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JIO – An Analysis of Prospects and Challenges

Published January 15, 2017 by vishalvkale



JIO – An Analysis of Prospects and Challenges
A common refrain, question, discussion point among at least us Telecom Professionals {those outside Jio at least} centers around what it is doing, what it plans to do, what disruptive impact it will have on services as well as devices and whether it will achieve whatever objectives it has set out for itself. My humble submission here is one simple statement: the key question is not among the points being pondered above; the real question is whether it, or indeed we as a nation, can afford it to fail? Indeed, does Jio have a choice in the matter except do what it is doing?
Before we move into details, just look at the numbers involved: as per Telecomtalk & Economic Times articles dated January the 14th 2017, it has infused 1,71,000 Crore into this venture; another 30,000 Crore is being planned. That brings the investments to 2,01,000 Crore. Its current subscriber base is between 67-73 Million Customers as on date, and is expected to touch 100 Million subscribers as per the news articles above. That means Jio will have to rake in 600 Rupees per month per customer just to recoup this {what I think is} Capex assuming a payback period of 10 years for the same. This does not account for Opex and other expenditure, system ugdrades that will be needed in future…
But, increase this subscriber base to 100 Million, and the required ARPU rough estimate falls drastically to Rs. 434. At 150 Million, this falls even further to a much more realizable and realistic 289 Rupees, which is far nearer to what the current ARPUs are today. Thus, it doesn’t have a choice… and neither do we.
WELCOME COMPETITION
Rather than worry about the disruption – and there has been, & will continue to be, disruption – let us welcome it. It is a harbinger of better services to the customers. Yes – for the industry and the employees, it does mean a very challenging and yet rewarding time; yes – it does involve, pain in the short term, perhaps medium term for the employees into this industry as well as for some companies. But for the customer, the future is exceedingly bright, as this disruption and ensuing competition will not just depress prices {sadly}, but also, hopefully, unlock innovation and development of
DISRUPTION
Disruption is not always bad, though it is always and nearly without exception, painful. It forces industries to introspect, set things in order, cut the wastage and the incorrect steps, and move forward. Added to this is the impetus it gives on giving a better end-customer experience. Let us take the Jio example. I have not used Jio services, but have used others, and on 3 handsets. The experience is very revealing, if you consider from a customer usage experience
I have tested the 4G as well as 3G speeds for the past 2 odd years nearly half-a-dozen cities in Western India as well as on journeys. The average 4G speed I register is around 5mbps, and highest I have ever experienced is 14mbps {once only} and the lowest 4mbps. Now these speeds are 3G speeds or 3.75G speeds; 4G experience should be at least 7-8mbps, ideally or optimally above 10mbps for a superb 4G experience, perhaps higher. Let us not get too specific or technical here.
IMPACT
Now the entry of Jio will cause, or rather force the competitors to invest in upgrading their networks in order that the customer gets a superior experience; they need to do this – as indeed they already are beginning to do. This is the first positive impact of competition induced disruption. Second, it will expose customers to a superior service along with all its advantages, unlock greater uses and scope of usage, open up new usage avenues that the greater speeds will bring,. It will also further develop other nascent markets – like the online video and content space, as an excellent example. As market size increases – as seen above – prices crash, further creating new market space…
ONWARD HO!
This brings us to the core ground reality+: currently, 4G phones are available starting around 4K; how many customers can afford that range, given our per capita income? How do you pull in new customers? You have to give a value offering; thus – the focus on a 4G experience at cheaper rates of devices. This will open new markets, as well as improve viability for Jio.
THE COMPETITION
In one word – it has no choice either. Both in services and in devices, there is a felt need for new innovative thinking in terms of a variety of areas. Companies, though currently hamstrung due to earnings issues, will need to find the space and the capital to innovate and improve their offerings. Fact of the matter is neither wing of this industry is making bushels of money – services or devices. And I order to maximize stakeholder values, they need to solve this conundrum – Jio or no Jio… namely, how to get more customers into the 4G fold….

    


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Cashless!!!!!

Published December 30, 2016 by vishalvkale

CASHLESS!!!!!
The newest mantra for the nation is this simple, soft and quiet little word – Cashless, that carries within itself a world of potent meaning, deep change, hopes, opportunities and stress… everywhere you turn around, you can see people on social media avowing it as the next great thing… while the naysayers are quick  to point out a series of objections and hindrances to this great new plan.
THE NAY-SAYERS
My take – both are right, both sides are spot-on; that said, there is a decided need to take a reality check for both sides. The nay-sayers first : they need to accept that digital payments are indeed getting to be the norm. You only have to visit the nearest multiplex window to see how many seats get booked through mobiles and other online methods to gauge the change that is sweeping the land. The need of the hour is to avoid making this is a matter of political affiliation, and view it as a sweeping change – one that is a logical extension to the inroads of the Smartphone and the Internet, as I pointed out in an earlier article nearly 18 months ago.
The current environment is strangely veering towards political aspects – which have only a defined and limited role in matters of economics. Be it social media or news articles, at least I have not come across an apolitical analysis, which is of course admittedly hard to pull off, given the important role political will and direction have in the realm of economics. But this is a vitally needed exercise, so that the bare facts and current status of the reality can be understood.
The advantages have been highlighted ad-nauseum on social media as well as news articles; I would rather not go down that road. In point of fact, the reality is that Digital modes of payment were always on the upswing in India {Let us, for a moment, forget the Urban-Rural argument. I will get to it in a minute}. Fact also is that this has got a major upswing and increase in momentum due to recent events. It is a further fact that internet usage as well as smartphone penetration is increasing at a rapid clip – these are all facts, and virtually beyond debate, almost.
The fact is that digital is here to stay; the inroads it has made into various industries, and the disruptive power of this new medium {subject of an upcoming analysis on my blog} – is bound to cause upheavals, change, stress, losses as well as profits. That is the way with disruptive technologies – they radically alter the playing field, making the new approach, new strategy, new tactics and a new mindset a virtual necessity. All it requires is to add two words to the naysayers argument : “for now”. All they state is mostly accurate – for now. This is what we examine in the next part below
THE CASHLESS ADVOCATES BRIGADE
The other side would do well to drop the rhetoric and get connected with reality. The reason is straightforward – no amount of rhetoric can overcome the very real problems, objections and hindrances that lie along the path to increasing cashless mechanisms. A current exponential growth rate of smartphones, data and internet does nothing to remove those problems – neither does it guarantee cashlessness, nor does it mean continued exponential growth. That is simple truth.
The first and foremost thing that needs to be understood and accepted is that going cashless is not and will never be a matter of economics or technology primarily. These are the enablers to this; the real starting point is the simple reality of consumer acceptance. You may have the greatest product on the planet – it is not going to sell unless the consumers want to use it, period. This is one of the first lessons of marketing, to be honest. You have to understand the consumer – not the mere presence of the tool or the solution which you perceive can make consumer life simpler
What makes the consumer life simpler is a matter of individual choice and priorities, determined by good old values, belief systems, demographic details etc – good old simple old-fashioned marketing at its best. And from that perspective, what screams out loud from the entire market is one reality – the penetration of online wallets, mobile payments, internet payments has not kept pace with the penetration of smartphones and the internet; and even the desktop & laptop. It is increasing – yes; but it is a fraction.
What this tells us is that there are major obstacles to large-scale consumer acceptance that have by-and-large nothing to do with the technology concerned. Has anything changed to alter that? I cant see anything. Let us for a moment assume that 100% India goes cashless in the cash crunch. Given the base problems of consumer acceptance – the online transactions would then recede the moment cash become available, given the customer does not accept it as a feasible long-term solution. Now neither of the above will happen – 100% India wont go cashless, and the ludicrous scenario of a reduction in cashless transactions will also not come about.
                 
CONCLUSION
A lot has been said of the physical issues – lack of smartphone penetration in especially rural India; connectivity issues; lack of POS terminals; Per capita income; hinterland issues et al; perhaps far too much. My humble submission to all is that these are standard realities for a developing economy, and only to be expected. What is more important is the lack of acceptance and consumer education in the set of consumers who can be called to be the innovators, the ones who drive the consumption
I am referring to educated people who still why away from using the new technology. The reasons that emerge from understanding these people is what will drive growth and consumption of cashless services in India. These can be fear of loss, lack of a proper legal framework [whether real or perceived} – these can be overcome. But that wont happen overnight, and wont happen with rhetoric. It requires consumer research not just by the State, but also by the companies operating in that sphere, who now need to identify consumer demographic groups consumption patterns of digital payment and craft strategies to increase consumption. This is something that will take time, so let us give it the time it needs. We don’t need or want rhetoric in such a nascent industry…

15 Days Only On A Smartphone {Understanding the internet – 3}

Published September 4, 2015 by vishalvkale

The Internet, The Digital Age and Social Media is all over and ubiquitous, at least in Modern Urban Life; everywhere you look, everywhere you turn – you can spot its presence, its over-arching and all-pervasive influence. Virtually every news media, every conversation on the topic of the internet – all of it focuses on its all pervasive presence and the impossibility of staying without the internet & social media  on a personal level.
This is now getting into an entirely new field : The Smartphone. It is increasingly thought that the power of the smartphone can replace the old desk- and laps by a segment of thinkers; that the smartphone can do just about everything; that it is now as essentiality; that be it personal or professional, you cannot survive in the modern world without the smartphone; that it is not a luxury but a felt and present need, as essentiality.
Life put in my path a chance, an opportunity to test both hypotheses, this all-prevalent understanding, this universally accepted truism by virtue of a transfer to Nagpur, without my Laptop or Desktop, at the mercy of a smartphone only till my new asset was allocated to me by the central team.  And truth be told – while at the official level, it may pose challenges, at the personal level, I have enjoyed it immensely, as it has exposed me, or rather reintroduced me to joys long forgotten, methods and habits now thought dead… 
On an official scale, it did pose many challenges- not insurmountable, but still challenges. It is just not feasible to get the same level of productivity on a smartphone as it is on a laptop; while basic tasks can be achieved with a modicum of ease and even convenience, complex and long tasks require the comfort of the laptop. That said, I cannot function without a smartphone anymore – not professionally, not anymore. Neither can I do so without a laptop – I require both. 
On a personal scale – it did not pose any challenges. There was not even one single bad point of not having a desktop or a laptop; it was a complete waste and a completely useless product, having no value addition. Not one personal task suffered, not one inconvenience was caused by not having access to the desktop or the laptop. Of course, you might comment that there was the smartphone : but hold on just a minute…

In the past 15 days, my usage of the smartphone was minimal for my personal purposes. While on an official level, I cannot function, I just cannot function – on a personal level, much to my surprise, I found myself quite comfortable not using the smart functions of my smartphone. I minimised my presence on Whatsapp, was sparing on LinkedIn and Facebook, and so on : and I did not miss it. Let alone miss it, to my tremendous surprise, I found I quite liked it.
  
I chose to call my relatives in place of Whatsapp messaging; as one example. I chose not to respond to comment on facebook and other social media and so on. I could go on and on; but the fact remains that on a personal level, my life suffered no major hiccups without the smart functions. This does not mean that the smartphone is useless; I did use it for important tasks – like ticketing, googling important things like stores in Nagpur, locations etc
 The impact of this conscious effort at abstinence on a personal level were learnings on professional and personal arenas; in the personal arena – many occasions and tasks, which could have been easier with a little bit of support, became hard in the absence not of the smartphone or the internet, but of the absence of the proper supporting infrastructure like apps and payment mechanisms. Not using the smart capabilities for these tasks revealed the immaturity of the overall market and that it has still a long way to go before being fully relevant and developed
I stopped playing games –  no Candy Crush, no Subway Surfer – nothing. I found a lot of time for neglected aspects like reading, which broadened into interest areas I would not have thought of earlier; I found other ways and means of using leisure. I rediscovered the beauty of the night sky and the environment, found a like-minded person who is interested in wildlife, found the inclination to plan a visit to the nearby Forest…
Can we function on a personal level without a smartphone? In Urban India, not really. But is it an essentiality, an unavoidable reality? Happily {being from Telecom}, No. I say so because while I minimised my usage of the smart capabilities of my phone, I could not take them to zero usage. Railway ticketing, option hunting, house hunting etc would be pretty much impossible without a smartphone. Thus, being from the Handset Trade, I am happy that the smartphone is now a ubiquitous presence in large parts of India
I found my residence in Nagpur on the Internet on my smart device; I found a job this way; I found many locations and other titbits of information that way; I got great value addition.  Most critically, not one task came up where I felt that I missed a Desktop or a Laptop. In my personal space, that had no value. But all of this together did not use up much data, and therein lies the rub. In a nutshell, while the smartphone was a massive value addition in important tasks and is irreplacable, removing it from my personal space proved to be a value – plus.
This places two clear challenges for the app space and for the service companies : the absence of offline payment mechanisms and their easy access {Cash cards, itzcash etc}, are one area of deep concern. The complete absence of apps that can really add value in personal tasks was another area. But most importantly, the fact that all my personal tasks taken together did not use more than a few hundred MB of data is a clear indication of the trend for the service industry in Telecom, and its challenges, but more of that in another article in this series. Let us leave this thought here.   
I close this article with one thought  : is social media over-rated? In 15 days of minimum usage, I have noticed no problems in being absent from Social Media. Sure, it is needed and a nice way to keep in touch and being informed, but it is, beyond a point, completely useless; moving away from Social Media has caused no problems so far as I can see. As a matter of fact, it has lead to positives in many ways…

Book Review : The Indian Media Business – 4th Edition

Published August 8, 2015 by vishalvkale

The Indian Media Business 4th Edition  
ByVanita Kohli  Khandekar
This is the updated 4thedition of the Book “The Indian Media Business”; if you are a deep student of Indian Business / Indian Media, then don’t miss this updated edition; but if you have read the 3rd edition, and are not too serious about Business in India as a student or analyst, then you can give this a pass. This edition has many changes to it that warrants its listing as a separate book almost; these flesh out the previous material, and make for an interesting and absorbing read. There is a new introductory chapter in the beginning of the book, as well as an analytical section in each chapter, updated data and more relevant graphics, more relevant and updated regulations, changes and history, making it overall a far superior effort to the previous one
THE FUTURE OF INDIAN MEDIA – {Introduction}
This is a short, 3-4 page analysis of the trends in Indian Media, taking a look at investment, profitability, fragmentation, consumer trends and segmentation; and is replete with excellent supportive data on reach, growth in media, time spent, revenues, investment, Media Groups etc
·                   The constant comparison {or, to be more precise, examples of  and from} with the developed markets, throughout the book, seems premature and out of place for the Indian scenario. This is a significant downside of the book – although it does give interesting insights of the international scene. Since this concerns Media – differences in Economic Status, Culture, Stage Of Development of the Industry renders any comparative look irrelevant.
·                   The notation – the consistent western notations make no sense, as we are attuned to thinking in terms of Lakh and Crore; thus, notations in Million and Billion are, frankly, useless, and are a major strain os you struggle to compare with other numbers you have read, or place it in perspective with Indian Data. This is a major problem throughout the book.
·                   The value-judgement on segmentation along linguistic or cultural lines has been treated, in my opinion, in a dismissive fashion – when the reality could just as well be that this is what is actually firming cultural ties, preventing domination of one tongue, leading to deepening democracy and prevention of fissiparous tendencies In its own small way
PRINT : {The Indian Print Industries Death-Defying Growth will continue for some some}
The analysis on print is excellent, the objections notwithstanding; with a superb presentation of why Print is in no danger, and will continue strong in India. It also identifies the threat of corruption of content very accurately in a separate segment, which is top-class, alongwith the presented linkage to advertising revenues. It presents a complete overview of the entire print scenario spanning magazines as well as dailies, regulations, metrics, valuations, changing readership trends etc
·                   Again, Language Newspapers and Media has not got the attention it deserves; this book is largely focused on the English Media, although around 90% of the material is generic and applicable to Print in general, and extensive data for even language media has been presented. That said, the focus in terms of analysis, space in the book and interpretation is lacking
·                   To be fair, the author has herself identified this with an exemplary case study on Hindi Newspapers, with some tough questions, like the over-emphasis by advertisers on the English Media – leading to the question, are brands reaching the right consumers? More research is needed-  but there, we are absent in both universities and companies…
TELEVISION : {The Indian Television Market is finally coming into its own}
One of the best chapters of the book – exhaustive, detailed, comprehensive and spectacular in content as well as analysis.
·                   Virtually flawless in its entirety, with an excellent coverage of issues , though it does tend to, yet again, miss the chance of analyzing the rise of regional channels fully, as well as advertising revenues by language
·                   The preference, in my humble opinion, of pay revenues begets the question – is this model workable in India? Can all Indians pay high fees? What about the regulation? The identified problem of cartelization in the book advocates a more measured response, and that regulated pricing is the only way forward; in a limited competition, the risk of rising prices cannot be negated.
·                   Further, the comparison with developed markets is again premature, as the paying power of consumers is much lesser in India; the elitist focus on pay models, or the opinion on exclusive broadcast rights of national events comes across as being pro-Corporate; the Indian consumer cannot afford to pay for access that the focus on pay or exclusivity will inevitably bring
FILMS : {In its 100th year, Indian Cinema look young, fit, and with it}
An excellent chapter, which identifies trends and developments that will surprise the reader; this is a chapter that is riveting and well presented, with several deep learnings and take-aways
·                   Again the comparison with Developed Markets! How can you compare ticket prices across India and the USA? What about the difference in purchasing power?Are we reaching all audiences? Can the poor afford your multiplexes? The pay models? Don’t they have a right to fun?What about developing alternative models for them, and not just in films? Cant some out-of-the-box thinking create a market out of that?
·                   “underworld money – industry is absolutely clean” : on what basis? No proof presented…
·                   The fragmentation of the market between NRI preferences and Resident Indian Preferences, local and regional preference variation elevates this chapter to the stuff of legend, with proof; as is the divide between A and B class cities in India.
MUSIC : {The music industry best symbolizes the possibilities and perils of digital}
The story of how an industry can adjust, revive and ride to glory, overcoming all converting challenges into opportunities… The story of music is, in the words of the author herself, is  “that digital can really trouble you, disrupt your business and make life miserable for you, but if you can harness it, it can still deliver”. That about sums it up; all other industries can learn from this excellent chapter! The big surprise of the chapter is the fact that of the Music Industry’s  Rs. 1060 Crore sales  in 2012, 60% came from new formats or non-physical sales.
·                   A flawless in its entirety, I could not find anything out of place in this entire chapter; which is replete with facts, is free from any assumptions unlike the previous ones…
RADIO : {The Radio business really needs to move on}
Yet another thought-provoking chapter, this goes deep into the Radio mess, looking at all issues relating to the current mess, from license fees to roll-out to content to localization in a very well-crafted chapter. The main take-away from the chapter is a superb detailed analysis of the Licensing norms and process, and a small examination of how decision paralysis is impacting the industry and spectrum both. That said, this chapter could have been better :
·                   Focus on content, especially localized content, could have been greater; while it is true that localization has, for the first time in the book,  got adequate space, the focus in not on the nature, language, content of the programmes; that could have been attempted. Content is the product – not radio; further, how will radio fare against Saavn, Hungama etc? How can FM differentiate and make itself more relevant? This I missed in the chapter
·                   A small notation : radio, with its relative ease of setting up, needs regulation more than most, imho : due to security considerations primarily, I don’t think this can be argued with
DIGITAL : { Stop, take a breath, Digital. Think about where you are headed }
A fantastic and deep look at the current status of digital and telecom, and emphasizes the felt need for a re-look, a re-think and the requirement of a sense of direction. The prologue successfully tackles the belief that Digital is a panacea in a sharp 5-6 page critical analysis, proving that it is anything but a panacea and a utopian ideal, using data, facts and figures to make its point. This one is a genuine surprise in some parts. It deals with convergence, fragmentation, ROI, Scale, Consolidation in a few behemoths, that no one is trying to grow the medium strategically and that there exist huge errors in companies in this field,
·                   I will just paraphrase the author here for emphasis : I cannot put it better. “This chapter then is an attempt to create a structure around all the forms of media emerging as a result of the affairs and marriages between old and new formats, between technology and content, between the medium and the message. It collapses the two old chapters on Internet and Telecom into one overarching one”. Top stuff- convergence is the future!
OUT-OF-HOME { The similarities between out of home media and cable TV are startling } & EVENTS { Everything is an event }
The last two chapters deal with the underdogs in media – out of home, and events. These two are deeply interesting, as for the first time, adequate attention has been paid to these two step-daughters of Media, given their historical treatment by us not from the Media trade at least. As in the rest of the chapters, everything from valuation, regulation, how the business works, history to current issues and major players to growth challenges have been covered in detail, making for a most absorbing read! The only miss is that the out-of-home completely ignores {apart from one mention in a table} Wall-Paintings, which were the mainstay in rural India; one can still spot these wall-paintings.
CONCLUSION
The book is a one-of-a-kind, placing in one place regulations, business internal, valuations, metrics, history, operation, challenges, issues, current operational methods,  – making it a top-notch resource if you want to have a overall understanding of the Indian Media business, as well as a starting point for deep studies. Reading this gives one a comprehensive idea of the trade in at least the basics. A must read for everyone in  Marketing, to be honest.
The book is good at tracing the genesis on each industry right to its beginnings, studying the interplay of market forces and regulations, also interventions, that lead to the current state of affairs – giving deep insights into both market forces as well as the good side of regulation & the perils of over-regulation. It identifies burning issues like Consolidation, content corruption, regulatory hurdles while also going deep into the genesis of some of these issues, while also examining how these industries actually operate, making this book a unique resource, and easily one of the best Business Books I have read.  

Smart Cities : More Questions Than Answers

Published May 17, 2015 by vishalvkale

SMART CITY
A ‘smart city’ is an urban region that is highly advanced in terms of overall infrastructure, sustainable real estate, communications and market viability. It is a city where information technology is the principal infrastructure and the basis for providing essential services to residents. A Smart City, should have Power, Water, Cleanliness, Seamless Information, 24/7 Utility Services, WiFi zones, Recreational Spaces, Waste Management, Connectivity in transport as well as communication, Speedy Service, Transparency and Accountability etc.

While there are good points & it is also a good and needed step, but…. firstly, it doesnt take into account the realities of the Indian Demography, Polity, Bureaucracy, Governance and Systems. it doesnt take into account the Indian Economy, and its doesnt take into account the status of the real estate sector, as also any number of other realities that beset the Indian Economy.


ECONOMIC STRUCTURE

Economic output by the entire corporate contributes just 18% or thereabouts to the Indian Economy. The rest is Agriculture, and unorganised sector. A smart city implies high doses of technological capability, which scores upon scores of our companies do not possess, and the gap is too large for them to plug, given the history and the monetary requirements. Other nations enjoy economies of scale and can produce whatever we can at cheaper rates. If we keep a purchase local condition, we are finished before we start, like the FDI in retail brouhaha.


If we cant compete in a commodity like Stainless Steel, it is foolish to believe we can compete in high-tech sectors. We have skills aplenty; they have the economies of scale, which is what is needed. For that, we have to dismantle a large part of our taxation structure, which is inverted in more than a few categories.



Next, how do you fit in the small variables like the thelaa-gaadis, small eateries, roadside stores etc – all the things that define a lovely Indian City in a Smart City concept? Is it clear? What happens to these small support services? They are a cultural reality; I wouldnt be caught dead in a 5-star; too stuffy and showy for my taste, Give me the fantastic Idli-Vada at Sion Station; given a choice, I would eat Idli Vada over those showy dishes in a Marriott any day! The point is that these minor details need to be idenitified and clarified before we start, or we run the risk of overzealous officials banning or relegating such activities to the backburner, leading to loss of livelihood to thousands, and an erosion of uniqueness and attractiveness as well.



Next, Sustainable Real Estate. End of Story. Take a gander at the real estate market in India. It is controlled and cartelised, beset by crime and corruption. TIll last year, prices were holding in Urban India depsite their being a 50% vacancy rate of unsold inventory. What happens when the Smart City Ball gets rolling? Sustainable? That it isnt. Valuations will go through the roof, and that is a fact. 


It completely ignores the structure of the Economy, which is characterised by small entrepreneurs. I would like to understand how the small entrepreneur with 50000 seed capital can make a mark in your smart cities. These ventures are capital intensive, and import oriented, which is the real reason why everyone from China to USA is agog; they see $$$$Kaching$$$$! Study the incomparable report on the Indian Economy by Prof Vaidyanathan – India, Uninc; it gives figures from Government sources and introduces you to the real India.


There are two data points available : 5th Economic Survey, 2005 and NSSO 2011, Both tell the same story: Smart Cities are nothing but a fantasy. They are premature, they are the future, but very premature. The Idea is right, but a decade or two too early. As per the first, there are 41.83 Million establishments in India; 76% of these worked without any power; employing 100.9 Million; 46% were own account establishments. As per NSSO 2011, 66% were OAE; retail trade slipped from 42% to 30% and ,manufacturing grew from 23% to 31%. Own Account Establishments were 60% of retail, 72% of Manufacturing, and 63% of service. Contribution to the GDP : between 46-58%.


Given the Smart City definition, a good number of them don’t fit – and largely for no fault of theirs. These organizations do not have the money to upgrade – they will upgrade eventually : a process that is currently underway. That is the time these concepts can work. And this will happen in tandem with improvements in education etc basic facilities in India, not before.

PRIORITIES & REQUIREMENTS

What does the nation require? Research shows that nearly 93Million of our farmers are losing 800-odd per crop; data shows the level of poverty in our nation; consumption trends corroborate, with the top 10% growing at a rate of 3% as opposed to 1% consumption growth for the bottom 40%. Farmer suicides are going up; the economic fundamentals are shaky; the global economy is in unprecedented turmoil, and all we can think of is Smart Cities? Our Armed Forces are in dire need of funds; and all we can think of is Smart Cities? We spend the lowest in GDP terms on Education, Defence and Health, and all we can think of are Smart Cities?



We dont need Smart Cities, We need Schools, Colleges, Primary Health Centers, Rockets, Mortars, Fighter Aircraft, Missiles, Satellites, Seed Research, Irrigation, Water Purity for Agriculture, Extension Workers to teach our Small and Marginal Farmers, Redoing our Duty and Taxation Structures, Fair prices for farmers at farm-gate, cement or pukka roads, etc etc. A smart city can come after that.



Besides, a Smart City requires – data connection. We in India have average & unreliable speeds of around 1,5mbps; the developed nations have a speed of upwards of 22mbps. They have high penetration of credit and debit cards and acceptability of online commerce; we dont. India has precisely 73Million broadband connections – this is including individuals with a double connection; I have three. Less than 69Million Indians consume more than 512mbps of data on a monthly basis; and cashless transactions are unknown outside the protected environs of top places.


The logic is sound, I clearly stated that concept is needed – but a decade or two too early. This will work in a relatively corruption-free atmosphere, where the Land issues are under control. That we dont have. Next, this works in economic reality which enable the above, which again we dont have, as I have been at pains to point out.


The shift to the small cities will not happen in the industrial sector; the vast majority – upto 90% – of the actual producers are concentrated in only a select few agglomerations, namely Mumbai, Delhi, Chennai, followed by Kolkata, Bangalore, Pune, Ahmedabad. Other second-level sites are Nashik, Meerut, Hyderabad, Coimbatore, Ludhiana, Kanpur, Rajkot,Surat. No one else comes even close to these cities, although Jaipur, Chandigarh, Hissar, Nagpur and a couple others do try hard. These are further populated by small enterprises.



The shift will not happen from these established centers; there is in existence an ecosystem that now is impossible to replace,. with manufacturing facilities being deeply interlinked with their vendors and suppliers who have now set up in the same or nearby areas. In B2B industries, a symbiotic relationship has started with the consumers and the manufacturers sometimes co-located, or located within 8-10Kms of each other.



The proof is in the manifest failure of industrial areas in other wannabe metros, like Indore and Bhopal, which have simple failed to take off. They remain consumption and trading centers, not producers, despite an incredible level of support given to them by successive Governments. The failure of Bhilai to rise as a comparable center to even Nagpur, let alone Surat & Rajkot, is a case in point.


MY FEAR
We are only exacerbating the rural-urban divide. As on date, few Urban Indians show the same level of passion for rural development, which is the only thing we need. Rest will take care of itself! We are asking people to focus their valuable- sorry, waste their valuable time on cities, where the conditions are utopic in comparison to villages and that is a fact! Large numbers of villagers would willingly settle for facilities comparable to our current “stupid cities” and that is also undeniable.


No amount of planning will overcome the serious objections there are, some of which are enlisted below. I dont buy visions; they are a dime a dozen. I buy execution – call it my sales instinct, but I am not impressed by Grand Visions without a proper execution document, which contains detailed studies & steps.  And this is not made after finalising the plan; that is stupid, blunt and straight. Typically, that is to be visualised before finalising the plan and the execution.



Where is that plan? If it exists, why isnt it in the public domain? Where is the detail on what exactly a “Smart City” means in practical terms – real world terms, not meaningless jargon, which even I can write, given I am a part-techie and a part-telecom / business person to boot?????? Give a person time and opportunity, and out comes a logical sounding plan! That is dead easy; doesnt require any great skill whatsoever. What will be the mode of transport in a Smart City? Residence and Commercial Areas? Connectivity in Roads? Size of internal roads? Drainage?



What will be the connectivity in terms of data and communication? What technology will be adopted? How will the technologies communicate with the other “stupid’ cities? What will it cost the residents?What happens to the slums? Or doesnt the concept apply to the slums? If they are in a smart city, they should be smart slums too! Each city has bylanes with crowded marketplaces; these are the epicenter of business in India, commanding a lion’s share of the business volume pan-India. What does this mean for them? What is in it for them?



How will rural India benefit? Please give specifics : not general statements like find jobs, or employment generation. Jobs in which industry, at what level paying what? Where will they stay? Where will the land come from? What will it do to land prices? How will you ensure proper settlement for dues – and if you think this is not important, I can produce 40 years worth of terrifying tales of neglect? How will you ensure Land Mafia is controlled – without real and serious administrative reform which no government – AAP apart- has shown any appetite for?



A Smart City means Power, Water round the clock, Where will that come from? We dont have enough power now, wont have for another 2 decades. Who will sacrifice their power for these Smart Cities? And why should any stupid city sacrifice even one kilowatt for a smart city, pray tell? Where will water come from? Any number of cities are seriously water deficient. Where is the plan for all this?????????



A Smart City implies a certain level of data connection backbone; which we dont have, and wont for a minimum 5-10 years more. It also means seamless information availability. How will you ensure that, given the various data collection points, formats, protocols? When your land records are not computerised? When any number of public facilities are not online fully, and there are no plans for them either? When you still have no common information system in the Government? When there is a redundancy in several documents?  I could go on and on… Where is the real plan?


Why does this generate this level of interest? Why doesnt the question of farmer suicides, famers earnings, rural facilities, etc generate the same level of attention, interest, passion in Urban Indians? Arent they Indians? What is being done for them, pray tell? We are still focussing on cities, not on the villages where the situation is decidedly bad. Why hasnt the same level of euphoria, the same level of passion, the same vision, the same money been generated for setting things right in Rural India? The government is hard selling this concept abroad, showcasing our development, whereas we require basic steps like Education, Health, Governance and Defence!



What it should have done is launched rural programmes with the same fervor, passion, vision and attention – which is not the case. We have finite resources both in terms of money as well as other aspects. How we spend those resources is the key.

In point of fact, Smart Cities is the last thing we need; we dont have the ground realities even in urban India for it, and that is a fact. Not one person anywhere in India has even tried to meet the serious and potent objections being raised by any number of people; and are focussing on the vision. 




Remember : Great plans fail on execution as, among other reasons, it turns out that the ground realities did not support the plan in the first place.



The Screen As A Strategy : Understanding The Internet

Published April 29, 2015 by vishalvkale

I closed the previous article {found here : Understanding The Internet : Reaching Into The Gut Of Existing Systems} with a statement that few organizations truly understand how to use the 5-21” space of the screen;  this article looks at this aspect in a little more detail. A great many companies use the customer-facing aspects of the internet as merely another tool to communicate and connect, completely ignoring the full power of the internet ecosystem.
The Screen, first of all, is mistakenly defined as just a mere device that displays, or acts as a window, disseminating information to your prospects and customers, and the general audience. The screen is more of a doorway, a portal that transports – or has the ability to – transport your customer into a world of constantly interacting stakeholders in your product, your company and your addressable market segment. If that doesn’t scare you as a Brand Manager, as a Marketer, and as a Sales Professional, high time it did.
Before the internet ecosystem evolved, the touchpoints a customer had for interfacing with your products were limited – The Shop, Company Offices, Other Customers who were limited to those who were met personally, Media, Competitors and a few more. But cut to today and that has undergone a sea-change, with the potential ability of the customer connect having increased to almost infinity, with the feasibility of getting exposed to and influenced by a much larger array of touchpoints, viewpoints, opinions – as well as both positive and negative customer feedback and experiences
It stands to reason that in the changed environment of freer flow of information & increased touchpoints, the customer communication has to change from a one-sided monologue to more of an engagement with the customer. The reason is straightforward – a greater number of touchpoints mean larger information volume and interactions, contrarian opinions, noise and greater scope for replaceable products to engage with prospective customers, as well as greater potential of the medium to enhance audience experiences.
Thus far, we are on established management jargon, which is spouted by a good number of companies. Only a select few organizations manage to actually convert the monologue with an active engagement; very very few, in fact. For, a large majority of the sites I visit, at least in India, still adhere to the old style of communication; little effort is made to enhance the customer experience, and make it more rewarding and meaningful. In some cases, the customer experience is actually negative in many ways. The reason this is not showing in sales is either due to the price differential; products are cheaper on the Ecommerce sites, or due to other attendant disadvantages.
Let me illustrate with 2 examples : one B2C and one B2B. The internet is so vast, that it is not feasible for me to cover more in a blog post; neither is it advisable. In B2C, let us take books. Why does a customer buy a book online? There are two reasons : Price, and Convenience, which has lead to galloping sales at online book stores. But halt a moment, and analyse in depth. And, instead of asking what does the internet give you, ask what does a book stall give you? Reverse your viewpoint for a minute!
In a book store, you can get a feel of the book, you can flip its pages – which is pretty damned important if you are reading a new author, or a serious topic; you can easily compare similar books or two options on the same subject. Furthermore, you can far more easily spot new books; the interface is much bigger than a small screen; in a store, you are exposed to 4 walls crammed with books, which  make for easy discovery.
To compete with this, you have the price-offs and the convenience factor of the small screen; till date there has been on attempt at going beyond this. Reviews do not count in the age of the convergence of technology; it is simple enough a task to look a book’s reviews on your smartphone and purchase offline! The offline stores are also now becoming more nimble, willingly offering discounts to regular customers, and other small facilities, like getting selected books for them. They are now allowing customers to sit on sofas in comfort, and browse books to their heart’s content – in other words, they have added several value-additions to the customer interface, making for a much more rewarding experience
And that is where the digital players are not doing anything : trying to make the customer interface more rewarding. Sure, this will be expensive, time-consuming and demanding; but it will have to be done sooner or later. Currently, you are not facing the pain as the market is untapped, and there is a scorching growth pace, that is hiding the underbelly. All are advised to study Telecom, and how its ARPU fell, and draw parallels and extrapolate to the future, with penetration at higher levels. That is a reality every industry has to face.
In our example, a moments’ thought and you can spot any number of ways that the customer experience can be made more rewarding. You can facilitate browsing titles – and the usage of technology can ensure that the browsing experience in online stores will be leagues ahead of the offline experience, as you can offer targeted searches in the book’s content. Author-searches, cross-selling opportunities, specific searches of interest – all of which can make the customer experience exceptionally powerful.
You cannot match the dexterity and ease of new book discovery in offline stores; but you can work around this issue by offering other advantages. You can offer first 1o pages downloads free, as an example. You can look at facilitating direct interactions with the author, fan pages, discussion forums; you can facilitate book searches and book discovery in a much wider database, and can give options for time of delivery if book not in stock {beyond the current We Will Get In Touch When In Stock} and so on and so forth.
All this can be achieved at the touch of a button for the customer, which cannot be matched by the offline store. The current model of price-driven sales online is already driving a deep schism into offline models, leading to a massive backlash by offline models, who are competing with extraordinary tenacity and dexterity, and are in the process not only maintaining relevance, but actually winning back lost ground.
And all because the online people aren’t using the full power of the medium; and that is because the pain isn’t showing in the numbers, as the high growth rate is ensuring the new customers are greater than Churn. As I said, learn from Telecom : there will come a time when Churn will exceed new customers. And no one can say how far away that time is, given the stunningly scorching growth rates in this industry.
In the next article, I shall take a look at the B2B marketplace, as well as some interesting entirely avoidable mistakes made by the best of them in this trade in both the B2B and B2C Space. 

UNDERSTANDING THE INTERNET : Reaching Into The Gut Of Existing Systems

Published April 17, 2015 by vishalvkale

UNDERSTANDING THE INTERNET : Reaching Into The Gut Of Existing Systems



At first glance, the title – understanding the internet – seems an anachronism, something out of place in the modern world, where the internet is ubiquitous, at least among the educated classes; and is rising fast in the rest of the people. You only have to look around to see people using the internet, gaining from it, and being completely comfortable with this medium.

And yet, that is precisely what my contention is : that this medium is actually the least understood, and in just about everything. The potential of this medium is being felt in just about every human endeavour, and as I have observed before, its raw power to reach into the gut of existing models is only just being felt across industries. What is this raw power I am referring to? And why is it the least understood medium?

The average person comes across individual levels or layers of the internet at various times; this interaction is in two distinct areas in terms of purpose of usage : Personal, & Business / Professional. On a personal level, we come across Facebook and Twitter, News Apps, Online Shopping portals, and many more sites targeted at the individual; traditional classification extends to such terms as Social Media, News Portals, and so on and so forth. But, on a professional level, depending upon our profession, we similarly interact with many sites and types of portals like dedicated B2B or B2E portals and other sites – which include the above listed personal sites!

If the above sounds confused or disorienting, let me clarify : my point, simply put, is that we need to reverse our outlook; when we think of the internet, all of us think of it from the lens our personal interaction on the internet, even when looking at the professional aspects. We always think of how the internet has reduced distances, made price discovery easier, information dissemination faster and borderless, made customer contact easier and so on – in other words, looking at it Point-To-Point, individually or lacking a systems perspective

The internet is all that, and much much more. We need to turn it around 180 degrees, and look at it from a business perspective, from a strategic perspective and a systems perspective to understand the raw power, as well as appreciate how little we understand this medium, or just how wrong we have been. This has profound implications for all businesses, as we shall see.

Reaching Into The Gut Of Existing Systems
Let us start at a very basic level – the simple point-to-point interaction. Consider pricing – in any market, it is now common for a customer to compare prices with the internet; it is equally common for a customer to compare prices across geographies. This applies to retailers and distributors as well; meaning, quite simply, that price differentials within the same market will go the way of the typewriter. What all team managers, especially senior managers, tend to forget is that this also applies to your teams, which is now stunningly well connected internally.
It has always been a simple sales tactic, that of differential pricing, which in an earlier era, was nearly undetectable, given the low interconnectivity between the constituent customer profiles and the channel partners / retail / Your own team members. This at times unhealthy practice gave results while harming the system and leading to a leak of corporate money, and harm to many a top performer and talent, as needless discounts are given;  in the current era of Facebook + LinkedIn + Whatsapp + Email + Mobile Telephones, this is just not tenable, as people are way too interconnected at each level of the business ecosystem – making for easy discovery of the stated underhanded tactics.
The combination of just these 5 – Whatsapp, LinkedIn, Facebook, Email and Mobile is hard to beat. You can share information over the mobile – back it up with proof of pricing by the simple expedient of a mail or a Whatsapp photograph, or look and compare online and offline prices with ease, given the penetration of the Mobile Internet. Convergence of technologies at its very, very best.
From a systems perspective, this means that the old tactic of having differential prices for varied distributors and geographies is now a much more challenging task, given the convergence of technologies and gadgets, and ease of connection. It has meant unhindered flow of information across and within markets, ensuring that the price differential gets easily exposed. This is driven by the entire interconnected ecosystem, as employees and the channel connect with each other with ease over various media; customer openly voice opinion on the internet etc.  
What most companies further do not understand is this : there is an increasing push-back from the retail end of the business as well as from teams, who are now converging into interest groups and power fora, and getting together to force companies and managers to alter their short-term tactics of differential pricing within the same channel as well as across channels. This is a direct result of the free flow of information wrought by the internet, the mobile and the entire information ecosystem.
And that is what I meant by stating reversing from an outward looking perspective of how the internet is changing the business environment and making life easier for businesses. That way is a strictly personal look – you are essentially analyzing the advantage you have as a professional. What needs to be done is analyse the entire impact from a systems perspective, from the perspective of not the Manager, but the entire business. In other words – get into the shoes of the Business, not the shoes of the person managing the business.
And that is the most critical learning, and the real power – we aren’t talking about just the internet, we shouldn’t be thinking about just the internet, but rather the entire ecosystem – The Internet, The Computer System, The Mobile, The Falling Cost of Access, The Fast Rising Usage. We should further be looking at it holistically, and from a dispassionate analytical perspective, and changing the operating style as the market changes all around you.
In simple terms, the entire basis of business, the entire basis of doing business on the ground is changing fast, driven by a vastly changed ecosystem. And managements just aren’t in sync with this simple reality. What has happened is, quite simply, the entire bedrock on which internal systems are based has vanished almost overnight, contributing to an exponential rise in pressure on employees, managers, systems and organizations alike, as they failed to change with the times…
There are many other parameters – like the impact on the simple things  – like telling the truth, or stretching the truth; and how the internet ecosystem is setting about revealing the truth and making lying impossible for organizations; or the simple fact that even some of the most tech-savvy organizations don’t understand the 14-21” screen, and how it is to be used for maximum impact, or indeed how to strategically use it… which is the subject of the next article in the Digital Series, of which this is the third…