 billion cross-border
merger in 2008 (Mookerji, 2009). On February 15, 2010 when Bharti declared that Zain, the third-
largest telecom operator in that continent, had accepted its bid, it was clear that he would face the
myriad challenges of running a global business.

Bharti Airtel’s home market at this time in 2010, was bleeding in the aftermath of the latest price war.
Indian markets were getting extremely competitive. Nowhere in the world there were a dozen or more
players in one country – whereas India had the unprecedented existence of 12 players. This had already
resulted in a no-holds barred war. Revenues had fallen to as low as half a paise per second. Every
company’s balance sheet was hurting, in 2010 compared to 2009 with Bharti’s revenue growing by
12.16 per cent, EBITDA grows by 10.00 per cent and profit after tax by 14.00 per cent. Fresh spectrum
to improve quality of services wasn’t available. Bharti’s new ventures were nothing much to write
about then - Telecom had sapped the energy of the company for it to concentrate on the group’s
insurance venture; in retail they had partnered with Walmart to enter into the Indian market, everybody
was struggling including Bharti. All these ended up in the company refocusing on their best bet -
telecom. The only emerging market that could have offered scale and future growth was Africa.6 The 53
countries that made up Africa had a combined population of a billion people. That was almost as big as
India and only a little smaller than China, where Bharti can’t go. Only two out of five African countries
had access to mobile services at that time. The demand for mobile services was growing at an average
rate of 25 per cent across the top 16 African markets. African countries were poor as well, just like large
parts of India.

5
Excerpts from company Annual Report 2010-11 – Sunil Mittal, CEO, wrote to shareholders: “Last June, we turned a new
chapter in the history of our company, when we set foot in Africa, widely referred to as the ‘last frontier of growth’. In one
sweeping move, we extended our mobile network across 15 new countries in the continent. The move truly heralded the
arrival of Bharti Airtel on the global telecom map. Although we already had a multi-country presence in South Asia, entry
into Africa introduced a paradigm shift in how we looked at the world and how the world looked at us.”

6
Excerpts from company Annual Report 2010-11 – Sunil Mittal, CEO, wrote to shareholders: “Our entry into Africa is
perfectly aligned with the emerging global reality, where future growth is increasingly going to be rooted in emerging and
developing economies. In fact, Africa and India are predicted to be the fastest growing regions in the global economy with
average annual real GDP growth estimated at 7 percent and 8 percent, respectively, between 2010 and 2050.” “Entry into
Africa has changed our lives enormously. Our global expansion is anchored in our strategy of transplanting our successful
business model and blending it with local needs. The challenge of operating in multiple socio-cultural, political and
regulatory environments is obviously there. The bigger challenge for the company, however, is in building a unified global
character embodying the highest standards of corporate governance that Airtel is so proud of. In the last ten months, we have
initiated synchronized action on multiple fronts – people leadership, brand presence and the business eco-system.”
4
Market Reaction

The Indian stock market did not view this acquisition of Zain by Bharti Airtel in the same way as the
company may have imagined. Bharti’s share fell by 9.22 per cent on February 15, 2010, the day it
announced the Zain deal. The reaction was quite opposite in Kuwait, the home country for Zain, where
the market soared 126 points, the largest single day gain in over six months. Regulatory difficulties of
operating in so many African countries; repatriation of money from these countries; lack of clarity on
mobile technology in Africa – were seemingly the issues driving market sentiments.

There were many positive views about this acquisition by Bharti Airtel. In ndia then the telecom market
were saturating ,with 12 service providers in some of the large circles; there was tremendous pressure
on pricing, margins and customer churns. The country had 500 million consumers already on board, the
next 250 million subscribers will come from bottom-of-the-pyramid markets without adding
significantly to the topline or bottomline. Cash flows of the company have had peaked. This made an
opportune time for India’s leading telcos to look out for Greenfield market. The markets in Europe and
America were already saturated. The Asian and Gulf markets were slowly moving towards the
saturation point. Other geographies were not too attractive except Africa. In the markets of Africa, the
inflection point was then and the growth was likely to move into a different trajectory. Airtel felt -
Africa is where the next phase of growth is, margins that telecom players make there awere higher than
in India.

There were other plusses. “Bharti could also use Africa's underdeveloped telephone infrastructure to its
advantage by leapfrogging into newer technologies, particularly those related to 3G networks." (Nair-
Ghaswalla, 2010). For Sri Sunil Bharti Mittal Africa was the key. Africa presented opportunity for a
variety of reasons. Telecom penetration in African countries varied from 37 per cent to 65 per cent.
There are quite a few market with penetration less than 40 percent. This presented an opportunity for
subscriber growth for Bharti . In Africa tariffs were relatively higher and costs in most telecom
operations could be brought down. Running a profitable operation with low tariffs, driving growth
through rapid addition of subscriber ,could also work in the African markets as well. This could be a
reason why quite a few Indian companies are interested in the geography.” <<Source>>a similarity of
business imperatives and therefore, applicability of business models,” adds Rohit Goel of AXE
Consulting . “Several African markets have relatively low penetration levels and promise strong growth
for telecom.” <<Source>>

“The African market is homologous to the Indian market in terms of its structural
similarities,” says Goel “Africa has a population of one billion, similar to India’s 1.2 billion.
Both Africa and India have disparity in income distribution and a high proportion of low
income population. The CINI index, a measure of the degree on inequality of distribution of
wealth, is 46.2 for Africa compared to 32.5 for India. In Africa, as in India, higher degree of
poverty is not synonymous with low adoption rates. Large distances, the informal job market
and lower penetration of fixed-line telephony have increased the importance of the mobile
phone in the citizen’s life.”
But Africa has its dangers too. There are many countries, and a great degree of variation. You can’t go
in with a one-size-fits-all frame of mind. “There are greater political risks and economic risks,” says
Abheek Dave , telcom strategist, New Age Financial Services. “Inflation, for instance, is a factor.”
5
Adds Nisha Tandon , telecom analyst at Jamnalal Prabhudas ,“Most of these countries are politically
instable.” These were shoals that Sri Sunil Mittal would have to navigate. <<Source>>

The moot quwstion here is that - has Bharti been left with the wooden spoon? Did it have to acquireZain
because there was no other choice, what with MTN of South Africa - with whom it negotiated twice -
having backed out? Compared to Zain, MTN was a much larger company, much better run and with a
wider footprint.

The Curent Development (2015)

Five years later Sunil Mittal, though always bullish on the continent, has started negotiations to sell his
telecom business in four African countries. On July 21, 2015, in a late night statement, France's Orange
and Bharti Airtel International (Netherlands) BV announced that they have entered into an exclusive
agreement for Orange acquiring Airtel's subsidiaries in the four African countries of - Burkina-Faso,
Chad, Congo Brazzaville and Sierra Leone. According to people in the know, the company is expecting
$1-1.2 billion for the four markets. Analysts have also welcomed this development and think this may be
the beginning of more asset sale in Africa (Taneja, 2015).

Currently in 2015, Airtel has operations in 17 countries in Africa out of which these four up for sale
contributed 15 per cent to its revenue from the continent in 2014-15. These are also among the better
performing countries in Africa in terms of revenue, and Airtel is among the top two operators in each of
these four markets (Taneja, 2015). .

On its entry into Africa, Airtel had targeted - revenues of $5 billion (going up from $3.6 billion at the
time of the acquisition in 2010); EBIDTA (earnings before interest, depreciation, taxation, and
amortisation) of $2 billion ($ 228 million at the end of December 2010); and a subscriber base of 100
million (42 million in 2010) - by 2013. At the end of March 2015, Airtel had a net loss of $585 million
on revenue of $4.4 billion from its African operations, and its subscriber base was 76 million. While
Airtel incurred capital expenditure of over $5 billion in Africa, the investment is yet to bear fruit, clearly
indicating how difficult the African market has been for the company. The company's management has
conceded many times in the past that Africa has turned out to be a bigger challenge than it had expected
(Taneja, 2015).

Reports term this latest asset-sale proposal as a positive development in light of the overall detrimental
impact that Airtel's African business has on its operations. The African thrust by Airtel has been termed
as an adventure which is not working out, hence an asset sale will boost investor sentiment. with the
company’s performance in Africa has been sub par on both the counts of - revenue as well as EBITDA.
(Taneja, 2015)
Though Airtel insists it is not exiting Africa, its decision to divest tower assets in Africa points towards a
different business strategy. In July, 2015, Airtel sold its mobile towers in five African markets for a
consideration $1.3 billion to cut its huge debt. It is further in the process of selling tower assets in six
other African countries. totaling 15,000 towers across 13 countries there.(Taneja, 2015)

Airtel is well positioned in the remaining 13 countries, apart from the four that are proposed to be sold -
and there is significant upside available. In response to a query by Reuters, the company reiterated that
6
they “remain fully committed to their Africa operations and will continue to invest in its growth and to
build a profitable business and accordingly have no plan to exit (Reuters, 2015).

The company also assured in July 2015 that the operations put on the block represented a relatively
small percentage of its overall Africa business, which is aimed at helping the company establish a
sharper focus on the remaining countries (Shah, 2015), significantly reduce its debt, boosting net profit
and free cash flow in Africa at the earliest (Ghosh, 2015).

Commenting upon this sell-off DSP Merril Lynch held the adverse macroeconomic conditions in Africa
responsible for the poor results of Airtel. They also predicted that operational weakness mayreduce
Airtel's bargaining power going forward as potential buyers may be interested in eclectically choosing
from the more profitable assets, and their preference would be more for Franco markets, rather than
Anglo markets or Nigeria (Ghosh, 2015).

Where did Airtel, which has done so well in India, go wrong in Africa? The number of its subscribers, at
76 million, is not small, but the quality of the subscribers is suspect. Average revenue per user (ARPU)
stood at $4.4 for March 2015, against $5.5 at the end of March 2014, a decline of 20 per cent. The voice
realisation per minute stood at $2.41 for March 2015, against $3.23 in March 2014, a decline of 25 per
cent. The only silver lining is data usage per customer which grew 34 per cent and stood at 130MBs.
(Airtel has over 30 million data users.) However, data ARPU declined 5 per cent and stood at $1.3 for
the year ended March 2015.Airtel followed a low tariff strategy in Africa, similar to India, but it met
with little success. Some even feel that Airtel overpaid Zain, and is now finding it difficult to sustain
operations. Airtel paid Zain $252 per subscriber when the average minutes of use per subscriber in a
month was just 100 compared to 350-400 in India.Back home, the company is gearing up for a 4G battle
with the forthcoming launch of Reliance Jio by December this year. Experts say that Airtel will have to
invest aggressively as the Reliance Jio launch could be disruptive. Could that mean Airtel will sell assets
elsewhere so that it can guard its home turf?

Valuation of ZAIN at the time of takeover

Bharti paid to Zain, for the African operations valuation of nine-times EBITDA. Some experts felt
valuation of six-times of EBIDTA would have been more appropriate. After playing the lead role in
India for almost 15 years, Bharti entered for the first time (not counting its Bangladesh investment) in
international a major market. Zain a company was present in 17 African countries and was a market
leader in two: Tanzania and Congo. In two others, Kenya and Nigeria, it is a distant second. In Africa,
the three big markets are South Africa, Nigeria and Egypt. Zain is present only in Nigeria .In Nigeria it
has an ownership dispute with Econet Group, but that could be a minor niggle.
The major issue was to turn around Zain, whose African operations are in losses right now. And it is not
because Zain is a laggard. But it was no MTN either, which was the market leader by far and quite
profitable too.

Fixing the interiors

Unlike MTN, Zain has a centralised command-and-control structure but most of its presence in Africa
has been built through acquisitions, biggest being that of Celtel. The model hasn’t worked. It’s the then
7
outgoing CEO Saad Al Barrak led the telco’s acquisition drive. He paid $3.4 billion for Netherlands-
based Celtel in 2005 to enter sub-Saharan Africa, as he wanted to turn Zain from a local company with
600,000 customers in 2002 into a top-10 global operator by 2011. All of these acquisitions were
diverse companies and to lash them together into a composite corporate culture was be perhaps the
toughest task. The deal poses for an interesting scenario : two independent entities Zain Africa and
Bharti — both of which are struggling in their own markets - when they merge, managing itself would
be a big issue, was observed by top corporate honcos.

Approach towards Integration

This is where Sunil Mittal was hoping its top team will deliver. As a first step, Mittal did entrust the
responsibility of managing the international business to his trusted lieutenant, Manoj Kohli. The
domestic business was led by Sanjay Kapoor. At the same time, in preparation for its global surge,
Bharti group human resources head Inder Walia already begun to build up a global cadre of senior
managers who have worked in different geographies. There was Shireesh Joshi who was from Pepsi
China. Chief Financial Officer B. Srikanth was from Unilever, UK. Joachim Horn, director - networks,
was the CTO of German Telecommunication major T-Mobile. None of these guys has any Africa
experience but each understands how multinationals build their presence in a new market and that was
likely to help.

Actually the way to understand is to analyse MTN’s approach. It has a strong culture that encourages the
understanding of local culture. Best practices from one location were ransplanted into other geographies.
Secondments were routine and that helped bring in best practices from different parts rather than [being]
just HQ driven. That also made MTN’s local units better run and more empowered to tailor the product
etc. to the local market. Till acquisition , Zain has had a very top-down approach and its local units were
not empowered. This was revealed in the company’s name itself. Zain’s culture is not quite equipped to
understand Africa. In fact, even the brand Zain has no meaning in Africa. It is primarily a middle-eastern
name that was brought in here underscoring the point that headquarters play a big role.
Mittal’s team had to find a solution to these seemingly touchy-feely issues but which would determine
how employees see themselves and how customers connect to the brand. Different Zain businesses have
been run like a loose entity, so processes were weak. This cut both ways as it may be easier for Bharti to
bring in its own processes etc. and knit it closely together. on the other hand, was simply too canny to
thrust his own cadre of managers in the difficult markets of Africa. While there was no official word,
senior officials in Bharti reckon that he will initially rely on Zain’s local managers. Kohli was likely to
provide the overall supervision, supported by a few key corporate finance and technology professionals.

8
 Revenue Profile
(Rs in Crores)
31-03-2008 31-03-2009 31-03-2010
A.Revenues (A.1..A.3) 27024.93 36961.55 39615.02
A.1Services 26900.26 36625.04 39003.27
A.2Indefeasible Right to use Sales 43.62 15.98 521.40
A.3Equipment 81.04 17.67 90.34
B.Operating Expenses 19379.39 26551.88 29633.99
C. Operating Income (A-B) 7645.53 10409.67 9981.03
D.Income Before Income Taxes 7653.70 9307.29 10097.80
E.Net Income 6815.89 8645.83 9301.98
E.1 115.07 175.92 199.37
E.2 Attributable to Bharti Airtel 6700.82 8469.91 9102.61
Profile of Segmental Revenues ( Rs in crores)
………………………………… 31-03-2008 31-03-2009 31-03-2010
A. Revenues (A.1..A.3) 27024.93 36961.55 39615.02
A.1 Mobile Services 21786.01 30360.11 32487.16
Segmental Profit 5212.03 6565.69 5818.50
A.2Telemedia(Broad Band) 2848.44 3351.74 3415.41
Segmental Profit 510.80 893.95 589.74
A.3Enterprise Services 5554.91 8361.16 8359.75
Segmental Profit 1510.34 2788.92 3176.18
A4.. Passive Infrastructure Services 602.34 4248.94 3542.54
Segmental Profit 73.73 212.99 220.93
A5.Others 243.10 361.14 582.53
Segmental Profit (579.19) (1952.49) (689.92)
A6.Eliminations (4009.88) (9721.54) (8772.36)
Segmental Profit (26.88) (39.15) (12.83)
P. Segmental Profit Attributable to Bharti-Airtel 6700.82 9102.61

Is Africa New battle Ground

What does Bharti find in Africa that makes it so attractive – it tried twice for MTN South Africa and was
even prepared to get into a deal where control of the combined entity wasn’t very clear.
Zain: Key Performance Indicator
Zain in Kuwait, formerly MTC is the Group’s Flagship Operation was established in 1983 and made
history in 1994 by becoming the first telecom operator to launch commercial services in the region.
Customers(‘000 Revenue EBITDA Net Income
) Million Million Million
US$ US$ US$
2003 1920 1094 473 346
2004 3192 1344 557 407
2005 13650 2254 914 622

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2006 27037 4466 1953 1015
2007 42501 5912 2424 1130
2008 63535 7441 2776 1196

The African footprint India Inc

The Essar Group is planning to invest $2 billion in the telecom sedor in Africa. Late last year, it
acquired 51% of the UAE-based Dhabi Group's Warid Telecom operations in Uganda and Congo for
$160 million. The group has a licence to operate in Uganda and operations in Kenya through Essar
Telecom Kenya. The Yu cellular network in Kenya has close to a million subscribers.
Reliance Communications (RCom) bought Ugandan telco Anupam Global Soft and invested $500
million in rolling out its network. RCom has been trying for Kenya and looking at Zambia. Reliance
Globalcom subsidiary, Flag Telecom, has established itself in Sudan, Nigeria and S. Africa.
Mahanagar Telephone Nigam Ltd has prepared a war chest of $100 million plus for acquisitions in
Africa. It already has a 100% subsidiary in Mauritius, styled Mahanagar Telephone Mauritius Ltd.
Bharat Sanchar Nigam Ltd is looking at smaller buys in Africa, after losing out in the Zain deal. It is
reported to have a $6 billion budget for international takeovers, but hasn't been having much luck. It
recently lost the bid for managing telecom networks of Ethiopian Telecommunications Corp to France
Telecom.
Tata Communications has increased its stake in Neotel, South Africa's first converged communications
network operator, to 56%.
Bharti Airtel: Performance at a glance7
Particulars Financial Year Ended March 31
2007 2008 2009 2010 2011 2012 2013 2014 2015
(Rs in Millions)
Revenue 184,20 270,12 373,52 418,94 595,383 683267 769045 857461 920394
2 2 1 8
EBITDA 74,407 114,01 152,85 168,14 200,718 222533 233340 278430 314517
8 8 9
Cash profit 73,037 111,53 135,76 16281 180581 198,89 195643 241813 285280
from 5 9 7 9
operations
Earnings 46,784 73,115 85,910 105,09 76,782 63,792 47853 78643 107130
before tax 1
Profit after 40,621 63,954 78,590 89,768 60,467 42,594 22757 27727 51835
tax
Shareholder 114,88 217,24 291,27 421,94 487,668 506,11 503217 597560 619564
’s equity 4 4 9 0 3
Net debt 42,867 40,886 84,022 23,920 599,512 618442 583567 605416 668417
Capital 157,75 258,13 375,30 445,86 1,087,1 1,1245 108678 120297 128798
employed 0 0 1 0 80 55 4 6 1

7
Taken from various Annual Reports of the Company. Data fron 2011 to 2015 has been taken from the Annual Report of
2014-15 Pg 6.
10
 Certain Ratios
Return on 43.10 38.51 30.91 24.52 13.30 8.57 4.51 5.04 8.52
shareholder’s
equity(%)
Return on 31.57 33.29 30.69 20.65 10.79 7.06 5.68 6.65 8.05
capital
employed(%)
Net debt to 0.58 0.36 0.55 0.15 2.95 2.60 2.51 2.19 2.08
EBITDA(Times
)
Interest 26.47 29.51 30.38 30.65 11.20 9.11 6.79 7.58 8.43
coverage
ratio(Times)
Book value per 30.30 57.23 76.72 111.1 128.41 133.27 132.51 149.49 154.9
equity share(Rs) 3 9
Earnings per 10.72 17.12 20.70 23.67 15.93 11.22 6.00 7.02 12.97
share (Rs)

The global mobile market

Scale and structure: The mobile industry alone has seven billion users, generating over US$960 billion
of annual service revenue every year. The majority of revenue comes from traditional calls and texts (for
example, last year 7,800 billion texts were sent around the world last year). However, over the last few
years the demand for data services, such as internet browsing on a smartphone, has accelerated, and
today around 28% of mobile revenue is from data, up from 13% in 2009s. Around 74% of mobile users
are in emerging markets, such as India and Africa, reflecting the typical combination of large
populations and the lack of fixed line infrastructure. The remaining users are from wealthier mature
markets, such as Europe. However, the proportion of the population with a phone – or mobile
penetration – tends to be higher in mature markets (usually over 100%) and lower in emerging markets,
particularly in rural areas, due mainly to lower incomes and less network coverage.

Growth:The demand for mobile services continues to grow strongly. In the last three years the number
of users increased by an average of 9% each year. In 2009 global mobile penetration was only 69%, and
by 2013 it had risen to 98%. Most of the increase in users has been from emerging markets due to
favourable growth drivers – young and expanding populations, faster economic growth, low but rising
mobile penetration, and less fixed line infrastructure. The other key area of growth is data, which is
being driven by increasing smartphone and tablet penetration, better mobile networks, and an increased
choice of internet content and applications (‘apps’).

Competition:The mobile industry is highly competitive, with many alternative providers, giving
customers a wide choice of supplier. In each country there are typically at least three to four mobile
network operators (‘MNOs’), such as Vodafone. In addition, there can be numerous mobile virtual
network operators (‘MVNOs’) – suppliers that rent capacity from mobile operators to sell on to their
customers. There can also be competition from internet-based companies and software providers that
offer alternative communication services such as voice over internet protocol (‘VoIP’) or instant

11
 messaging services.

Regulation:The mobile industry is very heavily regulated by national and supranational authorities.
Regulators continue to lower mobile termination rates (‘MTRs’) which are the fees mobile companies
charge for calls received from other companies’ networks, and to limit the amount that operators can
charge for mobile roaming services.
Revenue trends:In an environment of intense competition and significant regulatory pressures, the price
of mobile services has tended to reduce over time. However, with both more mobile phone users, mainly
in emerging markets, and more data usage, global mobile revenue remains on a positive trend and
expanded by 2% in 2013.
The global fixed market:The fixed communications market is valued at around US$500 billion.
Over the last three years, revenue from voice services has declined as the demand for traditional fixed
line calls has remained static at around one billion users. In contrast, revenue from fixed broadband or
internet usage on the PC is growing with an estimated 650 million customers worldwide – an increase of
nearly 30% over the last three years. This growth has been spread across all forms of broadband – DSL
(copper), cable and fibre, and within this, there is a growing preference for the high speed capability
provided by cable and fibre.

Global Telecommunication Revenues :

(US $ Billion)
2009 2010 2011 2012 2013
Mobile 822 862 902 940 963
Fixed Voice 362 340 319 298 277
Fixed Broad Band 170 184 197 209 217

Global Mobile Users Market

China Europe Asia India America Africa Middle

East
Emergin Mature North South
g
18% 17% 15% 4% 14% 6% 10% 11% 5%
The number of telephone subscribers in India increased from 979.2 million at the end of January 2015 to
987.3 million at the end of February 2015. The overall Tele-density in India increased from 78.2 at the
end of January 2015 to 78.7 at the end of February 2015. The Urban Tele-density increased from 148.5
to 149.3 and Rural Tele-density increased from 46.7 to 47.2 in the month of February 2015. 8

8
Monthly Report –March 2015 , Ministry of Finance
12
Performance of the Company
Graph -1: Growth of different type of customers

Graph -2:Revenues and Profits 2007-1015

Graph -3: Capital Structure 2007-1015

13
Graph -4 :Returns to Stakeholders 2007-1015

14
 :Journey Through The Times

1998:First Launched in Delhi

& HP
2004:Largest Telco in India

2008:Launched DTH

2010:Acquired Zain

2010:New Brand Launched

2011:Launched 3 G Services

2012:Launched Airtel Money

2013 :First operator to launch 4G in India

2014: Crossed 300 million customers

P.S.Economic Times reported on 15 January 2015 …Indias largest Telco’s Baharti Airtel, Vodafone
India and Idea Cellular will be hit hard if the upto $70 billion (Rs 469000 crores ) spectrum sale takes
place by March 2016, or even if partial success takes place .

15
References:

Dharmakumar, R. and Prasad, S. (2010) Bharti's minutes factory moves to Africa. Forbes India. Available at:
http://forbesindia.com/article/cross-border/bhartis-minutes-factory-moves-to-africa/12502/1?utm=slidebox. Accessed: 31
Mar 2016.

ET Bureau (2016) Bharti Airtel sells operations in Burkina Faso, Sierra Leone to Orange for around $900 million. Economic
Times, Available at: http://articles.economictimes.indiatimes.com/2016-01-14/news/69765611_1_bharti-airtel-congo-
brazzaville-burkina-faso. Accessed: 31 Mar 2016.

Ghosh, S. (2015) Africa talks may offer only a breather in Airtel’s efforts to fix losses. LiveMint ePaper, 22 Jul 2015.
Available at: http://www.livemint.com/Companies/NLFNh1Ld4JcqrGjKqt4cVM/Africa-talks-may-offer-only-a-breather-in-
Airtels-efforts-t.html. Accessed: 5 Apr 2016.

Mookerji, N. (2009) Bharti may have spent $5 Mn. In MTN bid. DNAIndia.com. Available at:
http://www.dnaindia.com/money/report-bharti-may-have-spent-5-m-on-mtn-bid-1294408. Accessed: 3 Apr 2016.

Nair-Ghaswall, A. (2010) Bharti throws price gauntlet at Africa. The Times of India, 31 Mar 2010, Delhi, p. 27.

NDTV (nd) Airtel acquires Zain's Africa business for $10.7 billion. Available at: http://www.ndtv.com/photos/news/airtel-
acquires-zains-africa-business-for-10-7-billion-7144#photo-76600. Accessed: 31 Mar 2016.

Reuters (2015) Bharti Airtel says no plan to exit Africa, despite Orange talks. Reuters, 21 Jul 2015. Available at:
http://www.reuters.com/article/bharti-airtel-africa-idUSL3N10149420150721. Accessed: 5 Apr 2016.

Shah, (2015) Bharti Airtel says no plan to exit Africa, despite Orange talks. Business Today, 21 Jul 2015. Available at:
http://www.businesstoday.in/sectors/telecom/bharti-airtel-no-plan-to-exit-africa-despite-orange-talks/story/221938.html.
Accessed: 5 Apr 2016.

Taneja, N. (2015) Bharti Airtel's plot veers off script in Africa. Business Standard, New Delhi, 29 Jul 2015. Available at:
http://www.business-standard.com/article/companies/bharti-airtel-s-plot-veers-off-script-in-africa-115072901366_1.html.
Accessed: 5 Apr 2016.

TRAI (2015) Press Release, No. 47/2015, 1 Sep 2015. New Delhi: Telecom Regulatory Authority of India. Available at:
http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/PR-No=47.pdf. Accessed: 1 Apr 2016.

Trak.in (2016) Indian Telecom Stats: 1 Billion Mobile Subscriber Base Reached, Active Base Cross 902M. Available at:
http://trak.in/tags/business/2016/01/05/indian-telecom-stats-1billion-mobile-subscriber-base/. Accessed: 1 Apr 2016.

Annexure –I
Three Segments of Telecom Market9
Mobile Comprises establishments operating and maintaining switching and
(Wireless) transmission facilities to provide direct communications via airwaves.
Fixed Line Consists of companies that operate and maintain switching and transmission
Telecom (Wireless) facilities to provide direct communications through land lines microwave or
a combination of land lines and satellite link ups.
Internet Includes internet service providers (ISPs) that offer broad band internet
Services connections through consumer and corporate channels.

9
WWW.IBEF.org Jan 2017 Pg
16
Balance Sheet Bharti Airtel: Standalone
201603 201503 201403 201303 201203 201103 201003 200903 200803 200703
SOURCES OF FUNDS :
Share Capital 1998.70 1998.70 1998.70 1898.80 1898.80 1898.80 1898.80 1898.24 1897.91 1895.93
Reserves Total 82448.10 76274.20 64729.30 52247.40 47530.80 42212.80 34652.30 25745.43 18342.35 9517.33
Equity Share Warrants 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity Application Money 0.00 0.00 0.00 0.00 0.00 0.00 186.10 0.29 1.23 0.00
Total Shareholders Funds 84446.80 78272.90 66728.00 54146.20 49429.60 44111.60 36737.20 27643.96 20241.49 11413.26
Secured Loans 2.00 1.90 1.40 2.00 2.90 17.10 39.40 51.73 52.42 266.45
Unsecured Loans 45741.50 21567.80 10364.00 14216.30 15298.50 11880.40 4999.50 7661.92 6517.92 5044.36
Total Debt 45743.50 21569.70 10365.40 14218.30 15301.40 11897.50 5038.90 7713.65 6570.34 5310.81
Other Liabilities 4621.60 4400.50 4148.90 3320.20 2658.90 2613.40 0.00 0.00 0.00 0.00
Total Liabilities 134811.90 104243.10 81242.30 71684.70 67389.90 58622.50 41776.10 35357.61 26811.83 16724.07
APPLICATION OF FUNDS :
Gross Block 145467.10 100087.00 79574.30 76206.10 66906.80 61437.40 44212.50 37266.70 28115.65 26509.93
Less : Accumulated Depreciation 53652.60 46642.60 39696.10 33023.50 26466.00 20736.70 16187.50 12253.34 9085.00 7204.30
Less:Impairment of Assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Block 91814.50 53444.40 39878.20 43182.60 40440.80 40700.70 28025.00 25013.36 19030.65 19305.63
Lease Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Capital Work in Progress 3796.60 9066.90 1244.20 1030.80 4466.50 6479.20 1594.70 2566.67 2751.08 2375.82
Producing Properties 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments 43026.90 43116.90 34523.90 28199.10 12337.80 11813.00 15773.30 11777.76 10952.85 705.82
Current Assets, Loans & Advances
Inventories 5.30 9.40 1.10 2.10 32.10 34.40 27.20 62.15 56.86 51.55
Sundry Debtors 3793.00 3311.00 2165.50 2246.80 2134.50 1461.90 2105.00 2550.05 2776.46 1873.30
Cash and Bank 52.10 388.70 446.00 362.70 481.20 133.20 816.70 2251.60 502.94 780.46
Loans and Advances 7554.50 6326.20 3637.10 2512.20 10862.10 3573.10 6381.00 4561.21 2923.61 2587.25
Total Current Assets 11404.90 10035.30 6249.70 5123.80 13509.90 5202.60 9329.90 9425.01 6259.87 5292.56
Less : Current Liabilities and Provisions
Current Liabilities 23075.80 19873.60 15069.00 14502.10 11540.10 11905.10 12284.80 13117.98 11909.07 9459.42
Provisions 772.70 1234.90 945.30 546.10 557.00 527.40 658.70 634.40 209.88 1262.33
Total Current Liabilities 23848.50 21108.50 16014.30 15048.20 12097.10 12432.50 12943.50 13752.38 12118.95 10721.75
Net Current Assets -12443.60 -11073.20 -9764.60 -9924.40 1412.80 -7229.90 -3613.60 -4327.37 -5859.08 -5429.19
Miscellaneous Expenses not written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.20 2.66
Deferred Tax Assets 2088.40 1911.80 1631.50 1364.30 1078.00 780.90 796.30 917.31 436.30 143.74
Deferred Tax Liability 5366.80 2983.90 2579.00 2514.60 1914.70 1308.50 799.60 590.20 500.17 380.41
Net Deferred Tax -3278.40 -1072.10 -947.50 -1150.30 -836.70 -527.60 -3.30 327.11 -63.87 -236.67
Other Assets 11895.90 10760.20 16308.10 10346.90 9568.70 7387.10 0.00 0.00 0.00 0.00
Total Assets 134811.90 104243.10 81242.30 71684.70 67389.90 58622.50 41776.10 35357.61 26811.83 16724.07
Contingent Liabilities 95052.60 100767.80 87232.10 60500.00 54144.10 50037.00 5396.40 3241.16 2148.87 1615.17

17
Income Statement Bharti Airtel: Standalone
201603 (12) 201503 (12) 201403 (12) 201303 (12) 201203 (12) 201103 (12) 201003 (12) 200903 (12) 200803 (12) 200703 (12)
INCOME :
Sales Turnover 60300.20 55496.40 49918.50 45350.90 41603.80 38017.70 35609.50 34014.29 25703.51 17851.60
Excise Duty 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Sales 60300.20 55496.40 49918.50 45350.90 41603.80 38017.70 35609.50 34014.29 25703.51 17851.60
Other Income 1485.60 5193.00 853.40 1463.10 624.70 321.20 377.30 525.14 359.91 148.49
Stock Adjustments 14.30 63.80 18.30 0.00 0.00 0.00 -35.00 5.29 9.05 30.07
Total Income 61800.10 60753.20 50790.20 46814.00 42228.50 38338.90 35951.80 34544.72 26072.47 18030.16
EXPENDITURE :
Raw Materials 51.60 71.40 20.50 1.90 18.30 16.10 35.00 125.09 155.30 53.95
Power & Fuel Cost 4038.70 4115.10 4169.70 3569.90 2972.70 2523.30 2265.00 2173.30 1045.16 658.78
Employee Cost 1869.30 1691.50 1648.10 1511.30 1391.50 1451.20 1525.60 1404.54 1306.57 1102.03
Other Manufacturing Expenses 18607.60 18003.70 16137.40 15427.00 13015.90 10868.60 9888.50 13049.37 8184.32 5813.82
Selling and Administration Expenses 12228.30 11203.00 10448.30 10427.80 9939.70 9451.10 7620.60 3766.89 3718.17 2250.33
Miscellaneous Expenses 1862.70 1044.40 1421.10 942.30 622.00 367.10 741.60 616.74 1028.47 887.60
Less: Pre-operative Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 0.00 49.70 107.40 112.40 1.80
Total Expenditure 38658.20 36129.10 33845.10 31880.20 27960.10 24677.40 22026.60 21028.53 15325.59 10764.71
Operating Profit 23141.90 24624.10 16945.10 14933.80 14268.40 13661.50 13925.20 13516.19 10746.88 7265.45
Interest 3559.00 1409.10 1336.40 1652.30 1396.20 324.10 -568.00 2148.38 607.76 310.78
Gross Profit 19582.90 23215.00 15608.70 13281.50 12872.20 13337.40 14493.20 11367.81 10139.12 6954.67
Depreciation 9543.10 7559.70 7231.30 6826.70 5916.00 4611.60 3793.90 3206.28 3166.58 2353.30
Profit Before Tax 10039.80 15655.30 8377.40 6454.80 6956.20 8725.80 10699.30 8161.53 6972.54 4601.37
Tax 287.00 2330.20 1980.00 1044.90 917.10 484.60 942.70 777.73 859.36 495.03
Fringe Benefit tax 0.00 0.00 0.00 0.00 0.00 0.00 0.00 35.87 37.23 25.50
Deferred Tax 2206.30 124.60 -202.80 313.60 309.10 524.30 330.40 -395.91 -168.24 47.61
Reported Net Profit 7546.50 13200.50 6600.20 5096.30 5730.00 7716.90 9426.20 7743.84 6244.19 4033.23
Extraordinary Items -406.69 2709.43 9.14 53.85 40.57 96.68 130.76 212.46 48.38 31.19
Adjusted Net Profit 7953.19 10491.07 6591.06 5042.45 5689.43 7620.22 9295.44 7531.38 6195.81 4002.04
Adjst. below Net Profit -942.50 -41.10 0.00 0.00 0.00 0.00 0.00 5.50 -22.25 -5.92
P & L Balance brought forward 60058.30 48496.50 42678.00 38343.80 33482.00 26778.50 18502.80 11797.22 5533.92 1456.38
Statutory Appropriations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Appropriations 473.60 1597.60 781.70 762.10 868.20 1013.40 1150.50 1043.73 -41.36 -50.23
P & L Balance carried down 66188.70 60058.30 48496.50 42678.00 38343.80 33482.00 26778.50 18502.83 11797.22 5533.92
Dividend 543.60 1539.00 719.50 379.80 379.80 379.80 379.80 379.65 0.00 0.00
Equity Dividend % 27.20 77.00 36.00 20.00 20.00 20.00 20.00 20.00 0.00 0.00
Dividend Per Share(Rs) 1.36 3.85 1.80 1.00 1.00 1.00 1.00 2.00 0.00 0.00
Book Value Per Share 211.25 195.80 166.92 142.57 130.15 116.15 96.24 145.62 106.63 60.19

18
Balance Sheet Bharti Airtel: Consolidated
201603 201503 201403 201303 201203 201103 201003 200903 200803 200703
SOURCES OF FUNDS :
Share Capital 1998.70 1998.70 1998.70 1898.80 1898.80 1898.80 1898.77 1898.24 1897.91 1895.93
Reserves Total 40298.90 37778.30 57757.30 48422.90 48712.50 46868.00 37980.15 27229.39 19825.24 9562.45
Equity Share Warrants 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity Application Money 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.29 1.23 0.00
Total Shareholders Funds 42297.60 39777.00 59756.00 50321.70 50611.30 48766.80 39878.92 29127.92 21724.38 11458.38
Minority Interest 7446.50 6890.60 4210.20 4088.60 2769.50 2856.30 2855.53 1229.75 1014.22 194.82
Secured Loans 6098.50 10495.20 11586.90 9770.80 12089.30 11235.50 4958.43 1428.73 58.26 245.28
Unsecured Loans 95536.90 72919.90 64308.90 56965.50 56933.90 47513.70 5329.71 12088.42 9543.49 5040.61
Total Debt 101635.40 83415.10 75895.80 66736.30 69023.20 58749.20 10288.14 13517.15 9601.75 5285.89
Policy Holders Fund 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Liabilities 6393.80 6188.90 5729.10 4591.00 3916.00 3416.30 0.00 0.00 0.00 0.00
Total Liabilities 157773.30 136271.60 145591.10 125737.60 126320.00 113788.60 53022.59 43874.82 32340.35 16939.09
APPLICATION OF FUNDS :
Gross Block 258759.80 208310.30 210195.50 181930.90 173221.60 155436.90 72116.34 58661.60 42322.41 28119.92
Less: Accumulated Depreciation 96764.60 84031.70 69317.30 55992.80 43789.70 31122.30 21267.28 14712.96 9772.96 7615.54
Less: Impairment of Assets 0.00 0.00 263.70 263.70 263.70 263.70 0.00 0.00 0.00 0.00
Net Block 161995.20 124278.60 140614.50 125674.40 129168.20 124050.90 50849.06 43948.64 32549.45 20504.38
Lease Adjustment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Capital Work in Progress 5824.70 17414.80 0.00 2991.90 4413.90 4823.40 2435.94 4143.65 3569.96 2470.88
Producing Properties 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Investments 3917.60 10752.00 15530.80 7709.80 1835.50 622.40 5162.07 2348.95 4809.71 147.14
Current Assets, Loans & Advances
Inventories 169.10 133.90 142.20 110.90 130.80 213.90 48.39 96.27 114.23 99.22
Sundry Debtors 5868.10 5207.20 6244.10 6782.40 6373.50 5492.90 3182.48 2899.78 2839.82 1871.21
Cash and Bank 5138.80 2083.10 4980.80 1607.80 2030.00 957.50 2578.63 2765.97 703.41 852.09
Loans and Advances 8145.40 6481.60 4792.10 4634.90 4460.90 3921.00 5653.23 6208.69 2849.15 2611.20
Total Current Assets 19321.40 13905.80 16159.20 13136.00 12995.20 10585.30 11462.73 11970.71 6506.61 5433.72
Less : Current Liabilities and Provisions
Current Liabilities 46311.20 41567.40 35728.60 32055.30 29450.50 31351.10 15169.23 16862.17 14132.34 10042.99
Provisions 1256.50 2036.00 172.50 176.80 129.00 118.00 1313.29 1704.35 690.33 1337.98
Total Current Liabilities 47567.70 43603.40 35901.10 32232.10 29579.50 31469.10 16482.52 18566.52 14822.67 11380.97
Net Current Assets -28246.30 -29697.60 -19741.90 -19096.10 -16584.30 -20883.80 -5019.79 -6595.81 -8316.06 -5947.25
Miscellaneous Expenses not written off 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.09 0.20 2.66
Deferred Tax Assets 2780.80 2360.40 6262.70 5849.10 5398.60 4610.90 1192.42 1322.38 458.34 164.80
Deferred Tax Liability 6619.30 4424.40 1685.00 1255.60 1433.00 1353.50 1597.11 1293.08 731.25 403.52
Net Deferred Tax -3838.50 -2064.00 4577.70 4593.50 3965.60 3257.40 -404.69 29.30 -272.91 -238.72
Other Assets 18120.60 15587.80 4610.00 3864.10 3521.10 1918.30 0.00 0.00 0.00 0.00
Total Assets 157773.30 136271.60 145591.10 125737.60 126320.00 113788.60 53022.59 43874.82 32340.35 16939.09
Contingent Liabilities 20823.60 20573.80 14183.60 9810.70 9410.20 6119.90 5881.61 3503.85 2351.82 1699.78

19
Income Statement Bharti Airtel: Consolodated
201603 201503 201403 201303) 201203 201103 201003 200903 200803 200703
INCOME :
Sales Turnover 100937.30 96100.70 85863.50 76947.00 71505.80 59601.80 41829.46 37352.08 27012.24 18481.64
Excise Duty 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Sales 100937.30 96100.70 85863.50 76947.00 71505.80 59601.80 41829.46 37352.08 27012.24 18481.64
Other Income 4033.40 2095.80 2456.90 860.90 264.30 353.60 1270.87 597.48 360.03 173.03
Stock Adjustments 499.60 494.80 0.00 0.00 0.00 0.00 -47.88 -17.96 23.02 53.59
Total Income 105470.30 98691.30 88320.40 77807.90 71770.10 59955.40 43052.45 37931.60 27395.29 18708.26
EXPENDITURE :
Raw Materials 1128.70 774.40 472.80 783.40 938.90 816.90 109.52 208.42 270.36 139.49
Power & Fuel Cost 8247.40 8439.80 0.00 0.00 0.00 0.00 3677.02 2787.00 1120.23 695.96
Employee Cost 5100.30 4857.00 4622.80 3882.30 3515.90 3278.40 1753.43 1702.29 1439.15 1201.25
Other Manufacturing Expenses 31198.80 30935.60 38509.60 35304.60 31605.80 25448.10 11489.18 11541.90 8542.96 5982.87
Selling and Administration Expenses 17410.60 16459.60 13708.90 13229.80 11305.80 9696.10 7301.28 5419.86 3086.54 2392.00
Miscellaneous Expenses 1647.60 2380.30 1613.60 489.00 434.50 296.20 1053.29 828.50 1673.23 871.06
Less: Pre-operative Expenses Capitalised 0.00 0.00 0.00 0.00 0.00 0.00 71.51 126.53 128.44 11.41
Total Expenditure 64733.40 63846.70 58927.70 53689.10 47800.90 39535.70 25312.21 22361.44 16004.03 11271.22
Operating Profit 40736.90 34844.60 29392.70 24118.80 23969.20 20419.70 17740.24 15570.16 11391.26 7437.04
Interest 8701.80 4446.50 5878.80 4518.70 4082.80 2534.90 645.40 2306.38 608.29 309.99
Gross Profit 32035.10 30398.10 23513.90 19600.10 19886.40 17884.80 17094.84 13263.78 10782.97 7127.05
Depreciation 21367.40 19858.30 15649.60 14814.80 13368.10 10206.60 6199.41 4672.77 3471.41 2448.66
Minority Interest (before tax) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 10667.70 10539.80 7864.30 4785.30 6518.30 7678.20 10895.43 8591.01 7311.56 4678.39
Tax 3326.70 5169.80 4127.00 2400.70 2677.60 2396.10 1099.75 808.23 895.47 497.01
Fringe Benefit Tax 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.81 40.30 27.17
Deferred Tax 1910.50 316.90 717.90 117.70 -417.40 -617.10 434.16 -302.21 -119.62 43.87
Net Profit 5430.50 5053.10 3019.40 2266.90 4258.10 5899.20 9361.52 8044.18 6495.41 4110.34
Minority Interest (after tax) 973.90 427.00 246.70 8.80 1.30 147.50 198.39 185.22 100.02 48.22
Profit/Loss of Associate Company 0.00 -5.30 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Profit after Minority Interest & P/L Asso.Co. 4456.60 4620.80 2772.70 2258.10 4256.80 5751.70 9163.13 7858.96 6395.39 4062.12
Extraordinary Items 1142.36 110.18 163.65 122.14 97.41 -67.74 110.37 225.60 45.84 30.63
Adjusted Net Profit 3314.24 4510.62 2609.05 2135.96 4159.39 5819.44 9052.76 7633.36 6349.55 4031.49
Adjst. below Net Profit 0.00 0.00 383.10 0.00 -2041.00 1268.10 0.00 0.00 0.00 -6.52
P & L Balance brought forward 25158.90 22600.70 41402.70 39568.20 35744.60 26843.63 18831.02 12015.79 5579.04 1473.21
Statutory Appropriations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Appropriations 654.30 2062.60 841.80 423.60 -1607.80 -1881.17 1150.52 1043.73 -41.36 -50.23
P & L Balance carried down 28961.20 25158.90 43716.70 41402.70 39568.20 35744.60 26843.63 18831.02 12015.79 5579.04
Dividend 543.60 1539.00 719.50 379.80 379.80 379.80 379.79 379.65 0.00 0.00
Equity Dividend (%) 27.20 77.00 36.00 20.00 20.00 20.00 20.00 20.00 0.00 0.00
Dividend Per Share(Rs) 1.36 3.85 1.80 1.00 1.00 1.00 1.00 2.00 0.00 0.00
EPS after Minority Interest (Unit Curr.) 10.87 10.25 6.63 5.78 11.05 14.98 23.96 41.06 33.70 21.43
Book Value (Unit Curr.) 105.81 99.50 149.49 132.51 133.27 128.41 105.01 153.43 114.45 60.43

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