Calcutta: An Emerging Opportunity

Weak market,

dictated consumer behaviour, red-tapism, lack of proper infrastructure,

and absence of pro-investment government policies will soon

be a thing of the past. The new signs indicate growth, vibrancy

and hope. The city has shown character in coming up with several

communication companies. So which are the active communication

segments here? And what do Calcuttans feel about the overall

growth?

If one does

not know to which port one is sailing to, no wind is favorable-Seneca.

Chaotic

and decaying. Vibrant and warm. Lapierre called her "The

City of Joy" and Rajiv Gandhi said



this was a "Dead City". Calcutta is its own antithesis.

Born as

trading post for the British more than 300 years ago, the city

has a history steeped in cultural, political, and social turmoil.

However, on the threshold to a new millenium, Calcutta is fighting

to find its position on the technology map of India. Investors

look at the region with caution and are unwilling to take any

risks. The state government has done little, inspite of plans

and promises, to attract investment. But it seems all this will

be history very soon.

If the demand

for telephones is any indication, then the city has already

crossed the first step in ensuring effective basic communication.

The performance graph of Calcutta Telephones has been on the

upswing. It is to their credit that the service quality has

improved drastically despite the heavily increased demand for

telephones. In 1998-99, new connections in Calcutta numbered

1,80,000. This is twice the number of new connections in Delhi.

Also, the number of faults per 100 lines is the lowest amongst

the four major metros. Calcutta Telephones, today, has 100 percent

digital junction networks and all its exchanges are electronic.

They have also adopted the micro-tunneling technique for laying

cables to avoid faults. Revenues from telephones have been growing

steadily and phone-on-demand concept is a reality today.b>Internet



This

method of communication is proving to be a threat to revenues

from long distance calls. Presently, there are three ISP''s-VSNL,

Satyam Online, Caltiger.com-providing services in the city.

Satyam Infoway was the first private ISP to begin operations

in the city last December. Satyam has a subscriber base of only

3,712. VSNL''s subscriber base, however amounted to around 20,000

(as estimated on September 1999). Caltiger, which began operations

last month, already claims to have a base of more than 1,600

subscribers.

Caltiger

wants to be an ISP with a social message. They have plans to

provide free services to their users. "Calcutta has been

neglected. However, it has a tremendous potential for growth.

Though the total subscriber base is lower than other cities,

the rate of growth of Internet subscribers has been the highest,"

says Vikrant Sen Chaudhuri, chief technology officer, Caltiger.com.

The trend is certainly encouraging if one notes that in January

last year, the number of Internet subscribers in the city was

a mere 4,000. Which means that there has been a growth of over

five times in two years time. Says Debraj Roy, manager (Internet

sales), Satyam Infoway Ltd., "Calcutta is still in the

learning phase as more and more people are getting to know the

use and advantages of Internet and how it can reduce the cost

of communication with friends and business associates."Challenges

Ahead



While on one hand there are positive signs, a lot of steps need
to be taken by the industry as well as the government to win

people''s confidence. It is estimated that this segment will

see a growth of over 50 percent in the current fiscal. Yet,

system integrators and vendors feel that the market is unorganized

and immature when compared to other cities. "There has

been no major developments in the city except for Software Technology

Parks (STP). Also, the region does not get enough importance,

as vendors do not find the market lucrative. Most of them have

not even opened their offices here," laments Rajarshi Ghosh,

director, Ad-Tech Systems & Supports (P) Ltd, a system integrator

operating in the eastern region. He also feels that there is

a lack of understanding regarding networking concepts and its

utility and that the state government and principal companies

should work hand-in-hand to improve the situation. "There

is an immediate need to improve infrastructure in the city.

The state government needs to focus on the problems facing the

industry and make efforts to set up more industries in the region,"

says Satish Choudhary, director, Leading Edge.

Besides

the economy, there is another issue that worries vendors in

the region. And that is lack of proper attention from principal

companies. "We decided to lay more focus on the eastern

region. And this year, our efforts have been rewarded with the

region accounting for almost 33 percent of our total revenue,"

says Mitra. He, however, does not expect an encore in the coming

years. "Our performance has mainly been due to the fact

that we bagged the order of Haldia Petrochemicals, the biggest

project being executed in the region till date," he adds.

The state

government has yet to chalk out a definite plan for the development

of IT and effective communication. Though land phone services

have improved over the years, mobile telephony and the Internet

are yet to catch up with the rest of the country. His views

are supported by Tirthankar Mitra, sales manager (East), BICC

Brand Rex. "The market is not very encouraging. Most of

our competitors operate through distributors. They have not

even bothered to open their offices in Calcutta. However, we

believe that if the region is paid a little more attention,

it could develop at a faster rate."

Cellular



The city is the only one in the country to provide the subscriber
with free incoming calls. Usha Martin Telekom, providers of

cellular service under the brand name Command rustled up a few

feathers by being the first to lift tariffs for incoming calls.

Modi Telstra soon followed suit. Yet, with all the gizmos and

packages, the operators are in no better a situation than their

counterparts elsewhere in the country. "By providing free

incoming calls we increased our subscriber base. This made up

for the loss incurred by providing free airtime," says

Tapas Das, head (Brand Marketing), Modi Telstra. Both claim

to have a subscriber base of around 30,000. Adds Das, "The

Calcuttan is slow in taking decisions as compared to his counterpart

in Delhi or Mumbai. Most of the problems faced by cellular operators

are similar throughout the country. It is only the numbers that

differ. In that sense, Calcutta is similar to other metros."Overview



The economic status of the city is the main factor of concern
for organizations. And with the state government not taking

effective measures to improve the situation, few are optimistic

of a rapid change in the situation. Years of a steady industrial

decline has led to a weakened market and dictated consumer behavior.

The decision making process is lengthy and red-tapism is the

rule of the day. "Though the market is moving, it is yet

to catch up with the other major metros. Also, by the time Calcutta

reaches where these cities are today, they will have moved far

ahead," says RN Sivaram, manager (Sales-South East), Apcom

Computers Ltd.

The industry

is of the opinion that unless the state improves the infrastructure

and focuses on outlining policies to attract investment, there

is little chance of improvement in the present scenario. The

state should announce a focussed policy for IT and associated

industries. This would help generate employment and also create

an awareness about the utility of communications.

"The

communication market in Calcutta has yet to emerge and is now

in the preliminary phase. Fixed line services have improved

over the years, mobile telephony is slow to catch but one can

see the future generation catching on. The prospects in the

data and video transmission area is certainly exciting,"

says Gautam Mukerji, marketing coordinator (Asia-Pacific), Usha

Communications Technology. While all Calcuttans have a lot of

complaints, there is one point of unanimous agreement they all

believe that they can now see the light at the end of the dark

tunnel.