Global Business Strategy: Telecommunication

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Table of Contents

Brazil
Russia
India
China
Investment rationale
Works Cited

Brazil

Brazil is the telecommunication hub of Latin America. It boasts of the biggest and sophisticated telecommunication industry the region. The National Telecommunication Agency is the industrys regulatory body. It seeks to ensure that the players enjoy protection from unhealthy competition while at the same time ensuring high regard for consumer interests. The industry comprises of firms that provide fixed line telephone services, mobile phone services as well as internet and cable television services (Leandro, 24).

The liberal and competitive environment, has not only favored local investment in the industry in the country, but has also attracted foreigners, as well. Some of the foreigners have made partnerships with local firms. The biggest players in the industry include the Telefonica Group, America Moville/ Telmex Group and the Oil (Telemar). These companies have subsidiaries that provide the different services to the industry at various levels with respect to geographical variation and income levels of the people. The nature of competition is thus based on the regions of operation and the target market for the various investors.

Investment opportunities are, however, more promising in the wireless sector of the industry because of the vast growth that continues to be experienced in it. The potential is not effectively tapped, explaining the low-penetration levels by the industry players currently in the market (Millar, 34).

Russia

In Russia, the telecommunication industry is vey advanced and different from that of Brazil. For instance, it is regulated through the Federal Law on communication. The fixed line sector is highly developed, and is based on a highly networked fiber optic cable that is spread out throughout the country. The industry was for a long time state controlled, and thus private companies investment was not possible. However, the liberalization programs of the 1990s paved way for players in the other fields of telecommunication- mobile phone service providers and internet service provision to hit the market. The result was aggressive coverage that explains why the country is currently among the highest ranked markets for mobile telephone operators (Litecky et al. 112).

India

Indias fast growing economy can be attributed to the countrys relentless investment in among other industries, telecommunication. The industry has experienced extensive reforms that have encouraged continued growth in terms of coverage and subscription to services rendered. Among the firms with significant control in the industry include the state run BSNL which provides services for fixed lines as well as mobile phone subscribers. It is the largest in India, and faces competition from other firms such as the government owned MTNL and VSNL, the privately owned indigenous BHARTI and TATA Teleservices as well as the internationally owned Vodafone which operates as HUTCH in India (Christensen, 3).

The investment opportunities in the country are very encouraging due to the potential that lies within the regions that have not been effectively exploited. This is because the greater percentage of the market is untapped, and the nature of the already exploited is such that it is customer driven. For a company with bigger bargaining power in terms of service delivery and customer satisfaction, investment is likely to be viable in this country. Diversification of telecommunication services is also the key to attainment of success, especially through partnership with already established industry players in provision of such new services (Patterson, 45).

China

The sub continent China boasts of a highly dynamic economy that revolves around information and technology with respect to heavy investment in development infrastructure of which telecommunication is pivotal. The telecommunication industry as is the case with most of the other industries in china is mostly state protected due to the countrys system of governance that is communistic.

This means that investment in the country is mainly by locals, with the international community being allowed limited or no space within Chinas economy. State run China Telecommunications Corporation also called China Telecom is the biggest player, and offers services that range across the board in telecommunication. Its strength is mainly etched in the government support it obtains. However, there are other players in the industry who cater for the ever hungry market that due to its size and nature of demand can not be fully satisfied by the corporation (Porter, 17). These players include china Mobile (Hong Kong) Limited which specializes in provision of mobile phone services as well as related services.

This company owns a number of subsidiary companies which operate on its behalf in the various regions in China, China Unicom whose parent company is the China Telecom and China Netcom Corporation. It is worth noting that recent relaxation of the countrys policies has seen massive interest by the international community especially since the cost of telecommunication equipment in China is relatively low (Boulton, 45).

Investment rationale

For a global business wishing to invest in these countries in the telecommunication sector, it can be seen that Brazil and India are most ideal due to the liberal nature of their economies. This is because there is an element of fairness among the players, and the market being demand pulled does not have restrictions nor insurmountable difficulties to new firms entering it (Walker, 10). This is however not the case with China since the state exerts too much control on its economy.

Coupled with massive investment potential in the two countries (Brazil and India), the prospects of investment in them are more economically viable in the long run, especially in the mainstream sectors of the industry. This does not mean that investment in Russia and China is not worth undertaking. This is because this may not necessarily be directly, but as partnerships with local companies that have already established themselves in the industry to widen their scope of services (Millar, 23).

Works Cited

Boulton, William. China Telecommunication Industry Overview. 2007. Web.

Christensen, Clayton. The Past and Future of Competitive Advantage. MIT Sloan Management Review, 42.2 (2001): 1-6.

Leandro, Rosa. Brazil Telecom/ IT Industry. 2007. Web.

Litecky, Charles et al. Competitor Analysis and Its Defenses in the E-Marketplace. Communications of the ACM, 48.8 (2005): 107-120.

Millar, Porter. Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press, 1985.

Millar, Vincent. How Information Gives You Competitive Advantage. New York: Harvard Business Review, 1985.

Patterson, Evans. Blown To Bits: How the New Economics of Information Transforms Strategy. New York: Harvard Business School Press, 2000.

Porter, Michael. The Five Competitive Forces That Shape Strategy. Harvard Business Review, 1.1(2008): 1-20.

Walker, Beth et al. Competitive Cognition. MIT Sloan Management Review, 46.4: (2005), 1-11.

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