I wrote this a little over a year ago.
India of 2008 in the mobile space is quite similar to Japan of 1998. And into that Japan is when NTT Docomo launched its i-mode service in February 1999. In less than 3 years, 30 million subscribers were using i-mode.
What are the similarities between 2008 India and 1998 Japan? (Here, my focus is on the saturated, urban markets.)
– Mobile is at the centre of people’s lives.For many, mobile is the only interactive device.
– Lack of PC installed base handicaps Internet growth.
– Broadband is available only in pockets.
– There are few value-generating services on the PC (fixed line) Internet.
– Services are on the mobile are still limited due to operator control.
It was in this world that NTT Docomo, Japan’s leading mobile operator with a majority share of the market, launched i-mode. The focus of i-mode was on mobile data services. Content providers got 91% of the end user price, with Docomo taking the other 9% forproviding billing services. In addition, Docomo retained the full data transfer charges that were paid by subscribers. It also created the entire ecosystem – including that of handsets and key anchor service providers.
This is the revolution that India needs on the data side.
A new year, a new BJP President, and a new beginning for Friends of BJP! We hope to continue the work we began almost exactly a year ago in getting Middle India more engaged with politics, public policy and governance. We also hope to provide the right inputs to the BJP as it seeks to recover lost ground and build a new foundation to challenge the Congress in the battle for minds in the coming years.
Here are the three questions we wanted to address first:
- What are the 2-3 big issues that will present the most challenges and opportunities for India?
- Which ideas/issues would resonate most with the youth in this decade — those issues which will fire them up to actively work towards their own and India’s development?
- Which matters should we focus on in the next 10 years? These should be achievable and must be important for India’s development?
Look forward to your inputs. I will publish my answers on Monday.
The focus should be on creating Friends of BJP Chapters in India’s top 50 urban centres (along with a Secretariat in Mumbai and Delhi) to manage ongoing activities, to drive conversation and expand the member network. The goal has to be to win the hearts and minds of youth and professionals in urban India by giving them a platform and a voice. For this, there is a need to start engaging with citizens at the local level. There are three areas to focus on:
- Engagement with Elected representatives: Repeat electoral success can be ensured by enhancing the engagement between elected representatives and the civil society. In order to achieve the objective it is proposed that
a) A mechanism is institutionalized to seek inputs, advice and criticism from people through the FBJP website for each BJP MP. This should be shared with the concerned MP and relevant Party leadership for follow up.
b) Consequently there should be on the ground engagement once in three months between the elected representatives (MP/MLA/Corporator) with the electorate. This will help create a two way process. It must be remembered that technology can at best complement but not replace the need for constant face-to-face interaction. A digital interface through the website will help get contact details and build profile of the constituency, which can help build “institutional memory” and subsequently used for micro targeting.
A Constituency-wise database can help in driving voter registration, taking up local issues, assessing the strength of ideological movement etc. Any work of this sort needs to be done in close co-ordination with local BJP units wherever possible.
- Constituency-level Grassroots PIN-code Network: Create a network of engaged people on the ground in every locality of urban India. Think of this as “Networks and Conversations” where people meet every so often to discuss issues, and meet others like them – discussions can be organised on a monthly basis in a co-ordinated way across India. The goal should be to have an engaged database of 100+ people in every urban constituency of India. [Note: The focus needs to be especially greater on the four states of Andhra Pradesh, Kerala, Tamil Nadu and West Bengal where the BJP does not have a significant presence.]
- Onground Activism: A couple of key issues relevant to sections of urban India need to be identified, and then need to be vigorously pursued at all levels. Two possible areas to begin with: National Security and Education Policy.
Tomorrow: Three Questions
The BJP needs to effectively communicate its thinking, ideology and activities better to people in India and outside. Media management has been often highlighted as one of the areas of deficiencies in the party’s communications. Members from Friends of BJP (along with the proposed Think Tank) can help build a better media outreach strategy using new media, offline distribution solutions, etc. We need to look for solutions which are “faster, better, cheaper” and can get the message across to the masses. Some possibilities:
- Innovative use of online (Net and mobile), complemented by offline distribution of CDs/DVDs, columns in print, TV appearances, etc.
- Direct 1:1 interaction with key members from the media
This strategy will only use contemporary mediums to increase outreach and is in no way a replacement to the grassroots movement. Public education is absolutely essential in a democratic setup. How the average citizen perceive the important issues, how informed he or she is about them, how they feel about them – all of these matter because public policy is formed as a distillation of how the public feels about them. Affecting change then is than a matter of changing public perception and that argues for a very effective campaign for public education. (Public education must be understood here as making the public informed about issues that matter in the larger scheme of things.)
The BJP needs to start winning the intellectual game once again. It was the party of big, bold ideas for India. It must reclaim the centre-right space in Indian politics. We need to shift from the politics of identity to the politics of aspiration, recognising that the (urban) Indian voter has changed and moved ahead. The ideas have to also instill a sense of confidence and pride in people about their country and culture, and at the same time be socially inclusive. Rebuilding this intellectual foundation will require a concerted effort along multiple activity streams:
- Create a Policy Foundation: Create a Think Tank for new ideas with a right-of-centre thrust, on a range of economic and social issues in the country. The Foundation will propose, educate and engage with policy makers (elected representatives and members of bureaucracy) with the objective of guiding public policy, legislation and delivery, and influencing public opinion. Its support in matters of policy and governance will be driven by India’s long-term requirement and not short-term opportunism. The Foundation will be guided by the principles of liberal democracy, free enterprise (keeping in mind the interests of wider sections of society), social inclusion, robust defence policy and nationalism and will deliver India-oriented research. The Foundation will have a physical presence in Delhi and a virtual presence for wider dissemination and ongoing engagement. It can also encompass a “political research and analysis wing” which will do a psephological study of historical voting trends (and more). This Think Tank will also host seminars every six month on contemporary issues facing the Nation and invite subject matter experts, members from the Government and beauracracy to come and participate in order to find India centric solutions. This will help create influence and allow the right wing movement to regain the intellectual space besides influencing policy.
- Create Policy Teams: The Think tank with inputs from members of the civil society and right leaning intellectuals can provide distill inputs to the party leadership and its Cells on various issues of governance.
- Build Strong Bridges: There needs to be formalised bi-annual interactions for key members across various groups with the BJP leadership. This will help ensure ideological bonding and check deviations.
A few months ago, a couple of us (Amit Malviya and me) had put together a note on taking further the Friends of BJP (FBJP) initiative we had started almost exactly a year ago. I am outlining the ideas in a series of four posts this week.
The country needs an effective alternate formation that puts India First. The 2009 Parliamentary Elections saw Friends of BJP strike a chord with professionals and urban youth. It is proposed to continue and build the movement in a much more structured manner with clear long-term goals. India is changing fast with an ever increasing urban population, which is educated and exposed to constant media intervention. What this growing Indian middle class currently lacks is a political platform where it can engage and contribute to the political process of this country. There is a need to modernise the political set up of the country and the FBJP movement can precisely do that for the right wing movement. FBJP should become an alternate platform for rallying people and ideas, an input for the political process. The efforts of the Friends of BJP over the next five years can fulfill this need giving BJP the opportunity to reinforce its credentials as a party of the thinking middle class, ensuring that enlightened debate on national issues continues, and giving the BJP supporters (at least those in urban India) a possible rallying point.
To do this will need a series of bold steps combined with a long-term vision that creates in India a nationally oriented group who think “India First”. The politics of India needs to change since its voters have changed. The mantle of cultural nationalism with “India First” thinking needs to be championed vigorously in the coming years. Youth and Professionals need to be energised with big ideas and vision for a prosperous and vibrant India. To lead the way, we envision a set of three themes for action: Ideas, Communications, Engagement (ICE).
I have collected together four articles from a series I wrote in 2004. These are writings from Atanu Dey on what Development really means. Here is an excerpt from the first in the series:
For India to develop, there is no way other than moving away from agriculture. By that I don’t mean that we give up agriculture or reduce our production. I only mean that instead of 66 percent of our labor force being in agriculture, we have to steadily reduce that to something like 10 or 20 percent at most in the medium term and to single digit percentages in the long term. When labor does make that transition, then the released labor has to be absorbed in manufacturing and services sectors. This is a natural progression, come to think of it.
Natural because first we need food. Then we need non-food stuff such as clothes and shelter and vehicles and roads and books and computers and shoes and ships and sealing wax etc. All that stuff has to be manufactured. Once we have food and manufactured stuff, we need services such as education and dentistry and dancing and musicals and movies and psychiatry and what nots. This entire edifice is built upon the agricultural sector because without it producing food, no manufacturing nor services would occur. Of course, if we got super good in manufacturing, we could export that and buy food. Or if we got super good in services (BPO or what have you), we could export that and buy food and manufactures. The trouble is that India has a very huge population. And therefore if we ever specialize (that is do only one thing), then we would be forced to produce in such great quantities to export the stuff that the world price of that (food, manufactures, services) will crash and we will not be able to survive.
The bottom line is this: A large economy has to be largely self-sufficient. It has to produce food, manufactures, and services domestically and it has to consume most of what it produces domestically as well. Only small economies can afford to specialize and survive through trade.
This week has been a bit rushed, since I am going to Tokyo next week Mon-Thu (Jan 25-28). If you follow this blog, are in Tokyo, and would be keen to meet up, do let me know. Email me at email@example.com.
This week’s links:
My cousin in the US wrote an iPhone app on a weekend. He put it out there. It now makes him $1,500 a month. Those are the kinds of stories that will drive creation at a large scale in India. That is what this idea of leveraging the mobile cash balance for third-party payments can do.
The story for Indian digital entrepreneurs has been one of disappointment. Poor data infrastructure (both wireline and wireless) coupled with a low user base has limited opportunities and investment in this market.
What is needed is a government intervention to change the game for India’s entrepreneurs. Nothing that I have described here increases any kind of risk in the system. Value creation will be additive. If we can even imagine India’s top 20% (10 crore) mobile users spending Rs 50 a month on new services, it creates a new annual market of Rs 6,000 crore ($1.3+ billion).
More importantly, it will create interest in computers, software and the Internet amongst the youth, and out of that we could see the emergence of India’s Tencents and Googles. A decade ago, many in India were fired up with the potential of the Internet only to be disappointed by the market. This time around, the potential of the market can delight many in India.
Indian consumers spend about Rs 100,000 crore ($22 billion) on mobile services – 50 crore subscribers with an ARPU of just under Rs 200. The number of postpaid users is less than 10%, though their value will be more. There is a lot of ‘cash balance’ flowing through the mobile ecosystem.
For operators, one issue could be that people may start using their ‘airtime money’ (which is very high margin for them) for alternate transactions (which would be low margin). I don’t think there will be a shift – there is no replacement for talking and texting. In fact, I expect that people will now probably have more money with the operators since there is much more that they can do, enabling operators to sell higher-priced VAS!
The real opportunity will be for thousands of developers and service providers who can now create paid services for the mass market with a capability to target hundreds of millions of Indian mobile users – and get 90-95% of what the end users pay. This will spawn a whole new industry in India, and make the mobile that much more valuable.
Apple did much the same with the iPhone. Its existing iTunes accounts with credit cards helped it jumpstart the Mobile App Store. Today, there are over 100,000 apps. India needs something on a similar scale to drive innovation at a mass scale.
Tomorrow: Part 5
To create a micropayments infrastructure, we need to build on what already exists. Mobile operators in India have created an amazing network of points of presence where one can buy airtime. They know how to handle cash that users pay. (Cash remains the preferred payment mechanism given the low penetration of credit, debit and cash cards in India.)
Today, mobile operators cannot use the cash balance that is there with them for purposes other than voice and data services. Besides, the high incidence of taxes (10% service tax and 15% spectrum and allied charges, for a total of about 23% on what the end users pay) makes it difficult to use the cash balance for real world transactions.
Suppose, we were to change this and allow the cash balance that operators have to be used for third-party non-voice services for a fee of 5-10%. Credit card companies charge merchants about 2.5-3% for transactions. Operators could play a similar role for small transactions (say, under Rs 250 or Rs 500).
This would be a game-changer in India. Application and service providers could now create services and leverage the cash balance that users have for collecting their payments. Consumers already know how to refill their accounts with cash given the ubiquity of the mobile prepaid infrastructure.
Tomorrow: Part 4
If we look at the Indian digital space, there are three primary ways for companies to make money: subscriptions, advertising and transactions (commerce).
India’s digital advertising market is still quite small (about Rs 700 cr – $150 million), with Google being the dominant player. Many of the leading Indian portals are losing money. While transactions are happening in large numbers, it is limited to a few categories. Subscriptions are non-existent in the Internet space, but if we extend that to “user pays”, the category is worth over $1 billion in the mobile space. Only a fraction of that (about 20%) actually flows through to the content and value-added services companies.
Given the realities, I think the opportunity lies in creating services that users can pay small amounts of money for – like they do on the mobile. What is needed, thus, is the equivalent of an open app store with a payment mechanism where mobile operators and taxes do not eat up 80% of what users pay. A related opportunity in this space is to create a friction-free person-to-person micropayments capability, much like PayPal.
So, is there a way this can be created? And if so, what would be its impact?
Tomorrow: Part 3
Even with India’s 500+ million mobile connections and a dozen operators, there has been limited innovation in the non-voice space. When one talks to some of the content and mobile companies, there is a growing feeling that things are just the way they were three years ago. Is there something that can be done to get us out of this stagnation and unleash innovation?
Before we start to address that question, let us take a look at some of the latest numbers from China (as of 2009-end):
- Internet users: 384 million (+28.9% year-on-year)
- Broadband users: 346 million (+76% yoy)
- Mobile Internet users: 233 million, doubled in the past year. (IAMAI’s latest report puts India’s mobile Internet user base at all of 2 million.)
The market cap of China’s largest Internet company, Tencent, is $40 billion. While I haven’t calculated it, the market cap of China’s digital companies would probably be in excess of $75 billion.
India needs that kind of wealth creation. That is what can help spur entrepreneurship and innovation across the country.
Tomorrow: Part 2
I wrote this series in 2005 about a train ride to and from Surat – done on the same day:
Recently, I took a train from Mumbai to Surat (a distance of 250 kilometres) and back. It was a day trip. I spent nine hours for the two legs of the journey. Ordinarily, I would have travelled in either first class or air-conditioned chair car. But since this was a trip done at short notice, the only confirmed tickets I got were in second class. Considering that most of my travel is by air, these train rides in packed second class compartments were a very different experience. I let the mind roam as I sat in the train. I had my writing book, mobile and iPod for company. This Tech Talk is as much about the train journeys as it is about the thoughts that crossed my mind during the travel.
…Every once in a while, I like to put myself in different situations. The train was going to be one such experience. So, I wasn’t too disappointed that I did not get first-class or chair car tickets. Had I got those tickets, the train ride would have been more like a plane ride. I would have taken a few books to read or perhaps even my laptop, and immersed myself in that for the entire journey. But given that I was going to be sitting in a packed second class compartment, even though I did have a few magazines and a book, I didn’t get to them. I was fascinated by what I saw and with the thoughts that crossed my mind.
One of my indulgences on the food front is the cheese pizza at Pizza Hut. Surat is the only place that I know of where they serve Jain cheese pizza (no onion and garlic in the preparation). They used to have a similar one in Mumbai at Chowpatty but it shut down to get replaced by an apparel store!
The Pizza Hut pizza has that something special that I love. I now get to eat it twice a year during the Surat trips. I haven’t found any other pizza coming close in the distinctive taste. It is as unique as the Cream Centre Chole.
A Pizza Hut pizza was my first meal when I landed in the US in New York in September 1988. (At that time, I did not follow the Jain diet restrictions.) That was also the first time I had ever tasted pizza – excluding the cheese and tomato sauce on bread that got passed around as pizza at home meals! After that, a weekly outing at Pizza Hut became much the norm through the four years that I stayed there.
Continuing this series on journeys through the Christmas-New Year vacation period, there were two more train trips – to Surat and back by train (Shatadbi). Surat is about 265 kilometres from Mumbai, and Shatadbi covers the distance in about 3 hours and 20 minutes. (It covers the 500-km stretch between Mumbai-Ahmedabad in 7 hours.)
The train compartments were a revelation – new and bigger, huge windows, sleek and modern-looking, much more comfortable seats in the chair car, more space for overhead luggage, brighter lighting, and better toilets.
I also saw the ticket collector with a handheld device which had the train reservation charts on it – that seems to definitely be a step in the right direction.
Trains are the most efficient way to travel in India. What we do need is a programme like China has for creating high-speed trains between cities in India. With trains capable of doing 350-400 kilometres an hour, Mumbai-Delhi could be reduced to four hours from the 16 that the Rajdhani takes. That would be the day!
On our return from Pune, Abhishek and I took the MSRTC Shivneri bus service. We were in a ‘Made in China’ King Kong bus. We left at 3 pm, and reached Dadar at 6:45 pm.
It was actually my first-ever bus ride back from Pune. It turned out to be a very pleasant experience. For Abhishek, the memory of the ride back was seeing a train in the ghats. With the big windows, there was so much to see all around.
I used to take the bus (Greyhound mostly) in the US but somehow in India, the bus ride was always seen as an option of last resort. That has changed over the years as the buses have become more comfortable and punctual.
After many years, I took the train to Pune recently. Since his mother wanted some son-free and husband-free time, Abhishek and I went off together on a 2-day journey to meet my grandparents and uncles, aunts and cousins.
We took the Inter-city, which leaves Mumbai at 6:45 am and reaches Pune just over three hours later. With a window seat for Abhishek, we had plenty to look.
The train was the preferred route to travel to Pune for the first 20+ years of my life. Then, with the expressway, the car became the convenient option. With Abhishek loving trains, it was back to the rails.
The journey brought back memories from the past, as we passed through the ghats and then the dash from Lonavla to Pune. Abhishek loved seeing the Mumbai local trains also.
We reached Pune on time. I hope it was the first of many more Mumbai-Pune train rides for Abhishek.