Five key lessons for Norwegian businesses from Telenor's foray into India.
“There is no one way to look at India. There are many Indias. Pluralism is a reality that emerges from the very nature of the country; it is a choice made inevitable by India’s geography and reaffirmed by its history“. said the famous Indian politician and ex United Nations Under- Secretary-General Shashi Tharoor in one of his talks.
This quote highlights the complexity of India as a nation, a country which is diverse in its culture, people and geography. Almost three years into its operations, Telenor became one of the most successful new entrants in India but also had to weather various storms and continues to sail the rough seas of the Indian telecom market. Some of the lessons from Telenor's troubles in India can be applied to other Norwegian industries that envision foraying into India in the near future.
1. Treat India as a continent
When Telenor launched its operations in India it ran a marketing campaign titled “now its my number”, targeting the ambitious youth population in India. This campaign was translated directly into multiple languages and launched across the country. While this campaign can make sense in some parts of India, it would not have the same impact in the rest of the country as the demographics, linguistic impact of the campaign and cultural relevance are different. So it is key to treat India as multiple markets with localized strategies that fit the regional contexts.
2. Learn to deal with Competition and Corruption
Telenor has had various challenges with the government in India due to lack of proper telecom policy and guidance when it came to spectrum allocation. Clarity on the policy guidelines were slow to come and raising these concerns in the media had little impact on the pace of change. Doing business in India can be challenging and bureaucratic. In the world bank's doing business report, India ranks poorly at 132 whereas Norway ranks at number 6. There is also rampant corruption in the country, While corruption could speed up businesses in India it could also destroy a company's reputation and jeopardize its operations. Rumours were ramapant that Telenor was a Pakistani company as it had the same logo in both countries and that caused confusion among the customers. The local players could either get into a price war or use other tactics such as spreading rumors to destroy a company's brand in the country. Hence understanding how a Norwegian company can differentiate itself from the local players and constantly monitoring the brand image is key to being successful in India.
3. Understand cultural differences and pace of business
When Stien Erik Vellan took charge as the first managing director of Telenor India he quoted “one day in India is like one week in Europe”. India is a fast paced market, imagine a billion people pulling in every direction, hence the pace of change is rapid. Due to multiculturalism, Indians are often careful about other peoples sentiments. This is reflected in the communication styles, most communication is tacit and indirect and there is a huge power distance between the boss and the employees, while in Norway most organizations have a non hierarchal structure and communication is almost always direct. Therefore understanding the pace of business and recruiting managers who can be bridge builders between cultures is key to being successful in India.
4. Choose the right partner
Various restrictions in operational policy and FDI in the telecom space led Telenor to choose an Indian partner. When Unitech was charged with corruption, Telenor had to face major troubles with dissolving its partnership as they lost the licenses. Foreign investor cannot invest directly or are required to obtain the approval of the government for investment in certain industries. Some local partners could have vested interest in the partnership and hence it is important to do due diligence and evolve the relationship with the potential partner over time. Getting out of a partnership in India is difficult, and the legal process is slow and arduous. So finding a right partner and understanding the role of the partner in the Indian business is crucial to being successful.
5. Have realistic expectations
When Telenor launched in India, it set up a pan India operation and projected to break even in 3 years. After 3 years in India, Telenor had to write off their India investment. The cost of operations in India can be high due to the vastness of the country and the complexity of the market. There are various uncertainties in the market due to political, economic and legal changes, which can cause unforeseen problems to Norwegian businesses in India. These risks should be factored in by Norwegian companies when computing the rate of return of an India investment. So being realistic about risks and return, having a long term perspective, starting small and scaling over time in a market like India will yield higher rewards.
In summary, as the world tries to figure a way out of this balance sheet recession, there are only a few places in the world with massive population and strong growth, India is one such country. While there are various problems with institutions in India, the opportunities most of the time outweigh the challenges. Hence India is an ideal market for Norwegian businesses. But as Shashi Tharoor pointed out in his speech, there are many ways to look at India and so Norwegian businesses should be cognizant of these different perspectives and learn from some of the key lessons from Telenor India before venturing into one of the few last growth markets in the world.(Vilkår)Copyright Dagens Næringsliv AS og/eller våre leverandører. Vi vil gjerne at du deler våre saker ved bruk av lenke, som leder direkte til våre sider. Kopiering eller annen form for bruk av hele eller deler av innholdet, kan kun skje etter skriftlig tillatelse eller som tillatt ved lov. For ytterligere vilkår se her.