SEPT. 29, 2002
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Cover: India's Hottest Young Executives
WEB SPECIALS: Unpublished reportage of just what
makes each of these
25 a rising star..


Long Bond Is Back
The government is bringing back the 30-year bond. Will insurers be the only takers?

More Net Specials
Business Today,  September 15, 2002
 
 
BLACK EYE
Nothing Hurts Like Excess
The Indian optic fibre industry is reeling under overcapacity.
Optic fibre:These ducts have now run dry

Don't be fooled by the coloured ducts you see going into the ground in your city-the Indian optic fibre industry is in the doldrums. OFC major Sterlite Optical reported a loss of Rs 14 crore for the March-June quarter and competitor Aksh lost Rs 2.22 crore. ''Telecom is in a tailspin the world over and the demand from the US market has dropped,'' rues Tarun Jain, Director (Finance), Sterlite Group. Thus, the company that exported 70 per cent of its produce in 2000-01 has to live with 40 per cent idle capacity and prices that have plummeted from $80-100 a km (Rs 3,920-4,900) to $20 (Rs 980). The Indian market for OFC may be growing at a healthy 30 per cent but most local TELCOs prefer to import their requirements from companies such as Corning, LG, or Sumitomo. And with even "basic telephony companies switching over to CDMA (Code Division Multiple Access, a wireless technology), there is a move away from OFC,'' explains B.R. Rakhecha, Executive Director, Aksh Optic Fibre. Clearly, the stage is set for a shakeout in the industry.

  "It's Not A Level Playing Field"  
  Burritos, Senor?  

 


ENCOUNTER
''It's Not A Level Playing Field''

Mohan Gyani: Great expectations

For once, that's coming not from the Bombay Club, but a foreign telecommunications giant, AT&T Wireless. In India recently for the launch of AT&T Wireless' launch of an offshore development centre, the $13.6-billion company's President and CEO, Mohan Gyani, who's also a director on the board of Idea Cellular, spoke to BT's on the Indian telecom market. Excerpts:

What is the status of Idea Cellular's launch in Delhi?

I had hoped that they would have launched by the time I came here. But we are still waiting for the government to allocate spectrum. It is confusing and frustrating.

With three operators already entrenched and a limited mobility provider (Tata Teleservices) to commence operations around the same time as Idea, how difficult will things be for the service in Delhi?

There are some advantages. We can learn the key value propositions of the incumbents and work out whether the space we look at should be the same as the incumbents', different, or one that the incumbents tried to capture but failed. However, everything we do must meet expectations.

What are your expectations regarding customer churn?

The customer churn will be high. I expect 40-50 per cent of Delhi customers to change carriers over the course of the next one year.

And what about telecom regulations in general?

More than the competition, the concern is over regulation in general. India is perhaps the only market in the world that hasn't grown to expectation. One reason for that is the lack of a supporting regulatory environment. There is no reason why the Indian market shouldn't have exploded like it did in China. As carriers, we plan on things happening. I have to justify why the next dollar should come to India. There are issues of interconnect, CPP... it's not a level playing field.

What about the proposed merger with BPL Mobile?

We don't have to do anything. We don't have our backs to the wall. M&A is like a baby being born. The baby decides the timing. However, I can tell you that a lot has changed in the telecom world in the past one year. You have to take a hard look (at the merger).


GASTRONEWS
Burritos, Senor?
A Mexican food chain gets set to debut in, of all places, Kolkata.

Tired of dosas and big macs? no problem. next month, if you are in Kolkata for the pujas, you may get to sink your teeth into burritos and tortillas, and chase them down with some authentic Mexican tequila. Courtesy Mandira Kanoi, a Kolkata-based entrepreneur who is bringing Castillo, a $38-million Mexican food chain, to India. Operating through franchisees, the chain, christened Kanoi Castillo Corporation for India, plans to open full service outlets (Casa Castillo), complete with margarita bars and a range of Mexican food.

According to Kanoi, the Mexican food chain will operate restaurants (10, across five metros) and a variety of ''customer points'' like theatres and airports. The investment per restaurant? Rs 50 lakh, excluding real estate. Says Kanoi: "It's time India got a taste of real Mexican food.'' We hope it's hot enough.

 

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