Showing posts with label India. Show all posts
Showing posts with label India. Show all posts

Monday, January 14, 2013

“Ours is a tough industry”

B&E: You’re celebrating 100 million subscribers. What’s the status quo?

SM: We’re currently in the 15th year of operation and although Airtel has managed to be profitable, we’re yet to be cash flow positive. We recently announced the maiden dividend of the company after 15 years. Our stakeholders were actually looking at waiting for another year for us to turn cash flow positive. However, due to the de-merger of our private company, we had the headroom this year and hence were able to announce a dividend. One has to remember that Airtel has invested Rs.700 billion in setting up hard infrastructure. Infrastructure alone takes Rs.200 billion per year. It should always be remembered that this is a tough industry and one needs to keep on investing. This way, profitability is always measured along with investments.

B&E: What then would be the future growth drivers for Airtel?

SM: Well, we’re hoping that 3G would be available soon, which will lead to better data services. Music-based services are already quite popular and we hope that their popularity will continue to increase in future.

B&E: Are you in the favour of auctioning of the spectrum, or should it be allocated on the basis of subscribers?

SM: Spectrum is an issue that concerns all mobile operators in the country. We’re absolutely aligned to the government process even if it is the auctioning of licenses. All we want is a stable regime with a single process. The practice of allocating licenses on the basis of number of subscribers is not followed anywhere else in the world. We already have the lowest spectrum than anyone else in the world and packing more and more customers is becoming increasingly difficult. We have two of the largest telecom companies of the world in India and they too would endorse this point that as we go further, it would be essential to have more spectrum.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face
IIPM – FLP (Flexi Learning Program)
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Friday, December 07, 2012

RELIANCE RETAIL: RATIONALISATION

Reliance needs to engage with a global partner for its back end

“Reliance Fresh failed because it was too aggressive with its strategies and wanted to capture the entire market without leaving any space for the middlemen and local retailers,” points out a Mumbai-based retail specialist. Reliance had planned to establish its C&C business (which has attracted international big wigs like Walmart, Tesco, Carrefour, Metro AG, et al) in Tier-II cities. However, tough economic conditions demanded conservation of cash reserves, so that business was scrapped.

Winston Churchill had once said, “If you are going through hell, then keep going.” Indeed, Reliance must keep going, but wthout repeating the mistakes of its past. Quite logically, Reliance will have to cut the flab that it developed in such a short amount of time. The company is also mulling over international tie-ups for back-end support. That is a prudent strategy, which has served players like Bharti & Tata well. Outsourcing supply chain management is more cost effective and feasible, especially for a geographically scattered country like India.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles.


 
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Thursday, October 25, 2012

“ We invested before time”

B&E: What factors have worked for you in India?

VT: We have been in the Indian market for 14 years now, and believe that our foresight and belief in the country and commitment to the telecom market, along with work with the government have helped grow the telecom industry. Nokia devices today straddle a comprehensive range of products at every price point for all segments. India is not only its second largest market globally, but is also one of the only three countries, where Nokia has an end-to-end presence, including a manufacturing unit, R&D centres and over 10,000 employees.

B&E: What strategy did you adopt in the initial days to help you penetrate the Indian market?

VT: Nokia had a holistic approach towards developing the market and growing its consumer base. Our strategy has hence been focused on investing before time, understanding different consumer needs, building a strong product portfolio that caters to all segments of the market and making our products and services relevant to the Indian market. We were the first to invest in setting up a robust distribution network, to understand the potential of having an effective after sales network. Today, our reach and scale is amongst the best in consumer durable industry, let alone handset industry. Nokia has 1,90,000 outlets and a retail point for every 20 sq. km and 800+ centers across 400+ cities.

B&E: What, according to you, are the biggest strengths for Nokia India ?

VT: One of our greatest strengths has been our power to localise our products and services. In India we have used our understanding of the Indian consumer to create handsets, applications and services that answer the needs of the consumer and deliver value.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Tuesday, October 16, 2012

Learning to live with Terror

Fighting terror can’t be held ransom to vote bank politics, believes Ranjit Bhushan

The spectre of terror, which has haunted India for a better part of the last three decades – first Punjab and then Kashmir, and then onto mainland India – was never brought out more starkly than it was in November 2008 when the deadly attacks in Mumbai were brought home by live media coverage to a disbelieving Indian public.

The sheer audacity and scale of the slaughter and the impotence of the Indian security mechanisms to put deterrents in place until a lot of damage had been done exposed people to their own vulnerabilities as never before.

Have lessons been learnt? More importantly, is there a bipartisan approach on terror attacks? By the looks of it, some more time would pass before such a consensus emerges. While leader of opposition, L. K. Advani, and Prime Minister, Manmohan Singh, have traded charges on whose government is more prone to terror attacks – UPA 2004 to 2009 or NDA 1999 to 2004 – it would be safe to say that the Mumbai attacks remain UPA’s Kandhar. There may have been no shameful ministerial escorts for hardened killers as in Kandhar, but the shifting of IPL, which had the potential to be a sporting brand as big as Wimbledon, on grounds that India was unsafe for hosting such events, falls in the same category of ‘crawling when asked to bend’. In other words, there is now no difference between India, Pakistan and Afghanistan.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Friday, October 05, 2012

The Road to Perdition!

Heavy Inflows of FII Money, Falling Exports due to Rising Rupee, And Widening Current Account Deficit! India is now walking on the same lane that Once Brought in the Asian Financial Crisis in 1997.

In July 1997 the South East Asian stock markets, especially South Korea, Malaysia, Thailand and Philippines, which till then were on rampage, not only came to a screeching halt, but also entered into a prolonged phase of nightmare – better known as the Asian financial crisis. Foreign Institutional Investors (FIIs), which poured in a whopping $19.1 billion into the countries’ markets in 1996 and drove these markets to record highs, flew away overnight ruining the countries’ stock markets and economic stability. So much so that while the Thai stock market lost 75% of its value, the PSE Composite in Philippines fell by around 66%.

The scenario was more or less the same in January 2008, when the Indian benchmark index Sensex after scaling a historic high of 21,206 on January 10, dwindled down to 15,322 by January 22. This time the same FIIs, who from January 1 till January 16 had infused Rs.30.59 billion into the Indian stock markets, pulled out a nerve-wracking Rs.44.65 billion in just two days, January 17 and 18. And now, the Indian stock market has again become the purple cow for the FII group. As per the Securities and Exchange Board of India (SEBI), net investments made by FIIs in the country’s equity markets has already gone past a mind-boggling Rs.1 trillion ($22 billion), pushing the market to the 21,000 level. What is most noticeable here is the way the FIIs have got hold of the nerve of the Indian market since the beginning of September 2010. Since then, while they have infused $17.3 billion, the Sensex has soared 16.5%. While industry mouthpieces like C. B. Bhave, Chairman SEBI, might not be overly worried about the situation, what cannot be ignored is the fact that while in 1996-97, India was fairly insulated from the global economy and even FII hot money vagaries, the situation is quite different currently. While the reasons for the sudden fall in the stock markets might be quite clear to industry players, a majority of global investors would fail to undertake a deeper analysis and could arbitrarily decrease the sovereign ratings for the nation – resulting in much collateral damage, international loan interest rates inclusive.

In fact, due to the increasing inflow of external capital and surging demand for the rupee, value of the domestic currency has risen sharply in terms of real effective exchange rate hurting the country’s exports. As for records, the rupee, which was trading at 47.08 against the greenback on August 31, surged almost 6% to 44.26 (as on November 8) on the back of heavy buying by the FIIs. Moreover, the strengthening of the rupee has allowed imports to surge 35.7% y-o-y in the second quarter as against a 21.7% y-o-y decline last year, pushing India’s trade deficit to rise by 33.5% to $34.2 billion in Q2FY’10 from $25.6 billion in the same quarter last fiscal. Though the exporters are now lobbying with the central bank to put a check on the rate hikes to somehow protect their competitiveness (a drop in the interest rate can put a pause to the capital inflow by reducing the difference between the prevailing near zero interest rates of the developed countries and the high interest rate of India), the Reserve Bank itself is in a helpless situation in its fight against inflation.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, August 11, 2012

“Better paid regulators will help ensure a safe food supply”

Elucidating the top three challenges faced by the Food Processing sector in India...

India is a nation of sharp contrasts - one of a burgeoning high tech industry but also where there is still no running water and electricity in some parts of the country. This was one of the points that was emphasized by the speakers, including the author, at an Institute of Food Technologists (IFT) sponsored short course last June entitled “Capitalizing on India’s Global Competitiveness and Robust Agri-Food Sector.” .

When it comes to food processing, the food processing industry suffers from many of the problems facing smaller and less developed nations. These issues range from poor hygiene, including water quality, food quality, safety and sanitation programs that would not meet the minimum requirements of the European Union, United States or major purchasers of foods or ingredients, regulators who do not understand these same requirements, and educational systems that teach old and out-dated systems and focus more on rote memory than actual understanding of the complex interrelationships of foods, processes and quality systems. Perhaps the greatest challenges facing developing nations, India included, are government, transportation and the lack of an integrated agri-business sector. Let’s look first at government.

The governments must do two things; ensure that their employees, especially inspectors and field people receive a living wage and must establish a code of ethics for their regulatory agencies. The latter action sets the precedence that government regulators, inspectors or high level officials understand that acceptance of graft or gifts are illegal and subject to punishment. This will be a difficult leap since the giving of gifts is normal in Asia, Africa and many of the developing nations. Better paid officials who are operating strictly as regulators will help top ensure a safe food supply. Transportation is another big issue in developing nations. India understands this and is in the process of creating a national highway system that will link the major cities especially ports.


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