Essar calling off the sale of BPL Mumbai circle operation to Hutch does not make much sense. Hutch has contested the decision and the Mumbai High Court has asked them to go for arbitration. So something amicable may be worked out here.
Essar is, after all, a partner of Hutch in the joint venture. Essar's attempts therefore looks more like an attempt by a peeved partner to cause serious hurt to Hutch, rather than well measured business decision.
In the mobile space in India, Bharti and Reliance have zoomed ahead. Bharti has had the least of problems. Reliance had trouble when Mukesh and Anil Ambani fought amongst themselves. Now that there is some degree of resolution there, Reliance is forging ahead.
If Hutch had worked out an aggressive strategy it could have reached number two position. Instead, now, it is in a distant fourth position (with BSNL/MTNL combo at number 3), and Idea, Tata Telecom both hot on its heels behind. Others including Maxis owned Aircel will be aggressively snapping up the new users in the 'C' circles.
Essar who has substantial stakes in Hutch Essar JV should realise that a stronger Hutch Essar, when it goes IPO will offer higher premium per share in the stock markets. You don't get a premium when you are number 4. Both number 1 & 2 are listed entities. Idea and Tata Telecom are well funded, but not strong enough brands compared to Hutch. But if Essar continues to harm the JV, Hutch will be left behind, thereby robbing Essar of valuble wealth.
Friday, August 11, 2006
Monday, August 07, 2006
Economic Times on banks lending to rural folks via moneylenders
Today's The Economic Times has an article titled Banks eye money lenders to give cheaper credit to farmers.
The article suggests that Banks cannot easily lend to the rural people because they do not reach the rural folks. What was unstated was also that Banks are afraid of lack of securitisation. So they are looking at village moneylenders, whose combined reach is great. So the banks are looking at somehow regulating them. Apparently a group has been constitued comprising of "six senior RBI officials and a senior bureaucrat each from of Bihar, Rajasthan and Andhra Pradesh" to take a look into using the moneylenders as conduits for reaching money to the needy farmers.
But then moneylenders are known to charge atrocious interest. "However, the money lenders have to be regulated so that they do not overcharge farmers" says one member of the group, according to ET.
I do not know whether this is a good method. Indian central bankers need not have to look at this solution at all. Grameen Bank in Bangladesh has already demonstrated over two decades, what can be achieved by direct micro and mini credit without any mortgage or security whatsoever. Grameen Bank is reaching millions of people - more than 90% are women. Grameen Bank has been successful in cutting out the local moneylenders who are basically exploitative.
How can regulation help change the moneylenders' behaviour overnight? Why should the moneylenders take money from banks and offer the same at low interest to the farmers (and others) when such a business will be entirely against their existing business where they are making substantial income, by charging 10% or more interest per month?
India has not bothered to copy a successful model such as Grameen. Instead we are offering a pale imitation in the form of Self Help Groups (SHGs) where the group is forced to save money first and then borrow from within that group fund so collected. There may be minimal topping-up over the savings at best. The banks do not care much about the SHGs. That job is left to various NGOs. The state governments step in and pay some compensation to the NGOs for starting up new groups.
From what little I have learnt about the SHGs in India, they are in no way comparable to the Grameen experiment.
I would suggest that what India needs is three or four banks in the mould of Grameen Bank, operating in various parts of the country. One each for each zone - perhaps. The Banks can simply be identical copies of Grameen Bank. Like in the case of the Grameen Bank, it is advisable to keep the Government out of the Bank so that Government does not get into one of its debt write-offs every once in a while for the sake of votes. Government, at best, should have only 20-25% equity in such a bank. The rest of the equity should be with the participating women, and other funders. There is also enough of an opportunity for private banks to start this kind of a venture.
It would be better to stay away from using the moneylenders.
The article suggests that Banks cannot easily lend to the rural people because they do not reach the rural folks. What was unstated was also that Banks are afraid of lack of securitisation. So they are looking at village moneylenders, whose combined reach is great. So the banks are looking at somehow regulating them. Apparently a group has been constitued comprising of "six senior RBI officials and a senior bureaucrat each from of Bihar, Rajasthan and Andhra Pradesh" to take a look into using the moneylenders as conduits for reaching money to the needy farmers.
But then moneylenders are known to charge atrocious interest. "However, the money lenders have to be regulated so that they do not overcharge farmers" says one member of the group, according to ET.
I do not know whether this is a good method. Indian central bankers need not have to look at this solution at all. Grameen Bank in Bangladesh has already demonstrated over two decades, what can be achieved by direct micro and mini credit without any mortgage or security whatsoever. Grameen Bank is reaching millions of people - more than 90% are women. Grameen Bank has been successful in cutting out the local moneylenders who are basically exploitative.
How can regulation help change the moneylenders' behaviour overnight? Why should the moneylenders take money from banks and offer the same at low interest to the farmers (and others) when such a business will be entirely against their existing business where they are making substantial income, by charging 10% or more interest per month?
India has not bothered to copy a successful model such as Grameen. Instead we are offering a pale imitation in the form of Self Help Groups (SHGs) where the group is forced to save money first and then borrow from within that group fund so collected. There may be minimal topping-up over the savings at best. The banks do not care much about the SHGs. That job is left to various NGOs. The state governments step in and pay some compensation to the NGOs for starting up new groups.
From what little I have learnt about the SHGs in India, they are in no way comparable to the Grameen experiment.
I would suggest that what India needs is three or four banks in the mould of Grameen Bank, operating in various parts of the country. One each for each zone - perhaps. The Banks can simply be identical copies of Grameen Bank. Like in the case of the Grameen Bank, it is advisable to keep the Government out of the Bank so that Government does not get into one of its debt write-offs every once in a while for the sake of votes. Government, at best, should have only 20-25% equity in such a bank. The rest of the equity should be with the participating women, and other funders. There is also enough of an opportunity for private banks to start this kind of a venture.
It would be better to stay away from using the moneylenders.
Sunday, August 06, 2006
Lok Sabha question on sporting telecast rights to Doordarshan
Minister of I&B Priya Ranjan Dasmunshi, while answering a written question in Lok Sabha has said as below:
It is also surprising that there were no follow-up questions on why such an executive order was sent out rather than contemplating a proper legislation, what the Ministry is proposing to do about the Ten Sports issue, whether the GO is fair or not, what have the International sporting bodies - in particular the ICC - conveyed to the Ministry of I&B etc.
This is the quality of debate in Lok Sabha. This is the quality of our representatives in the Parliament.
The Government has no proposal to set up a Regulatory Authority to monitor and regulate the earnings through telecasting of sporting events. However, the Government is contemplating the establishment of an autonomous authority to regulate Broadcasting sector.It is however surprising that the Minister did not inform the members of the Parliament that Doordarshan and Ministry of I&B have been taken to the judiciary a few times and the judiciary has found no reason to uphold the Government Order of 5th April 2006.
Also there is no proposal to give Doordarshan the sole right of telecasting the sports events organised in the country. However, the Government has issued an order on 5th April, 2006 vide which live feeds of a number of specified sporting events of national importance held in India or abroad are required to be shared with Prasar Bharati with immediate effect by sports channels/sports management companies having television broadcasting rights for broadcast on their terrestrial and DTH networks. In case of cricket events, these shall include all matches featuring India and the finals and semi finals of international events.
It is also surprising that there were no follow-up questions on why such an executive order was sent out rather than contemplating a proper legislation, what the Ministry is proposing to do about the Ten Sports issue, whether the GO is fair or not, what have the International sporting bodies - in particular the ICC - conveyed to the Ministry of I&B etc.
This is the quality of debate in Lok Sabha. This is the quality of our representatives in the Parliament.
Saturday, August 05, 2006
Ten Sports continues to defy the Indian Government
Ten Sports has been the only channel consistently taking on the Government of India and Prasar Bharati, the Govt. controlled television channel, when it comes to sharing of sporting telecast rights.
In November 2005, the Ministry of Information and Broadcasting issued a policy guideline for Cable operators and Television Channels operating in India that certain notified sports events must be shared with the Govt. owned Doordarshan, only on a revenue sharing basis. Worse, the guidelines were applicable to several events for which the telecast rights were acquired long back.
This was done primarily because Doordarshan was losing out on the lucrative cricket rights. While Doordarshan knows it can make a lot of money from cricket, it doesn't have the ability and money to compete fair and squarely in the rights market. So it used a backdoor method.
This infringes heavily on the rights of private Telecasters and their ability to make money. However other channels did not care much. ESPN - Star Sports, Zee Sports and various other rights holders including Nimbus did not take the Govt. head on.
Only Ten Sports did. Ten Sports owns cricket broadcast rights to events happening in Pakistan, West Indies and Sri Lanka. Ten Sports consistently challenged the Ministry and Prasar Bharati. In the case of Indian tour of Pakistan in early 2006, Doordarshan backed out of Tests but the ODIs were telecast across both the channels after Doordarshan was forced by the Courts to pay a fixed fee for showing the 'dirty feed' (namely the Ten Sports feed with all the Ten Sports advertisements and logo) without any alterations whatsoever.
Basically the Courts called Doordarshan's bluff on 'public service'. Doordarshan kept claiming that its intentions were noble and not money, and that it wanted maximum number of people to receive the broadcasts. So the Courts ruled that Doordarshan shall show the Ten Sports feed without any alteration and not make money out of any advertisements. Doordarshan also tried showing a pre-match, post-match show, which was also stopped by Ten Sports by going to Courts.
Thus, badly mauled by the legal set-up in India, Doordarshan stayed away during the Indian tour of West Indies. Public service did not come in to the picture, since the matches were in the middle of night.
Now that matches are being held in Sri Lanka in broad daylight and prime time, Doordarshan has dusted and brought back to life 'public service'. Ten Sports, as usual, went to Supreme Court, where the bench is finding Ten Sports' claims perfectly valid.
The impugned guidelines from Ministry of I&B are so pathetic, the Courts are repeatedly smashing them. It has become so much of an embarassment for the Government. The Govt. has avoided bringing a legislation and has used the Ministerial guidelines to impose something as major as controlling the event telecast rights and curtailing the freedom of operation of private enterprises. Even if they try a legislation, there may not be a sensible debate on this issue. Majority in the Parliament will be used to force a 'bad law', forcing the private enterprises to fight in the Courts again.
But, there are ways by which a legislation in Parliament can control events held in India, and forcing the event organizers to sell or offer virtually for free, terrestrial rights to Doordarshan. For events held outside the country, no such thing is possible. It does not happen in UK, or Australia, but in both these countries Terrestrial channels must be offered rights for certain events held in the country. India can look at building such a legislation than coming up with patently unfair policy guidelines.
In November 2005, the Ministry of Information and Broadcasting issued a policy guideline for Cable operators and Television Channels operating in India that certain notified sports events must be shared with the Govt. owned Doordarshan, only on a revenue sharing basis. Worse, the guidelines were applicable to several events for which the telecast rights were acquired long back.
This was done primarily because Doordarshan was losing out on the lucrative cricket rights. While Doordarshan knows it can make a lot of money from cricket, it doesn't have the ability and money to compete fair and squarely in the rights market. So it used a backdoor method.
This infringes heavily on the rights of private Telecasters and their ability to make money. However other channels did not care much. ESPN - Star Sports, Zee Sports and various other rights holders including Nimbus did not take the Govt. head on.
Only Ten Sports did. Ten Sports owns cricket broadcast rights to events happening in Pakistan, West Indies and Sri Lanka. Ten Sports consistently challenged the Ministry and Prasar Bharati. In the case of Indian tour of Pakistan in early 2006, Doordarshan backed out of Tests but the ODIs were telecast across both the channels after Doordarshan was forced by the Courts to pay a fixed fee for showing the 'dirty feed' (namely the Ten Sports feed with all the Ten Sports advertisements and logo) without any alterations whatsoever.
Basically the Courts called Doordarshan's bluff on 'public service'. Doordarshan kept claiming that its intentions were noble and not money, and that it wanted maximum number of people to receive the broadcasts. So the Courts ruled that Doordarshan shall show the Ten Sports feed without any alteration and not make money out of any advertisements. Doordarshan also tried showing a pre-match, post-match show, which was also stopped by Ten Sports by going to Courts.
Thus, badly mauled by the legal set-up in India, Doordarshan stayed away during the Indian tour of West Indies. Public service did not come in to the picture, since the matches were in the middle of night.
Now that matches are being held in Sri Lanka in broad daylight and prime time, Doordarshan has dusted and brought back to life 'public service'. Ten Sports, as usual, went to Supreme Court, where the bench is finding Ten Sports' claims perfectly valid.
The impugned guidelines from Ministry of I&B are so pathetic, the Courts are repeatedly smashing them. It has become so much of an embarassment for the Government. The Govt. has avoided bringing a legislation and has used the Ministerial guidelines to impose something as major as controlling the event telecast rights and curtailing the freedom of operation of private enterprises. Even if they try a legislation, there may not be a sensible debate on this issue. Majority in the Parliament will be used to force a 'bad law', forcing the private enterprises to fight in the Courts again.
But, there are ways by which a legislation in Parliament can control events held in India, and forcing the event organizers to sell or offer virtually for free, terrestrial rights to Doordarshan. For events held outside the country, no such thing is possible. It does not happen in UK, or Australia, but in both these countries Terrestrial channels must be offered rights for certain events held in the country. India can look at building such a legislation than coming up with patently unfair policy guidelines.
Friday, August 04, 2006
PS Krishnan on Social Justice and Reservation
PS Krishnan, Retd. IAS, is a former secretary to the Government of India and former member secretary of the National Commission for Backward Classes. He was the Secretary in-charge during VP Singh's time resurrecting the Mandal Commission Report.
He was recently in Chennai to give a lecture on "Social Justice and Reservation" organized by the Chennai based Indian School of Social Sciences.
I have recorded the lecture and the subsequent Q&A session and am making it available here. This is a mildly edited version. I have removed one mindless question unconnected with the reservation issue (in the Q&A section), a few word repetitions, coughs, cellphone rings and other such noises.
[Links changed, 1st May 2008]
1. Sashi Kumar of Asian College of Journalism introduces PS Krishnan, followed by Krishnan's lecture on Social Justice and Reservation., 58.43 min, 26.8 MB, 64kbps MP3 file
2. Questions and answers that followed the lecture, 42.37 min, 19.5 MB, MP3 file
Quite a bit of what PS Krishnan said in the lecture appears in an article he wrote in Frontline, Apr. 22 - May 05, 2006.
He was recently in Chennai to give a lecture on "Social Justice and Reservation" organized by the Chennai based Indian School of Social Sciences.
I have recorded the lecture and the subsequent Q&A session and am making it available here. This is a mildly edited version. I have removed one mindless question unconnected with the reservation issue (in the Q&A section), a few word repetitions, coughs, cellphone rings and other such noises.
[Links changed, 1st May 2008]
1. Sashi Kumar of Asian College of Journalism introduces PS Krishnan, followed by Krishnan's lecture on Social Justice and Reservation., 58.43 min, 26.8 MB, 64kbps MP3 file
2. Questions and answers that followed the lecture, 42.37 min, 19.5 MB, MP3 file
Quite a bit of what PS Krishnan said in the lecture appears in an article he wrote in Frontline, Apr. 22 - May 05, 2006.
Wednesday, July 19, 2006
Deemed Universities can start courses without getting UGC permission
The Hindu News
In a clarification sent out couple of days back, UGC has said that Deemed Universities can start any course they want (such as B.A., B.Sc., M.A., M.Sc. or M.Com.) without prior approval from UGC.
This is exactly the opposite of what they supposedly wrote to the Deemed Universities a few days back - wherein they had said Deemed Universities must give an "undertaking that no course will be started without its nod."
So let us recount what has happened over the last 10 days:
What is the current status regarding the technical courses started by DUs without AICTE approval? No answer. In fact this was the major issue on which the students fought pitched street battles in a few DUs in Tamil Nadu.
How soon will AICTE and UGC undertake joint inspections of DUs as per the Chennai High Court Order? What will their action be if they find flagrant violation as in the case of Vinayaka Mission institutions? No clarity.
Why is UGC so pathetic? Can't they think clearly and then send out letters once and for all? Are they being pressured by DU lobby to let them off hook?
If Private Universities were considered an aberration and a whole bunch of them abolished by a Supreme Court order couple of years back, why are DUs, which for all practical purposes are Private Universities, being allowed to run unchecked?
All through this muddle Human Resource Development Ministry keeps mum.
How can we expect India to produce better engineers tomorrow?
In a clarification sent out couple of days back, UGC has said that Deemed Universities can start any course they want (such as B.A., B.Sc., M.A., M.Sc. or M.Com.) without prior approval from UGC.
This is exactly the opposite of what they supposedly wrote to the Deemed Universities a few days back - wherein they had said Deemed Universities must give an "undertaking that no course will be started without its nod."
So let us recount what has happened over the last 10 days:
- All Technical Institutions are under the control of AICTE.
- But wait... once the Technical Institution becomes a Deemed University, that institution is not exactly under the control of AICTE, but rather under UGC.
- So what can be done if the DU is found to be violating the AICTE norms? AICTE cannot take unilateral action. They can inspect DU's premises... but not on their own. They need UGC persons to accompany them. AICTE can find out what is wrong with the DU, but cannot act on their own. Must pass on the info to UGC and UGC will act on them.
- UGC sends a letter to all DUs asking them to follow AICTE norms, and that they give an undertaking that they will not start any course on their own without getting UGC permission first.
- Then very soon UGC sends another letter that supercedes all the earlier letters, allowing DUs to start whatever course (but non-technical) they want without getting UGC's permission.
What is the current status regarding the technical courses started by DUs without AICTE approval? No answer. In fact this was the major issue on which the students fought pitched street battles in a few DUs in Tamil Nadu.
How soon will AICTE and UGC undertake joint inspections of DUs as per the Chennai High Court Order? What will their action be if they find flagrant violation as in the case of Vinayaka Mission institutions? No clarity.
Why is UGC so pathetic? Can't they think clearly and then send out letters once and for all? Are they being pressured by DU lobby to let them off hook?
If Private Universities were considered an aberration and a whole bunch of them abolished by a Supreme Court order couple of years back, why are DUs, which for all practical purposes are Private Universities, being allowed to run unchecked?
All through this muddle Human Resource Development Ministry keeps mum.
How can we expect India to produce better engineers tomorrow?
Sunday, July 16, 2006
UGC wakes up to Deemed Universities' abuses
After Chennai High Court order asking AICTE and UGC to undertake joint inspection of Deemed Universities' precincts, UGC has written a letter to all the DUs asking for an "undertaking that no course will be started without its [UGC's] nod".
I think, the wording has to be stricter than this. DUs should be threatened with dire action if any violation is found - such as immediate revoking of DU status and relegation to a mere college status under respective local Universities.
In 2005, UGC had sent out a similar letter to DUs, but out of 103 DUs, only 40 or so seem to have written back to UGC. DUs will continue to flout the norms, unless some are punished severely and others are told to behave.
The Hindu News
I think, the wording has to be stricter than this. DUs should be threatened with dire action if any violation is found - such as immediate revoking of DU status and relegation to a mere college status under respective local Universities.
In 2005, UGC had sent out a similar letter to DUs, but out of 103 DUs, only 40 or so seem to have written back to UGC. DUs will continue to flout the norms, unless some are punished severely and others are told to behave.
The Hindu News
Saturday, July 15, 2006
AICTE cannot take direct action against deemed varsities
In what can only be termed as a victory of sorts to the erring Deemed Universitites, Chennai High Court has ruled that AICTE cannot act directly against the erring DUs, but can only bring the errors to the notice of UGC.
The Hindu News
AICTE cannot also inspect the DU's premises on its own. It needs to include a representative from the UGC.
If this is what the Court thinks, why do we need AICTE? It can as well be disbanded and the money allocated to UGC to build its own expertise to inspect and regulate the Deemed Universities and Engineering Colleges.
Actually, the problems lies with the Central Government. They should regularise the roles of AICTE, UGC, MCI and so on through proper unambiguous legislation. The executives are once again relagating their powers and allowing the judiciary to control various aspects of the administration.
The Hindu News
AICTE cannot also inspect the DU's premises on its own. It needs to include a representative from the UGC.
If this is what the Court thinks, why do we need AICTE? It can as well be disbanded and the money allocated to UGC to build its own expertise to inspect and regulate the Deemed Universities and Engineering Colleges.
Actually, the problems lies with the Central Government. They should regularise the roles of AICTE, UGC, MCI and so on through proper unambiguous legislation. The executives are once again relagating their powers and allowing the judiciary to control various aspects of the administration.
Wednesday, June 07, 2006
Local Loop Unbundling in UK
Free broadband. That is the wave sweeping UK right now.
A few years back, people were offered free dialup Internet connection in UK. But you paid for the phone calls. Why would the Internet Service Providers (ISPs) offer Internet for free? What was there in it for them?
This could work because the ISPs bought bulk telephone time from British Telecom (BT), and asked BT to bill the customers using the Internet connection on the normal billing mode for those minutes which they used for connecting to Internet with that particular ISP.
Sounds confusing? This is how it works.
Freeserve was the first company in UK which offered this service. Until this company was set up in 1998, Internet access in UK was metered. One had to pay the costs of both the telephone calling time plus the ISP's charges per minute - something similar to what it is now in India. All that Freeserve did was to do a deal with BT and promised that its customers will call Freeserve's numbers at least one million minutes every month (say), and negotiated a price for the same (say 10p a minute), and guarantee this payment to BT whether or not Freeserve's customers utilised these many minutes or not each month. What BT will guarantee in turn is that it will charge its customers calling Freeserve's numbers the normal rate (say 25p per minute) and will pay that amount to Freeserve. Thus, the differential 25p - 10p = 15p per minute was what Freeserve was getting for providing its services.
Thus BT banked on Freeserve's marketing ability and innovative service it was offering its customers to make money. Freeserve was making its money by banking on the increasing demand for Internet dialup connectivity.
But this did not last long. More and more companies jumped in the fray making similar offers. The per minute call rate kept falling in UK, thus squeezing the differential. Some competitors offered flat rate deals for unlimited time.
Then BT started offering DSL services and that almost completed wiped out the above business model. DSL is of course an excellent model. It doesn't clog up the local loop allowing one to make a phone call as well as an Internet data transfer simultaneously. But BT had an undue advantage. Only BT owned bulk of the local loop across the country. BT could take its own sweet time to offer DSL to specific areas. If someone had to challenge BT, they had to start laying their own lines, copper lines or fibre optic lines or coaxial cable or something else.
Then, the telecom regulator in UK (Ofcom) started looking at unbundling the local loop. This proposal - despite resistance from BT - was accepted by the Government and the roll-out process is going on now.
Thus we now have the rush from innovative companies looking at offering free Broadband connectivity. Pure mobile phone operators as well as Cable and/or DTH Television players have also decided to offer a free broadband deal for their existing customers.
The convergence game in UK is far more interesting than anywhere else in the world. UK, for long, had a virtual mobile service model in place. Virgin Mobile (which is merging with NTL - cable TV operator who is also offering telecom services) was one such. It was using T-Mobile's platform to offer its branded services. The 'Freeserve' type model emerged only in UK. The ground situation in USA is very different that some of these models could not have developed in USA.
Now, let us take a look at the situation in India.
The landline in India is still dominated by government owned BSNL and MTNL. These companies have not looked at selling bulk minutes to any third party operator so far. Thus, Freeserve like model has not emerged in India. We have jumped straight to the DSL revolution. But BSNL and MTNL resist local loop unbundling, though the Indian regulator TRAI suggested this. BSNL and MTNL have strong Government backing. The Department of Telecommunication and the Minister for Telecom Dayanidhi Maran have strongly defended not unbundling the local loop. We will never get to see local loop unbundling in the next 5 years or so.
The mobile phone sector in India is booming. Thus no mobile phone operator has bothered to look at interesting models such as virtual mobile service. BPL talked about it at some point in time, but has since been taken over by Hutch.
India is probably looking towards a Wi-Max driven revolution to unshackle the broadband market and Internet connectivity.
The connectivity costs have come down. Airtel offers a Rs. 600 a month, unlimited download, but a restricted 128 kbps DSL connection. Certain other deals from Airtel offer connectivity at about Rs. 200 a month. BSNL offers similar services. None of the operators will be interested in offering higher bandwidth, higher quality of service for a while anyway. The TV distribution platforms have not shown any initiative in offering high speed Internet connection. Reliance has talked a lot, but is far from delivering an integrated triple-play or quadruple-play solution.
At times, a booming market by itself turns out to be bad for the customers. The service providers have little time to think of innovative and interesting solutions. They keep working hard, just to handle the massive demand for the basic services!
A few years back, people were offered free dialup Internet connection in UK. But you paid for the phone calls. Why would the Internet Service Providers (ISPs) offer Internet for free? What was there in it for them?
This could work because the ISPs bought bulk telephone time from British Telecom (BT), and asked BT to bill the customers using the Internet connection on the normal billing mode for those minutes which they used for connecting to Internet with that particular ISP.
Sounds confusing? This is how it works.
Freeserve was the first company in UK which offered this service. Until this company was set up in 1998, Internet access in UK was metered. One had to pay the costs of both the telephone calling time plus the ISP's charges per minute - something similar to what it is now in India. All that Freeserve did was to do a deal with BT and promised that its customers will call Freeserve's numbers at least one million minutes every month (say), and negotiated a price for the same (say 10p a minute), and guarantee this payment to BT whether or not Freeserve's customers utilised these many minutes or not each month. What BT will guarantee in turn is that it will charge its customers calling Freeserve's numbers the normal rate (say 25p per minute) and will pay that amount to Freeserve. Thus, the differential 25p - 10p = 15p per minute was what Freeserve was getting for providing its services.
Thus BT banked on Freeserve's marketing ability and innovative service it was offering its customers to make money. Freeserve was making its money by banking on the increasing demand for Internet dialup connectivity.
But this did not last long. More and more companies jumped in the fray making similar offers. The per minute call rate kept falling in UK, thus squeezing the differential. Some competitors offered flat rate deals for unlimited time.
Then BT started offering DSL services and that almost completed wiped out the above business model. DSL is of course an excellent model. It doesn't clog up the local loop allowing one to make a phone call as well as an Internet data transfer simultaneously. But BT had an undue advantage. Only BT owned bulk of the local loop across the country. BT could take its own sweet time to offer DSL to specific areas. If someone had to challenge BT, they had to start laying their own lines, copper lines or fibre optic lines or coaxial cable or something else.
Then, the telecom regulator in UK (Ofcom) started looking at unbundling the local loop. This proposal - despite resistance from BT - was accepted by the Government and the roll-out process is going on now.
Thus we now have the rush from innovative companies looking at offering free Broadband connectivity. Pure mobile phone operators as well as Cable and/or DTH Television players have also decided to offer a free broadband deal for their existing customers.
The convergence game in UK is far more interesting than anywhere else in the world. UK, for long, had a virtual mobile service model in place. Virgin Mobile (which is merging with NTL - cable TV operator who is also offering telecom services) was one such. It was using T-Mobile's platform to offer its branded services. The 'Freeserve' type model emerged only in UK. The ground situation in USA is very different that some of these models could not have developed in USA.
Now, let us take a look at the situation in India.
The landline in India is still dominated by government owned BSNL and MTNL. These companies have not looked at selling bulk minutes to any third party operator so far. Thus, Freeserve like model has not emerged in India. We have jumped straight to the DSL revolution. But BSNL and MTNL resist local loop unbundling, though the Indian regulator TRAI suggested this. BSNL and MTNL have strong Government backing. The Department of Telecommunication and the Minister for Telecom Dayanidhi Maran have strongly defended not unbundling the local loop. We will never get to see local loop unbundling in the next 5 years or so.
The mobile phone sector in India is booming. Thus no mobile phone operator has bothered to look at interesting models such as virtual mobile service. BPL talked about it at some point in time, but has since been taken over by Hutch.
India is probably looking towards a Wi-Max driven revolution to unshackle the broadband market and Internet connectivity.
The connectivity costs have come down. Airtel offers a Rs. 600 a month, unlimited download, but a restricted 128 kbps DSL connection. Certain other deals from Airtel offer connectivity at about Rs. 200 a month. BSNL offers similar services. None of the operators will be interested in offering higher bandwidth, higher quality of service for a while anyway. The TV distribution platforms have not shown any initiative in offering high speed Internet connection. Reliance has talked a lot, but is far from delivering an integrated triple-play or quadruple-play solution.
At times, a booming market by itself turns out to be bad for the customers. The service providers have little time to think of innovative and interesting solutions. They keep working hard, just to handle the massive demand for the basic services!
Thursday, June 01, 2006
Chennai - Healthcare Capital of India?
I do not have any data. This is based on my personal observation over the last 4 months - during which time I visited Ramachandra Medical College Hospital, Apollo Hospitals, MV Diabetes Centre and Shankara Nethralaya in Chennai.
In each of these hospitals, I noticed a huge crowd, but what was interesting was the presence of patients who spoke Malayalam, Telugu, Hindi, Bengali and a few other assorted North Indian languages. In each Hospital, the staff were equipped to deal with the patients who could only speak in the above languages. The staff were all - or almost all - Tamilians but they spoke perfect Bengali, Hindi, Malayalam, Telugu and what not besides Tamil and English.
In Apollo where my father underwent a heart bypass surgery, I found NRIs from Malaysia and USA. I also found a few Africans and Caucasians (not sure of their nationalities). In and around Apollo Hospitals in Greams Lane, I found plenty of Malayali and Bengali patients staying in temporary accomodations.
I thought that the facilities for something as complex as heart bypass surgery are perhaps not widespread and perhaps Chennai has over the years built up sufficient number of private hospitals that specialise in heart surgery. But when I went to Shankara Nethralaya, I found several people who seem to have clearly come from North India and from Bengal for something as simple as an eye checkup and proper prescription of glasses. This is difficult for me to understand. Surely there should be enough eye hospitals around the country? It was strange to see the staff at Shankara Nethralaya talking to the patients in perfectly acceptable Bengali and Hindi. Unless the stream of visitors is large, the staff wouldn't have taken the effort to learn these languages.
So what is actually happening? Does anyone know?
As an aside, I wonder if people in North India will take the effort of learning Tamil or Telugu to talk to their customers.
In each of these hospitals, I noticed a huge crowd, but what was interesting was the presence of patients who spoke Malayalam, Telugu, Hindi, Bengali and a few other assorted North Indian languages. In each Hospital, the staff were equipped to deal with the patients who could only speak in the above languages. The staff were all - or almost all - Tamilians but they spoke perfect Bengali, Hindi, Malayalam, Telugu and what not besides Tamil and English.
In Apollo where my father underwent a heart bypass surgery, I found NRIs from Malaysia and USA. I also found a few Africans and Caucasians (not sure of their nationalities). In and around Apollo Hospitals in Greams Lane, I found plenty of Malayali and Bengali patients staying in temporary accomodations.
I thought that the facilities for something as complex as heart bypass surgery are perhaps not widespread and perhaps Chennai has over the years built up sufficient number of private hospitals that specialise in heart surgery. But when I went to Shankara Nethralaya, I found several people who seem to have clearly come from North India and from Bengal for something as simple as an eye checkup and proper prescription of glasses. This is difficult for me to understand. Surely there should be enough eye hospitals around the country? It was strange to see the staff at Shankara Nethralaya talking to the patients in perfectly acceptable Bengali and Hindi. Unless the stream of visitors is large, the staff wouldn't have taken the effort to learn these languages.
So what is actually happening? Does anyone know?
As an aside, I wonder if people in North India will take the effort of learning Tamil or Telugu to talk to their customers.
Subscribe to:
Posts (Atom)