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TRENDS: MONOPOLIES Smells Like A Dead Fish MTNL's cellular service, Dolphin, is still in choppy waters four months after its much-hyped launch.
Narendra sharma's waterloo stares him in the face every moment of his workday. The view from his swank office on the 12th floor of arguably the best office building in the capital's central business district, Connaught Place, is great. Only, the vista has two elements that the Chairman and Managing Director of MTNL doesn't quite like: base stations of Essar Cellphone, and Airtel, the cellular service providers with which his company's Dolphin service has gone head to head for the past four months. Together, in the two cities in which it operates, Delhi and Mumbai, Dolphin has all of 18,000 subscribers. Its largest competitor in Delhi, Airtel, has 3,335,211; in Mumbai, BPL has 270,056. With just 130 base stations in Delhi and 128 in Mumbai-Airtel and Essar have over 300 each in Delhi-the quality of the service is, at best, pedestrian; Dolphin's roaming service, launched in late May, covers only the two cities in which it operates; and MTNL is yet to launch pre-paid cards, used by between 45 and 50 per cent of cellular phone users in Delhi. And with its billing system just in place, Dolphin sent out its first bill only in June. ''When the last date for payments is over, MTNL will get to know how many customers it really has,'' remarks a senior executive with a competitor. The man in the hot seat, J.M. Mishra, MTNL's Principal Chief General Manager (sic), accepts that things could be better at Dolphin, but believes the service is coming in for some unfair criticism. ''Everyone was willing to give our competitors time; that's not happening in our case." It isn't, because MTNL is far better off than its competitors were when they started off: it has Rs 2,000 crore of reserves, a ready list of high-value customers (from its basic service), and an equipment cost per line of just $84 (Rs 3,948) almost a third of its competitors. Sharma, whose previous stint was at the Telecom Regulatory Authority of India, does have a growth blueprint for Dolphin. And that envisages launching discounted pre-paid cards, tapping high-value customers of its basic service, and appointing nine franchisees who will go out and market the Dolphin brand. But with each of its rivals in Delhi and Mumbai set to add approximately 200,000 customers this year, the state-owned telecom provider will have to do these soon to prove to the world that it can swim with the best. -Ashutosh Sinha COLOURED WATER Both Coke and Pepsi seek to find their personal Indian summer by launching flavoured extensions. A drowning man, that hackneyed saw goes, will clutch at a straw. In the case of troubled beverage majors, Coca-Cola India and Pepsico India, the straw comes inside a bottle of a piquantly flavoured non-cola brand. For two years running, the cola market in India has stagnated; in contrast, the non-cola one has limped along at 10 per cent. That could explain why, suddenly, all the action is in fruit-flavoured (and the more esoteric the flavour, the better) carbonated drinks. Pepsi fired the first salvo by launching Mirinda Apple. Coke replied by launching Fanta in two flavours; green apple and water melon. ''It's a natural progression of things,'' says Subroto Chattopadhyay, Vice-President (Marketing), Pepsi Foods. Coke's experience with Maaza would suggest that it was indeed that: in 2000, the brand's volumes grew by 70 per cent; in the first quarter of 2001, by 45 per cent. Still, Maaza is a 'real' fruit drink, like Pepsi's Slice. It isn't carbonated like all other offerings from the two companies are, and Indians have always had a predilection for anything to do with mangoes. The two companies could then find it difficult to emulate Maaza's success with their artificially-flavoured offerings-even south of the Vindhyas where people seem to prefer these to colas. Coke and Pepsi are also not done yet: they promise to bring in more flavours from their international portfolio. The only people who could eventually benefit from this rush for flavours are the ad agencies who get to spend lots of money on ads for the new offerings. In the advertising lexicon, coloured water equals money, lots of it. -Vinod Mahanta
ADMINISTRATION Karnataka aims to become a software piracy-free state.
May be India's software capital should have done this earlier, but companies aren't complaining. Last fortnight, the Karnataka government announced that it was cracking down on illegal use of software in the state. To begin with, the state is putting its own house in order. Government departments are being asked to ensure they use only legal software. The next step would be to check piracy at consumer level. Says Vivek Kulkarni, Karnataka's it Secretary: ''Piracy hurts new investments, tax revenues, and employment.'' Affected companies are only too glad to help check the Rs 900-crore-a-year software theft. ''We believe that educating customers on the benefits of using genuine software will reduce the piracy. Only price reduction will not solve the problem,'' says Himanshu Goyal, Business Development Manager, Adobe Systems (India), 90 per cent of whose installed software such as Photoshop and Pagemaker is said to be pirated in India. Other companies like Microsoft, whose popular Windows software is one of the most pirated, have set up anti-piracy hotlines. Nasscom runs another hotline (1-600-334455). And if more states like Karnataka back their efforts, software's Long John Silvers may finally go on the run. -Venkatesha Babu CORPORATE NOTES: INTERVIEW On a recent visit to India, Sony Corporation's President and Chief Operating Officer, Kunitake Ando, spoke to BT on the convergence side of the company's businesses. Meet the man behind the Vaio. A Sony lifer, Kunitake Ando, is credited with Sony's comeback into the portable computer market. Ando was in India in mid-June to inaugurate Sony's new software architecture division in Bangalore and to (in his own words), ''gain an understanding of the Indian software development capabilities that could be used in Sony's future strategy''.
The Indian operations were set up only in 1995, and we are very happy with the results. We clocked a turnover of Rs 625 crore last year. This year, we aim to do Rs 700 crore. But I am here to see India's software prowess firsthand. The Sony India Software Centre (SISC), an offshore development centre of Sony Corp, achieved exports of $6.2 million (Rs 29.14 crore) since its inception in 1998. It has played a key role in the development of Aibo (Sony's robot dog) and the Digital TV. And its systems design division supports nearly 50 Sony Group entities. What is the road ahead for the Sony India Software Centre? We have invested Rs 78 million in SISC till now. In just two years, the number of people on our rolls here has shot up from 17 to 170. By the end of this financial year, this will increase to 250. The software centre has two divisions, the systems design one, and the software architecture one. Both have had a role to play in the infotech initiatives of most Sony operations across the world. Is Sony moving away from being primarily a hardware company? Hardware is the foundation of Sony's business. We plan to introduce a blue-tooth enabled PDA in the market next month. This is based on the Palm OS, but are designed by Sony. The other products we have lined up include a set-top box and other mobile devices-not just mart phones, but entertainment-oriented PDAs. You've adopted the Palm OS for your PDAs and have signaled your intent to do the same with the Symbiam one for your phones. Does this, and Sony's investment in chip maker Transmeta mean the company is moving away from the Wintel duopoly? Our position has always been Operating System-free. We have an excellent relationship with both Microsoft and Intel. We want to develop very unique hardware and also very unique application software. Applications will make the product different, not the OS. The OS is something you shouldn't see or touch or feel. Sony's strength is really to offer products that appeal to customers. In India, apart from consumer durables Sony has only been into products like monitors. When do you think we will see it sell Vaio notebooks and mobile phones here? We see India as a promising market and the Indian subsidiary has been asking for their introduction here. We are rolling out these products in several south east Asian countries and will be doing so in India, too, this year. But Sony realised the potential of the mobile phone business a bit late, didn't it? You are not exactly a telecom powerhouse... Some people even call telecom our missing link, but I don't think so: this has been addressed by our alliance with Ericcson. What about the Playstation and the Aibo? Will Sony launch them here? (laughs). We have to see... Do you see yourself selling more of your products through the internet? We would like to strengthen our electronics business side, although Sony is a total-value chain company. Since our main business is consumer electronics, no matter how much you become an ''E''-type of operation, I think still the main business will be through brick-and-mortar dealers. But the ratio in terms of e-business may increase. You have a subsidiary in Singapore that allows music and videos to be downloaded from its site for a fee. Do you have plans to set up a similar operation here? Right now, no. -Venkatesha Babu CORPORATE NOTES: ECONOMIC TRUTHS Another new economy company goes the enterprise-way in search of revenues.
Old-e economist john Maynard Keynes may have written about free being a four letter word a long time ago, but new-e executives like Unimobile's chief executive, Vasudev Bhandarkar, are just realising it. ''If you stand at a street-corner distributing money, there will obviously be a long queue.'' His reference is to pc-to-mobile messaging service Unimobile nee Gray Cell was offering free to its customers till February this year. The technology was hot enough to create a ripple in the Valley, and founder Raj Reddy moved the company to California to be, as they say, where the action was. The service was popular-25 million messages were exchanged through the site in December 2000-but the company wasn't making money from it. ''The consumer business was not monetisable,'' says Bhandarkar.
In February, around the same time that a terse announcement on the site informed users that the service was being suspended, Unimobile revisited its enterprise-strategy, which had been drafted in November, 2000. Messaging isn't a critical need for corporates, but the company tweaked its solution to make it possible for them to communicate with their customers through the Unimobile messaging platform. Singapore Airlines, for instance, uses it to provide customers with flight alerts. On the strength of this, Unimobile has sold its repackaged enterprise solution to 15 customers across the world including Citibank, Domino's, and Singapore Airlines. Bhandarkar's targets? Twenty five customers by year-end, and operating profits by mid-2002. Displaying the zeal of a convert, Bhandarkar claims Unimobile's competitors-he won't take names but there are several like Quios, Loboz, Myalerts.com-which haven't moved to an enterprise-focus will soon find the going difficult. ''No company that has unlimited free messaging can hope to succeed''. Unimobile learnt that the hard way. -Ashutosh Sinha
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First things first. How important are the
Indian operations to Sony Corp?
