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New strategies of industrial organization: outsourcing and consolidation in the mobile telecom sector in India

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  • Sumangala Damodaran

Abstract

The paper discusses the experience of the mobile telecom sector in India in terms of its business organization. There is a high level of outsourcing of activities, including those such as network management, which would usually be included within the core competence of mobile telecom companies. This outsourcing strategy, pioneered by Bharti Airtel, has resulted in considerable cost savings and increased profits for a small number of core employees of the lead firm. At the same time, in some outsourced activities, such as tower construction, there is a large incidence of casual and contract labour, all forms of precarious employment of the informal variety. However, because of the high level of oligopolistic competition among mobile telecom service providers, some of the benefits of lower cost have been passed on to consumers in the form of low-cost services. But the Bharti Airtel outsourcing strategy is important in pushing the limits of what could be called core competence in a business model dominated by outsourcing.

Suggested Citation

  • Sumangala Damodaran, 2013. "New strategies of industrial organization: outsourcing and consolidation in the mobile telecom sector in India," Global Development Institute Working Paper Series ctg-2013-32, GDI, The University of Manchester.
    • Handle: RePEc:bwp:bwppap:ctg-2013-32
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    1. Joonkoo Lee & Gary Gereffi, 2013. "The co-evolution of concentration in mobile phone global value chains and its impact on social upgrading in developing countries," Global Development Institute Working Paper Series ctg-2013-25, GDI, The University of Manchester.
    2. repec:ilo:ilowps:370120 is not listed on IDEAS
    3. William MILBERG, 2004. "The changing structure of trade linked to global production systems: What are the policy implications?," International Labour Review, International Labour Organization, vol. 143(1-2), pages 45-90, March.
    4. Milberg, William S.,, 2004. "The changing structure of international trade linked to global production systems : what are the policy implications?," ILO Working Papers 993701203402676, International Labour Organization.
    5. Milberg, William & Winkler, Deborah, 2010. "Trade crisis and recovery : restructuring of global value chains," Policy Research Working Paper Series 5294, The World Bank.
    6. Sandip Sarkar & Balwant Singh Mehta & Dev Nathan, 2013. "How social upgrading drives economic upgrading by Indian IT majors: the case of telecom IT services," Global Development Institute Working Paper Series ctg-2013-27, GDI, The University of Manchester.
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    1. Sandip Sarkar & Balwant Singh Mehta & Dev Nathan, 2013. "How social upgrading drives economic upgrading by Indian IT majors: the case of telecom IT services," Global Development Institute Working Paper Series ctg-2013-27, GDI, The University of Manchester.

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