IT Minister Maran: Ringing in change

One India might yet become a reality. Union it and Communications Minister Dayanidhi Maran's proposal for a single tariff plan for calls made from and to anywhere in the country is finding takers in the telecom industry. Idea Cellular subscribers in Delhi can call any GSM number in the country at 99 paise a minute. And Hutch India is allowing its Mumbai subscribers to call any other Hutch subscriber anywhere in the country for Rs 1. (This service comes at an additional monthly rental of Rs 25). This means the line between local calls and NLD (national long distance) services is getting blurred, at least partially.

In the four years since the government stripped Bharat Sanchar Nigam Ltd off its monopoly over NLD, three telcos-Bharti Tele-Ventures, Reliance Infocomm and VSNL-have acquired NLD licences, and also invested heavily in the NLD backbone. Operators like Hutch and Idea-which have just announced 67 per cent cuts in STD rates-route their NLD calls through one of these operators. This is in sharp contrast to the US, where there are over 100 NLD operators, or Europe, where each country has over 10 NLD licencees, says T.V. Ramachandran, Director General, Cellular Operators Association of India.

A policy decision on One India-which will set the new roadmap for the NLD services-is awaited. "If the One India plan is implemented, we may see NLD's share in overall cellular usage jump to 30-40 per cent from the current 20 per cent levels," says Ramachandran. "But the industry can't price local and STD calls at the same level," he adds. With cellular tariffs one of the lowest in the world, it is held that the intra-circle call rates (local calls) should be maintained at the current levels. "The objective of One India can still be achieved by replacing four distance-based STD tariff slabs with one single flat rate for all inter-circle STD calls," he says.

The final word on the One India plan is not yet out. The industry is hoping the new draft Telecom Policy, due early next month, will throw some light on the matter.

-Kumarkaushalam

TAX
The Great Divide

CM's conclave: VAT and watch

Value added tax is a hot potato. As many as five of the 12 chief ministers present at the Third India Today Chief Ministers Conclave, held in the Capital on August 5, remain opposed to it. UP Chief Minister Mulayam Singh Yadav dubs it "regressive"; his counterpart in Rajasthan, Vasundhara Raje Scindia, feels VAT takes away a state's power to grant tax exemptions on various items; and even pro-reforms Gujarat Chief Minister Narendra Modi says: "It is not enough to see whether there has been a jump in tax collections; its impact on consumers, traders and others is more important." Chhattisgarh Chief Minister Raman Singh and his opposite number in Uttaranchal, N.D. Tiwari, also backed these arguments. The Chief Ministers of Delhi and Punjab, Sheila Dixit and Capt Amarinder Singh, respectively, defended VAT valiantly, but their arguments-better compliance and the impressive growth in tax collections-fell on deaf ears. VAT, it seems, can take a walk.

-Ashish Gupta

Q&A
"We Are The Dell Of The Consulting Industry"

"We have the pure model of the future. We are as pure as you get"

In 2004, Infosys Technologies announced the creation of a subsidiary, Infosys Consulting Inc. headed by Stephen R. Pratt, a former senior partner at Deloitte Consulting. A year later, in 2005, the company announced that Infosys Consulting had registered losses of Rs 33.03 crore in 2004-05; that it would turn around in 2005-06; and that it was investing $20 million (Rs 88 crore) and hiring 500 more consultants by March 2007 (it said this would create 2,000 jobs downstream at Infosys Technologies). Pratt was in India at the time and spoke to BT. Excerpts:

It wasn't so much buying into Infosys as it was buying into India, right? At some point you must have said, 'Why am I not doing this'.

There actually was an epiphany. We were doing this project and we had about 200 people, all in cubicles on the client's site. It was costing the client over $100 million (Rs 440 crore). The company was going through a lot of trouble and I was working with the CFO to save costs, and one of the biggest items was us. We said, "What's the best way to optimise this". We thought about it and decided moving work to India was the way to do it. We tried it and it was wonderful. I said, "That's the future".

This was in 2001?

2002, I think. And one thing led to another and I got hold of Infosys.

Was there some consternation in your peer circle when you decided to make the move?

Certainly people were upset. I think people were also beginning to get the idea that the future was combining consulting with the delivery of technology. I like to think-over the years, I had started lots of practices (in consulting) that turned out to be the next big thing-that when I left, people said, 'Maybe, this Infosys is for real'. And certainly when we were able to recruit Raj Joshi, CEO, Deloitte Offshore, and Paul Cole, Leader, Cap Gemini, Global Operations, and Romil Bahl, Global Leader, EDs Consulting, and Ming Tsai, Global Leader, Retail Practice, IBM, then a lot of people said, 'Boy, there is something going on here'.

Why is it that we have seen very little advertising for Infosys Consulting? You open any serious international magazine, and there is Accenture.

I think the best brand in our industry is McKinsey and McKinsey doesn't advertise. We do recruiting advertising in Consulting magazine. For branding within the client community, we do smaller forums, but it is more idea driven than just saying, 'Go, be a tiger.'

We met a senior Accenture executive some time ago and he was very clear that the two of you operate in very different markets. Would you like to comment on that?

Accenture is trying to compete in Infosys' traditional market-where the client says 'Go, build this technology for me'-and we are competing in their home market, which is 'Go, solve this business problem for me.' What we are now trying to do is to use the technology delivery capability of Infosys to enter the second market. We hope they keep thinking that we are not in their market.

It seems very evident that Accenture and IBM have a front-end and are trying to build delivery capabilities in India, while Infosys is doing things the other way. Who is better off?

We are. I just left that world to be here. We have the 'pure' model of the future, consulting with no one on site who does technology and then having globally distributed technology (delivery). We are as pure as you get. We are the Dell of the consulting industry. We have a very lean supply chain of consulting talent.

The Cricket Fever Cools?
Advertising rates for the recently-concluded Indian Oil Cup Series were abysmal. Sign of things to come?

Bowled out: The lack of hi-profile players kept advertisers away

Cricket ad rates, which had gone through the roof to touch Rs 5,00,000 per 10 seconds during the 2004 India-Pak series, have crashed by over 600 per cent. According to sources in top media-buying houses,10-seconders for the recently-concluded Indian Oil Cup have been bought for as little as Rs 50,000. Advertising rates, according to industry watchers, are a factor of viewership, and cricket's TRPs have been dismal in the recent past. Even the India-Pak series, which concluded in April this year, failed to enthuse fans. "Viewership and ad rates mainly depend on the profile of the series and the stars playing in it. It's not only a lacklustre series this time, the stars are also missing. Hence, the dips," says Sunder Raman, gm, Mindshare. So, are advertisers beginning to abandon cricket? Hardly. "No other property on TV gives a targeted access to male audience. Cricket is the only event that cuts across age, income groups and geographies," says Atul Sobti, VP (Sales and Marketing), Hero Honda. A love affair by default, then.

-Archna Shukla

GLIMMER
The Valley Is Hot Again

Placid waters: And boats with a view

Something interesting is going on in Kashmir. Domestic tourists are returning to the Valley in droves. First half of this year, close to 200,000 tourists visited Kashmir-double of last year's numbers in the same period, and the highest since the start of insurgency in the state in the late-80s. What explains the surge? "I think domestic tourists have become slightly immune to the insurgency," reckons Sanjay Saxena of Delhi-based travel agency, Travelease. "Besides, a houseboat on Dal Lake still counts among one of the best holiday options." Apparently, a night for two on such a houseboat costs Rs 3,000 (with meals thrown in), but Saxena says rates seem set to go up. For the embattled Kashmiris, booming tourism may do what two decades of political handouts haven't.

-Kushan Mitra