Zain deal: Bharti Airtel or Bsnl

-

Zain Mobile communication, Kuwait based mobile operator has been acquired(Not entire only African based assets) by India's no.1 mobile operator Sunil mittal led Bharti Airtel on last week march 2010. The deal has been finalized,total amout is $10.7 billions. Sunil mittal acquired this company in very sophisticated manner within one and half month. Talking about Zain,which has present in 23 countries(Africa 15 and rest are in Middles east). After acquiring this company Bharti became the world's fifth largest mobile operator. Now, Bharti has customer database of 179 millions with presence in 18 countries( India, Sri Lanka Bangladesh and Africa's 15 countries). Bharti has opportunity for operating in this emerging market with its same brand name called"Airtel". Talking about Zain it had customer database of 42 millions and presence in 15 countries of Africa and 8 countries of Middle east. Bharti is going to pay $8.3 billion and remaining amount they will take from banks(standard charted, SBI and Barclays) than pay.

Talking about what are the challenges which Bharti can face-
The very first one is Bharti is going to take debt from banks and analysts say the interest rate is high. so, we have to see reaction of his shareholders. This will effect happiness of shareholders.
Second reason is also similar to that, state-owned BSNL and MTNL also wanted to acquired this company but they were not willing to pay more than $10 billions. In this point analysts has also some sort of confusion that "why BSNL cannot acquired this company" Does $0.7 billions differ or something else.
Third challenges could be that Zain is operating in 15 countries of Africa and 7 of them are making loss however in 10 countries they are market leader. let's see how Bharti can grow in that particular countries.

My analysis says, Bharti is fully confident about entering in this market. After some year of operation in this countries they can acquire MTN. As I know this could be Bharti's long term aim.
As fas as analyst's view are concern some where I am not agree with this point because they says, If BSNL cannot acquire then why Bharti did this. There is differences of deal amount. My view is that's what BSNL is running behind the Bharti. Being a competitor they should know about there future plan. Any company cannot success if they imposes product to customers. That's what BSNL is doing. Taking risk is a funda of Business so, you have to take risk. BSNL was only paying $0.7 billions extra why they did not do so.
Now we have to see future direction of Sunil Mittal.

Comments

  1. AnonymousMarch 31, 2010 at 12:13 PM

    Nevertheless, Bharti is going to be successful in the growing market of African countries provided it follows its winning strategy that it adopted in India. An astounding network service and a good tariff rate are some of the key factors that it can count on.

    ReplyDelete

Post a Comment

Popular posts from this blog

World Class Exhibition Center in Dwarka

-
Image
The national capital is set to get a state-of-the-art convention centre on the lines of the ones in Shanghai, Hong Kong and Singapore for hosting exhibitions, trade fairs and summits of international standards. To be constructed in Dwarka’s Sector 25, three kilometers from the IGI airport in south-west Delhi, the two-phased project was approved by the Union cabinet in November while the contracts were awarded last week. Architects working on the project, billed as one of the biggest in Asia, said it is conceived as a smart, zero energy, world-class facility designed for an events like G-20 summit. The  exhibition-cum-convention centre in Dwarka  and its allied infrastructure which includes, an arena, primary structure, Delhi Metro, road connectivity, hotels and office spaces, is being constructed at an estimated cost of ₹25,703 crore. It will be completed by 2025, a statement of Union ministry of commerce and industry informing about the Cabinet decision said.
Read more

Toyota: A Case of Overconfident

-
Image
Toyota a Japanese automobile company and world's largest automobile company in terms of sales. Now a days company is facing crisis this is due to recall of their vehicles(Toyota Prius) which has some sort of problem in brake and accelarater. Why this is a case of overconfident because when company got news about problem in few cars. They were fully confident that they can handle this problem effectively but fact is not like this. Now they are going to become victim of overconfident. According to company's philosophy "each problem provides opportunity for improvement". That's what company is facing problem. According to analysts the main reason for this recall is higher growing rate and other factors as well. so, being a company who believe in Just-in-time facilities how they are facing this types of problems. Now when Toyota started repairing millions of defected car they were not able to handle it. The very first and recent reason is Arrogance which the company h
Read more

Marketing Myopia : A complex Marketing concept

-
Image
Marketing Myopia is a term used in marketing which has been written by Theodore Levitt. Basically this concept talks about short sightedness of an Industry or any product or services by company or marketers. In this post I will write about this concept in brief with example for better understanding. According to Mr. Levitt they started talking about first Railroads. In case of railroads there was not a fault in management however there were fault in vision of long term. They took railroads only in terms of railways instead of taking in entire Transportation solution. This concept say that instead of taking it in one way of solution they should take in to in a way of entire solution. So, this is what we called as Marketing Myopia. They are giving excuse that car and other transportation services have destroyed the drastic growth of this sector. Again there is time to think out of the box. Second example is the Bollywood industry again there is also same problem. In case of Bollywood wha
Read more