What happens when it takes two hours to cover a distance of 13.9 kilometres (8.6 miles) in non peak traffic hour on a working day? The city in question is Kolkata, the mode of transport moving at an average speed of 6.95 km per hour is a four wheeler and the year is 2012. The challenge is to get to the destination (Howrah station) from Netaji Subhash Chandra Bose Airport in less than 2 hours. 

According to Google maps, the distance of 13.9 km (8.6 miles), the shortest route between the source and destination should take 26 minutes and through the longer route (9.2 miles) should take 32 minutes. It should take 2 hours 46 minutes to walk that distance. Who would prefer walking 8 miles? But would you not give it a thought if it takes you 2 hours to cover 8 miles in the best available mode of transportation!?

In that case, would you say that there is something wrong with Google Maps’ estimation or would you say that it didn’t consider the traffic before estimating? No, the point is not that. The world relies on Google Maps and knows that it is fairly accurate though for the time being it has removed the feature of estimating the time during peak hour traffic. Anyways, this post is not about Google Maps.

A quick narration on what happened that day. And knowing our everyday unruly adventures on Indian roads/ highway, our civic sense, and unmanned traffic signals, I can say with a certain degree of conviction that this is what happens almost every other day in Kolkata or in any other busy city in India. I landed safely and on time  at Netaji Subhash Chandra Bose Airport, Kolkata. After I collected my baggage, I headed to the taxi stand. I was relaxed as I had exactly 2 hours (which according to Google estimate was more than enough and according to my estimate, was adequate) to make it to the Howrah station to start the next leg of my journey on train. Our estimates would have been right in a perfect world but not in the real world complex scenario of congested Kolkata traffic and its poor road conditions.

That day I had already missed my train and was yet to reach the railway station. Sitting at the back seat of a cab/taxi, a question popped up in my mind: Is “getting stuck by n more hours than the estimated” in the traffic affecting Kolkata’s economy and hence India’s economy? And by how much are we losing due to the hours lost by in the traffic?

Let's look at few facts and figures and plug in some numbers there to see by how much Kolkata is losing in traffic congestion, afterall time is money!

Estimated time by Google’s shortest route- 26 minutes
Actual time taken by taxi (the driver took shortest route) - 180 minutes

 Population and GDP (2011)

Kolkata’s GDP (by PPP) - $150 billion [1]
Population of Kolkata (including city and suburbs) - 15.5 million
GDP per capita of WB - $875 (Kolkata’s GDP per capita wasn’t available)

Paid and Unpaid hours of Work

Indians on an average work for 8.1 hours a day, out of which 5 hours is for the paid work and 3.1 hours is for unpaid . OECD in their calculation of unpaid [2]work has included cooking, cleaning and shopping.

Paid hours worked per person per annum @ 5hrs a day - 1825 hrs
Hence GDP per hour - $875/1825= $0.47
 

Labor Force (2011)

Data on the number of employed in Kolkata couldn’t be found. India’s labour force is 487.6 million, which is 40.6% of the total population. Let us assume that 40.6% of Kolkata population or 6.2 millions contribute towards the economic activity and GNP of the city.
 

Distance commuted on an average on Indian Roads

India has “4km of roads per 1000 people, which includes both paved and unpaved roads” compared to “United States which has 21 kilometres of roads per 1000 people, while France about 15 kilometres per 1000 people - predominantly paved and high quality in both cases[3]”.

Hence, on an average 3500 people were commuting that day on that 13 km stretch of road, mostly by motor bikes or two wheelers, four wheelers (including buses).

40.6% of those 3500 commuters, which equals to 1421, are involved in some kind of economic activity and gets paid everyday at least for 5 hours of work.

Value of Time lost in Traffic

Time lost by every commuter in 13.5 km  stretch = 90 mins (1.5 hours)
Total unpaid hours of 1421 commuters =  2131.5 national hours on one way commute in a day is lost
Hence, GDP lost by 1421 commuters in a day if they are stuck for 1.5 more hours = $1001.  In 365 days these 1421 commuters lose $3, 65,658 in just 1.5 hours in a day by commuting on jam-packed 13.5 km. And if 6.2 million people of Kolkata who contribute towards the economic activity get caught for 1.5 hours more in the traffic in a day then how much does the city loses- 6.2 million X $0.47 X 1.5 hrs= $4.3 million lost by a city in a day because of poor and age old infrastructure.

Conclusion

You can argue that the theory, assumptions and the numbers are flawed but the question here is don’t we deserve a better infrastructure (roads) when we are playing a crucial role in the development of a city, paying taxes and eventually contributing towards the GDP of the country? I feel that the most of the Indian cities (consider Kolkata here) even though are thriving are trapped inside some contradictory circumstances- industrial growth rate is high- good reason to attract entrepreneurs and talented workforce. Puntos, Polos, Ritz have replaced the Marutis and there is a strong demand for BMWs and Audis.  And the irony is that the roads that are supossed to support the day to day economic activity of the city are old, creaky and stingy- could it be a reason good enough to drive away the entrepreneurs and talented workforce?

2G Scam: Licenses Revoked- Who is going to  get hit and how significant the affect would be?

In a historic moment today the Supreme Court revoked 122 2G spectrum licenses in the hearing of 2G spectrum scam which was listed as one of the top 10 ‘Abuses of Power’ by Time Magazine in 2011. These 122 licenses were alloted by the former telecom minister A. Raja on January 10, 2008. The current licenses will be effective for four more months after which the licenses will be revoked. The court has asked for a fresh auction mechanism.

List of the companies who were given licenses in 2008 with the count of licenses acquired and their customer base as on Sept 2011: 

Only 8% (approximately 73.5 million) of 879 million subscriber base are likely to get affected. (the numbers include inactive subscribers too). Uninor, Videocon, Etisalat and S Tel are hit the most as all their licenses are revoked. This is more than the 5% number which is going around.

It is unknown at the point when the auction will be held and who will participate. What the affected operators will do then is also unknown. Does the current market allow operators to bid high for spectrum ? At worst case TRAI has asked affected subscribers to use the MNP facility.

Solution for the affected subscribers

According to TRAI’s latest data (as on Dec 2011) 29 million subscribers had opted in for Mobile Number Portability (MNP) service, which was launched in January 2011. The cancellation of 2G licenses will give another substantial reason to the subscribers to use the MNP service much more aggressively.  komparify.com can help subscribers in making the decision of selecting best option based on their usage pattern, out of the various combinations of available mobile postpaid and prepaid plans.

Where is the saving?

Well, it all started when in May Airtel and Aircel brought iPhone 4 for Indian customers with their “reverse subsidy plans”. The offer was of 50 percent discount on the monthly rental plan if purchased directly from one of the two operators. While handsets in many countries are subsidized where the subscribers get rebate on the handsets in exchange for signing up for a plan contract. In simple words, the phone comes locked in with a particular network and the buyer gets tied up to the contract for at least two years, like AT&T and iPhone in the US.

What is reverse subsidy?

The scenario becomes a bit different in India: now that the 3G war is over; the telecom operators have already made heavy investments on 3G spectrum and they will have to make further investments in building up the infrastructure to support the 3G network. Market is getting flooded with all sorts of 3G enabled handsets, there has to be something alluring to make the customers buy the new smartphone as well as consume more data through their phone. No, you don’t get any rebate on your phone, instead you get a discount ( money back offer) on the 3G plans for two years if you buy your smartphone directly from the operator. However, in the case of Airtel and Aircel, their 50 percent discount on plan for 2 years wasn’t really a money back offer instead it turns out to be a myth.

Who else recently jumped on the bandwagon?

Last month Reliance Communications joined hands with LG and bundled its postpaid and prepaid 3G plans with LG Optimus handsets. If you buy LG Optimus from Reliance you get a rebate on your Reliance 3G postpaid or prepaid plan and the maximum saving goes up to Rs 20000 and Rs 10000 on 1799/- and 999/- postpaid plan respectively, as claimed by them.

Read our analysis on Reliance 3G Plan Money Back offer on 3gsimplified.com

Superhero Zoozoo is everywhere! Yes, Vodafone has already painted your city and TV set white and grey with its Zoozoo ad, 3G - Faster, Smarter, Better. However, Vodafone users are waiting for the roll out of its 3G services, which is anticipated within next few weeks.

Let us look at some numbers and figures. With the market share of 16.52% * , Vodafone is the third largest mobile service provider in India after Bharti and Reliance. It showed a significant increase of 16.7% in its revenue for the Q3, FY11, despite the introduction of per-second tariffs due to price competition in the market. Vodafone position got further strengthened after the Mobile Number Portability (MNP) was implemented in India in January this year. MNP worked in its favor and Vodafone out numbered its competitors by net addition of 1.93 lakh** subscribers in its network. Idea and Aircel came second and third in terms of consumer preferences. During the 3G spectrum auction, Vodafone had won license to offer 3G services in the following 10 circles: Delhi, Mumbai, Chennai, Maharashtra, Gujarat, Kolkata, Tamil Nadu, West Bengal, Haryana and Uttar Pradesh (East).

There are few good reasons that suggest Vodafone is going to have a strong, quality launch. First it took advantage of the MNP and created a strong user base, next it created a buzz around its 3G services with unique Zoozoo superman avatar during the world cup. Meanwhile, the company introduced range of products around 3G; Vodafone 3G USB Stick, R201 MiFi, as an endeavor to offer mobile-internet services to its customers. The 3G USB Stick was launched much before the company had got the 3G-spectrum license. Now, it has come up with the concept of 3G Experience Zones in selected stores of cities within its circles, which is an attempt to invite customers to test and experience its 3G Services and the customer feedback would help the Vodafone in enhancing its customer experience before the official roll out.

Hence all this while Vodafone was getting prepared and gearing up for the big game! So, watch out for Vodafone 3G plans next week.   

*  TRAI data as on 31st Jan 2011
** Data source- MNP India

The roll out of 3g services is heating up in India. After Aircel rolled out its data services in February, Bangalore has four operators providing 3G mobile services- Aircel, Airtel, BSNL and Tata Docomo. With the launch of 3G services these mobile operators have added to the plethora of plans and topup choices already at your discretion.

In Bangalore, all the providers who had bid for the 3G spectrum license have already launched. We decided to do a comprehensive comparative study of the 3g plans that every operator has to offer. To help you choose the right 3G plan and help you save money on your mobile phone bill, we analysed the data using our comparator engine. Operators have different plans for different circles, but the results here are indicative of how much 3G plans can cost pan India and the competitiveness of the market.

The comparison is based on the average Indian¹ postpaid subscribers usage pattern, which is 611 minutes¹ of calling and 97 SMS’ ¹ + data usage per month.We compared the plans of Aircel, Airtel, BSNL or Tata Docomo (postpaid voice plus data plan).

The first graph shows you the minimum monthly cost of the plans for the usage. It is to be noted that the minutes of usage and SMS were kept the same throughout the search, whereas the data usage doubled for each subsequent search starting from 75 MB to 150 MB to 300 MB and went on to 2 GB. The best plan was discovered by feeding the usage data into our compare plans function. We found the cost of the best plan for each usage pattern and then graphed it.

As you can see from the graph, most of the operators are competitive if you use small amounts of data. BSNL is the best operator if you use heavy data and Aircel can get pretty expensive if you are a heavy data user. Airtel can be expensive if your data usage is between 300 MB and 1 GB.

The second graph shows you the average monthly cost of the plans for the usage. Like before the calls and the SMS were kept constant and the data varied. The difference here is that we graphed the average cost of all the plans for an operator instead of the best plan. This will give you an indication of how much 3G will cost a subscriber who has not chosen the best plan.

This graph shows you the cost of choosing the plan suboptimally. i.e. not choosing the best plan. It looks like not choosing the best plan can be high if you are a BSNL subscriber. The best BSNL plan can be Rs. 600 per month cheaper than the average BSNL plan for the same usage !

The second graph shows you your cost even if you chose a suboptimal plan. Using our compare plans can easily save you Rs. 300- Rs. 700 a month. So what are you waiting for. Search for the best plans … now.

(1) Based on Trai Data

What is hot after Android, Apple, Facebook and Google? Groupon!

For the last few weeks, I have started to follow and think more on the nature and types of online couponing industry (in India) and believe me it was fascinating initially but overwhelming now. Fascinating because I bought few appealing deals online at an unbeatable price for myself (but still haven’t used them) and overwhelming because there are so many of such sites offering deals, discounts and coupons and each one of them claims to be different. It is interesting that if and when one innovative formula succeeds then somewhere some new kid on the block starts ‘fast following’ that classic example of success. Groupon is one such formula, which is now been ‘fast followed’ all over the world. There are 500 similar deal-of-the-day websites worldwide, including 100 in the USA and __?_ in India.

It is true that the pace of e-retailing in India has been slow vis-à-vis in Western countries. India is still waiting for something as remarkable as Amazon. Can Infibeam and Flipkart be the Amazon of India? Ponder over these small and simple points:
    -- Amazon, USA started in 1994 (brand new business model)
    -- Flipkart, India started in 2005 (started by the former employee of Amazon; hence it is emulated from Amazon business model)
    --I nfibeam, India started very recently (they didn’t even bother to change the UI and kept it similar to that of Amazon!)

You must be wondering why I jumped from coupons to e-retailing! No, I didn’t mean to digress from what this post is meant to be about i.e., couponing industry but the two industries are linked. In fact, couponing is taking e-retail and retail in India to the next level. In India e-retailing has just begun to grow with some original business ideas (Dabbawalas etc) and with some imitated business models. Nevertheless, it opened avenues for new entrants who came with new or borrowed business plans. Yesterday, at the launch of iPad 2 Steve Jobs said “2011 is the year of copy cats”.  Of course at that moment he was talking about the tablet market but it looks like ‘copying’ has started in other markets as well and in all over the world!

Coming back to India’s SnapDeal, which is a close resemblance and clone of Groupon and which in competition has given birth to many such deal-of-the-day websites. Dealivore, KhojGuru, MyDala, DealsAndYou, AajKaCatch, BindaasBargain, MasthiDeals, Taggle etc. are just a small number in the Indian web space. For how long will this model work? And now that Groupon has already entered the Indian market by acquiring SoSasta, there is going to be an aggressive competition for surviving in the group and coupon buying space here. Of course, as for now SnapDeal is the largest online couponing site in India. People might be visiting their web site to look for the deals, and the site claims to have witnessed a major traffic growth but how many of the visitors actually buy the deal. Clearly this cannot continue forever and that too when there are so many similar looking websites.

The deal web site visitors belong to the age group of 18-25 years, as that is the age bracket that has adopted the online market in India as for now. Yeah, the online market in India is nascent and Indians still value the ‘touch and feel’ factor of buying experience rather than the convenience factor. However, the other side of the story is that the small business and local retailers get some visibility but is it really their publicity. Frankly no. Who gets more publicity, more reviews or more references?

I have subscribed to two websites SnapDeal and Dealivore and they send me an enlightening SMS every morning on the deal-of-the-day. And in one nanosecond I forget the names of these health & beauty services or food & dining services featured by them. The websites might get inside the customer’s head and remain there for some time but what after that?

Long way to go! Let us just wait and see which one of these will be the first (to ape Groupon further), to have an innovative nationwide deal partnering with one of the leading Indian retailers, may be Shopper’s Stop or Pantaloon. When one morning of 2010 Groupon partnered with Gap, at one point of time they were selling at the rate of 10 deals per second and their server crashed. Hope we get to hear similar stories and some numbers from the Indian deal websites very soon before they crash.

I have been waiting to write this blog entry for quite some time. I have selected six megatrends happening around us and have briefly covered them. They have the potential to further shape the national and global picture in the next ten years. Well, each megatrend covered here has a supporting megatrend and this chain reaction offers businesses and individuals with set of glaring opportunities. 

Power point presentation:

#1 Demographic Shift
The projection is alarming! The world is getting divided into the ‘old world’ and the ‘young world’. The people aged over 60 years is growing faster than any other age group in developed countries, which has resulted in raising the age at which retirees can collect pension. This megatrend has created ‘old world’ where the work force is aging and they are aging rapidly. Percentage of people over 65 in Japan will grow from 24% in 2010 to 29% in 2020 (1) . In USA and Spain the retirement age is 67 (2) , in France it is 62 (3)  , which indicates that old people will have to work longer provided they can catch up with the new technology.

Threats
Aging population → Reduced labor supply → Developed countries economy will shrink → Government expenditure increases in terms of higher pension and health care costs.

Opportunities
Demographics determine and influence the overall expenditure in healthcare sector. Since the older population is growing rapidly in the developed countries, they consume more healthcare facilities than their younger counterpart, which can be seen as a success story for public health policies and healthcare sector.

#2 Healthcare Sector
There is a virtuous circle for health care sector. The early baby boomers as they grow older they spend on more on health care facilities to live longer and as they live longer they spend more on health care.
Going forward, there is a lucrative market for investment in and around healthcare sector, which will also change the way the healthcare is delivered. The ageing theme will attract investors, who will maximize from their investment in new services such as senior citizen service, home care, companion care and other care facilities, assisted living services, medical research and technology.

#3 Migration
Migration is not a new phenomenon. Like healthcare, it is the repercussion of the demographic shift.
Developed countries will shop for younger unskilled as well as skilled educated human resources from countries like Africa, India and China. By 2020 it could be possible that the emerging countries, which has younger population will lead the economic growth of developed nations.

This younger, migrating population will create and fuel the economy  with innovative business ideas. Nandan Nilekani’s AADHAR project and his vision of having Multipurpose National Indentity Card for every Indian is the result of migrating population, which in turn has created employment and other business opportunities.

And remember, when a migrant moves and leaves his family behind, it means that people impacted by migration will be four times the number that migrates. This has huge socio-economic consequences. It builds a remittance economy; the guy sends the money back, the family is no longer poor. (4) 

Threats
Migration → Urbanization → Burden on Existing Resources → Social and Political Unrest

Opportunities
When young people migrate, they adopt technology to stay connected.  The number of mobile phone subscribers in India, China, the distribution of smart phones in emerging nations like Africa are some of the outstanding instances.

#4 Mobile Technology & Social Network
Mobile technology is going to be the next big thing. Earlier it was PCs and browsers and in next 10 years we will see extensive use of smart phones and apps. Mobile payment and transfer, mobile data portability, mobile health, mobile learning, mobile tagging, Near Field Communication (NFC) will become more common.
Real time information and data will be easily created, updated, served and accessed on the go through mobile bogging with no operation cost.  The mobile market and technology will shrink the size of our laptop. Imagine your smart phone is the only gadget you own and it plays multiple roles for you, that of a workstation which easily slides in your pocket, your payment gateway at bank and supermarket, your house and car key, your universal remote, your tablet, e-book and your navigator. Apple with its iPhone built and dominated the touch screen ecosystem and who knows if some Motorola with Atrix’s superior user experience will create a new full-blown ecosystem for smart phones!

With more than 500 million active users, more than the population of the USA, Facebook is the third most populous country after China and India. What happens when poor migrants get access to Mobile + Internet + Facebook app to remain connected with their friends and family and for monetary transactions?  Facebook’s like recommend and comment features already have their ubiquitous and growing presence around the web world. According to a Morgan Stanley report “facebook has the potential to be the only communication engine/ platform” (5)  for one to one and one to many communication on mobile internet.

#5 Resource Depletion
Nevertheless, urbanization and migration have led to an increased burden on the existing resources of the place. There are other factors putting pressure on the natural resources. Better life, increase in purchasing power and consumption needs have depleted the natural resources and the reality is grim. According to UN “ 1.8 billon will be living in countries with absolute water scarcity by 2025” and the world will see “40% increase in the consumption of crude oil” (6) . Looks like, the manufacturing industry of China may consume most of the world’s natural resources and raw materials. The challenge is to explore and optimize the energy to fuel the future and existing industries.

Opportunities
The price driven innovation in energy efficiency, reusable resources and search for substitutes have attracted growing attention of research, industry and countries. By 2020 we will see green products everywhere, which will give a new meaning to the consumerism.

#6 Green Tech Boom
Green and clean technology is the emerging megatrend leading us to the smart consumerism in everything. Rising fuel price and pollution have caused mainstream awareness amongst consumers and industrialists. Automobile industry is continuously working on development of alternative transport technology. Over the next decade automobile market will see growth and adoption for all forms of electric vehicles. Recharge time and life of batteries, recharge stations, the source of electricity, the production and recycling of EV batteries are few challenges and primary focus of interest now.

Genetically modified animals and plants will be the answer to the increasing population and hunger around the globe. Green method of construction, use of local and recycled materials, better handling of wood waste, recycling of construction waste etc will find more usage in the construction industry.

What this adds up to is that there are valid concerns with potential barriers-to-adoption; one major barrier will be price. While some of us might not be prepared to pay for it now, the future will certainly make us pay heavy price for it when we will run out of fossil fuel to sustain our industries, industrial farming, transportation and our food habits!

Source:

1.  GE Reports, Imagination Daily, Healthymagination studies Japan’s aging population http://www.gereports.com/healthymagination-studies-japans-aging-population/
2. The New York Times, Spain to Raise Retirement Age to 67 http://www.nytimes.com/2011/01/28/world/europe/28iht-spain28.html
3. CBS News, Violent Protests in France Over Retirement Age http://www.cbsnews.com/stories/2010/10/19/world/main6971082.shtml
4. The Economic Times, 26 Dec 2010, Three Numbers Will Define Us, Nandan Nilekani
5. Mobile Internet Market to Eclipse Desktop Internet http://www.briansolis.com/2010/02/mobile-internet-market-to-eclispse-desktop-...
6.  UN Report 2006