About Value Systems and Economic Power

Extract from Thomas Friedman's Op-Ed in New York Times: We're No. 1(1)!
Who will tell the people? China and India have been catching up to America not only via cheap labor and currencies. They are catching us because they now have free markets like we do, education like we do, access to capital and technology like we do, but, most importantly, values like our Greatest Generation had. That is, a willingness to postpone gratification, invest for the future, work harder than the next guy and hold their kids to the highest expectations.

 

In a flat world where everyone has access to everything, values matter more than ever. Right now the Hindus and Confucians have more Protestant ethics than we do, and as long as that is the case we’ll be No. 11!

 

I liked this article that seeks to distinguish the USA of the early 20th century and now, and how India and China, demonstrating the same great values that the earlier USA had, are emerging as major threats to US economic dominance. Thomas Friedman has always been brutally honest with his opinions. Some may disagree with his conclusions (or the approach with which he arrives at them), but there is no denying that Mr. Friedman has admirably managed to simplify and put in context complex macro-economic shifts that we are all part of.

 

The India that he briefly describes in the above op-ed is the India that I have generally known; the India in which most of us grew up in; the India that thankfully still exists in many small towns and villages.

A common scene in most towns of India - amidst the chaos, institutes of English and Computer education stand out. 

My fear is that India is changing fast. Instant wealth / success and gratification are now more sought after than the rigour of education and hard-work. What was earlier perhaps limited to the glitz capital, Mumbai is now spreading wide across the country, thanks to televised shows and new media.

Will a Times of India op-ed in 2050 lament the loss of Indian values? Maybe these are the cycles of life, the ups and downs in the fortunes of various nations. Or can a nation's leaders and thinkers steer a different course? Governance in India, in the current times, does not give such confidence. We have many strategists; we are missing the leaders. 

India Spectrum Auctions 101

All you wanted to know about the India 3G & BWA Spectrum Auction process.

What is being auctioned

3G: Three slots of 5MHz spectrum in most circles; 4 slots in a few. That means, in addition to BSNL or MTNL, you will have at least 3 private operators offering 3G services in each circle.

BWA: This is Broadband Wireless Access spectrum... this is spectrum in a different frequency band where a few technologies like WiMax and LTE are available/being developed to offer very high speed data connectivity. 2 slots of 20MHz each are being auctioned. Again, BSNL and MTNL have already been allocated one slot of this spectrum.

Circles and Eligibility Points

India is divided into 22 telecom circles:. 

2 Metros
Mumbai and Delhi (NCR) 
5 Category A Circles
Rest of Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh and Gujarat 
9 Category B Circles
Kolkata, Punjab, Kerala, UP (East), UP (West), Haryana, Rajasthan, MP and Rest of West Bengal 
6 Category C Circles
HP, Bihar, Orissa, Assam, North East and J&K

In order to bid in the auction, bidders needed to obtain Eligibility Points. Each Metro and Cat A circle needs 32 points, Cat B 12 points and Cat C 4 points totaling 350 EPs. The EPs were obtained by paying earnest money in proportion to the number of EPs sought; most bidders obtained 350 EPs. The points are fungible across circles, i.e. if you had only 100 points, you could use them to bid for any combination of circles within that limit. Eligibility Points determine how many & which circles a bidder can bid on, at any time.

Bidding

Bidding for all 22 circles happens simultaneously in each "clock round" of bidding. The first round starts at the Reserve Price (Cat A: 320 cr; Cat B: 120 cr; Cat C: 30 cr for 3G..... half of this for BWA). About 4 to 6 rounds of bidding happen daily (based on the last 30 days of bidding.)

In each round, a bidder has to only say Yes or No for each circle at the current round price. 

The price for the next round is determined based on the level of demand (i.e. # of Yes bids) for each circle in the previous round. Excess Demand is calculated as Demand (# of Yes Bids) - Supply (# of Spectrum Slots). If ED is 0 or 1, the price increase is 1%; if ED = 2, 5% and ED>=3, it is 10%. If ED<0, i.e. demand is less than supply, then price does not increase. (Price increments are also capped at Rs 40 cr (20 cr for BWA) in each round.)

The interesting thing is that even if there is no excess demand for a circle in a round, the auction for that circle does not end... it goes on till all the circles have reached a point of no excess demand. So you could have a situation that demand = supply in a circle, but its price increases in the next round because some other circles still have excess demand. This is probably the only "flaw" in the auction design -- of course, it benefits the Seller (the Government in this case).

Activity Ratio

A bidder can bid for only those circles that are within the Eligibility Points that it has at that time. Thus, the EPs associated with all the "Yes" bids of a bidder determine how many bids it can place in the subsequent round. In the initial rounds, however, this is relaxed and a bidder can retain its EPs, if it bids at or above the specified Activity Level. So, the auction starts at 80% level, i.e. a bid equivalent to 280 points (80% of 350) retains the bidders 350 points in the next round. The Activity Ratio is increased by the Auctioneer to 90% at a later stage and then to 100%. At 100%, bidders have to bid (i.e. choose Yes) in order to retain the associated EPs. Unless they are a Provisional Winner in that circle. 

What! More complexity! 

During each round, the Auctioneer declares (based on pre-set rules) a number of Provisional Winners (equal to the number of slots). Being a Provisional Winner does not automatically guarantee the circle to a bidder; the primary benefit is that a Provisional Winner is deemed to have bid for the next round and can therefore retain Eligibility Points even when it chooses "No" for that circle. The Provisional Winner concept can be used by the bidders to "reduce" the demand level and consequently, the price increment in that round.

The End

The auction comes to an end when two conditions are met:
1. Activity Ratio is 100%
2. Excess Demand is 0 or less in all circles simultaneously

The Government has said that winners in the 3G auction will be allocated spectrum in September 2010. Based on that schedule, we can expect that services should be available in a few major markets in early 2011. The BWA spectrum is likely to be allocated immediately to the two winners; depending on their technology choices, wireless broadband services could be available towards the end of 2010.

(Note: I have tried to keep this quite simple and have not gone into all the details/complexities of the auction design. For those interested in the painful details, I am happy to answer your questions.)

Roof-top Capers

It was another morning. I had not slept much the previous night, having stayed awake to complete a Harry Potter book. My friend had gifted me this big, hardbound book a few days before, and I had reluctantly started reading it. And could not put it down. Unfortunately, it was the middle of the week. I was still new at work and hadn't yet learnt any bunking/goofing off tricks. So I missed the 8.19 to Churchgate (for what else happens when I miss the 8.19, check out: The Day Shahrukh Khan Saved My Life) for the first time.

There's nothing more irritating than seeing the local train leave the platform right in front of your eyes, particularly when the next train on that platform is about ten minutes later, sure to result in the disapproving eye-brow from the big boss. And my project manager had ended the previous evening with a 'let's catch up first thing tomorrow morning' threat of more work. Platform 7 was to offer me no relief, so I proceeded to the overbridge, looking for options. It's easy to generate multiple "strategic options" on a slide but Andheri station, that morning, was in no mood to support my cause.

Back of the envelope calculation revealed that a Slow train after 8.25am would not work; there was no option but to go for a Fast local. I had come to this conclusion even before I had reached the top stair of the bridge, all I had to do now was to go to the correct platform. They don't teach you in b-school not to jump to conclusions too fast, they don't teach you in life too. You have to learn it the hard way, so there I was running fast to catch the next Fast.

All the while, there was a song playing in my head, just refusing to go away. Chaiyya Chaiyaa. With Jhankaar Beats. It had been playing in the auto that brought me to the station and the words looped tunelessly in my mind. It was perhaps coincidental that I was reminded of this song, featuring a train and others, at a train station, but at that time, it was just a background score.

I shall not go into the painful details of how I got into the First Class compartment of the next Fast local: it was from Virar and painfully over-crowded, there were even some chaps sitting on top of the local train! Getting into a Virar-Churchgate local during peak hours was obviously a very stupid thing but such was my dedication to work that I took the chance. Luckily, I did not suffer much physical damage while I was pushed inside; I managed to find some space to stand and held an overhead handle tight. 

Whether it was the gentle swaying of the train or my night-out with Harry Potter, I felt drowsy. Standing. My mind's iPod continued to play Chaiyya Chaiyya in a repeat mode. 

I must admit that I had always been fascinated by that song. Of course, Malaika Arora was mind-blowing and Shahrukh Khan outdid himself in this foot-tapping song, but the most exciting part for me was its picturization on top of a moving train! What a fun way to experience the thrill of a train journey and the beauty of nature all-around. If you had friends with you, some steaming chai and hot pakoras. Aaah! And, yeah, if someone like Malaika was dancing too, then it would be heaven. But, nah! that only happens in movies, so I would settle for the rest. 

I guess my fascination for train-top journeys began in a more sober setting. Ben Kingsley, playing Mohandas Gandhi, joins other passengers on top of a train in his discovery of India journey. What a moment in his realization of what the true India was. Even today, almost 90 years later, hundreds of people travel on train roofs, often because there is no space for them elsewhere but sometimes because it offers the best view, conversations and air conditioning. I had never travelled on a train roof in spite of my several train journeys across India. Wouldn't it be fun to try it out sometime?

My thoughts turned to other famous train roof-top scenes from my favourite movies. Young Indy making his escape from the circus train in Last Crusade and of course, the climax of Mission Impossible. Too much! Well, I could do with less adventure, I suppose. But, the chai and pakoras were a must. 

The train stopped with a sudden shudder. Irritated that my pleasant reverie was disturbed, I opened my eyes and looked around. We had stopped in between stations and there was some commotion from a few compartments away. There was a buzz in ours too. Somebody must have pulled the chain, was the most popular view. Maybe the power has failed, ventured a few others. A couple of guys who were sitting close to where I was could not bear the uncertainty and got up to conduct an inquiry. A few people jumped down from the train and moved towards the source of the noise.

I seized the opportunity and sat down. If that guy returned later, well, it was his fault; he didn't have a reservation for this seat. I retrieved the Economic Times from my bag and looked at the crossword. Why did it have to be in the inner pages and not conveniently in the last one, I cribbed as if that would help me crack more clues! A few minutes passed and the train remained still. Would I lose the Fast train advantage due to this halt? I went back to looking for the anagram clues. Chaiyya Chaiyya continued to compete for attention.

Five or more minutes passed, I reconciled myself to seeing the boss' eyebrows shoot up today; others were also discussing their respective excuses at work. Suddenly there was more buzz, some guys climbed back into the train (quite a feat, that!!) and the train's horn indicated its readiness to resume the journey. Some adventure and a major waste of time, I thought.

The check-shirt guy, surely a broker, whose seat I was occupying did not seem to be in a hurry to reclaim his position. He was in an animated conversation with others standing around him. The buzz in the train refused to die. Unable to hold my curiosity any longer, I looked up and asked, to nobody in particular, 'Kya hua?'  I must have spoken loudly because there was a sudden break in all conversation; the broker heard it and said, "Ek ladka gir gaya train se, abhi zinda hai lekin serious. Shaayad current laga tha, train ke oopar baitha tha." (A boy fell from the train, he's still alive but in a serious condition. Probably electrocuted, he was sitting on the roof.)

Gandhiji, SRK, Indy, Ethan... I am not joining you on the roof, thank you.

This is the fourth in a series of stories from and about train journeys. Other similar stories can be found here.

The Day Shahrukh Khan Saved My Life

For the first two years of my work-life,  8.19 was central to everything. The slow local that originated at Andheri station, to get me to Churchgate, determined how the day would go. If we (some of my colleagues and I) got a seat - at least before Bandra, we would have the opportunity to 'put fight' on the Economic Times crossword, be relaxed enough to get our shoes polished when we disembarked and then reach our Colaba office before the boss did. If we missed the train, then anything could happen. Usually for the worse. 

That fateful morning in April - we were in the midst of appraisals, I remember - I was running late. Every auto, it seemed, was taken. I stood in front of my building, waving at every passing auto. But Juhu Versova Link Road was filled with hundreds and thousands like me, all competing for the 8.19. Most of us were wearing blue or white shirts or blue and white shirts, with dark trousers and black shoes. You would find black or brown leather bags on our shoulders, a few lucky ones just carried a newspaper in their hands. We were all recent MBAs landed in Mumbai with shared accommodation in Andheri and the ambition to move south-wards. We were the 8.19 First Class crowd.

About ten minutes later, I was in an auto, sharing it with some other guy who I only knew as the guy with a discman. He usually sat by himself in the train and listened to music till we reached Churchgate. In tough circumstances such as those of that morning, you made friends with anybody, particularly if the other person was getting into an auto alone. We hardly spoke during the fifteen minute ride to the station; this auto, like many other new ones, was fitted with a tape-player and a T-Series cassette. Kumar Sanu was belting out some old Kishore hits and that was sufficient excuse for us not to engage in conversation.

It was almost 8.15 by the time we reached the Juhu Galli-SV Road junction signal, the final barrier before we hit the entrance to platform 7. The signal had just turned red and we waited impatiently, urging the driver, "Chalo, chalo," almost willing him to break the signal and get ahead. The auto-driver was not really in favour of such heroics at that five-way junction; he fiddled with the springy thing that was hanging from the rear-view mirror. As the signal turned green, Discman and I settled our accounts with the driver and got ready to jump out of the auto. Our three-wheeler, in pole position at the junction, got into the one-way lane towards the station ahead of five others that were vying for the honours. Changing gears, he led the race to the platform entrance. The train stood on the platform.

Having entered the auto later, I was the first to get out. I crossed the road and was climbing the steps when I heard the train horn. The train had decided that it would not wait for me. I did not give up - oftentimes these train drivers would have a false start and be called back to the starting line. And the First Class compartment was right there, in front of me. So I ran.

I glanced backwards to see if the Discman was also giving chase, but he was still at the gate and had obviously given up. The backward glance, as they often say during cricket commentary, lost me two precious seconds and was to prove costly. I was (and am) a tall guy; I was (and am not) quite fit and agile. I decided that I could get into the 8.19 with a bit of effort. Any well-reasoning guy, like Discman, would have told you that it was just not possible; the train was cleared to leave the platform and the motorman, obviously well-fed that bright and sunny morning, was raring to show his moves. He took off with a vengeance. But it was one of those times when reason takes a quick nap to permit perverse foolishness to take over (some call it adrenalin). So I ran faster.

Pushing one or two by-standers, I made a dash for the First Class compartment. It is not very easy to run on any Mumbai suburban platform, particularly when you are wearing formal shoes and have a shoulder bag filled with McKinsey Quarterly and HBR print-outs. However, I was possessed and got pretty close to the compartment door. This is the moment where Hindi movies like DDLJ get it all wrong: you feel that jumping onto a running train and getting hold of a handle is quite easy. I mean, it's been done countless times, and Shahrukh Khan's always around, no? Let me tell you, in case you are planning to attempt a similar stunt in future, that not only is it very difficult to coordinate so many parts of your body and the train at the same time, but it is also very dangerous, given the liberal gap between the train and the platform. So I jumped.

(see 2:00 to 2:30 in this DDLJ video; sorry for the poor quality but it has sub-titles too)

I may have alluded to it earlier, now is the time to clarify that the 8.19 was a very popular train and left Andheri station with 200% capacity utilization. Not much floor space in the train, even in the First Class rake, was left spare for idiots like me. Whereas I was hoping to get my left foot on the train floor and the left hand on the pole that bisected the entrance, said floor and pole were fully accounted for. But like the Light Brigade I had no option to turn back, I was committed. My left shoe made an uninvited entry to the shoe party on the floor; my left hand sought friendship with a strange other. It was a precarious situation, my left limbs were trying to make themselves wanted while most of my body and bag were experiencing loss of gravity. We were now out of Andheri station.

Although nobody outright rejected the intruder, there weren't welcome songs either. Instead of the violins I heard a few people cursing me and my family for my stupidity. Those words probably helped clear my mind and woke reason from its slumber. I was terrified. The sweat in my palms did not help my grip and my foot was still trying to find space for itself. I shifted my body inwards and tried to force my right foot also into the party. At that point, the train shivered a bit as it changed tracks. My hand began to disengage and I knew that something bad was going to happen. He held my wrist and pulled me in. Whether it was extreme-fear induced adrenalin or that guy's strength, I don't know, but two seconds later I found myself mostly inside. My right hand groped for support and found something, my feet too were on something solid. I was breathless and out of my wits for a while. We reached Vile Parle station and more people got in. I managed to stay on my feet, held in place by everyone else around. By the time we got to Bandra, I had been pushed right inside and finally, had some space and air. 

I looked around, remembering that somebody had helped me get in, nay, saved my life. I had no clue who it was, there were too many people all around. I didn't know which one of them was my Shahrukh Khan.

(Title Inspiration: Allan Seally's "How Raj Kapoor Saved My Life")
This is the third in a series of stories from and about train journeys. Other similar stories can be found here.

Comfortably Numb!

It must have been during our third year in engineering that Suraj and I went to Anand to attend a Spic-Macay meeting at the Institute of Rural Management, Anand (IRMA). We got into one of several trains that passed by Surat on their way to Ahmedabad. I remember we reached Anand by about 11am and were hajaar impressed by the IRMA campus, and more importantly, the food that was served in the hostel mess for lunch. I have no recollection of what happened at that meeting but that's fair enough, I guess.

The meeting ended by late afternoon and we took an auto rickshaw to the Anand station. The queue at the ticket counter and the crowd on the platform should have given me some premonition of what would happen later, but I was twenty then and didn't care much about anything really. Suraj and I were more excited about IRMA, in fact. Not a bad choice for post-graduate studies if we didn't make it to the tier-1 MBA institutes. Of course, we were not too kicked by the rural management part of the whole thing, however, they seemed to have good placements. Moreover, the campus was great, there were real women on campus and the mess was wonderful. What more could two twenty-year olds ask for?

We were still thinking through the scenarios when we felt the mood change on the platform. There was palpable tension, a feeling of anticipation like a batsman taking guard at the wicket. I took a deep breath of air, straightened my shoulders, patted the jhola on my back to check that it was still there, balanced my body with a slight hunch while glancing at my Lotto shoes that gave me a competitive advantage and prepared for the assault. The train had not yet slowed down when two opposing forces began their battle at the doors. There were men and women, mostly men actually, seeking to alight from the train who were met by a thicker wall of those that wanted to pierce their way into the train. I must admit that I used my height and thick head to good advantage and managed to breach the fortress. As I paused to catch my breath, I looked around for a status check on Suraj. Suraj, if I haven't mentioned it earlier, was six feet and three inches tall (the same height as Amitabh Bachchan, he never failed to remind us) and reasonably well built. He was using his long hands and longer legs to good use, scaring everyone into submission. Within minutes, the train jerked and began chugging along. We were inside the train, without loss of limb or respect. 

As the train picked speed, so did the sound levels in the compartment. We were standing somewhere in between the toilets and the doors, sharing the space with about thirty others. Some were in deep conversation, some were trying to park their backsides at the same place where they were vertical earlier, some others were opening their bags for assorted eatables and chewables, a few even chose to use the anonymity of the situation to pass wind. Such an environment did not deter Suraj and me from continuing our discussions about career options and male-female ratios in each of those options. Baroda, about forty minutes later, however, had better exit to entry ratio, and we were able to make our way to the other door for some fresh air.  

The sun had decided it had had enough for the day as the train pulled out of Baroda, and was on its way out. When one of the passengers mentioned that the platform at the only other stop would be on the other side, we promptly sat down at the door, with our feet on the steps. We were wearing jeans, so it didn't matter how dirty the floor was: jeans were designed for such use only. The cool breeze was exhilarating as was the feeling that our career plans were falling into place. One hand held the handle while the other contributed to the animated discussion that we continued. Villages passed by and so did a couple of culverts. The train swerved suddenly on a few occasions and we hung on for dear life, but all in all, we had the best seats in the train.

One doesn't realize how time passes by when you are young and more so with a friend; we had left behind Ankleshwar and were about half an hour away from Surat, home to our engineering college and hostel. It was reasonably dark now, a bit chilly and, I must admit, slightly scary. It's easy to sit at the door during the day, hearing the wheels grind the rails and seeing poles whizz by; at night, it's a different matter. Not only are the senses dulled by the harmonic motion of the train, there was also a general sense of quiet within the compartment, with loud conversations having given way to whispers, yawns and surprise, even snoring. I was getting a bit restless now and was ready to get off the train and stretch the legs. I could see a few lights in the distance and perhaps the outline of a few houses. We were close to Surat but not nearly there, I said to myself, when a platform appeared. On our side.

My right foot which was resting on the middle step made contact with the platform with an upward jerk. The train continued speeding, unaware of the predicament my foot found itself in. For about twenty or thirty feet, I was too shocked to react, then survival instinct kicked in. I pulled my foot, sheathed in size ten Lottos, inwards first, disengaged it from the platform and then twisting it sideways pulled it up to the top step, just above the platform to give company to the left. The nameless station passed by.

Wild pain in the foot succeeded wild panic in the mind. I must have uttered several four letter words causing Suraj to take notice (he, by the way, had kept his long legs out danger's way by keeping them close to himself). In seconds, before I could even reply to Suraj, I felt my right foot missing. I mean, I could not feel it. My leg entered the shoe and danced with infinity. "I can't feel much... am like comfortably numb, man!" I assured Suraj. "Cool! By the way, did you know that there's a Pink Floyd song called Comfortably Numb?" said he, perhaps in an attempt to divert my attention. In those days, almost blasphemously, I hadn't discovered Time or most of the Floyd classics and knew them only as Another Brick in the Wall. And I didn't particularly care, at that time, for an education.

Luckily, Surat did arrive ten minutes later and with Suraj's help, I limped my way to an auto. Suraj, ever the practical guy, suggested that we should see a doctor before we reached the hostel. He remembered that there was a bloke near the college gate whom he had consulted in the first year and whose clinic stayed open late. Doctor Something Shah, when we reached his abode a little later, suggested I put some Iodex and went to sleep, 'everything be alright tomorrow, young boy'. Next morning did not bring much cheer and we went back to Dr. Shah. He reluctantly advised me to get an X-Ray done at a nearby setup, gave it a dismissive glance and wrote me a prescription of two tablets for three days.

Two weeks passed. The swelling of the foot reduced but did not go away. There was an occasional shooting pain when I put pressure on the right foot. But I was going home soon to Bombay for study holidays, so I just did not bother. Copying the syllabus for the exams and photocopying notes from my friends kept me busy for a few days. My slight limp did not escape my father's attention, though, when I reached home. "I slipped in bathroom and fell," I explained - the train story might read well in a book, not with parents. A visit to the orthopedic in the neighborhood was suggested and complied with. I showed him the X-Ray and the prescription.

"There is a clear hair-line fracture visible in the X-Ray," the ortho said. "This could not have been caused by slipping and falling," he clarified unnecessarily. "And, these medicines are for malaria," he concluded.

This is the second in a series of stories from and about train journeys. Other similar stories can be found here

A train, India, and countless stories.

I cannot remember when I traveled in a train for the first time but my mother tells me it must have been when I was a couple of months old. My father, a bank officer, would get transferred every few years and we would set off, discovering new parts of India. And wherever we were, thrice a year we would be on a train to my grandparents' house in Rajahmundry, on the banks of River Godavari.

My affair with trains intensified when I joined boarding school in Bangalore for my 11th and 12th standard. Every term break, I would take a night train to Madras (as it was called then, and still is, in my memories) and change to the Coromandel Express the next morning to Vijayawada. I loved traveling alone, charting out what I would do next. I'd spend most of the eight hours standing or sitting at the door, taking in the beautiful sights of Indian countryside. Filmfare, CineBlitz and other assorted magazines would be devoured alongwith samosas, coffee, dal-vadas and soan papdi.

My English text had Ruskin Bond's Eyes Have It as one of twelve short stories; I had also read his Night Train at Deoli. I dreamt of such romantic encounters on my journeys too, but alas, that wasn't to be. Perhaps I didn't have the finesse of Bond or maybe Dehra and Mussourie were where the action was!

For eight years during my hostel life, I must have made countless journeys. From Bangalore to Vijayawada, Surat and Ahmedabad to Mumbai, Surat to Tirupati and Ahmedabad to Cochin, each was a thrilling adventure. I was a romantic poet in one, I broke a foot in another, I ran barefoot on a platform at midnight looking for chai during a third, I slept under a berth in one other...


As I make this twenty hour journey with my wife and two daughters in the comfort of an AC First Class compartment, in the company of Ruskin Bond's Short Stories, I cannot but feel nostalgic about the journeys that shaped my youth.

2009: Sad Year for Indian Telecom; 2010: Unlikely to be better

I spent the entire Oh-Ohs (00's) decade working on telecom. NTP '99 heralded the real opening up of the Indian telecom sector and every spare hand was diverted to telecom... and boy, has it been an exciting ride! More than 500million subscribers were added during this period; we have seen tariffs hit all-time lows; 8 new submarine cables connected India to the rest of the world... the achievements are endless to recount here.

However, I am saddened by the manner this decade ended. 2009 has to count as the year that promised so much but delivered almost nothing. The most talked about disappointment, of course, was the postponement of the 3G & BWA spectrum auctions. What is more disconcerting was that major decisions that would have created true customer choice - Number Portability, MVNO and Internet Telephony - were put off, on some pretext or the other. Even the one decision (this year) on Calling Cards could not be implemented because the terms and procedures are yet to be finalized.


Most people are happy about the entry of new (mobile) operators and consequent reduction in tariffs. I am not so sure, though. Adding new (facilities-based) players to a reasonably crowded market is not necessarily in the best interest of the industry or the customers. While it does result in some short-term pricing benefits, the common resource used by all of them is scarce spectrum -- the more fragmented it gets, poorer the quality of service. So while we have so-called lowest tariffs, we also have poor service levels. Instead, the Government had the opportunity to introduce new forms of competition (& customer choice) through MVNO and Internet Telephony, but dragged its feet on those decisions.

Telecom policy-making was at its worst this year, with no clarity on who was responsible and in what direction we were headed. What we needed was an NTP 2009; what we got was EGoM meetings and TRAI consultation papers.


2009 saw Bharti losing out an opportunity to become a global leader in the mobile business; in fact, none of the Indian companies could capitalize on the recession (& low valuations) in developed markets to make any large, bold moves/acquisitions. Intense tariff pressures in the domestic market dented their valuations - most analysts reacted with a Sell on the Indian telecom sector, probably for the first time in the last 5-8 years.


Will 2010 be different? I do not see much cause for cheer: the fundamental problem around policy-making is not likely to go away in a hurry. 3G & BWA auctions might happen in early 2010 (only because the Government is counting on the auction money in this financial year!), but networks/services would be available only towards the end of the year, in a limited manner. The camps on both sides of MNP, MVNO and Internet Telephony are strong and therefore, I expect status quo will prevail - for all practical purposes.


It will feel good to be proven wrong.

Politics of States. State of Politics.

So the Government has finally agreed to the formation of Telangana state. Rather, it was forced into submission by a politician who decided to sacrifice his life for the cause.

Does it make sense to have smaller states, maybe city states? Ramesh Srivats has written a very interesting piece and I have commented, largely in agreement.

But the sad part about the decision yesterday was the process that led to it. As ad-hoc and unilateral as ever.

One numbers politician threatens to commit suicide. Everyone watches, waiting to call his bluff. No way, he says, and reaches the edge of the cliff. Centre gulps. High Command weighs political consequences and blinks. Both of them live to fight another day. So this is what democracy is about. 

Of course, the alternative is not a pretty picture too. Creation of a Committee or a Commission, discussing the report a decade later in Parliament, discrediting the people involved, forming a Parliamentary Committee or better still a Joint Parliamentary Committee, discussing the report a couple of years later, discrediting the people involved...... merry go round.

I think I like the suicide err fast unto death approach. Decisions can be taken, either ways, in 12-15 days. Very efficient.

So, if you want your Bangalore city state or Mumbai state, form a party, find a leader who is willing to commit suicide, and attack!

10 years after NTP 99

As I drive on the highway between Bangalore and Mysore two things strike me. I have not lost voice and data connectivity for even a minute since I left Bangalore airport. And every few minutes I can notice a hoarding, banner or display of one or the other telecom brand. In a country where it can take twenty years to build a bridge, the development in the telecom sector is tremendous. Yes, there are still many things that are not correct and the future maybe uncertain but the change it has created - at the grassroots level - should not be under-estimated. 300 million people (at least) are connected in a way they have never been in this country. The freedom movement is the only other thing that comes to mind. Critical observers will say that this happened in spite of the Government, and they would probably be almost correct. The only credit that I would give is for NTP 99 which really opened up the market; that was the first and last pro-active and coordinated policy work.

It is tempting to say that the next decade will be more exciting than the previous one. I really hope that it's true, for the sake of the 800 million others that are waiting to be connected.

Vulgar salaries down down!!!

... or so our politicians would have us believe.

Having imposed cattle class on their ilk, the high-priests of austerity have turned to a new, softer target: executive salaries. Never mind, that in our so-called "liberal" economy, the Government has no locus standi on determining or even influencing salaries in private sector enterprise.

It is the owners of the enterprise, the shareholders who must decide what they want to pay their managers. If they believe that a CEO is worth paying Rs 50 crores, so be it, even though it might be 12,500 times the per capita GDP of India (as TOI informed us recently). Remember, there are many CEOs, including those of blue-chip companies, whose CEOs get paid far less. Far, far less, in fact.

That is the question investors (and perhaps the Government as the regulator) must try and solve. Why can some companies attract CEOs - highly experienced professionals - for a compensation of about Rs 1-5 crores whereas other companies end up paying 10-50 times as much? It is very obvious that owner-CEOs have a significantly higher level of compensation than professional-CEOs. In a large Indian telecom company, the owner Executive Chairman received almost 8 times as much compensation as the professional MD.

Are the public and institutional shareholders exercising any control or influence over executive compensation, particularly when the "executive" is a significant shareholder himself/herself? The blame, if any, must then lie with the "independent" Directors who are letting the promoters decide how much to pay themselves. (Btw, politicians have the same problem: MPs vote for their own salary hikes in Parliament.)

So, Mr. Minister, the answer does not lie in "regulating" executive compensation and/or asking for "restraint". The Government needs to ensure, through regulation and education, that our publicly listed companies behave like public companies, with active public shareholders (represented by strong, knowledgeable and truly independent Directors). We have too many private fiefdoms masquerading as public companies in India.