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Several government-departments are in the process of compiling extensive customer databases.
''Nobody notices postmen, somehow,'' he
said thoughtfully. If the customer is, as that hoary saw claims, King, then, in a land of over 1 billion people customer-information is the key to the kingdom. The Census Department is perhaps the best equipped to collate and analyse this data, but collating information across a population of a billion plus is no ordinary task, and the department is content to release data regarding macro demographic trends. Forget marketers, Indian law does not permit this data to be used by anyone, even the government. ''However, trends culled from these are used as inputs by the Planning Commission, state governments, even the World Bank,'' says J.K. Banthia, Registrar General of India. It isn't just the Census Department that collects data on customers. The Income Tax Department does, and it already has an extensive database of over 10 million people. Thus far, this information has largely been restricted to where people live and how much tax they pay, but the department is now expanding the scope of its data-gathering to include details of an individual's high-value transactions. There's little chance of marketers gaining access to this information, just like there's little chance of them gaining access to electoral rolls maintained by the Election Commission.
But it is the data collection drive that the Department of Post has embarked upon that should delight marketers. This data isn't just about income and expenditure-the only details the taxman is interested in-or age (the only parameter of concern to the Election Commission). The scope of the data being collected by the Department of Post extends to ownership of durables, purchase-intent, media-habits, and product usage. ''This isn't a sec a, or sec b kind of thing,'' says Vishali Sarkar the general manager of Ogilvy One, which is aiding DOP in its efforts, referring to the prevalent practice of classifying households on the basis of the education and occupation of the 'chief earning member'. ''We are talking about the economic profile of specific individuals''. Over the next three years, the department will collect details of over 100 million Indians, and this information (glory be!) will be shared with marketers-not in terms of selling part of the database, but in terms of the marketer defining which segment he wants to target, and the department reaching out to them through direct mailers. ''Our focus is the marketers,'' adds Vineed Pandey, Director, DOP, echoing the new revenue-mindedness that is sweeping through the department (See page 108, India Post: Thinking Out Of The Box). Get ready then, to see a quantum jump in the volume of junk mail you receive. -Ashutosh Sinha Q&A
The man behind PwC's report, Ashwani Puri, the head of the firm's corporate finance practice, spoke to BT on trends in business restructuring in India What are the reasons behind business restructuring exercises failing to yield the desired results? And why is it a slow and costly proposition? We attribute this to two reasons. First, it takes a long time to reach a consensus amongst partners/promoters, stakeholders and the management of the company on restructuring. Second, promoters often don't take into consideration aspects like tax implications, stamp duties and the viewpoints of the shareholders while planning a business restructuring exercise. Hence, the effort fails. Have you found any commonalities in why Indian businesses are going in for restructuring? There are several common reasons. These go back to pressures being exerted by the market and the economy. Interestingly, we found that a large number of promoters want to increase their holdings in their companies. This is happening essentially because institutions' holdings in companies is no longer static; they can unload (their holdings) at any point of time. Besides, when share prices fall, promoters want to take advantage of the low prices. Your study talks of a correlation between the per capita GNP and an environment conducive to restructuring. How do you explain this? I feel that in a prosperous environment, resources can be moved quickly and put to different use, when the situation so demands. This leads to a more conducive environment for restructuring. However, that's not always the case. In Japan, for instance, till recently the environment was not conducive for restructuring. But the Japanese government has taken measures now (like offering tax sops) to change that. Do you see any trends in the way family-run businesses in India are restructuring themselves? Today, the Indian family-run businesses are separating the wealth of their companies from their personal wealth. They usually do this by increasing their salaries or by changing the shareholding patterns in their companies. This is a very positive change, since it brings about transparency within the company. And the interests of the individual do not tend to drive the company. -Swati Prasad
TELCO TALKS
Remember ICICI's takeover of Lalbhai-owned Anagram Finance? And Standard Chartered's acquisition of anz Grindlays? It's an enduring conundrum how reports attributed to gingerly-protected 'sources', often carrying denials from those involved, turn out to be true. The latest in that long line is news that the Nandas of the Escorts Group and the BK Modi Group, two of Delhi's oldest business families, are in talks to merge their cellular service business, Escotel and Spice, respectively. This one, however, appears an extremely unlikely candidate for carrying forward the legacy of turning out to be true. It is true that Escotel needs a partner. First Pacific-the Hong Kong-based investment and management company that holds 49 per cent equity in Escotel's existing cellular operations in Haryana, Kerala, and Uttar Pradesh West-chose to stay out of the bidding for the fourth licences in India. Escotel went it alone and bagged four fourth licences for Uttar Pradesh East, Punjab, Himachal Pradesh and Rajasthan. Now, it needs a strategic partner as it takes the next step of getting the operations off the ground. But Spice makes a poor partner. Escotel has sufficient operating experience and needs someone who can bring strong financials to the table. Some telecom analysts believe the whole affair is driven by some fine posturing on Spice's part. The Modis, having sold their Kolkata cellular operation to Bharti Enterprises, are rumoured to be on the lookout for a good deal for their Karnataka and Punjab operations. They could be trying to convey to BPL-Birla AT&T-Tata (reports of this merger were confirmed early on) that there were other buyers around. Escotel CEO Manoj Kohli determinedly quashes the speculation: ''We are not interested in a merger. We would like to buy 100 per cent in Karnataka if they are willing to sell it to us.'' He also fears that a merger with Spice may mar the equity holding structure of Escotel, which has kept away from the multiple holding company format that most TELCOs in the country have adopted to sidestep the 49 per cent cap on foreign equity. Kohli's comment makes sense. But that doesn't mean we can write off a merger. Remember Anagram and ANZ? -Suveen K. Sinha Corporate Snippets
Advance tax payments this year are said to be piercing the roof. But don't put it down to good-intent. It just happens that the corporate sector earns an interest at the annual rate of 12 per cent on advance tax refunds. At a time when long term bank rates are stagnant at 7 per cent, this sure is an effective way to boost the other income head in the P&L account. It is an indication of how the opening up of the telecom sector has been paved with legal disputes. The Cellular Operators Association of India (COAI) has had to to shell out 43 per cent of its 2000-01 income of Rs 3.06 crore as legal and consultancy charges. Of this, Rs 84.56 lakh was accounted for by legal expenses, and Rs 48.30 lakh by consultancy charges. Little wonder then that much of the telecom industry has heaved a sigh of relief at the appointment of Pramod Mahajan as the communications minister. Mahajan is seen to be far more market savvy than his predecessor Ram Vilas Paswan. There is a catch though. The savviness could cut both ways and telecom companies may find themselves at the receiving end.
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