B-Schools now offer a much wider range of courses, which facilitate career specialisation right from the first step

IIPM Mumbai Campus

Academic options and corporate futures

The path to a focused management career is a much easier one to tread these days. With B-Schools increasingly providing industry-specific courses at the degree and post-graduate diploma level, students can now look at such a specialisation right from day one of their management education.

This also enables them to make the transition from the halls of academia to the conference rooms in their preferred industry organisation that much sooner. Unlike the past, there is no need to first do a general course, start working and then do a specialised course side-by-side.

As each new career opportunity presents itself, B-Schools have come up with relevant courses that not only help in bridging the manpower gap, but also actually offer a curriculum that meets industry needs beyond just the basic recruitment criteria.

There are courses in spheres like Services Management, Pharmaceuticals Management, Capital Markets, Actuarial Science, Technology and Retail Management, Wealth Management, Global Mergers and Acquisitions, Foreign Trade Policy and Derivatives, which enable the management aspirants to take advantage of emerging opportunities. With such a vast range of options on offer from BSchools - and this is just the tip of the iceberg so to speak - the future of management students seems very bright indeed.

The most important thing is that industry and academia have not only managed to shrug off the past but are also working together to build a better future for students. The course curriculum and internships are being designed to mirror the real corporate world as much as possible and healthy ties with the corporate world to ensure students have exposure to current trends and challenges, in light of emerging career opportunities Initiatives such as live projects, summer internships, real life case studies, guest lectures by industry professionals, seminars, workshops and industrial visits enable management institute to provide essential practical exposure to the students. Establishing industry partnerships in conventional as well as sunrise sectors enables candidates to work on short-term and long-term projects.

B-Schools in India are increasingly benchmarking themselves and their courses against the best in the world. There is a rising emphasis on management education in the current scenario, with a minimum level of management courses has become essential for employment and/or career growth in most fields given the extremely competitive workplace environment. Interestingly, instead of being complacent, most B-Schools are upping the ante by benchmarking themselves against the best in India, followed by Asia and finally the world.

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“In india, for india...”

B&E: How did you started off in India?

VR: GE Healthcare came to India in the year 1990 through a joint venture with Wipro Corporation. We obviously started at the bottom of the table as most of the big players had established business in India. GE Healthcare was represented through a GE business unit called IGE, which had some presence in the X-ray imaging business. Thus, our immediate vision was to establish ourselves as a top-of-the-line medical equipment supplier and a preferred partner for Indian healthcare practitioners.

B&E: So, how has been your journey till date?

VR: The biggest challenge we faced was do get business from the government. As we were a new entrant in the market therefore we could not grab a good mind share and were able manage only a meager percentage of its business. It took us time to educate them on our technology and service capabilities. However, today, with our investments in technologies, resources, education, et al, we are getting a good chunk of government business as well. Other learning was to bring in more local products and solutions for the local market. We believe we could have accelerated with “In India, for India” solution a lot earlier.

B&E: What is your advice to a MNC that plans to enter the Indian market in the near future?

VR: India is a huge market, but it’s a unique market. On one hand, it has an urban market, which is at par with the developed world, on the other it has a huge under-developed market that is crying for basic necessities. I would say that the key to growth in India to get a deep understanding of the Indian consumer. One should be patient enough to play a long innings and should bring out products/solutions that are aligned to Indian consumer needs.

B&E: What, according to you, are the factors that must be taken care of by the government?

VR: Infrastructure is a big issue here, whether it is road, electricity or healthcare, it really needs to be improved. However, government seems committed to growth and is willing to invest in infrastructure. It’s a very good sign.

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Source : IIPM Editorial, 2009

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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If you Thought that the colour of success was red, blue or pink; think again, my friend! It’s positively Green...

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Madonna will “speak to the planet” at Wembley stadium in London. She would call for mass global change to reduce carbon emissions and to tackle the “climate crisis.” Former US Vice President, Al Gore, has turned into an environmental campaigner and has started a spectacular series of concerts across the world called “Live Earth” to raise awareness about global warming. The world’s biggest stars would perform across all the seven continents (even Antarctica!) to appeal to the world to reduce its “carbon footprints”.

In fact, Carbon foot printing is the latest buzz among environmentalists. It is a way of measuring how much impact you, as an individual or a corporate, have on the earth in terms of units of carbon dioxide produced. You can now calculate your carbon footprint (how much you have contributed to polluting the earth); you can even offset your carbon footprint. You could plant a tree in Kenya to help reduce CO2 emissions. In fact, your wedding too can now be customized to become “carbon-neutral”. Instead of receiving 10 juicers or 5 toasters you could ask your guests to donate trees to organisations like carbon footprints.com at the cost of £10 per green tree.

The world is getting more and more carbon literate, especially with the scare of global warming looming closer and everyone wanting to leave a greener earth for their children. Many are busy calculating their carbon footprints by measuring the amount of CO2 they are producing through consumption of gas, heating and electricity. Even the means of transport – not just cars, but lights too emit CO2 and cause environmental damage – and people across the world are doing their best to cut it down as much as possible.

Superstars like Madonna and Kate Moss, thanks to their private jets, their super luxury cars and their ultra lavish lifestyle are among the worst polluters and have the largest carbon footprints. This is no small matter and companies are now under pressure to reduce their green house gas emissions, and come out with more carbon- neutral products, services and even events. No wonder even “Live Earth” concerts are being lambasted for causing immense emissions. With stars jetting in from around the world, fans arriving in gas guzzling cars, thousand of tonnes of rubbish, and sound equipment using so much power, these events are slated to become big polluters. Ironical?!

Green Marketing is Smart Marketing

Companies are now developing products keeping the environment in mind and marketers are using “environmental- friendly” as the new trick to sell their products and make them look more attractive. Running short of ideas? Well, you could get great ones by just brainstorming with an environmentalist. The Arm and Hammer brand of baking soda for 7 years had no growth in sales. Then they decided to market their products as an environmentally preferable cleaning agent. Sales rose by 30% in 35 months!

Toyota and British Petroleum too are big organisations that have realized the power of eco-innovation and green marketing. Toyota has beaten its domestic competitors, hands down, by introducing new automotive eco-innovations. Its ecofriendly cars like Prius are slowly eating away into the competitors’ market share. British Petroleum’s advertising campaign “Beyond Petroleum” highlighted the company’s support of renewable energy recourses. It is one of the very few companies that mention climate change in their annual reports.

Shareholders are today demanding that companies reveal more about the environmental impact of their products and explain what they are doing to make them more environmentally compatible.

Ireland’s largest insurer “Irish life and Permanent” has launched “green loans scheme,” designed to reward borrowers, who wish to borrow money for environment-friendly improvements to their homes by offering them a 1% discount on the normal lending rate for its personal loans. Similarly, HSBC had started a “green sale” that reinforces the bank’s commitment to environmental issues. It would donate £0.50 to WWF for every customer who signs up for internet banking during the period of sale. It expects to raise £1 million this way. Such schemes have helped HSBC to become the world’s first carbon neutral financial service provider.

Wal-Mart too is testing an energysaving retail store design. Philips has introduced energy saving bulbs. P&G’s new laundry detergent – Tide Coldwater is designed to clean clothes effectively in cold water, & hence help the consumers save energy. Steelcase, the world’s largest office furnit u r e manufacturer has come out with a “Think Chair”, which is 99% recyclable – its presence symbolizes a smart socially responsible office! Xerox promotes its solid ink printer as being non-toxic and producing 90% less waste than laser printers. McDonald’s is doing all it can, to show to the world that it cares by incorporating a series of environmental and social initiatives. Early this month, it announced that it would turn its spent cooking oil into bio-diesel fuel to power vans in the UK. Its menu now has coffee, soya, et al, that is sourced from companies, which do not destroy rainforests. Its décor of bright red & yellow is slowly being changed to dark green to reinforce its environmental faith and have a positive influence on consumers.

Pret-a-manger, a sandwich chain in the UK today has 1.3% of the sandwich market eating out of its hand. It snatched the share from Marks & Spencer (the original inventors of the sandwich for lunch concept). They did this by using only natural ingredients and minimum preservatives and making sure everything in their shop was recyclable, as also caused minimum waste (of paper) & damage to the environment. GM too launched a campaign “Live green, go yellow” to promote its flexible – fuel vehicles & its support of ethanol-based gasoline.

Green: Colour of money

It’s the youth that are turning more “green-conscious” today. According to a poll done in America, 50% of the respondents from the age group of 18-29 years, said that they were ready to spend more on products that were organic/environmentally-friendly or fair trade. It shows that Generation Y is obviously more environmental savvy than its seniors.

No wonder, the very popular website among the youth called “Second Life” where people create virtual doubles of themselves, has launched a competition for the best idea to redevelop an area in the city and make it more environmental-friendly. People from everywhere participated, which shows that people want to do something for their surroundings, if given an opportunity.

Countries that have suffered environmental disasters like the Bhopal Gas Tragedy (India), the Exxon oil spill, the Chernobyl disaster (Ukraine) that caused radioactive contamination are today demanding their pound of flesh. They want better, safer products & don’t mind paying more, but they want to put an end to these manmade disasters.

Green is the new mantra. Anything “green” sells, even the green Ogre “Shrek”! It raked in more than $600 million and created history as the largest domestic debut ever for an animated film in the USA. Remember how Popeye, the cartoon character, solved all his problems by gulping down a jar of green spinach – well, if you want to win and watch your competitors turn green with envy – go green!

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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From bestsellers to blockbusters

Why Study Abroad When IIPM Gives You 3 global Advantages!

Harry Potter, The Da Vinci Code, Lord of the Rings, Gone with the Wind, et al were all bestsellers before they become thundering blockbusters. Not only these, the best of Hollywood cinema has been picked up from the best pot-boilers. But, when it comes to Indian films, such cases are few and far in between. However, cinema adaptations of books have seldom failed to work their magic at the box office. Fascinated by Bibhutibhushan Bandopadhyay’s book Pather Panchali, Satyajit Ray decided to portray it on silver screen. The film went on to become one of India’s most recognised films globally. When it comes to cinema inspired by literature, Bengali cinema boasts the maximum numbers – Devdas, Choker Bali, Parineeta to name a few. In recent times, Vishal Bharadwaj, has mastered the art of putting life into the written word. His critically acclaimed Maqbool was a take off from Shakespeare’s Macbeth; while the recent hit Omkara was a local spin off on the great playwright’s Othelo. Even Booker prize winner Jhumpa Lahiri’s The Namesake was recently translated onto celluloid by Meera Nair and was well-recieved. Nevertheless, the fact that on the Indian cinema has largely ignored the literary powers of Indian authors, is intriguing. Does Indian literature lack the punch or are desi filmmakers not book-savvy? The jury is still out!

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read between the lines

Why Study Abroad When IIPM Gives You 3 global Advantages!

Potter’s swan song is taking the global literary world by storm. Is the Indian publishing Industry turning green? 4Ps B&M searches for the magic wand!

For John, getting up early in the morning is an ordeal. If work or play require him to be up before the crack of dawn, he doesn’t sleep at all. July 20 is one such day in the life of John, a merchandising manager at one of the leading bookstores in the country. Midnight will mark the launch of the seventh and the last book of the Harry Potter series – Harry Potter and the Deathly Hallows. Bookstores all over the country will pull up their shutters as early as 5 a.m. in the morning, only to be greeted by droves of eager fans waiting to lay their hands on the book before it’s ‘sold-out’. “This Potter mania is for real,” the Store Manager of Landmark bookstore tells 4Ps B&M. “There were dozens of fans waiting outside the store last time (when the sixth book was launched in July 2005) and this time around, we are expecting a larger crowd,” he says.

Heavy discounts, attractive offers and thousands of pre-bookings mark the grand finale of the Harry Potter series in the country like elsewhere. Penguin India which is distributing the book in the country is expecting to sell 260,000 copies of the book, the number is up by 100,000 this time. Retailers are not only ready with various allures for book-lovers but are also going the extra mile to set the mood through various events, promotions and are decking up their stores with Harry Potter paraphernalia.

Never before has this Bollywood and cricket crazy nation witnessed such love for a book. Looking at Pottermania in the country, a patriot is compelled to ask – if Potter can do it, why can’t an Indian book? “There is no hit formula in books. You never know what may click. Books like Harry Potter come once in a while,” offers Sanjoy Roy, Marketing Manager, Cambridge University Press. Neat! But, the patriot is not convinced. India is taking huge strides globally, the Sensex is zooming northward, and Indian companies are on a global acquisition spree. But, the cover of the Indian book publishing industry still sports the look of a cottage industry. Why?

Industry estimates place Indian book publishing industry’s size at Rs.70-80 billion, which is growing annually by 20%. However, no one has accurate figures. The annual report of PricewaterhouseCoopers on Media and Entertainment sector gives book publishing a miss. “We don’t do much on Indian book publishing industry as it is highly unorganised,” says a media analyst with PwC. However, their global report on publishing has a chapter on India which puts the industry’s worth in India at $1 billion, which includes all kinds of books, B2B publishing and also outsourcing and e-publishing. The global book publishing industry is worth $121 billion and is projected to grow at a CAGR of 3.6%. “However, out of this $1 billion, retail forms a very small part. The per capita spending of India on books is as low as $1,” she adds.

But, the country’s low spending on books does not signal that India is bereft of good writers. The names might be handful but Salman Rushdie, Mulk Raj Anand, Vikram Seth, Khushwant Singh, Arundhati Roy, Amitava Ghosh, Jhumpa Lahiri are some Indian writers writing in English who have made the country proud by winning international acclaim. But with a sale of 5,000 copies considered a bestseller here, Indian publishing industry has a long way to go. Agrees S.C. Sethi, President of Federation of Publishers’ and Booksellers Association of India as he points out, “We have excellent fiction writers in the country. But the industry is facing many challenges. Piracy is one. Then the Indian market is not very big, therefore not much is spent on advertising. A Penguin India will only print 1,000-2,000 copies of any book, but a publisher in America will print over 100,000 copies, as the market is huge and people are into the reading habit. In India, people are more into buying chocolates and sweetmeats instead.”

While piracy continues to be one of the biggest growth dampeners, many also complain of the high prices that both Indian and foreign books demand. Moreover, the industry is highly fragmented with only a few players dominating it. Forget acquisitions abroad, Indian publishers are not able to even compete with foreign players like Penguin on the home turf. But, all is not dark. There are silver linings which promise a better future. Says, P. Sukumar, CEO, HarperCollins Publishers India, “When I joined the industry eight years back, Penguin controlled 90% of the market. Today, publishers like us are equal contenders and even homegrowns like Rupa are doing extremely well.” Sukumar also hints about the increase in demand. “Earlier, if a book sold 3,000 copies it was considered a bestseller, today most books comfortably cross the 5,000 mark; and now 8,000 copies is generally considered a mark of a bestseller,” he adds.

The retail boom in the country is also set to give major impetus to the industry, doing away with the ‘display’ problem that the industry faces. And as far as the nation’s reading habits are considered: Here’s hoping that Harry, the wizard kid leaves behind a long-lasting spell to cure that!

Edit bureau: Surabhi Agarwal

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit Below....
The Sunday Indian - India's Greatest News weekly
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Dishy Doubts!

Why Study Abroad When IIPM Gives You 3 global Advantages!

Arun Kumar Kapoor, Dish TV CEO on the trials & triumphs of the Indian DTH mart!

Late last year, when Jawahar Goel – Additional Vice Chairman, Essel Group – went to Chandigarh, to wean away the then Hutchison Essar (South’s) CEO of Punjab Circle, Arun Kumar Kapoor, as the new CEO for Zee’s Direct-to-Home (DTH) venture, Dish TV, he hadn’t had the faintest idea of the responsibility he was taking on. Kapoor’s concerned wife, who stayed back in Chandigarh for some time, urged Goel to ensure that her husband remained ‘well fed’ in Delhi, despite her temporary absence. And ever since, the generous Goel makes it a point to invite the beleaguered Kapoor to share his home-packed lunch daily. And it’s easy, as the two share adjoining cabins in the sprawling Dish TV facility in Filmcity, Noida.

So, when the 4Ps B&M team went in for the scheduled meeting with the Dish TV head honcho on a lazy Friday afternoon, Kapoor regretfully told us that he’d be missing the day’s luncheon rendezvous with his big boss. But there are many more things that the fair and stocky CEO will miss out on, as he tries to tide the storm of competition that has all-but-arrived at Dish TV’s shores.

Anil Ambani is preparing to launch his DTH venture this fiscal – Reliance’s Blue Magic – and even Sunil Mittal’s Bharti Telemedia has an aggressive action plan lined up. Sun TV’s DTH venture is also on the anvil. And all that, if you’re not looking at existing players like Tata Sky and DD Direct, which are aggressively inching closer to the finishing line.

His cozy lunch sessions with Goel notwithstanding, even at the time of his joining, Kapoor was painfully aware of the cutthroat realities of the DTH market. In terms of sheer number of subscribers and distribution muscle, Dish TV continued to ride the DTH wave, but life at the top had become suddenly much more tedious for the Rs.194 crore giant. It made losses of Rs 250 crores in the last financial year. A management graduate from Jamnalal Bajaj Institute, Mumbai; Kapoor brought in a new thought process to Dish TV.

“Till even 7-8 months ago, we had the misconception of being a ‘technology’ company, but our orientation has changed. We see ourselves as a ‘service’ company today,” explains Kapoor, even as he compares the transition to the one witnessed in the telecom sector. “Mobile phones were earlier sold as durables, today they are virtually FMCG. Similarly, Dish TV is also moving to the FMCG mode,” he says.

And Kapoor should know. His 24 years experience in various companies includes a vast repertoire in the mobile telephony business, notably with Airtel, Spice Cell and Hutch. “We (Dish TV) once prided ourselves in making everything in-house, but have realised that we must focus on simply building our brand and providing services, and rest everything should be out-sourced,” offers Kapoor. With the change in thinking, also came a change in organisation’s structure, making Dish TV move towards being a more matrix organisation.

At its inception, Dish TV focussed on providing their DTH services in cable frustrated cities and that willy-nilly has become their strength. Presently, with its 2.1 million subscribers, Dish TV covers over 4,100 towns across the country and while 20% of their subscribers come from the top 15 cities, a whopping 60%, coming from the top 100 cities, make the backbone of this DTH service provider. Clearly, the strategy was to make inroads in the hinterlands and mop up a large spread. So Dish TV’s advertising in metros and bigger cities was conspicuous by its absence.

But in 2006, Tata Sky came in with a different strategy up its sleeve, and in just the first six months of its launch, went ahead and garnered a staggering half a million subscribers. With the first whiff of serious competition, Dish TV quickly changed tack and, over the last few months, has begun focussing more keenly on metros and big city markets.

Kapoor admits that as opposed to Dish TV’s key strategy of distribution, Tata Sky branded itself well. “That is an ‘unfortunate reality’,” he quips, but at the same time, he is gung-ho on Dish TV’s current and future endeavours.

“Last 3-4 months, we have increased our advertising and branding strengths considerably. Presently, if Tata Sky spends Rs.15 crore on advertising, we are spending Rs.10 crore. Over the next 6 months, competition will further drive up our advertising and marketing spends,” he avers. He candidly admits that going ahead, the battle will be tougher in the bigger cities.

Moreover, till August last year, Zee only had the Zee bouquet to offer its DTH subscribers; yet government regulations have forced Dish TV, as also other DTH operators, to provide the entire bouquet now. With virtually similar products on offer, the differentiation is clearly going to come from brand perception and service quality. Kapoor is also confident that Dish TV’s early distribution reach is already a key benefit in their kitty. Besides, with more channel launches, their enhanced satellite capacity will give them an edge, albeit, only for a while; till others play catch-up.

What’s more, the coming second phase of the CAS rollout, also has Kapoor rubbing his hands in glee. At the time of the last CAS rollout, about 1.6 million homes were impacted, a quarter of which went into the DTH kitty. Visibly excited, Kapoor says, “This time, 7.9 million satellite homes across Delhi, Mumbai and Kolkata will be affected. Imagine the huge opportunity in front of us!”

Over the next two years, the government plans to unleash the CAS regime across 35 cities in India. Little surprise that Kapoor has greedily set his eyes on an even bigger, 70 million homes, target.

The man’s contribution has also manifested itself in making Dish TV a more fun@work place, a throwback to his days at IBM Daksh and Hutch. Grinning mischievously, he explains how he’s coined pseudo names for all his colleagues and respective HODs. There’s Daddu, Romeo, Hitler, and of course, he himself is called Ravana in office. And his leadership style: “Tough love”. Even as you stare incredulously at him, wondering what he means, he is quick to explain: “It means that I love you, so I can be tough with you”. And that’s precisely the ethos that Kapoor prefers to encourage in his work space.

Likening himself to a coiled spring during his working hours, Kapoor adds, “I tend to lose my temper at times, but am very fair and just at the same time, have a high EQ (emotional quotient), I would say that I am human but not ‘humane’. I am great at delegating and give a lot of space to my employees. And yes, I can be very brutal when it comes to giving the reviews.” After work, though, it’s entirely a different proposition with this CEO, who prefers to just relax and let others around him also relax! A sports aficionado (he even played for the Delhi boxing team); Arun loves to travel, besides being a big time foodie. “I live to eat,” he admits fondly, and we have a certain Mr. Jawahar Goel to vouch for that... Remember those lunch-sessions?

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit Below....
The Sunday Indian - India's Greatest News weekly
IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES
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ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
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Harry Potter and the India story

Why Study Abroad When IIPM Gives You 3 global Advantages!

Warner Brothers has been going full throttle with Harry Potter and the Order of the Phoenix in India – make no mistake about that! So, to grab the imagination of the masses – and ensure that they come in hordes into movie theatres, fifth Harry Potter film has been dubbed in regional languages across the country. Warner Brothers has released 250 prints of Harry Potter and the Order of the Phoenix (the movie released on July 13). Of this, there are 75 prints in Hindi and 25 each in Tamil and Telugu; the remaining are in English. English versions of the film have hit markets like Mumbai, Goa, Pune, Bengalooru and Kolkata. English and Hindi versions have been released in Delhi, Indore, Nagpur, Baroda etc. The South (markets like Chennai) has seen releases in Tamil. And so on. The first of the Potter series, Harry Potter and the Philosopher’s Stone, that released in early 2000, earned Rs.2.5 crore in India, while the previous Harry Potter and the Goblet of Fire (released in 2005) made about Rs.5 crore. According to industry estimates, Harry Potter and the Order of the Phoenix may well rake in Rs.8 crore. Turner Group-owned channels like Pogo, Cartoon Network and HBO will all have special programmes and contests around the movie. And the magic does not stop there! Harry Potter video games will soon be available on Microsoft’s Xbox 360 and Sony’s PS3 at a discounted offering of Rs.1,999 (normally these sell for Rs.2,510). Let’s say this for Harry: he’s cast a real spell!

For Complete IIPM Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

For More IIPM Info, Visit Below....
The Sunday Indian - India's Greatest News weekly
IIPM, ADMISSIONS FOR NEW DELHI & GURGAON BRANCHES
IIPM, GURGAON
ARINDAM CHAUDHURI’S 4 REASONS WHY YOU SHOULD CHOOSE IIPM...
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The Indian Telecom Sector

IIPM PUBLICATION

The Indian telecom sector is unfolding a strange saga of unprecedented growth on one hand and some nonsensical interference from the ministry on the other hand. If everything goes as per the telecom ministry’s glorious plans, the time is not far when the telecom sector’s fantastic growth journey is smashed to extinction without even a ‘dumb’ hope of resuscitation

Ram Singh a labourer by profession, knows nothing beyond his paraphernalia and his daily target of digging the land. Along with a few coworkers, he is busy digging the pavement and putting in cables besides a road in the hustling city of Indore. As instructed by his the kedar, he is dumping the mud right on the road, causing disruption to the traffic and frustration to the pedestrians. In reality, Singh and his men are laying down the foundations of the all-important telecom infrastructure, undertaking on-ground execution of the most important revolution to have hit the Indian economy in the past 60 years, the great Indian telecom revolution.

Well, neither Ram Singh nor the frustrated pedestrians (who are cursing him for all the hassles created on the road) quite realize the importance of the work being carried out. The funny part is, after analysing the Indian telecom sector, we’re left wondering whether even the Indian government does? At one point, it became tough for us to decide what was dumber – the telecom policies or the politicians & bureaucrats implementing them? If you find out, write back to us...

Yes, the telecom sector is no more just another success story, it’s a revolution indeed. With new records being made every day, the world’s fastest growing sector has entered a phase where growth seems to be an obvious phenomenon. Exactly one year back, Business Week had written how India’s fixed land line and mobile base had reached 150 million, with the mobile subscriber additions growing at around 5 million a month. In one year, the monthly subscriber additions have already thundered beyond the 7 million mark and the total subscriber base has crossed the 200 million figure.

Before you start praising the government, you should know that almost all the growth (yes, all) has been because of private corporations and their aggressive marketing policies. Well, even rising income levels and falling communication costs (partly because of lower tariff s by the government) are a few factors that have literally fuelled the growth of this sector. According to Gartner, the value of the cellular services segment in India would grow from $9 billion in 2006 to a massive $25 billion in 2011, at a CAGR of 18.4%. Also, as per Gartner estimates, the cellular market penetration would also increase from 12.7% in 2006 to 38.6% by 2011. The Department of Telecom (DoT) “plans to achieve” (given their propensity to take credit for anything positive) a subscriber base of 250 million by the end of this year and 500 million by the end of 2010. The fact is that even a better target is quite achievable as long as the government keeps its interference to the minimum and enacts pro-customer policies rather than being clearly nepotist.

Government; The Grid-Locker
If you were to double the ‘dumb’ quotient portrayed by Jim Carrey in the side-splitting classic, Dumb & Dumber (yes, we plagiarised the concept for the cover picture), you still wouldn’t have reached half of where our government’s policies are currently. Be it the long pending issue of spectrum allocation, infrastructure sharing, levying of Access Deficit Charges or the heavy burden of taxes on operators, the government doesn’t seem to be having a solution to these cliff -hangers.

In a hitting quasi-indictment, the report submitted by the Spectrum Management Committee clearly questions the work being done by Union Communications and IT minister A. Raja and even his predecessors – “The committee feels that the lack of foresight planning on the part of DoT has led to ad hoc and injudicious allocations of spectrum, which in turn has caused non-availability of this scarce resource when the telecom operators need it the most for faster expansion of telecom services.” Well, instead of answering the issues raised in the report, Raja conveniently preferred to call off the meeting of the Group of Ministers (which was called to most urgently resolve the most critical spectrum related issues) till September. DoT has not even been able to pursue the Army to vacate the additional 42.5 MHz spectrum, which was supposed to be eventually utilized for mobile services. Top players like Reliance Communications and Idea Cellular are now facing delayed roll-outs of their GSM operations in circles they were hitherto absent, and all because of spectrum allocation problems.

As per the present spectrum policy of DoT, a GSM operator receives up to 6.25 MHz spectrum, while a CDMA operator – without any supporting logic given by the government – gets only up to 5 MHz, on meeting the specified subscriber base criteria. Any additional allocation of spectrum is made on the basis of the total subscriber base of the operator. This unequal distribution of spectrum to GSM and CDMA has oft en resulted in dispute between the two groups.

Well, the unhappiness of the operators does not end here. Presently, the levies and duties on Indian telecom sector are perhaps the highest in the world. The telecom industry carries a burden of levies like the license fee, the universal services obligation fund, spectrum charges in addition to the compulsory service charge. In total, a telecom operator in India pays a total of 17-26% regulatory charges (of total revenues) in addition to the Goods and Services tax. When compared to China (where regulatory charges are approximately 3.5%), Sri Lanka (2.3%) and Pakistan (2.5%), the Indian operators clearly seem to be bearing the burden of the government policies, more than anything else. In the Union Budget 2007-08, the Finance Minister announced that the government will constitute a separate committee to study the present structure of levies on telecom and make suitable recommendations to simplify the levies. However, even in this case, no pre-emptive action has been taken till date.

Utterly ludicrously, news floats in now that the government, instead of allowing more competition per circle (which will favour the consumer), is actually toying with the idea of capping the number of players in each circle! Oh, how easy a way to solve competitive issues...

Towering aspirations or towering infernos?
The telecom war in India is getting all the more interesting by the day. Although the telecom players are fighting an aggressive marketing war to substantially increase their monthly subscriber additions, the real war is taking place closer to the towers. But why are suddenly telecom companies (telcos, if you may) in India running after the tower business?

Firstly, existing players in the absence of additional spectrum, will have to incur higher capex to service the increasing number of subscribers with their limited available spectrum. Secondly, about 70- 75% of the incremental capex of the telcos will be used for the rural areas, which are currently having very low penetration levels. According to Shubham Majumdar of Macquire Research, “The rural population base in India is widely dispersed geographically, which underlines the need for a larger number of towers...” Thirdly, the telecom sector has one of the highest minutes of usage in the world, implying that number of cell sites required would also be very high. As Arpita Agarwal, Associate Director of PwC deliberated to us, “Towers are a basic infrastructure for the mobile industry to grow. Unless you have the towers, you cannot have the desired reach of the services.” Shushmul Maheshwari of RNCOS confirmed to B&E, “To create a strong countrywide network, as per our analysis, the requirement for mobile towers will double from the current level by 2010.”

Hence, be it the market leader Bharti Airtel, the public sector giant BSNL, the aggressive Reliance Communications, Vodafone-Essar or be it the comparatively smaller players like Tata Indicom and Idea Cellular, all are embracing ‘towering’ expansion plans. Such is the madness to set up the telecom infrastructure that the cumulative expansion plans of all the players for the year 2007-08 have touched an astronomical figure of Rs.600 billion [For the uninitiated, the figure represents an astounding 60% of the total investments that have been made in the infrastructure business since the sector was thrown open to private investment]. Th e Indian telecom sector currently has 120,000 towers and already 80,000 more towers are under construction. Harit Shah, Sr. Research Analyst, Angel Broking, shared with B&E, “We still have about 110,000 towers in India. If we have to go near the government target of 5oo million subscribers by 2010, then we would be required to have around 330,000 towers – that means 220,000 more!”

Well, leading this race of telecom infrastructure expansion is Reliance Communications, which has already announced the world’s largest telecom network roll-out this year. In one of his media interactions, Anil Ambani, Chairman, Reliance Communications, addressed to B&E, “By the end of this fiscal year, the coverage of our wireless network will expand to 23,000 towns and 600,000 villages, with almost complete coverage of the country’s rail and road network. We have already committed 95% of this year’s capex guidance of $2.5 to accelerate this roll-out!” Sunil Mittal, CMD of Bharti Airtel, wasn’t far behind when he exclaimed, “We believe that the Indian telecom sector is entering the next phase of growth. We will continue to expand our network aggressively to enhance penetration in the rural markets and be at the forefront of this growth.”

Bharti too has announced massive capex plans for the year 2007-08. Interestingly, a majority of its funds (nearly $1 billion) would be utilized to expand its tower business, which currently comprises 40,000 towers as compared to Reliance’s 13,000. According to a report on Indian telecom sector released by Macquire Research, Bharti Infratel (their tower business) would capture a dominant market share in the tower space. As per the estimates, Bharti Infratel will have a portfolio of 114,000 towers by March 2010, translating into all-India towers market share of 33%. Reliance Telecom Infrastructure is likely to have the second largest portfolio of 63,000 towers, with a market share of 18.3%.

Though these leading players are investing heavily in the telecom tower business to rapidly expand their presence, the smaller players like Idea Cellular are taking it slow, expanding from one circle to another. The Birla Group owned Idea Cellular currently operates in 14 circles and is planning to become a pan India player. However, its late entry in the remaining circle poses to be a big challenge for this sixth largest telecom player of India. Apart from the telcos, there are many other companies like GTL, Quipo and Essar Telecom Infrastructures which are providing towers to operators. Out of these third party tower companies, GTL is perhaps the most significant player with 1,350 towers. Though the figure is small, GTL plans to take these numbers to 18,000 in the coming three years.

Together in ‘towering’ losses?!
While a few industry experts believe that laying down new telecom infrastructure is the best way for the telcos to tap the massive potential of the Indian telecom market, there are others who feel that infrastructure sharing is the most cost effective and the fastest means of reaching the last mile. According to Nripendra Mishra, Chairman, TRAI, “The challenge is to optimally utilize available resources while ensuring competition and availability of services at affordable prices. The infrastructure sharing therefore is the crying need of the hour.”

India is on the threshold of advanced services like 3G and WiMax. Though the deployment of the 3G and WiMax networks is taking some time, once laid down, these services would require a sound telecom infrastructure. Also, if the government wants these services to be priced competitively, an effective lowcsot solution like infrastructure sharing would suit best to the operators’ needs. Also, in a scenario where the falling tariff orders are squeezing operators margins, sharing of infrastructure would be the best suited solution for the operators.

Though passive infrastructure sharing (sharing of towers) is already taking place in a few circles, there is still no clear mandate from DoT on how should the telecom operators share the passive as well as the active network infrastructure [In a letter posted to TRAI, DoT injudiciously comments,“One of the ways of ensuring infrastructure sharing is to bring out a proper legislation...”].

As Macquire research states, “This (tower building) is a highly capex intensive business. A huge increase in capex could have a very negative impact on the balance sheets of the companies, exposing them to significant financial risk.” Even if we assume that only the top players would take up the daunting (and important) task of laying down telecom infrastructure, it would surely adversely affect the profitability of these players. Also, other factors, like an unexpected failure to execute the tower and infrastructure sharing business, could well prove fatal to the sector’s future. Not only this, the sector would also have to confront the unforeseen financial burden that might arise from likely 3G auctions. Well, finding a proactive solution to these foreseen problems might well help the telcos to continue their extraordinary growth.

Right now, it is the government and its regulations that seem to be enjoying the laughs. The previous issue of B&E even brought out how miserably BSNL, once a top telecom firm, was being mismanaged horrendously due to governmental interference.

However, blindly to all this, with more unanswered issues than a pack of cards to its credit, the telecom ministry is perhaps basking falsely in the glory of the growth brought about by the private operators. Communication Minister A. Raja might wish to ‘wish’ all the problems away; but strangely, despite his predecessor wishing the same, all that got ‘wished’ away successfully were the persons themselves. Indian telecom has seen much of ‘dumb’ and ‘dumber’; one just hopes a new definition of ‘dumbest’ is not around the corner...

B&E edit bureau: Devdeep Singh & Surbhi Chawla

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An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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The Sensex rise and fall means

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nothing at all

...for the bottom disadvantaged 80% of India

Thank god for the Sensex (and the Nifty and similar indices), that news channels and media houses have front page news to write about. And why not! Didn’t the Sensex reach giddying historical heights of 15,800 odd points and also had the second highest fall in history to languish below 14,000 points, all in the last few weeks? In reality, apart from being ‘front page news’, for whatever the news, media might be imagining, these indices mean nothing at all to the majority India.

That’s no surprise, considering the fact that only a miniscule 4% of stock market investments are of retail investors, with 96% being in the hands of institutions! Consider this too – according to a most recent report by Asian Development Bank (ADB), over the last five years, while the share of retained corporate operating profits to GDP has shot up to an estimated 9.1% in F2 ’07 from 3.7% in F2 ’02, the share of wages to GDP has pathetically declined to an estimated 28.7% from 31%. The report further identifies that while pay packages for educated youth are skyrocketing, wages for unskilled labourers have stagnated. Even India’s Gini coefficient (a measure for income distribution inequalities), languishes at 36.2 – instead of being near zero – proving huge inequalities.

Of course, according to the World Bank, the percentage of Indians living below poverty line (earning less than $1 a day) has reduced from 45% in 1994 to 34.3% in 2004, the absolute number of poor Indians (about 400 million) is larger than the US population. If $1 a day was too easy a poverty line, UNDP confirms that India has 78% of its citizens living below $2 a day. How’s that for living in destitute misery? India now proudly also accounts for 1.9 million (18%) of the 10.5 million global deaths among children under five years of age – the highest for any single nation.

In this race of India from ‘underdeveloped’ to ‘developing’ and now to a ‘transforming’ (if the US State Department is to be believed!) economy, the gap between ‘haves & have-nots’ has been clearly increasing; and the Sensex falling or rising means, sadly, nothing at all!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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The Indo-Us Nuclear Deal

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• Indo-US 123 Agreement. It solves the enriched uranium shortage that has hampered India’s nuclear programme for decades, pushing India down to 27 among the 30 countries using nuclear power.
  
• 123 also preserves India’s right to reprocess the spent fuel from civilian reactors producing commercial power.
  
• While the agreement claims not to impinge upon India’s military strategic programme, it has been accorded the status of non-nuclear weapons state and if India chooses to conduct tests that are found to violate IAEA norms, the US has a right to terminate the agreement. But even this termination will have to be followed by a year’s notice.
  
• If the US goes ahead with the termination, it has a right of return over materials transferred under the 123 Agreement. The right to return is not automatic. Instead, the US will first consider the circumstances in which India has conducted the test.
  
• Even after the numerous barriers before the right to return are crossed, India can continue to source its fuel supplies from countries such as France, Russia & the United Kingdom.
  
• India has got a better deal than China under the same 123. Unlike India, China has also accepted bilateral international inspection. Unlike China, India has right to return clause for material.

For Complete IIPM Article, Click on IIPM Article Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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When re-structuring becomes the key!

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Your focus has been the global market. Do you think Indian textile market doesn’t offer enough? Prior to 2000, the home market was not as profitable as it is today. So we were more into exports as 50% of our revenue accrued from exports. This was perhaps the reason. Mayur as a brand lost its popularity and our business in the country wasn’t doing well too. But now, with the domestic market growing at more than 30%, we are coming out with various ways of diversifying an capturing more domestic share.

Like other textile giants, you too did not diversify at right time. Does this matter to you today?
I agree that it took us some time to find out the potential areas. But I do not think it’s too late as the Indian market is growing and we have an advantage of our manufacturing plants and logistics. We have fixed up a target of Rs.12 billion and we did a lot of management re-shuffle to achieve the same. During the last four years, we have been focussing to achieve this target and thanks to the growth in domestic market, in 2006 we crossed a turnover of Rs.10 billion.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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