TRENDS (Page 2)

TELECOM
Promise From An Old Peril

Quietly, BSNL's monopolistic babus are preparing to offer voice over the net.

"India is a key market for AmEx"

The Problem With Time

The Next Small Thing

Is it a threat? or an opportunity? While officials of Bharat Sanchar Nigam Ltd (BSNL) oscillate between the two, the reality of internet telephony is casting a shadow over the Rs 8,500-crore plus revenues that BSNL gets from long-distance telephone calls.

The fear is that bsnl's revenues, Rs 5,575.2 crore during the first quarter of the current fiscal, will be affected because the decision of the government to legalise internet telephony from April 2002. Given the quality of IP telephony service and that there are only 60 lakh computers and 20 lakh internet connections in India, the reach of internet telephony is too limited to be of worry-for now. That could rapidly change.

2001 Winter Collection

Aere are some predictions as to what you will be wearing this winter: a turtle-neck if you are a man, and a ribbed, mock-neck sweater in lamb's wool if you are a woman. Below, men will most likely sport flat-front trousers. At a party, chances are you would be caught wearing a zip-pocketed shirt of a nylon-spandex blend. At other times, you may be found in fleece baseball jackets and canvas boot-cut trousers. In fact, garment retailers are betting top dollar on this coming true. Early this month, ITC Wills Sport unveiled its Winter Collection featuring a mix of work, leisure and party wear cutting across apparel lines. Blackberry's is planning to introduce its own winter wear, and so is Raymond's Park Avenue.

It's not unusual for garment marketers in the Rs 20,000-crore apparel industry to push sales in winter through new launches. But this time, the push seems more aggressive. Rajiv K. Jaiswal, Deputy Marketing Manager, Blackberry's, explains: ''The market has been sluggish and growing at a monotonous 30 per cent year-on-year for the past few. It's high time the industry broke out of the gridlock.'' Now, a cold winter is all that it needs.

-Moinak Mitra

Your old telephone is a circuit-switched network where a voice calls hogs an entire circuit. Data on the net is instead chopped into packets, which are reassembled at the receiver's end. That means more, and cheaper, calls.

BSNL-after years of opposing voice over the net-is now, away from public gaze, carrying out a trial runs of its voice over internet protocol (VOIP) services in Mumbai, Delhi, Kolkata, Chennai, Pune, and Ahmedabad. Estimates suggest that the capital expenditure for a greenfield telecom network could be 20 per cent lower than the traditional circuit-switched network.

''The challenge is to roll out the VOIP network as quickly as possible so that the threat of fall in revenues is compensated with the increase in the new revenue stream,'' says Karthik Natrajan, Sales Manager (India), Juniper Networks.

The threat can become an opportunity. TOT Thailand, which is that country's main telecom operator, reduced its average long-distance call charges from 14 baht to 2 baht (Rs 15.12 to Rs 2.16) a minute on the newly launched VOIP network. Even with this huge a reduction in charges, its revenues increased by one per cent during the last year.

It's an experience the government's monopolistic babus would do well to bear in mind.

-Ashutosh Sinha

Q&A
"India is a key market for AmEx"

Giampiero Grandi, Managing Director, AmEx (PFS)

Giampiero Grandi, Managing Director (Personal Finance Services), American Express Bank, on what India means for his company.

How do you view opportunities in India against the ongoing war?

We are very bullish on India. The Indian government may have revised the GDP growth rate downwards, but a 5 per cent plus growth rate is pretty healthy. And I feel that there is no slowdown here. India is an important market, which is going through some significant changes and growth. The affluent market is the fastest growing segment in India. Amex caters primarily to the affluent segment.

But isn't the affluent base small?

Yes, but this small base in a country the size of India is sizeable-it comprises some 5 to 6 million people. India has leapfrogged in technology, and the Indian consumer wants the best in the world. The speed of change of the consumer demand in India is the fastest.

With global credit cards and debit cards becoming popular, how do you expect your traveller's cheque (TC) business to fare?

TC is a growing business. Over time, the TC has evolved and today it is more popular with retailers and small businessmen rather than with the affluent. This is so because retailers go to places where cards are not accepted. And then, TCs have a lot of safety attached to them. TCs and plastic money don't compete with each other. Rather, they complement one another. Till a few years ago, tcs were growing in double digits. Interestingly, the total spend on tcs in India is much more than the total spend on credit cards.

How is it different to sell personal finance products to a developing market, as opposed to a developed one?

Affluents around the world are converging. So are their needs and lifestyles. Therefore, some aspects in financial services are common to all of them, irrespective of whether they belong to a developed country or a developing one.

-Swati Prasad

TIME ZONES
The Problem With Time
By next year, India might have two time zones. More daylight for the east-and great confusion for the rest of us.

The us has five, Russia has eight. But can a timeless country like India really hope to join the multi time-zone club? Well, it could happen with the creation of two zones: East and West, an hour apart. Indian Standard Time (IST), is currently the local time in the city of Mirzapur, Uttar Pradesh. If the government accepts the change, Bhopal will be the reference for western time and Kolkata for the east. So when the clock strikes 12 at noon in Delhi, it will be 1 pm in Calcutta and eastwards.

Troubles of Tech

The Great PC Nightmare
The promise remains, but growth rates are gone.

The infotech slump continues. The sale of personal computers (PCs) registered a decline in sales for the quarter ended September 2001. This is worrying. During 1999 and 2000, the July-September quarter witnessed the most robust sales compared of all quarters. "It has been a disaster," says Sameer Kochar, Managing Director, Skoch Consultancy Services, which tracks the it market. Demand from India's it companies-once growing at nearly 30 per cent-is down to just three per cent. The consumer market, once growing between 30-40 per cent has now dropped to around 4 per cent. The only growth has come from the government and banks, mainly because they have to expend their budgets.

-Ashutosh Sinha

''Certainly the quality of life in the east and north east will improve,'' says Subir Gokarn, Chief Economist, National Council for Applied Economic Research. ''You want all your people working when it's bright and sunny and not in the dark.'' India's eastern and western borders are actually more than 2,000 kilometres-or three time zones-apart. A three-man government committee will submit its report to the Cabinet by December. ''The initial confusion over the time zones would give office-goers in the east an excuse for coming late,'' muses Shashanka Bhide, Head, Macroeconomic Monitoring and Forecasting, NCAER. But according to Gokarn the eastern time zone should also extend to Andhra and Tamil Nadu. They too could benefit from the move. As for the confusion all this might cause-let's not talk about that right now.

-T.R. Vivek

TECHNOLOGY
The Next Small Thing
As business interest grows, some Indians latch on, but what's needed is lots of money.

THE PROMISE OF NANOTECHNOLOGY

Trillions of quantum dots--particles only a few atoms across--can be programmed to glow a variety of colours simply by varying their size. Sold by Quantum Dot Corporation, a California company cofounded by an Indian, these luminous nanosize (each is 10-9 metre wide) crystals made from a semiconductor material act as bar codes useful to label cells with unique color patterns and actually watch what happens as they respond to drug.

Bala Manian's company, quantum dot corporation, hasn't kept its crown jewels in any bank vault. At their facilities in Palo Alto, California, you will find their jewels under a microscope, twinkling luminously like the Nizam's finest. The jewels are called quantum dots. They are crystals just a few hundred atoms across.

Manian, co-founder of Quantum Dot, and his investors-he and partner Joel Martin raised $7.5 million in venture funding in the company's eight months of existence-are betting that these tiny sparklers will change how biologists create the next small thing. The central theme of nanotechnology is that we will be able to manufacture materials and devices starting from the molecular level. That scale, if you can imagine it, is a billionth of a metre, a nanometre.

Manian's quantum dots are a few nanometres across, about the same size as a protein molecule or a short sequence of DNA. These nanodots could be used to tag up to 40,000 genes or proteins in as little as 10 minutes-an ability that could lead to a rapid and simple test to detect a particular set of proteins, which for instance might indicate a person is having a heart attack.

In 2000, the US Patent Office issued 150 nanotechnology patents. That's up from zero just 10 years ago. In September, investment giant Merrill Lynch told managers of its mutual funds that it was time to start looking at nanotechnology. A Merrill Lynch report said nanotech applications in instrumentation (companies making nanotech tools, computing, biology and materials), will make it to the market in the next two or three years.

Like Manian, a clutch of Indians are at work-as befits nanotechnology-quietly, invisibly, all over the world. India caught the tail end of the it boom, it's barely scratched the surface of the biotech boom, but it cannot hope to keep up with the coming age if it does not latch onto nanotechnology.

"Unlike biotechnology, nanotech is the field where physics, chemistry and biology converge in the truest sense," says Dr M.S.M. Saifullah, a Hyderabad native and researcher with the 8-million-pound Nanoscale Science Laboratory of the University of Cambridge, the UK. Saifullah tries to make make crystals from carbon nanotubes, rolled sheets of graphite 10,000 thousand times thinner than a human hair, but with the strength of diamond. Potential applications are in airplanes, buildings and new plasma displays.

Nanotech can work in India provided the government can assure funding for the next 10 years or so and ask industry to jump in. But nanotech isn't as yet on the radar, and so those who work in the field must do so within their scientific briefs.

That's what Vikram Jayaram does at the Indian Institute of Science in Bangalore, where he is one of more than 10 nanotech researchers. A professor at the Ceramic Materials Lab, Jayaram-who's trying to develop super-hard ceramics-believes medicine and drug delivery systems must necessarily be the areas of nanotech focus for India for the same reason that biotech and gene manipulation are important. The market is vast, products are around the corner, and development of tech is based in large measure on intellectual capital. The other institutes doing nanotech research in India are the Tata Institute of Fundamental Research, the IITs and the Radiophysics Institute of the University of Calcutta.

Could a Bala Manian emerge from any of these? We can hope of course-but cash is welcome.

-Samar Halarnkar

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