...Foreign Direct Investment in the Indian Telecommunications Sector By Keith Green Abstract This paper will examine the current status of foreign direct investment (FDI) in the Indian telecommunications sector and the issues facing foreign companies seeking to invest in the Indian telecommunications sector. The paper concludes with a brief econometric examination of the factors influencing the level of FDI in the Indian telecommunications sector. Introduction In the early 1990s India began to open up an economy that was previously closed to foreign direct investment (FDI). The liberalization in India included the gradual granting of authority for foreign direct investment in specific sectors of the economy. India has received significant inflows of foreign direct investment after liberalizing its economy in 1991 (see Figure 1 in the appendix). FDI inflows to India have exceeded many other ASEAN countries over time. However, China, not depicted in Figure 1, continues to be the leading destination for FDI in the Asia-Pacific region. India has achieved substantive improvements in telecommunications access since opening its telecommunications sector in the early 1990s. However, India has realized fewer benefits than were possible during the period of market reform. The slow implementation pace of liberalization, disparity between urban and rural areas and unclear regulations have impeded the flow of investment to the telecommunications sector in comparison to other emerging market...
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...Performance of Indian firms before and after entry of foreign firms Under the Guidance of Prof. Saptarshi Purkayastha Under the Guidance of Prof. Saptarshi Purkayastha Submitted by: Group 6, Section B JAYASHREE LANJEKAR PGP/16/024 HEMANT KUMAR PGP/16/083 NISHANTH S PGP/16/096 T DURGALAKSHMI PGP/16/115 ARKAPRABHA DEBNATH PGP/16/133 UMESH KUMAR (GL) PGP/16/174 Submitted by: Group 6, Section B JAYASHREE LANJEKAR PGP/16/024 HEMANT KUMAR PGP/16/083 NISHANTH S PGP/16/096 T DURGALAKSHMI PGP/16/115 ARKAPRABHA DEBNATH PGP/16/133 UMESH KUMAR (GL) PGP/16/174 CONTENTS 1. | Introduction | 3 | 2. | Research Questions | 3 | 3. | Research Methodology | 4 | 4. | Literature Review | 4 | 5. | Conclusion | 14 | 6. | Tables | 15 | | | | | | | Introduction FDI refers to direct investment in business or production in a country by a foreign company. It leads to capital inflows from abroad into the production capacity of an economy, and facilitates international trade and knowledge transfer. It is a source of employment and capital which results in country's development. It improves the foreign exchange, helps transfer new technologies, increases competition, exports and tax revenues. It benefits the recipient country's business in terms of management, revenue generation by following the best practices which are of global standards. The policies related to FDI underwent major change in 1991 as a part of structural adjustment program. Since...
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...India’s telecommunication is the second largest in the world based on the total number of telephone users both fixed and mobile phone. Indian telecom sector is more than 165 years old. Telecommunications was first introduced in India in 1851 when the first operational land lines were laid by the government near Kolkata (then Calcutta), although telephone services were formally introduced in India much later in 1881. Further, in 1883, telephone services were merged with the postal system. In 1947, after India attained independence, all foreign telecommunication companies were nationalised to form the Posts, Telephone and Telegraph (PTT), a body that was governed by the Ministry of Communication. The Indian telecom sector was entirely...
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...Characteristics of the Industry: Telecommunications started in the nineteenth century with the telegraph, and developed through the telephone and radio to TV to satellites and the Internet etc. The data transmitted has advanced from signals through voice to pictures and data and, with the development of convergence, to combinations of these. Every year, new technologies increase the services available and the speed of delivery. A combination of factors is resulting in the ever-decreasing cost of these services. The Communication Companies in India are on the ever rising trend and there has been a stupendous growth in this sector over the last decade. The telecommunication industry in India is one of the rapidly growing industries in the world and has also developed the second largest communication network. Major players in Indian telecom industry are Tata Communications, Airtel, Reliance, Vodafone, BSNL, Tata tele services etc. The Telecom Regulatory Authority of India (TRAI) is the independent regulator of the telecommunications business in India. TRAI was established on...
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...importance. Background of the Study Today’s globalised information driven economy this can also comprise issues like • How other customers or influencing groups perceive the product or brand • The degree to which the customer feels the actual marketing campaign addresses the most important issues • Responsiveness and service quality of any affiliates, e.g. distribution partners Customer perceptions are dynamic. First of all, with the developing relationship between customer and company, his perceptions of the company and its products or services will change. INDUSTRY PROFILE INDIAN TELECOM AND CELLULAR INDUSTRY The telecom industry is one of the fastest growing industries in India. India has nearly 200 million telephone lines making it the third largest network in the world 2cr China and USA. With a growth rate of 45%, Indian telecom industry has the highest...
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...debate on the public versus the private sector— which one of the two is better for the growth of Indian economy—has been long alive. It has assumed increased importance with India’s recent impressive performance in all fields—from IT to computer software, from telecommunications to health, from generation of energy to manufacturing of industrial goods. While the popular belief is that most of the public sector undertakings are white elephants—a drain on the Indian economy, the fact remains that many public sector undertakings, mainly in the field of telecommunications and petroleum and gas explorations such as the Bharat Sanchar Nigam and the National Thermal Power Corporation, have outperformed most of the private sector undertakings in the same fields and registered more profits than them.In telecommunications, the Bharat Sanchar Nigam continues to lead from the front leaving many big and reputed private players such as Bharti Mobile, Bharti Telenet, BTA Cellcom, Escotel Mobile Communication, Tata Internet Services and Hutchison Telecom East far behind. Where the private players have even made losses, the Bharat Sanchar Nigam has made huge profits. In the banking sector, too, public sector undertakings remain far ahead vis-a-vis most of the private players in the business. In the finance sector, predominantly banking, public sector undertakings have accounted hugely for the aggregate net profits compared to private sector undertakings. The situation remains somewhat...
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...A BRIEF REPORT ON TELECOM SECTOR IN INDIA January 2015 For more information, contact: sateesh.kulkarni@asa.in A brief report on Telecom Sector in India 1. INDUSTRY OVERVIEW 1.1 Introduction The Indian telecommunications industry is one of the fastest growing in the world. Government policies and regulatory framework implemented by Telecom Regulatory Authority of India (TRAI) have provided a conducive environment for service providers. This has made the sector more competitive, while enhancing the accessibility of telecommunication services at affordable tariffs to the consumers. In the last two decades, the Indian Telecom Sector and mobile telephony in particular has caught the imagination of India by revolutionizing the way we communicate, share information; and through its staggering growth helped millions stay connected. This growth, however, has and continues to be at the cost of the Climate, powered by an unsustainable and inefficient model of energy generation and usage. Simultaneously, this growth has also come at significant and growing loss to the state exchequer, raising fundamental questions on the future business and operation model of the Telecom sector. Telecommunication services are globally recognised as one of the driving forces for overall economic development in a nation. They are also one of the prime support services needed for rapid growth and modernisation of various sectors of the economy. The Government of India recognises...
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...Introduction Industry Profile India's telecommunication network is the third largest in the world and the second largest among the emerging economies of Asia on the basis of its customer base and it has one of the lowest tariffs in the world enabled by the hyper-competition in its market. Major sectors of the Indian telecommunication industry are telephony, internet and broadcasting. Today, it is the fastest growing market in the world. The total number of subscribers during July-2012 was recorded to be 679.05 million with an increase from the previous year of 0.25%. The total revenue of the Indian telecom sector grew by 7% to 283,207 crore (US$51.26 billion) for 2010–11 financial year, while revenues from telecom equipment segment stood at 117,039 crore (US$21.18 billion).The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for India’s resurgent India’s economic growth. Major sectors of telecommunication industry in India are telephony, internet and broadcasting. The primary regulator of telecommunications in India is the Telecom Regulatory Authority of India (TRAI). The mission of TRAI is to create and nurture an environment which will enable the quick growth of the telecommunication sector in the country. One of the major objective of TRAI is to provide a transparent policy environment. TRAI has regularly issued orders and directions on various subjects like tariff, interconnections...
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...Title: Financial Leverage Practice of Indian Communications Ltd.: Bane or boon Indian Communications Ltd. had been a zero debt company since start. Of late, shareholders of the company were pressurizing to include debt in the capital structure as shareholders competitor company were getting a higher yield on account of financial leverage. The shareholders’ movement from Indian Communications has resulted in decline in the market price of the company. The board of the company was under a dilemma- should they go for debt not? If they went for debt, it might be risky, and if they did not would- shareholders would withdraw. In both the cases, it would affect the company’s survival. INDIAN COMMUNICATIONS LTD. Indian Communications Ltd was a telecommunication company headquartered in Mumbai, India. It was a leading player in next generation, integrated (wireless and wire line), and digital network, covering over 20,000 cities and towns and over 2, 00,000 villages . It had business operations in more than 20 countries. With US $ 10bn revenues in FY 14 it had been a great last year. It was India's truly integrated telecommunication service provider. The company had a Customer base of around 100 million including over 2 million individual overseas retail customers and corporate clientage over 30,000 Indian and multinational corporations. . Two friends started it in 1997 with just US$ 1000. From the beginning, the company had followed a conservative financing...
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...Background Paper submitted to the Committee on India: Vision 2020 Telecom Sector in India: Vision 2020 Manas Bhattacharya*, IES (Deputy Director General (Finance), Department of Telecommunications, Ministry of Communications & IT, Government of India) The views exposed in this paper are that of the authors not of the Planning Commission Telecom Sector in India: Vision 2020 by Manas Bhattacharya*, IES (Deputy Director General (Finance), Department of Telecommunications, Ministry of Communications & IT, Government of India) Introduction The purpose of this paper is to construct a vision of Indian telecom sector for the year 2020, i.e., about two decades from now. Development being a continuous process, the choice of the year 2020 is just an arbitrary division of time, a pre-defined time horizon to take stock of what is likely to be achieved. Pre-portrayal of a stage of development in future requires understanding of the process of change, the dynamics that set law of motion. In attempting to do so, the present paper deciphers the recent past. Process of change is often volatile and responsive to intervention and global circumstances impacting it. In such an inherently dynamic situation it is convenient to assume that cross-country experiences incubate the most recent seeds of change. This is because countries at various stages of development encapsulate developmental experiences that occur with the passage of time. The present paper isolates...
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...“REPORT ON IMPACT OF TELECOM INDUSTRY ON INDIAN ECONOMY” INTRODUCTION The Indian telecom industry is one of the fastest growing in the world. Government policies and regulatory framework implemented by Telecom Regulatory Authority of India (TRAI) have provided a conducive environment for service provider. This has made the sector more competitive, while enhancing the accessibility of telecommunication services at affordable tariffs to the customers. In the last two decades, the Indian Telecom Sector and mobile telephony in particular has caught the imagination of India by revolutionizing the way we communicate, share information, and through its staggering growth helped millions stay connected. This growth, however, had and continues to be at the cost of the climate, powered by an unsustainable and inefficient model of energy generation and usage. Simultaneously, this growth has also come at significant and growing loss to the state exchequer, raising fundamental questions on the future business and operation model of the telecom sector. The telecom industry has witnessed significant growth in subscriber base over the last decades, with increasing network coverage and a competition induced decline in tariffs acting as catalysts for the growth in subscriber base. The growth story and the potential have also served to attract newer players in the industry, with the results that the intensity of competition has kept increasing. The sector expected to witness up US$ 56.3 billion...
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...Telecom Industry in India 1. INDUSTRYOVERVIEW 1.1 Background The Indian Telecommunications network is the third largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world. The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for India’s resurgent India’s economic growth. 1.1.1 Growth This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector. The rapid strides in the telecom sector have been facilitated by liberal policies of the Government that provide easy market access for telecom equipment and a fair regulatory framework for offering telecom services to the Indian consumers at affordable prices. 1.1.2 Wireline Vs Wireless It has also undergone a substantial change in terms of mobile versus fixed phones and public versus private participation. The preference for use of wireless phones has also been predominant in the sector. Participation of the private entities in the telecom sector is rapidly increasing rate there by presenting the enormous growth opportunities. There is a clear distinction between the Global Satellite Mobile Communication (GSM) and Code Division Multiple Access (CDMA) technologies used and the graph below shows the divide between the two. 1.2 Segment wise Status 1.2.1 Wireline Services...
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...Orascom Telecom Case Course: MKTG36048 Date: January 24th, 2012 Sheridan College Executive Summary With Orascom’s Algerian office being attacked and its failure to enter the Indian market, they have a real problem assessing risks in internationalization. The company has done really well locally becoming the market leader within Egypt by owning 43.6% of market share within the telecom industry. Algeria showed the right signs for entry as its GDP increased at a rate of 3.8% per year. There was also very little competition in Algeria since there was only one telecom company available. However there were country risks that were not assessed. This resulted in Orascoms office in Algeria to be attacked by angry soccer fans. India took on new liberalized laws that would open the telecom industry to the private sector and reduce tariffs. The telecom sector was projected to make $43 billion in revenues. This shows that there were investments to be made in the industry as there were millions of new subscribers every year. However, Orascom failed to capitalize on the huge Indian market as it failed in the Indian market within in a short amount of time of entering. If Orascom follows the recommendation of improving its strategic planning, then the risks of internationalization will be minimized and this will result in the company being very successful entering foreign markets. Table of Contents Introduction 4 Environmental Analysis 5 SWOT Analysis 10 Problem Statement...
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...Consultation Paper No 3/2011 TELECOM REGULATORY AUTHORITY OF INDIA Consultation Paper On Green Telecommunications 3rd February, 2011 Mahanagar Doorsanchar Bhawan Jawahar Lal Nehru Marg New Delhi-110002 Preface Operation of telecommunications networks requires electrical power. The expense on energy accounts for a significant share of the operational cost of these networks. This is particularly so in the rural areas where availability of power is uncertain. The use of diesel generators to ensure continuous power supply has the disadvantage of increasing the greenhouse gas emission and consequent enlargement of the carbon footprint which has a deleterious impact on the environment. While contribution of the telecommunications sector to the global carbon footprint is low compared to other sectors like transportation and construction, it nevertheless contributes a noteworthy share and increasingly so with growing reach of the telecommunications network. Efforts are afoot, all over the world, to find measures to deal with this issue. As the second largest and fastest growing market in the world, there is need for India to be conscious of the concerns in this regard. Besides, as a country heavily dependent on import of petroleum products while being abundant in renewable energy sources there is scope for innovative measures towards making telecommunications green. It is in this regard that TRAI believes that this is an opportune time to discuss the related issues...
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...determine the customer satisfaction & expectation towards a telecommunication company in West Midnapore which is a district of West Bengal. A descriptive study was conducted to achieve the objectives. In total 250 respondents filled a well-structured questionnaire having a list of statements pertaining to products, services & facilities provided by the service provider. Results reveal that the dimensions which influence the satisfaction level of customer’s are: Core services (like good coverage, good connectivity and network quality) and call rate. Further results show that there is a significant relation between the brand name and the preference of customers. Hence, it has been recommended that telecom companies should focus on connectivity, call rate, coverage and network quality. Keywords: Customer Satisfaction & Expectation, Customer Preference, Product Quality, Value for Money, Analysis of Strengths & Weaknesses of the Product. INTRODUCTION The breathtaking growth of the telecommunication companies in India over the last twenty years has made a history. The economic resurgence affected in the early 1990s brought around a paradigm shift on the overall business scenario of India. With the arrival of private telecommunication companies in India, the industry observed introduction of mobile phones into the Indian market and it became extremely popular amongst the Indian masses. India's telecom sector has shown huge expansion in the recent years in all respects...
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