A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration.

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 1996

This study attempts to identify the strategic issues related to the financing of the telecommunication sector in India. Lessons from international experience of telecom financing especially in the developing Asian countries have been discussed in India's context. Case studies have been included which illustrate the actual issues being confronted by telecom companies in the liberalized environment. The study identifies the country risk, tariff structure, country's legal system, market and technological risk. Infrastructure development, country's economic condition, bureaucratic problems of the developing countries are also considered. Data collection is based on the interviews of CEO's and managers in India and France. It is found that the investment needs in the next ten years are extremely high and there is heavy competition for funds within the domestic as well as the international capital market. The participation of multilateral agencies is critical for the success of telecom project financing. Financial institutions and development banks will have to play a major role in mobilizing funds by developing new financial instruments. The telecom companies too need to understand the capital market very well and the government of India should encourage investment opportunities by creating conditions for the development of domestic capital market. It is felt that project financing and leasing will form the main forte for financing telecommunications in India in the near future.