Telenor's Dilemma: The 2G Spectrum Scam in India
(7 pages of text)
In 2008 the Supreme Court of India revoked the 2G spectrum licences issued to many local and international companies because of major violations in the granting procedure by the Telecom Ministry. One of the worst affected companies was Norway’s Telenor communications company, which was involved with a local company in a joint venture, Uninor, which had all of its licences cancelled. The case provides students an opportunity to assess and understand the implications of the political as well as legal risks involved in entering uncertain markets, such as India’s, and to devise appropriate coping strategies to establish and successfully operate in such markets. The case drives home the significance of political and legal business environmental factors that have an impact on the successful conduct of business. Multinational companies tend to be vulnerable to political risks, and the case suggests to students how to handle such situations.
The case can be used in business environment and international business management courses. For business environment courses, the case may be focused on understanding the dynamics of the political and legal environment. For international business management courses, the case is most pertinent in discussions around risk insuring strategies/coping mechanisms in light of the political and legal environment. In this process of devising strategies, some of the noteworthy decisions to be made include assessing market parameters to devise entry strategies, framing for strategic decision making and managing long-term interests.
Information, Media & Telecommunications
India, Large, 2011
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