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December 30, 2002

 
Hey, Reliance Infocomm finally has a website! Crappy one (why do so many Indian companies have crappy websites?), and has an alarming tendency to choke (I sincerely hope this is not a harbinger of things to come :-)), but I guess it's early days. Message to Reliance: lose the Flash animation on the home page. Flash-only home pages are so 1999 - not even Macromedia does it.

 

 
Great article from Network Computing on what to expect if you wish to use your CDMA 2000 1X phone a lot for data. Given ping rates Indian dialup customers currently get, though, I think 500ms-600ms to the US (if possible) would not be bad at all.

 

December 28, 2002

 
The Telegraph: tremors in Bollywood as markets hug Hollywood. Not surprising. Given the most Indian directors haven't gone beyond the tired themes of love, friendship and boy-meets-girl bubble romance, why should people pay to watch Hindi films, especially now that English ones are also available in the local lingo? Film music standards have come down, dialog has gone to the dogs, the dresses actresses wear are more substantial than the plot (and that's not saying much for the dresses); in general, Bollywood has gotten predictable -- and still refuses to acknowledge the advances Hollywood has made in cinema. The incredibly talented Govind Nihlani, who made Tamas and Hazaar Chaurasi Ki Maa and probably couldn't make a bubble-romance movie to save his life, puts it very well: Audiences are not excited by us anymore. Their tastes have changed. Darn right.

Last week, it was my ill fortune to see Kaante, a bad re-make of Reservoir Dogs (hey, I was bored and had nothing else to do), which apparently had been shot fully in LA and promised 'Hollywood production values'. Boy, was I disappointed. Bad editing, a cameraman who had a bad case of the jitters (guys, even heard of the Steadicam? Oh, the jitter was meant to induce a film noir effect, you say? Ok. but to me it mostly looked like film-noir-by-accident), the most ridiculous bank robbery ever committed onto film, and Sanjay Dutt (and most of the rest) spouting scatological profundities like he was still in the Mumbai docks -- that surely left the largely 'family' audience embarrassed (it was the opening weekend, most came to see what Amitabh Bachhan was upto in this movie). Two days before, I was at the India premiere of Die Another Day -- nothing earth-shaking, but solid production values and good, if mindless, fun. Don't know why I bother with Hindi movies at all: guess its some renegade hope-against-hope within me that this time they'll get things right.

Of course, when Nihlani says, We can’t make a Titanic here, he is only half right: Ang Lee needed only $12M to complete Crouching Tiger (which was the most expensive Chinese film to date): nowhere near $270M for Lord of the Rings or $300M for Titanic. Danny Boyle needed even less to complete 28 Days Later, which did well in the British charts this year (he used Digital Video to cut cost); whereas Sanjay Bhansali burned through almost Rs 50 crore ($10M) to create Devdas, the most expensive Hindi movie, which turned out to be a barely passable song-n-dance turkey where the sets looked very good. It barely made its money back. I think the lesson is clear: big budget (by Indian standards) films will have storylines to support their budgets, and (if used) the effects have to be real, not cheesy phong-shaded monsters. That means a world-class production facility in India. And 'til you have that, dramas (I thought Road was passable, and the box office gave its thumbs-up to Raaz, for example) will do well. And the further you are from boy-meets-girl crap, the better.

PS. This might be a good Hindi film to watch this winter: Mr and Mrs Iyer. Interesting storyline.

 

 
It's interesting to read the responses of cellular operators (cellcos) in these two Business Standard articles to the Reliance WLL launch. It's pretty clear that their preferred weapon for countering the WLL threat will be regulatory appeals and FUD. What neither of them will admit is that each cell service viewed itself as a "premium provider", whereas Reliance is betting heavily on commoditizing telecom and growing the market. It's interesting to look at the arguments cellcos present:

Most subscribers who are left in the market are the pre-paid card types who will not pay anything more than Rs 300 a month. Yes, but that could be because they are scared of running of humongous cellphone bills. Consider the number of Indian parents who `finance' their teenagers' cellphones, I'd say that there are a lot of people out there who wish they could talk more, but are scared of ballooning bills, Airtel's (to choose a cellco at random) non-prepaid tariffs being what they are (Rs 2.60/minute incoming and outgoing, for example). Also, let's examine that Rs 300 number in detail. Airtel's tariffs in Madras provide a 300/mo card, but the talk value of that card is only Rs 50. At their rates (Rs 2 incoming, Rs 4 outgoing) one gets something like 25 minutes incoming talktime a month, assuming zero outgoing calls. Each SMS further reduces the talktime left.

In contrast, plans like Reliance's provide cheap Long Distance (STD) services and free incoming calls, and outgoing calls going at 1.20/minute, it will be a cakewalk for a lot of kids to sweet-talk their parents into a service that'll only cost marginally more (600 bucks per month) and provide much more value. The cost of entry is also temptingly low, Rs 3000 for starters.

Customers will be paying upfront for the new Reliance services and the cellcos will be pointing out that this could be risky. It is after all an untested service. Classic FUD. On the other hand, the cost of entry is low: Rs 3000 (plus Rs 600/month), about the same as the deposit for a postpaid connection (and a Java-enabled phone in the bargain. I wonder if someone can supply Stingers in India at around this price. Otherwise, Microsoft may kiss yet another large market goodbye, especially with Mukesh Ambani's new-found love for Java). Also, I don't know about other cellcos, but Airtel's service is not anything to write home about: Airtel. Busy Signals are our middle name :).

WiLL customers won't be able to talk to 10 million mobile phone customers until the interconnect agreement is signed. The cellcos are in a bind here: Reliance's STD rates are Rs 0.40/minute, and the only way they can provide that is if BSNL or Bharti provides similar prices. Given Bhartis current STD performance, I am doubtful; BSNL may be better placed and in fact says will match Reliance's rates (one wonders what these greedy incompetent ****s were doing these last 50 years!) On the other hand, any cellco who wants to provide STD through Reliance will almost certainly have to sign for interconnects with Reliance. And given that interconnects are required by law (and the TRAI can enforce this), it is only a matter of time anyway.

Vikas Saraf, CEO, Essar, GSM cellco: [Customers] should be educated that they are paying extra because for instance, they are getting SMS as a value add. I pay Rs 1 per SMS I send anyway. Users get CDMA-based text messaging for free in most of Reliance's plans. 'Nuff said. CDMA/GSM message interop is another question, but there is no technical barrier.

The GSM operators strongest point is that intra-circle (typically, circle==state) cell-to-cell calls are much cheaper than an equivalent STD call. Of course, thanks to GoI stupidity in handing out licenses, most subscribers in metros cannot take advantage of this (they are a circle unto themselves). But if you call STD out-of-circle you're out of luck. Of course, STD rates will probably crash anyway, removing this advantage from GSM operators.

Reliance package is a niche package. Very few customers will go for this, said a Delhi-based cellular operator. Yeah sure. The niches are: folk who think a prepaid is too restrictive (and at Rs 50 talktime for every Rs 300 you spend, you bet it is!), and that's a huge niche. Folk who use STD extensively and are `left out of the intra-circle rain' -- these tend spend a lot on talktime. And intra-city only users who are sick and tired of incoming charges (of course, expect to see free incoming across the board from GSM cellcos soon).

After all this, the killer app Reliance has up its sleeve is Data. At a theoretical max of 144k/s, Reliance steams past the GSM cellcos struggling with 3G (this mirrors European problems with 3G recently). The bandwidth scene in India isn't too good, with most landlines maxing out at 33k/s. If Reliance delivers great service, it will sweep India's software hubs: Bangalore, Madras, Pune, Hyderabad, Noida. Geeks love toys! So Reliance has yet another niche going for it: the high-speed mobile internet user, something the GSM cellcos have no answer for. Also, if they can get some form of video communications onto their phones -- well, the next campus craze isn't too hard to predict. So potentially, the niche for Reliance has suddenly widened to the 14-21 segment, and definitely the 22-35 yuppie crowd.

End of day, the fundamental mismatch between cellcos and Reliance is the same as the mismatch between HIndustan Motors and Maruti -- the former trundled out average performers aimed at people who saw cars as premium items, the latter made cars mass-market, and snazzy and fuel-efficient to boot. For too long, GSM cellcos have seen themselves as offering a premium service (and not very good one at that) and dismissing the vast bulk of users in India as "300-rupee pre-paid types", and Reliance is changing the rules of the game by commoditizing connectivity. Only time will tell which vision is correct.

 

December 27, 2002

 
To close the day, here's a (fairly typical) tale of government bungling, this time about telecom in the North-East.

 

 
Rediff coverage on Reliance's prices and schemes. 600 rupees a month is certainly the right price to hook the Indian consumer. But I wonder what 'free internet access' they are talking about. And yes, this article does confirm that the phones won't be dogs, and in fact will be J2ME ready.

 

 
Now that the launch is over, it's worth thinking about why this launch mattered at all. India is a infrastructurally weak country: the only thing we really have is a set of railways that probably was the best thing the Brits gave to India. Roads, ports, sanitation and health services -- we are light years behind on every metric of development. (No fair saying I-can-get-broadband-in-insert-posh-metro-residential-area-here, true development happens when the average Joe outside Dindigul can access it too). At least for telecom infrastructure, we now have a company that seems eager to champion the cause of the common man, and make money in the process. From an interview in the Business Standard
Cost is our prime driver. We had to keep a low cost base, but yet make money. We also require huge capacity. We cannot charge more than Rs 500 per month. At the same time, we also cannot afford a customer acquisition cost of Rs 1,500 a month like the GSM players.
National Long Distance charges are another sticking point -- in a country where an average urban salary can be as low as 10,000 rupees (if you are reading this on the 'Net in India, you're one of the luckier ones, that figure doesn't apply to you), a long distance call that costs Rs 6/minute (late hours) and Rs 24/minute (peak) will only discourage calls. Cheaper NLD (Rs 0.40/minute intra-network) will make distances a lot more bearable (insert huggy-feely telecom ad here). Indeed, if they pull it off, Reliance will have done more for national integration with this one stroke than a lot of Indian pols have done for decades.

We keep talking about India's rapidly expanding service sector, and the 'information economy' made possible by IT. Well, IT as a success story definitely wouldn't have happened without good telecom infrastructure, which is why it is no coincidence that inside a software major at Bangalore, Madras, Hyderabad, Pune or Noida, telecom infrastructure tends to be very good indeed. Well, it's time those benefits percolated from the sheltered groves of STPI units to Indian business in general. That doesn't only include big business, it also includes small business scattered across interior towns countrywide.

We will be empowering at least 2 million people with the option to get not only a mobile phone but also data connectivity on the mobile. They can watch films. They can actually get POP3 mail. ... So your mobile becomes a small computer in your hand.
(It seems a lot of the phones they'll sell will be J2ME enabled -- I bet Sun is smiling.)

Of course, it's early days yet (service demos start Jan 15, service starts Feb or March), but I am holding the breath -- as far as I am concerned, anything that increases India's infrastructural wealth deserves to be lauded.

 

 
Reliance emerges from stealth mode: the opening plan will offer WLL, initially limited to the zone you sign up for (i.e., no roaming -- already Reliance is expressing interest in cellular licenses, so this could change), at an upfront cost of Rs 3000 and a monthly cost of Rs 100; this gets you a CDMA phone worth Rs 10,000, plus free unlimited incoming calls (a big deal in a country where it can cost upto Rs 4/minute to receive calls on a cellphone) , plus free calls upto 400 minutes/month. This ToI article is also worth reading.

 

 
Clone!. Pop culture presents clones as being identical to their parent, but I wonder what difference upbringing will make. This is the nature-vs-nurture debate that keeps popping up in any discussion about clones.

 

 
This page (dated Sep 2002) estimates India's outbound bandwidth at something like 900G. The ground reality is that, of that, 160G is currently being used only for voice traffic because Bharti hasn't received a security clearance yet for data (If an company operating in India cannot factor in and tackle government delays into its plans, it will suffer. Reliance has a much better record on this than Bharti). 640G is expected to be operational only around Jan 2003. Meanwhile, we are stuck with around 4G outbound.

 

 
(via CNBCi) Reliance WLL launch timings: Press Conference at 1.30pm, inauguration in Thane at 4.30pm.

 

December 24, 2002

 
Reliance to offer broadband via CDMA, CorDECT: Reliance Infocom (as well as Tata Indicom) has chosen Qualcomm's CDMA 2000 1x, which is capable of providing data speeds of close to 144 kbps for urban areas (the slower corDECT from IIT Madras will power rural deployments as it costs less to deploy - even corDECT can do 35/70kbps).

This will be worth watching, because dialup available to Indian consumers today typically maxes out at 33kbps on a good day, and `broadband', while theoretically easy to get in metros, is hobbled for individual subscribers because of pathetic service or nonsensical 300M/month bandwidth-caps. A dial-up line that can do an effective 64k will be manna from heaven for Indian consumers.

The problem until now, of course, was that India was at a distinct disadvantage in terms of international -- and even domestic -- bandwidth available to it. The domestic bandwidth scene is now looking good, and international bandwidth, while far away from the 100Gbps talked about here, has come a long way from 350Mbps in 2000 to something like 3Gbps in Sep 2002 (over an estimated capacity of 900G - go figure)

All this means that the Indian home user has finally a fighting chance at broadband. At reasonable (by Indian standards) prices. And that is something to cheer about.

 

December 21, 2002

 
Excellent article on what's up with India's WLL rollouts:
So why have cellular operators been crying foul? ... Because of the different government rules for the two services, which suddenly seem to be sharing the same playing field. The cellular companies paid as much as Rs 3,000 crore each to offer services in just one metro. Against this, fixed line WLL licences came for a measly Rs 495 crore. For the whole country. Cellular operators also pay -- which means the customer pays -- something called access charges to connect to a fixed phone network like BSNL's or MTNL's. ... But a WLL operator does not need to pay any access charges.
I think the WLL operators have clearly demonstrated that the possibility of great consumer benefit exists (especially in a market as hyper-price-sensitive as India), if only because the government turned a blind eye to WLL technology in the 1999 Telecom Policy. It is significant that the WLL rollouts have not been stopped, because it will be difficult for the COAI to get courts or governments to get the paying public to abandon their WLL mobiles after widespread deployment.

 

December 19, 2002

 
Here's one launch worth watching: Reliance Infocomm's WLL offering could shake up the market if they play their cards right. Also, for the last eight months, Reliance has been investing significantly in laying fiber in urban centres across the country. Couple cheap WLL and ubiquitous fiber and you have a winning combination for all sorts of innovative apps. Watch this space for more.

 

December 16, 2002

 
Gujarat state election results roll in. Pol Pot Redux leads his party to a landslide. Some worry about more violence in Gujarat, but I think that is unlikely -- until it's time for the next elections. Meanwhile, intimidation of minorities will continue apace as the architects of this election campaign get their pound of flesh from Modi, but of course, the (now) vigilant police will never allow it to escalate to levels that hit national headlines.

People who try to extrapolate this to the rest of India will be disappointed, though. What works in Gujarat really doesn't work across India. The BJP had to water down its agenda to form the NDA, and while a hawkish agenda may get it a slim majority, it will almost certainly alienate a lot of people and lead to gridlock in parliament. In particular, it's difficult to see a hawkish campaign working in Bihar, West Bengal, Andhra Pradesh, Tamil Nadu, Kerala, and most of the North-East, and to a lesser extent in Karnataka and Madhya Pradesh. Of course, what the BJP (a strategy-driven party, something unusual in India's kneejerk-reaction-driven political circus) is probably betting on is that it will grab the electorally important states of Maharashtra, Gujarat, UP (including Uttaranchal), and gain numbers from Bihar (it is already strong in Jharkhand) and Madhya Pradesh. This will ensure that it can enforce it's own undiluted agenda if it wins the next general elections.

"In a democracy, people get the kind of government they deserve." --Adlai Stevenson.

 

December 07, 2002

 
Can't believe I haven't added Root Node to my links page yet. Great source of links. On another note, sathanurdam no longer seems to connect :-(.

 

 
David Warren. A must read.
The moral order of Islam, while it overlaps with Judaism, Christianity, and all of the world's "great religions" in many crucial respects, is nevertheless unique in its emphases. Building upon such essentially tribal values as trust, honour, manliness, loyalty, the duty of hospitality, it builds a moral order in which, I will dare to say, justice is the pre-eminent value. And it is justice, beyond all other values, that is demanded in the confrontation between the Muslim and the world, between the insiders of the Islamic family and the outsiders -- the people who still live beyond the Islamic "realm of peace". How radically different from the Christian worldview, itself deriving from the Jewish, in which, from its own Gospel beginnings, the worldly virtues are presented as written into the natural order, accessible to all whether Christian or not, so that it is quite possible for a non-Christian to be a good and worthy man. Or, turning this over, in its full universal implications, Christ proclaims that there can be no justice in this world -- only in heaven. Every single one of Christ's parables hinges not on justice but on truth, and at the center of the Christian revelation is this uncanny statement, "That you shall know the Truth, and the Truth shall make you free."

 

December 02, 2002

 
The Rainmaker?

 


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