Emergic: Rajesh Jain’s Blog

Over the past month or so, I have begun to read India’s post-Independence history. The objective was to get a better understanding of India’s political past, so one can think about the future. The idea was to understand the evolution of the various political leaders, dig deeper into the events that have shaped the policies through our past 60 years, and fathom why we made a number of wrong turns since Independence.

My approach has been to focus on key events through these 60 years, and read them through the words of multiple authors. Writers have their biases, and to interpret what has happened, I figured it would be a good idea to read a wide  range of analyses so I could then create my own mental models and maps of what happened.

It has been a fascinating journey so far. And as I read, so many “What-Ifs” come up. India has been singularly unfortunate that at many times, when we could chosen development and prosperity, events occurred which pushed us in a different direction.

Continued tomorrow.

History was never a subject I particularly liked when in school. Maybe, it was because all it involved was memorisation of lots of dates and events, and other random stuff. History just seemed so static – we were studying our own country, but in a sort of distant way. And then there was  world history with even more dates and events. The only skill involved in the study of history  was how well one could reproduce the printed text book.

India’s history is rich and tapestried. It is long and has a fascinating array of people and stories.  Unfortunately, that breadth and depth was missing in the way the text books were written and the subject was taught. The saving grace was   Amar Chitra Katha comics.  Published twice a month, they were something I looked forward to. It brought history  alive in a manner in which history textbooks never did.

And so it has been  for the better part of my life. The present and future seemed of greater interest than the past. That is starting to change.

Continued tomorrow.

From a post a year ago:

This week’s links:

• The coming tech-led boom: from WSJ. “In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution.”
• Top Tech Trends: from IEEE Spectrum. “Prediction of the tech that will make news this year.”
• The e-commerce revolution is all about you: from Techcrunch. “With the increasing mountains of data at digital retailers’ fingertips, ecommerce is about to get even more personal.”
• 2009 India Election Analysis: I came across this a few days ago. Very interesting points highlighted by Christopher Jaffrelot and Gilles Verniers. “Evidence from the results themselves show that…the process of fragmentation of the party system and the electorate is still progressing, Indian voters having opted for regional and local players more than they ever did before.”
• Unravelling India: An op-ed (Part 1) in the Business Standard on India’s economic scenario. ” How badly will this political paralysis hurt the economy’s immediate prospects? What’s the best way of tackling the endemic corruption? And is India’s long-term growth story still intact?”

One point to note about India is the huge base of feature phones. These are not the smartphone variety with Android, iOS or Blackberry’s operating systems and app stores.  It will take some time before the smartphones reach critical mass. So, in the near-term, the opportunity is not as much on apps but on delivering services to feature phones via mobile operator billing.

The combination of open publishing platforms and operator-enabled micro-billing can transform the MVAS space in India by creating entrepreneurs everywhere – just like Apple’s AppStore did globally. This is what will drive the local content industry and create services relevant in our daily lives.

There is an exciting new world ahead of us. India’s mobile data revolution has largely bypassed the local industry. With some big thinking from the operators and RBI to simplify the mobile micro-payments, we could see a huge flourish of ideas and innovation. Will 2012 see this happen?

For the next-generation of MVAS to flourish in India, it is important to add a capability of micro-billing of consumers. This removes the dependency on advertising as the only source of revenue for content and service creators. As we have seen from the first generation of MVAS, users have no problems in paying anywhere from Rs 3 for an sms to a shortcode to Rs 30 per month for various services.

Since RBI has put very onerous conditions and not differentiated small payments from large, the banking and mobile wallets route looks unlikely to gain wide transaction in the near future. That leaves the operator route. Operators should  come up with a revenue share where the majority of what the user pays goes to the content and service providers, and payments should be made every month. This will create the necessary incentive for an entire industry of entrepreneurs to kickstart the Indian i-mode revolution.

The market is large. There are 100+ million mobile users in India who could easily pay Rs 50-100 each month for a wide range of data services. This is a market worth Rs 6,000-12,000 crore ($1.2-2.4 billion) annually. Operators would tend to make their money from increased data usage and the transaction fees, while the content and service providers would now also be able to get larger shares.

Continued tomorrow.

What will this new generation of MVAS look like? What can enable this world faster?

To answer these questions, it is instructive to look at what happened in Japan’s mobile space in 1999. That was when NTT Docomo, the largest mobile operator, launched i-mode. It did three things: opened up its platform to all software or content entities from a service creation point of view, standaridsed the pricing of each service to 300 yen a month, and shared 91% of this revenue with the service provider.

In other words, what NTT Docomo did was keep the data traffic revenue and 9% of the monthly service revenue. IN a few months, the service ecosystem had exploded to tens of thousands and i-mode’s user base grow to millions. It was a win-win for everyone.

If mobile operators in India can get their actions right, India too can see a similar explosion of mobile data innovation in the coming years.

Continued tomorrow.

Given the mobile base of 100 million, the natural question to ask is: what are these users doing? From anecdotal evidence speaking to people, the answer comes down to search, consuming media (songs, videos), and social network use (primarily Facebook). The top sites in India are similar to those elsewhere in the world, if one looks at the data from Opera.

The challenge in this emerging world is that of monetisation.  The only option for content creators is that of advertising. The other option – subscriber pays – has been a non-starter in India for two reasons: the operator revenue shares and closed platforms make it hard for content creators to make money by billing through the operator, and the mobile payments options through the banking network are so regulated and cumbersome to make them almost unusable for small payments.

What is clear, though, is that users are moving from one world of value-added services to another. Ringtones, wallpapers, CRBT and the ilk are being pushed to the background as a new set of services and needs comes to the fore. A next-generation of mobile value-added services awaits us.

Continued tomorrow.

A new world of mobile data is emerging. It is being driven by the rise of better phones, faster networks and an increasing variety of content applications and mobile internet portals. While India is not the first country to experience this new world, it is unique because it is one of the few countries where the mobile is becoming  the primary (and in many cases only) device in people’s lives.

In India today, there are an estimated 100 million people who already use the mobile Internet. This is an extrapolation from the datapoint provided by Vodafone that it has 32 million people using the mobile Internet. Airtel would probably have a similar number, and other operators put together would add an equal number.

The PC internet in India has about 80-100 million users, according to recent surveys and estimates. While there is some overlap between the PC and mobile Internet users, it would be fair to say that the Internet in India now has about 120+ million unique users – about 10% of the population. Going ahead, this user base should rise even faster.

Continued tomorrow.

From a series I wrote a year ago:

Being part of this movement to help transform India is what I propose to do going ahead. We cannot sit by silently and watch the extraction and exploitation continue. It is only when some among us start getting outraged at what we see happening that the wheels will be set in motion. But this has to be done in a planned way. One has to bring the inventiveness and energy of a startup to this process. There is one path to success, and that needs to be figured out.

When we look back at India since the 1930s, it is a tale of missed opportunities. There are many occasions when we could have taken a turn for the better, but poor decisions by our leaders failed us repeatedly. Some were plain stupid, others were motivated. We cannot afford the luxury of time any more. There are too many futures at stake now – our futures.

The good news is that India can be transformed. And we can make this happen during our lifetimes to bequeath to the next generation a country they can genuinely be proud of. As citizens of India, some of us need to step forward to lead this effort.

This week’s links:

• The rise and fall of personal computing: A fascinating graph from asymco.
• Making Customer Segmentation Deliver: from strategy+business. “As the ability to gather sophisticated data grows, here’s a four-step process for making segmentation drive improved performance.”
• Customers, Competition and Cost: A Knowledge@Wharton interview with Sam’s Club CEO Brian Cornell on the Essential ‘Cs’ of Leadership.
• India at 60: by Shankkar Aiyar. “The Republic has failed its people on both justice and equality, on delivering the basic standards of humanity.”
• The Future of Cars: from Technology Review. “Cars are soon going to be the new smart hubs of entertainment and utility.”

Government and Politics: Interference and Opportunity

2011 will be remembered as the year that the government started cracking down and limiting the freedom of speech on the Internet. Perhaps shaken by the success of the India Against Corruption mobilisation via mobile and social media, the government fought back by cracking down on social media, TV channels and SMS. 2012 will see various court battles to determine whether India sees censorship in the China model, as one of the judged hinted.

India’s mobilisation and politics can also be changed via the coming rise in digital users. IAC was a good showcase of what can be possible. Given the large base of urban Middle India and the tools that they have to now organise, there is no reason for this segment to continue to stay apathetic to social and civic issues relevant to the future of the country.

Last Word

So, even as India’s Internet comes of age finally, our government, digital infrastructure  and regulation hold our usage back. I hope that 2012 sees these obstacles go. But given past experience, I am not optimistic. And yet, we as consumers will find our own paths to make the digital world an even greater part of our life.

Marketing: Multiple options

Digital media options are proliferating. Marketers now talk of paid, owned and earned media. Paid media is the search and display ads that companies run. Owned media is the properties that are created – for example, Facebook pages and mobile apps. Earned media is the multiplier effect from users spreading the word on their own through social media and other mechanisms.

There is mobile marketing with all the various options – SMS, voice, mobile Internet and apps. There is also social media. Email marketing is also growing rapidly in India. What is perhaps lacking is more innovation in how all of these options can be better integrated together.  For example, TV advertising could include opt-in options to drive permission marketing to the mobile.

As digital marketing options proliferate and ever greater percentages of the budgets shift, companies will demand even greater accountability of their spends. So, analytics will emerge as a by-product of the process with even sharper targeting of users. There is so much information that we are leaving in trails on the Internet and sharing that the world of microtargeting is now becoming a reality.

Entrepreneurs: Optimism Abounds

The past year has seen at least a few private companies like Flipkart and InMobi with valuations rising to the magical billion-dollar mark. eCommerce companies of all shapes and sizes have been at the receiving end of dollops of dollars. That is good. While there will be many failures, there will be a large array of entrepreneurs who will learn a lot from this process. Multiple models will be tried and morphed, and good always comes out of such experimentation.

A decade ago, there was a similar optimism but that window was too short and the user base was simply not there on the Internet. This time around, it is for real. There is a much better pipeline of funding available for entrepreneurs now – from individuals, angel networks to VCs. All we need to keep this pipeline running is a continuous flow of exists through M&As and IPOs.

What we need in India now is more investments into localised content and services. This will help drive more usage and advertising. The ad spends on the Indian Internet at Rs 1,500 crore annually are still now large enough to sustain a vibrant content ecosystem. Local languages and content will be critical in the next phase of the Indian Internet.

Continued tomorrow.

Mobile Payments: Mired in regulation

One of the big boosters for monetisation on the Internet and eCommerce can come from enabling mobile payments. Here, regulation by RBI and the payout regime from the DoT has ensured that mass-scale mobile payments remain a mirage.

Imagine being able to pay for a book you bought by just having it added it to the phone bill (or being deducted from a prepaid amount). If this process is simplified, then even an SMS sent by a merchant can turn into an actionable transaction with the consumer just smsing a Y to complete the purchase.

To make this happen, while the theory of mobile wallets happens, the process is simply too cumbersome. For sub-thousand rupee payments, we need a simpler process. Operators should have not to pay service tax and revenue share to the government on these charges. They can take a transaction fee (3-10%), and pass on the rest to the merchant.

Unfortunately, 2012 is unlikely to see much change on this front.

Bandwidth: Frozen in time

India’s data pipes scenario doesn’t look that good in the near-term. The wireline networks are almost entirely dependent on a broke BSNL and a meandering MTNL. As a result, we are not seeing the high-speed networks that should have been ubiquitous by now. By not unbundling the local loop (last mile), the government has forced private players to take the wireless route even for the last mile.

Reliance’s impending entry with their 4G networks will change the game. But it will take a couple years for that to happen at a national level. One would have thought that the existing 3G mobile operators would have fast-tracked moves, but that hasn’t happened. So, with BSNL and MTNL not doing much, RIL’s entry still some time away and the 3G networks not living up to their promise, things aren’t changing much.

Bandwidth remains critical because the Indian Internet usage needs to switch from intermittent to always-on, and from low broadband (sub-1 Mpbs) to real broadband (multi-Mbps). Until that happens, the usage will remain somewhat muted. For applications like multi-player gaming to take off, high-speed networks are critical.

Continued tomorrow.

From a post a year ago:

One of my favourite books (and movie series) is “Lord of the Rings.” And so, I can think of no better way to end this series than with three quotes from the movie that I feel epitomise my thinking and life.

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Frodo: I wish the Ring had never come to me. I wish none of this had happened.

Gandalf: So do all who live to see such times, but that is not for them to decide. All we have to decide is what to do with the time that is given to us.

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To bear a ring of power is to be alone.

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Even the smallest person can change the course of the future.

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This week’s links:

• 25 Big Ideas for 2012: from Wired UK. “Social design and Facebook’s next big move.”
• John Battelle’s 2012 Predictions: Among them: “Twitter will become a force as a media company, not just a platform for others’ media. To do so, it will improve its #Discover feature and roll out something like Flipboard.” and “Every major player on the Internet will have to do a deal with Twitter, and Twitter will emerge as a Swiss like, open, neutral player in the battle for the consumer web.”
• The Seven Habits of Spectacularly Unsuccessful Executives: from Forbes. “Habit # 1:  They see themselves and their companies as dominating their environment.”
• Management Team – While Building the Business: by Fred Wilson. “Building the business largely means building the management team. They are one and the same. Many founders are naturally talented at building product and building the user base. But building the company comes harder to them.”
• Identity Politics in India: by Atanu Dey. “The identity that matters most during elections is our identity as responsible citizens. We care not about the identity or the personality of the candidate but rather what ideas and ideals the candidate holds and whether those ideas will lead to social welfare. We care about honesty and decency, about public order and private enterprise. It is that identity of ours that we should wear proudly on our chests and act accordingly at the ballot box.”

Video : Variety and Vroom

If Facebook is synonymous with social networking, YouTube is the same with video. In terms of viewers, it is the 10^th largest TV channel in India, if one sees it thus. As bandwidth costs have become flatter, video usage has increased, both on wireline and mobile networks. Hundreds of movies and  tens of thousands of snippets are creating a varied video experience.

In 2012, we can expect much more Live Video. Already, one can see many events like – including the ongoing India-Australia series (should one want to, of course). Political rallies, some conferences are now being live streamed over the Internet, thus enabling reach independent of geography.

Video brings things alive in a way text simply cannot. And this opens up huge possibilities in India. We will start seeing made-for-Internet “TV channels” which bypass the investments required for distribution via cable and satellite. This has the potential to change many industries in India, from education to politics.

Continued next week.

Mobile: Missing Data

The mobile revolution in India has seen an amazing decade of growth. With nearly 900 million SIMs distributed to 500+ million Indians, the mobile has done for communications what the landline telephone never did. The voice revolution in India is finally complete. Pretty much everyone who chooses to be connected can do so for a small investment.

The next upgrade will come through the use of Data. This is where the operators’ 3G strategy has been confusing and disappointing. They haven’t really pushed 3G hard enough. The networks too are not delivering the speeds that they should. So, even as have devices capable of doing so much more, the usage of data and the ecosystem of content and applications is not growing fast enough.

Data plans for postpaid users need to become much more rational. To charge Rs 600 as operators want to do on a Blackberry data connection is irrational, even as they offer cheaper plans for BBM and email. Operators should replicate the i-mode model of open platforms and micropayments to drive the ecosystem in India. That is where the Rs 500+ data ARPU is going to happen.

Continued tomorrow.