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| Qualcomm's Jacobs: sugar daddy |
If
you feel there is too much of telecommunications in this issue (a
full-blown feature, a couple of smaller items in this section, even
a CEO-toon or two), the feeling is legitimate. However, Qualcomm
Inc.'s announcement that it will acquire a strategic stake of 4
per cent in Reliance Communications deserves space simply because
the deal is worth Rs 1,000 crore-a cool Rs 200 crore more than the
total foreign investment in the fixed line telephony business, since
the sector was opened up.
That's not the only reason, though. The deal
honours Reliance Communication -an arm of Reliance Industries that
will offer fixed-line telephony services with limited mobility in
17 circles in addition to domestic and international long-distance
telephony services - with a valuation of $5 billion.
If company insiders are to be believed, Reliance's
other telecom and it business-including cellular services, broadband,
and international data centres-is valued at $2.5 billion. That gives
the group's telecom and it holding company, Reliance Infocom, more
than twice the valuation of Bharti Televentures, the services arm
of Bharti Enterprises, which has been valued by investment bank
Merrill Lynch at $3.6 billion.
''Our valuation is based on the fact that Reliance
has put in a fibre optic system across India and has the latest
technology,'' says Irwin Mark Jacobs, Chairman and CEO of San Diego-based
Qualcomm. This marks a critical departure from the pattern of foreign
investment in telecom, which has so far largely been focussed on
cellular telephony, with the valuations being based on subscriber-base.
The Reliance-Qualcomm relationship is however
certain to add another angle to the ongoing litigation over introduction
of limited mobility through wireless in local loop. The technology
given by Qualcomm to Reliance is cdma2000 IX, capable of enabling
the third generation of mobile telephony. As a cellular operator
says: ''There is nothing limited about this mobility.''
-Suveen K. Sinha
PRIME TIME
Weak Link, Strong Ratings?
KBC goes off television screens, and Kamzor
Kadii Kaun debuts. But KKK will never be a KBC.
Can the weakest
link garner the strongest ratings? Can Kamzor Kadii Kaun (KKK) fill
up ably for Kaun Banega Crorepati (KBC)? Can Neena Gupta do an Amitabh
Bachchan? Data compiled by rating agency AC Nielsen tam indicates
that whilst the much-hyped KKK hasn't exactly set the idiot boxes
on fire, it's no washout either. In the West and Hindi-speaking
belt, the Q&A show brought to life by Gupta's offhand style
clocked a double-figure rating of 11.68 per cent. However, all-India
figures are a more sober 6.3, for 2001's last week, and the new
year's first. The reach, at 26 per cent, matches that of the still-popular
weepy soaps like Kahaani Ghar Ghar Kii, and is almost double what
Star enjoyed for the 9-10 pm slot on Tuesdays.
KKK's ratings, however, are no match for the
explosive start made by KBC in July 2000; the Bachchan-centric quiz
show notched up ratings of 10-11 in the initial weeks, eventually
peaking at 23. In fact, even the weepy soaps still score higher
than KKK, with ratings of 10-12. t.
Star TV officials, however, stress that KKK
can't be expected to match KBC's performance. KKK, for one, will
continue to be once-a-week show, with the slots left vacant by KBC
being filled by programmes like Sanjivani, an ER, Chicago Hope kind
of soap. Instead, they point to the continued dominance of Star
Plus, which accounts for the top 15 programmes on television. And
where it matters most-advertising rates-there's little compromise.
Rates for KKK are Rs 3 lakh-plus per 10 seconds, not too different
from what KBC was bringing in. KKK may not be Star's strongest link,
but it fits well in the chain.
-Brian Carvalho
KINETIC
Corporate Convenience?
If you want to know who's who in Kinetic group,
it is easy to get confused. BT tries to help out.
Arun Pande is
the managing director of the two-wheeler business of the Pune-based
Kinetic group. Yes, your read it right! No, we are not confusing
him with Sulajja Firodia Motwani. She is the joint managing director.
But we are ready to forgive you for assuming the lady was in charge,
however difficult it may be to confuse one for the other.
You can be forgiven because Pande, who has
had stints at Tata Engineering, Eicher, and Bajaj, has neither been
seen nor heard for a long time. The last time he was seen and heard
was at a press conference in Delhi over a year ago. Which was when
Motwani was about to start a family.
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| Sulajja Firodia Motwani: family in charge |
In the meantime, Kinetic, which is having an
impressive run in the two-wheeler industry, has had a spate of public
functions launching motorcycles and scooters. All of these have
been addressed by Motwani, now the proud mother of a baby boy, and
a recent recruit from LG Electronics India, vice-president (marketing)
Ajay Kapila.
Motwani's father and founder of the group,
Arun Firodia, remains the chairman of the group, but has allowed
the daughter to become the face and voice of the company. His son-in-law,
Manish Motwani, who met Sulajja in the US, is looking after the
group's consultancy and it business. The latest entrant into the
business from the family happens to be Sulajja's younger sister,
Vismaya. In her mid-twenties, Vismaya, is trying to add value to
the company in the fields of marketing and advertising.
We can forgive you again if you have started
wondering what this story is about. It is just that Pande was brought
into the group two years ago with much fanfare. His induction was
meant to be the first step towards professionalising the management
of the group. The family was to withdraw somewhat and concern itself
mainly with the strategic initiatives.
''The MD is mainly an engineering and factory
man and he spends most of his time there,'' says Kapila, as he tries
to explain Pande's absence at the launch of Kinetic's newest scooter,
Nova.
There is nothing wrong with that, except that
it leads one to wonder whether Pande came in because Sulajja was
to remain out of action for some time and Vismaya was too young-probably
still is-to assume a major responsibility.
-Suveen K. Sinha
FIAT
History, Anyone?
Fiat chooses not to capitalise on its brand
recognition and renounces its legacy.
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| Fiat India's Maurizio Paolo Bianchi:
a clean break |
Fiat has been a
household name in India for four decades. Indeed, the first car
in the family for many of you could well have been a Premier Padmini,
which was manufactured in India by Premier Automobiles under a licence
from Fiat Auto.
Most companies would have looked to capitalise
on this kind of brand recognition when the automobile sector was
opened to private investment in the mid-1990s. Fiat, on the contrary,
faded into the background as unheard of companies (how many people
could pronounce Hyundai or Daewoo five years ago?) came and cornered
the limelight.
Now, Fiat wants to renounce its legacy. ''The
new life for Fiat has just started with the launch of Palio in India,''
says Pietro Sighicelli, Vice President of Fiat Auto's global operations.
He would like to clearly distinguish between the current phase,
which started two years ago when Fiat acquired control of 97 per
cent equity in Fiat India, and its association with pal first as
a licensor and then as an equity partner. ''We cannot take responsibility
for pal,'' he says.
That absolves him of accountability for the
failure of Uno and the lukewarm success of the three-box Siena as
well as its Weekend variant.
Sighicelli and Fiat India managing director
Maurizio Paolo Bianchi begin to beam at the mention of Palio. And
why not? Launched in two variants with engine sizes of 1.3 and 1.6
litres, Palio has received the kind of enthusiastic response that
has been matched only by Indica V2.
Bianchi is now busy addressing the one complaint
the company receives most frequently: inadequate network. The number
of dealerships will increase from 60 to 75 by the end of this year;
service points, from 100 to 150.
In contrast to what most other auto companies
in the country are doing, Fiat India has no plans to bring in completely
built up units. It business plan is strong on investment and manufacturing
in the country.
But why should Fiat Auto focus so much on India,
a minuscule market in the global context? ''We expect to sell 100,000
units in India in three-four years,'' says Sighicelli.
When the future looks this rosy, it is not
difficult to give history a go by.
-Suveen K. Sinha
SOFTWARE
Branding The Bytes
Wipro is branding its range of services to reduce
time to market and costs.
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| Azim Premji: branding services |
This should do
the branding gurus proud. The Bangalore-based it company, Wipro,
has embarked on a major initiative to brand its services offerings.
Wait a minute, though. How does it matter if you call business process
outsourcing (BPO) by another name? It doesn't, right? Dead wrong,
says Wipro's Head of Strategic Marketing, Sangita Singh. ''We've
ensured 75 per cent faster time to market, 35 per cent cost savings,
and a 10 per cent increase in productivity by branding different
services segments such as BPO and technology assessment (called
TransIT), and component-based security frameworks (Wipro Websecure).''
This is not the first time that Wipro has done
such branding. Earlier the company had branded its hardware design
methodology that automated monitoring and error detection through
the design cycle. The results were so impressive that it decided
to extend the exercise to services. For example, the VLSI (very
large system integration) design cycle time was hacked by 40 per
cent, leading to savings in excess of a million dollars. Says A.
Vasudevan, gm (VSLI System Design), Wipro: ''More importantly, we
have very happy customers in companies like Alcatel, Texas Instruments
and Silicon Wave.'' The result: in services, 85 per cent of the
business over the last five years is from repeat customers, says
Singh.
Today, Wipro's portfolio of services includes
11 brands, with names like InstaIntelligence and Cybermine, which
enable jump-start of projects (the former) and e-business intelligence
(the latter). In between, there are others like DocSmart, which
allows users to create centralised libraries containing all of unstructured
data, and Channel[W], a web-based employee self-service framework
for hr. In fact, in a true FMCG fashion, there's even an offshore-onsite
model (ShoreGain) that ''guarantees to reduce costs by 35 per cent
within the first 18 months''.
What next? Let BT take a wild guess: A money-back
plan if the software service doesn't work.
-Venkatesha Babu
CORPORATE CRAZE
Lemmings, All
Now, it's housing finance everyone wants
to enter. The customers aren't complaining.
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| HDFC's Parekh thinks the rush will be a short-lived
one |
Reports that IDBI
is eyeing possible acquisitions in the housing finance domain shouldn't
surprise anyone. With low credit-offtake from corporates leaving
most banks awash with funds, housing finance looks an attractive
diversification. ''Most institutions are in the midst of a strong
retail drive,'' says V. Hari Krishna, Associate Director, Corporate
Finance at real estate consultancy Jones Lang Lasalle. ''Housing
is on top of every consumer's list and is lowest on (every) lender's
risk spectrum.''
The numbers work out too. Although the low
cost of housing finance-around 11.5 per cent-reduces their margin
to around 2 per cent, as against the 8 per cent plus in car finance,
companies stand to benefit from the low default rate on housing
loans. However, there is a widespread belief that the rush to enter
housing finance will be a short-lived one. Deepak Parekh, the chairman
of HDFC shares this belief: ''Once industrial growth picks up, companies
will prefer to concentrate on institutional and bulk borrowers.''
Right now, though, customers aren't complaining.
-Abir Pal
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