Discoveries

I will not even discuss the 2000-01 industry performance. Just go through

V&D100, an annual round up on the Indian communications industry. You will

see that the growth in fiscal 2000-01 has been good. Over 26 percent growth will

make anybody, anywhere in this world, sit up.

The big question today, is, how is 2001-02 going to be? Apparently, AMJ has

not been very encouraging. And there are mixed feelings on how the rest of the

year will fare. I believe that services like Internet, cellular, basic services

will take-off at the mass market level. Consequently, the service providers will

invest substantially on their network to keep up with demand as well as

competition. The enterprises will be cautious - both in terms of their own

networking and communications infrastructure plans, as well as going out to

service providers for newer value-added services. But even then, one should not

expect an overall growth of anything less than 25 percent.

More interesting than all this, the V&D100 survey threw up some very

interesting trends. Viable and realistic business models will start emerging. It

will primarily be driven by dog-eat-dog competition among the private players on

one hand, and the MTNL/BSNL factor on the other. M&As in Indian

communications indicate that not everyone will survive. And just the

announcement of WLL, and new (though very late) MTNL cellular rates, have

already shown results.

Some of the infrastructure equipment biggies are in great trouble. With huge

outstanding (estimates range from 0.5 to 0.75 billion dollars) from service

providers. Stories abound about Ericsson, Nokia, Motorola and many others. These

companies are technology leaders also, and if they see their money not coming

out, new technology induction into India might get hit. Blame will have to be

shared by those over-enthusiastic vendors too, who offered tempting financing

options to their buyers. But service providers, who have always blamed the

Government for putting India in a bad light, must realize that this will put

India in even poorer light.

And finally the transformation of BSNL and MTNL. Both now agree that

competition can catch up and kill. They are investing heavily on enhancing

infrastructure, decentralizing for faster decision-making, and have begun to

listen to their huge base of subscribers. One year back, this was unimaginable.

If this is the way they improve, the Reliance, the Bharti and the Tata groups,

better do some calculations again.

ibrahima@cmil.com