Expressing Digitally: Bharti Airtel forays into Digital Media and Entertainment Business
The telecom market in India is slowly maturing and coming at terms to the reality of end of an era of weighing its business prospects led by higher average revenue per user (ARPUs) basis to gradually shifting at encoding the industry prospects, in this new decade, where the business may well be dictated by the new phenomenon of multiple SIM connections just as the urban markets reach their saturation point and the margin of profit per customer witnesses crunch based on severe price wars.
However, irrespective of the competition in the domestic markets, a section of the smarter investor community has still not given up on the long-term prospects of India’s numero uno telecom service provider Bharti Airtel Ltd.
Not only is the company a biggest player in one of the world’s fastest growing telecom market of India, Bharti Airtel also has a diversified presence in various other fields of operation including financial service like life insurance and general insurance in partnership with AXA of France, multiple-format retail stores, and integrated services like broadband, digital TV business (DTH service), IPTV and enterprise business solutions to corporate customers.
Further, the company has announced the launch of Digital Media business – its foray into Entertainment – to deliver content to a range of users, including producers and media firms.
By means of Digital Media Exchange service, a more secured distribution platform across multiple media platforms will be enabled ensuring integrated content delivery and aggregation platform directed towards all media formats for the content producers.
“There is a clear demand for secure digital distribution capability across multiple platforms. Airtel Digital Media Business will help establish India as an innovation hub for global content and format delivery,” said Sanjay Kapoor, chief executive of Airtel for India.
This move by the company of diversifying into the Digital Media business to tap growth prospects in yet another high growth business area comes at an opportune time when the Indian telecom markets are showing signs of stressed pricing regime for at least next couple of years to come on the back of entry of new players in the market.
The move will open up the market opportunity for the Indian media and entertainment industry that is estimated to grow from Rs.61,100 crore to Rs.92,900 crore at 11 per cent CAGR of over 2009-13, according to PWC Entertainment & Media Outlook 2005-09.
More recently, the company has been in the news on the back of its announcement of being in exclusive discussion with Zain’s Africa unit (until March 25) for its acquisition and foray into yet another fast growing telecom market of Asia.
For long-term investors of Bharti Airtel, an integral part of their investment strategy has been a clear faith in the strong and trustworthy management of the company. The management has left no stones unturned in order to ensure a first-mover advantage in thinking out-of-the box in order to out-class the competitors.
Thus, Bharti Airtel and its management can be called as working in the best interests of its long-term shareholders by means of diversifying into various different forms of business operations and also on look-out of geographical spread-out in form of inorganic growth route to tap fast growing markets.
Do you feel Bharti Airtel’s foray into Digital Media business will be a success?