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Showing posts from 2009

Self Destruction

Vasu Reddy from Chicago
vasureddy@aol.com

The value of our common language and statehood seem to go into hibernation when politicians hack into the fabric of Andhra Pradesh in the name of individual district or regional rights. Andhra Pradesh has fostered a well positioned growth over the last 15 years or so, and continues to develop into one of the foremost investment destinations in India.

The last 4 elected governments 2 with YSR, and 2 before that with CBN, did quite well for the City of Hyderabad first, and then with YSR for the state. The untimely death of YSR, has really brought out the worst in the political parties, and in just a couple of months, the state has been thrown into chaos.

There is no easy solution to dividing the state, and its people. For decades they are one fabric. Albeit identified as 3 major regions in the state, they are one people and one language, bonded together with culture, tradition, customs, marriage, settlements and work, along with the capital city…

Oblivious To Scandal

Vasu Reddy from Chicago
vasureddy@aol.com

You don’t need much to make a mess out of a good thing. As the old saying goes one bad apple spoils the whole bushel. The glory of surpassing the 500 million connections was superseded by the allegations of the largest telecom scam that ever suspected in the telecom world. While the delays in 3 G spectrum negotiations continue between the military and DOT, a new date has been announced along with a new fee structure.

The telecom minister seems unperturbed with alleged scam that totals a loss of 20,000 to 60,000 to Indian coffers. When the CBI raided the telecom ministry and DOT, followed by a number of locations across the country, there was no surprise element to the public. For several years there was suspicion of wrongdoing, specially supported by the new licensees generating exorbitant valuations, and actually getting paid for it from foreign telecom companies. These multiples (in billions of dollars) were generated without a network o…

Planning For Global Expansion

Vasu Reddy from Chicago
vasureddy@aol.com

Three times it happened with the same company, twice by Bharti and once by Reliance Communications. Trying to merge with MTN of South Africa in the last year by the biggest telecom companies in India came up with nothing. It is interesting to note Bharti did this twice, despite their fantastic organizational setup. If we do acknowledge that Reliance failing to close the MTN tie-up has something to do with the big brother syndrome, it is surprising that Bharti will do it twice with the same result.

There could be a slew of reasons for the failure in negotiations, including respective laws, regulations, unions, shareholder issues, accounting, markets, and whatever else imaginable. But trying to do it 3 times in a year is a bit too much. MTN offers a nice relationship to the Indian telecoms with its own emerging markets to add to India’s own aggressive expansion of its mobile markets. But it really is not the only available opportunity.

When th…

3 G Opportunity

Vasu Reddy from Chicago
vasureddy@aol.com

BSNL and MTNL have a great opportunity on hand with 3 G network rollout. Because of their government backing and ownership they have natural advantages that can be immediately translated into huge payoff for both the companies themselves and the government of India.

Although the license fees that can be expected by the government can be in several billions for 3 G auctions, there is an immediate opportunity for both the government to realize the market based opportunity with 3 G networks. A little bit of imagination and a little bit of planning can bring enormous returns along with larger customer base with very high value customers to these networks.

The government owned networks have huge cash reserves and the government itself as the checkbook for never worrying about the network deployment. The is enough capital available for these network to fully rollout the 3 G network and make the highest value services available immediately. When mone…

The Importance of Expansion

Vasu Reddy from Chicago
vasureddy@aol.com

The last couple of years have been quite speculative for the Indian Telecommunications companies going global. Special references can be made to South Africa’s MTN and Bharti and Reliance trying to merge and create a top 5 global telecom company. The current due diligence and negotiations between Bharti and MTN are their second round in 2 years and still continuing, while Reliance’s tryst with MTN last year ended partially because Reliance’s family matters made it a spectacle in the press, and might have derailed the proposed merger.

India and its regulators and the government should encourage and become conducive to expansion of Indian telecoms into the global networks. Helping with changes with favorable laws and financial processes will bring the expansion plans to reality quickly, and lead to continued growth in telephone density.

Global acquisitions will bring global market understanding into the already robust growth in India’s own intern…

Familiarity Breeds Actors

Vasu Reddy from Chicago
vasureddy@aol.com


In the almost eighty year history of cinema we have cultivated the habit of watching performances from familiar names, especially form male actors. The great names of Akkineni and Nandamuri and Krishna, Shobhan Babu were weekly providers of melodrama and happiness to millions of fans. When these veterans stopped (except Krishna) Chiranjeevi and others entered entertainment scene and have continued to supply us with entertainment. Now we have a host of actors who come into our screens due to their lineage. Cinema continues to be a major pastime for our people even in this age of internet and television, and multiple other newly acquired entertainment venues.

The control of production and distribution channels plays a major role in bringing a movie to the market. Some of the new actors have advantages of their family name which other newcomers don’t have which certainly removes the barriers to entry for a movie hero, irrespective of their talen…

Associations

Vasu Reddy from Chicago
vasureddy@aol.com


A group of people with common ideas or aspirations form associations. We have 100’s or 1000’s of associations of Indian origin in the USA, and all of them successfully funded by the associates. We have several decades of history with Indian associations in the USA and most of the older ones have been quite purposeful in their activities.

As it happens with most successful enterprises each of our historical associations have helped fund temples, medical and educational organizations and multitude of wonderful non-for-profit enterprises with generosity and genuine goodness.

The bigger associations also have annual or semi-annual gatherings on a very grand scale that showcases the wealth factor of the NRI community, and draw thousands of like minded families to be together for a few days. They spend vast amount of resources for collective show of camaraderie of their associations, and make these gathering very successful in size and showmanship. …

Associations

Vasu Reddy from Chicago
vasureddy@aol.com


A group of people with common ideas or aspirations form associations. We have 100’s or 1000’s of associations of Indian origin in the USA, and all of them successfully funded by the associates. We have several decades of history with Indian associations in the USA and most of the older ones have been quite purposeful in their activities.

As it happens with most successful enterprises each of our historical associations have helped fund temples, medical and educational organizations and multitude of wonderful non-for-profit enterprises with generosity and genuine goodness.

The bigger associations also have annual or semi-annual gatherings on a very grand scale that showcases the wealth factor of the NRI community, and draw thousands of like minded families to be together for a few days. They spend vast amount of resources for collective show of camaraderie of their associations, and make these gathering very successful in size and showmanship. …

In Country Long Term Plans for Indian Telecom

Vasu Reddy from Chicago
vasureddy@aol.com

It will not be expensive. It will not require big budgets. It will not need any investment bankers. It will not need any government approvals. It will not need shareholder consent. It will be a simple strategy to look for greater revenue sources with long term profit for telecom companies.

India still offers great internal opportunity for long term growth with sustainable revenue and profit opportunities in telecom.

Telecommuting
Billions of hours and dollars are spent on the streets fighting traffic and consuming fuel. Let us not forget the pollution and all other costs of travelling. The stress is another factor in simply getting from place to place. There is no place in India big or small where traffic doesn’t far exceed the capacity of the roads, and it is only getting worse.

With most urban India well connected, companies can start looking at telecommuting as an option to ease the burden of traffic and cost. Internet and phone service …

Indian Telecom – The Case for Faster Growth

Vasu Reddy from Chicago
vasureddy@aol.com

Some 429 million or more users and adding quickly to this is quite an attractive case for faster growth. Government of India and the private sector should push for more rapid and positive changes in telecom. The positive effects on the overall economy due to the communications industry are enormous; 13,000 Crores of possible revenues for DOT in 2009, with 55,000 Crores of revenues in past five years, with a 15% estimated increase in the 2009 revenues to DOT for the foreseeable future. These are billions of dollars every year and just to the DOT as licensing fees from operators.

There is positive earning that contributes to income tax that further enhances government’s take from communications industry. There is no begrudging these numbers, rather the fantastic positive effect of the communications industry to the nation’s coffers. Every minute people are calling out to someone, there is revenue to the government.

There are government enterpri…

Too Successful To Regulate?

Vasu Reddy from Chicago
vasureddy@aol.com

Every wireless communications company in India is big. By big meaning they have already paid huge upfront costs for license and infrastructure even before they get started. Each wireless player have to pay hundreds of millions to get a UAS license and then pay for the area licenses, along with infrastructure and people costs. There is no small mobile services company in India; each and every one all of them are big investments.

There is constant squabble about the impending changes to regulations in the communications markets, and constant delays in implementation of changes and advances. The much delayed 3 G license auctions is an example of squandering a wonderful opportunity to help relieve the congestion in the mobile airwaves, and allowing for much needed high end mobiles services. 3 G services would help bring in more low ARP users who need basic services into the mobile population, while allowing the migration of high ARP users to mov…

Slumdog Telecom

Vasu Reddy from Chicago
vasureddy@aol.com

Using the “Slumdog” title in the Telecom story is not to just attract attention. It’s really a great title for the Telecom Industry in India, which has been a great story for 15 plus years now, and continues to get bigger and bigger in the Telecom success stories of the world.

Despite the extraordinary growth with the market (with over 400 million subscribers) there is continued debate amongst the network operators, policy makers, politicians and technologists. All the commotion is not all that bad with the Indian Telecom market and it for sure makes great reading. There are endless delays with new spectrum auctions, allocation of spectrum to the already approved operators, debates on value of the 3 G spectrum, more committees to decide on future, BSNL and MTNL continuing to get preferential deals, bickering amongst the CDMA and GSM operators, TRAI and DOT differences and whatever that can be remotely controversial is all on the table.

3 G stor…

Telecom Village Project

Vasu Reddy from Chicago
vasureddy@aol.com

Introspection is quite personal. While continuing to write regular perspective on Indian telecom, its governing agencies and its major players, the time has come to make a project on brining the benefits of telecom to a village.

My personal telecom project is to try and bring present day network to my own village in Andhra Pradesh. It is in Kadapa district near the town of Proddutur and known as Korrapadu. There are about 2,000 to 2,200 total homes in my village with about 6,000 people living there. The local education stops at 10th standard in the village. The high school has about 300 students, which is a number that is vastly improved number from may be 10 years ago. The school is well maintained and well organized. The village folks contribute to the school by being generous with donating to children who come first in school, and also to children who do well in various subjects. There are approximately 100 fixed lines connections in t…

Imagining Value Addition from 3 G Networks

Vasu Reddy from Chicago
vasureddy@aol.com

It is anticipated that India will soon conduct 3 G auctions. Although the dates for these auctions have been moved, it is certain sooner or later they will happen. There is continued debate with the regulators on how many 3 G licenses should be auctioned, and how much should be the floor price and competition and other issues. It is very likely that these issues will be resolved and in some form or fashion the auctions will go on. When the auctions are successfully completed and new networks come to life, the users can look forward to added features and functionality with 3 G.

With the expectation of some great new ways to use these new networks, here are some predictions and services that can become real.

Video chat is probably one of the exciting features that can become a viable and inexpensive option with 3 G networks. It will be a great way to see folks while we chat, and perhaps a good value added feature to push on the new network. …