Infrastructure for the Indus Towers Project, One

Infrastructure

For the Indus Towers project, one of the challenges is to find goal congruence with the three major stakeholder groups. The three stakeholder groups are the three companies engaged in the joint venture -- Bharti Airtel, Vodafone and Idea Cellular. The Indus Towers venture is an effort between the three partners to join their tower resources. The three stakeholders are the three largest players in the Indian market. Airtel operates only in India; Vodafone is global and Idea is a subsidiary of an Indian multinational.

The benefits of the infrastructure sharing project are to achieve a higher level of efficiency with infrastructure buildout. If the companies do not work together, they will each need to build their own infrastructure to cover all of India. This will create a high level of overlap as in many markets all three companies will build towers and other critical infrastructure. Passive infrastructure sharing such as with towers and other physical infrastructure allows for all three companies to lower their costs. However, all three companies are still competing with each other, which can complicate such partnerships.

The Stakes

Airtel's business model is that the company is a marketing operation, and tends to outsource the technical aspects of its business, including to Siemens, Ericsson and now the towers to the Indus Towers partnership. Airtel ended up taking over the tower capacity it had outsourced because European companies had trouble dealing with the operating conditions in rural India. Airtel wants to take its infrastructure holdings public and has already brought on some international investors in 2007 to begin that process.

Idea came on board after the initial joint venture was founded. Idea brought no infrastructure to the table, but was a customer for the excess capacity. For Idea, the stakes are to gain access to the market and be able to grow. Each company contributed employees to the partnership and wants to use the partnership as a tool to meet its own strategic objectives; conflict arises when those objectives conflict, which can happen when objectives are mutually exclusive or when there are capacity constraints. Dividing up problems also proved to be an issue for these companies. Other issues surrounded things like capital, in terms of who contributed what capital and for what purpose. Airtel in particular wanted to grow the company more quickly than the other firms. Complicating things is that the company has its own governance, and that means that no one partner can dictate the direction for the company -- compromise and an independent pathway are both quite likely in such a scenario.

Recommendations

Yang (2010) notes that there are fifteen different key success factors for such projects. Compromise is one of the KSFs he identified, but Yang also prescribes analysis of the changing stakeholder roles within the company. This is the case with Indus, because the roles and perspectives of the different companies were subject to evolution over time, changing the types of decisions made with this project and the perspectives of the companies contributing to these decisions. Thus, each time a potential conflict arises, the stakeholders need to assess their own needs, those of the joint venture and understand the intersection between interests. In most cases, the interests are similar, but the pathways to achieve those interests are quite different between the different players.

In this case, the joint venture is between three private companies, but there is often a public sector entity involved as well, and they are not guided entirely by profit. At least with Indus Towers all three companies want to make money. Odoni (2009) notes that one best practice is to have a specific means of communication between the different stakeholders. By keeping the lines of communication open, this will encourage the different stakeholders to ensure that they are working on issues and interests, something that will keep all parties oriented towards addressing solutions, rather than engaging in conflict.