Sunday, February 14, 2010

India's telecom revolution- Part 1

During the 1980s in India, one had to wait for a few years in the queue to qualify for a land line connection. Of course there were priority lists and perhaps some red tape involved in the allocation. Those were the times when one had to be a doctor to be in the priority list. The tele-density ( number of connections per 100 of the population) was an abysmal 2 to 4%. Come 1995, India launched the second generation digital telephony ( GSM technology). For the first time in the country,a major pan India infrastructure project was awarded to the private sector.

Imagine those sleepy days when the archaic DOT phones could ring endlessly and when having a land line connection was considered to be a status symbol and people used to envy the wireless sets in the possession of our cops. The mobile revolution since 1994 was albeit a slow one. India's states were categorized into telecom circles and were rated as A,B and C ,based on their importance. The four metros functioned as separate circles and is still the case. Bombay, for example ,was a Class A circle ,while a state like Kerala, Class B, and some of the eastern states were Class C. There was a virtual duopoly in most of these circles with only two operators allowed to operate in each of these. Interestingly , a state like Tamil Nadu had a monopoly for about 5 years . The industry was obviously in the formative ( development) stage. There were a bunch of operators with not even a single one with a pan India presence. The industry was marked by high entry barriers including high capital costs, low subscriber growth, high operating costs , low ARPU ( average revenue per user) and low economies of scale. The largest operator at the time, BPL Mobile , for example, had operations in Kerala, Tamil Nadu, Maharashtra and Bombay. Clearly some key southern states like A.P and Karnataka are missing. A call originating from Kerala to Maharashtra had to exit Kerala, route it through another operator's network in Karnataka and finally terminate to BPL's own network in Maharashtra. Imagine the inter-connect fees that could be levied by other stake holders for a single call. In those days, there was not a single operator that could be called as a national operator.High entry level fees paid by the operators to the government exacerbated the situation. Ironically , the only positive factor was the availability of spectrum due to lesser sites and customer penetration.

All these changed by the New Telecom Policy 1999 ushered in by the then A.B Vajpayee government. The government eased the license fees for existing and new players and encouraged more players ( including the state run BSNL) to enter the fray. Most importantly , the calling party pays ( CPP) was implemented virtually ending the period of charging incoming calls. The favorable policies brought into new entrants with a new brand Airtel popping up in the horizon.( The Bharti run Airtel brand was not even in the picture in the first few years of the mobile revolution). Prices were slashed with the rates going from highs of Rs. 16 per minute to lows of 40 paise/minute. The industry was at once propelled into the growth stage with spiraling customer demand, low capital and operating costs and high handset penetration. Older players like BPL exited the industry and newer ones like Airtel and Essar took roots. With the advent of CDMA, almost all industry power houses from the Birlas, the Tatas and the Ambanis made their entry in this industry. For some, the telecom business became their core business, pushing their other businesses out of their radar. The last ten years has seen unprecedented growth with teledensity capping 30% and with subscribers being added in millions. ( To be continued)

Sunday, December 20, 2009

The will of the people- A case for new states

In a matter of 10 days, K Chandrasekhara Rao was catapulted to celebrity status. The head of the Telungana Rashtra Samiti was literally in the woods post the election debacle in May. The untimely death of DR. YSR and the changed political atmosphere in Andhra acted as the catalyst in igniting the demand for a seperate Telungana carved out of Andhra Pradesh. While a weak CM in the form of Roasiah was found wanting in a crisis situation, the charismatic KCR literally walked away with Telungana. When the home minister P. Chidambaram announced that a new state of Telungana would become a reality, he virtually opened up a Pandora's box of new demands. When the main stream media reported that there is demand for atleast 10 new states in the Indian union, the public were shocked. In 10 years time, you may see a Harit Pradesh, Gorkhaland,Coorg or Vidharba, to name a few. It is prudent to mention at this juncture that some of these demands are decades old. Let us analyze the pros and cons of forming new states. Again, let me make myself amply clear- I am not taking any sides in this debate. I believe that the will of the people is important here.

The pros- Let us roughly compare two large democracies, India and the U.S. India has a population of 1.1 billion and growing ,while America has a slow growing population around 300+ million. America is almost three times larger than India. In short, we have around 4 times the population of the States in about one-third of their area. Broadly speaking the population/area dynamics tantamount to a factor of 12. Now let us see some other vital info. United States has 50 states and India has a dynamic number of 29. Dynamic in the sense that India is still a relatively young democracy and there are bound to be changes till a state of equilibrium is reached. If we compare blindly with the American model, we may feel that our number of 29 is not that big. ( taking into account the factor of 12 that I had mentioned earlier).

Apart from this, India also has seven union territories. Of this, both Pondichery and Delhi have elected legislatures headed by a Chief Minister. This means that India has 31 elected legislatures and fully functioning bureaucracies in these places. Administrative efficiency is a big plus that one can get out of smaller states. Can we now imagine that Andhra Pradesh and Karnataka were part of one big state till the sixties and so was the case with Punjab, Haryana and Himachal Pradesh?. Definitely smaller states have increased efficiency in all spheres and have resulted in more focus on underdeveloped areas. India's massive population calls for the creation of newer states that would provide opportunities for a greater number of the population. While the post independence era was marked by the division based on linguistic seperations,the globalization era resulted in new constraints based on development thresholds. Jharkand, Uttaranchal and Chattisgarh were created for the massive potential that they held and based on the assumption that smaller states would concenrate their focus on the best pay off activities in the respective areas.For example Jharkandh and Chattisgarh are rich in natural reserves and it would make better sense to relieve them from bigger states like Bihar and M.P respectively. Whether this has worked according to the plan is a big question mark.I am not suprised at the corruption scandals emanating from these smaller states.

Now let us look at the cons. Creation of a smaller state is no small investment. It requires the recreation of a functioning bureaucracy, a full fledged legislature, construction of complexes to house the government- Name any expense, this has to be borne before a new state comes into fruition. An antagonistic creation would lead to bureaucratic clashes, red tapism and many other forms of debauchery. As always, some people gain more in this situation and losers will not be willing to sit back and take notice. A new state is like an orphan, separted from dad and mom and could be a recipe for potential misrule, widespread corruption and all things gone wrong. It may also lack the clout of bigger, older states and may find difficult to extract funds from Delhi. This is a great irony as smaller states are created for better efficiency and fund allocation.Imagine this situation- A big state like AP has about 42 MPs and a smaller state may have just 10 MPs. Calculate the clout exercised by 10 MPs against 42 on a level playing field.

Let us adopt a wait and watch policy and see what transpires in the near future. Will a seperate state of Telungana be created? Will there be a stronger demand for even more states. Is India better off being a federation of smaller states or a tightly knit republic of fewer states. Is the consent of the legislature required to carve out new states or is the decision made solely by the union parliament. Whatever happens, an Indian will hope for a better India for her people- an India where the fruits of globalization and hope are meted out to every nook and corner of our great nation.

Saturday, October 31, 2009

The decline of the BJP

When Atal Behari Vajpayee was sworn in as the Prime Minister in 1999 for the third consecutive time ( after the 1996 thirteen day fiasco and the 1998 romance with the AIADMK ), little did the Indian electorate realize that the saffron party had peaked. The Opposition parties particularly the Congress was in utter disarray and the Treasury benches were filled with mighty regional satraps and the powerful BJP . Vajpayee was able to insulate the party from the clutches of the RSS. To his credit, Atalji paid occasional visits to the RSS headquarters in Nagpur to ease the friction between the party and the RSS godfathers. However, those were mere proxy meetings and Atalji rarely heeded to their advice. A decade later, so much water seems to have flowed in the holy Ganges. The Grand Old Party , which was on life support ventilator since the Narasimha Rao ,has returned to the state of the natural party of governance. The BJP is in shambles and virtually left without a genuine leader.
BJP minus Vajpayee is a big zero and it took several years for the BJP to figure this out. Do you think that Vajpayee was the only factor that gave the BJP the edge in several general elections? I do not think so. In a party filled with members who have strong affinity to the RSS, it was difficult for a man of the stature of Vajpayee to play second fiddle to the Sangh. Though the retirement of Vajpayee was a major blow to the BJP, the main factor responsible for its decline was the loss of its identity.
In the early 1980s , the BJP posed itself as the " party with a difference". " You have tried others, now try the BJP" - ran the major campaign poster. Throughout that decade,the party rose steadily but surely. Of course the Mandir-Mandal issue skyrocketed the fortunes of the party. While this was the main catalyst that propelled the party into power, the key factor was the will of the people itself. Having experienced the monotony of the Congress babus and also having experienced some shaky coalitions in the form of Janata Dal , the people were eager to try something different. The mighty Indian electorate succumbed to the temptation of the BJP's slogan and promise .
The six years of BJP rule proved that this party was alas ,not a different one. Except for a change of faces,the party looked no different than the Congress. Scandals and corruption were rampant, coalition politics was a harakiri and regional satraps had their say. There was a clear lack of cohesion in the ruling administration with the Deputy PM's office functioning as a seperate power centre. Even Vajpayee looked jaded throughout much of his term, thanks to his failing health and arguably it was Brajesh Mishra ( the NSA) who called the shots. The relative calm in India was punctuated by the Gujarat riots and Vajpayee failed to impose his will against Modi & Co.From 2002, the power centre was slowly shifting towards Advani and the RSS. The India Shining campaign of 2004 was cut short by the resurgenceof the Grand Old Party .

The Bharatiya Janata Party had ample opportunities during the six years of its rule to establish itself as the " natural party of governance". Instead , it floundered these life lines by proving to be just another side of the same " coin". The Indian electorate, bereft of hope, had badly needed change. They were willing to try the BJP, the regional parties ranging from BSP to NCP and even the so called Janata Dal. But these parties failed to live upto the expectations. When BJP was renegated as the principal opposition party in the 2004 General Elections, one would have thought that things would change in 5 years. Instead, Manmohan Singh fought the anti incumbency and brought the party back to power in 2009.
Now, the Indian electorate see another beacon in the horizon- that of youth, of growth, of development and a better governance. The recent successes of the Congress in many state elections in India have clearly proved the emergence of Rahul Gandhi to the forefront. For this very reason, the BJP will slide further. By the next elections, I doubt whether they can even hold on to their place as India's principal opposition party. They have nothing to offer and worse still no leaders worthy of stature. In fighting is the order of the day and even the nascent Yeduriyappa government Of Karnataka has been rocked by rebellion. India might have just entered another long period of dominance by the Congress and we can only hope that things would be different now. Whether the demise of a meaningful opposition will be good for the country, only time can tell.

Thursday, August 20, 2009

The rise and fall of Jaswant

Flash back to the New Year 2000. The Indian Airlines flight IC 814 was hijacked from Kathmandu to Kandahar with hundreds of passengers on board. The Taliban militia , a relatively unknown entity at the time, staged the hostage drama to free some hardcore terrorists held in Indian jails. We all know the end of the story or did the story ever end at all? What some readers may have missed is that the Indian external affairs minister at the time ,Jaswant Singh, had accompanied the JEM terrorist who had been exchanged for the hostages.
Jaswant Singh was the impeccable person spotted always in a casual army shirt. His demeanor and curt replies to journo questions gave him an image of a retired general from the army. Perhaps one can argue that Shri A.B Vajpayee had a right hand in Pramod Mahajan and a left one in Jaswant Singh. He was the initial choice for finance minister in Vajpayee's cabinet. The all powerful RSS led by K.S Sudershan was largely instrumental in playing spoil sport to Jaswant's chances. Vajpayee could still accomodate him in the external ministry ( even against the wishes of the RSS). Jaswant as an external affairs minister was a welcome change from the Nehruvian socialists who adorned the ministry from time immemorial. He could think "out of the box" and initiated major policy reversals and steps taking into account the geopolitical situation of the day. Was it right for India to continue with the Nehruvian policy of non alignment when India had bigger threats to security at home? Did the age old policy of supporting the right to a Palestinian nation did actually come in the way of a tectonic shift in India's policy towards Israel? A weak opposition in the form of a decimated Congress party could not question the policy shifts during Jaswant's time. Jaswant Singh was instrumental in developing good strategic relations with many countries and it was during his tenure that India came close to winning a permanent seat in the UN security council. He had good personal rapport with many world leaders at the time and particularly with the American leaders.

Jaswant Singh was never a member of the RSS and it was difficult for them to support a person who held different points of view particularly on issues that were sensitive to them- financial policy and foreign relations. Vajpayee , as a PM, and the defacto head of the BJP could use his discretion to choose Jaswant Singh for the post of external affairs minister. Imagine Jaswant as the finance minister- In all certainity he would have carried India towards the path of reforms and development with greater alacrity. I would say that if Yaswant Sinha has earned a B grade for his performance as FM, a Jaswant Singh would have earned at least an A-. In a party driven largely by ideologies and where most of the leaders had their roots and obligation to the RSS, Jaswant Singh was the exception.
Fast Forward to the Year 2009- The 18th day of August to be precise. Jaswant Singh is out of the BJP! The man who claimed to be one of the founder members of the party was unceremoniously shown the door. His crime- Writing and publising a book! and the book is on Jinnah- the bete noire of the BJP. The same party that had warned and eventually pardoned Advani for praising Jinnah ( during Advani's Pakistan Visit a couple of years ago) has shown no mercy to Jaswant Singh. Is writing a book and expressing an alternate point of view an unfathomable and unpardonable crime in a democratic party? This is India and Jaswant Singh has the right to express his opinion. ( I have not read the book and am eagerly waiting to get a copy). Shashi Tharoor had opined in his tweets that one should not be removed from a party just for writing a book and having views that may not neccesarily synch with the party views.BJP is in crisis now and Jaswant was one of its able leaders. Whosoever is the brain behind this move ( to expel Jaswant Singh) they have only accelerated the fall of the party. The party that peaked during the late 1990s with stalwarts like A.B Vajpayee at the helm is reduced to a bunch of " jokers" (in) fighting for supremacy.
Kudos to thee Shri. Jaswant Singh.. for you were one of the best ministers we have ever seen.

Thursday, July 16, 2009

The big M s of Kerala

The two of them find themsleves in the list of the best five actors in the country. They have been in the Malayalam film industry for more than 25 years. The two have earned 7 national best actor awards between them and the Indian Government had honoured them with the prestigious Padmashree. No role is considered challenging to these acting titans and they have mesmerized even non-Malayalees with their acting versatility. But in the last 10 years...What has happened to the aging superstars of Mollywood? I have heard scores of people saying a zillion times- " It is time for them to call it a day"? Do you really believe that Mammootty and Mohanlal should retire..? Let us analyze...

To me , they are the greatest stars of all time. I have grown up seeing their films.. Malluwood had its golden age during the 1980s when the two M's seized opportunity after opportunity and churned out characters with amazing ease. Be it the Sethumadhavan of Kireedam, Chathiyan Chanthu of Vadakkan Veeragatha , the mesmerizing psychatrist " Sunny" of Manichitrathazhu or the media baron G.K from the superhit movie New Delhi, the two artists have spell bounded the audiences time and again. The two M's were a welcome relief from the genre of " overacting" movies of the 1960s and 1970s. Though I have been biased towards Mohanlal ( do not ask a Trivandrumite why he/she is biased towards Lal), I have equally enjoyed Mammootty films also.
Fast forward to the late 1990s, the early 2000s and the recent times. Mammooty is 55 and Lal has almost turned 50. There is a young Prithviraj who is 25 years old and trying to get a solid break. Though Suresh Gopi and Dileep are in the top too, they do not pose any threat to the two M's.
Malayalee audiences are getting pissed off with the kind of crappy movies that are being made in the last few years. Both Mammootty and Lal have let the audiences down considerably. The younger audiences are tilting towards Tamil and Bollywood films while the older audiences prefer to stay at home and not waste their money. I feel that the game is up for the two M s the way they are going. One looks like a businessman doing a side business of acting and the other like a jaded person who is just a shadow of his former self. Whether the two would still prefer to sing duets with heroines half their ages is a matter of personal choice. But if they would like to have an inkling of audience reaction, I would suggest them to watch their movies in theatres ( of course after the initial hype and hoopla).
By no means an average Malayalee film lover is suggesting that the two M s should retire. Our industry is blessed to have these amazing actors. We are only suggesting that they should act in meaningful cinema and act in roles that do justice to their plethora of talent. Artists have a commitment to society and frankly they do not have any retirement age. However, there should be a limit to the buffoonery on screen in the name of acting. Remember- dancing with younger heroines do not make the two M s any younger. They are just making a mockery of themselves. I still believe that these great actors have years of career ahead of them. But they should select their roles wisely. At this point in the careers I have no reason to believe that Mammotty andLal are acting for money. There is no point acting in 6 to 7 trash films in a year. Instead they should act in a maximum of 2 films that are likely to be well appreciated by the audience. If the superstars get 60 lakhs per film, they typically earn around INR 4 crore per year. By acting in lesser number of films, I strongly believe that they will be able to command a higher market price and eventually make almost the same amount of money annually. The tamil superstar Rajanikanth acts in a film only once in 2 years and Hindi star Amir Khan acts only in one film per year.

If Mammootty and Mohanlal want their right place in history , they should take a break. Let the younger lot also spread their wings... After all, that is the basic law of nature...Otherwise the two actors may find themselves in a place where they are condemned by even their die hard fans.

Saturday, June 27, 2009

General Elections 2009- An appraisal

It is probably too late to give my 2 cents on the outcome of the Indian General Elections. But it is never late to do a post mortem on the epic event. First of all , I humbly admit that my prediction in a previous blog ( June 6,2008 , " Some politics") that the NDA would return to power has proved wrong. While I admit that I went off the mark, I would defend that my predictions were atleast 9 months before the first votes were cast. A lot of things changed between June 2008 and April of 2009 and I was presumably wrong in a predicting the outcome of such a complex political excercise so early in the game when even the best psephologists are left scrambling for answers. I am not claiming that NDA would have returned to power if the elections were held in August of last year. I am just suggesting that the NDA lost its track running into 2009.
The absence of a core identity was the biggest handicap for the coalition. To be fair to the UPA, they won mainly due to the absence of a viable alternative at the Center. True, the UPA did some good things during their tenure. But, did they do anything substantial that India could be proud of. I would rather say that UPA was a one man army with Manmohan Singh proving to be the biggest " batsman" for them. Be it the Nuclear deal, the way he dealth with Pakistan post the Mumbai attacks, Manmohan was seen as delivering. The middle class India could relate to Manmohan as one among them and as a person who had the best interests of the nation in mind. The left parties did a grave mistake by attacking Dr. Singh on the nuclear deal issue and withdrawing support on this. ( Even the CPI leader A.B Bardhan admitted the folly the left parties made with respect to the deal. The CPI(M) could not even earn the trust of the leftist voters on this issue. When the Prime Minister repeatedy assured the nation that the nuclear partership is hugely beneficial to India , everyone except some left leaders believed him. Though the nuclear deal was not a decisive issue for this elections ( thanks to the illiteracy of a large section of the populace), I would say that this episode was the game changer. This proved to the educated Indian middle class neutral voter that Manmohan is for real and that he is a true and decisive leader.
The BJP , on the other hand, was left without any strategies. Have realized the limitations of playing the Hindutva card, the part chose the worst strategy they could ever adopt- that of attacking the personal integrity and leadership skills of Dr. Singh. That would have perhaps eliminated even the slightest chances of a BJP revival. Be it the Varun Gandhi episode or the BJP/BJD clashes in Orissa, BJP was largely seen as a party with " no difference"- that of internal squabbles and age old " ideologies". Moreover they were considered as favoring only a certain section of the population. They proved too much of a burden for a young, vibrant, secular, democratic India. Apart from Karnataka, BJP was seen as losing ground everywhere.

Now where does this end up to..? Well, I won't commit the same folly of giving exact predictions. However, I feel that the Congress will regain its past glory under Rahul Gandhi. The future of India belongs to the Congress party. As for the opposition parties, the BJP might meet the fate of the erstwhile JanataDal of the late 1980s. It might splinter into different groups and in the absence of a young, charismatic leader it could well be curtains for the party. Regional parties would still play their part, but none will have the ability to pose a threat to the Congress for a long time to come. Rahul Gandhi is the trump card for the Congress now and it may not be surprising if the party on its own reaches 300+ seats in 2014.
Again, a week in politics is more than a lifetime- goes the old adage and I have five solid years to defend my territory......

Human and Happiness Indices-Some Thoughts

(A long time since my last blog. My classes are taking away a significant amount of time but I really enjoy those. Some recent events have instigated me to comment on two indices that have confused social and financial scientists the world over). The first is the Human Development Index ( HDI) and the second is the Happiness Index ( HI). For those who are not that familiar with HDI- It is the score of a section of the population ( mostly nation based) that considers various factors like the (GDP) per capita income, the level of unemployment, literacy and educational attainment. The nations are then ranked based on their respective scores. To give some hindsight into the 2008 rankings, Iceland was the # 1 pushing Norway onto the # 2 position. The United States is at # 15, not too bad considering the relative size it has, Canada at # 3, India unsurprisingly at # 132 and Bhutan at # 131 ( http://hdr.undp.org/en/statistics/). These statistics are annually compiled by the UNDP and have been met with euphoria and skepticism. The basic objective , it may seem, is to classify countries as developed, developing and underdeveloped. Some people might be curious as to why Iceland is 14 ranks ahead of the United States. This could be attributed partly to the country's low size and population. The African countries , plagued by internal strifes, high levels of illiteracy and abject poverty are lower down the order.
The second index ( arguably no so popular one) is the Human Happiness Index ( HHI). Accrording to the 2006 statistics, Denmark tops the list with U.S at a reasonable 23 and India at 125 (http://www.businessweek.com/globalbiz/content/oct2006/gb20061011_072596.htm). While this is a highly subjective measure, there seems to be quite a bit of correlation between the HDI and HHI. But there is no 100% positive correlation. Why is this? Most of us work hard to maximize our wealth. Most of us believe that wealth translates directly to happiness. Statistics show that people are reasonably happy when they earn a moderate income ( I mean less than $ 150,000 a year). Increased income after that level does not result in any increase in happiness. To me, the rationale is simple. The higher you go ( be it the corporate world, the murky world of poilitics or entrepreneurship), it is increasingly difficult to balance your personal and professional priorities. We all know that this is the very key to a happy and prosperous life. The hardest part in a man's ( woman's) life is to decide and draw the limits. Peer pressure is a difficult one to handle.
Whilst we all believe that one of the purposes in life is to garner more and more wealth , we all should take a break and ponder as to what we would really like to achieve. Assuming we live upto 75 years of age and assuming that we have earned a million + dollars savings for our families and assuming that they are happy with our contribution, is this really what you strived so hard for. Maybe, maybe not. I would think that unless we create an atmosphere of distribution of wealth , we have not done anything meaningful to the society. At our deathbeds, we may not be too concerned about the extra dollars in hand ( if we have a reasonable amount of savings). Instead, we might be thinking about our purpose in life and whether we have done full justice to these. Now, distribution of wealth is not blindly giving away large sums of money . That would defeat the whole purpose. As one my teachers, the late Fr. Puilckal in my high school said, charity is to " help someone to help themselves". There are certainly people who are not in positions to help themselves. We should be more considerate to these people. If we are in a position to create job opportunities to deserving people, if we are in a position to help send the poorest of the poor children to schools, if we are in a position to play our part to uplift the society ( of which our family is a part), then do so- for that is the best thing you can do for one's country and for humanity.
In my mind, India is already a superpower. A country that is spiritually and culturally superior than most nations of the world. A country that is beset with many economic and social problems, but which has the raw talent and potential to tackle all this effectively. To me , the notion of a superpower is 50% culture + 50% materialism. Others may feel it differently. Based on that, India scores 75%. Some other countries that are materially well off get scores less than 75. While we increase our scores for materialsm , we should not forget our cultural roots and our rich heritage. I would rather prefer my country to be only 70% as developed as the first world countries but can still boast of superior cultural and moral standards.
Recently, the monarch of Bhutan ( a reformer and a a great patriot) shifted his nation's goals from Human development index to Human happiness index. Though Bhutan ranks no.131 in HDI, the tiny Himalayan kingdom has its task cut out to reach the top rankings due to its low population. But the monarch chose happiness as the criteria for success. He believes that the goal in a man's life is to achieve happiness. And believe me the people in this nation are said to lead relatively stress-free lives. Perhaps India should take a cue from its tiny neighbor and implement some of their policies.