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| Siddhartha Ray: A new avatar,
now |
Those
who do remember Siddhartha 'Stracon' Ray, probably associate him
with his company's spat with India's government-owned broadcaster
Doordarshan over the telecast of the 2000 Cricket World Cup. Ray
is back in the news, though, in the business of telecommunications,
armed with a (George) Gilderian vision for the international direct
dial (IDD) business. While most telcos and their CEOs believe telecom
services will be accorded commodity status in the future, Ray claims
the process has already happened. And he is putting (or has put)
his money where his mouth his. ISP-turned-telco Data Access, in
which Hong Kong's Pacific century Cyber Works-a firm founded by
Li Ka Shing's son Richard Li-has a 49 per cent stake, has leveraged
the commodity-trading model to emerge India's second largest IDD
company, after VSNL.
Ray, whose first brush with commodities came
in the mid 1980s when he marketed steel for Nicco Corporation is
willing to admit the Rs 25 crore Data Access burnt on creating an
ISP brand, Now, short for Network Of the World, in the go-go days
of the internet, was ''a big mistake''. Data Access' new mantra,
for its ISP and IDD businesses, is commoditisation. ''We are a bulk-seller
and deal with limited clients,'' explains the chain smoker between
drags on his Benson & Hedges cigarette. ''We do have retail,
but that part is small and non-remunerative.''
With no aspirations of becoming a last-mile
player, Data Access is happy to serve as a switch between telcos
originating calls, and those terminating them. Apart from the Rs
25 crore it paid for a licence, the company has invested Rs 250
crore in technology-a VOIP switch and a Time Division Multiplexing
(TDM) network. That's about 25 per cent higher than what other technologies
would cost, but it ensures a higher call completion rate. With nodes
in London, New York, and Hong Kong (apart from Delhi), Data Access
can also carry traffic that isn't headed into or out of India. Ray
claims, all this and an employee strength of 280 enables Data Access
carry a one-minute call between India and the US for all of 0.25
cents; VSNL, which employs 2,800, spends 7 cents, he adds. With
some 84 international carriers, BSNL, MTNL, Hutch, Bharti, and Hughes
as its customers, Ray's commodity-strategy seems to be working.
Data Access claims to be carrying 40 per cent of incoming long distance
calls, and expects to close 2003 with Rs 3,000 crore in revenues.
The target for the year 2005? Rs 8,000 crore. Even incorporating
the Rs 100 crore the company will have to invest in the network
by March next, that's some payoff.
If things are as good as that, why would Li
want PCCW to sell 23 per cent of its stake? Ray has no satisfactory
answer, but has to somehow find the money to buy back the equity-or
another partner. The buzz in telecom circles is that PCCW has plans
of going it alone in the IDD business in India. Finding either the
money or the partner won't be easy. Data Access is largely a one-man
show. But don't count that one-man out yet: in the early 1990s,
Ray was the head of Dalmia Brothers' flailing media business; vested
with the task of forging an alliance with Li Ka Shing's Hutchison
to bring Star TV into the country he lost out to Zee; however, he
managed to impress enough to find a place for himself in Star-CEO
of South & West Asia. Maybe he can pull off something like that
again.
-Suveen K. Sinha
PLASTIC FANTASTIC
Deep in Debt
Some key numbers on the plastic culture.
NUMBER OF CREDIT CARDS ISSUED: 60.68
lakh
TOTAL CARD SPEND: Rs 13,322 crore
THE TOP THREE CREDIT CARD ISSUERS: Citibank
(16 lakh), Standard Chartered (14 lakh), SBI (9.03 lakh)
THE TOP THREE IN TERMS OF CARD SPEND: Citibank
(Rs 4,240 crore), Standard Chartered (Rs 3,300 crore), SBI (Rs 1,485
crore)
NUMBER OF DEBIT CARDS ISSUED: 31.3 lakh
THE TOP 3 DEBIT CARD ISSUERS: ICICI
Bank (10lakh), HDFC Bank (8 lakh), Citibank (7 lakh)
NUMBER OF ATM OUTLETS: 5,516
TOP THREE ATM CARD ISSUERS: ICICI Bank
(25 lakh), SBI (18 lakh), HDFC Bank (14 lakh)
Source: Venture Infotek; all figures at the end
of March 2002
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