Internationalisation of the Indian telecommunication industry (1947–2004): A firm-level perspective

Abstract

While the importance of the telecom revolution in India has been recognised, little attention has been paid to the diverse international influences at the firm level. This article addresses this gap by developing a firm-level framework, drawing on the resource-based view, institution-based view and the knowledge-based view of the firm, and by drawing on data related to the various foreign firms’ entry strategies during the pre-liberalisation period (1980–1991) and the liberalisation period (1991–). The article demonstrates that the two periods required foreign firms to have different capabilities to enter the Indian telecom industry. The article also sheds light on the international knowledge-transfer process in the Indian telecommunications industry with a specific focus on the differences between different foreign-country firms.

Keywords:

• Telecommunication
• India
• organisational capabilities
• internationalisation
• strategy

Notes

1. Telecom Regulatory Authority of India (TRAI).

2. Given India’s large population spread across urban and rural areas, it is instructive to look at the urban/rural difference in teledensity. By mid-2017, urban teledensity was 172.98 and rural teledensity was 57.73. The Indian telecom sector still has a significant challenge in achieving urban/rural parity.

3. While not systematic data collection, I have benefitted from conversation with Ashok Juneja, ex-CEO of Bharti Broadband and part of the Usha Martin Telecom bidding team.

4. Committee of Public Undertakings (COPU).

5. There were a number of strikes at P&T and ITI during this period.

6. Deregulation of the telecom industry is mired in controversy. Two telecom ministers, Sukh Ram (1993–1996), and A Raja (2007–2010), have been prosecuted of corruption. Because the process of granting telecom licences is set by the telecom minister, and firms are looking for information about the policy, it opened up the potential for corruption and bribery.

7. The DoT invited bids for the first licences for the metro cities on 31 March 1992. The DoT announced the winners on 12 December 1992. Four companies filed writ petitions at the Delhi High Court, challenging the decision. On 26 February 1993, the Delhi High Court upheld the challenge from two companies, forcing the DoT to change the companies it granted licences. The resulting changes meant that Tata Cellular lost its licence and, hence, challenged this in the courts. On 26 July 1994, the Supreme Court of India delivered its verdict on the bidding process for the metro licences. The evidence presented in the two cases provided useful data for understand the joint venture partnerships in the bidding process. Since the courts examined and clarified the criteria used for selection, they provided information on the technical and financial capabilities of the foreign partners.