Amatra White Paper on ‘FDI in the Indian Telecom Market’ highlights the Landscape & Opportunities for Investors

Bangalore, May 2007: Amatra Business Consulting (Amatra), a company focusing on strategic and business innovation consulting for hi-tech hi-growth markets, today released a paper on Foreign Direct Investment in the Indian Telecom Market.

In the last 10 years India has emerged as one of the largest and high potential telecom sectors in the world. The liberalization measures by the India government starting in the 90’s coupled with India’s innate market potential and tremendous local enterprise have placed the Indian telecom market in the third place after China and the US. The buoyant opportunities in terms of large number of present and potential subscribers have made the telecom sector a very lucrative investment opportunity for investors. This paper talks about some of the recent developments in the telecom sector in terms of reforms and the flow of Foreign Direct Investment (FDI) and suggests the opportunities and points to challenges for investors.

The paper has a discussion on the tremendous growth witnessed by the Indian Telecommunications Industry in the last ten years. The paper attributes the growth of the telecom sector in India to a combination of factors like increase in the amount of disposable income of the middle class, changes in lifestyle, the world's lowest mobile call rates (as little as $0.02 a minute), availability of low tariff mobile services, handset financing, and easy payment plans among others. However, the reforms initiated in the telecom sector by the Government of India have been identified as the main driver for the growth.

Today the Telecom Commission, the Department of Telecommunications (DoT) and the Telecom Regulatory Authority of India (TRAI) collaborate in managing the telecom sector. However the reforms that began in the 1980s with telecom equipment manufacturing being opened for private sector was the first step in the development of the Indian telecom market. The key push to open the telecom sector came in the mid 1990’s, first with the National Telecom Policy (NTP) in 1994 and then the NTP in 1999. There were three phases of reforms and the setting up of bodies like Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) to continue service delivery momentum.

The paper reflects on the reforms in the telecom industry and some of the resultant growth opportunities, the FDI Policy for the Telecom Sector and the Sector Wise Actual Inflow of FDI from August 1991 to January 2007. The paper goes on to enumerate the opportunities for the investors like the fact that India boasts of a practically untouched rural market, there is an investment opportunity of more than $22 billion across many areas and there are opportunities in application and content development ranging from gaming to education. The paper also throws some light on the caveats for investors such as the gap between percentages of inflows to approvals is lowest in Indian telecom sector.

The paper on Foreign Direct Investment in the Indian Telecom Market will help foreign investors identify the tremendous opportunity provided by the burgeoning Indian Telecom Market. It will help them factor in the pros and cons of investing in the Indian telecom sector. Please visit the Amatra website www.amatra.in to request a copy of the whitepaper.

About Amatra:

Amatra provides business design solutions across strategic marketing, Amatra Business Consulting (Amatra) is a consulting company for the hi-tech hi-growth markets. While our customers innovate on technology, we help them realize the market by catalyzing Business Model Innovation, align Strategy Development & Planning, help them in Strategic Marketing, Market Planning, Market Communication and by helping manage Customer Buy Cycles. Amatra’s customers in India are technology innovators that are seeking to be successful in the market and cut market clutter with their products and services; customers in US and Europe use Amatra for market analysis and research. More information about Amatra can be found on www.amatra.in

Contact:
Lillian D’Costa
+91.80.41256367
Lilian.dcosta@amatra.in


Corporate Address:

Amatra Business Consulting
#421, B-Wing
Carlton Towers
1 Airport Road
Bangalore
India - 560008