Bangalore Monday December 15
For forty five years after independence Indian companies for all purposes operated without competition. Monopolies were granted by the government for extended periods. Many fortunes were made, both by industrialists and corrupt politicians. Consumers had to wait years for “luxury” goods such as cars and telephones. This began to change in 1992, when in the face of an economic collapse the Indian economy began to reform. Slowly, industrial sector after sector was opened up to multiple competitors, even foreign ones. The IT industry evolved slightly differently as the government babus (bureaucrats) were so used to regulating physical goods that the industry was able to export its bits and bytes via satellite links without intervention.
Today India has hyper competition in many industries and consumers are the net beneficiaries. There are five major wireless carriers with about equal market share (contrast this with the U.S. which rapidly moving to a duopoly of Verizon and AT&T). As a result making a cellphone voice call in India is the cheapest in the world. My monthly cellphone bill in Boston averages $120 or about $4 per day. I am spending about 50 cents a day in India. Albeit cellphone conversations in India tend to be quick and short, I can only attribute this to how costly phone calls used to be just a few years ago. There are a multitude of startup companies offering value-added services in this vibrant ecosystem. I met a young engineer who had bootstrapped a company to offer mobile internet advertising services to brands. He was saying that the growth of mobile internet usage in rural cities was exploding as small scale business men had no other way to access the internet for relevant content such as local weather, crop prices, etc.
Similarly there is significant competition amongst domestic airlines. The customer service on these airlines reminds me of flying in the 1980s in the U.S.. Call centers that respond within seconds, ground staff that is friendly and efficient and best of all, in-flight service that astounds (I just had a flight attendant service a bathroom after a particularly long winded customer!). My sister-in-law just flew from Delhi to Toronto on a Jet Airways flight and said it was the best business class experience she had ever had, and she is a frequent and demanding flier. I was conversing with an executive at the biggest training school for airline staff and she said that they train about 2,000 customer service reps annually and only the crème de ala crème make it on to plane as flight attendants, and yes, looks are an important criteria.
In contrast almost any government run service is horrendous. Delhi’s domestic airport was mobbed at 5:30am for early morning flights. Security was overwhelmed and chaotic. I witnessed a shouting match between a patiently queuing customer and someone jumping to the head of the line because they were late for a flight. There are exceptions of course. The entire city of Delhi appears to be under construction with an extensive expansion to their 4-year old metro (subway) underway to be ready for the Commonwealth Games in 2010. Crews are literally working 24x7 with minor disruption to traffic. I contrast this to the Winter Street exit off Rte 95 in Waltham where repair of single bridge has been going for over three years with no end in sight. Interestingly elections are hard fought in India because politicians end up in personally lucrative monopolies. Since they maybe in power only for a single term, they try to extract as much graft as they can. Government led corruption is the bane of emerging economies from democratic India to autocratic China. Fortunately India has a highly competitive press corps that is valiantly trying to inform the public about government’s misdeeds. In the aftermath of the Mumbai terrorist attack, some politicians’ heads rolled as a result of press coverage of their ineptitude. In the U.S. no leader lost their job as a result of the security lapses in advance of 9/11. Nevertheless the Indian public would gladly trade the U.S. public sector for India’s. Perhaps our multitude of outsourced government contractors should set up in India and begin lobbying for outsourced services from the Indian government, a win-win situation for both countries!
There is no doubt India’s youngsters are eager to move up the social ladder and are prepared to study hard, work hard and compete aggressively.
Ready to compete in the global economy