Tata and the Missed Opportunity
Tata are one of the oldest business houses in this country. As the ad line went, “We Also Make Steel” encapsulated what Tata’s stood for. Hence, it gave them unparalleled advantage as far as brand name recall is concerned. Tata’s acquired Videsh Sanchar Nigam Limited (VSNL). Their foray in the GSM business was partnership with other operators branded as Idea Cellular. Tata is using its own brand name to market CDMA based telephones.
After acquiring VSNL way beyond its market price, some people had expressed surprise over the excess valuation done. I felt long time back that it was a prize catch. The main reason was that VSNL had painstakingly created infrastructure, which Tata’s did not have to do. Then came the acquisition of Tyco which again was a sick unit picked for a song. How they planned to leverage the same was a mystery to all. It soon became clear after they acquired Dishnet DSL and marketed the same as VSNL Broadband. It gave me some reason to cheer that broadband OPPORTUNITY may soon be knocking at my doorstep. Arguably, Tata has replicated the same model of business as Reliance did. From international gateways to bandwidth and bringing it on to the end user premises. It could be a perfect recipe for success, until Tata spoilt their own broth.
For long, they chose to concentrate in a few southern states. As the other players spread far and wide, Tata’s were surprisingly sleeping over the same. They would claim that they were in the process of consolidation. I doubt whether funds were a problem. Given Tata’s size, it could easily muster the resources it needed for expansion. It chose to sit back and wait.
Finally, it did launch in other circles at a breakneck speed. In the meantime, frustrated consumers started complaining about the lousy services. Or the lack of customer support which failed to resolve the complaints on a timely basis. Dishnet soon screwed up its market and brand name that it had created from a scratch. As I had mentioned earlier, Tata’s chose to rely on the existing infrastructure instead of creating their own. This could be interpreted as either sensible or foolishness.
Admittedly, Tata’s have chosen to concentrate mainly in the urban areas. It goes beyond reason to sniff around in the saturated markets. In any case, according to feedback I got in my city, they have not really been up to the mark. Of course, freebies like Internet or free phone for the first 3 months have not really enthused many subscribers. The only positive factor I see is the per second pulse. This means that usage can be tracked easily.
Internet remains a major problem with most of the operators. Tata’s have missed out the bus on that too. Perhaps they are still suffering from the hangover of acquiring VSNL as their subsidiary. What they got in addition to infrastructure was massive sloth and typical bureaucratic delays. My earlier post on the same amplifies the same. However, I fail to understand the logic behind having Saurav Ganguly as their mascot. How would he be able to sell the products given his own limited appeal? Another instance of lousy effort in marketing.
The only way to shake up the moribund state of affairs is getting aggressive on Data. For example, if it could offer unlimited Internet through its dial up mode. It could collaborate with BSNL to offer its broadband offering using BSNL’s local loop. I am not aware of what goes on in the background, yet given the size of Tata’s they could achieve that.
They ought not repeat the mistakes that they are doing in the mobile telephony segment. Namely fishing in saturated markets. It is absolutely asinine to try and lure away customers from established operators. This is because they do not have any real differentiator in services. The only hope for them is to tap the lucrative corporate market, but given the aggressiveness of Reliance in the same segment, it seems unlikely that they would be able to manage to do take a sizeable share. Plus, of course, a big question mark over their own network!
The best option seems to be capturing the market share in Dial up Internet especially in the small cities. One main reason why it could be winner there is that it owns its own gateways, thanks to VSNL acquisition. Yet seeing their efforts and halfhearted attempts to make any headway, it is like shooting their own foot. As I mentioned, it is the same hangover that refuses to change.
There have been enough snide remarks over their capabilities. Some said that they are best in making salt and they ought to stick on to that. My word of advice to the highly paid morons sitting high up. Until the time you are a volume player, any attempt to narrow your product offerings is suicidal. The same comparison can be drawn from the fast moving consumer goods. Hindustan Lever is having unparalleled reach thanks to its massive grass roots distribution and product offerings in almost every segment of the paying capacity of its patrons. “We Also Make Steel” should now be replaced by “We Also Make our Customers Happy”!