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Formulating a Proactive Entry Strategy for Ericsson in India New Site Leasing Industry

Ericsson, Emily (2007) MIO920
Production Management
Abstract
Ericsson India is looking into the possibility to enter a new business in the country. The
business is a “telecom site leasing” service which would be included in Ericsson’s service
portfolio. Services are an increasingly important part of the company’s total revenues.
Demand for so called turn-key services, meaning full implementation and control over a
customer’s network, is an example of a service which is increasing in developing
countries like India. Ericsson finds it therefore natural to grow within the service segment
in these markets. The idea to expand the service offerings with an entrance to the so
called tower industry emerged from identified new opportunities and a noted market
demand. This thesis has investigated how... (More)
Ericsson India is looking into the possibility to enter a new business in the country. The
business is a “telecom site leasing” service which would be included in Ericsson’s service
portfolio. Services are an increasingly important part of the company’s total revenues.
Demand for so called turn-key services, meaning full implementation and control over a
customer’s network, is an example of a service which is increasing in developing
countries like India. Ericsson finds it therefore natural to grow within the service segment
in these markets. The idea to expand the service offerings with an entrance to the so
called tower industry emerged from identified new opportunities and a noted market
demand. This thesis has investigated how Ericsson should enter this “site leasing”
business in India.
The business is expected to take off with or without Ericsson, as regulators and the Indian
government see many benefits to the economy with the concept. Since the aim of the
concept is to achieve as many tenants as possible per tower, infrastructure costs are
expected to decrease per operator. The cost reductions is the main reason for the belief
that the service is expected to improve coverage in rural areas, which at the present have
a network penetration of less than 2%. The service is also supported by the government
and the regulators because it is estimated to improve countryside and city esthetics and
network capacity in urban areas, which are facing problems with insufficient space.
It was found through various analyses that Ericsson should invest in a pilot project
initially to minimize risks. After an evaluation of the pilot project it is recommended to
start an aggressive investment strategy. In this way it is believed that Ericsson will raise
barriers for entering competitors and thus create a more profitable business. The strategy
is also believed to overcome the weakness of the Ericsson non-associated tower brand
easier through faster implementation of the business on a wider scale than competitors.
Moreover, it was also found that Ericsson should differentiate the service compared to
competitors. Ericsson has the capability to supply customers with a service with
perceived benefits, thereof the strategy. It is estimated that Ericsson will alone be able to
hold such a position in the industry and thus the incentive to price their service slightly
higher than competitors. It is furthermore recommended that Ericsson should monitor the
new business closely to correct dissatisfying performance in time. (Less)
Please use this url to cite or link to this publication:
author
Ericsson, Emily
supervisor
organization
course
MIO920
year
type
M1 - University Diploma
subject
other publication id
07/5258
language
English
id
1980682
date added to LUP
2011-06-20 11:02:40
date last changed
2011-06-20 11:02:40
@misc{1980682,
  abstract     = {{Ericsson India is looking into the possibility to enter a new business in the country. The
business is a “telecom site leasing” service which would be included in Ericsson’s service
portfolio. Services are an increasingly important part of the company’s total revenues.
Demand for so called turn-key services, meaning full implementation and control over a
customer’s network, is an example of a service which is increasing in developing
countries like India. Ericsson finds it therefore natural to grow within the service segment
in these markets. The idea to expand the service offerings with an entrance to the so
called tower industry emerged from identified new opportunities and a noted market
demand. This thesis has investigated how Ericsson should enter this “site leasing”
business in India.
The business is expected to take off with or without Ericsson, as regulators and the Indian
government see many benefits to the economy with the concept. Since the aim of the
concept is to achieve as many tenants as possible per tower, infrastructure costs are
expected to decrease per operator. The cost reductions is the main reason for the belief
that the service is expected to improve coverage in rural areas, which at the present have
a network penetration of less than 2%. The service is also supported by the government
and the regulators because it is estimated to improve countryside and city esthetics and
network capacity in urban areas, which are facing problems with insufficient space.
It was found through various analyses that Ericsson should invest in a pilot project
initially to minimize risks. After an evaluation of the pilot project it is recommended to
start an aggressive investment strategy. In this way it is believed that Ericsson will raise
barriers for entering competitors and thus create a more profitable business. The strategy
is also believed to overcome the weakness of the Ericsson non-associated tower brand
easier through faster implementation of the business on a wider scale than competitors.
Moreover, it was also found that Ericsson should differentiate the service compared to
competitors. Ericsson has the capability to supply customers with a service with
perceived benefits, thereof the strategy. It is estimated that Ericsson will alone be able to
hold such a position in the industry and thus the incentive to price their service slightly
higher than competitors. It is furthermore recommended that Ericsson should monitor the
new business closely to correct dissatisfying performance in time.}},
  author       = {{Ericsson, Emily}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Formulating a Proactive Entry Strategy for Ericsson in India New Site Leasing Industry}},
  year         = {{2007}},
}