Essential Reading 5

ESSENTIAL READINGS 5
VALUE CHAIN IN TELECOM INDUSTRY

A value chain is a set of activities that an organization carries out to create value for its
customers. Porter proposed a general-purpose value chain that companies can use to examine
all of their activities, and see how they're connected. The way in which value chain activities
are performed determines costs and affects profits, so this tool can help you understand the
sources of value for your organization.
Elements in Porter's Value Chain
Rather than looking at departments or accounting cost types, Porter's Value Chain focuses on
systems, and how inputs are changed into the outputs purchased by consumers. Using this
viewpoint, Porter described a chain of activities common to all businesses, and he divided them
into primary and support activities, as shown below.
Porter’s Value Chain Diagram

Communication service providers need to look beyond the role of connectivity enablers. In
order to do so, they need to deliver innovation faster into the market and leverage platforms to
transform the existing technological infrastructure for a faster ideation to implementation of
innovation.
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Course-: MSL-723 (Telecom Systems Management)
Course Coordinator: Prof. Mahim Sagar
The Internet of Things (IoT), mobility, social media, and alternative channels of
communication and engagement are driving dramatic changes across businesses. In the telecom
industry, communication service providers (CSPs) are already making a strategic shift toward
becoming true horizontal service providers in order to leverage opportunities presented by
information and communications technology (ICT) to drive growth beyond the communication
infrastructure.
CSPs are also realizing the importance of monetizing data and having information capabilities
to counter the stagnation in their core products and services.
New infrastructure and business models allow CSPs to collaborate with suppliers and partners
to move up the value chain and explore new markets and revenue streams. The formation of
multiple consortiums for global mobility, machine-to-machine (M2M) technology, and over-
the top (OTT) services also point toward a more collaborative and open value chain.
Telecom service providers across the globe are aspiring to expand their core
telecommunications business by transforming themselves from telcos to digital telcos. They
are looking for new revenue-generating opportunities in adjacent industries such as financial
services, e-health, M2M, cloud computing, safety, video and digital homes, applications, and
advertising. Optimizing investments in legacy services and improving margins are also high
on their priority list.
The key difference between traditional telco services and digital telco services lies in the
solution tenants. At one end of the spectrum, CSPs are looking at simplified and standardized
business support systems (BSS) and operations support systems (OSS) solutions to support
traditional telco services.
At the other end, there is a growing need for flexible, adaptable, and extensible solutions for
digital telco services, due to the evolving nature of service models and partner ecosystems.
In order to support the growing maturity of existing services, and enable the next generation of
digital services, telcos need pre-integrated, flexible, and adaptable platforms that adhere to
industry standards.
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The global communication services industry is witnessing a high degree of device proliferation
across homes and enterprises. While telecom companies are not new to managing devices,
current trends with respect to the device ecosystem are creating the need for more efficient
platforms to manage them. CSPs need to consider certain factors in the consumer and enterprise
space:
• Devices are the window to services for the end-user and need to be managed better
than ever before.
• Addressing service complexity to not only just manage end devices but also devices
and nodes in a network topology and ensuring one system to manage multiple devices
and processes.
Further, a telecom company’s operations can be simplified in the follow ways:

Integrating Separate Processes
At a telecom company, monitoring the devices in a network operations center (NoC), delivering
a committed quality of A transformed CDM strategy allows CSPs to embrace devices
management platforms as a key to service differentiation, automation of operational processes,
and enhanced customer experience service (QoS), and fixing device or network problems
involve a host of processes. Automating the routine monitoring of devices and their
configuration will help the company ensure committed service levels to customers.
Consolidating Numerous Tools
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CSPs typically buy and maintain numerous tools, even though they have invested significantly
in making their networks IP enabled. These can be consolidated to a technology and OEM
agnostic solution to reduce operational complexity and cost.
Automating the IP Network
Automating routine issues can reduce the chances of errors, as well as reduce operational
complexity.
Platformization can help telecom service providers fundamentally change the way they do
business.
The various platforms can host revenue generating products and services, such as mobile
banking and ICT platforms for small and medium businesses.
Source: White paper on Transforming the Telecom Value Chain, Tata Consultancy Services,
2017
TELECOM VALUE CHAIN
The Telecom Industry value chain looks something like the figure below:
The value chain now is structured in a way that all the different players in the ecosystem have
direct access to the user.
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The increasing connection between physical devices and online services is driving new
applications that take personal data and turn it into useful, personal, social, visual and
manipulable representations. For long the mobile carriers had best opportunity to define the
services landscape but they squandered the opportunity, e.g., the carriers always had the
location data and could have started the location-based services long time back but they could
not do it as they were too busy in day-to-day operations. The operators did not create an
ecosystem that could have created huge services business with their support. The other problem
with the operators was fragmentation and hence no operator had scale. The handset vendors
and internet players have now taken upon themselves to change the telecom industry.
Convergence is driving the change as it is leading to increasing services revenues that have
attracted many internet players to mobility. It is very clear now that mobile internet is going
too far exceed the fixed internet so all the players from the internet space are entering the
mobile industry. Operators fear that they would be reduced to a dumb pipe just like the PC
industry and hence they are unwilling to cede any space to the other players in the ecosystem.
The other ecosystem players are moving very fast to take control over most of the components
of the value chain. The following examples illustrate the uneasy relationship between the
operators and handset vendors:
1. Direct Handset Sales
2. Embedded Software SIM
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3. Ecosystem war
4. Duopoly fears
5. Near Field Communications
1. Direct Handset Sales: Google tried to sell Nexus One online in a bid to directly sell it
to the end user instead of the carriers in a bid to shakeup the carrier dominated
distribution model. Google wants the carriers to offer just the voice and data so that it
can offer its services freely and reduce the carriers to a dumb pipe. Though the Nexus
One experiment did not succeed, it does point towards the tussle between carriers and
handset vendors for direct access to users.
2. Embedded Software SIM – Embedded software SIM that would allow the users to
buy the phone on the web and then select the carrier of their choice. Embedded SIM
can potentially increase churn and the carriers may need to bid to be on iPhone’s SIM
that could lead to a price war in competitive markets. Many analysts believe that with
handset vendor controlled embedded SIMs, the dis-intermediation of carriers from
retail distribution would just become a question of timing and degree. So concerned are
the operators with this development that they have started to work on embedded SIM
standards under GSMA so that they can influence the standards and make
it compulsory for all the players to adhere to them.
3. Ecosystem wars – Leading operators across the global have announced partnership to
launch their own application development effort under the name of Wholesale
Application Community (WAC). WAC apps are designed to be used across all
platforms, so conceivably the same WAC application could work on an Android phone
and an iPhone. This is interesting as the battle is now about ecosystem and not about
device features. The handset vendors are trying to create the
ecosystem around their operating system which the operators are trying to break via
WAC.
4. Duopoly fears – Carriers fear that Google and Apple would control most of the parts
of the ecosystem and hence are keen that the vendors do not select Android as an
operating system. According to Into Mobile , a group of European mobile operators
have concluded that iOS, Android and other such operating system are “trojan horse”
that are stealing away the operator’s direct relationship with their customers, and
therefore vast revenues. The carriers fear that in case the operating systems get reduced
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to two, they would lose the bargaining power and could soon find themselves in the
same situation as service providers for fixed line internet.
5. Near Field Communications– Near Field Communications (NFC) is a technology
that has the potential to make the mobile payments easier by just tapping the phone at
the Point of Sale (POS). Though the technology has been in existence for many years
now, the recent push by Google and Apple seems to have changed the equation. Google
and Apple want to drive billing through a device to challenge the operator billing
alternative and this move would bring them right in the center of the mobile payments.
Source: http://www.telecomcircle.com/2011/03/changing-dynamics-of-telecom-industry/
TELECOM SERVICE PROVIDERS

A telecommunication service provider (TSP) is a type of communications service provider that
has traditionally provided telephone and similar services. This category includes incumbent
local exchange carriers, competitive local exchange carriers, and mobile wireless
communication companies.
MNO- MOBILE NETWORK OPERATORS

A mobile network operator (MNO) is a telecommunications service provider organization that
provides wireless voice and data communication for its subscribed mobile users.
Mobile network operators are independent communication service providers that own the
complete telecom infrastructure for hosting and managing mobile communications between
the subscribed mobile users with users in the same and external wireless and wired telecom
networks.
Mobile network operators are also known as carrier service providers, mobile phone operator
and mobile network carriers.
Mobile network operators create a network of high-end telecommunication devices,
specialized software and client-end subscriber identity modules to provide end-to-end
communication between wired and wireless telecom end-user devices.
Mobile network operators install a number of base stations, while mobile subscribers use a
circuit like chip in their cell phones to access network services when they are in the range or
coverage cell of a base station. Besides providing voice dialling and receiving capabilities,
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MNOs also provide data communications through text messages and Internet connectivity and
are now providing video communications as well.
DOT – DEPARTMENT OF TELECOM

The Department of Telecommunications, abbreviated to DoT, is a department of the Ministry
of Communications of the executive branch of the Government of India.
Telecom services have been recognized the world-over as an important tool for socio-economic
development for a nation and hence telecom infrastructure is treated as a crucial factor to realize
the socio-economic objectives in India. Accordingly, the Department of Telecom has been
formulating developmental policies for the accelerated growth of the telecommunication
services.
The Department is also responsible for grant of licenses for various telecom services like
Unified Access Service Internet and VSAT service. The Department is also responsible for
frequency management in the field of radio communication in close coordination with the
international bodies. It also enforces wireless regulatory measures by monitoring wireless
transmission of all users in the country. The following units function under the DoT
DoT Units
• Telecom Enforcement Resource and Monitoring (TERM) Cells, formerly Vigilance
Telecom Monitoring (VTM)
• Controller Of Communication Accounts (CCA) Units (Details of CCA Offices)
• Wireless Planning & Coordination Wing (WPC)
• Telecommunication Engineering Center (TEC)
• National Telecommunications Institute for Policy Research Innovation Training
(NTIPRIT)
• National Institute of Communication Finance (NICF)
• Telephone Advisory Committees
R&D Unit
• Center for Development of Telematics (C-DOT)
Public Sector Units
• Bharat Sanchar Nigam Limited (BSNL)
• Indian Telephone Industries Limited (ITI)
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• Mahanagar Telephone Nigam Limited (MTNL)
• Telecommunications Consultants India Limited (TCIL)
SPECTRUM
Spectrum relates to the radio frequencies allocated to the mobile industry and other sectors for
communication over the airwaves. Because the mobile industry has demonstrated — time and
time again — its potential to generate economic value and social benefit, operators are urging
national regulators to release sufficient, affordable spectrum in a timely manner for mobile.
Additional spectrum, including both coverage and capacity bands, means mobile operators can
connect more people and offer faster speeds.
SPECTRUM LICENSE
When allocating spectrum to a specific usage, the government will also have to decide on the
mechanism of allocating usage rights to individual users through licensing. Licensing can be
implemented by the government or the regulator.
Individual spectrum licenses give the holder of the license the exclusive right to use and
manage the frequency band in a pre-determined geographic area – these are typically for mobile
networks.
These licenses are long-term in duration, 15 - 25 years. They are intended to correspond to the
expected life of a mobile network. An exclusive spectrum license normally confers various
rights and obligations on the licensee. However, the licensee normally has a reasonable amount
of flexibility regarding the use of the band. An exclusive spectrum license for a mobile operator
may be combined with the license to enter the market (if required) or may be separately
awarded.
When the number of licenses available is less than the anticipated demand from licenses, some
form of selection is necessary. Selection processes may take the form of a competitive selection
(so-called “beauty contests”) or an auction. Both types of selection process attempt to ensure
that the most appropriate bidder receives the license.
For both auctions and beauty contests there will be a set of minimum requirements to ensure
that the bidders are “qualified” (as per e.g. legal, technical, financial, minimum roll out
requirements).
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For example, if the new license is issued to enhance competition any entity related to existing
operators should be excluded from bidding.
SPECTRUM HARMONIZATION
Frequency Spectrum is one natural resource which all countries have been blessed with
equitably.
Mobile networks work on spectrum allocated either through a bidding process or through
licenses granted to operate. Globally, ITU-R a standards body recommends and regulates
spectrum bands for various applications. In turn, Mobile operators use allotted spectrum bands
to deliver voice and data services on 2G, 3G and now 4G bearers.
Uniform allocation of spectrum comes with many advantages. It minimizes radio interference,
improves customer experience, facilitates international roaming and reduces the manufacturing
cost of phone/devices. Harmonization also leads to the complete utilization of the entire band,
leading to spectrum efficiency, increased radio capacity and lowering of Network costs. It will
enable our defence services to modernize their communication infrastructure with Next Gen
technologies.
Harmonization with bring significant advantage to all TSP’s who will now gain access to these
vacated contiguous spots. The process will help us to offer high quality data speeds, improve
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quality perception and provide a solid platform for the digital story.
Source:https://telecom.economictimes.indiatimes.com/tele-talk/frequency-
spectrummanagement-harmonisation-and-carrier aggregation
TELEDENSITY
Telephone density or teledensity is the number of telephone connections for every hundred
individuals living within an area. It varies widely across the nations and also between urban
and rural areas within a country.
NTP – NATIONAL TELECOM POLICY 1994

The key objectives of NTP-94 were to provide telecom services to everyone at affordable rates,
maximum coverage of telephony services to the rural areas, establishing India as a
manufacturing base and major exporter for telecom equipment and protecting the defence and
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security interests of the country. Due to the changes in technology taking place at that point in
time, making India a technologically capable country was essential for reducing telecom
infrastructure costs and facilitating faster network roll outs.
NTP-94 was a big step for the ministry to enable and sustain growth in the telecom sector.
NTP- 94 facilitated the entry of private players to bridge the resource gap and opened up
opportunities for players to provide telecom services on demand to everyone in the nation.
India has been divided into 23 service areas which consist of 19 telecom circles and four
metros. Licenses were awarded to 8 CMTS operators in the four metros, 14 CMTS operators
in 18 state circles, 6 BTS operators in 6 state circles and to paging operators in 27 cities and 18
state circles (DOT) (TRAI, 1994). Out of the 14 CMTS operators, only 9 were operational and
the roll out of services was never completed. Basic telecom services by private operators had
only just commenced in a limited way in two of the six circles where licenses were awarded.
This slow rate of growth and the achievement of only 50% rural coverage, led the government
of India to recognize the need for a new telecom policy. NTP-94 certainly had shortcomings
that were to an extent addressed in the next policy. During NTP-94, the privatization of the
industry & service rollout lagged because telecom providers spent excessive amounts on
spectrum & lower financial resources prevented them from providing faster services
(Sivasankari et al., 2009). Additionally, non-winning bidders had complained lack of
transparency in the auction Process. Plans were hence laid out for the new
telecom policy to overcome these shortcomings, to meet the technical challenges and aid the
industry players in achieving faster and better growth rates.
NTP – NATIONAL TELECOM POLICY 1999
The objectives of National Telecom Policy 1999 drafted by the Department of

Telecommunication (DOT), Government of India, resulted from the fast change in the overall
scenario of the telecommunication industry of India. The 'Telecom Regulatory Authority of
India' (TRAI) and 'Department of Telecommunication' (DOT) are the the two main governing
bodies of the Indian telecommunication industry and they realized the need for an overall
revamping of the Indian telecommunication policy of 1994, to compliment the rapid growth of
this industry. Further, to compliment the stupendous growth of the Indian telecommunication
industry, the objectives of National Telecom Policy 1999 were made more coherent and in
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tandem with the requirements of the Indian telecommunication industry.
The highlights of the objectives of National Telecom Policy 1999 of India are as follows
To facilitate affordable and effective telecommunication for all
• Ensuring quick availability of telephone connectivity through efficient service
networks
• Achieve universal service access at reasonable cost, connecting all rural areas of India
• Encourage the development of telecommunication facilities in remote, hilly and tribal
areas of India
• Convert Public Call Offices (PCOs) into Public Teleinfo centers, offering multimedia
services like government and business information systems, Integrated Service Digital
Network (ISDN) services, remote database access, etc
• Providing world class telecommunication services
• Solving consumer complaints, resolve disputes, and special attention to be given to
public interface
• To provide the widest possible range of products and services at affordable price, to all
Indians
• To emerges as a major manufacturing industry and major exporter of
telecommunication equipment
• To protect the defence and security interests of India
• Creating world class telecommunication infrastructure to meet the communication
requirements of IT, ITES, media and other IT based industry, to become a IT super
power
• Easy and affordable access to basic telecommunication services across all the states of
India
• Affordable and efficient basic telephony facility to each and every applicant
• Provision for world class service to all uncovered and rural areas of India
• Establishment of modern and efficient telecommunication infrastructure to meet the
requirements of modern India
• Continual upgradation of the Indian telecommunication sector and provide an equal
opportunity for all the telecommunication service providers doing business in India
• Strengthening R&D on telecommunication hardware and software
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• Efficient and unbiased spectrum management
• Facilitating protection of the Indian defense and security systems
• Facilitating the Indian telecommunication companies to reach global standards
• Facilitate world class products and services at affordable prices
• Institutionalize the Department Of Telecommunication (DOT), Government of India
and help it function as a corporate body Facilitate reliable communication relay media
to all telephone exchanges.
The main contributing factors for the tremendous success of the Indian National Telecom
Policy 1999 are as follows –
• Investor friendly TRAI telecommunication policies
• Low operational cost of telecommunication industry in the domestic market
• Access to world class infrastructure at cheap cost
• Availability of huge English speaking workforce
• Availability of strong technical education amongst the majority of Indians
• Access to huge number of science and engineering graduates
• Assurance of high quality output
• Access to highly skilled workforce
• Use of innovative technologies
• High entrepreneurship skills
• Good relationship with client and expansion of existing relationships
• Huge success in overseas markets and easy creation of global brands
• Huge untapped market, across all industries especially, in IT and ITES industries
• Ever growing domestic market, especially the market in rural India offers tremendous
scope
• Increased manufacturing of electronics and hardware components in India
• Aggressive of R&D in telecommunication domain
• Increased penetration of computers and Internet across all sections of Indian society
• Development of local language softwares, especially for the use of rural mass of India
Source:https://business.mapsofindia.com/communications-industry/national-
policyobjectives.html
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ROLE OF A REGULATOR
The Policy clarified the role of TRAI in the telecom sector. This was done with regard to the
problem where the DoT refused to accept the TRAI’s jurisdiction over some legal questions.
The Policy expressly mentions that TRAI is envisioned to be an independent regulator with
comprehensive powers. It stated that TRAI has the authority to hear disputes regarding
telecommunication and also issue directives to the Government.
The Policy also clarified that the Government will invariably take into consideration TRAI’s
recommendation with respect to licensing issues. It also completely ruled out any possibility
of delegation of the Government’s licensing and policy making powers as they are essential
sovereign functions that cannot be delegated. The Policy also specified regulatory and advisory
assignments for TRAI. It would be responsible for formulating regulatory details, licensing
conditions and various guidelines with respect to different classes of service providers.
GSM – GLOBAL SYSTEM FOR MOBILE COMMUNICATION

DESCRIPTION: GSM is another 2G technology which was developed by European
Telecommunications Standards Institute (ETSI) as a digital standard with certain benefits
which the analog networks couldn’t provide i.e. the ability to have roaming facility.
GSM was a successful standard for mobile phones, but was used primarily for voice based
services and limited data services. There was a need for another standard that could facilitate
transfer of large volumes of text and pictures. This need led to the creation of the next standard,
which brought with it even higher data rates with dial up speed of 30 to 90 kbps. General Packet
Radio System (GPRS), was developed to fill the gap and was essentially based on GSM. GPRS
helped achieve higher transmission speeds and was capable of sending two to three times the
information compared to earlier 2G standards
EDGE network delivered faster data rates and was proved to be the easier up gradation upon
existed GSM networks. For most of the GSM/ GPRS networks, upgrading to an EDGE network
merely required software modifications with no need for additional hardware implementation.
BIBILOGRAPHY: Sagar et al, 2009
CDMA – CODE DIVISION MULTIPLE ACCESS

DESCRIPTION: CDMA stands for “Code Division Multiple Access”. In this case, each user
is allocated a code which consists essentially in a spread spectrum sequence such as a
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Hadamard (or Walsh) sequence, wherein all the sequences are orthogonal. To this sequence is
superimposed a scrambling or pseudo noise (PN), generally a Gold sequence.
KEY INSIGHTS: When the central station transmits to terminals (downlink transmission)
messages coded in this way, each terminal receives its own message together with all the others.
This terminal can recover its own message because it multiplies the received signals by its own
code, i.e., its own spread sequence, and, therefore, the other messages are eliminated due to the
orthogonality between the codes.
In such a downlink communication, between the base and the terminals, the PN sequence is
used to avoid interference between the corresponding zone and the neighbouring zones; in fact,
different scrambling sequences are used for the neighbouring zones. Moreover, with such
scrambling it is possible to take advantage of the multipath diversity.
For uplink communications, i.e. communications transmitted from terminals to the central
station,
CDMA is also used to distinguish communications coming from different terminals.
CDMA telecommunication systems face the difficult problem of elimination of interference for
receivers, because all communications received simultaneously strongly interfere with each
other.
To solve this problem for uplink transmissions, at the central station, conventional rake
receivers are used which detect the signals having the correct scrambling or PN sequence and
which can cancel the effects of multipath transmissions. But this kind of processing is generally
insufficient for CDMA due to the strong interference effect of other communications. This is
more particularly true when the number of simultaneous users, or communications, is high. It
must also be noted that the signals which have the most detrimental interfering effect are those
which have the highest power.
KEY WORDS: CDMA, Downlink Communications, Uplink Communications

BIBILOGRAPHY: Elie Bejjani, Jean-Francois Bouguier, Benoi Cacqueray (2001): “To a
Telecommunication System Using Code Division Multiple Access (CDMA)” United States of
Patent, Oct 9, 2001
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WPC – WIRELESS PLANNING COMMISSION
The allocation of spectrum for different purposes was and is managed by the Wireless Planning
and Coordination (WPC) of Ministry of Communications.
The WIRELESS PLANNING & COORDINATION (WPC) is a wing of the Ministry of
Communications created in 1952 and is the National Radio Regulatory Authority with the
following roles (www.wpc.co.in) (WPC, 2014):-
a. WPC is responsible for spectrum management including licensing and caters to the needs
of all wireless users (Government and Private) in the country.
b. WPC exercises the statutory functions of the Central Government and issues licenses to
establish, maintain and operate wireless stations. WPC is divided into major sections like
Licensing and Regulation (LR), New Technology Group (NTG) and Standing Advisory
Committee on Radio Frequency Allocation (SACFA).
SACFA makes recommendations on major frequency allocation issues, formulation of

frequency allocation plans, and other issues related to the International Telecom Union (ITU)
Technology Recommended frequency

890-915 MHz paired with
GSM 900
935-960 MHz
GSM 1800
1805-1880 MHz
CDMA 800
869-889 MHz
1880-1900 MHz (TDD -
Cor-DECT
unpaired)
1920–1980 MHz paired with
2110–2170 MHz and 2010 –
IMT 2000 (3G)
2025 MHz
(TDD – unpaired)
2300 MHz – 2400 MHz
BWA (4G)
(TDD – unpaired)
Source: WPC (2011)
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NFAP – NATIONAL FREQUENCY ALLOCATION PLAN
The National Frequency Allocation Plan provides a broad regulatory framework, identifying
which frequency bands are available for cellular mobile service, Wi-fi, sound and television
broadcasting, radio navigation for aircrafts and ships, defence and security communications,
disaster relief and emergency communications, satellite communications and satellite
broadcasting, and amateur service etc.
The National Frequency Allocation Plan is a top-level plan based on the ITU Radio regulation
stable of frequency allocations which indicate show the radio frequency spectrum is divided
into bands that can be used as defined services. It serves to guide the regulator and the user
community about how radio frequencies will be assigned and licensed.
India has released its National Frequency Allocation Plan 2018 (NFAP), which presents a
pioneering roadmap for the Indian digital communications industry. The NFAP releases a
quantum of 605 MHz license exempt spectrum in 5GHz band for Wireless Access Services and
Radio Local Area Networks in outdoor, to meet increasing data demand (from a current figure
of 50 MHz since 2007).
The NFAP also offers over 30 license exempt bands for Short Range Devices (SRDs),
Ultrawideband Devices (UWDs) and additional spectrum for M2M services, creating
opportunities for the public to enjoy benefits from technologies and enabling the industry to
build domestic manufacturing ecosystem. India signalled its spectrum plans for 5G services
aspiring to adopt the next generation technology as a leading market.
Source: https://medium.com/redact/india-releases-national-frequency-allocation-plan-2018
INNOVATION
Innovation involves the use or development of an invention for some useful purpose.
Innovations have often served as the point of departure for new inventions. Innovation
converts invention into commercial success.
KEY INSIGHTS: The concept of innovation has played a more important role in
management and economics than the concept of invention. It was not, however, until
Schumpeter identified innovation as the essential function of the entrepreneur and then went
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on to make the innovator and the process of innovation one of the three elements, along with
credit and profit maximization.
Organizations need to innovate in response to changing customer demands and lifestyles and
in order to capitalise on opportunities offered by technology and changing marketplaces,
structures and dynamics. Organizational innovation can be performed in relation to products,
services, operations, processes, and people. As long ago as Schumpeter, 1950 argued that
organisations should innovate in order to renew the value of their asset endowment. Even
before this, whilst the term innovation may not have been used extensively, processes that are
associated with innovation and economic and technological change were perceived as being
important (Lorenziet al., 1912; Veblen, 1899; Schumpeter, 1934).
IMPLICATIONS: For those managing innovation within firms, a major implication of the
concept is that a greater absorptive capacity capability will lead to strengthened innovation
capabilities and a higher likelihood of successfully developing innovations. As such,
individuals throughout a firm should strive to develop essential skills and a shared language
of related knowledge to be able to more readily identify and comprehend developments
outside the firm and assimilate such knowledge with the aim of establishing and pursuing
appropriate commercial applications. Having a strong internal R&D capability and conducting
the firm’s R&D internally an, for example, help to prepare a firm to make better use of
external information as part of strengthening the firm’s absorptive capacity.
KEY WORDS: Feasibility, Commercial Success, Absorptive capacity
BIBLIOGRAPHY:
• Baregheh, A., Rowley, J., &Sambrook, S. (2009). Towards a
Multi-disciplinary definition of innovation. Management decision, 47(8), 1323-1339.
• Ruttan, V. W. (1959). Usher and Schumpeter on invention, innovation, and
technological change. The quarterly journal of economics, 596-606.
• Suarez-Villa, L. (1990) “Invention, Inventive Learning and Innovative
Capacity.”Behavioral Science, vol. 35, no. 4, pp. 290-310.
LPG IN TELECOM INDUSTRY:

LPG stands for "Liberalization, Privatization, Globalization" in the context of the
telecommunications industry. These three reforms have greatly impacted the way
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telecommunications services are provided, leading to increased competition and improved
services for consumers. Liberalization refers to the removal of government monopoly and the
introduction of private players in the telecommunications sector. Privatization refers to the
transfer of ownership of state-owned telecom companies to private hands. Globalization refers
to the increasing interconnectedness and integration of telecom markets worldwide, facilitated
by advancements in technology and the growth of international trade.
Here are some key points about LPG in the telecom industry:
1. Liberalization: The liberalization of the telecom industry allowed for private companies
to enter the market and provide services, breaking the government monopoly. This
increased competition and led to lower prices and improved services for consumers. In
the 1990s, the Indian government began to liberalize the telecommunications sector by
issuing licenses to private companies to provide services and compete with the state-
owned monopoly, the Department of Telecommunications (DoT).
2. Privatization: The privatization of state-owned telecom companies has led to more
efficient management and better financial performance, as private companies have an
incentive to maximize profits. It has also increased foreign investment in the sector.
3. Globalization: The globalization of the telecom industry has allowed for the integration
of markets worldwide, leading to increased competition and the spread of technology
and services. This has allowed for the growth of international trade and the development
of new business models, such as outsourcing and offshoring. India has become a hub
for outsourcing and offshoring, and the country has seen significant growth in the IT
and telecom sectors as a result.
4. Impact on Consumers: The LPG reforms in the telecom industry have resulted in
increased competition, lower prices, and improved services for consumers. They have
also increased access to communication technologies, such as mobile phones and the
internet, leading to greater connectivity and improved quality of life.
5. Challenges: Despite the benefits of LPG reforms, there are also challenges, such as the
need for regulation to ensure fair competition and protect consumer interests. There are
also concerns about the concentration of ownership in the hands of a few companies,
leading to reduced competition and higher prices.
BIBLIOGRAPHY: Ravan, S. V. (2014). Impact of LPG on Indian economy. Prime International
Research Journal, 1(4), 21-33.
19
Example Discussed in the Class
• Apple products are innovation which uses the Xerox printing machine touch pad for
the touch mobile.
• Apollo provide your medicine in hour to your door step is a value addition service.
• Amazon adding value to
o Kellogg’s corn flakes easily available at the amazon which is convenient to the
consumer at point of purchase.
o It is augmentation level of value chain.
• Core competence of Amul is Milk collection while Reliance is Petrochemicals industry.
• Pharma company control the entire value chain by holding the patent.
• Fabindia makeup up to 500%: from concept to final consumer.
• Spectrum reserved by Indian Government to ISRO, AIR, MoD, DD
• Airtel is a marketing company and Airtel NOC is Handled by IBM
20

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ESSENTIAL READINGS 5

VALUE CHAIN IN TELECOM INDUSTRY

Porter’s Value Chain Diagram

Further, a telecom company’s operations can be simplified in the follow ways:

TELECOM SERVICE PROVIDERS

MNO- MOBILE NETWORK OPERATORS

DOT – DEPARTMENT OF TELECOM

NTP – NATIONAL TELECOM POLICY 1994

NTP – NATIONAL TELECOM POLICY 1999

The objectives of National Telecom Policy 1999 drafted by the Department of

GSM – GLOBAL SYSTEM FOR MOBILE COMMUNICATION

CDMA – CODE DIVISION MULTIPLE ACCESS

KEY WORDS: CDMA, Downlink Communications, Uplink Communications

SACFA makes recommendations on major frequency allocation issues, formulation of

Technology Recommended frequency

LPG IN TELECOM INDUSTRY:

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