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A cheap, desi wireless technology lets you call your home AC from your car, start the washing, heat water-and more.
What is the most critical issue facing the Indian automotive industry? Productivity. No other country in this world has so many people working on producing one car: 700. In Japan, Germany, and the US, the number is seven to eight people. If you are not taking up that challenge, you will get into trouble as far as the automotive sector is concerned. China won't allow you five years or more. You have to do it within the next three or four years. Intellectually, you are superior. But you are unfortunately not able to translate this into practical reality when it comes to economic performance. Is it time for the non-Asian MNCs in India to rework strategies? Yes, it is. They don't possess the focus, the attention that the Japanese and Hyundai have. They don't perpetually review, analyse, observe, and adapt skills. The cultural background of the Japanese and Hyundai is a little bit similar to yours. They do understand you a little bit better than a German or a Frenchman or an Italian. Or, is it just a question of having the right product for the Indian market? This is a universal problem. Do you see the latest models of these companies being launched in India anytime soon? My first visit to Argentina 10 years ago was a shock. I saw Renault cars, 20 years old. But it couldn't continue. There are too many Argentines travelling the world. Not too long in the future, you will see the latest models in your country. In view of the low volumes that most companies sell in India, do you foresee a shakeout? There will be some companies that disappear, and if some others are lucky-and I say lucky-they will be acquired. Ultimately, everyone has the same interest: produce things and be happy and successful. Germany is a flourishing country economically. And German automotive companies (Mazda and Opel) have been acquired by Ford and General Motors. If Germany tried to fend off takeovers, it wouldn't be where it is today. There is a debate going on globally over the wisdom in having common platforms across a large number of models. Some people say models and platforms should be specific to markets. The enormous advantages of common platforms cannot be denied. Not many customers care about what lies underneath the car so long as they can derive pleasure driving it. The whole creativity or music of a car is above the platform. If you were to head a company entering the Indian market, what kind of a product will you come with? What will be your pricing and what volumes will you target? I'll go with the small car line, a small Maruti or a 1,000 cc car. I would come with a very attractive price to make sure I get the volumes-about 50,000 a year will be a good number if the car is not manufactured in the country. If it is manufactured here, 80,000-90,000 will be good. -Suveen K. Sinha TELECOM
Towards the close of the last century, the Kerala High Court ruled in favour of a woman who had been denied a telephone connection since her husband had not paid the outstanding bills against his connection. The telephone department had chosen to keep the wife's deposit and square it off against the husband's dues. Sunil Mittal, the CEO of telecom conglomerate Bharti Enterprises, can take heart from the ruling. He is facing a somewhat similar situation owing to DoT's decision not to grant a service licence to a company if any of its sister concerns owes any dues to the department.
By the time you see this in print, the dispute would be settled. And it can be settled only one way, by Mittal paying up the Rs 515 crore that JT Mobiles-acquired by Bharti in late 1999-owes to the department for the Punjab cellular service licence held by its subsidiary, Evergrowth Telecom. This is one game in which the DoT holds all the cards. Evergrowth was not a part of the JTM acquisition since its shares had been pledged by the original promoters with the Essar Group by a Rs 280 crore infusion. Nevertheless, Mittal has offered to pay the undisputed amount of about Rs 70 crore upfront and furnish bank and corporate guarantees for the rest. But the DoT is being extra tough perhaps because this may be its chance to recover Evergrowth's dues. Ideally, it should have sued JTM's promoters after two successive defaults on licence fee payment. Instead, it let the dues mount and terminated the licence once the arrears touched about Rs 475 crore. This meant the licence could not be sold to raise money. If Mittal doesn't clear the dues by September 15, he will be left holding next to nothing. He will not get any of the eight fourth cellular licences he has won through a three-stage bidding process. He can't obtain the four basic service licences he wants, nor the one for national long distance telephony. And he also stands to forfeit the licence fees for the fourth cellular licences that he has already paid. DoT officials have a queer rationalisation. Says one: ''He (Mittal) is obtaining so many licences. What is Rs 500 crore distributed over all his new licences. How much incremental cost would it be per licence?'' But doesn't it work both ways? DoT is awarding so many fresh licences. What's Rs 500 crore distributed over all of them? If waived, how much of a loss will it be per licence? -Suveen K. Sinha RADIO GAGA
At college in the university of California, Los Angeles (UCLA), Ethiopian-born Noah Samara waited at restaurants. Now, he's just waiting for his idea to gain momentum. The idea itself, satellite radio beamed down to high-end receivers came to him, aptly, in a restaurant in Jamaica two years ago. Since then, the former lawyer has ploughed in Rs 5,640 crore ($1.2 billion) to build the Worldspace service. Today, Worldspace delivers its satellite-radio service in 70 countries across Asia and Africa. In India, it delivers 25 channels, including 14 leased channels like CNN, Bloomberg, and Radio Midday. That's one of Samara's lifelines: companies pay between $50,000 and $300,000 to Worldspace to carry their channels. Advertising, is another: the patient Ethiopian is waiting for the numbers to swell a bit before going out and soliciting ads. That's going to take a while: in 12 months of operation in India Worldspace has sold all of 25,000 receivers.
Like all prudent new-e operators, though, Samara has a b2b p2p (sorry, couldn't help that) and alternate revenue streams. The first comes from Worldspace's ability to offer specific audio content to a closed user group, for instance, to the sales team of a pharmaceutical company. The second comes from it's capability to pipe multimedia content at speeds of 128 kbps through satellites. Right now, however, royalty payments from manufacturers, like BPL, who make and sell Worldspace receivers account for the bulk of the company's revenues. In one year of operation, Worldspace has sold 150,000 receivers across Asia and Africa. Samara says he'll start making money once he sells 2.5 million units, which he hopes to do by mid-2003. ''We will provide great service and the money will follow like the sun follows the moon." -Vinod Mahanta OVERDRIVE
Even if you tried to forget the hype, wide-eyed consultants did their best to remind you with their eye-popping estimates for the organised retail industry. One optimistic soul predicted Rs 36,000 crore by 2005, ignoring the fact that the current size of the pie is only a little over a tenth that. There's at least one section of industry that has no problems digesting the claim that the Indian retail industry will grow tenfold in four years, real estate developers. Probably encouraged-taken in may be a better way to put it-by the rosy projections, a host of developers have entered the fray. According to property consultants Chesterton Meghraj, 51 malls are in various stages of construction all over the country. Good news? Not really. ''Twenty-five per cent of these malls will either remain vacant or not be completed. Retailers are few, but the supply is far too much,'' points out Anuj Puri, Managing Director, Chesterton Meghraj.
Consider this : Five malls are being built in Gurgaon, within a 2 km radius, spanning 10 lakh square feet. The developers are the DLF group (two malls), the MGF group (two) and the Sahara group. In Mumbai, some 24 malls being put up in the suburbs by various builders, including the Runwal group, the Rahejas, the Nirmal group, and Cable Corporation of India. Together, they will use up over 50 lakh square feet. And let's not forget Mumbai's mill area, where another 4 lakh square feet is being developed. The action isn't confined to just the major metros, with properties being developed right from Ludhiana and Noida to Kolkata, Hyderabad and Chennai. The question: with foreign investment still not allowed in the retail sector, who is going to fill up these spaces? It isn't as if there's no action happening in retail, but most of it is confined to expansions by existing players. Ajay Piramal's Crossroads recently snapped up some 50,000 square feet from L&T in Mumbai's financial district, which it will develop and subsequently lease out. Shoppers' Stop is expanding by putting up two more stores in Mumbai's suburbs, one in Bandra and the other in the distant one of Mulund. Indeed, amongst the few in the fray today, the trend is to opt for the suburbs rather than the heart of the city. ''Retailers are now looking at more economical locations, with rents that are 65-70 per cent lower than before,'' adds Puri. If you hadn't heard of Mulund before, you sure will soon. For that's also where the Nirmal group of builders too is putting up its project-a discount store, a food court housing McDonald's and Pizza Hut, a 60-70,000 square feet entertainment complex and a six to seven screen multiplex. To ensure a captive market, the builders are even putting up a residential complex nearby. Now maybe that's what other developers should consider building along with their malls. -Brian Carvalho
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