All the major private telecom operators have been aggressively targeting the rural markets though such markets have their own challenges like high costs of network roll-out and operations, high sales and servicing costs per subscriber, etc. His teaching and research interests include areas like managerial economics, economic environment of business, global competitiveness and international trade issues. In the fixed wireless service segment, TTSL has remained the undisputed market leader among all the private operators in India. Bhawsar rather than the static approach of looking at the end results, i. It offered calls on any network, irrespective of the place in the country, at 1 paisa per second.
This list can be lengthy, but all these factors, by and large, originate from within the boundaries of the participating firms. Tata DoCoMo worked with a simple, easy to understand per second pricing model for almost all the services it offered including voice calls, SMS and VAS like 24 hour music, cricket commentary, voice chat, etc. Till date, both RBI and the finance ministry had said that a contract between the two companies — under which Docomo was guaranteed a payout — would violate foreign investment rules. The intension was to monitor progress of the alliance and reap synergies. Under such circumstances, brand positioning became very important. All the major private telecom operators have been aggressively targeting the rural markets though such markets have their own challenges like high costs of network roll-out and operations, high sales and servicing costs per subscriber, etc.
For a diversified group like Tata making a foothold in the Indian telecom business by capturing a respectable market share and establishing the Tata DoCoMo brand were more important than just making quick bucks. All the major private telecom operators have been aggressively targeting the rural markets though such markets have their own challenges like high costs of network roll-out and operations, high sales and servicing costs per subscriber, etc.
ntt docomo joint venture with tata case study
In India, the inter distance between two BTS is less than metres, the lowest in the world Sridhar, b. Dofomo, in a JV, a lot of deliberations happen for selection of partners.
It is also a relationship between two or more countries and therefore its social and political impact could be much deeper. The wireless subscription crossed the wire line connections in September and continued to grow with an annual average of TTSL until today is an unlisted company.
In contrast, NTT with its limited business interests outside telecom was hungry for making instant profits from a growing Indian market. Unfortunately, Tata DoCoMo was unable to utilise the allocated spectrum to its full efficiency.
According to Iriyama et al. The strategy of pay per second worked well for the TTSL and its customers. However, in the later years, maintaining financial performance became a major challenge for TTSL. TTSL was the first among the private players in India to launch 3G services in nine licensed service areas for which it had 3G licenses.
While borrowing from the resource dependency theory, they convey that once the partners are done with the type of resources, they were seeking to form an alliance, there remains no motivation for them to continue. Therefore, it must be utilised before the advantage ceases. It aims to provide high level of satisfaction to its customers for international roaming and corporate mobile services http: Vickers analysed JVs as a way to deter entry through pre-emptive patenting.
In fact, more number of JVs come to the limelight when they terminate prematurely or encounter problems before they eventually fail. However, Tata DoCoMo improved their performance quarter on quarter inwhile for other players it declined Table 5. We attempt this in the following paragraphs. Get instant notifications from Economic Times Allow Not now You can switch off notifications anytime using browser settings.
When Docomo sought to quit, the equity value of the company was significantly below the agreed half of the investment.
NTT Docomo: After a long, bitter feud, Tata Group and NTT Docomo may reach settlement today
However, JVs are prone to failure because of various reasons. It is an important tool for strengthening and upgrading strategic positions of firms vis-a-vis their rivals, pre-empting competitors and an effective mechanism to guarantee the entry deterring investment. In spite of that, India lacks a good policy framework for spectrum management that would have taken the industry to a higher growth trajectory.
Government has thus docommo a high reuse of vennture. During the first two years of operation, the venture performed well meeting most of its business targets.
In this JV too such benefits are quite apparent. Further, mobile subscription per inhabitants has grown from a meagre 2. Within initial few months of its launch, the company became the number one operator in terms of new subscribers added. But not withstanding its popularity, the success rate of IJVs is not very impressive. When Tata DoCoMo changed the billing plan, a major tariff war erupted.
With advancement in technology, inthe Indian Government announced the policy for 3G mobile services to be implemented from Table 3. Additionally, seven to eight meetings of four sub-committees were proposed during the year. The Indian Government needs to play a proactive role in amicable resolution of the pending issues between the partners to give a signal to the global business community that India still is an attractive place for investment.
Through this JV, the Tata group once again wanted to make a differentiation by offering the cheapest mobile communication services to the masses. In India, ringtones, SMS, ring back tones, etc.