This is the concluding part of the exclusive interview given by Mr Philip Rixhon, partner, Andersen Consulting and Mr Abhijit Gajendragadkar, associate partner to Partha P Sinha of the eFE.Excerpts:
How do you view the growth scenario in the cellular sector in the country?
PR: There are obviously different scenarios and different phases. I assume that the cellular market will first grow quickly and that there will be more cellular subscribers than fixed telephone lines. Depending on the regulation, the cable TV network could be used for TV of course, but also for Internet access and voice-over-IP. Given its current importance in India compared to the wired telephony last mile, it could play a major role in telecommunications.
AG: I believe in India, the cellular sector will grow at a faster rate in the urban areas than the fixed line ones. As this sector grows, the calling-party-pay system is also likely to be in place. And, the other advantage of cellular telephony is that unlike fixed line phones, it is not a shared device. There is an aura of individualism that goes with it.
Moving over to the Internet sector, what kind of ISPs will be in a better position in the emerging scenario? As of now, too many ISPs are trying to grab the attention of a limited number of Internet users.
PR: There are three keys to success for ISPs:
Customer centric - To offer to the customer a constant high quality personalized delivery experience.Moving up in the value chain - To offer value added services and not only access advertisement.First mover advantage - To capture the market quickly and to keep it through the first two keys for success.Given the low level of Internet users in the country, do you see e-commerce models will work in India (here Net-banking is at a nascent stage, credit card users are also a very few in numbers and the knowledge of the Net users about transactions over the Net is limited)?
PR: The number of Internet users can - also in India - be dramatically increased in the coming years. So e-commerce models may work. E-commerce players can prepare themselves for the market, launch products and services on a very modest scale, test and pilot everything which must be tested and piloted during the necessary increase in Internet penetration - and then sell quickly.AG: Here you can also address this from another perspective- that of increased thrust on the usage of Internet bringing in more users and hence more demand for bandwidth. When the availability of bandwidth is not a constraint Net users will have a richer experience of the Net and this will again bring in more users. Some of the incremental users will also take a plunge into transaction-based usage on the Net. And as the number of users increase, this will drive e-commerce and Internet firms towards innovations in service offerings. So as the user side explodes, the payment side needs to be more robust.
What kind of e-commerce business model do you believe will ultimately survive here?
PR: This answer addresses the question of sustainable - surviving - business models. Nothing to do with the speculative hype about eye balls. Everyone, even in the most advanced e-commerce country - the USA - is still looking for a sustainable profitable business model, see Amazon.com's and others' struggles. For sure the miraculous business model has not yet been found. It would be surprising if the surviving Indian business model was already known. However, it seems that the majority of the rules of the so-called "old economy" will still apply: the clients must get - and perceive - value for their money and stick to the providers. The running costs and amortisation must be lower than the revenues. Surprisingly enough such basic economical laws must have to be reminded to the majority of the so-called "new economy" players.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.