Foreign direct investment in the Indian telecommunications sector

physical infrastructure. Consequently many foreign companies entered and then exited the Indian
telecommunications sector within a few years.

Indian rural areas represent the greatest growth area for telecommunications. However,
this growth is limited by the extreme poverty of the persons living in the rural areas, where there
may be a greater focus on life’s basic necessities of food, health, sanitation and water. The
present cost of telecommunications access may exceed the affordability of rural residents.

Foreign direct investment in the Indian telecommunications sector would likely increase
further if limits on investment were removed, regulations were clarified and the physical
infrastructure was improved. These actions would improve regulatory transparency and entail
additional costs.

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