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al.); (Rahman, 136- 138) (Dasgupta)
From the segmentation analysis and mobile content revenues forecast, the need for launching the low-cost and ultra-low cost mobile cellular phone business in India based on value-added services that can be incrementally added to consumers' accounts is preferable to concentrating only on price alone. Creating the unique value proposition for the service based on mobile content also is attractive to potential partners who are necessary for the nationwide success of the company across India's broad geographic regions. This concentration on value-added services is also critical when the competitors to the proposed company are also taken into account. The following section provides insights into the competitive landscape in India for cellular and telecommunications.
Competitive Landscape and Analysis
The following is an analysis of the competitive landscape of providers that the proposed company will need to partner with in some cases, and compete with in others. Clearly the most important attribute of these partnerships strategies is attracting content providers who can sustain transfer rates at GSM level across India for extended periods of time to ensure the business model of the proposed company is feasible. Figure 2 provides an assessment of the competitive telecommunications landscape of the India, and illustrates the interrelationships in the market. Vodafone, at&T, Cognito, IBM, Verizon and T-Mobile all span multiple areas, illustrating their ability to scale across multiple roles in the value chain necessary to support the delivery of multimedia content.
Figure 2: India Telecommunications Competitive Analysis
Sources: AMR Research (et.al.); (Rahman, 136- 138) (Dasgupta)
An evaluation of service providers who have increased their breadth of coverage in India to alleviate risk is shown in Figure 3, Competitive Assessment of Mobile Solution Management Partners. The difference between the companies shown in Figure 2 relative to Figure 3 is that breadth of coverage over the telecommunications platform components as is shown in the latter diagram (Figure 2). Figure 3 shows that IBM, potentially a partner, also has a core business strength in partnering strategies, as does Computer Associates (CA) and Hewlett-Packard (HP). Nokia, the strongest competitor intent on creating their own launch strategy in India, needs to become the basis of comparison with regard to market execution performance.
Both of these analyses provide a useful foundation for analyzing who would be a potential infrastructure partner for the launch of the proposed new business.
Figure 3: Competitive Assessment of Mobile Solution Management Partners
Sources: AMR Research (et.al.); (Rahman, 136- 138) (Dasgupta) (Thiagarajan, et.al.) (Subhedar, 35-36)
Figures 2 and 3 illustrate that the Indian telecommunications market is maturing rapidly and the beginnings of consolidation are beginning to occur. In many industries consolidation is considered a precursor to pricing being used as the unique value proposition, yet in this case the consolidation of service providers forms the foundation of a reduction in risk. As Figure 2 shows, there is ample room for Joint Ventures (JV), a strategy that can significantly reduce the risk of launching the new company into an unfamiliar and untested market. As part of the risk mitigation strategy this will be the course of action the company takes going forward. Figure 4, Multimedia Cellular Devices Roadmap, shows the progression of services over the first four years of the venture's development. It is critical for the development of the Joint Venture partner with a technology provider capable of fulfilling the requirements of this product roadmap as well.
Organizational Structure at Launch
As the proposed business is focused on the development of a Joint Venture (JV) to gain the necessary insights while gaining the critical support necessary to operate the new business in India, it is recommended that the initial staff be 50 or less employees, with the following allocation of people per department.
First, the management team needs to include senior managers from the telecommunications industry who are well-suited for starting up entirely new operations throughout a third world nation. This includes previous experience throughout Asian countries and recognition of how chaotic the development of a new business in India can be. These senior managers also need to have a solid understanding and experience in working with the Indian government, specifically in the areas of legal and regulatory affairs, focusing on how to gain permission to operate while working to get an Indian national on the board of directors of the company, which is a core requirement. The senior management team must also have extensive experience in getting partnerships and Joint Ventures (JVs) created quickly in third world nations, yet also having the expertise in managing telecommunications requirements.
Reporting to the senior management team will be three departments, including Marketing & Sales, Operations, Finance and Accounting, Services, and Legal & Regulatory Affairs. These five departments each will be headed by a Vice President who has over twenty years of experience in the telecommunications industry, preferably in emerging and rapidly developing markets. It is highly advisable that each of the department Vice Presidents or senior managers be of Indian descent or Indian citizens to ensure the new business stays aligned to the unique cultural requirements of India. Considering the many findings of Hofstede (421, 422) this strategy of having each department managed and led by an Indian national who has been educated in the U.S. Or Europe so they also understand senior management, makes sense. The many failures of Joint Ventures in fact can be attributed to the lack of sensitivity to ethnocentric perceptions of western managers who attempt to force their views onto their subordinates. Ethnocentrism can cause a new venture to fail, and therefore needs to be guarded against vigorously, by having trained managers in leaders in key positions to guide a Joint Ventures' growth. The allocation of headcount by department needs to be approximately as follows. In senior management, there need to be five Vice Presidents, a government and legal expert or attorney to advice on how to work effectively with the Indian local and national departments of economic development. This is a very key position in any start-up, and this position should also be filled with a native Indian as well. In terms of headcount across Marketing & Sales, Operations, Finance and Accounting, Services, and Legal & Regulatory Affairs, the staffing levels need to be concentrated more in Operations and Services, as these two department fulfill the strategic role of integrating with the selected Joint Venture (JV) partners, creating and defining integration processes, and also creating the necessary internal controls to ensure projects stay in scope and on target for completion. Project management experts including Six Sigma expertise that can assist with the development of entirely new processes and approaches to getting Joint Venture systems in place and goals attained. The staff also needs to be acclimatized to the expectations of the ventures' senior management in the U.S., and will need to periodically visit the company to understand why objectives are defined in specific terms and how they interact with the other key aspects of the company's goals. In short, the senior managers of the Joint Venture must work to create a foundation of trust with their Indian employees so they understand the scope and range of objectives they are expected to attain. This management structure further supports the scalability of the financials for this business, which are shown in Appendix a of this paper. The financials show a minimal investment that is underscored by shared risk, which keeps operating expenses down. The concentration on market growth through advertising is also illustrated in the rapid sales ramp-up as well. In summary, the business model of this Joint Venture (JV) to launch low cost cellular phones into India is fraught with risk yet can be successful given the selection of the right infrastructure partner, which needs to be at&T as the accumulated research shows that this infrastructure partner has had the greatest success in working with the Indian government (Frieden, et.al.) while at the same time accomplishing its build-out of bandwidth the most effectively of any potential Joint Venture partner in the country today.
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Geert Hofstede. "Asian management in…[continue]
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