Friday, April 12, 2013

An Opportunity that Grabbed us

Benefits of Economy and a Quicker Passage to The Operating table have Made India one of The Front Runners in Medical Tourism. But Critical Failings, from The Government as well as The Private Sector, mean that India is Failing to Adequately tap The Opportunity

Since time immemorial, the mystical land of India has been enchanting foreigners from all over the world. Healing of the body, mind & spirit has been one of the country’s most compelling value propositions, one which even a young Steve Jobs couldn’t resist, many years ago. And as the costs of healthcare have soared, particularly in developing countries, India’s hospitals and physicians have made all possible efforts to become a destination for tourists who seek not just therapeutic solutions but a range of other treatments and sight seeing tours; adding to the “wellness” factor. Almost a decade has passed since medical tourism was originally envisioned as a major phenomenon in India.

A 2009 report by the Confederation of Indian Industries (CII) & McKinsey forecasts that medical tourism will generate $2.4 billion between 2009–2012 for India by attracting 1.1 million health tourists, up from 150,000 in 2002. India’s share in the global tourism industry is expected to rise to around 3% by 2013 (RNCOS report) with revenues of around $3 billion and a CAGR of 26% during 2011–2013.

There are over 3,371 hospitals and around 754,985 registered practitioners catering to the needs of traditional Indian healthcare. Indian hotels are also entering the wellness services market by collaborating with professional organisations in a range of wellness fields. According to the Ministry Of Tourism, as against an ordinary vacationer’s per-capita spend of $3,000 per visitor, the average medical tourist in India shells out more than $7,000 per visit. Traditionally patients from neighbouring SAARC countries and Middle East frequented hospitals in India. But patients from Africa and even Europe and US have started coming only in the last five years. Pricing is the clear advantage. The Planning Commission points out that India is far economical compared to peer countries. For example, heart bypass surgery costs $6,000 in India, $7,894 in Thailand, $10,417 in Singapore, $19,700 in Britain and $23,938 in the US.

India spends roughly 6% of GDP on healthcare and is expected to reach 8% by 2012. Private sector expenditure in healthcare is expected to reach $45 billion by 2012. But in comparison with America’s 15.3%, Switzerland’s 11.3% or France’s 11.1%, the country still falters when it comes to quality as well as quantity of medical facilities. B&E does a reality check to analyse whether the country has really lived up to the hype.

The flip side has majorly been the role of the government; or may we say, the lack of it. Although infrastructure spending for health care has intensified, only the private sector has flourished. Top Indian corporate hospitals like Apollo, Fortis, Wockhardt, Max and Manipal have stepped in to provide quality healthcare and technology. Nearly 75% of health care services and investments in India are provided by the private sector.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
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Thursday, April 04, 2013

Reaching out for The Broadband Dream

Over a year has Passed by since The Broadband Spectrum auction, which raised hopes of bringing Internet to The Masses. What’s delaying The Launch of BWA services?

Can Internet penetration in India match the surge in the number of mobile phone subscribers? It’s a far-fetched thought at the moment. Today, every second person in the country owns a mobile phone. At last count, the number of wireless phone subscribers stood at 840 million and tele-density had crossed the 50% mark. According to Voice&Data, approximately 10 million mobile phones were sold in India every month in 2010, while at the same time, an average of 622,000 new users signed up each day to a mobile service; adding 227 million new mobile subscribers in 2010. In contrast, the total number of internet subscribers in India is just 18 million out of which those with a broadband connection make up a paltry 11 million, according to Telecom Regulatory Authority of India. That’s 9 million less broadband connections than what was originally targeted by the government. India was supposed to double its rate of broadband reach to 2% – 20 million broadband connections – by 2010, but missed it by a long shot. In comparison, other Asian nations like China, South Korea and Japan have broadband penetration of 21%, 95% and 75% respectively. According to the latest figures from China’s Internet Network Information Center, the number of internet users in China rose to 457 million at the end of June, 2010, an increase of about 73 million over the past six months. The figures show that the number of broadband users reached 126 million while the internet penetration rate climbed to about 34%. On the other hand, in India, the rate of growth of Internet connections actually fell to just 4.4% during the December quarter, 2010, or 23% compared to the last three months of 2009.

A World Bank study shows that every increase of 10% in broadband penetration can lead to an increase in GDP growth by 1.4%, and can add more than 200 million jobs. Last year, the French government announced a budget of €2.8 billion for broadband penetration. In 2009, when the rest of the world was grappling with recession, the Australian government set aside a specific fund for broadband penetration.

Clearly, internet penetration is very important for the economic growth of a country. However, it has been more than a year since Broadband Wireless Access spectrum was auctioned in India, barely days after the controversial 3G spectrum sales. The BWA auction raised Rs.385.4 billion compared with Rs.677.2 billion for the 3G spectrum. But while 3G services were launched by private operators in December 2010, none of the private operators has rolled out BWA services. Only BSNL, which was given start-up spectrum much earlier than private operators, has launched BWA services in a few circles on WiMax technology.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Investors, Meet Alan. Alan, Meet The Investors. Now get along!

Alan Mulally, Ford’s turnaround guy won’t speculate about his own fate. The stock market will. This time, it is his China Strategy that has made them Unhappy. Has Mulally lost his Midas touch?

On a cold February morning of 2007, Mulally’s Falcon jet landed on the airstrip of a 330 acre auto-testing facility in East Haddam (Conn.), 720 miles due East of his office in Dearborn (MI). He was accompanied by two of Ford’s senior engineers. For Mulally, this was his first field trip to conduct a detailed trial of every Ford model on the market shelf. For 4 hours, he patiently listened to all the complaints made by third-party experts about his company’s vehicles. That the new Ford Edge SUV had no electronic opener and no handle on the rear making it impossible for five-footers to close the hatch was one. When questioned, his engineers exuded lumps of defensive excuses. First, their new boss gave them a piece of his mind. Then, he took out two pens and notepads from his satchel and followed it up with a command: “You know what? Just listen and take notes.” Mulally was prepared. He did not care about the humiliation his engineers suffered while standing amidst a gang of auto reviewers. He was least bothered about them being uncomfortable. What Ford needed then was correction of many mistakes, not cloaks that concealed the rust.

Every top executive in the automobile industry today, carries around with him a heavy backpack of tales. For Alan Mulally, much of what it holds is about resentment and confrontation. Be it insiders or outsiders, engineers or investors, he has waded through miles of objections and excuses to make Ford a profitable machine again.

What is widely known outside the walls of Ford’s offices is about Mulally being a Mr. Dear CEO. He never was. At 7 am every Thursday, Mulally meets 15 of his top executives in a windowless conference room, a floor below his 12th floor office in the company’s headquarters in Dearborn. It is called the Thunderbird Room. In these meetings, every reporting officer gets to know that Mulally has held his feet to the fire. He cares little about the displeasures earned in the path to progress. When in early 2009, Mulally decided to even consider postponing his plans to launch the new F-Series (because he wanted to clear out Ford’s inventory), he made many senior officials unhappy, including his global marketing chief James Farley.

He has also angered the markets in the past. It happened on November 29, 2006, when he pledged all of the company’s assets for $23.6 billion to US bankers in a packed hotel ballroom in New York. Ten trading sessions later, the stock was down 15.79% to $6.88 per share. During Q1, 2008, Mulally decided to show no loyalty to brands like Volvo, Jaguar, Land Rover & Aston Martin. He sold them off. The silence in the ever-giggling investor category became more pronounced. One trading session after the JLR deal was announced on March 27, 2008, Ford’s stock fell 6.83% to $5.59. During the eight months that followed, Ford’s stock plummeted to a historical low of $1.26 (Nov 19, 2008). The company lost a further $14.8 billion in FY2008 (the highest in its 105 year history) and burned 61% of its cash reserves ($21.2 billion) that year alone. Mulally’s promises of a turnaround tale had started looking like scrap metal. But the unexpected happened and Ford was back on its feet as the #2 car seller in the large US and EU markets during 2009 and 2010 (a situation last seen in FY2000). Credit goes to Ford’s lower-priced, smaller vehicles (which makes up 48% of Ford’s global sales today). The company made $9.28 billion in net profits.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Thursday, March 28, 2013

Sunny Side up for DTH Firms

India’s DTH Industry is Making a Bold Gambit to take off into Profit zone on The Back of Growing Popularity for High-Definition and value-added Services.

Decades ago, when celebrated American author and critic John Mason Brown spoke about television being chewing gum for the eyes, the visual medium was still years away from efflorescence. Today, as the total number of digital TV households worldwide fast approaches the 1-billion mark, representing a penetration rate of 65%, those words have even found global utterance.

According to UK-based research and forecasting agency Informa Telecoms & Media, which delivers strategic insight on the display industry based on global market data and primary research, more than 401-million digital TV homes are expected to be added between the end of 2010 and the end of 2015, with China contributing a massive 136 million, followed by India with 47 million. A recent report by DisplaySearch, a leading global market research and consulting firm specialising in the $770-billion display supply chain market, says total worldwide television shipments increased 6% from 205 million units in 2009 to 218 million units in 2010.

The boom in TV sales is feeding the demand for high-end LCD and LED television sets by consumers looking for quality TV viewing. Industry observers say that there are about 13 to14 million households buying LCD and LED TVs every year in India. Approximately 700,000 LCD TVs were shipped by brands in India during the month of October alone last year. As television buyers in India gravitate to purchasing more of flat panel displays, direct-to-home (DTH) satellite television has emerged as the choice medium for digital and high-definition (HD)-quality video over other media channels like digital cable networks or IPTV, offering a broader entertainment experience to subscribers. On offer are entertainment, news and lots more options such as searching for job vacancies on TV, looking for prospective marriage partners and choosing travel packages across India that DTH viewers living in even remote nooks & corners of the country can choose from. Proliferation of television channels, viewers increasing sensitivity to quality transmission & programming of their choice and a growing demand for value-added services, have further promoted DTH revolution in the country.

“The need to be entertained, coupled with the diversity of broadcast channels, pay-per-view (PPV) opportunities, gaming and interactive services are the biggest growth drivers for DTH in India,” says a senior executive of a DTH service provider. “The big opportunity for DTH in India”, believes R. C. Venkateish, Chief Executive Officer, Dishtv, “is a virgin market served only by terrestrial broadcaster Doordarshan”. There are still large swathes of cable-starved areas in the country, where people watch only Doordarshan channels. Also, by and large, cable networks in India still run on analog technologies and are not yet digitised. According to analysts, the Indian market has a huge opportunity despite having seven DTH players, including government-owned DD Direct. The total number of households in India is estimated around 232 million, of them only 141 million have TV sets. Of the total number of the households, 116 million have cable and satellite connections of which DTH users count for just 31 million.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles


 
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Monday, March 18, 2013

For Feeding Mouths Aplenty

While India continues to reel under The Effect of rising food Prices & Increasing hunger, The Proposed National Food Security Act can be a Panacea. But with a narrow minded Focus & Select targets, The Upcoming Legislation might end up Nowhere & can worsen The Delivery of food grains to The Hungry.

John Van Hengel, born 1923 in Waupan, Wisconsin, was an ordinary man with all vices and sins – as per America’s Second Harvest, a company founded by Hengel himself. He undertook various occupations; from being an ad man to a beer truck driver in Hollywood, married a model, divorced her and underwent spinal surgery post a deadly fight. It was while working at a soup kitchen post his surgery when he met this mother of 10 and her dying husband. She survived by rummaging in food bins and was desperate for a place to both deposit food and check it out – like a bank. Hengel, hooked to the idea, persuaded a grocery store manager to donate surplus food. From a defunct church bakery selling more than 250,000 pounds of food to 36 charities in its first year, America’s Second Harvest was born in 1976, the world’s first Food Bank Chain. For a country like the US with around 20 million people belonging to households suffering from ‘very low food security’ (households where at least one person remains hungry during a year), food banks have been a revolution. But for India, where ITC pioneer Sam Pitroda recently unveiled his ambitious food bank scheme, the 250 million plus hungry population might prove too Herculean a task. The only light at the tunnel end is the National Food Security Bill, touted to hit harder at hunger than NREGA did at poverty. But a clichéd narrow focus and lack of holistic research-backed provisions endanger the entire system of fighting hunger in India.

Despite numerous measures and programmes – Targeted PDS, Mid-Day Meal Scheme, National Food for Work Programme, Antyodaya Anna Yojna and Integrated Child Development Scheme – the number of undernourished people increased from about 210 million in 1990-92 to 252 million in 2005-06. India houses around half the world’s undernourished children. Also, there has been a general decline in per capita calorie consumption in recent decades. Grain mountains and hungry millions continue to coexist. According to the Global Hunger Index 2009, India is ranked 65 among 84 developing countries – worse than nearly 25 Sub-Saharan African countries and all of South Asia, except Bangladesh. The reason – all government schemes have been victims of narrow minded targets, rampant corruption and perpetual battles between central and state government owned entities.

The Targeted Public Distribution Scheme (TDPS) was introduced in 1997 as a revised version of PDS, allegedly serving only the urban poor and being a miserable failure to effectively serve the poorer sections of the population. But even this has slowly bled from the entangled web of poor targeting, high administrative costs, and low effectiveness of the programme. The NFSA, if enacted, mandates the provision of a minimum of 25 kg of rice or wheat to Below Poverty Line (BPL) families per month at Rs.3 per kg. The TDPS targeted same at Rs.4.15 per kg for wheat and Rs.5.65 per kg for rice. But as you go into the depth of the meaning behind each word, the proposed legislation faces sure shot stumbling blocks with the debate regarding the definition of hunger and hungry and the number of BPL families.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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