No one to ‘lie’ abroad?

Many embassies are running without ambassadors, putting question marks on the countries that are unable or unwilling to employ them

As countries of the world increasingly compete for political, economic, military, resource – basically all kinds of power – diplomacy has become increasingly important. The diplomatic baton is carried by the ambassadors or High Commissioners (in the case of Commonwealth countries) presiding over the embassies in different nations. In spite of the importance and authority attached to the post of ambassadors in pursuing the political and diplomatic process in the target country, it is flabbergasting to find that a sizeable number of them are missing in most embassies of the world! In US, the most important country in the world to carry out diplomatic efforts, as many as 13 embassies have no ambassador. The fact that this list excludes Bhutan, Cuba, North Korea, Myanmar, Somalia and Iran with whom US does not have diplomatic ties makes it even more surreal! Similarly, 18 embassies in Japan are run without ambassadors while New Zealand has as many as 30! Surprisingly, with nine missing ambassadors, India has fewer vacancies in embassies than US!

Most of these absent ambassadors are from very small, little known and impoverished states: Togo, East Timor, El Salvador, et al in US; Gabon, Guyana, Haiti... et al in Japan; and Burkina Faso, Rwanda, Costa Rica et al in India. It is difficult to comprehend their trajectories and come to a conclusion about why they don’t have any diplomatic goals in countries much bigger and powerful than theirs! This ennui is perhaps brought about by their much superior counterparts refusing to recognise them on a respectable standing. In a quid pro quo example, US operates 34 embassies abroad that have no ambassadors.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Girish Vanvari, Exec. Director & Head – M&A & PE Group, KPMG India

B&E: And what about IT and telecom? They have been considered particularly ripe for M&A, haven’t they?
GV: With respect to deal making in the IT sector, many companies are sitting on idle cash. There are not too many targets to acquire, and the valuations are also high. Moreover, as the value of the rupee is appreciating, the sector will come under pressure. In telecom, with margins under pressure, one may see consolidation in the domestic sector. Further, there is still some consolidation left in telecom infra space.

B&E: The Vodafone case, the ruling in the case of Aditya Birla Novo and Idea Cellular, changes in the takeover code, new competition bill – do these prove that the government is encouraging M&As? What is your suggestion for potential buyers at this juncture?
GV: The government is doing its bit to plug loopholes in the M&A tax and regulatory regime; the recent Takeover Code amendment and the Competition Act are a case in point. However, any change creates its own set of uncertainties in interpretation and execution, which is what corporate India is presently going through, In the backdrop of the Vodafone and Aditya Birla Nuvo rulings, the mood is that of caution with changing laws. I am confident that in the long run, these changes will pan out right; but in the short term, it’s certainly creating uncertainty. I would say that at this point, acquirers have to be more particular about valuations, withholding issues and the regulatory environment. Further time taken for deal closures should be appropriately factored in as well.


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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Alok Sheel, Secretary, Ministry of Finance, Government of India

B&E: Is there any probability that India might see recession by 2012?
AS: Recession technically means negative GDP growth in two consecutive quarters and nobody really envisages that would happen in India even in the worst case scenario. If there is another global recession, or a second dip, India cannot escape. However, while its growth rates might fall by a few percentage points, it is highly unlikely, given its domestic growth drivers and a well regulated financial system, that it will see negative growth.

B&E: If India faces a recession or dramatic slowdown, do you think that the Indian government is prepared enough to tackle that?
AS: As I said earlier, the trend in the reduction of the public debt ratio has been very encouraging. At the same time, interest rates have been repeatedly raised by RBI. Therefore, unlike advanced countries, India has both fiscal and monetary space to respond to another severe global downturn, although it would be more difficult this time. Also, monetary space is amore than the fiscal space, since the fiscal deficit is coming down more slowly.

B&E: What steps need to be taken globally to tackle such a crisis as it affects all nations?
AS: A discussion on global imbalances is going on in the G20. There are major seven systemically important economies in this premier global forum for international cooperation that individually comprise more than 5% of G20 GDP at either market exchange rates or at PPP. These countries are US, UK, Germany, France, China, Japan and India. All these countries have large imbalances. US and the UK have big current account deficits; and China, Germany and Japan have huge current account surpluses. India has only a 2-3% current account deficit though, a level that can be financed on a sustainable basis over the medium to long term, especially in view of our large hard currency reserves.

Read more....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

As India Intensifies its Struggle against Corruption in The Political Sphere, Virat Bahri wonders why The Debate on Transparency can’t be Extended to India inc. as well, and how B&E Power 100 Companies can play a key role

“In God we trust; all others bring data!” Dr. W. Edwards Deming, American statistician”

“Earnings can be as pliable as putty when a charlatan heads the company reporting them.” Warren Buffett, Chairman, Berkshire Hathaway”


Ruling parties of the day in India are not generally concerned about any issue of voter confidence they face; unless of course it happens in election year. They are quite self assured about the incredibly short public memory, just as they are of their ability to sway popular opinion back in their favour through some deft political maneuvering as the time comes.

This time, though, matters have been very different, at least so far. Even as the first half of year 2011 comes to a close, the issue of corruption and how it stands in India’s way to becoming a First World country, has become too well etched in public memory for UPA to brush under the carpet. And this is a great victory for the ‘Anna Hazare’ brand of activism – however you may perceive it. For a nation with a score of 3.3 (equal to Albania, Jamaica & Liberia) and a rank of 87 in the Transparency International’s Corruption Perceptions Index 2010, such a movement deserves Godspeed.

In these turbulent times, one does wonder, though, on the reasons why the debate on transparency still centres so much on politics and not on corporate India. That is surprising, since the 2G scam is where the most serious questions on the government started getting raised. Five executives were also arrested - Unitech Wireless (Tamil Nadu) Ltd. MD Sanjay Chandra, Swan Telecom Director Vinod Goenka and three high profile executives from Reliance ADAG.

Consider an interesting contrast in the following two situations, where protests on transparency came from unexpected quarters. While we recently witnessed how yoga guru Baba Ramdev took up the cudgels against the centre to declare black money at Swiss Bank accounts as national property, the US saw four orders (all shareholders of Goldman Sachs) of Catholic nuns protesting in the month of April against the excessive compensations amounting to around $70 million paid by Goldman Sachs to CEO Lloyd Blankfein and four other top executives for year 2010. Activism in the US face a significantly enhanced level of scrutiny from all stakeholders. In India, however, it’s still largely about government and bureaucracy, apart from serious land acquisition related protests from communities like Posco, Vedanta, Arcelor Mittal and Tata Motors. Of course, America learnt it the hard way when it was rocked by a series of accounting scandals like Enron, Worldcom, Tyco, AOL, Bristol Myers-Squibb, Merill Lynch, Lehman Brothers, et al. The Sarbanes-Oxley (SOX) legislation of 2002 took some pathbreaking initiatives by making the CEO and the CFO accountable for the certification of quarterly reports and disclosure of all known control deficiencies and acts of fraud. Besides, it also made the management and the independent auditor responsible for reviewing the company’s performance. A 2009 survey of financial executives by SEC reveals that while there is significant cost involved in compliance, the benefits are many – 73% respondents said that their company’s internal control structure has improved, 71% admit that the audit committee’s confidence in their companies got better, 49% appreciate the better quality of the financial reporting, 48% say that the ability to prevent and detect fraud has increased and 40% agree that their confidence in other companies with SOX compliance has grown. A Lord & Benoit report showed that two years post-SOX, share prices of companies that enhanced internal controls for both years increased by 27.67%. For companies that only got SOX smart in year 2, share prices increased by 25.74% and share prices for those who failed to implement SOX at all declined by 5.75%.

Of course, all regulation in America itself looks on weak legs since it could not prevent the Lehman debacle and its aftermath, and America still laments the fact that no prosecutions have happened. The Financial Crisis Enquiry Commission was set up to analyse the root causes and deliberate on accountability for the crisis, which destroyed around $11 trillion in household wealth and led to 26 million Americans going jobless. The commission concluded that regulators and companies both failed in their duties miserably – they had enough warning signs and could have helped matters. That is perhaps why the Say on Pay bill, which was an important section of Barack Obama’s political agenda, gets American shareholders incensed like nobody’s business.

If the stringent laws in the US can fail to control human vice, then India needs to wake up immediately. Cases like Satyam have been few and far between so far, but we could be indeed committing the same mistake as the Americans did – they ignored the fine print when the times were good and the real estate bubble was in the pink of its health. India is a booming economy and corporates are showing stupendous results on the back of a strong domestic market. However, closer analyses reveal that a bit of paranoia wouldn’t harm at all. KPMG’s Fraud Survey Report 2010, which interviewed senior management of 1000 top Indian companies, found that 75% of respondents believed that fraud in India was on the rise and 81% said that the biggest issue was financial statement fraud. Major factors that are believed to be increasing such incidents include “ineffective whistle-blowing systems, lack of objective and independent internal audit functions with forensic skills, inadequate oversight of senior management activities by the audit committee and weak regulatory environment.” Also the maximum percentage of respondents from financial services industry perceive that the fraud in their industry is significantly high, followed by consumer markets. This is indeed a serious issue, since the financial services industry is a cornerstone of any economy. In B&E’s Power 100, 30 companies belong to this industry. In India, the public sector also controls around 250 large (40 companies in Power 100 2011) and small organizations, and a number of them are falling behind in terms of adhering to corporate governance norms. It is equally important to have independent committees to assess whether the government itself is doing justice to minority shareholders. As the government plans greater divestment from PSUs, such transparency could in fact be a blessing in disguise.


Read more....


Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
 

“Google is Trapped in The Android World”

An expert from the IT-obsessed state of California, Santa Barbara-based Andrew Seybold, who has served on the Motorola Research Board, IBM’s Mobile Computing Advisory Board and is a consultant to companies like RIM, HP, AT&T, Verizon, Nokia, Motorola & Qualcomm, speaks to B&E about pricing issues, and other growing concerns for Google’s Android OS.

B&E: According to UK-based research firm IHS, the Android Market saw revenue grow by 861.5% y-o-y from 2009 to 2010, but the actual dollar figures are small compared to all the other major app stores. What do you think will Google do in near future to increase revenues from apps?
Andrew Seybold (AS): The Android Market place is about those who believe that everything on the Internet should be free, free O/S, free apps. And they are not those who spend money, or desire valued content in the long-run. Therefore the Android community is going to have a tough time figuring out how to monetise apps for the devices.

B&E: Historically, apps have never really been money making machines. Will it be different with Android OS?
AS: Google itself set the stage as a free and open environment. And today, it is trying to capitalise on it. They set the bar for usage of everything free. Apple makes its money on hardware, not much on apps. The developers make more money on apps than Apple does by a long shot, going back to BREW – the first of these types of stores. Qualcomm did not make real money on apps. Its motive was to have the networks sell more devices, which in turn, sold more chipsets. Apps will never be a big money making proposition for those who run the stores. They are only used to drive other forms of business like in BREW, Apple, and even RIM. Since Google has no other portion of the ecosystem in which to make revenue, they are at a real disadvantage over the others who use the apps to drive other profit centres of their business.

B&E: Paid apps have lagged on Android for a number of reasons. One of them has been inadequate billing options. But Google has worked on this front, Do you see this as a move from Google to monetise its Android OS?
AS: It wasn’t until last month that Google added the ability for consumers to pay for Android apps through its AT&T plan. Android is about consumer devices and usage. Google hasn’t made it easy to purchase apps and even adding more ways to purchase apps is not going to make Android a money-making operation.

B&E: In case, one day, Android no longer remains OPEN & FREE, how will the handset makers react?
AS: If Android changes its business model, the handset vendors will lose interest in it.

B&E: Fragmentation of the OS – is that an issue for app-devlopers?
AS: Handset makers are constantly making changes to Android, which, in turn becomes a headache for developers. Apple is the leader – one OS controlled by them, across multiple platforms, easy to build apps for. Android developers have to understand the various differences of the OS supported by the different handset vendors and build applications for multiple flavours of the OS.

Read more....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Pachauri Redux; Politicians Undo

Over two years have Passed since a Series of Leaked E-Mails Triggered Doubts over The Extent of Global Warming being Projected by The IPCC, with its Chief, Rajendra Pachauri, having made to beat a Hasty retreat on its stand over Reports on Melting glaciers. But Pachauri, Disappointingly, still enjoys The Support of Various Government Functionaries

It can be termed nothing short of a shame for the nation when the media, both in India and abroad, slammed Rajendra K. Pachauri, the Chief of UN’s Intergovernment Panel on Climate Change (IPCC), for passing distorted and ‘falsified’ research figures as truths on climate change. The credibility of the IPCC, established in 1988 by the World Meteorological Organisation (WMO) and the United Nations Environment Programme (UNEP), had taken a serious beating in the wake of its false validation of data inferring glaciers were retreating and reports that ice from the world’s mountain tops was disappearing due to global warming – these findings, it later transpired, were actually based on a university student’s thesis and an article published in a magazine for climbers.

It all started when a series of leaked e-mails triggered doubts over the extent and rate of global warming, as projected by the IPCC. The panel headed by Pachauri had claimed that Himalayan glaciers could melt away by 2035, causing an obvious furore. “The clear and well-established standards of evidence, required by the IPCC procedures, were not applied properly,” the IPCC later said in a statement on its website, accepting the error... and this after Pachauri had claimed that IPCC procedures were robust and the world should have no doubt about climate change.

The IPCC essentially came under flak on three counts, the first of which was that due diligence was not followed and the claims were not peer-reviewed. Secondly, for the disgustingly authoritative tone in its predictions for the future; and thirdly, for merely being the words of authors who were no experts. The IPCC study is reported to have taken the deadline on the melting of the Himalayas from a Russian study, which predicted the melting of the glaciers by 2350. IPCC changed it to 2035, making it a ‘Himalayan’ blunder. The IPCC is also said to have taken references from a study done by World Wildlife Fund, which carried a report based on an article in a magazine called New Scientist in 1999. Interestingly, the magazine had attributed the report to statements from Syed Iqbal Hasnain, a leading glaciologist and senior fellow at The Energy and Resources Institute (TERI), who had made a presentation at the Centre for Science and Environment (CSE) in February, 1999, where he had talked about the controversial 2035 deadline. Hasnain reaffirmed his stand and told B&E that IPCC experts had never approached him for his research papers on Himalayan glaciers.

Pachauri claimed, “The IPCC doesn’t do any research itself. We only develop our assessments on the basis of peer-reviewed literature. So, this is really hundreds and thousands of years of research efforts that go into the distinct material that comes into the report.” There is an acceptable notion that it might be too early to deny the reality of climate change and global warming. But passing off unverified reports as gospel truths? That, for sure, is not acceptable, especially given the vast economic disparity faced by the world.

Apart from the international flak that Pachauri received over his alleged copy-paste con, even Indian environmentalists launched their own attacks on a man they claim is harming endangered forests, depleting scarce water reserves and promoting power companies which emit carbon gases that cause global warming. According to them, Pachauri’s consultancy group, TERI, had built a university on the Ridge, a protected forest threatened by construction in New Delhi, and has also been a contractor for the Commonwealth Games Village, which campaigners said could severely damage the Yamuna river, the capital’s “water lifeline”. Several campaigners also said that TERI had failed to declare conflicts of interests when it had produced favourable reports or given environmental awards to companies that funded its projects. Gopal Krishna of the Toxics Watch Alliance had told The Daily Telegraph, a UK-based English daily, that TERI had promoted “waste to energy” companies which generated power by incinerating waste, in spite of UN concerns that the process led to the emission of dangerous toxins and carbon gases.

Pollution from one such plant had caused miscarriages, asthma, and severe sickness in local villages, he had alleged. “There’s a conflict of interest because TERI was funded by Thermax, an incinerator company,” he had said.

There is another allegation, if Himanshu Thakkur of the South Asia Network on Dams, Rivers and People, is to be believed. According to Himanshu, who reportedly began investigating TERI after it awarded the State-run National Hydroelectric Power Corporation (NHPC) for “environmental excellence” for its power project in Uri district of Jammu and Kashmir. He discovered that the corporation had a poor record in the area and that it had been criticised in neighbouring states for insensitivity to national park forests. In a shocking revelation, he also claimed that the company had paid TERI £125,000 to fund a chair in its new university on Delhi’s endangered Ridge. His evidence persuaded the panel that had awarded the prize, which included J. S. Verma, the former Chief Justice of India, to withdraw the award. TERI then formed a new committee and confirmed the prize prompting Justice Verma and three other judges to resign in protest. TERI, however, rubbished these allegations when contacted.

Read more....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Will AT&T have The Last Laugh?

The Entire Telecom Fraternity is apprehensive about AT&T’s Buyout of T-Mobile. They say it will Benefit the buyer. It will. But the more Important debate is – will This Deal finally go through? B&E analyses why The US Justice Department does not really have a strong Anti-Competitive case against AT&T.

The world is currently fretting over who actually will gain in AT&T’s $39 billion acquisition of the $21.35 billion-a-year revenue-earning T-Mobile. Do a reality check, and you will realise that this is one of those few pointless exercises in life. The second largest AT&T, (valued at $176.34 billion) takes over the fourth-largest T-Mobile, and displaces Verizon (valued at $108.09 billion) as the new #1 US carrier. Period. The biggest advantage to AT&T is that this takeover will give it control over T-Mobile’s HSPA+platform, which will grant the combine a strong foothold on 4G, making it a strong rival to Verizon (which plans to roll-out its 4G service in H2, 2011). Given the degree of technological synergies and the expansive hold on frequency bands across US, this marriage, like any other during the past decade amongst US carriers, has promises written all over it. You said competition? We are talking about the new probable leader (AT&T and T-Mobile combine) with a bag full of 126.53 million customers and the follower with 93.2 million. While speaking to B&E, Scott Woolley, Contributing Editor of Fortune magazine says, “AT&T’s $39 billion buyout of T-Mobile addresses the company’s urgent capacity crunch with the immediate expansion of critical infrastructure. It is also a move to improve network quality for millions of AT&T subscribers and gives T-Mobile customers access to Long Term Evolution (LTE – a move towards 4G technology).” It is a case of enterprise slamdunk!

But that supremacy is what gives experts all reasons to be suspicious of any forecast – will this deal win the approvals of the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC)? That is the unsettling question. For AT&T, it is a $3 billion question (the amount AT&T will be paying T-mobile if the deal falls apart), while for Deutsche Telekom AG, it is $36 billion lost in cash & stock. A shot at becoming America’s largest telecom operator does win a lot of unwanted attention. AT&T claims that this acquisition will bring down call rates. At face value, the argument sounds genuine.

For those worried about prices biting-off a pound of the consumer flesh, the price vis-a-vis consolidation trend during the past decade will help soothe some nerves. Typical to the US market, here is a reality check. Post 1999, level of competition in the US market has actually fallen. Bell Atlantic and GTE combined to form Verizon. SBC, Bell South, Cingular & the old AT&T is today the new AT&T. Sprint & Nextel became one and then gobbled-up Virgin. And Verizon bought Alltel in 2008. In short, there were 11 big players before the start of the century which controlled 85% of the US market. Today, there are four which control 82%. According to a 2010 US GAO Report, which measured cellular price movements using US CPI Urban Consumers Cellular Telephone Index (CPI-U) as the barometer, “from 1999-2009, wireless prices have decreased by 50%”. The secret as it seems: price in the US & European wireless market have always been determined by technology than by competition. With 4G implementation in place, prices of the existing 3G offerings should only head southwards.

Read more...

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Will AT&T have The Last Laugh?

The Entire Telecom Fraternity is apprehensive about AT&T’s Buyout of T-Mobile. They say it will Benefit the buyer. It will. But the more Important debate is – will This Deal finally go through? B&E analyses why The US Justice Department does not really have a strong Anti-Competitive case against AT&T.

The world is currently fretting over who actually will gain in AT&T’s $39 billion acquisition of the $21.35 billion-a-year revenue-earning T-Mobile. Do a reality check, and you will realise that this is one of those few pointless exercises in life. The second largest AT&T, (valued at $176.34 billion) takes over the fourth-largest T-Mobile, and displaces Verizon (valued at $108.09 billion) as the new #1 US carrier. Period. The biggest advantage to AT&T is that this takeover will give it control over T-Mobile’s HSPA+platform, which will grant the combine a strong foothold on 4G, making it a strong rival to Verizon (which plans to roll-out its 4G service in H2, 2011). Given the degree of technological synergies and the expansive hold on frequency bands across US, this marriage, like any other during the past decade amongst US carriers, has promises written all over it. You said competition? We are talking about the new probable leader (AT&T and T-Mobile combine) with a bag full of 126.53 million customers and the follower with 93.2 million. While speaking to B&E, Scott Woolley, Contributing Editor of Fortune magazine says, “AT&T’s $39 billion buyout of T-Mobile addresses the company’s urgent capacity crunch with the immediate expansion of critical infrastructure. It is also a move to improve network quality for millions of AT&T subscribers and gives T-Mobile customers access to Long Term Evolution (LTE – a move towards 4G technology).” It is a case of enterprise slamdunk!

But that supremacy is what gives experts all reasons to be suspicious of any forecast – will this deal win the approvals of the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC)? That is the unsettling question. For AT&T, it is a $3 billion question (the amount AT&T will be paying T-mobile if the deal falls apart), while for Deutsche Telekom AG, it is $36 billion lost in cash & stock. A shot at becoming America’s largest telecom operator does win a lot of unwanted attention. AT&T claims that this acquisition will bring down call rates. At face value, the argument sounds genuine.

For those worried about prices biting-off a pound of the consumer flesh, the price vis-a-vis consolidation trend during the past decade will help soothe some nerves. Typical to the US market, here is a reality check. Post 1999, level of competition in the US market has actually fallen. Bell Atlantic and GTE combined to form Verizon. SBC, Bell South, Cingular & the old AT&T is today the new AT&T. Sprint & Nextel became one and then gobbled-up Virgin. And Verizon bought Alltel in 2008. In short, there were 11 big players before the start of the century which controlled 85% of the US market. Today, there are four which control 82%. According to a 2010 US GAO Report, which measured cellular price movements using US CPI Urban Consumers Cellular Telephone Index (CPI-U) as the barometer, “from 1999-2009, wireless prices have decreased by 50%”. The secret as it seems: price in the US & European wireless market have always been determined by technology than by competition. With 4G implementation in place, prices of the existing 3G offerings should only head southwards.

Fair enough. The only issue is – if we dig a little deeper, we discover that this decline in cellular rates do not add up. The CPI-U doesn’t measure the expenditure incurred on phone bills. With the increase in sales of tablets and smartphones, consumers are paying more for data services. Even AT&T’s revenue from post-paid connections per customer has increased by 3% over the past several years, revenues from data services was up by 47.57% in 2010 as compared to 2008. Something to ponder over.

Read more.....

Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age WomanIIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management

Why Hasn’t The DGCA head been Suspended yet?

The DGCA head should be Immediately Suspended & Questioned on numerous loopholes in our Aviation Infrastructure Endangering Thousands

“Whoever willfully flies any aircraft in such a manner as to cause danger to any person or to any property on land or water or in the air shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to ten lakh rupees, or with both.” These are the glorious words from the Aircraft (Amendment) Act, 2007 that adorns the website of the Directorate General of Civil Aviation. Whoever from DGCA was consulted for making this Act must have been either extremely shrewd or farsighted... or both. The onus of any ‘flight’ crime endangering lives or property, as per the Act, only lies with the pilots and not with anybody else. Given the latest rot exposed in the fudging of pilots’ marks, one questions why this Act should not be expanded to include in its ambit even on-ground officials like the head of DGCA who, either through deliberate commission or omission, have been as much party to the issue of endangering lives of flyers as the criminal pilots themselves. While pilots have been arrested, and so have been some low-key DGCA officials, the huge question is, why hasn’t the DGCA head, an IAS officer called SNA Zaidi, been suspended till now?

Charge 1 - Criminal negligence: The latest series of scams shows how pilots used forged mark sheets to secure their ‘Airline Transport Pilot Licences’. These licenses are required by co-pilots to graduate to become a ‘commander’. 4,000 such licences are under scrutiny. The police have arrested Parminder Kaur Gulati of Indigo and Jitender Kishen Verma of Air India in this scam. These pilots forged mark-sheets in order to obtain their respective licences. Even a veteran pilot – Air India captain J. K. Verma (flying for Air India since 1989) – forged his testimonials to get his licence. Arjun Giare, who obtained his license through a faked mark-sheet (forged Class 10 certificate to meet the minimum age criteria) was even suspended in the year 2000 by the US Federal Aviation Authority. In another case, Garima Passi, daughter of Director of Air Safety in DGCA, was suspended recently as even her licence was based on forged documents.

Crime branch officers (who are investigating this case) have commented that “such a scam could not have taken place without some DGCA officials being in the know.” Mark-sheets are issued to pilots from the DGCA’s central examination office in R. K. Puram in New Delhi, which are to be submitted to DGCA’s head office for further processing. The issue here is not that pilots have fake licenses – pilots have original and authentic licenses. But these licences are based on fake mark sheets – which possibly could not have been approved at the license issuing end, unless DGCA officials throughout the organisation were complicit to the act.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

The Larger issues that Hinder India’s rural Development

UPA’s flagship Project NREGA has, to a Certain Extent, succeeded in Empowering The Rural Poor, but The Government needs to also address The Larger issues that Hinder India’s rural Development. 

Considering that most of the Indian poor live on agriculture, removing poverty and improving agriculture are two sides of the same coin. While there is an elaborate structure of schemes and institutions relating to agriculture, it is not clear who will finally interface with the farmer and ensure the support required. Forecasts by analysts that poverty will decline steadily can be no consolation to those living in poverty. There is an urgent need to add value to the life of the Indian poor. As of 2010, over 37% of India’s population of 1.35 billion still lives below the poverty line (22% rural and 15% urban, based on UN data). Government schemes are slow with the delivery systems weak and inadequate. The never ending blame game over the onus of implementation and monitoring that ministries and the Centre and state governments repeatedly indulge in, further paints a bleak picture.

All said and done, NREGA was not initiated as a scheme to create public assets to help the nation and society at large. In fact, until recently, the preamble of the Act did not even include the concept of building durable assets. Development in the true sense has to go much beyond giving cash. Answerability is of utmost importance. Strict laws should be put to place to ensure utmost accountability from all sections involved. Conceptualising a well-intended concept and taking no onus for its implementation isn’t an example of good governance. Skills training for those involved in such schemes and proper guidance for correct utilisation of money are equally important. While India needs to grow at a phenomenal rate to truly transform the employment and poverty scenario, NREGA has set upon an important task towards a more equitable distribution of this wealth. Needless to add, we have a long way to go till we see the real rural revolution that India truly aspires for.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

 

Have you Heard of The ‘BRIC’ Strategy?

It’s sad how a Giant like Mitsubishi has almost Fallen by The Wayside in The India Auto-Sweepstakes, with much of it being its Own Undoing. B&E does a to-date-legacy Summary on The Death of a Brand…in India.

With a presence in over 170 countries, there is no denying that Mitsubishi is one of the oldest names operating in the global automobile circuit, and has had glorious moments in its journey, which started way back in 1917 with the Model A. It stands as the 7th largest Japanese auto major today and the 17th largest globally.

It also took an important lead, when it set up its Chennai car plant in 1998, in collaboration with Hindustan Motors Ltd. However, despite having received rave reviews for its cars (particularly Lancer), the company is actually facing humbling times in the Indian market. One wonders why the company hasn’t been too interested in being a part of the success story of the second fastest growing auto market in the world – India. In fact, Brazil has found better favour as the Japanese automaker recently made it clear that it is trying to quickly lift global production to 1.5 million units by redistributing business resources and will be investing close to $241.5 million for securing a 50% share in MMC Automotores do Brasil SA (a Brazilian company responsible for production of Mitsubishi products). Going simply by the numbers, even globally the company seems to be developing a laudable vision – Mitsubishi is eying sales of over 13,70,000 units by the end of FY 2013 from the current sales of 1,000,000 units by the end of FY2010. The company is planning to build a third factory in Thailand, which will make it the second largest export hub after Japan. It is aiming to strengthen production in China and even start producing a new SUV series in Russia.

And what about India? Well, in all of Mitsubishi’s BRIC speak, the ‘I’, that is India, is strangely absent. And the more intriguing part is, one isn’t quite able to understand the reasons that Mitsubishi might be avoiding mentioning India as one of its topmost priorities. What could be called the ‘clarion call’ of 2010 for Mitsubishi was the fact that while Hindustan Motors sold close to 490 units of the decades-old Ambassador in the month of December 2010, Mitsubishi managed to deliver only 143 units, combining all the offerings that it has in its India portfolio! And the response of Mitsubishi to all this? Well, nothing to write home about.

It’s quite intriguing, the current situation for Mitsubishi in India. During the late 1990s, Lancer was the epitome of technology and style for the Indian consumer. The modern looks coupled with the superior technology offered exactly what its target segment was looking for. However, the years that followed have only taken the company only deeper into the woods. The biggest issue facing the Japanese giant is the product portfolio. Today, the situation is such that while any prospective buyer in India would be able to drivel off various car brand names of Mitsubishi’s competitors like Honda, Toyota, GM, it’s rare now to meet a buyer who would be able to recall even three brand names of Mitsubishi vehicles (the list starts at Lancer and ends at Pajero). Over the years, while competitors kept introducing new models specifically targeted at various demographic and psychographic consumer segments, Mitsubishi’s product portfolio has remained an awkward mix with a couple of sedans and SUVs minus a hatchback. Yes, Mitsubishi had recently showcased its global concept car at the Geneva Motor Show, which is scheduled to launch from its Thailand facility in 2012. The company has even confirmed this in its global mid-term business plan from 2011-2013, which it calls Jump 2013. But concept cars are, well, only concept cars.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting

HP – The Largest IT Company in The World

The new CEO is a Software Guy and has Prior Experience only in Enterprise sales – A Clear Mismatch with The Current Philosophy of HP – The Largest IT Company in The World. Is he The Right Choice?

While HP is known for its hardware, distribution and B2C business, software is more of loose change (accounting for 2.8% of HP’s topline for Q2, 2010). And this is precisely what Apotheker has set out to repair. Expectably, under him, HP’s focus on software will increase manifold. But with software, comes innovation. And Apotheker’s SAP files prove him a failure at it. Also, he has earned a reputation for establishing an environment at SAP, which focuses on high-cost and low return maintenance and support pricing, rather than profitable applications, despite the billions spent on innovation. The fact that he has also presided over product delays and has demonstrated ill-sense of pricing techniques, also does not ensure better days ahead for HP; the foreboding danger being a repetition of what happened to SAP – HP might soon find competitors chiselling away its PC market share.

So what should Apotheker do? He has options. The most irresistible one will be not to tamper with HP’s pride – its hardware business. But he is apparently going to do that, despite knowing that Hurd tried in vain to give HP a software and enterprise business edge with its acquisitions of EDS, 3Com and Palm. Neither did the $13.9 billion EDS acquisition help HP make waves in the consulting & services business (where IBM is #1), nor did the $2.7 billion 3Com buy manage a dent in the network arena where Cisco rules. And as far as the $1.2 billion Palm buy goes, everyone knows what an HP ‘smartphone’ looks like, right?

Many claim that Apotheker might do to HP what Palmisano did to IBM. But the truth is – the very imagination lacks logic. HP is not IBM. When IBM chose to go the software way, it was being sucked into a black hole, with its hardware business collapsing. It was then that IBM decided to shed deadweight. HP is in not in a similar situation by light-years! It is the #1 IT company in the world (having made $114.55 billion in revenues in FY2009) and sells the largest numbers of PCs and printers in the world (claiming 37% of global market share in the printer segment; Q3, 2010). What makes Apotheker believe that HP needs a makeover? Whether he will take a dig on cloud computing is a wonder (as he has had his share of expensive failures in this regard while at SAP, burning $5 billion in 2 yrs.), but what is inevitable, is that HP under Apotheker will join the battle to capture the enterprise space from the likes of Oracle and IBM. This would call for expensive acquisitions of players like SAP, Salesforce.com, et al, which will put big question marks on the ROI figure of HP, that is already lower than the industry’s (12.36 and 15.56 respectively).

All said and done, Apotheker has never before been answerable to such a large shareholder base. So the first task for him is not managing the finances or balancing the software-hardware see-saw. It is to win favour of and retain talent at HP, who would already have headhunters knocking at their sedan doors, as King of Mindspring adds, “HP enjoys a host of experienced, senior executives leading its printer, server, storage and networking divisions, who can keep the company’s efforts on track while Apotheker learns the ropes.” Lesjak (CFO), Bradley (Personal Systems Group Head), Robinson (CTO & CSO), Perez (Head of HR), and Joshi (Head of Imaging and Printing Group) are names which should find a regular place in Apotheker’s dining plans over the new few months, if he is to imagine any chance of being around at a multifaceted monolith like HP before his debut speech is forgotten this time.

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Source : IIPM Editorial, 2012.

An Initiative of IIPM, Malay Chaudhuri 
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles. 

IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting