India Country Analysis

Introduction 

Turnkey Network Solutions (TNS) is a network solutions provider offering complete “turnkey” network and telecommunications infrastructure installations and support.  Formed in 2000 in Grand Rapids, Michigan, Turnkey’s goal is to be a one-stop solution for customers’ telecommunications needs – eliminating the need to contract with multiple vendors.  With steady growth through 2005 became a Cisco advanced technology partner allowing Turnkey to provide Cisco equipment directly to its client base.  In 2009 Turnkey’s growth and growing Cisco partnership earned them the status of Certified Cisco Premier Partner as well as becoming a Tier 1 vendor for AT&T and Verizon wireless.  As Turnkey grew it expanded its commercial services to include; design and engineering services and construction and maintenance services.  In 2010 the Professional Services Department which handles a wide variety of technical tasks, including network engineering, test and turn up of a wide variety of equipment, switch translations and switch decommissioning.  TNS provides solutions for designing, installing, and documenting aerial, buried and underground cable installations, as well as engineering and maintaining your existing infrastructure (Turnkey 2016).

The goal of Turnkey Network Solutions in India will be to provide and enhance the underserved and demanded internet and telecommunications infrastructure needed for companies, individuals, local and foreign commerce and to support educational and healthcare systems for the citizens of India.  The increased telecommunications access will provide business opportunities, advanced educational opportunities and connect India’s market potential to the rest of the world.  Infrastructure needs in India are estimated to be in the $1.5-2 trillion range (India, 2016). The goal of this analysis will be to provide all the necessary information needed to make a decision to proceed with globalizing TNS in India.  The analysis will provide critical data and information about India’s political and social systems, entry requirements, and India’s capital, product and labor markets. The report will conclude with a recommendation to go global and invest in the Indian telecommunications market through a joint venture.

Political and Social Systems

India has the largest democracy per populous in the world with a population of 1.3 billion people.  The demand for technology infrastructure is one of the fastest growing sectors in India and is expected within a few years to be the second largest telecom market behind the United States (Business Maps of India).  Government support of infrastructure growth is high as it will benefit the political, social and educational systems in the country.  Indian government is highly bureaucratic with corruption being the biggest problem in both the state and local governments.  Since 2014, Prime Minister Modi and the “new” government of India have gotten serious about dealing with corruption and focused on growing the markets, investing in people and gaining the trust of the Indian people as well as foreign investors (Source).  The co-existence of the state and civil society safeguards the interest of both the government and the citizens.  The democratic nature of the Indian civil society is reflected in the implementation of a democratic constitution signed in 1949.  There is the occasional rise of conflict between the civil society and the state, as the demands and expectation of the society are not fulfilled.  A number of programs have been adopted to eradicate poverty, unemployment, illiteracy and malnutrition.  With the expansion of state functions, too much bureaucratization brings corruption and red tape (Source).  Since Turnkey is not a direct to consumer product it will be less susceptible to corruption and will primarily focus on working with and assisting the government of India with its growth initiatives.  Since Modi took over in 2014, more and more importance is being placed on the decentralization of power, people’s participation in the process of administration and ensuring transparency in administration with the right to information (Source).  

Terrorism, corrupt politics, communalism and the caste system are other threats to Indian civil society.  Social protection has assumed a more important role in recent years with goals of alleviating poverty, increasing social welfare and implementing a social security system (Source).  Indian media is largely paper based due to lack of internet and telecommunications infrastructure.  Media is free and independent and has been throughout most if its history.  Typically the media is owned and operated by large for-profit companies.  With the expansion of the telecommunications infrastructure,

Openness

India’s economic liberalization began in the early 1990’s and has accelerated ever since.  More and more sectors are being opened up for Foreign Direct Investment, even in the multi-brand retail sector.  In some cases red tape still hinders companies in sectors where government does allow foreign investment.  This creates huge opportunities for Indian and foreign companies involved in agriculture, retail and infrastructure in the more advanced states of the country (Source).  Many companies have already expanded in India and many more are expected.  The current government has proposed a nationwide program of building 100 Smart Cities, which will include a wide variety of major infrastructure projects providing a great opportunity for Turnkey.  The program will be funded by central and state governments, with a hope of obtaining partnership and assistance from private sector capital.  President Obama and Indian Prime Minister Modi have established an “Infrastructure Collaboration Platform” that strategically tries to identify infrastructure projects that encourage US company participation.  Through this agreement the government of India (Ministry of Urban Development) is encouraging the US government and US companies to take the lead in the development of these Smart Cities in three major urban areas: Ajmer in the state of Rajasthan, Allahabad in the state of Uttar Pradesh and Vishakhapatnam in the state of Andhra Pradesh (Source).  A memo of understanding has been signed with the Ministry of Finance to implement this program.

Market entry is primarily done through joint ventures or contracts with local representatives that provide guidance and consulting services (Source).  Given the benefits of building the country’s telecommunications infrastructure Turnkey will be well served in forming a joint venture with one or more of India’s telecommunications companies to assist in the government’s expansion efforts.  

Capital Market

The Reserve Bank of India (RBI) is well established and plays a critical role in the expansion and growth of the Indian economy and capital markets.  In, 2015 for example the bank lowered interest rates to help the agricultural and services sectors increase their investments.  The Reserve Bank of India frames regulation for rating Commercial Paper, Bank loans, Security Receipts, Securitised instruments (Pass Through Certificates) and Fixed Deposits by Non-Banking Financial Companies & Housing Finance Companies (Source).  The overall GDP of India places it as the ninth largest economy in the world and is expected to grow at a rate of 6-7% through 2025.  Some experts even predict it will surpass the US during the same time period.  Capital is readily available to both local and foreign companies.  The Export-Import Bank is the official export credit agency of the United States and supports the purchase of US goods and services by credit worthy Indian buyers (Source).  Accounting standards are in place and function well in India as part of the common law system.  India does not have a clear law on corporate bankruptcy rather an assortment of laws pertaining to insolvency.  The current law in force was enacted in 1920 and is called the Provincial Insolvency Act.  The legal definitions of the terms bankruptcy, insolvency, liquidation and dissolution are contested in the Indian legal system.  Nearly 60,000 bankruptcy cases await action within the Indian legal system (A.A.K 2015).