Business Case Studies,Corporate Governance & Business Ethics Case Study, Indian Telecom War: Startup Reliance Takes on Leader Airtel in 4G Services

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Indian Telecom War: Startup Reliance Takes on Leader Airtel in 4G Services



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Code : COM0265

Year :
2013

Industry : Telecommunications

Region : India

Teaching Note: Available

Structured Assignment : Not Available

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Indian Telecom Growth StoryTelecommunications was first introduced in India in 1851 when operational landlines were laid near Kolkata (then Calcutta) by the British. After India became independent in 1947, the government of India did not make any great alterations to the telecommunications policies of the erstwhile colonial rulers. The industry was heavily government-controlled until it was liberalized in the early nineties It was only the New Telecom Policy of 1999 (NTP-99) that provided the much needed impetus for the growth of the industry by encouraging private operators...

Airtel's Move for BWA Airtel, an India-based global telecommunications company, had operations in 19 countries across Asia and Africa. The company offered mobile voice and data services, fixed line, high speed broadband, IPTV , DTH , turnkey telecom solutions for enterprises, and national and international long distance services to carriers. It was ranked among the six best performing technology companies in the world by BusinessWeek. It had more than 200 million customers across its operations....

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Reliance's Entry into Telecom The Reliance Group was founded by Dhirubhai H. Ambani and it became Indiaís largest private sector enterprise with widespread businesses interests, including exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics, and chemicals), textiles, and retail. The Group was listed in the Fortune Global 500 rankings. Reliance enjoyed global leadership in polyester yarn as it was the largest polyester yarn and fiber producer in the world...

Is India Ready Yet For 4G Services? In the telecom industry, business analysts considered two factors critical for success: the first mover advantage and the scale advantage. Airtel had both advantages in the 2G and 3G arenas, but RIL was confident that it had the scale advantage in 4G services (license in 22 circles against Airtelís 8 circles) and that it would be able to nullify Airtelís first mover advantage by offering superior 4G services. RIL hinted that it was in talks with handset makers to offer 4G devices at around INR 5,000 (USD 90) and undercut monthly rentals. RIL partnered with Russia-based voice and video over IP (VVIP) technology provider Spirit DSP to offer those services on its network...





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