Back in the mid-90s, Motorola was one of the first to launch GSM handsets in India. But by the end of the last financial year, it had managed less than 8 per cent share of the booming market, simply because late-comers such as Nokia and Samsung have stolen the market from it with phones that aren't just better-looking, but also more aggressively priced. But thanks to an aggressive "Moto" ad campaign of 18 months, a distribution revamp that has increased direct and indirect presence to 600 towns, and the launch of newer handsets like the 3131 CDMA phone (with Reliance Infocomm) and an economy range GSM phone (C200), Motorola is growing in visibility if not marketshare. "Last seven-eight months have seen the brand gain tremendous visibility," says Parijat Chakraborty, Head of Communications Research at IDC India.

Motorola's uptick is largely due to it reaching out to a younger set of consumers between 16 and 24 years old, who-as the company discovered-were the primary decision-makers even when not buying a phone for themselves. "They were influencing the father or the elder brother in the choice of phone," says Narendra Nayak, Country Manager (Handset Division), Motorola India. The strategy now, he says, is to have feature-packed products across all segments and to keep up the thrust on adult youth. "We are also targeting the replacement market aggressively," notes Nayak.

But with newer players crowding the handset market in India, Motorola's high visibility need not necessarily translate into higher sales.

-Sudarshana Banerjee

Cabir Calling
World's first mobile phone virus debuts.

It's a Christmas of sorts for tech geeks and could well be the beginning of dark age for mobile phone users. Kaspersky Labs, a Moscow-based antivirus software company, has announced the birth of the world's first mobile phone virus, Cabir, which does not need a pc to infect. Cabir typically affects high-end phones that use the Symbian operating system (OS), which means several models of Nokia, Motorola, Siemens and Sony Ericsson, among others, run the risk of being infected.

But can a call from your phone spread a virus? Highly unlikely. "Today there is no known, free-spreading mobile malware in commercial mobile networks," says a Nokia statement posted on the company's website. Experts, however, say that it is only a matter of time before programmers adapt the code to damage phones or have them call premium rate numbers or at the least send nuisance text messages. Says Ramyang Pandya, National Sales Manager, BenQ India: "SMS, mms or data services like downloading games or wall paper, even browsing the web, can transmit a (mobile phone) virus."

In June 2000, the first ever mobile phone virus was born in Spain, but it needed a pc to spread. Cabir, however, can spread phone to phone or phone to internet. So, the next time you download a new ringtone, Cabir may just decide to hitch a ride.

-Sudarshana Banerjee

ON THE ROAD DEPARTMENT
Reliance's Other Retail Business
The company's oil-retailing efforts move up a gear.

Highway star: Reliance goes retail all over again; this time it is petrol stations

In the past 12 months reliance Infocomm, the telecom arm of India's largest private sector company, has sold some 7.8 million mobile connections. It seems only apt, then, that parent Reliance Industries favours the former's distinctive blue and green colours and new-age logo to its own when it comes to branding its petro-retailing business. Some of these have opened for business or are in various stages of construction in 20 states across the country; as this article goes to press, 75 Reliance Petroleum outlets are open for business.

By September 30, this year, Reliance would have opened an additional 400 retail outlets, a number that seems insignificant when compared with the 23,000-strong retail network of the state-owned oil companies, the 1,000 new outlets that Indian Oil Corporation plans to put down by March 2005, even the 5,600 outlets for which it (Reliance) has been granted licences. One reason for that could be the company's belief that it can still get its hands on one of the state-owned oil majors, never mind that the ruling United Progressive Alliance government has articulated its intent not to privatise any profit-making public sector companies; Reliance has a better-than-average track record in lobbying governments to change their stance. Another is its low tolerance for pilferage, which, at an average of 3 per cent according to some analysts (given that some 8 million tonnes of petrol and 40 million tonnes of diesel are sold in India every year, that works out to a staggering Rs 3,986.4 crore) is cause for concern for most oil firms. Reliance hopes to combat this through a mix of mechanics-superior locks on tankers and storage tanks-and information technology, a software that will monitor oil stock across outlets and be controlled from corporate HQ in Mumbai.

Reliance's retail presence is evident in the Bareilly region of Uttar Pradesh where 14 of its outlets will be located. There's one at Bilaspur, the fertile agricultural hinterland of the Terai that many reckon is a mini-Punjab. Located at around 220 km from Delhi, on National Highway 87, this outlet will largely cater to the farming community. "Farmers drive in on their tractors and purchase diesel by the barrelful to run farm generator sets that pump water for irrigation," says Roop Khubley, Territory Manager, Reliance Petroleum, explaining the rationale behind the location. Then, there are the 1,000 trucks a day that on an average ride NH 87, the gateway to the mountains of Uttaranchal, not to mention, in summer months, a not insignificant amount of tourist traffic (again, mostly diesel vehicles). India's obsession with diesel-the country drinks 40 million tonnes of it a year, as compared to 8 million tonnes of petrol-fits neatly with Reliance's highway-retail strategy. With state-owned oil firms already occupying prime retail space in the cities, Reliance's approach, admit analysts, may be the best way forward for a new entrant.

Going retail is an imperative for Reliance, which refines 29.6 million tonnes of crude every year. Today, the three state-owned firms market around 4.33 million tonnes of this, with the rest being exported. The absence of a retail presence puts Reliance at a disadvantage, concedes R.B. Sahi, President (Retail), Reliance Group. "First, we lose out on import tariff protection; then, we cannot brand our product or sell it at a premium." And Indian firms are not really competitive in export markets, given that they have to first import crude, refine it, and then export it. That's what makes Bilaspur such an important destination for Reliance.

-Aditya Wali & Ashish Gupta

Is This The End Of The Road For GTB?
Despite the RBI's best efforts, there seem to be no takers for the ailing GTB.

Local trust?: Customers queue up, but suitors are missing

Ten years after it was first set up, Global Trust Bank (GTB) is on the verge of collapse. Even as this Ramesh Gelli-promoted private sector bank makes last-ditch attempts at survival by, among others, offering a strategic stake to Newbridge Capital, a global private equity investor, the Reserve Bank of India (RBI) is said to be weighing various options for the bank. These include merging GTB with a public sector bank or overriding the bank board and transferring its sticky assets to an asset reconstruction company.

For the last two years, GTB has been trying to raise its equity capital, but with little success. Its talks with Development Bank of Singapore for a strategic stake to help recapitalise the bank failed and the bank's net profit for the third quarter ending December 2003 dipped to Rs 1.6 crore as against Rs 8.8 crore for the corresponding period in the previous year. Meanwhile, GTB's cup of woes continues to overflow. The bank's erstwhile promoter Ramesh Gelli (now he is just an investor in the bank) is perceived to be close to former Andhra Pradesh Chief minister Chandrababu Naidu. The change in political equation could make reviving GTB harder still. Add to it the findings from RBI's latest inspection report based on March 31, 2003 results that reveal a gaping Rs 750-crore hole in the balance sheet. The bank is yet to declare its results for the year ending March 2004, as it is grappling with provisioning figures. Sudhakar Gande, Managing Director of GTB, was not available for comment.

The RBI is likely to take a call once GTB finalises its financial accounts for the year ending March 31, 2004. The apex bank has been looking at mergers as one of the ways to strengthen weak banks. Earlier the ailing Nedungadi Bank was merged with Punjab National Bank, and Bank of Baroda picked up Benares State Bank. But this time around, none of the public sector banks seems to be keen on tying the knot with GTB, despite its strong presence in the south. Why? Simply because they feel that GTB would only be a drag on the bottomline. At the same time, GTB is too big for RBI to let it simply collapse. GTB needs a saviour-fast.

-Roshni Jayakar

SNAFU
Honda Hits
A Bump Over Dampers

Honda's City: A smooth ride ruined

The new Honda City might have won acclaim for its futuristic design, but it seems that space-age looks cannot keep the gremlins at bay. In the most significant automobile recall in India in almost a decade, Honda Siel Motors, the manufacturer of the City, has decided to recall over 13,000 cars that were manufactured before April 2004. The last major product recall in India was by Maruti Udyog in 1997 when 9,000 vehicles were recalled due to a potentially defective steering column. Says Neeraj Garg, Assistant General Manager, Honda Siel: "One batch of dampers made by our supplier Munjal Showa was found to be not upto Honda standards. However, we decided to recall all cars manufactured before that batch as a matter of goodwill."

Will the recall hit the sales of the new City, which has sold some 18,000 units since its launch in September last year? Unlikely. Recalls, although rare in India, are a regular occurrence in the developed markets and far from peeving customers actually reinforce their confidence in the automotive brand. Besides, "the way Honda has handled this means that there will be no issues with either the brand or sales", says Hormazd Sorabjee, Editor, Autocar India.

-Kushan Mitra