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been set to enter emerging markets through this strategy. For an established player it would be
suspected that it would raise cash for its Capex or may even raise money for an acquisition –
both global and local. Page 7 of 18 Origin of the MTYT Model from AirTel We have been citing the example of AirTel to build the premises of this unique model. In order
to understand these premises we will be trying to map the events of Bharti AirTel leading to
global acquisitions. Graph 1: Mobile Customers and Customer Adds Graph 2: Market Share Variation Page 8 of 18 Declining Growth Rates Graph 3: Growth Rates of Customer Adds and Overall Customer Base The history of Bharti AirTel can be split into three phases: Pre – 2000, 2000-2007 and 2008+.
Period Key Events
• Pre-2000 SingTel acquires strategic equity
stake • Aftermath
AirTel begins domestic acquisition
of players to expand domestic reach •
2000-2007 Entry of CDMA players Launch Continuously Launch of free incoming calls • AirTel market leader • • Increase of Market Share of life time increasing market share validity • Temporarily arresting the declining
customer add growth rate products
• Saturation of urban markets • Continuously Expansion in Sri Lanka declining market • Overseas share
2008+ Continuously declining growth • AirTel declared 100 Merger talks between MTN and
AirTel rates in customer adds
• Eyes on new markets: Rural and million • subscriber mark and wanted next Acquisitions: Warid Telecom, Zain
Telecom and Seychelles Telecom 100 million
Table 1: AirTel Timeline Page 9 of 18 Thus we can infer the following premises of the MTYT Theory in the Telecom space:
1. The telecom player starts out as an independent entity and sells its stake to a foreign player.
The equity is in the form of strategic equity with complete freedom given to the player to
take decisions in the Indian market. This equips the player to dominate the market through:
o Technological breakthrough
o Acquiring other market players
o Market expansion through organic routes
o Innovative product portfolio
2. If the growth strategy succeeds then there comes a period of dominance where the player
establishes itself as one of the market leaders. The player will also have a Pan-India license
or should be present in most of the Indian circles (20+).
3. After the peak, the company would experience stagnation with little room for expansion in
the domestic markets. The Indian telecom market got crowded with 13-14 players in each
circle and with tough domestic M&A laws; it became obvious to search for other emerging
markets. Identifying the New MTYT Players Today, the Indian market is saturated and other emerging markets like Africa appear to be the
likely markets where more growth can be seen. Thus the period of dominance will be short lived
and after gaining a good amount of market share the player will shift focus to other emerging
markets. The peri...
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This document was uploaded on 01/14/2014.
- Winter '14