Resource title

The Formation of the Russian cellular industry: entrepreneurial success in a failing economy

Resource image

image for OpenScout resource :: The Formation of the Russian cellular industry: entrepreneurial success in a failing economy

Resource description

We analyse the emergence of the cellular industry in Moscow and St. Petersburg in the context of Russia's post-socialist transformation in the 1990s. How could the cellular industry have succeeded in the period of a deep economic recession, weakened state, and immature markets? We identify the driving forces and key relationships that supported the fledgling industry. The primary role belongs to individual Russian entrepreneurs with a strong private interest in their businesses and ties to the state bureaucracy and to foreign investors with technological and managerial know-how and access to financial capital. The contribution made by Russian entrepreneurs was primarily institutional and directed towards the establishment of the favourable regulatory framework and development of patronage relationships with government officials. However, the resulting network, while based on short-term interests in technology and engineering, and this nexus stabilized the industry and facilitated its growth. Foreign telecom operators were more successful in Russia than foreign equipment manufacturers because the latter lacked expertise in cellular services and were interested primarily in exploiting new markets for its equipment, offering it to the Russian partners as an investment in kind, often overpriced and technologically outdated.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2007/2007-27.pdf

Resource license

Copyright INSEAD. All rights reserved