Eclat The Economic Vista

THE EDITOR’S NOTE

It gives us immense pleasure to bring to our readers Eclat-The Economic Vista , previously known as E-Review, in a new avatar.

In this issue the spotlight is on the telecom sector. Tele-communications has proved to be indispensable for India’s socio-economic development by connecting Indians far and wide in a cost effective fashion. From being a luxury twenty five years back, to becoming a necessity for every Indian , broadband and mobile have come a long way.

Your feedback and comments are extremely important to us. You may mail them to us at éclat@mbe-du.org. We shall publish them under the section “Letters To The Editor” from the next edition onwards.

-The Eclat Team

EclatThe Economic Vista

Issue#4

contents

{ Eyeing Telecom }

by Parag Dubey, Vinit Singh and Deepti Dabral

Telecom Sector In India UMMER OF 1985

It was in 1980s that the telecom

industry got a new lease of life when Mr.

Sam Pitroda increased awareness about the potential

of telecom & its role in democratization, connectivity

and decentralization.

TThe telecom sector was heavily regulated by the gov-

ernment initially and it was only in 1985 that talks first

began to allow the entry of private participants into it.

As a result, the industry was deregulated in 1992

marking the beginning of the telecom revolution in

India.

Subsequently, Telecom Regulatory Authority of India

(TRAI) was established in 1997 to supervise the opera-

tions of the private players in this sector. 2004.. The

scope of the telecom industry has been expanding

ever since and broadcasting & cable servicesexpand-

ing ever since. The broadcasting & cable services have

been brought under the ambit of telecommunications

as directed by the Central Government in 2004.

From ‘PIYA GAYE RAN-GOON’ days to ‘WHAT IS YOUR MOBILE NO’ era

The telecom industry has witnessed phenomenal

growth over the years and has penetrated the

Indian market far and wide.This is evident from

the fact that the teledensity has risen from 0.5%

in 1989 to 56.83% in 2010.

TThe market initially saw the duopoly of MTNL

and BSNL, but post liberalization there are as

many as 15 operators fighting in each of the 22

circles

S

{ Eyeing Telecom }

). The magnitude of competition has risen so much that

the ARPU (average revenue per user) which stood at

500 per month in 1995 has fallen to . 145 per

month in 2010. Competition has led to frequent price

wars between the major players, which has directly

benefited the consumer segment in the form of reduc-

tion of average call rates from 16.80 per minute to

0.5 per 0.5 per minute in a span of 15 years.

WHAT’S NEW

There has been an astounding growth of 8882% in the

number of wireless subscribers from 2002-2010 re-

flecting a change n consumer preference from wired

to wireless networks (refer to Exhibit 2).

Technology upgradation helps the service

providers to remain competent by improving

upon richness of customer experience

ihe telecom industry in India, which was dominated

largely by CDMA and GSM technologies, is coming

of age now with the advent of 3G technology. The

recently completed 3G and broadband wireless

spectrum auctions enabled the government to earn

around 70000 crores which was almost double of

its expectations.

And also the utilization of the available

bandwidth, reducing cost per megabit and

increasing average revenue per user for the

operator. TThe telecom sector over the years

has incorporated many value added ser-

vices (VAS) like mobile TV, downloading

songs & applications, m-commerce. This seg-

ment presently accounts for 10-12 % of the

telecom operator’s revenue and is bound to

get a further boost with the ingress of 3G

services.

TELECOM NOT ALONE

Its contribution to the GDP in the year 2009

has been 1.5% bearing testimony to the fact

that Indian telecom industry is one of the fast-

est growing telecom markets in the world.

The ceiling on FDI in this sector was raised from

26% to 74% in the year 2005. Friendly FDI poli-

cies and the large untapped potential have

led to a surge in FDI to 108.11 billion in

2009-10. By 2012, this sector is expected to

provide employment to over 10 million people

in the country. It is interesting to note that the

teletelecom industry is eating into the business of

other industries like music, camera and avia-

tion.

{ Eyeing Telecom }

The ceiling on FDI in this sector was raised from 26% to

74% in the year 2005. Friendly FDI policies and the

large untapped potential have led to a surge in FDI to

108.11 billion in 2009-10. By 2012, this sector is ex-

pected to provide employment to over 10 million

people in the country. It is interesting to note that the

telecom industry is eating into the business of other in-

dustries like music, camera and aviation. Some promi-

nent instances are Airtel selling more music than the

music companies, Nokia selling more cameras than

Sony or Nikon and teleconferencing eliminating the

need for air travel.

Also, to achieve inclusive growth, the collaboration be-

tween banking and telecom sector is crucial. Banks

must capitalize on the extensive reach of telecom com-

panies across India to further the cause of financial in-

clusion.

THE SHOW MUST GO ON…TThe telecommunications industry is not free

from challenges, the most predominant

being keeping it updated with the latest

technology. India is lagging behind Japan

by a decade as far as introduction of new

technology is concerned. Presently, the

telecom industry has huge scope for ex-

pansion lpansion l

and it would continue to be a vital

element in integrating the popu-

lace at large and thereby contrib-

uting in nation building.

“ ”Its contribution to the GDP in the year 2009 has been 1.5% bearing testimony to the fact that Indian telecom in-dustry is one of the fastest growing telecom markets in the world.

Vodafone developed into a strong brand with its di-

verse product line and services. Its portfolio of value

added services include tunes and downloads, enter-

tainment, news and updates, sports, call manage-

ment, astrology, finance, travel, messaging, and dial

in services. Apart from prepaid and postpaid cards it

also provides long distance services, such as voice

services, world calling cards, and home calling cards.

Additionally, it provides bonus cards that offer unlim-

ited mobile Internet browsing for pre-paid customers.

For corporate customers it has business solutions,

such as mail on the move, data access, and business

applications.

{ Brand Focus }

What they have to offer?V odafone Essar Limited - a subsidiary of Voda fone International Holdings B.V , is one of

the major players in the telecom sector of India. For-

merly known as Hutchison Essar , its operations start-

ed in India in 1994 and changed its name to Voda-

fone Essar Limited in March 2007. Branded as

Vodafone , 67% of it is owned by Vodafone and 33%

by the Essar Group.

Vodafone is the second largest telecom operator of

India in terms of revenue, second only to Bharti Airtel.

It is the third largest in terms of market share behind

Airtel and Reliance communications. Based in

Mumbai, it covers 23 circles in India. Its marketing

strategy is mainly concerned with advertising which

is also its greatest strength.

by Pallavi and Pavan Kunchala

Vodafone also offers very affordable “Magic

box Handset”, starting at price as low as Rs

859. Keeping up with fast 3G wireless tech-

nology it has also introduced iPhone 3G and

iPhone3GS. Its strategic alliances with Apple

and Blackberry have been a success. Target-

ing the youth and students, it has launched

many offers and plans.

Painting the town red with Vodafone !

In 2007, Hutch became Vodafone in one of the big-

gest brand transition exercises in recent times. In

these three years, it came up with a series of ad-

vertisements with no consistent target audience.

They started with an ad featuring a pug with the

tag “where ever you go, our network follows”,

showing its network expansion. This was replaced

by 'Happy to Help' Ad, where Vodafone veered to-

wards warmth and emotions. Next, it came up with

‘Chota recharge’ commercials. It brought in Irfan

khan highlighting their economical plans for the ‘the

common man’.

In April 2009, it launched an innovative advertising

campaign that caught the imagination of both the

public and the advertising experts by introducing

new characters called the Zoozoos. The campaign

focused on the different value added services (VAS)

offered by the company. It created separate ads for

each service. They kept updating their strategies

with thewith their strong market research.

The Zoozoos and their ads became really popu-

lar soon after they were aired on television. A

total of 30 different TVCs including Cricket

Alerts, Beauty Alerts, Phone Backup, Chhota

Credit, Vodafone Maps, Vodafone Call Filter,

Live Games, Musical Greetings, etc. were aired.

For Vodafone, the target audience is youth. They

ccreated the necessary buzz both in traditional

as well as in social networking sites like Face-

book, Twitter and video sharing website, You-

Tube. They came up with exciting ideas and

launched an innovative competition ‘Complete

the Zoozoo story’. It also launched Zoozoo

Merchandise in collaboration with Shoppers

Stop.

In April 2009, ZOOZOOS cam-paign was launched, whcih changed the bmarketing land-scape and was a huge success!

“

”In April 2009, ZOOZOOS cam-paign was launched, whcih changed the bmarketing land-scape and was a huge success!

{ Brand Focus }

{ Brand Focus }

Activities related to Brand Building

The company used almost all media channels

to advertise its services. It not only advertised

on television, but also in newspapers, the

radio, and on hoardings across the country. It

introduced Innovative Distributors to reach

the customer through Exclusive Shops, Hub

and Spoke and Associate distributors. Sev-

eeral advertisements in which the Zoozoos

featured were shown on television during the

Indian Premier League (IPL) Season 2..

In May 2009, with limited network coverage con-

fined to urban and semi urban areas, Vodafone

made their footing in rural markets by providing net-

work coverage and special offers like ‘Gappa

Goshti’. They also worked on tapping the telecom

market with their exclusive handsets.In July 2010,

with the launch of VF 247 solar powered phone

they introduced the latest generation eco-friendly

solar charging handsets in India.

Brand Recognition

The zoozoo concept has immediately connect-

ed with the audiences, but the downside is

that the characters are bigger than the story

being sold. People have a limited capacity to

remember features, Hence, a strategy of re-

leasing the ads in a phased manner, rather

than hammering them out one after the other,

would have worked better. Some analysts are

doubtful about whether the ads have attract-

ed people living in the semi-urban and rural

areas of India. However, with the ever evolving

strategies and the recent success in 3G auc-

tions, Vodafone proved itself as one of the

strongest and fastest evolving brands.

With most of the villages not connected over

mobile networks, there exists a huge potential

to expand operations to over 6 lakh villages.

Vodafone Essar Limited has received many

awards over the years such as the Best Mobile

Service in India, Most Effective and Most Cre-

ative Advertiser of the Year and Most Re-

spected Telecom Company. Vodafone

changed the perception of the people that

strong valued brands are the brands with

strong heritage.

MARKETWATCH

he month of August witnessed a war between

the Bull and the Bear to dominate the markets,

creating an environment of volatility. The bench-

mark index closed at 17,971 which was 102 points

up as compared to the opening day of the month. It

has risen 4% in 2010, with foreign funds pumping in

$11.3 billion in Indian equities. So far in the year, the

benchmark index has outperformed broader indexes

such as MSCI’s measure of Asian markets other than

Japan and emeJapan and emerging markets index which have

dropped 3.2% and 1.3%, respectively. The Indian

Markets, however, showed resilience to downside

and resistance to upside.

The world economy, sending jitters as a surprise,

have shaken the trend but not much to worry about,

seems the environment, the chances of a spectacular

crash seem remote, as are the chances of a gung-ho

bull charge.

It has been an end to end movement on the in-

dices in a narrow range making people skeptical

to show any conviction. Last week of August saw

NIFTY fall close to 2% over the week and close

at levels close to 5400. VIX for the month of

August had been around 17% due to lower vola-

tility on the NIFTY.

The month showed a lot of developments in the

corporate basket. Billionaire Anil Aggarwal pro-

moted Vedanta Resource’s offer, to buyout Cairn

Energy plc a London based company held

Indian arm Cairn India for $9.6 billion (44,800

crore INR) surprised the markets as the Indian

billionaire’s decision to explore the dominance of

BusBusiness tycoon Mukesh Ambani.

Stock of Cairn Energy boosted as declarations

on open offer and payment of non competence

fee of (INR 50/-) extra to minority and majority

shareholders, with Reliance behaving neutral.

by Rishabh Sonthalia

{ Market W

atch }

T

The global cues are positive. Although there was specter of sovereign debt crisis in Europe, the growth in UK has been revised upwards to 1.7 % which is fastest since 2001.

IIndian growth is broadening its scope and inflation-ary pressures are easing. Going by the numbers, our economy grew @ 8.7 % in June quarter, its stron-gest pace since December 2007. The fundamentals are strong and indications are of robust growth with the FIIs expected to pour huge money in the month ahead. However, the flow of money in the secondary market may seal primary markets. Looking forward to a fresh month of September, which will kick off the corporate rain of the second quarter results, the markets are expected to be range bound.

Indian growth is broadening its scope and inflationary pressures are easing. Going by the numbers, economy grew @ 8.7 % in June quarter, its strongest pace since December 2007.

“

”Indian growth is broadening its scope and inflationary pressures are easing. Going by the numbers, economy grew @ 8.7 % in June quarter, its strongest pace since December 2007.

In another development, the Centre refused permission to Vedanta Resources to mine baux-ite from Orissa’s Niyamgiri hills for its alumina re-finery. This decision hammered stocks of both the Indian as well as London Companies. Ster-lite Industries was rammed by 4% and Hindustan Zinc slipped to 3.85% in India and Vedanta Rsources Plc was down 8%.

IPOs remain the flavor of the month as listing fireworks have now become a custom for the investors. SKS microfinance and Bajaj corp made a stellar listing with gains of above 15% on the indices, and many filing their DRHP with SEBI to add large to the party.

{ Market Watch }

{ News Bytes }

NEWS

News and events in and around the globe

by Rakesh Airan and Varun Bansal

Constantly surrounded by controversies, the Pakistan

cricket team is once again, up against something that

can put a halt to the future of many Pakistani cricketers

and can bring disgrace to their entire nation. This time,

many players, allegedly, have been accepting cash

for throwing no-balls.

AA middleman named Mazhan Majeed has mentioned

seven Pakistani players’ role in the latest betting scan-

dal. These seven include the likes of Salman Butt, the

captain, Mohammad Amir, a young lethal pace bowler

and Kamran Akmal, the batsman-wicketkeeper.

Though none of the players have been arrested so far,

but investigations are on and the mobile phones of

some some of the players have been confiscated.

Pakistan did it again!

The Pakistani Prime Minister has said that the

matter has brought shame to their nation and

has asked for strict action to be taken against

the culprits.

CCricket is a gentleman’s game and the very

foundation of the game is based on fair-play,

and the regularity with which such incidents

happen call for stricter action from the authori-

ties, to clean up the game.

The Silly PointThe Suraj Randiv - Virender Sehwag incident

makes people question the rules of the gam.

TThe recent incident of Suraj Randiv bowling a

deliberate no-ball will be remembered by the

followers of the game for a long time to

come. The controversy has raised several fin-

gers on the rules laid down for such unusual

circumstances.

Bytes

{ News Bytes }

In a case where a run is needed to win the

match and if a wide or a no-ball is bowled, the

match is deemed to be over irrespective of

whether the batsman scores any run off that ball

or not. Such rules sometimes make the game

look silly. Why should a batsman be denied of

runs that he scores off his bat even if it was a

no-bano-ball and only a run was required to finish the

match? Cricketing gurus profess that the rules

have been designed keeping in mind the inter-

est of the game and not the milestones of indi-

vidual batsman.

Consequently, what follows is that Randiv did

not do anything that was illegal.

International Mobile Equipment Identity (IMEI) numbers

Mobile operators store these numbers in Equipment

Identity Register (EIR). Hence, if a handset is stolen,

and its owner can provide the IMEI number to his

operator, all calls from the device can be barred.

The telecom department had asked all telcos to in-

stall EIR so that calls without IMEI or with invalid

identification numbers are not processed. The tele-

com department of India plans to take legal action

against all mobile phone companies for failure to

cut services to customers who use handsets which

do not have a unique identification number.

This comes after a recent check by the telecom de-

partment which revealed that no mobile phone

company had complied completely with the

government’s 2009 directive, mandating all telcos

to block calls to and from handsets that did not

have IMEI numbers.

It is estimated that a significant majority of these

handsets are cheap imports from China.

It’s time for Indian IT services majors to start innovating“East is East; West is West and never the twain

shall meet”, Rudyard Kipling said this when the

world was clearly divided into two halves. But if

Rudyard Kipling were to be present today then

maybe his words would be, “East is West; West is

East and they have to meet”. Because this is the

era of globalization where “go local” is the

mantmantra and I am sure that even Kipling would

have agreed. Today, globalization is so evident in

every walk of our lives that we don’t even stop to

notice it. Why else do you think that we get a

McAloo Tikki burger at the Mc Donald’s store

Are you carrying a Chinese Mobile Phone? IMEI

number is a 15-digit code that reflects on the

operator’s network whenever a call is made or

received from any handset and therefore allows

lawful interception of all calls.

However, in India, where cricket is a religion and

cricketers are worshipped, people are not ready to

forget the incident easily and even the media has

taken firm steps to criticize the incident and ensure

that the Sri Lankan management does not sleep

over the issue. Randiv was given a match ban and

was fined an amount equaling the entire match fee.

ItIt still remains to be seen what happens the next

time when Sehwag and Randiv confront each other

with the bat and the ball!

{ News Bytes }

around the corner which is otherwise a US fast food

giant! If McDonald’s and the likes were to take Kipling

seriously today then an Indian wouldn’t have tasted a

burger sitting in India, leave aside a localized flavour of

burger.

McDonalds’s wouldn’t be McDonald’s if it

didn’t retain its emphasis on quality at low

price segment. So even when the call is to

adopt or adapt, the mantra to success also

remains in upholding what is integral to one’s

own identity.

MaMany experts say that the opportunities

emerging in the US after the recession will

be immense and both American and non-

American companies will get to share those

opportunities. Indian companies will have to

co-exist with a new breed of US After all, US

on shoring could even become the peg that

is required to survive in a world where off

shoring starts losing its shine and the advan-

tages of costs are taken away.

Indian companies have been expanding their local presence in the US in various sectors such as consulting, project man-agement and sometimes in software design and ddevelopment.

”Indian companies have been expanding their local presence in the US in various sectors such as consulting, project man-agement and sometimes in software design and ddevelopment.

ADB plans -bonds to fund private infra projects

ADB plans to enter the Indian debt market

early next year to raise funds through rupee

bonds to finance private sector infrastructure

projects.

“

On shoring or domestic outsourcing is the new buzz-

word in US business circles. Companies such as Micro-

soft, Mattel and RJ Reynolds have started giving busi-

ness to on shoring firms. This means that business that

would have otherwise been given to companies in

India, Philippines or other emerging countries has start-

ed going to these new breed of entrepreneurs. Thei

rise isn’t a big worry for BPOs and call centres in India

yet, but the trend cannot be ignored either.

For companies today have won over geographical

barriers and in their endeavour to reach to a global

audience have accepted to learn and un-learn a lot of

theories/fundamentals which makes them viable in a

global market. Being cultural sensitive to the market in

which a company sells its products/services has

become a basic requirement and no company can dare

toto overlook this necessity. Globalisation today is at a

level where the companies have not only expanded

their customer or manufacturing bases but also become

more flexible. Companies either adapt or adopt in

order to survive in a foreign market.

Indian companies have been expanding their local

presence in the US in various sectors such as consulting,

project management and sometimes in software design

and development. They have development centers

close to customer locations.

WWe are all surrounded by such examples all around us.

Large multinationals which have opened offices all

around the world have retained their essence only

when they accepted that diversity was inevitable. But in

this diversity what unites these companies is their inher-

ent organization culture. There is thin line between

losing identity and adopting foreign culture..

{ News Bytes }

ADB is rated AAA by three international rating

agencies. It needs to borrow an estimated $15

billion to $17 billion per annum in the next three

calendar years. ADB had issued rupee bonds

worth $100 million in 2004, its first ever global

foray into local currency borrowing. Since then, it

has issued bonds in Chinese Yuan, Indonesian

RupiahRupiah and Philippine Peso. In recent years, it has

been financing Indian projects through cross

currency swaps, or funds raised in other curren-

cies are lent in India and the risk is hedged

through swaps wherein payments in one cur-

rency are exchanged for another at an agreed

rate. ADB is looking at offering a premium of 20

to 80 basis points on the rupee bonds over the

prevailing government securities rate at the time

of the issue.

In India, the finance ministry had given the ADB a

4,475-crore window to raise local currency funds

either through bonds or cross-currency swaps. Of

this, about 2,711 crore has not yet been utilised.

ADB’s infrastructure portfolio in India includes 66

projects totalling more than $12.08 billion, and 129

technical assistance projects totalling more than

$6$67.75 million. India needs over $1 trillion investment

in infrastructure sector over the 12th Five-Year Plan

(2012-17), more than half of which has to come from

the private sector.

Flooding and other urgent needs in Pakistan.!

The 40 names that have pledged to date have a

combined net worth surpassing $230 billion, ac-

cording to Forbes. Several of them have said that

they plan to give away much more than 50 per-

cent of their wealth. Buffett has promised to

donate more than 99 percent of his wealth. This is

an example for everyone to strive help where

help is needed most. We all must work hard every

day on giving back and making the world a

better place for generations to come.”

Today Pakistan is in dire need for aid. The floods

started on July 28 with heavy monsoon rains

which went on to submerge thousands of villages,

washed away hundreds of kilometers of roads,

dozens of bridges and over 1.7 million acres of

crops.

TThe country's worst natural disaster has killed

over 1,600 people , affected about 20 million

nationwide, and 6 million are in urgent need of

food aid -- more than double the number of

people affected by the 2004 tsunami and the

Haiti earthquake combined with the threat of dis-

ease ever-present in the camps sheltering survi-

vors.

The urgent needs for food, clean water, and safe

shelter continue to increase, especially for the

most vulnerable. With widespread devastation to

crops, granaries, and livestock, there is both an

immediate and long-term need for food, agricul-

tural support, and other critical assistance to pro-

tect lives and livelihoods. Pakistan's acceptance of

a $5 million flood aid donation from India could

be a confidence-building measure between the

two countries.

The two countries have made efforts in recent

months to repair bilateral relations, which took a

plunge following the 2008 Mumbai attacks. India

blames those attacks on Pakistan-backed militants.

The two countries have fought three full-scale

wars, most recently in 1999.

In addition to Buffett and Gates — America's two

wealthiest individuals, with a combined net worth

of $90 billion, according to Forbes — 38 other bil-

lionaires have signed The Giving Pledge.

{ News Bytes }

16

“In such times of natural disasters, all of South Asia

should rise to the occasion and extend every possible

help to the people of Pakistan affected by the trag-

edy,” Mr. Singh said, according to a statement released

by his office. It’s a good confidence building measure

between the two countries.

“It’s a tremendous gesture, very mature. India should be

commended for donating it and Pakistan should be

commended for accepting it.”

TThe United Nations appealed to the international com-

munity to donate $460 million in emergency assistance

last week, and has met half of that goal. The US in-

creased its flood aid to Pakistan from $80 million to

$150 million. Haiti earthquake aftermath, the outpour-

ing of individual aid donations was so huge that some

aid workers worried the country couldn’t absorb them

all. That, apparently, won’t be a problem in Pakistan.

There have been one off cases where likes of Holly-

wood star Angelina Jolie has contributed $100,000

(about Pakistani Rs.8.5 million) for flood ravaged Paki-

stan, a move that surpasses President Asif Ali Zardari's

Rs.5 million donation and the help extended by most

other politicians.

Many blame politics and the lingering ill feelings that

some have toward Pakistan in the now-decade long

war on terror for the little aid pouring in Pakistan. How-

ever, as humans we need to feel the pain of our Paki-

stani brothers and sisters and contribute whole heart-

edly.

“

”It’s a tremendous gesture, very mature. India should be com-mended for donating it and Pakistan should be commended for accepting it.”

National Newsby Kumar Anant

Fresh Violence in the valley

AA spate of fresh protests were reported

from the valley, rendering the Omar Ab-

dullah government at helm , helpless and

left with no option but to resort to the im-

position of curfew in many parts of the

state. The protesting mob, defying the

curfew, took to the streets in many parts of

the Anantnag and Pulwama districts and

Maisamu locality of Srinagar, pelted

stones at the security personnel, set vari-

ous public transport vehicles on fire and

vandalized public property. Many people

have been reported killed so far and sev-

eral others severely wounded in the firing

launched by the CRPF personnel to contain

the protesting rabble, leaving the fate of

the state once again in the doldrums.

Major Irregularities in CWG 2010 revealed

TThe report submitted by the central vigilance

commission and the Comptroller and Auditor

General (CAG), indicated some humongous

latent Graft involved in laying down the infra-

structure and procurement of the required

equipments and other materials for CWG

2010. It has once again drawn the ruling UPA

ggovernment and the opposition, in a running

battle with the latter demanding a CBI probe

in the matter. Mr. Sharad Yadav of the Janata

{ News Bytes }

17

of the Janata Dal (United) upped his ante for

the resignation of the incumbent Organizing

Committee chairman Mr. Suresh Kalmadi. If

the ongoing irregularities in the preparation

for the mega event expose any sort of covert

corruption, it will be a shame in the face of this

indigent and helpless country ravished bru-

ttally by the filthy game of politics.

Nature’s Rage –The Leh Flash Flood

The people in Leh were sound asleep on the

devastating night of August 6, when a freaky

cloudburst converted their homes into huge

debris.

In the grisly flash flood that occurred there, more

than 30 villages of the town were left sans resi-

dents, buildings and crucial sources of people’s

livelihood. More than 130 people were reported

dead, several injured and many awaited rescue s

buried under the debris. Army personnel were

deployed for the rescue operation with their

heavyheavy machinery to remove the debris and re-

cover the bodies of the missing. Several public

property, Hospitals, Schools and business were

either demolished or left cruelly devastated.

Amended Civil Liability for the Nuclear Damage

Bill Passed in the LOK SABHA:

Going through a lot of contention, due to the ex-

iguous role of the foreign player involved in the

damage liability, the Civil Liability For the Nuclear

Damage Bill was finally passed in the LOK SABHA

with UPA and BJP joining hands this time.

Minister of State for Science and Technology Prith-

viraj Chavan while introducing the Bill in the LOK

SABHA ,stated that the amended Bill has gone

through prime revision taking into consideration the

recommendations of the Standing Committee which

is looking into the matter of the debated role of the

Foreign Player, and the petty liability cap provided

tto them. According to the revised bill , the public

sector operator of the plant will have the right to

ask for the damages incurred in any kind of mishap

only if the supplier’s culpability by way of “Intent to

Cause Damage” is proved.

“Yaaro, India Bula Liya”,The theme song for CWG-2010 released amid wide fanfare

Soliciting every Indian to come forward and support

CWG 2010, AR Rahman launched the much await-

ed CWG theme “khelo,jeeyo,hey-o,let’s go” at at

the launch event organized in the Kingdom of

Dream in Gurgaon, owned by Wizcraft. The melo-

dious song is written, composed and sung by

Rahman himself, who has been working on it for the

last six months. The song will be uploaded on the

CWG 2010 website where it can be watched free

of cost, but it will not be freely downloadable .Ac-

cording to CWG officials, the audio of the song will

be released in due course of time. “Starting on a

slow note the song incites the latent sportsperson

within you and foments you to assert -Let’s go”, said

someone who watched the song on a public net-

working site where the song is available. However,

within hours of its launch, news about a section of

the population disliking the song also surfaced,

amidst constant comparisons with the very famous

“Waka Waka” theme song of the recently conclud-

ed FIFA World Cup.

The Upstart’s Assault

J As the oldest and largest telecommunications

player in the country, Meridicom was accus-

tomed to seeing both old and new competitors

bigger mobile companies, cable TV operators,

and internet providers- undercut its prices on all

types of services by the usual 10%. Meridicom

was the industry price leader, so when it pub-

lished rates, everyone else reacted predictably.

But TelZip was now changing the game - not only

giving away a high-growth, high-margin product

but attacking Meridicom head-on.

Joe had barely digested the news when CEO

Gerald Segner opened the door. "Why didn't

we know about this?" he asked, stem but calm.

"We suspected that TelZip was planning to go

after new markets:” Joe answered. ”But I must

admit I didn't expect it to be broadband- or for

them to give it away free for life."

n.

1.

a. A detailed intensive study of a unit, such as a corporation or a corporate divi-

sion, that stresses factors contributing to its success or failure.

b. An exemplary or cautionary model; an instructive example: "Before they lost

their independence, [the two companies] were case studies in unsuccessful long-

term planning" (T. Boone Pickens, Jr.)

case study

Case StudyHBR

{ HBR Case Study }

{ HBR Case Study }

"TelZip can do it because their broadband business is

brand-new. We have a 60% market share, and we're

contributing 25% to the top line right now. We're also

the fastest growing part of this company, and we

have the highest margins. So you can't kill us off. If

Meridicom is going to offer discounts, all the product

lines need to take the pain." "We shouldn't discount at

alall," Adam said. “But if we do, it's certainly not coming

out of our business. We're number one in our market,

70% of Meridicom's revenues. Why should we cut

prices?" That was the trouble. Segner wanted to end

this bickering and focus all the units on improving the

customer experience. He had been frustrated by his

own lack of progress for six months and then brought

Joe Joe in to help. In theory, the division heads should

agree to their CEO's strategy. But when it came

down to it, they cared more about protecting their turf

than working together. They were quasi-independent

operators, still remunerated based on the perfor-

mance of their own units. And because all three con-

tinued to make money for the company, it would be

hard to move them away from the status quo. Frank

had been quietly sipping tea and taking notes in his

Moleskine. Adam and Emeline, whose divisions were

several times the size of his, called him "the doodler"

behind his back. But Joe considered him to be the most

thoughtful of the three. ''Adam,'' Frank said, "I think

you're ignoring that TelZip is a serious player in the

momobile phone market now. They have a 25% share,

compared with our 5%, and a lot of name recognition.

The only way we're going to catch up to them and

others in that business is by offering something more

compelling. Sure, customers care about both service

and price, especially nowadays. But they also want

predictability about what their costs will be each

month, and momonth, and mobile is the biggest and most variable

component of that. Broadband is less of a worry be-

cause it's a fixed charge. Still, if you're looking for reli-

able rates, 'free forever' is about as good as it gets."

Joe sighed. Yes, free forever was pretty hard

to beat.

Fire and Wine

Joe Joe was standing outside the little wine shop

around the corner from his office, trying to re-

member whether his wife wanted red or

white for the dinner party that night, when he

heard a shout from behind him. "Joe, I'm so

glad I ran into you." It was Charles DeGraff,

Meridicom's head of sales. "Has this TelZip

tthing driven you to drink?" "It's been rough.

But, no, my wife asked me to pick up some

wine, and I know this guy always ducks out

before7." "You should try the one down the

street- open until 11 and 10% off when you

buy six bottles. Anyway, while I have you, I

want to say that this TelZip thing is a huge op-

portunity for us. We should match them- full-

page ad in tomorrow's FT. Show all these little

guys who's boss. Sure, margins might suffer for

a while. But we'll kill everyone else off and

even boost-our market share."

"You really think we should fight fire with fire?"

"Look, all I hear from out major business customers

is that we're too expensive. They tell me: 'How can

we run a successful company when we're paying

so much to you?' Segner wants us to focus on the

customer, right? Well, the customer wants us to ac-

knowledge the competition in our market and give

them a bthem a better deal!'

sit Tight or Stand Up?

Joe had missed his kids' bedtime and was on track

to be late with the wine for the dinner party when

Segner stopped by on his way out of the building.

"Just checking in about TelZip. What's the plan?"

The truth was Joe hadn't decided. Doing nothing,

as Adam had advised, might make sense.

{ HBR Case Study }

{ HBR Case Study }

TelZip wasn't a large competitor, and Segner

cared more about pricing power and margins

than about small dips in market share. But per-

haps Charles was right to advocate for a

direct response. Meridicom was large enough

to make "free forever" credible, maybe even

turn this challenge into an opportunity. The

question question was how- and, given the difficulty Joe

had already faced in getting the divisions to

work together, how quickly.

Should Joe ignore or respond to TelZip's bold move?Should Joe ignore or respond to TelZip's bold move

Case StudyAnalysis

by Parag Dubey and Shashank Rawat

SHOULD JOE IGNORE OR RESPOND TO TELZIP’S BOLD MOVE?

TThis case study has been divided into sections,

each leading to the one following it and de-

scribing the challenges that the incumbent com-

pany is facing and the possible solutions to

them.

WHY MERIDICOM CAN’T AFFORD INACTION

•• Free forever is as attractive as it can get. Had there

been an offer from Telzip saying that they are offer-

ing broadband for free (with no mention of the word

‘forever’) it wouldn’t have caused so much damage to

the other players because in this case the customers

would rationally expect Telzip to start charging for

broadband in the near future and very few would

ttake the trouble to switch to Telzip for that interim

period.

• It is true that Meridicom is an established and reputed

brand but their customer service is abysmal to say the

least. The customers are sent three different bills for dif-

ferent services and they are made to call up customer

care established in 3 different countries for their queries.

This is to say that there’s nothing that will retain the cus-

tomers with Meridicom in the face of this attack. Meridi

com is expensive. Moreover, its customer service lacks

quality on several accounts. All in all there is reason

enough for customers to make a switch.

• The attack is not just from Telzip’s side. There is a possi-

bility that the other players in the market which are

bigger than Telzip but smaller than Meridicom will

follow suit and offer broadband for free.

MERIDICOM’S MOVE IN THE SHORT TERMNNext is to decide what action Meridicom as a com-

pany should take to combat Telzip. The basic idea

behind any strategy that Meridicom will undertake

should be to divert the consumer’s attention from

Telzip’s ‘free broadband’ campaign to an attractive

plan that Meridicom proposes to launch.

Meridicom shouldn’t offer free broadband because

broadband, apart from being the fastest growing seg-

ment and the one with the highest margins also con-

tributes 25% to Meridicom’s revenue. Offering broad-

band for free would lead to a decline in Meridicom’s

revenue with no substantial increase in market share

because all other players will most likely follow

Meridicom’s action (since it is the market leader) and

this will kill customer’s incentive to shift to Meridicom.

One of the things that Meridicom could do is to bundle

up its services- landline, broadband and mobile for its

business customers at a nice discount which catches the

consumer’s attention. The mobile segment should be

made to take the maximum share of the discount be-

cause that will have the twin advantage of forcing

Telzip to go defensive on the mobile front where it has

esestablished itself well with a market share of 25% and

enabling Meridicom to establish its footing in this seg-

ment.

For eg- if a customer switches from Meridicom

to Telzip to benefit from the free broadband

then Meridicom not only loses a broadband

customer but also a landline customer.

TThe fact that the division heads (D.H.) work

only in the interest of their respective divisions

and care the least about the other division’s

performance is a serious problem. To tackle

this, a remuneration plan should be designed

for the long run where each D.H. has a stake in

the performance of the other divisions also i.e.

thethe variable pay of any D.H. goes up with an

increase in performance of not just his division

but also that of the other divisions. This will

drive them to work in tandem with each other

and bother about the performance of the

other divisions also.

LONG TERM PLANS AND LESSONS FOR MERIDI-COM

Meridicom’s long term objective should be to

focus on improving the customer’s experience with

the brand because an effective and quick custom-

er service is very essential to develop a long

term relationship with the customers.

HOW TO GET THE DIVISION HEADS TO WORK IN A COL-LABORATED FASHIONOnce it is decided that Meridicom has to react and in-

troduce an extremely compelling plan it is imperative to

get the division heads-Adam, Emeline and Frank to work

together and devise a strategy to take Telzip head on.

Joe has to convince them of the fact that a turning of

tables in one division can have a significant impact on

the revenue and market shares of the other divisions as

wewell.

{ HBR Case Study }

by Deepti Dabral and Anmol Bajaj

{ The 4G Debate }

WiMAX vs. LTEThe standard wireless technologies have come

a long way since the days of TDM (time division

multiplexing) & FDM (frequency division multi-

plexing). The recent hugely successful auctions of

the 3G & broadband wireless access spectrum

in April 2010 indicate the stiff competition be-

tween the service providers to acquire the maxi

mum & potentially profitable circles.

Technology remains an important determinant

for service providers in providing wireless data

services such as high-speed Internet connectiv-

ity, streaming multimedia, high-resolution video

conferencing and m-commerce applications to

their consumers.

The 3G services are expected to be launched

by end of 2010 in India by the service operators.

However, with respect to the mobile technology

being used in the other parts of the world, we

are almost a decade behind them. Japan is al-

-ready a pioneer in 4G technology & China has 3G

well established in its mobile framework. Launch of

4G services would help India match advanced coun-

tries in terms of high internet speeds. 4G provides 10

times faster internet speed than 3G and can support

the demands for live high definition multimedia con-

tent. 4G has the potential to make broadband a

ubiquitous phenomenon. A recent World Bank report

has stated that a 10% increase in broadband pen-

etration boosts the economic growth by 1.3%. This

statement exemplifies the significance of expansion of

broadband to every part of the underdeveloped

India.

At present, WiMAX and LTE are the two major 4G

technologies in the world. There is a crucial debate

going on to decide the best 4G technology in the

world with WiMAX and LTE competing fiercely with

each other to win the title. Both have their own set of

giants supporting them. WiMAX is supported by Intel,

Motorola & Samsung, while LTE is backed by Ericsson

& Nokia.& Nokia.

{ The 4G Debate }

Exhibit 1: Comparison of WiMAX and LTE Source: voicendata.ciol.comWith the increasing overlap of the ecosystems for both WiMAX and LTE, the convergence of the two technologies might become a reality on the global telecom stage. This convergence can hugely benefit the operators, consumers & other participants in the telecom sector.

Glossary of Terms

WiMAX Worldwide Interoperability for Microwave Access

LLTE Long Term Evolution

IP Internet Protocol

WCDMA Wireless Code Division Multiple Access

GSM Global System for Mobile Communications

3GPP 3rd Generation Partnership Project

OFDMA Orthogonal Frequency Division Multiple Access

SC-FDMA Single Carrier Frequency Division Multiple Access

{ India Inc Speaks }

IndiaIncSpeaks!

Anmol: Please tell us about your journey after MBE.

AshuAshutosh: After MBE, I joined IMRB which pro-vided me good experience and exposure since I

got the chance to interact with senior people in

the corporate world. This was important in terms of

fast growth. I got opportunities to work with some

very good companies like Pepsi, Dabur, Smithkline

Beecham. After spending nearly 4 yrs in research,

II moved to client side. I switched to Amway India

Enterprise which was setting up operations in

India at that time and was trying to understand

the Indian market. This was particularly a challeng-

ing role because I did great in terms of value addi-

tion to the company and myself.I got to know a lot

of people and I assume I put a positive impression

them because I had offers from many of them

and Anmol Bajaj

Ithem. Meanwhile, Reliance Communications of-

fered me a role. After spending near about 30

years of my life in Delhi I decided to shift to Mumbai.

I observed how they took multi-crore decisions with

such ease. It was also great to work in telecom be-

cause it is a continuously evolving and technology

oriented sector. What is true today might be not be

the same tomorrow. Reliance Communications

played a big role in changing the dynamics of this

industry by decreasing the call rates by a huge

amount. Telecom has indded played a crucial role in

accelerating the rate of economic development in

India. I worked in Reliance for 10 years. Then, I

wanted to come back to Delhi so I joined Airtel in

enterpriseenterprise domain. Here, I am handling the market-

ing function.

by Deepti Dabral

{ India Inc Speaks }

market offers substantial value to Airtel. Our

huge telecom infrastructure, submarine cable

system and network across the globe have en-

abled us to connect continents. We intend to use

it to expand our services globally.

{ India Inc Speaks}

Page 3PartyGenesis 2010

““Genesis-The First Stride”, the MBE inaugural semi-

nar by the Business Economics Association (BEA),

marks the commencement of a fresh academic ses-

sion at MBE and serves as a harbinger to a year

that is abuzz with oodles of student activities, ump-

teen industry interaction seminars and scores of

other summits and conventions.

This year, Mr. Pankaj Jha, MD, Millward Brown

played emcee to the occasion with his insightful pre-

sentation on the theme of the seminar, “Build your

Brand, Build your business”. The event unfurled with

the lamp lighting ceremony witnessing the presence

of esteemed faculty members including Dr. Yamini

Gupt and Dr. Aradhana Agarwal along with other

pprominent members of the Department.

Post that, Dr. Aradhana Agarwal addressed the

gathering, offering a gratified reception to Mr.

Pankaj Jha, and expounded about the signifi-

cance of marketing and branding in the triumph

of any business empire

Mr. Jha, with his insights on the notion of brand-

ing, enlightened the audience and gave them an

industry perspective. Thereafter, there was an

open-house discussion wherein students solicited

answers to their every scant query and made

themselves sentient with all the avant-garde

practices in the branding arena.

In the hindsight, the Sui-generis way in

which this year’s genesis was carried out, left ev-

eryone blithe, enlightened and blessed.

MBE

{ Page 3 at MBE }

Reminiscence 2010 (The Delhi Chapter)

{ Page 3 at MBE }

“Radiant-Razzmatazz”, “Vivid-Flamboyance”

or the “Puissant-Panache”, what epitomizes

the Reminiscence-2010 perspicuously, is still

under the scanner for the whole congrega-

tion present at Pragati Maidan on the eve-

ning of 21st august 2010. Albeit the gloomy

weather condition in the morning attempted

to wash-out all the sanguine vibes of the co-

ordinating crew, to hold the event al-fresco, it

could not by any means obstruct their rock-

solid modus operandi at place to carry out

the mission slickly.

Refuting any kind of give-in against any impediment

under way, everyone kept themselves starry-eyed

and uttered “CHE-SARA-SARA” in full chorus. The

students of MBE were ready to confront any trouble

that comes their way to make the event a big suc-

cess, and as a consequence, all the assiduous effort

put by the coordinating crew and the firm founda-

tion granted by this year’s sponsors “Smart Money

Clip” and “Club Mahindra” was not in vain, and the

evening culminated in a dazzling occasion that was a

cause célèbre for the entire MBE fraternity. To com-

prehend the actual display of the occasion, let us

cut across to the evening of 21st August at Pragati

Maidan and have a closer glimpse over the whole

lot that went along there, from the scratch.

The red carpet was rolled out, and the sun slowly

started playing truant to the firmament, giving way

to a spectacular glittering milieu, which lasted for the

rest of that night. The event kick-started with the

alumni turning up gradually, and by the time the cul-

tural geeks were lined-up with their blistering perfor-

mances, the world and his wife was present there

from the MBE alumni community, to offer them a stun-

ning ovation. Post a shimmering lamp-lighting ceremo-

ny, the head of the Department, Dr. Rashmi Agar-

wal, offered a brief welcome note to all the dignitar-

ies present there, delineating everyone about all the

latest developments in the Department and its prog-

ress. After this, it was time to get lost in the glimmeri

lapis-lazuli strewn here and there, flashing sequins

embellishing different upholsteries, and the nostalgic

“Old-Pals”. With Reminiscence-2010 celebrating the

silver jubilee year for the 1985 batch, it was a mo-

mentous occasion for the alumni present there from

1985 batch, who barely took any time in recounting

those far-gone anecdotes and bursting into a loud

guffaw, reincarnating those bygone best days of

their lives. As the spices and condiments started kin-

dling that long dormant appetite in the guise of fra-

grant aroma emanating from the dinner’s desk, it

was a suitable time to say “bon appétit” to everyone.

Close on the heels of it as the music sent that adren-

aline rush down everyone’s spine, the frolicking

rabble started giving their reproachful glimpse at the

various “Pappus” in various corners of the hall who

can’t really dance, and the rest of the night people

spent expunging their “Pappu Can’t Dance” image.

(Any pun intended? Hmmm, not really).

After a reinvigorating and relishing sojourn that ev-

eryone lived there ,people spake ‘Arrivederci’ to

each other and went back with a sparkling imprint

in their psyche that will unquestionably keep them

chuckling for coming few days. Coming to the de-

nouement ,the shining éclat with which the Reminis-

cence winded up ,after much applauded

Genesis2010 and with ‘Annual Convention’ and

other major events in the pipeline ,the year 2010-11

is undoubtedly going to mark itself as an ‘Annus

Mirabilis’ in the MBE annals.

Some small occasions in our life make the things go

around, and fill us with fresh energy and a new vigour,

even more so when we are extremely fed up of the

passing by hackneyed days and the hermetic work

schedule, offering us no flexibility or any respite. Then as

manna from heaven, we come across some pristine mo-

ments, where we fancy taking a pause and vouchsafe

those wistfthose wistful memories to encompass us entirely, and to

take us flowing with them to that forgotten land where

we once wished to stay long, providing us with an op-

portunity to live again those most vibrant days of our

life..

The first edition of the Mumbai chapter of the

‘Reminiscence-2010’ at ‘Grand Residency’ Bandra-West

on 28th August 2010 wrapped up on a similar note, of-

fering all the alumni of the department of business eco-

nomics (MBE) a wonderful platform to re-electrify those

idyllic instants of their life, lost somewhere in the mist of

the hectic work hour and other obligations of their life.

A solid foundation was laid down for the event

according to the pre-designed blueprint of the organiz-

ing squad which consisted senior placement committee

team, Alumni committee members, President Mr. Ishu

Kapoor and other students from the MBE. The event un-

furled with Professor Lallan Prasad and Dr. Yamini Gupt

offering a delightful welcome to all the alumni, who

made their presence felt there, earmarking some pre-

cious time from their tight schedule. After this, President,

Mr. Ishu Kapoor, updated everyone about all the cur-

rent transformation that their Alma Mater had gone

through in the recent years. Post that, different alumni

shared diverse incidents from their life including their two

year stopover at MBE and how this helped them attain

some new echelons in their careers, providing students

an avenue to explore the face of the Department of

Business economics during those days

through the eyes of its alumni. This was fol-

lowed by snacks and dinner. After dinner,

the students were all poised to send the

alumni thinking through a MBE quiz that they

had prepared for them, where the alumni

were quizzed about the various questions

rrelated to Department Of Business Econom-

ics. After seemingly a grueling quizzing ses-

sion for the alumni, everyone enjoyed the

pleasant AV prepared by the students of

MBE giving a brief snapshot of the long

voyage of the Department of Business Eco-

nomics over the past 37 years. The students

then conversed with the alumni and seeked

After the magnificent Delhi Chapter, the

heartwarming Mumbai chapter of the Reminis-

cence 2010 concluded adding another suc-

cessful feather in the MBE’s cap, which sends

an upbeat indication to the upcoming days to

unfurl at MBE.

Reminiscence 2010(The Mumbai Chapter)

{ Page 3 at MBE }

{ Page 3 at MBE }

The business economics association (BEA), in a

bid to hone student’s mettle ,and offer them a

platform to flaunt their entrepreneurial knack in

the social arena ,invited Ms. Shruti from SIFE

(Students In Free Enterprise) at the department

of business economics to delineate about vari-

ous plinth SIFE has on offer to the student com-

munity, at length.

SIFE founded in the year 1975 and head-

quartered at Springfield Missouri is an interna-

tional network of the students of various re-

nowned educational institution worldwide,

many academicians and business leaders, serv-

ing various social communities

through the industrious effort of the Student Team

at various colleges worldwide , and endeavor to

teach students practically the market economics,

entrepreneurship, financial literacy and the per-

sonal success skills in some of the complex and un-

derprivileged social settings.

The beatific demeanor in which Ms. Shruti illustrat-

ed the nitty-gritty of the efforts involved in the pro-

cess of being part of the SIFE, left the students feel-

ing extremely consecrated and bucolically connect-

ed to the indigents, receiving a helping hand from

the SIFE effort. Unquestionably the session was a

strong wake-up call for all those who are wholly

gung-ho and has chutzpah to not only think out of

the box, but to implement their ideas real time.

Sourceswww.telecomcircle.com

www.dot.gov.in

www.telecomindiaonline.com

www.ciol.com

www.vodafone.in

http://enterprise.vodafone.com/

hhttp://www.airtel.in/

Faculty AdvisorProf. V. K. Kaul, Master Of Business Economics, UDSC

Disclaimer

This review is just a compilation of analytical articles, analysis backed by the analysis report and news from various sources. Thus, readers are expected to cross-check the facts before relying upon them. Though much care has beentaken to present the facts without error, still if errors creep in, necessary feed backs will be always welcomed. Team members will not be responsible for any undertakings. The e-review is not meant for sale and hence, no part of thereview should be used without the prior permission of the team.