Disaggregation of infrastructure and service: Learning from Indian telecom sector

摘要

• Telecom market in India has seen tremendous growth post industrial liberalization that saw unveiling of national telecom policy in 1994 followed by new telecom policy in 1999. Today India boasts of 900 million telecom subscribers and very competitive tariffs at less than US$ 0.01 (less than INR 0.5) per minute. • Indian Telcos, in a fiercely competitive market with 8 to 12 players in each circle, did a good job in keeping costs low and making their business profitable at low ARPUs of USD 2–3 per month. • Companies took bets on technology: GSM / CDMA earlier and 3G HSPA/ TDLTE now. The focus on differentiation and capability building through technology management that was noticed in earlier phases of growth has reduced in the last phase with Telcos outsourcing their network and IT systems and sharing infrastructure. • This paper attempts to study the impact of policy and outsourcing decision on Telcos' competitiveness particularly in the face of global competition and ability to succeed during volatile time and rapidly changing market dynamics — The key objective of our study is to understand the growth of Indian telecom sector during three phases (Phase I from 1994 to 1999, Phase II from 2000 to 2006 and Phase III from 2007 onwards), exploring technology strategies and competitiveness performance with specific focus on the relationship between infrastructure and service integration — We begin by understanding the impact of policy intervention on the growth and in creating competition and expanding the telecom market in India — Some leading Indian companies adopted a unique business model outsourcing large part of their Network and IT infrastructure and this paper attempts to evaluate its impacts.