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APRIL 8, 2007
 Cover Story
 BT Special
 Back of the Book

Mobile Security
Today, it is all about information and how the right information is sent to the right people at the right time and right place. Uncertainty about how to secure mobile phones in the face of increasing threats is slowing individual adoption of mobile applications. There are many facets of mobile security, including network intrusion, mobile viruses, spam and mobile phishing. Analysts expect big telecom companies to develop security solutions on various security platforms.

Rough Ride
These are competitive times for the Indian aviation industry. As salaries zoom, players are scrambling to find profits. Even the state-owned Indian is now seeking young airhostesses to take on the competition. It is planning to introduce a voluntary retirement scheme for airhostesses above 40 years. On an average, they draw a salary of Rs 5 lakh a year. The salaries of pilots, too, are soaring. According to industry estimates, the country needs over 3,000 pilots over the next five years.
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Business Today,  March 25, 2007

Goodbye, Dalal Street
The Essar group is delisting its companies.
At a time when promoters are falling over each other (well, almost) to get listed on the stock exchanges, one business conglomerate is bucking the trend by delisting its shares. The Ruias of the Essar Group have informed the exchanges that they will be delisting their three listed companies, Essar Oil, Essar Steel and Essar Shipping. At a time when the Indian stock markets appear set for a long term secular rally (short-term bursts of volatility notwithstanding), the Ruias, it would seem, are losing an opportunity to create market wealth. However, the group has an explanation. Says Manish Kedia, VP (Corporate Affairs) for the group: "Delisting will give more flexibility in operation and management. Secondly, with the promoters holding more than 85 per cent in Essar Oil and Essar Steel, there is no meaning in them being listed."

Industry analysts are less charitable. As one points out, being listed means one has to comply with regulations. For instance, at least half of a company's board has to be made up of independent directors. For a group with such a high shareholding, this norm may be a bit difficult to digest. What's more, all three companies' prospects are bright, as they can ride a booming economy. Says Harsh Khandelwal, AVP (Corporate Development & Strategy), yes Bank: "The group may want to keep the wealth with itself rather than distribute it among shareholders." However, shareholders may still have one last card up their sleeve-they might just not sell if they consider the exit price bland.

Talking Shop
Mobile retailing is a Rs 75,000 crore opportunity.

If you can't make mobile phones or provide cellular services in the world's fastest growing telecom market, do the next best thing: Sell handsets and airtime via a chain of stores nationwide. There's good reason to do so. The mobile retailing industry is worth Rs 75,000 crore, and is growing at a little over 20 per cent annually. However, most consumers are accustomed to buying their phones, airtime, ring tones, wallpapers etc., from their not-always-friendly neighbourhood shop, which typically stocks as many as 20 brands, and which also serves as a convenient stopover for exchange or repair. If customers have preferred this option, it's because of the paucity of specialty stores-stores that linked across the country by one brand and a single standard of service. Of late, though, a number of players-ranging from unknown promoters in smaller towns to sister companies of service providers to established multi-format retailers-have sniffed out the opportunity in mobile retailing.

Consider, for instance, Mobile Magic, launched in 2004, based in Nagpur, and focussing on smaller towns. The company is present in four states (Maharashtra, Madhya Pradesh, Chhattisgarh and Gujarat), and is opening five new stores each month. On one fine day in May, Mobile Magic plans to create a big bang of sorts by launching 100 stores across the country, simultaneously. "Our emphasis will be in tier-II, -III and -IV towns. We will also be present in metros but just for representative value. We want to have evenly distributed network of franchisees across India with 350 stores by 2007-end and 3,500 by 2010," says Vivek Palod, one of Mobile Magic's founding partners. Mobile Magic has an in-house training centre in Nagpur, dubbed MMIT (Mobile Magic Institute of Technology), where engineers are trained to offer service; a testing facility for manufacturers/operators to test their products before launch is also available. These engineers will be absorbed by Mobile Magic in their showrooms across the country.

Rumi Juneja and Vijay, two former Motorola managers, staked out the organised retail industry across many countries before coming up with the Mobilnxt chain of stores, which has received $1 million (Rs 4.4 crore) from a few HNIS and VC firms. "Internationally, technology product retailing has moved towards value-added customer support services," says Romi Juneja, co-founder, Mobilnxt, which is based out of Bangalore. Mobilnxt already has 22 stores with an average area of 300 sq. ft in nine tier-I and tier-II cities, and will set up another 150 this year.

The organised retailers have their own plans. Subhiksha is putting up stores in small towns (for new subscribers) as well as the metros (for the replacement market). Says Managing Director R. Subramanian: "South, North and West-these were the focus areas for us for our supermarkets business, and we are following the same logic across the country for the mobile market too." RPG's Cellucom, which has just one standalone store currently (14 with its hypermarkets), is targeting 400 stores by the year-end. "The stores are still at an 'evolving stage'. In the coming few days, there will be more brands retailed as well as a range of accessories and spare parts will be added to the stock," says Sanjiv Goenka, Vice Chairman, RPG Enterprises. Meantime, Essar Telecom Retail has also launched multiple formats for its mobile retail venture, The MobileStore. Classified into large, medium, compact and shop-in-shops, the MobileStore has categorised its mobile device offerings into four key consumer segments: business, lifestyle, fun and value. Essar, which says it will invest $250 million (Rs 1,100 crore) in the venture for the next two years, is opening two stores daily, starting with the metros.

Then there's Spice Telecom's retail venture, HotSpot, which like Mobile Magic, has its own training academy. HotSpot, which is present in Delhi and the NCR, currently has 50 outlets, and is aiming for 450 by the year-end. "Starting from April, we will be opening at least one shop daily," says Sanjeev Mahajan, CEO, HotSpot. Apart from the existing brands in India, HotSpot also retails its own brand of mobile phones. The company recently launched its sub-Rs 1,000 handsets.

Mobile Magic, Mobilnxt, MobileStore...they all sound like clones of each other. But Palod of Mobile Magic insists that marketing and sales activities will determine the difference. "We bundle our product with freebies like Free SIM cards, sunglasses, travel bags, free airtime etc. We also give added features like Spycall or Blackballer preloaded. No other retailer offers this," he explains. Of course, these chains will also have to contend with the stores of the manufacturers themselves-Nokia's Concept stores and Motorola's motostore, with a team of motoexperts in tow. The neighbourhood SIM card peddler never had it so bad.

One House, One Face
Publicis flags off the India Media Exchange.

After equities and commodities, it's time for a media exchange, although this one offers little opportunity for common punters to trade and make (or lose) a fortune.

Global advertising giant Publicis Group Media (PGM) has unveiled an India Media Exchange by bringing together the media-buying functions of two PGM-owned media houses in India, Zenith Optimedia and Starcom MediaVest Group. Initially, all traditional media-buying for both houses will be done by IMX. As Jack Klues, Chairman, PGM, who was in Mumbai to launch IMX, puts it: "There will be a time when other media forms will fall under IMX, but everyone believes that traditional media is the proper starting place."

Klues is quick to point out that IMX will never trump or supersede the two brands, but simply service them. He goes on to explain: "Let's be honest, IMX has been built in this market to improve the overall visibility of Zenith Optimedia and Starcom MediaVest, and the clients they represent. The IMX structure improves our visibility to media owners amidst bigger competitors (like GroupM) out there." So is this an attempt to take on GroupM, WPP's media-buying agency, which is the largest in India? "GroupM and PGM are, to some degree, parallel organisations. The difference is that GroupM can behave like an operational brand; it publicly pursues or services clients as a collective. PGM will not," points out Klues, adding that IMX is not a visible or an operating brand (which GroupM is).

To be sure, IMX is the second agency of its kind in the world from the PGM stable. It has already commenced the CMX (the China Media Exchange), and Klues doesn't rule out other such PGM exchanges in other countries.