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June 30, 2004

Is Reliance The Next Telco Tiger

Promod Haque is on a road-show in India. Seeking new venture opportunities and also declaring India as a big market opportunity for NVP's portfolio companies (mainly Virtela Communications and Veraz).
While giving a keynote speech at Tie Bangalore session, he strongly emphasized that Indian call centers should invest in latest telecom infrastructure in order to have a differentiating offering. Behind all this preaching is the lucrative $12billion worth of Telco gears market which Indian call center market will be needing in next 4 years.

Most of his slides were covering the obvious points such as low-cost offerings, capital efficiency, networked and Global economy, coming wave of always-connected smart-device environment, mobility etc. Two trends were clearly missing - Rise of publish-subscribe model generating new business models in the media sector and the overall impact of open source movement on the Enterprise software economics.

Though from this boring presentation one prediction stands out - According to him in next 5-10 years either Reliance or Bharti Telecom (Both India based Telco upstarts, who are seeing tremendous growth in India) could buy one of the leading carriers in US ! Though nobody will shed any tears on this deal if it really happens.

I will put my money on Reliance, These guys really know how to define the market (by creative bundling and pricing), change the market (by changing the scale) and lord over the market (if not by aggressive pricing then by befriending every politicians out there in the North and South block).


Spending some time inside their Reliance WebWorld retail outlet gives an idea of how these guys use scale, bundling and combine that with aggressive retailing to make a huge impact. Think of this place as a combination of Kinko's, Starbucks, and possibly Sprint PCS retail shops. Once the price point becomes attractive, lot of mom and pop shops doesn't need to own lot of office gear. Just walk-into the nearest WebWorld.

Judging by the crowd this place sure seems to be doing a great business. Other technologies which Reliance is working on includes Tivo-like device( at a fraction of the cost since this is India!), Comcast type content bundling (again at the fraction of the cost).

June 30, 2004 in Current Affairs | Permalink


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