TELECOMMUNICATIONS

In the Indian government announced plans to lower the price of bandwidth by up to 25 percent and allow for its resale to new operators, giving foreign firms greater access
to the largely private-sector telecommunications infrastructure.55 As a result, international
firms such as BT and Cable & Wireless, which are both based in the United Kingdom, are
reportedly interested in entering the Indian telecom market to provide broader advanced
networking services, such as network integration and security. Additionally, current
operators in India, such as AT&T,56 which competes with Indian telecom companies in both
domestic and international long distance services, believe that these changes will also
improve overall service quality and reliability since end-to-end control of transmission
systems are now possible. Moreover, broadband internet service, which has grown over
600 percent to 1.5 million Indian subscribers, is seen as the primary driver of the
bandwidth market in India.57 Expansion in services such as Internet telephony (VoIP), which reached 1 billion minutes in India during the first quarter, reflecting six-fold growth from 160 million minutes,58 will also likely provide greater investment opportunities in the Indian telecom sector as bandwidth prices continue to fall.

Retailing Due to lingering political and social sensitivities within the retail sector, foreign investor in India’s retailing industry remain limited to single-brand retail outlets. With a total of
12 million retailers in India (97 percent of which are small mom-and-pop style businesses), there is strong opposition to foreign involvement.59 However, the Indian government is actively considering whether to allow greater foreign investments in specific products, namely, sporting goods, stationery, construction materials, and electronics.60 As foreign investors were allowed to control a maximum of 51 percent equity in Indian retail ventures that sell products under a single international brand. Arvind Brands, the second largest domestic apparel company in India, created a joint venture with Tommy Hilfiger licensor, Ganesh,61 to establish Hilfiger-branded clothing and apparel stores throughout India.
Bharti Enterprises and Wal-Mart announced a jointventure agreement where Wal-Mart would provide its goods wholesale to the Indian retailer and provide logistics and distribution services to the joint venture.63 Specifically, Bharti, a major Indian telecom operator, is planning to invest $2.5 billion to create a national supermarket chain creating 10 million square feet of retail space and employ 60,000 people.64 Industry sources estimate that retail sales in India will grow from $300 billion to an estimated $427 billion and $637 billion.