Corporate rivalry affecting govt decision-making, says Raja

A fresh or snap tender from BSNL for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja has said in a letter to the PM

Apparently peeved by the vigilance authorities' direction for a fresh or snap tender to procure equipment for state-run Bharat Sanchar Nigam Ltd (BSNL), the telecom ministry has complained to prime minister Manmohan Singh that corporate rivalries were affecting the government's decision-making, reports PTI.

Pointing out that a fresh or snap tender for an estimated Rs36,000-crore GSM mobile equipment contract could still be challenged by corporate rivals, telecom minister A Raja brought to Dr Singh's notice various developments that have delayed the telecom company's expansion for nearly two years.

BSNL had invited bids to add 93 million GSM lines about two years ago and one of the leading vendors Nokia-Siemens Network (NSN) was disqualified on technical issues, and since then, the state-run company has not been able to place the orders due to various reasons including legal battles.

Swedish vendor Ericsson was the lowest bidder for the Northern and Eastern regions, while China's Huawei was selected for the Southern zone. NSN had challenged the disqualification in two High Courts which had upheld BSNL's decision.

"In this regard, you will appreciate the trend where corporate rivalries are buffering government decision-making," Mr Raja said in his letter to the PM.

The minister said that BSNL needs these lines urgently in view of its rapidly-declining market share and said that its inadequate capacity to add mobile subscribers may lead to further deterioration in its market share.

It has been more than 20 months since BSNL is trying to put in place the procurement order, Mr Raja said in his letter, adding that “it appears that the CVC observations mainly pertain to the rejection of NSN, which has been examined in detail and upheld by two High Courts earlier”.

Earlier, Department of Telecom (DoT) joint secretary JS Deepak, who is on BSNL's board as the government nominee, had questioned the single bid brought out by BSNL and the lack of comparative analysis on the basis of total cost to the company.

To this observation, BSNL had maintained that at the time of inviting bids, many vendors were in the fray and their bids had been scrutinised, but in the end only one vendor emerged as the lowest bidder in the respective zones. The process cannot be categorised as a single bid, BSNL officials said.

Cancellation or any delay in the contract could hit BSNL hard at a time when the government is thinking of disinvestment, a senior official said on condition of anonymity, adding that in such an eventuality, only corporate rivals could be benefited.

BSNL's capacity to add more mobile subscribers is diminishing in most of the centres at a time when private players are adding 15 million-17 million new users every month.

Further delay in execution of the project would affect BSNL both in terms of market share as well as revenues.

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    Intuit plans to reach a million people in the next three years

    US-based Intuit Inc has launched a personal finance software package for Indians. Umang Bedi, MD, talks about the company’s plans for India with Moneylife’s Pallabika Ganguly

    Pallabika Ganguly (ML): How do you plan to market Intuit products in India?
    Umang Bedi (UB):
    We believe in customer delight and we believe that happy customers are the biggest marketing vehicle for us. We are mostly marketing ourselves by word-of-mouth that is the strongest (strategy). When we launched our beta version, 87% out of the early 5,000 users said friends and family recommended them this product. But we are also looking at building partnerships with financial institutions.

    ML: How much have you invested in India?
    In the last four years, we have invested $45 million in India.

    ML: What was the thinking behind this financial software designed for India?
    We did a survey of available products and their pros and cons. We found that many people were finding it difficult to manage their own money. Even for cash assessment, if people think that they have a certain amount of money, there would always be a difference of 20% to 30% with that figure. The survey also showed us that people were struggling to find out their net-worth at any given time and had to calculate it manually or by using Excel sheets. This was the starting point in launching Intuit Money Manager. We developed it and thought that we would take this money manager to the masses in India.

    ML: What was the method that you followed for your survey?
    We did a research-based survey called ‘Follow me home’ with around 1,000 customers. We went to their homes, offices and observed them contextually. That is, we did not ask any questions and simply observed their means of managing finances. That helped us to identify the pain-point while managing finances, which the customer does not realise.

    We did the survey in four segments—25 years-30 years (single income); 30years-40years (people who may be married, with kids) and (people who were) 40 years plus. We concentrated on these three segments and women separately to observe the gender difference (in attitudes towards money management). We found similar pain-points with all (segments).

    The survey also showed that people from the first group (25 years-30 years) usually end up cashless by the 20th of every month. This leads them to either borrow money from someone, or pay bills late, etc. While people in the age group of 30 years-40 years were looking to invest their money, people above the 40-year age group were busy looking at returns. However, this group was finding it most difficult to keep track of investments and returns.

    ML: Before launching the software, how did you conduct the beta test?
    We did a beta test with over the last four-and-a-half months. We had put up a small banner on the site asking if people would like to opt for the money manager. If people opted for the same, we requested them to fill in nine details. In 48 hours, we had over 15,000 people opting for our software. After the beta test, we went live in early January and in ten days, we had 10,500 people regularly using the software.

    ML: What are the advantages of using the software?
    The product is a smarter way to manage your finances. It provides you with a single window to aggregate all your financial information across disparate financial institutions in one place and then provides you intelligence in the form of tools on how to plan your money and keep a track on your spending. For example, one of my colleagues likes to dine outside, so on Saturdays and Sundays he eats all his meals outside home. When he logged into the money manager for the first time and put the details of his finances and expenses, he found that during the last six months, he had spent more than Rs1 lakh just for dining outside home. He realised that he needs to cut down on dining out so as to save money for the future.

    ML: How will the software store the details of cash spending?
    For cash, you have either have to manually enter the information or submit it when you withdraw cash from any source, let’s say an ATM. The software stores this information and allows you to split it into different segments according to your spending. This way you get a chance to break one transaction (cash withdrawals from ATMs), into multiple transactions. 

    ML: Do you think the software will be economical for Indians?
    The product comes with a 90-day free trial. After that period, if you like, you can enrol for subscription for as low as Re 1 per day or Rs365 per annum. But if you want to subscribe within 15 days of trial, there is a special rate of Rs249 per annum. I think one rupee a day for managing your finances is quite economical.

    ML: What are your growth plans over the next three years?
    About 20 million out of 50 million internet users are using Internet banking today and the number of Internet banking customers is growing at about 30% per annum. We see the gap being bridged. Therefore, over the next three to five years, we may be able to reach millions of people.

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    1 decade ago

    Perfios and Arthamoney are other similar services. They are good and it is free ! :)

    Hindujas to acquire construction co; to invest $10 billion in power

    The Hinduja group is buying more than 51% stake in an Indian construction company and also plans to invest $10 billion in the power sector

    Diversified business group Hinduja on Monday said that it is close to acquiring an Indian construction company in a bid to secure a foothold in India's fast-growing infrastructure sector, especially roads, and also announced an investment of $10 billion (around Rs46,200 crore) in the power sector, reports PTI.

    "We have shortlisted a local company which we are buying. When you have a local infrastructure company which has synergy then you can start much faster. It is an acceptable company which can be a good foothold for us to give a growth. It is well-managed," Hinduja group's global president GP Hinduja said in an interview at Davos.

    "We will retain them as minority partners. The Hinduja policy is to have a minimum 51%. This company is engaged in everything (construction), in parking, roads, concessions, in bridges. But our focus will be on roads," he said, adding that the announcement would be made by 15th March.

    Mr Hinduja, who was in Davos to participate in the World Economic Forum's (WEF) annual meeting, said that soon after the taking over of the Indian company, the group will announce its foreign partner, which has already been selected.

    About foreign direct investment (FDI) induction programme he said, "We definitely have a programme with full focus on infrastructure including power involving 10,000MW. Finances for the 1,000MW plant at Visakhapatnam are likely to be tied up by the end of this month."

    Asked how much investment is expected by the group in the power sector, he said, "Going by $1 billion for 1,000MW, we are ready to bring $10 billion for the 10,000MW once things start moving."

    The group has already announced plan to invest $50 billion in power, realty, auto, healthcare and oil & gas projects in India, whose appetite for infrastructure funds is pegged at about $500 billion over the next four-five years.

    "In road construction, we have synergy with the transport sector (Ashok Leyland)," Mr Hinduja said.

    The group planned the construction of parking lots after acquiring the Indian firm while the foreign partner will be there for technology transfer, he added.

    "For road concessions (development of toll plazas), you need a very sophisticated technology. Contractors are cheaper in India. We will bring the concession technology from outside," he said.

    "In our ten verticals, for both organic and inorganic growth, there are full plans which are under implementation," he added.

    Roads and transport minister Kamal Nath had recently announced that India required $50 billion to construct 20,000 km of highways and had sought a $3-billion loan from the World Bank.

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