Foreign Direct Investment seems to be manna frm heaven in India. I d agree to an extent about the inflow of money in this country; not in crucial sectors of Telecom. I held this view long time back and still hold it now too.
Over the past 2 days, there has been a quiet tectonic shift in the Indian Telecom; I have yet to see it’s condemnation. First, Maran insists that Access Deficit Charge(ADC) should stay on to subsidise BSNL for rural operations I fail to understand as to how this is actually helping the growth of telecom. In any case, it’s a sheer fallacy that BSNL is increasing it’s wireline infrastructure in the rural areas. Buoyed by increased demand for mobile and CDMA services, it is getting congested. Hence, the percieved benefits of affordable telephony are simply missing.
Further, Broadband would remain a pipe dream and a whole generation would grow up with a digital divide. This is not in the best interests of the nation.
Now, the juvenile fascination with merger between MTNL and BSNL. Why dont they leave these two companies alone? In anycase, we have had to suffer them for years together. “Synergies” would only double the misery. Period. More than that, it may be a prelude to selling them en block since either alone it wouldn’t make a good selling proposition to any “foreign buyer”. Don’t get me wrong here. I d still hold that it is an attempt to subvert our crucial infrastructure.
A significant development this week; Singtel upped it’s investment in Airtel. I had earlier mentioned that Singapore based companies remained a front for Chinese to enter India through backdoor. This is indeed a graver security threat ; any economist would know. I vae no idea as to why BSNL persisted with Huawei modems and not anyone else. Why patronise the Chinese and not spur on development in India for the same?
What is more disturbing here is the typical PRO speak here. It says and I quote,”We believe that SingTel’s increase in the stake is an expression of confidence in India,” said New Delhi-based Bharti Tele-Ventures.
All in all, I d still hold that Indian Telecom party has lot to achieve on it’s own rather than stand on the crutches of foreign funds. It is debatable. Still wondering. Reliance and Tata’s have considerable presence in India- we don’t get to hear much on that front. Why Bharti and their ilk are diluting their stakes in their own infrastructure?
People buy Huawei because they are probably the cheapest telecome equipment vendors around (partially due to the fact that the Chinese government has given them lot of subsidies). These artificial subsidies have put the Western vendors at a disadvantage. India doesn’t have any telecom equipment vendor which can give Huawei a run for its money.
Singapore telecom firms are run very efficiently. They have mighty ambitions and have invested all over Asia (Singtel Optus in Australia, plus a few more in Indonesia and Philippines). It is not a backdoor for Chinese firms to enter into India. Singtel has invested directly in Bharti. Temasek (Singapore government’s VC / private equity fund) is a big shareholder in SingTel. Similarly Temasek has a big shareholding in ST Technologies telemedia which has invested in idea cellular (along with JV partner telekom malaysia). There is definitely a conflict of interest here as Temasek directly / indirectly has stake in two telecom operators in India.
S’pore as a country (Temasek to be more precise) has been very aggressive on investing in India. They have a foothold in sectors like budget airlines, pharma, IT, biotech, banking.
You have a nice blog. Keep up the good work.
People buy Huawei because they are probably the cheapest telecome\ equipment vendors around (partially due to the fact that the Chinese government has given them lot of subsidies). These artificial subsidies have put the Western vendors at a disadvantage. India doesn’t have any telecom equipment vendor which can give Huawei a run for its money.
Singapore telecom firms are run very efficiently. They have mighty ambitions and have invested all over Asia (Singtel Optus in Australia, plus a few more in Indonesia and Philippines). It is not a backdoor for Chinese firms to enter into India. Singtel has invested directly in Bharti. Temasek (Singapore government’s VC / private equity fund) is a big shareholder in SingTel. Similarly Temasek has a big shareholding in ST Technologies telemedia which has invested in idea cellular (along with JV partner telekom malaysia). There is definitely a conflict of interest here as Temasek directly / indirectly has stake in two telecom operators in India.
S’pore as a country (Temasek to be more precise) has been very aggressive on investing in India. They have a foothold in sectors like budget airlines, pharma, IT, biotech, banking.
You have a nice blog. Keep up the good work.
Thanks for the encouraging comments.
I am aware of the Singapore holding patterns; Temasek is getting agressive becuase it is awash with funds and needs places to invest.
That’s precisely the reason why China is encouraging this holding. Singapore and China share common interests.
There was a news report in Rediff about a year back which criticised the FDI inflows in India. There was no way it could be monitored and hence the big hoopla behind the same. China needs to subvert India in many ways. Primarily through border skirmishes( it still raids Arunachal and surrunding areas), Tibet, and encoraging Pakistan. Indians have been stupid enough to open up their infrastructure to foreigners- China would want to have a pie in that too.
Plus of ocurse, introduce their own standards. Hence, they are investing heavily in the new generation Internet( which would give them substantial royalties after it is patented) and equipment manufacture. It is following the same policies as to what the “western world” did for agriculture-subsidies. Hence, the cheap doesnt mean the best. Think about it. BSNL has been dumb enough to merrily shove down Huawei modems through our throats.
Thanks for the encouraging comments.
I am aware of the Singapore holding patterns; Temasek is getting agressive becuase it is awash with funds and needs places to invest.
That’s precisely the reason why China is encouraging this holding. Singapore and China share common interests.
There was a news report in Rediff about a year back which criticised the FDI inflows in India. There was no way it could be monitored and hence the big hoopla behind the same. China needs to subvert India in many ways. Primarily through border skirmishes( it still raids Arunachal and surrunding areas), Tibet, and encoraging Pakistan. Indians have been stupid enough to open up their infrastructure to foreigners- China would want to have a pie in that too.
Plus of ocurse, introduce their own standards. Hence, they are investing heavily in the new generation Internet( which would give them substantial royalties after it is patented) and equipment manufacture. It is following the same policies as to what the “western world” did for agriculture-subsidies. Hence, the cheap doesnt mean the best. Think about it. BSNL has been dumb enough to merrily shove down Huawei modems through our throats.
Abhishek,
Connecting Singapore’s Temasek to the Chinese government is just indulging in idle conspiracy theories. Singapore, least of all Temasek, does not take any cues from China. Singapore (and ASEAN in general) see China as an economic and geopolitical threat, and see India as an counter-balance.
Indeed, Singapore’s greater economic engagement with India has as much to do with this need to counter-balance China as it has to do with investment opportunity.
Abhishek,
Connecting Singapore’s Temasek to the Chinese government is just indulging in idle conspiracy theories. Singapore, least of all Temasek, does not take any cues from China. Singapore (and ASEAN in general) see China as an economic and geopolitical threat, and see India as an counter-balance.
Indeed, Singapore’s greater economic engagement with India has as much to do with this need to counter-balance China as it has to do with investment opportunity.
This is one of the best sights for FDI in telecom industry in India.