Bharti’s ring cuts through rivals’ tones

Bharti Airtel is widening the gap between its user base and that of its closest rivals, Vodafone Essar and Reliance Communications (RCOM), at the same scorching pace at which India’s telecom market is growing. The Sunil Mittal-promoted GSM operator is not only leading the pack in terms of monthly subscriber net additions, but with each passing month, it is turning out to be stronger than the No 2 and No 3 players.

An analysis of subscriber figures shows that while Bharti was ahead of Vodafone (then Hutch) by just about 2 million subscribers in June 2005, today the gap stands at nearly 12 million. RCOM (then Reliance Infocomm) had 11 million users against Bharti’s 12 million in June 2005. Two years down the line, the one million subscriber gap has widened to nearly 11 million.

In June 2006, with 23.1 million users, Bharti had 5.6 million more users than Vodafone. A year later, the difference has more than doubled.

The two companies are almost neck-to-neck in the metros, where there is very little upside due to higher penetration. However, Bharti is way ahead of Vodafone in B and C circles like UP (East) and UP (West), Kerala, Haryana and Bihar.

Analysts said this is largely a result of Hutch’s milder and slower marketing strategy, delay in network expansion and Bharti’s aggressive outsourcing policy. Moreover, Bharti has a pan India presence spanning across all the 23 circles. This is in contrast to Vodafone, which lacks a prominent presence in C circles.

“Hutch has been slow in expanding network in B and C circles while Bharti saw rapid growth. Moreover, in a sector where time to market is crucial, Bharti outsourced non-core activities to focus on marketing and branding,” Frost & Sullivan VP (technology) Alok Shende said.

By outsourcing functions such as network and call centre management and IT, Bharti freed bandwidth allowing it to focus on reaching the market faster, added Mr Shende. According to another telecom expert, Bharti’s first-mover advantage also helped the operator in leading the pack. It first brought Research In Motion’s BlackBerry handhelds to India three years ago and was also the first one to introduce electronic recharge and caller back tunes among other product innovations.

Over past few years, Bharti has shown high agility in grabbing foothold in new territories. For instance, in the Mumbai circle, Vodafone was the market leader and Bharti was the last entrant. Today, Bharti is the second largest player with a subscriber base of nearly 2 million compared to Vodafone’s 2.6 million.
As of June 2007, Bharti commanded 23.5% share of the total wireless market in the country, followed by RCOM at 17.7% and Vodafone at 17.6%.

In terms of monthly additions too, Bharti is creating new records every month. In June 2007, the GSM giant added 1.96 million cellular subscribers, Vodafone 1.5 million and RCOM 1.2 million. Bharti is expected to cross the 2 million subscriber addition mark in July, according to industry experts.