2G-BASICS

2G (or 2-G) is short for second-generation wireless telephone technology. Three primary benefits of 2G networks over their predecessors were that phone conversations were digitally encrypted; 2G systems were significantly more efficient on the spectrum allowing for far greater mobile phone penetration levels; and 2G introduced data services for mobile, starting with SMS text messages2G technologies can be divided into TDMA-based and CDMA-based standards depending on the type of multiplexing used

Capacity

Using digital signals between the handsets and the towers increases system capacity in two key ways:

1. Digital voice data can be compressed and multiplexed much more effectively than analog voice encodings through the use of various codecs, allowing more calls to be packed into the same amount of radio bandwidth.

2. The digital systems were designed to emit less radio power from the handsets. This meant that cells could be smaller; so more cells could be placed in the same amount of space. This was also made possible by cell towers and related equipment getting less expensive.

Advantages

1. The lower power emissions helped address health concerns.

2. Going all-digital allowed for the introduction of digital data services, such as SMS and email.

3. Greatly reduced fraud. With analog systems it was possible to have two or more "cloned" handsets that had the same phone number.

4. Enhanced privacy. A key digital advantage not often mentioned is that digital cellular calls are much harder to eavesdrop on by use of radio scanners. While the security algorithms used have proved not to be as secure as initially advertised, 2G phones are immensely more private than 1G phones, which have no protection against eavesdropping.

Disadvantages

1. In less populous areas, the weaker digital signal may not be sufficient to reach a cell tower. This tends to be a particular problem on 2G systems deployed on higher frequencies, but is mostly not a problem on 2G systems deployed on lower frequencies. National regulations differ greatly among countries which dictate where 2G can be deployed.

2. Analog has a smooth decay curve, digital a jagged steppy one. This can be both an advantage and a disadvantage. Under good conditions, digital will sound better. Under slightly worse conditions, analog will experience static, while digital has occasional dropouts. As conditions worsen, though, digital will start to completely fail, by dropping calls or being unintelligible, while analog slowly gets worse, generally holding a call longer and allowing at least a few words to get through.

3. While digital calls tend to be free of static and background noise, the lossy compression used by the codecs takes a toll; the range of sound that they convey is reduced. You'll hear less of the tonality of someone's voice talking on a digital cellphone, but you will hear it more clearly.

FDI in India

Foreign Direct Investment (FDI) flows are usually preferred over other forms of external finance because they are non-debt creating, non-volatile and their returns depend on the performance of the projects financed by the investors. FDI also facilitates international trade and transfer of knowledge, skills and technology. In a world of increased competition and rapid technological change, their complimentary and catalytic role can be very valuable

In recent years privatization and dis-investment of public enterprises have become an important channel for the flow of FDI into many emerging economies. FDI plays a pivotal role in the development of India's economy. It is an integral part of the global economic system. Advantages of FDI can be enjoyed to full extent through various national policies and international investment architecture. Both the factors contribute enormously to the maximum FDI inflows in India, which stimulates the economic development of the country.

Enhanced international response and powerful sectoral productivity ratios in India are incessantly drawing the attention of the global investors in India. Other aspects being characterized to the resumption in foreign direct investment (FDI) recently entail growing client assurance in the market.

India proudly features in the third slot of global direct investment destinations, despite of the recession and as per the latest report by United Nations Conference on Trade and Development (UNCTAD), it will retain its slot in the next two years.

India drew FDI influx of US$ 1.74 billion during November 2009 which is 60% more than US$ 1.08 billion procured in the previous fiscal. As per the information produced by Department of Industrial Policy and Promotion (DIPP), the collective amount of FDI influx 1991 to 2009 stood at US$ 127.46 billion

The services industry entailing fiscal and non-fiscal services drew FDI valued US$ 3.54 billion during 2009-10, while software and hardware industry acquired around US$ 595 million. In the same period the telecommunications industry obtained US$ 2.36 billion of FDI.

FDI Scenario in India

The aggregate cost of 32 domestic mergers and acquisition (M&A) agreements in India in January 2010 stood at US$ 2,167 million against 8 deals amounting to US$ 1,324 million and 28 deals amounting to US$ 223 million in 2009 and 2008, respectively.

In the fiscal year 2009, developing economies gained a massive share of 51.6% FDI, more than what the developed nations gained, as per the survey by Ernst & Young on globalization. This was chiefly because of major decline in FDI into industrial markets, that was 50% less than FDI in 2008. From 4% of 2004 to 8% of 2005, the nation's endowments in infrastructure industry doubled, as per the report by Planning Commission of India.

With the fiscal structure gaining momentum, endowment proposals in India Inc witnessed an upsurge of around 16% in 2009 to US$ 345.3, as per the report conducted by a premiere sectoral body. In 2009, nine tenders contributing total FDI of US$ 112.25 million was sanctioned by the central administration. Among the sanctioned tenders, Mitsui and Company of Japan is expected to contribute US$ 69.83 million to set-up a fully governed subsidiary in the warehousing industry.

In January 2010, the Indian government gave its consent to 14 FDI tenders which are likely to bring foreign investment amounting to US$ 157.89 million. These encompass:

• US$ 58.82 million worth FDI tender by Asset Reconstruction Company

• FDI valuing US$ 44.39 million by Standard Chartered Bank that is likely to elevate to 100% from 74.9% in its portfolio management arm

• Tenders by SaharaOne, KS Oils and NDTV Imagine

• NDTV Lifestyle tender worth US$ 54.28 million

• Tender by India Infrastructure Development Fund based in Mauritius that is likely to bring US$ 517.29 million

FDI in India - Policy Initiatives

The Indian government has assured to release an improvised FDI policy in every six months. The offers announced by Union Finance Minister, Pranab Mukherjee, in Union Budget 2010-11, to enhance investment ambiance in India on February 26, 2010 entail:

• Measures implemented to un-complicate the FDI system

• System for computation of indirect foreign investment in Indian firms has been comprehensively classified.

• Entire liberalization of costing and imbursement of technology transmit charges and trademark, and royalty expenses.

Additionally, the Indian government has permitted the Foreign Investment Promotion Board (FIPB), to sanction FDI tenders of up to US$ 358.3 million. Previously all the tenders that entailed foreign direct investment of more than US$ 129.16 million were presented in front of Cabinet Committee of Economic Affairs (CCEA) for authorization. As the Union Home Minister, Mr P Chidambaram, the exemption would accelerate foreign direct investment inflow.

An Overview of Advantages of FDI-

Foreign Direct Investment in India is allowed through four basic routes namely, financial collaborations, technical collaborations and joint ventures, capital markets via Euro issues, and private placements or preferential allotments.

FDI inflow helps the developing countries to develop a transparent, broad, and effective policy environment for investment issues as well as, builds human and institutional capacities to execute the same.

Benefits of Foreign Direct Investment-

Attracting foreign direct investment has become an integral part of the economic development strategies for India. FDI ensures a huge amount of domestic capital, production level, and employment opportunities in the developing countries, which is a major step towards the economic growth of the country. FDI has been a booming factor that has bolstered the economic life of India, but on the other hand it is also being blamed for ousting domestic inflows. FDI is also claimed to have lowered few regulatory standards in terms of investment patterns. The effects of FDI are by and large transformative. The incorporation of a range of well-composed and relevant policies will boost up the profit ratio from Foreign Direct Investment higher. Some of the biggest advantages of FDI enjoyed by India have been listed as under:

Economic growth- This is one of the major sectors, which is enormously benefited from foreign direct investment. A remarkable inflow of FDI in various industrial units in India has boosted the economic life of country.

Trade- Foreign Direct Investments have opened a wide spectrum of opportunities in the trading of goods and services in India both in terms of import and export production. Products of superior quality are manufactured by various industries in India due to greater amount of FDI inflows in the country.

Employment and skill levels- FDI has also ensured a number of employment opportunities by aiding the setting up of industrial units in various corners of India.

Technology diffusion and knowledge transfer- FDI apparently helps in the outsourcing of knowledge from India especially in the Information Technology sector. It helps in developing the know-how process in India in terms of enhancing the technological advancement in India.

Linkages and spillover to domestic firms- Various foreign firms are now occupying a position in the Indian market through Joint Ventures and collaboration concerns. The maximum amount of the profits gained by the foreign firms through these joint ventures is spent on the Indian market.