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BSNL
VS
AIRTEL
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TABLE OF CONTENTS
DIFFERENT TYPES OF BUSINESS ENTITY-:
An active, in which different person exchange something of value whether goods or
service for service for mutual gain or Profit.
In other word, An enterprise engaged in production and distribution of good for sale
in market or rendering services for a price. There are many types of business entity defined
in the legal systems of various countries. These include corporations, partnerships, sole
traders, and other specialized types of organization.
It should be remembered, however, that the regulations governing particular types of
entity, even those described as roughly equivalent, may differ to a greater or lesser extent
between countries. The form of organization will be decided by various factors, such as-
A. Size and nature of the business to be started.
B. Technical difficulties
C. Market conditions (i.e.- competition and scope of the article in the market)
D. Capital required starting the business and the means to collect the funds.
E. Limitations and restriction put forth by the government (i.e. - grant of loan,
license, foreign exchange and other such things.
Depending on which type of business entity you choose will also influence the legal
structure. Various type of business organization on the basic of various social, economic and
human requirements are mentioned below.
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A. Public Sector
1. Departmental organization
2. Public corporations
3. Government company
B. Private Sector
1. Individual ownership or Sole proprietorship
2. Partnership
3. Joint stock company
4. Co-operative organization
C. Joint Sector
Ownership and control shared by private entrepreneur, state and public.
OBJECTIVEOBJECTIVE
To make a comparative analysis of trend of productivity of these two sectors which have
been taken into account particularly after the liberalization of Indian economy.
NATURE OF CHANGES IN INDIAN BUSINESS ENVIRONMENT AFTER
ECONOMIC PLAN
TRENDS OF PRIVATE SECTOR (Power), PUBLIC SECTOR (Power)
UNDERTAKINGS IN INDIAN ECONOMY
BEHAVIOUR OF THESE UNDERTAKING AFTER NEW ECONOMY POLICY.
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For the following Companies:
1. BHARAT SANCHAR NIGAM LTDs.
2. BHARTI AIRTEL LIMITED.
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PART I
STUDY OF THE TREND OF
MANAGERIAL ECONOMICS
at
BHARAT SANCHAR NIGAM LTD.
A PUBLIC SECTOR UNIT
www.bsnl.co.in
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PUBLIC SECTOR UNITPUBLIC SECTOR UNIT
BHARAT SANCHAR NIGAM LTD.
Bharat Sanchar Nigam Ltd. formed in October, 2000, is World's 7th largest
Telecommunications Company providing comprehensive range of telecom services in India:
Wire-line, CDMA mobile, GSM Mobile, Internet, Broadband, Carrier service, MPLS-VPN,
VSAT, VoIP services, IN Services etc. Presently it is one of the largest & leading public
sector units in India.
BSNL has installed Quality Telecom Network in the country and now focusing on
improving it, expanding the network, introducing new telecom services with ICT applications
in villages and wining customer's confidence. Today, it has about 47.3 million line basic
telephone capacity, 4 million WLL capacity, 48.11 Million GSM Capacity, more than 37382
fixed exchanges, 44966 BTS, 3140 Node B ( 3G BTS), 287 Satellite Stations, 480196 Rkm
of OFC Cable, 63730 Rkm of Microwave Network connecting 602 Districts, 7330
cities/towns and 5.5 Lakhs villages.
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BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet Customers
who access Internet through various modes viz. Dial-up, Leased Line, DIAS, Account Less
Internet (CLI). BSNL has been adjudged as the NUMBER ONE ISP in the country.
BSNL has set up a world class multi-gigabit, multi-protocol convergent IP
infrastructure that provides convergent services like voice, data and video through the same
Backbone and Broadband Access Network. At present there are 0.6 million DataOne
broadband customers.
The company has vast experience in Planning, Installation, network integration and
Maintenance of Switching & Transmission Networks and also has a world class ISO 9000
certified Telecom Training Institute.
Scaling new heights of success, the present turnover of BSNL is more than Rs.351,
820 million (US $ 8 billion) with net profit to the tune of Rs.99, 390 million (US $ 2.26
billion) for last financial year. The infrastructure asset on telephone alone is worth about
Rs.630, 000 million (US $ 14.37 billion).
BSNL plans to expand its customer base from present 47 millions lines to 125 million
lines by December 2007 and infrastructure investment plan to the tune of Rs. 733 crores (US$
16.67 million) in the next three years.
The turnover, nationwide coverage, reach, comprehensive range of telecom services
and the desire to excel has made BSNL the No. 1 Telecom Company of India.
Bharat Sanchar Nigam Limited has got net fixed assets valuing more than Rs. 54698
Crores (US $ 13.67 billion), which are in the form of Land, Buildings Cables, Apparatus &
Plants etc. as on 31.03.2008.
VISION OF BSNL
To become the largest telecom Service Provider in Asia.
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MISSION OF BSNL
To provide world class State-of-art technology telecom services to its customers on
demand at competitive prices.
To provide world class telecom infrastructure in its area of operation and to contribute to
the growth of the country's economy.
BOARD OF DIRECTORS
Corporate structure of BSNL Board consists of CMD & Five full time Directors,
Human Resource (HR), Consumer Mobility, Consumer Fixed Access, Finance, Enterprise,
who manage the entire gamut of BSNL operations. There are five other Directors in the full
Board of BSNL.
CMD - Shri Kuldeep Goyal
Director - Consumer Fixed Access(CFA)- Shri Rajesh Wadhwa
Director - Consumer Mobility(CM)-Shri R.K.Aggarwal
Director (Enterprise) - Shri Rajendra Singh
Director (HR)- Shri Gopal Das
Shri J.S.Deepak, I.A.S., Govt. Director
Shri P.K.Mittal, Govt. Director
Shri Mahesh Shah, Director
Dr. S.K.Kak, Director
Sanjiv Gupta, Director
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SERVICES PROVIDED BY BSNL
Services provided by BSNL are as follows-
BSNL LANDLINE
BSNL MOBILE
POSTPAID
PREPAID
BSNL WLL
INTERNET SERVICES
BROADBAND
WI-FI
DIAL UP INTERNET
BSNL MANAGED NETWORK SERVICES
BSNL MPLS-VPN
ISDN
LEASED LINE
INTELLIGENT NETWORK
VIDEO CONFERENCING
AUDIO CONFERENCING
I NET
TELEX/ TELEGRAPH
EPABX
INMARSAT
KU-BAND
TRANSPONDER
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SOCIAL COMMITMENT
BSNL is committed to provide quality Telecom Services at affordable price to the
citizens of the remotest part of the Country. BSNL is making all effort to ensure that the
main objectives of the new Telecom Policy 1999 (salient points indicated below) are
achieved:
Access to telecommunications is of utmost importance for achievement of the
country's social and economic goals. Availability of affordable and effective
communications for the citizens is at the core of the vision and goal of the new Telecom
policy 1999.
Strive to provide a balance between the provision of universal service to all uncovered
areas, including the rural areas, and the provision of high-level services capable of
meeting the needs of the country's economy;
Encourage development of telecommunication facilities in remote, hilly and tribal
areas of the country;
Transform in a time bound manner, the telecommunications sector to a greater
competitive environment in both urban and rural areas providing equal opportunities andlevel playing field for all players.
GROWTH PLAN
BSNL's future plan include a fast expansion programme of increasing the present 34
million lines to twice that number by 2005 and some 120 million lines by 2010.
The shift in demand from voice to data domination, and from wire line to wireless,
has revolutionized the very nature of the network. BSNL has already set in place several
measures that should enable it to evolve into a fully integrated multi-operator by 2005 and
its incumbent status, size, infrastructure and human resource should certainly, give it a
distinct advantage. Consolidation of the network and maintaining high quality of service
comparable to International standards is the key aim of the Growth Plan.
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STUDY OF THE TREND OF MANAGERIAL ECONOMICS
For discussing the trend of managerial economics in any public sector undertaking,
we require at least seven parameters as follows:
Employment and Wages
Sales
Total Cost
Total income
Investment pattern
Productivity
Profit after tax
No. of Users (subscribers)
EMPLOYMENT & WAGES
Here we will try to analyse the nature of the movement of employment, average productivity
and wage rate in the BSNL during the last decade. We will also try to examine the
relationship between changes in employment and money wage rate and between net sale &
total income during that period.
As we have discussed about production earlier, so by knowing employment we can
easily evaluate the productivity of the company for different years.
Employment by BSNL
Year Employment in cr
2001 INR 2,748.70
2002 INR 5,203.10
2003 INR 7,302.39
2004 INR 6,810.892005 INR 8,393.02
2006 INR 7,833.61
2007 INR 7,693.56
2008 INR 8,808.91
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SALES
Sales and other incomes has been tremendously increased over the last decade. The main
reason to this may be the increased productivity and the marketing strategies of the company.
It is also accompanying with the degradation of value of currency.
The main reason to this may be the increased productivity and the marketing
strategies of the company. It is also accompanying with the degradation of value of currency.
Net Sales of BSNL
Year Net Sale in cr
2001 INR 11,663.89
2002 INR 24,297.21
2003 INR 25,293.00
2004 INR 31,399.00
2005 INR 33,450.04
2006 INR 36,138.93
2007 INR 34,616.21
2008 INR 32,359.53
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TOTAL COSTS
DIFFERENT COST OF BSNLIN INR Cr.
Year 2008 2007 2006 2005 2004 2003 2002 2001
Raw Materials 0.00 0 0 0 0 0 0 0
Power & Fuel
Cost1687.36 1522.5 1357.64 0 1144.82 1050.94 891.52 357.29
Employee Cost 8808.917693.5
67833.61 8393.02 6810.89 7302.39 5203.1 2748.7
Other
Manufacturing
Expenses
8558.257995.2
67432.27 0 4562.09 4266.25 4169.47 1926.35
Selling and
Administration
Expenses
3136.183156.1
43176.1
11364.2
42704.37 2371.91 1941.35 24.59
Miscellaneous
Expenses
12141854.8
12495.62 534.38 2848.16 2022.5 884.39 2505.76
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Less: Pre-
operative
Expenses
Capitalised
429.55 452.27 474.99 0 436.2 1089.73 1403.89 690.78
TotalExpenditure
33636.43
21770 21820.25
20291.64
17634.13
15924.26
11685.94
6871.91
TOTAL INCOME
Year 2008 2007 2006 2005 2004 2003 2002 2001
Sales
Turnover33093.49 34616.21 36138.93 33450.04 31399.34 25293.15 24297.21 11663.89
Excise Duty 0 0 0 0 0 0 0 0
Net Sales 33093.49 34616.21 36138.93 33450.04 31399.34 25293.15 24297.21 11663.89
Other Income 5883.81 5252.21 4620.61 4405.91 5192.93 3204.88 3483.5 87.43
Stock
Adjustments0 0 0 0 0 0 0 0
Total Income 3008.50 39868.42 40759.54 37855.95 36592.27 28498.03 27780.71 11751.32
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INVESTMENT PATTERN
Investments of BSNL
Year Investments in INR Cr
2001 0.00
2002 0.00
2003 200.00
2004 200.00
2005 200.00
2006 200.00
2007 200.00
2008 200.00
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PRODUCTIVITY
Productivity BSNL
Year Productivity
2001 1.71
2002 2.38
2003 1.79
2004 2.08
2005 1.87
2006 1.87
2007 1.83
2008 1.13
PROFIT
PROFIT BEFOR TAX, TAX & NET PROFIT OF BSNL in INR Cr.
Year 2008 2007 2006 2005 2004 2003 2002 2001
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Operating Profit 17257.55 18098.42 18939.29 17564.31 18958.14 12573.77 16094.77 4879.41
Interest 472.58 796.6 1120.62 29.29 88.24 364.55 496.46 274.28
Gross Profit 16784.97 17301.82 17818.67 17535.02 18869.9 12209.22 15598.31 4605.13
Depreciation 8921.93 9149.31 9376.69 9624.86 9873.74 9551.31 8746.13 3858.08
Profit Before Tax 7863.04 8152.51 8441.98 7910.16 8996.16 2657.91 6852.18 747.05
Tax 733.88 767.59 801.3 -513.8 2045.2 204.33 540.01 0
Fringe Benefit tax 33 37 41 0 0 0 0 0
Deferred Tax 424.12 -457.95 -1340.02 -1759.33 974.44 1009.13 0 0
Reported Net Profit 6672.04 7805.87 8939.7 10183.29 5976.52 1444.45 6312.17 747.05
Extraordinary Items 100.89 7.06 535.33 1589.95 1529.14 1231.31 2112.34 -1.77
Adjusted Net Profit 3009.39 7798.81 8404.37 8593.34 4447.38 213.14 4199.83 748.82
NO. OF USERS (SUBSCRIBERS)
No. of Subscribers of BSNL
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Year Subscribers in Million
2001 0.82
2002 2.04
2003 5.962004 8.88
2005 14.80
2006 24.78
2007 35.92
2008 45.28
2009 57.30
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SUMMARY OF MAIN FINDINGS
As per the discussion done above, we can conclude
Economic Parameters BSNL
Employment Upward trend followed byconstant
Sales Upward trend
Total Cost Upward trend
Total Income Upward trend
Investment Pattern Steadily Constant
Productivity No Such Pattern
Net Profit Upward trend followed bydownward
No. of Subscribers Upward trend
BSNL has shown a sharp upward trend in the number of subscribers, which helpBSNL to make more income by more sales hence more profit during last few years accept in
year 2008. In year 2008 its shown huge decrement in its profit. One of the reasons for this is
recession period over that period.
BSNL has also shown an upward trend in total expenditure (cost) over that period of
time but employment cost has been almost constant during last few years.
BSNL has shown no particular pattern in it productivity but it has shown a bit of
negativity in it pattern.
BSNL has start investing since 2003 & after that a constant investment of Rs. 200 cr
is made every year.
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PART II
STUDY OF THE TREND OF
MANAGERIAL ECONOMICS
at
BHARTI AIRTEL LIMITED.
A PRIVATE SECTOR UNIT
www.airtel.co.in
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PUBLIC SECTOR UNITPUBLIC SECTOR UNIT
BHARTI AIRTEL LIMITED
Telecom giant Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti
Group, has a diverse business portfolio and has created global brands in the
telecommunication sector. Bharti has recently forayed into retail business as Bharti Retail
Pvt. Ltd. under a MoU with Wal-Mart for the cash & carry business. It has successfully
launched an international venture with EL Rothschild Group to export fresh agri products
exclusively to markets in Europe and USA and has launched Bharti AXA Life Insurance
Company Ltd under a joint venture with AXA, world leader in financial protection and
wealth management.
Airtel comes to you from Bharti Airtel Limited, Indias largest integrated and the firstprivate telecom services provider with a footprint in all the 23 telecom circles. Bharti Airtel
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since its inception has been at the forefront of technology and has steered the course of the
telecom sector in the country with its world class products and services. The businesses at
Bharti Airtel have been structured into three individual strategic business units (SBUs) -
Mobile Services, Airtel Telemedia Services & Enterprise Services. The mobile business
provides mobile & fixed wireless services using GSM technology across 23 telecom circles
while the Airtel Telemedia Services business offers broadband & telephone services in 95
cities and has recently launched India's best Direct-to-Home (DTH) service, Airtel digital
TV. The Enterprise services provide end-to-end telecom solutions to corporate customers and
national & international long distance services to carriers. All these services are provided
under the Airtel brand.
We are one of Asia leading providers of telecommunication services with presence in
all the 22 licensed jurisdictions (also known as Telecom Circles) in India, and in Srilanka.
We served an aggregate of 105,195,762 customers as of June 30, 2009; of whom 102,367,881
subscribe to our GSM services and 2,827,881 use our Telemedia Services either for voice
and/or broadband access delivered through DSL. We are the largest wireless service provider
in the country, based on the number of subscribers as of June 30, 2009. We also offer an
integrated suite of telecom solutions to our enterprise customers, in addition to providing long
distance connectivity both nationally and internationally. We have recently forayed intomedia by launching our DTH and IPTV Services. All these services are rendered under a
unified brand Airtel.
The company also deploys, owns and manages passive infrastructure pertaining to
telecom operations under its subsidiary Bharti Infratel Limited. Bharti Infratel owns 42% of
Indus Towers Limited.
Bharti Infratel and Indus Towers are the two top providers of passive infrastructure
services in India.
Company shares are listed on The Stock Exchange, Mumbai (BSE) and The National
Stock Exchange of India Limited (NSE).
The company has a strategic alliance with SingTel. The investment made by SingTel
is one of the largest investments made in the world outside Singapore, in the company.
The company mobile network equipment partners include Ericsson and Nokia. In thecase of the broadband and telephone services and enterprise services (carriers), equipment
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suppliers include Siemens, Nortel, Corning, among others. The Company also has an
information technology alliance with IBM for its group-wide information technology
requirements and with Nortel for call center technology requirements. The call center
operations for the mobile services have been outsourced to IBM Daksh, Hinduja TMT,
Teletech & Mphasis.
As an outcome of a restructuring exercise conducted within the company; a new
integrated organizational structure has emerged; with realigned roles, responsibilities and
reporting relationships of Bhartis key team players. With effect from March 01, 2006,
this unified management structure of 'One Airtel' will enable continued improvement in the
delivery of the Group strategic vision.
VISION & PROMISE OF AIRTEL
By 2010 Airtel will be the most admired brand in India:
Loved by more customers
Targeted by top talent
Benchmarked by more businesses
We at Airtel always think in fresh and innovative ways about the needs of our
customers and how we want them to feel. We deliver what we promise and go out of our wayto delight the customer with a little bit more
BOARD OF DIRECTORS
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The board of directors of the Company has an optimum mix of executive and non-
executive directors, which consists of two executive and fourteen non-executive
directors.The Chairman and Managing Director, Mr. Sunil Bharti Mittal, is an Executive
Director and the number of Independent Directors on the Board is 50% of the total board
strength. The independence of a director is determined on the basis that such director
does not have any material pecuniary relationship with the Company, its promoters or its
management, which may affect the independence of the judgment of a Director. The board
members possess requisite skills, experience and expertise required to take decisions,
which are in the best interest of the Company.
The composition of the Board is as under:
Sunil Bharti Mittal
Rajan Bharti Mittal
Akhil Gupta
Rakesh Bharti Mittal
Chua Sock Koong
N. Kumar
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SERVICES PROVIDED BY AIRTEL
Services provided by AIRTEL are as follows-
AIRTEL LANDLINE
AIRTEL MOBILE
POSTPAID
PREPAID
AIRTEL WLL
INTERNET SERVICES
BROADBAND
WI-FI
DIAL UP INTERNET
AIRTEL MANAGED NETWORK SERVICES
AIRTEL MPLS-VPN
ISDN
LEASED LINE
INTELLIGENT NETWORK
VIDEO CONFERENCING
AUDIO CONFERENCING
I NET
TELEX/ TELEGRAPH
EPABX
INMARSAT
KU-BAND
TRANSPONDER
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AWARDS AND RECOGNITIONS
Voted Indias most innovative company in a survey conducted by The WallStreet Journal in 2008
Winner of the Gallup Great Workplace Award- Gallup Consulting, 2008
2nd Most Trusted Service Brand - Annual Economic Times-Brand Equity,Most Trusted Brands survey 2008
Best Content Service Award for its Farmer Information DisseminationPlatform for Bharti Airtels joint venture with IFFCO, IKSL (IFFCO KisanSamachar) - World Communications Awards 2008
Best Project Management Award for its Gujarat e-GRAM project - WorldCommunications Awards 2008
Best Telecom Company at the NDTV Profit Business Leadership Awards
Best Carrier India for innovative products & services and efficient cost models andthe Ovum Telco-Transformation award recognizing philosophy and execution of asuccessful outsourcing strategy at the Telecom Asia Awards 2008
Sunil Bharti Mittal was awarded the GSM Association Chairmans Award 2008.The highest honour in global telecom sector, recognized his tremendous contributionto the development of Indias telecom sector
Sunil Bharti Mittal adjudged the Business Leader Transforming India, 2008 at the
NDTV Profit Business Leadership Awards
CORPORATE RESPONSIBILITY AT BHARTI AIRTEL
At Bharti, CSR is a way of life. Each department and employee strives to be sensitive to thestakeholders and environment within their work context. Bharti encourages employees totake decisions and design business-linked processes that are sensitive to communities andenvironment.
Corporate Social Responsibility (CSR) in Bharti encompasses much more thanonly social outreach programs. It is an integral part of the way Bharti conducts its business.The essence of Bhartis commitment to Corporate Social Responsibility is embedded inthe Corporate Values, which stem from its deepest held beliefs. These Values are:
To be responsive to the needs of our customers
To trust and respect our employees
To be transparent and sensitive in our dealings with all stakeholders
We encourage our employees to take decisions and design business processes, keeping inmind the following:
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Ethics, fairness and being correct
Meeting and going beyond compliances and legal requirements
Showing respect and sensitivity towards stakeholders and communities, and
Nurturing the environment
We practice our CSR beliefs and commitments through a three-prongedapproach:
Engaging with stakeholders
Ensuring stakeholder sensitive policies and practices
Undertaking programs for our employees, community and environment
Bharti Airtel sensitizes its employees towards CSR issues at various forums. We feel that itis important that each employee should understand the importance of environmental, social
and economical aspects while taking business decisions. At Bharti, each employee is
sensitized towards CSR issues and thus operations at the ground level are influenced. Such
sensitization exercises have resulted in many socially and environmentally sensitive
decisions on the ground. For example, Confidence Plan for hearing impaired people, covers
noise-making DG sets at extra cost, investing in consumer awareness campaigns to ensure
safe use of mobile are some examples of the above.
Bharti Airtel Limited firmly believes in the principles of Corporate Governance and is
committed to conduct its business in a manner, which will ensure sustainable, capital-
efficient and long-term growth thereby maximising value for its shareholders, customers,
employees and society at large. Companys policies are in line with Corporate
Governance guidelines prescribed under Listing Agreement/s with Stock Exchanges and the
Company ensures that various disclosures requirements are complied in letter and
spirit for effective Corporate Governance.
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FACTSHEET
Business
Description
Provides GSM mobile services in all the 22 telecom circles in
India, and was the first private operator to have an all India
presence.
Provides telemedia services (fixed line and broadband
services through DSL) in 95 cities in India.
Established July 07, 1995, as a Public Limited Company
Proportionate
Revenue
Rs. 369,615 million (year ended March 31, 2009-Audited)
Rs. 270,250 million (year ended March 31, 2008-Audited)
As per US GAAP Accounts
Proportionate
EBITDA
Rs. 151,678 million (year ended March 31, 2009 - Audited)
Rs. 113,715 million (year ended March 31, 2008 - Audited)
As per US GAAP Accounts
Shares in Issue 1,898,373,280 as at June 30, 2009
Listings The Stock Exchange, Mumbai (BSE)
The National Stock Exchange of India Limited (NSE)
Market
Capitalisation
Customer Base 102,367,881 GSM mobile and 2,827,881 Telemedia
Customers (status as on June 30, 2009)
Operational
Network
Provides GSM mobile services in all the 22 telecom circles in
India, and was the first private operator to have an all India
presence.
Provides telemedia services (fixed line) in 95 cities in India.
Registered Office Bharti Airtel Limited
(A Bharti Enterprise)
Aravali Crescent, 1 Nelson Mandela Road, Vasant Kunj Phase
II
New Delhi - 110 070
Tel. No.: +91 11 4666 6100
Fax No.: +91 11 4666 6411
STUDY OF THE TREND OF MANAGERIAL ECONOMICS
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For discussing the trend of managerial economics in any public sector undertaking,
we require at least seven parameters as follows:
Employment and Wages
Sales
Total Cost
Total income
Investment pattern
Productivity
Profit after tax
No. of Users (subscribers)
EMPLOYMENT & WAGES
Here we will try to analyze the nature of the movement of employment, average productivity
and wage rate in the AIRTEL during the last decade. We will also try to examine the
relationship between changes in employment and money wage rate and between net sale &
total income during that period.
As we have discussed about production earlier, so by knowing employment we caneasily evaluate the productivity of the company for different years.
SALES
Employment by AirTel
Year Employment in INR Cr
2001 7.99
2002 19.35
2003 18.94
2004 16.84
2005 488.13
2006 754.99
2007 1102.03
2008 1306.70
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Sales and other incomes has been tremendously increased over the last decade. The main
reason to this may be the increased productivity and the marketing strategies of the company.
It is also accompanying with the degradation of value of currency.
The main reason to this may be the increased productivity and the marketing
strategies of the company. It is also accompanying with the degradation of value of currency.
Net Sales of AIRTEL
Year Net Sale in INR Cr
2001 0.00
2002 0.00
2003 0.00
2004 0.00
2005 7903.03
2006 11231.47
2007 17851.60
2008 25761.11
TOTAL COSTS
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DIFFERENT COST OF AIRTEL IN INR Cr.
Year 2008 2007 2006 2005 2004 2003 2002 2001
Raw Materials 155.3 53.95 54.42 83.7 0 0 0 0
Power & Fuel
Cost 1045.16 658.78 26.98 16.69 0.38 0.1 0.12 0.12EmployeeCost
1306.57 1102.03 754.99 488.1316.8
418.9
419.3
57.99
OtherManufacturingExpenses
8184.4 5813.824404.7
83139.4
81.29 2.41 1.21 1.67
Selling andAdministrationExpenses
3747.17 2250.331330.0
7869.69 15 10.5
26.42
13.19
MiscellaneousExpenses
1056.99 887.6 671.92 538.32 4.16 5.85 6.64 1.84
Less: Pre-operativeExpensesCapitalised
112.4 1.8 0.85 0.03 0 0 0 0
TotalExpenditure
15383.19
10764.71
7242.31
5135.98
37.67
37.853.7
424.81
TOTAL INCOME
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Year 2008 2007 2006 2005 2004 2003 2002 2001
Sales
Turnover25761.11 17851.6 11231.47 7903.03 0 0 0 0
Excise Duty0 0 0 0 0 0 0 0
Net Sales 25761.11 17851.6 11231.47 7903.03 0 0 0 0
Other
Income359.91 148.49 94.3 122.02 63.15 72.9 66.2 57.85
Stock
Adjustments9.05 30.07 -13.84 11.57 0 0 0 0
Total Income26130.07 18030.16 11311.93 8036.62 63.15 72.9 66.2 57.85
INVESTMENT PATTERN
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INVESTMENTS OF AIRTEL
Year Investments in INR Cr
2001 794.47
2002 1899.67
2003 1467.79
2004 1762.67
2005 931.90
2006 719.70
2007 1102.03
2008 1306.57
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PRODUCTIVITY
Productivity AIRTEL
Year Productivity
2001 2.33
2002 1.23
2003 1.93
2004 1.68
2005 1.56
2006 1.56
2007 1.67
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2008 1.70
PROFIT
PROFIT BEFOR TAX, TAX & NET PROFIT OF AIRTEL in INR Cr.
Year 2008 2007 2006 2005 2004 2003 2002 2001
Operating Profit10746.88 7265.45 4069.62 2900.64 25.48 35.1 12.46 33.04
Interest607.76 310.78 236.81 317 21.36 31.23 9.09 29
Gross Profit10139.12 6954.67 3832.81 2583.64 4.12 3.87 3.37 4.04
Depreciation3166.58 2353.3 1547.02 1019.36 3.87 3.6 3.23 3.45
Profit Before Tax6972.54 4601.37 2285.79 1564.28 0.25 0.27 0.14 0.59
Tax859.36 495.03 166.52 8.61 -0.12 0.05 0.01 0.2
Fringe Benefit tax37.23 25.5 19.05 0 0 0 0 0
Deferred Tax-168.24 47.61 88.14 345 0 0 0 0
Reported Net Profit 6244.19 4033.23 2012.08 1210.67 0.37 0.22 0.13 0.39
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Extraordinary Items48.38 31.19 12.57 28.22 13.29 23.13 47.59 28.09
Adjusted Net Profit6195.81 4002.04 1999.51 1182.45 -12.92 -22.91 -47.46 -27.7
NO. OF USERS (SUBSCRIBERS)
No. of Subscribers of AIRTEL
Year Subscribers in Million
2001 0.77
2002 1.11
2003 3.36
2004 9.83
2005 16.30
2006 22.77
2007 52.96
2008 82.92
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2009 107.99
SUMMARY OF MAIN FINDINGS
As per the discussion done above, we can conclude
Economic Parameters AIRTEL
Employment Upward trend
Sales Upward trend
Total Cost Upward trend
Total Income Sharp Upward trend
Investment Pattern No Such Pattern
Productivity Almost Constant
Net Profit Sharp Upward trend
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No. of Subscribers Sharp Upward trend
AIRTEL has shown a sharp upward trend in the number of subscribers, which help
AIRTEL to make more income by more sales hence more profit during last few years acceptin year 2008. In year 2008 its shown huge decrement in its profit. One of the reasons for this
is recession period over that period.
AIRTEL also has shown an upward trend in total expenditure (cost) over that period
of time with increase in employment cost as well during last few years.
AIRTEL has shown no particular pattern in it productivity but it has shown a bit of
negativity in it pattern.
AIRTEL has not shown any certainty in its investments.
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PART III
COMPARATIVE ANALYSIS OF THE TREND OF
MANAGERIAL ECONOMICS
At
BHARAT SANCHAR NIGAM LTD.
A PUBLIC SECTOR UNIT
www.bsnl.co.in
&
BHARTI AIRTEL LIMITED.
A PRIVATE SECTOR UNIT
www.airtel.co.in
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COMPARATIVE ANALYSIS
For doing Comparatives analysis between a public sector undertakings (BHARAT
SANCHAR NIGAM LIMITED) & private sector undertakings (BHARTI AIRTEL
LIMITED) we require following parametersof managerial economics:
Employment and Wages
Sales
Total Cost
Total income
Investment pattern
Productivity
Profit after tax
No. of Users (subscribers)
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
EMPLOYMENT & WAGES
Comparative Analysis of BSNL & Airtel in Terms of Employment provided by them in
INR Cr.
Year BSNL AIRTEL
2001 2748.70 7.99
2002 5203.10 19.35
2003 7302.39 18.94
2004 6810.89 16.84
2005 8393.02 488.13
2006 7833.61 754.99
2007 7693.56 1102.03
2008 8808.91 1306.70
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
SALES
Comparative Analysis of BSNL & AIRTEL in Terms of NET SALES in cr.Year BSNL AIRTEL
2001 11663.89 0.00
2002 24297.21 0.00
2003 25293.00 0.00
2004 31399.00 0.00
2005 33450.04 7903.03
2006 36138.93 11231.47
2007 34616.21 17851.60
2008 32359.53 25761.11
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
TOTAL COST
Comparative Analysis of BSNL & Airtel in Terms of Expenditure in Cr.
Year BSNL AIRTEL
2001 6871.91 24.81
2002 11685.94 53.74
2003 15924.26 37.80
2004 17634.13 37.67
2005 20291.64 5135.98
2006 21820.25 7242.31
2007 21770.00 10764.71
2008 33636.43 15383.19
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
TOTAL INCOME
Comparative Analysis of BSNL & Airtel in Terms of Total Income in cr.
Year BSNL AIRTEL
2001 11751.32 57.85
2002 27780.71 66.20
2003 28498.03 72.90
2004 36592.27 63.15
2005 37855.95 8036.62
2006 40759.54 11311.93
2007 39868.42 18030.16
2008 38053.40 26130.70
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
INVESTMENT PATTERN
Comparative Analysis of BSNL & AIRTEL in Terms of Investments in cr.
Year BSNL AIRTEL
2001 0.00 794.47
2002 0.00 1899.67
2003 200.00 1467.79
2004 200.00 1762.67
2005 200.00 931.90
2006 200.00 719.70
2007 200.00 1102.03
2008 200.00 1306.57
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
PRODUCTIVITY
Comparative Analysis of BSNL & AIREL in Terms of ProductivityYear BSNL AIRTEL
2001 1.71 2.33
2002 2.38 1.23
2003 1.79 1.93
2004 2.08 1.68
2005 1.87 1.56
2006 1.87 1.56
2007 1.83 1.67
2008 1.13 1.70
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COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OF
PROFIT AFTER TAX
Comparative Analysis of BSNL & Airtel in Terms of Net Profit in INR Cr.
Year BSNL AIRTEL
2001 748.82 -27.70
2002 4199.83 -47.46
2003 213.14 -22.91
2004 4447.38 -12.92
2005 8593.34 1182.45
2006 8404.37 1999.51
2007 7798.81 4002.04
2008 3009.39 6195.81
COMPARATIVE ANALYSIS IN BSNL & AIRTEL ON THE BASIS OFNO. OF USERS (SUBSCRIBERS)
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Comparative Analysis of BSNL & Airtel in Terms of Subscribers in Million
Year BSNL AIRTEL
2001 0.82 0.77
2002 2.04 1.112003 5.96 3.36
2004 8.88 9.83
2005 14.80 16.30
2006 24.78 22.77
2007 35.92 52.96
2008 45.28 82.92
2009 57.30 107.99
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SUMMARY COMPARITIVE ANALYSIS
Shown below is the performance of BSNL and AIRTEL in the following economicparameters over the last 10 years, as discussed above:
Economic Parameters BSNL AIRTEL
Employment Upward trend followed byconstant
Upward trend
Sales Upward trend Upward trend
Total Cost Upward trend Upward trend
Total Income Upward trend Sharp Upward trend
Investment Pattern Steadily Constant No Such Pattern
Productivity No Such Pattern Almost Constant
Net Profit Upward trend followed bydownward
Sharp Upward trend
No. of Subscribers Upward trend Sharp Upward trend
In the above analysis we have found that no of subscribers in both BSNL & Airtel has beenincresed wich helps to increase their sale & total income. Althoug we also find someincerase in cost to the both the companies.
Both Airtel & BSNL have shown an upward trend in profit except in 2008 by BSNL.Althoug Airtel have shown some loses till 2004 but after that it showed a great degree ofupward trend
BSNL has shown an constant investment pattern where as no perticular pattern is shownby Bharti Airtel.
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CONCLUSION
Telecom sector is one of the sectors which are really booming in India. In every organization
whether it is public or private company or even on the individual level telecommunication
plays a very important role for transformation of information. It is one sector touching life
every where. Due to the ever increasing need of computer hardware and system software
applications in both public and private sectors, Which helped telecom sector to plays an
important role to connect them world wide. Thus we see the growth of telecom sector helps
in the growth of IT sector & vice versa. Telecom industry has grown exponentially in the past
10 years. The New Economic Policy adopted by the Govt. of India since 1991 has helped
augment the growth with easier access to international markets.
This has been mainly due to:-
The rise in the telecom sector and the boom in the Indian economy.
The rise in the demand in the market due to good economic conditions.
Fall in the price of phone (handset).
The availability of new technologies in India and outside.
The emergence of new markets.
The investments by these companies for their expansion.
It has been observed that the total income, sales, no. of user (subscribers) of the two
companies have increased during the time period. This helps to providing more employment
as the employment cost & wages increasing.
Bharat Sanchar Nigam limited has made the income of more than Rs. 30853 cr with a
profit of more than Rs. 3009 Cr in year 2008. BSNL has succeed to add more 12 million
Subscribers to his network in last year making its 57 millions subscriber enterprise with the
growth rate of 22.36%.
Bharti Airtel limited is one company which has shown the growth rate of 44.47% last
year in his income & making a profit of RS. 6195.35 cr with the growth rate of 54.79% as
compared to 2007. Airtel has added 25 million people in 2008 with the growth rate of more
than 30%. Which makes its no subscriber more than 110 million people.
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BIBLIOGRAPHY
Retrieved from following websites:
www.bsnl.co.in www.airtel.co.in
www.trie.com
www.bworld.com
www.business2.com
www.business-today.com
Retrieved from following books:
Wage-productivity Relationship in Indian Public Sector
Author:-Dr. P.K. Chakrabarti
Investment Decision in Indian Public Sector
Author:-Dr. P.K. Chakrabarti
Coal Industry in West Bengal
Author:-Dr. P.K. Chakrabarti
CAPITALINE Database.
http://www.bsnl.co.in/http://www.airtel.co.in/http://www.trie.com/http://www.bworld.com/http://www.business2.com/http://www.business-today.com/http://www.bsnl.co.in/http://www.airtel.co.in/http://www.trie.com/http://www.bworld.com/http://www.business2.com/http://www.business-today.com/