Special Economic Zones: The recent policies of setting up Special Economic Zones (SEZs), has added incentive for foreign investors to set up shop in India. These zones typically provide freedom from local tax regimes like excise, municipal duties, customs etc. (Indian Budget, 2005-06). Therefore it’s a huge opportunity for Freshtel to set up business without the conventional constraints of corporate tax, customs and excise duties. Consumer Base: With a population of over one billion, India provides a very attractive outlook for the number-intensive industry like Freshtel.
The large number of potential subscribers provides us immense opportunities for applying “economies of scale” fundamental. Since the VOIP technology has not yet percolated in the domestic market ruled by conventional mobile telecommunication companies, Freshtel should get ready to avail this opportunity. Rising Business Process Outsourcing: Opening up the economy has also culminated a boom in the Information Technology and allied sectors through Business Process Outsourcing (BPO). Freshtel has a huge potential base of corporate customers available through this mushrooming sector.
Biggest of Forbes 500 companies recently decided to transition or transfer some their operations to India and extensively employ the VOIP technology as it is the most economical mode of long distance communication and coordination.
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This market has sufficient number of advantages over the other contenders. South American and other European Union markets demand a huge investment in terms of setting up logistical support required by VOIP technology as highlighted: * There is significant stagnation in the growth of data transmission and telecommunication market in Europe. Growth in the telecom services market in Europe is expected to slow down further in 2005 to slightly below 4%. The slowdown should continue during the period 2005- 2008, but at a more moderate pace, with estimated growth of 3. 5% in 2008. (Sophie Bismut, 2004)
* The socialistic mindset of Argentinean and Brazilian governments is also a political challenge that Freshtel could face. Changes to existing telecom law have been the subject of considerable debate during 2006. (South Americans Debating Changes To Telecom Laws – November 2006) * From infrastructure point of view, South American countries are yet to develop reliable and widespread reach of data transmission services like High Speed Internet. “Paucity of funds available for IT investments has compelled Latin American enterprises to outsource their IT infrastructure requirements. ” (Frost and Sullivan, 2004)