Management discussion and analysisECONOMIC OVERVIEW
The global economy is on a clear track of revival with a continued dual speed recovery.As per the International Monetary Fund (IMF), the world economy grew by 5% in 2010, led by7.1% growth of emerging economies and a 3% growth of advanced economies. After a year ofdebt crises in Europe and mixed news about the quality of the US recovery, there is agrowing consensus that the worst is over.
With the maturing of emerging nations, financial power and consumption is increasinglyshifting from West to East – from aging industrial nations to emerging industrialpowers in Asia, South America and Africa. These economies are morphing from being theworld’s back office to nerve centre of activity. In China and India alone, about twobillion new middle income consumers are expected to join the consumer base in the next 20years. Both Africa and Asia are expected to be the fastest growing regions with a 7% and5.4% per annum growth respectively in real GDP between 2010 and 2050. The economic growthprospects in these geographies clearly complement the Company’s strategy of offeringtelecom services in 19 countries across South Asia and Africa.
INDIAN TELECOM SECTOR
Financial year 2011 saw the continuance of strong customer growth for the Indiantelecom market, which witnessed a 36% increase in its customer base during the 12-monthperiod. The total telecom customer base in India stood at 846 Mn, second only to China,with teledensity of 70.9% as at the end of March 31, 2011.
While wireline customers decreased by 6%, the growth of the telecom sector was fuelledby the wireless segment. The wireless segment crossed the 800 Mn customer mark with 812 Mncustomers as at end of March 31, 2011. The wireless segment grew by 39% during the year,contributing nearly 96% of the total telecom customer base. The telecom rural penetrationat 33.8% at end of March 31, 2011 offers huge growth potential in terms of both customersand usage.
Growth in broadband services has been very low with 12 Mn broadband customersrepresenting a broadband penetration of just 1% however the potential for growth is high.The impending rollout of the wireless broadband using TDD LTE technology coupled with themobile platform leveraging 3G is likely to provide an impetus to broadband penetration.
With the advent of 3G services in India, the telecom market is all set to witness a newwave of mobile applications ushering the growth of data services including internetbrowsing, entertainment services, application stores, video calling, enterprise services,m-Heath, m-Education, m-Commerce, e-governance, etc. This is expected to provide thetrigger for the next phase of growth of the telecom industry. New innovative applications,enhanced user experience and decreasing price of 3G enabled handsets would be the keydrivers of the adoption of the 3G services in India.
Given the huge growth potential offered by the telecom industry through increasedcoverage and newer products and services, the competition will remain intense with bothexisting and new players attempting to maximize their share of the growing telecom market.
AFRICAN TELECOM SECTOR
Year 2011 continued to experience growth in African telecom market. The total customerbase grew 17% over the 12-month period. The total telecom customer base stood at 205 Mn asat end of March 2011.
Though a few countries have very high penetration, due to higher GDP per capita andrelatively smaller population or multi – sim environment, penetration in outermarkets where the Company operates is still low. Of 16 African countries where Airteloperates, only 7 countries (Congo B, Gabon, Ghana, Kenya, Nigeria, Seychelles and SierraLeone) have crossed 50% SIM penetration mark.
The competitive intensity in each of the sixteen countries varies from 2 to 10 players.There have been no major competition launches during the year.
RECENT DEVELOPMENT IN REGULATIONS
Telecom sector is one of the highly regulated sectors in India. Beside Department ofTelecom (DoT), Telecom Regulatory Authority of India (TRAI) set up by the Government ofIndia is the nodal authority, which regulates the telecom services in India. During theyear some of the key regulatory changes were as follows:
• 3G & BWA Auction
DoT completed the 3G and BWA (Broadband Wireless Access) auctions for the first time inIndia through a unique reverse auction process.
• Mobile Number Portability (MNP)
Post the launch of MNP in Haryana on November 25, 2010 as a pilot, MNP was launched ona pan India basis on January 20, 2011.
• Measurement of EMF from Base station Antenna
All service providers are required to submit self-certification for compliance to EMFradiation norms for all BTSs (Base Transceiver Station) with the respective TelecomEnforcement Resource and Monitoring (TERM) Cells of DoT by November 15, 2010 and has laiddown a penalty of Rs 5 lakhs per non-complaint site. For new BTS sites, DoT has mandatedto start radiation only after submission of self-certificate to DoT. TERM cell will check10% of the total sites, randomly.
• Subscriber Verification
DoT has decentralized the imposition of penalty in respect of subscriber verificationfailure cases to respective TERM Cells w.e.f. June 01, 2010. This was previously handleddirectly by DoT Headquarters.
On November 18, 2010, DoT clarified that subscriber verification on non-compliant casesreferred from lawful security agencies, complaints, cases discovered during investigationsof bulk cases, etc. may be separately investigated/ audited and will not be combined withthe monthly sample Customer Acquisition Forms (CAF) audit for the purpose of calculatingoverall percentage compliance. The imposition of penalty on such cases will be applicableas per the graded penalty prescribed by DoT for monthly audits ranging from Rs 1,000 to Rs50,000 per subscriber.
On February 03, 2011, DoT clarified that in respect of subscriber verification failurecases, the penalty is to be calculated as per rate applicable in the slab relating to thepercentage of correct subscriber verification for all failed CAFs in the audit.
• Extension of Prepaid Mobile Services in J&K, Assam & North East
DoT has extended Prepaid Mobile Services in J&K, Assam and North East Telecomservice areas for the period of two years, till March 31, 2013.
• Unsolicited Commercial Communications (UCC)
On December 01, 2010, TRAI released "The Telecom Commercial CommunicationsCustomer Preference Regulations, 2010". This Regulation covers both Commercialcalls as well as SMSs and had to be effective from January 01, 2011. On January 31, 2011,the DoT had communicated a fresh numbering series beginning with the number"140" for mobile services telemarketers. However, due to non availability of thenumber series for fixed network, TRAI has further extended the date of implementation ofthis regulation.
• Recommendations on Spectrum Management and Licensing Framework
TRAI submitted its recommendations on Spectrum Management and Licensing Framework toDoT on May 11, 2010 and also set up an expert group to make suitable recommendations onpricing of 1800 MHz Spectrum. The Experts group submitted its report "The 2010 valueof spectrum in 1800 MHz band" on January 30, 2011 with the recommendation for PanIndia spectrum price (per MHz) up to 6.2 MHz to be approx. Rs 1,769 Cr and the price ofthe Pan India spectrum (per MHz) beyond 6.2 MHz to be Rs 4,571 Cr based on the abovereport.
• TRAI recommendations on Efficient Utilisation of Numbering resources in India
On National numbering plan, TRAI has recommended to continue with the existing 10-digitnumbering scheme. TRAI also recommended to migrate to an integrated 10-digit numberingscheme by December 31, 2011.
OPPORTUNITIES AND THREATS
Opportunities
Untapped Landscape
Indian telecom market holds large untapped potential in the rural areas. With majorityof the population yet to get access to telecommunication and rural teledensity still at33.8%; there is significant growth potential for the sector. While urban areas presentpotential for data services, rural areas provide robust and sustainable growth in thevoice space.
Similarly in Africa, the mobile penetration level across most of the countries ofoperation is very low. The Company is aiming at fully exploiting this opportunity anddrive deeper penetration, especially in the rural areas.
New Technologies and Paradigms
With the launch of 3G services, the Indian telecom sector is poised to take asignificant leap in life enriching services delivered through better technology andservice delivery. Further, new technologies such as BWA, will extend the reach oftelecommunication services and offer new platforms for development of new businesses. Alarger share of rural customers will experience internet for the first time through mobilephones, heralding a new era in India’s internet revolution.
Powered by higher browsing speeds through technologies such as 3G, Value Added Services(VAS) offers a new area of growth. New services such as music downloads, mobile TV, MMS,video calling, video streaming and availability of relatively inexpensive feature richphones are building the foundation of a content rich customer experience on mobile phones.
Like India, Africa too offers a potential market to leverage 3G and data throughvarious mobile applications. Deployment of 3G network and products will be a priority thisyear for the African operations.
With technologies like cloud computing and grid computing gaining momentum, the IndianData Centre Services are on the rise and is emerging as a long-term growth opportunity.Cloud based services such as Software as a Service (SaaS), Platform as a Service (PaaS)offer new opportunities for small and medium businesses.
The growing demand of digital content, especially High Definition (HD) content, willfurther accelerate the growth of digital TV services. Digital Media Exchange (DMX),coupled with Teleport Services, will get content aggregation capabilities to the market,thereby opening new avenues for a telecom service provider in digital signage and digitalcinema content delivery domains.
Growing overseas
Sri Lanka, Bangladesh and Africa offer exciting potential for Airtel and the Company isusing its experience in the Indian telecom market to build a low cost business model forthese markets as well.
Strong Strategic Partnerships
Forming enduring partnerships of strategic importance successfully is an intrinsic partof Bharti Airtel’s DNA. Company’s strategic alliance with SingTel has enabled itto continuously enhance and expand its telecommunication network in India. SingTel’sinvestment in Bharti Airtel is one of their largest investments in the world outsideSingapore. In addition, we have also forged strategic partnerships in specific areasincluding networks, information technology, call centre technology, content space andothers.
These strategic partners have been an integral part of Bharti Airtel’sachievements over the years. They have supported the Company's growth plans, helped itlaunch new and innovative products in the market and maintain its leadership position inthe Indian telecom industry. Besides these strategic partners, Bharti Airtel is alsoengaged with a large number of partners, spread across the globe, who support its productand service requirements.
Threats
Regulatory Environment
Financial year 2010-11 was marked as a year of uncertain regulatory environment inIndia, with 2G license allotment taking centre stage as a political agenda. The proposedNational Telecom Policy 2011 will help in stabilizing the regulatory environment in thecountry. The Policy will aim at affordability and sustainability in the telecom sector forthe larger benefit of population with clear and transparent regime covering licensing,predictable and transparent availability of spectrum, convergence, uniform telecominfrastructure guidelines, rationalisation of taxes and levies, conducive manufacturing,enhancing digital literacy in the masses and ensuring competitiveness of telecom sector.
Increased competition
Mobile business continues to witness rollout of services by new operators in variouscircles. This resultant increase in competition may lead to further lowering in tariffrates. Increased competition is also witnessed in direct to home and enterprise servicesbusiness, with the growing number of service providers for these services. Bharti Airtel,with significantly large and diverse customer base; integrated suite of products andservices; pan India operations; and a very strong brand is best positioned to emergestronger from the market environment and will retain its leadership position in the Indianmarket.
In Africa also, competition from other large global players poses a challenge and inturn the Company is countering this specific risk through its innovative products,superior customer services and positive relationships with local governments.
Political instability and government intervention is another key threat that theCompany faces in a few countries in Africa. The Company proactively engages in positiverelationships with the local governments and regulators to minimise the risk.
REVIEW OF OPERATIONS
Bharti Airtel put up a strong performance in the financial year 2010-11. The Companyentered the league of global telcos by completing the acquisition of Zain Group’s("Zain") mobile operations in 15 countries across Africa on June 8, 2010. TheCompany later also acquired Telecom Seychelles Limited expanding its overall presence to19 countries across the globe.
As on March 31, 2011, the Company had an aggregate of 220.9 Mn customers consisting of211.9 Mn Mobile, 3.3 Mn Telemedia and 5.7 Mn Digital TV customers. Its total customer baseas on March 31, 2011 increased by 61% compared to the customer base as on March 31, 2010.
The Company reported a net income of Rs 60,467 Mn for the full year ended March 31,2011, with a Y-o-Y decline of 33% due to increase in net finance charges (excluding forexrestatement losses) (Rs 14,802 Mn), Forex restatement losses (Rs 6,833 Mn), re-brandingexpenses (Rs 3,395 Mn) and increase in spectrum charges in India (Rs 2,650 Mn).
FINANCIAL PERFORMANCE
Amount in Rs Mn except ratios
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Gross revenue | 594,672 | 418,472 | 42% |
| EBITDA | 199,664 | 167,633 | 19% |
| Earnings before taxation | 76,782 | 105,091 | -27% |
| Net income | 60,467 | 89,768 | -33% |
| Gross assets | 1,503,473 | 731,871 | 105% |
| Capital expenditure | 306,948 | 108,334 | 183% |
| Capital productivity | 40% | 57% | – |
KEY ACCOUNTING CHANGES
Consequent to the adoption of IFRS w.e.f. April 1, 2010, and in consonance with IFRS 8the ‘Chief Operating decision maker’ management approach the Company hasreviewed its operating segments disclosures which are mentioned below. These have alsobeen restated for prior periods.
Mobile Services (India and South Asia) – These services cover telecom servicesprovided through cellular mobile technology in the geographies of India and South Asia.This also includes the captive national long distance network (erstwhile reported underEnterprise Services segment) which primarily provides connectivity to the Mobile Servicesbusiness in India.
Mobile Services (Africa) – These services cover telecom services providedthrough cellular mobile technology in the African continent.
Telemedia Services – These services are provided through wire-lineconnectivity to customer household, small & medium businesses. Enterprise Services– These services cover long distance services to third party international ordomestic telecom service providers and internet broad-band/network solution services tocorporate customers. [This segment previously included the captive national longdistance network which has now been reported under Mobile Services (India & SouthAsia)].
Passive Infra Services – These services includes setting up, operating andmaintenance of communication towers for wireless telecom services provided both within andoutside the group in and out of India.
Other Operations – These represent revenues and expenses, assets andliabilities for the group none of which constitutes a separately reportable segment. Thecorporate headquarters expenses are not charged to individual segments.
SEGMENT-WISE PERFORMANCE
Mobile Services (India and South Asia)
The Company offers mobile services using GSM technology in South East Asia acrossIndia, Sri Lanka and Bangladesh, serving over 167 Mn customers in these geographies as atend of March 31, 2011. The Company had over 162 Mn mobile customers in India as on March31, 2011, which makes it the largest wireless operator in India both in terms of customerswith a customer market share of 20% and revenues with a revenue market share of 30%. TheCompany offers post-paid, pre-paid, roaming, internet and other value added servicesthrough its extensive sales and distribution network covering over 1.6 Mn outlets. It hasits network presence in 5,113 census towns and 452,215 non-census towns and villages inIndia, covering approximately 86.1% of the country’s population. During the financialyear gone by, the Company had acquired 3G licenses in 13 telecom services areas of thetotal 22 service areas (Delhi, Mumbai, Tamil Nadu, Karnataka, Andhra Pradesh, UP(West), Rajasthan, West Bengal, Himachal Pradesh, Bihar, Assam, North East and Jammu &Kashmir) and BWA licenses in 4 telecom service areas (Maharashtra, Kolkata, Punjab,Karnataka) in India at a total cost of Rs 156.1 Bn (USD 3.3 Bn). The Company hasrecently launched 3G services in key cities of the country offering host of innovativeservices like Mobile TV entertainment, video calls, live streaming of videos, highdefinition gaming along with access to high speed internet.
Airtel Sri Lanka expanded its presence to all the 25 administrative districts of SriLanka with the launch of mobile services in the northern and the eastern region of thecountry and had 1.81 Mn customers as end of March 31, 2011. Airtel Sri Lanka has launched3.5G services in major towns and have created a nation wide distribution networkcomprising over 26,000 retailers. Airtel Bangladesh had 3.7 Mn customers as at end of FY11and offers mobile services across 64 districts of Bangladesh with a distribution networkof over 64,000 retailers across the country. The burgeoning economy of Bangladesh coupledwith low penetration of approx. 43% and a strong youth base presents a unique marketopportunity for telecom services in the country.
Key financial results for the year ended March 31, 2011
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Customers (Mn) | 167.7 | 131.3 | 28% |
| Gross revenues (Rs Mn) | 362,689 | 331,275 | 9% |
| EBIT (Rs Mn ) | 85,417 | 94,353 | -9% |
The Company registered a year on year growth of 9% in revenues despite growingcompetition from new entrants and declining realised rates per minute.
Mobile Services (Africa)
The Company offers mobile services using GSM technology in Africa across 16 countriesand serves over 44 Mn customers in these geographies as at the end of March 31, 2011. TheCompany offers post-paid, pre-paid, roaming, internet and other value added services.
Key financial results for the year ended March 31, 2011
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Customers (Mn) | 44.2 | – | N.A. |
| Gross revenues (Rs Mn) | 130,834 | – | N.A. |
| EBIT (Rs Mn) | 5,173 | – | N.A. |
African operations are witnessing growth momentum over the past few quarters. Thegrowth is fueled by the new brand identity and the Company’s commitment to thenetwork expansion.
Telemedia Services
The Company provides broadband (DSL), data and telephone services (fixed line) in 87cities with concerted focus on the various data solutions for the Small & MediumBusiness (SMB) segment. It had 3.3 Mn customers as at March 31, 2011 of which 43.1%subscribed to its broadband/internet services.
The product offerings in this segment include fixed-line telephones providing local,national and international long distance voice connectivity, broadband internet accessthrough DSL; internet leased lines as well as MPLS (Multiprotocol Label SwitchingSolutions). The Company remains strongly committed to its focus on the SMB segment byproviding a range of telecom and software solutions and aim to achieve revenue leadershipin this rapidly growing segment of the ICT (Information and Communications Technology)market. The strategy of the telemedia services business unit is to focus on cities andcommercial pockets with high revenue potential.
Key financial results for the year ended March 31, 2011
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Customers (Mn) | 3.3 | 3.1 | 7% |
| Gross revenues (Rs Mn) | 36,324 | 34,154 | 6% |
| EBIT (Rs Mn ) | 8,334 | 7,568 | 10% |
The revenue growth of 6% year on year in telemedia services is mainly attributable tostrong off-take of data services. Telemedia services ended the financial year with datarevenues contributing over 50% of the total telemedia revenues in the last quarter of FY2010-11.
Enterprise Services
Enterprise services delivers end-to-end telecom solutions to large Indian and globalcorporates by serving as the single point of contact for all telecommunication needsacross data, voice, network integration and managed services requirement. Enterpriseservices owns a state of the art national and international long distance networkinfrastructure, enabling it to provide connectivity services both within India andconnecting India to the world. The international infrastructure includes ownership of thei2i submarine cable system connecting Chennai to Singapore, consortium ownership of theSMW4 submarine cable system connecting Chennai and Mumbai to Singapore and Europe, andinvestments in new cable systems such as Asia America Gateway (AAG), India Middle East andWestern Europe (IMEWE), Unity North, EIG (Europe India Gateway) and East Africa SubmarineSystem (EASSy) expanding the Company’s global network to over 225,000 Rkms, covering50 countries across 5 continents. Revenues from enterprise services for the financial yearended March 31, 2011 were Rs 41,292 Mn and represented a year on year decline of 8%.
Key financial results for the year ended March 31, 2011
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Gross revenues (Rs Mn) | 41,292 | 44,798 | -8% |
| EBIT (Rs Mn ) | 5,536 | 9,328 | -41% |
While the Indian economy has been relatively insulated from the global economicslowdown, large corporates did however exercised caution in IT and Telecom spends whichhad its impact in FY11. Additionally, this segment witnessed the entry of some of theestablished mobile players in this segment resulting in increased competition andaggressive pricing.
All this had attributed to the decline in revenues in FY11. With clear signs of revivalworld wide and the Company’s growing focus of being global network solution provider,the segment is well placed to be back on the growth trajectory.
Digital TV Services
Airtel Digital TV breached the coveted 5 Mn customer mark in FY11, in just 21 months ofits national operations, fastest ever by any operator. The Company added 3.1 Mn digital TVcustomers during FY 2010-11 taking its total customer base to 5.7 Mn customers as at endof March 31, 2011. The Company added every 4th new customer joining the Direct-To-Home(DTH) platform despite stiff competition and aggressive pricing. Airtel is the firstcompany in India that provides real integration of all the three screens viz. TV, Mobileand Computers enabling the customers’ record their favourite TV programmes throughmobile and web. The Company continues to expand the distribution, going beyond 9,000 townsand deep into rural India.
Passive Infrastructure Services
Bharti Infratel Limited, a subsidiary of Bharti Airtel, provides passive infrastructureservices on a non-discriminatory basis to all telecom operators in India.
Bharti Infratel deploys, owns and manages telecom towers and communications structuresin 11 circles of India and also holds 42% share in Indus Towers (a joint venture betweenBharti Infratel, Vodafone and Idea Cellular). Indus operates in 16 circles (4 circlescommon with Infratel, 12 circles on exclusive basis). Bharti Infratel had 32,792 towers in11 circles as at end of March 31, 2011, excluding the 35,254 towers in 11 circles forwhich the right of use has been assigned to Indus with effect from January 01, 2009. IndusTowers had a portfolio of 108,586 towers including the towers under right of use.
Key financial results for the year ended March 31, 2011
| Particulars | Financial Year | |
| 2010-11 | 2009-10 | Y-o-Y Growth |
| Gross revenues (Rs Mn) | 85,555 | 70,852 | 21% |
| EBIT (Rs Mn ) | 11,688 | 7,362 | 59% |
RISK AND CONCERNS
The following section discusses the various aspects of enterprise-wide risk management.Readers are cautioned that the risk related information outlined here is not exhaustiveand is for information purpose only.
Bharti Airtel believes that risk management and internal control are fundamental toeffective corporate governance and the development of a sustainable business. BhartiAirtel has a robust process to identify key risks and prioritise relevant action plansthat can mitigate these risks. Subsequent to the acquisition of Zain’s business inAfrica, the risk assessment exercise has been extended to cover the Africa operations. Keyrisks that may impact the Company’s business include:
• Changes in Regulatory Environment
Despite being a regulated and competitive sector, Indian telecom sector is maturingfast and continues to offer level playing field. Larger players control majority of marketshare and regulatory authorities keep consumers’ interest at the forefront. Privateplayers have driven the telecom growth in the country and Bharti Airtel has led from thefront. In the process, it has created a large pool of loyal customers and talented humanresource capital, in addition to a vibrant brand.
In Africa, the regulatory environment in which Bharti Airtel operates in, varies fromcountry to country and is at varying stages of development. This has contributed touncertainties in the regulatory environment.
• Technical failures or natural disaster damaging telecom networks
The Company maintains insurance for its assets, equal to the replacement value of itsexisting telecommunications network, which provides cover for damage caused by fire,special perils and terrorist attacks. Technical failures and natural disasters even whencovered by insurance may cause disruption, however temporary to the Company's operations.The Company has been investing significantly in business continuity plans and disasterrecovery initiatives which will enable it to continue with normal operations and seamlessservice to its customers under most circumstances. This is of particular significance toAfrica especially where Bharti Airtel is expanding its network coverage and capacity aspart of its growth plans.
• Increased competition; Irrational tariffs
The Telecom industry in India has witnessed the entry of various new players which hasresulted in heightened competition and drop in tariffs. The Company has made significantinvestments to build capabilities in customer analytics. These analytical abilitiescoupled with Company's continuous focus on cost-reduction initiatives has helped inoffering plans that match customer expectations and gives them true value for their money.In addition, the Company has continually taken steps to enhance customer experience byoffering new and innovative products and services, thereby providing many reasons for thecustomer to choose brand airtel.
In Africa increased competition resulted in tariff drops in Tanzania, Kenya, Uganda andNiger. The Company has embarked on an affordability strategy that includes bundled lowcost handsets, low denomination coupons and Easy Recharge (electronic vouchers).
INTERNAL CONTROL SYSTEMS
The Company’s philosophy towards control systems is mindful of leveragingresources towards optimisation while ensuring the protection of its assets. The Companydeploys a robust system of internal controls that facilitates the accurate and timelycompilation of financial statements and management reports; ensures regulatory andstatutory compliance; and safeguards investors’ interest by ensuring highest level ofgovernance and periodic communication with investors. In India M/s. PricewaterhouseCoopersPrivate Limited and M/s. ANB Consulting Private Limited are the joint internal auditors ofthe Company and submit quarterly audit reports to the Audit Committee.
The Company has taken several steps to further strengthen the internal control systemsin Africa including significant improvement in the quality and frequency of variousreconciliations, expansion of the scope and coverage of revenue assurance checks,segregation of duties, self-validation checks at the operating company level, training andeducating key personnel on internal control aspects, IT security improvements, etc. withregard to Oracle ERP systems, the Company has implemented Oracle in Bangladesh and hascommenced implementation in Africa with added features for better internal controls onpurchase-to-pay, fixed assets capitalisation and inventory control processes.
The Audit Committee reviews the effectiveness of the internal control system in theCompany and also invites the senior management/ functional directors to provide an updateon their functions from time to time. A CEO and CFO Certificate forming part of theCorporate Governance Report confirm the existence of effective internal control systemsand procedures in the Company. Company’s Internal Assurance Group also conductsperiodic assurance reviews to assess the adequacy of internal control systems and reportsto the Audit Committee of the Board.
HUMAN RESOURCES AND GLOBAL INTEGRATION INITIATIVES
With the expansion of our operations to 19 countries in two continents, and moreimportantly the multiple socio-cultural and economic environments, people haveincreasingly emerged as a strategic driver of the Company’s business. Over the lastyear, people policies and people management framework have been aligned to serve thelarger business goals on the global platform.
Airtel India and South Asia
Long term development of human capital and strategic employment of retention toolsremained at the core of the Company’s strategy in India. "BLeAP"- BusinessLeader Acceleration Programme and "ELeAP"- Emerging Leader AccelerationProgramme, helped it to prepare top talent from middle and senior management to take onleadership positions in the organisation. Similarly, differentiated compensation togetherwith new long term incentive plans, job enrichment and development through specialtraining interventions helped the Company to retain top talent.
Partnering with Business to create a more tech-savvy employee pool was one of the keyplanks of people development. Following the emergence of 3G, data and other technologies,almost 95% of sales employees have been covered through 3G learning interventions. TheCompany has taken various initiatives to improve employee productivity and efficiency byproviding enriched jobs, career opportunities for growth and incentives.
Year 2010-11 was also the year of One Airtel organisation across South Asia– wherein we saw integration of people, IT and other processes in Bangladesh and SriLanka. Airtel India processes and systems in the areas of people and capabilitydevelopment were replicated in both the countries.
The Company won the ‘2010 Gallup Great Workplace Award’ once again andfeatured amongst the top 10 companies in ‘Business Today Best Company to Workfor’ survey. The ‘Great Places to Work’ study rated Airtel amongst Top4 Large companies. The Outlook Business - Aon Hewitt survey rated Airtel amongst the Top 5companies in India.
Africa
Appreciation of people challenges and integrating people to the airtel wayremained a key thrust area during the year in Africa. Africa
Leadership Conclave in Kampala, Uganda in June 2010, involving 130 senior leaders fromthe 16 African operations was the first serious initiative on this score. The highlight ofthe Conclave was a joint visioning exercise to develop the vision for Airtel Africa 2015 -"To be the most loved brand in the daily lives of Africans".
Ensuring availability of the right talent at the Nairobi Head Office and the individualOpcos remained an overriding priority. Gaps in the talent framework were proactivelyfilled through multiple sources – promoting local talent duly supported by deputingselect personnel from India to fill key positions. The amalgamation of expat and localtalent is working seamlessly ensuring smooth and dynamic business delivery.
Airtel Africa has also initiated transformation in the areas of IT, Network and CSDwith key best in class partners.
Training programmes for the multi-lingual workforce were conducted for continuous upskilling at Opcos. Approx 6,000 personnel have been trained across all Opcos.
Cross pollination of talent within airtel’s global workforce is animportant element of our HR initiative. Movement of young high potential Africa employeesto Airtel India to understand the Airtel business model has commenced and is gatheringmomentum. Various knowledge sharing platforms have also been created to ensure seamlessknowledge transfer across geographies.
OUTLOOK
As a market leader in the Indian Telecom space, Bharti Airtel’s outlook ispromising and is in line with future growth potential of the sector. Emerging markets ofSri Lanka and Bangladesh and newer product family of Digital TV will continue to be thefocus areas and Airtel will continue to build its integrated solutions created forenterprise and small & medium business.
Rated as a pioneer in bringing life enriching telecom products and services for thecustomers, airtel will continue its journey with Commerce and Entertainment verticals. 3Gand BWA licenses will further usher a new era of content rich applications and servicesfor the customers. With stronger emphasis on Data business across domestic andinternational markets, the Company believes data will be a key driver of overall growth.
With its business offerings across the entire telecom spectrum to retail andinstitutional customers and geographic spread spanning most of the urban and rural India,enables airtel to benefit from all possible growth opportunities in the Indianmarket. Also its continued unwavering focus on cost and synergies across the organizationwill keep it in good stead and this very business model augurs well for its expansion andsuccess in new geographies.
As regard the Africa operations, looking forward into FY 2011-12, the Company will befocusing on strengthening its business model across all the 16 countries of operation. Itwill also be leveraging the opportunities that 3G, data, MNP and airtel money presents.Exploited fully, these opportunities have the potential to make Airtel truly unique toboth current and prospective customers in the market.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Company’sobjectives, projections, estimates, expectations may constitute a "forward-lookingstatement" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company’s operations include economic conditionsaffecting demand/ supply and price conditions in the domestic markets in which the Companyoperates, changes in the Government Regulations, tax laws and other statutes and otherincidental factors.