(a). Problem Essay: The main problem facing Bharti Airtel Limited is “How to manage capital expenditure for its operations and how to deal with the expected exponential growth and competitive environment”. The challenges that the company faces are1. Keeping pace with expansion: Bharti's customer base is growing at 100% annually. It currently has its mobile operations in 15 out of 25 circles in the country and its fixed line operations in 6 circles. So it is a huge challenge to keep up with the expansion.2. Capital Expenditure and Risk: They are facing a serious capital expenditure problem. They could not run the new software on equipment purchased 2 years ago and it is no longer useful. They require a cost structure linked to reliable and predictable usage. They want to buy fewer boxes but get maximum capacity and coverage to remain competitive.3. IT Requirements: They need an IT network that can scale to the size the organization is expected to become in a few years. There is a scalability issue in their system. Their IT infrastructure is further complicated by incompatible IT systems inherited through acquisitions and as a result faces the need for large IT investments to get things right.4. Human Resource Problem: It is becoming difficult for the company to hire more and more people and retain the best and brightest people.5. Remaining Competitive: In 2002-03, the Indian market became highly competitive. Due to declining ARPU (average monthly revenue per customer unit), players have struggled to acquire new subscribers. As the industry consolidates, the focus is shifting from having a national footprint to being able to provide value-added services. Work...... half of the paper...... the steps you need to go through when dealing with suppliers. The proposed idea seems satisfactory in achieving the results. One thing that should be ensured is that they incorporate risk clauses into the plan. (d). Conclusion: To remain competitive in India's rapidly growing telecom sector, companies should be efficient and able to retain customers by reducing the cost of service. This can be achieved by better managing capital expenditure. One of the options available to Bharti is to opt for strategic outsourcing. The case illustrates the innovative approach to gain competitive advantage through outsourcing and also discusses the pros and cons of outsourcing. If the deal is successful, Bharti can reduce its capital expenditure and grow with the growing customer base, as well as effectively reduce costs.