Strategic Thought Transformation - The IIPM Think Tank

T E L E C O M R E V O L U T I O N
infrastructure for a longtime now. The
lack of an overall comprehensive plan to
accommodate the ever increasing mobile
subscriber base is appalling.”
In truly long-term strategies and policies,
the issues of 3G and spectrum cannot
be separated from those of value-added
services. Ultimately, it is the efficient infrastructure
that enables high-speed networks
and diverse, low-cost services.
Boosting Indian Competitiveness
Boosting Economic Growth
To India’s regulators and policy authorities,
the key challenge is to boost conditions
for rapid and sustained productivity
growth – to facilitate the transition from
agriculture to industrialization and knowledge.
In emerging economies, the mobile
revolution can have highly beneficial outcomes.
Due to lower cost in rollout over
large areas than fixed-line telecom, the
economic growth impact of mobiles is
large in both developed and developing
countries, but around twice as important
in the latter.
Strongly supported by operators, vendors,
regulators and industry bodies, the
Figure 8 India in Global Competition
Growth Competitiveness
Index
Business Competitiveness
Index
1. Finland 1. United States
2. United States 2. Finland
3. Sweden 3. Germany
4. Denmark 4. Denmark
5. Taiwan 5. Singapore
6. Singapore 6. United Kingdom
7. Iceland 7. Switzerland
8. Switzerland 8. Japan
49. China 31. India
50. India 57. China
Business Competitiveness Index (BCI)
BCI
Company
Strategies
Quality of Business
Environment
2005 1998 2005 1998 2005 1998
India 31 44 30 50 31 42
China 57 42 53 35 58 44
Despite reforms,
levies and duties
on Indian telecom
sector remain
some of the
highest in the
world
government goal is 250 million telephone
lines in 2008, which is predicated on 200
million mobile subscribers. Such objectives
require changes.
Despite reforms,
levies and duties
on Indian telecom
sector remain some
of the highest in
the world, which
leaves negligible
surplus for expansion,
while slowing
down the diffusion
of new technologies.
The mobile
industry should not
be viewed just as a
source of revenue
by the government,
but as an enabler of
economic growth.
Over 2005, the
government introduced a number of significant
policy measures to realize the
potential of India’s mobile segment. In
the long term, one of the most important
measures has been the enhanced FDI limit
in telecom from 49 percent to 74 percent,
which is attracting
major foreign
multinationals with
substantial investment
plans. These
global telecom and
IT companies have
committed investments
of over US $
8 billion. Sustaining
such encouraging
trends would assist
to realize the dream
of India as important
regional hub.
Staying Close to
the Productivity
Frontier
To the leading mobile
industry firms
– including operators,
equipment
manufacturers and IT
enablers – the task is
to stay close to the cutting edge in innovation-driven
growth. According to the Global
Competitiveness Report 2005-2006 by
the World Economic
Forum, India ranked
50th, right after
China, in the growth
competitiveness index
(GCI). With business
competitiveness index
(BCI), India’s ranking
has improved, while
China’s has decreased
(Figure 8).
In the innovation-driven
stage of
economic development,
it is the ability
to produce innovative
products and services
at the global technology
frontier. In
business process outsourcing,
many Indian ICT giants, including
Wipro, Infosys and Tata, have managed
to move higher in the value-added. The
mobile revolution holds compa rable
potential to ambitious Indian firms.
Due to globalization, mobile future
now has two faces: innovation and new
services in maturing markets, double-digit
growth and new subscribers in emerging
markets. While maturing markets remain
necessary to industry growth, emerging
markets – particularly China and India
– are now critical to industry leadership.
For Indian operators, IT enablers, even
nascent equipment manufacturers, the secret
of success is to excel in the new ‘dual
business models’ that capitalize on India’s
inherent cost advantage, while focusing on
unique products and services that can be
leveraged worldwide.
New Roadmap
With industry globalization, the ongoing
transition to multimedia cellular and alternative
broadband access technologies
requires:
firm-level strategies, regional and
government policies which embrace globalization;
close cooperation with US technology
sector to benefit from US capabilities in
An IIPM Intelligence Unit Publication STRATEGIC INNOVATORS 71