Outsourcing

economic and social upgrading in global production networks

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

1

Ambedkar University, Delhi, India

Email: [e-mail]

Sumangala Damodaran1

May 2013

Capturing the Gains 2013

Working Paper 32
ISBN : 978-1-909336-87-2

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.

Keywords: Mobile telecom, industrial organization, outsourcing, impact on workers, profits, mobile phone users

Author

Sumangala Damodaran is Associate Professor, School of Development Studies, Ambedkar
University, Delhi, India.

Acknowledgements
The author wrote this paper with substantial research assistance from Anindita Chatterjee and Vikas Dalal, who conducted the field study and collected the information that was necessary. Thanks are owed to Joonkoo Lee and Dev Nathan for their comments and suggestions, which have helped improve the paper. Thanks also go to Balwant

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