Thursday, 10 November 2016

Who blew my Trumpet?

Who blew my Trumpet?

The last time I wrote something was when Steve jobs bid adieu to this world prematurely. He still lives in our heart.

Now let me do that again on this occasion when Trump triumphs the world by getting into the echelons of the White house as an outsider - as a pure businessman rather than a senator or a military person.

I’m part of the media industry for several years and keenly follow all major and important happenings around the world. Press celebrated his victory by pulling in more pages as specials in their daily. Press had plenty to write on Trump than senator Hilary except that she would have been the first women president if got elected.

I’ve searched in most Indian dailies to find out the takeaways for the business community from this election. Many wrote about how he won, his strategies, his wealth, family, controversies etc. but very few wrote on the lessons we could learn from his election sweep from a marketing and business perspective.


AMERICA FIRST

This is the most important among all ideas Trump has put forth in his election campaign. America and its citizens are second to none. Country first and all others come after that. His campaign slogan ‘Making America Great Again’ (MAGA) & ‘Making America safe again’ (MASA) created waves. Though democrats have ridiculed this at the beginning but soon found it difficult to cope with the spread of this message in the country. Clinton countered this by telling “America is already great” didn’t go well  with the voters.

In a corporate environment if an employee treat his work as paramount and has an ‘ORGANISATION FIRST’ attitude, the results will be tremendous. All successful people understand that and are implied in their approach and culture.



BLUE COLLAR

His opinion and stand on the blue-collar workers, minorities, gays, Hispanics, religions, immigration and all other sensitive topics all were crisp and clear.  Many felt that it was more from his heart than from the head. I correct that - it was from his gut.

White-collar people were eagerly watching on how his policies are going to affect the blue collar rather than them. When they found it’s not going to affect them, they didn’t make an issue.  It was a reverse approach by Trump.

These days’ people are smart and look for the benefits others get so that they can adjust their demands. Trump sensed this and Hilary missed it.

Strategy is more important than process.

WHITE WASH

Trump didn’t expressly try to please Blacks or other minorities in US but kept them at par with the whites. Whereas Clinton deliberately tired to give her an image of a pro black and minority messiah. This has upset the white majority in America and later she fall on her face. America is meant for the Americans as India is for Indians.

Trump knew the basic principle in business that he can’t please all. Clinton once again bite the dust.  

STRAIGHT FROM THE GUT

Very few understand this statement well. Jack Welsh, Iconic GE man, is the propounder of this great belief. If your gut instinct is right you seldom fails.

Trump was a man of ‘real’. He had his opinion on everything and that was his own. He never asked anyone to subscribe to it. Everyone is entitled to his or her opinion. So is he. Trump always expressed his opinion straight and upfront. He ended up in several controversies. All short range. People sensed it. Trump presented himself to his voters as he is. In the same way as he is a human being, husband, father, son, divorcee, business man, billionaire, tax evader (legal), womanizer (who is not?) and what not every kind of avatars. Hilary’s was a canned life and sounded artificial in her approach.

Americans live in a most advanced society. They know what is right or wrong in a defined context and also know to take decisions in any adversities or otherwise. They were looking for a true American and didn’t care if he had any flaws. They know that as long as it’s not impacting their country and citizens it’s perfectly fine. Clinton miserably failed to understand that as she was under a false belief that one should always be 100% perfect to rule America. May be her experience from her own husband while he was the president might have made her to take such a stand.

Corporate world has no place to accommodate personal feelings or allegations of anyone. As long as an employee steer clear of this head wind and continue contributing towards the growth of the company he or she should be declared as a winner.

SING & SWING

This is the most difficult thing to do. Virtually impossible to do both simultaneously especially if it’s on a long rope swing and at that too at a good pace. Trump knew it well in advance. He preempted his competition and focused on the core areas. Swing states like Florida, Ohio, Virginia and couple of other states were under Trump’s radar from the very beginning. All his campaign efforts were focused on these Swing States. He knows if at least 3 of the swing states decide to vote for him he will win the elections. He practiced well on how to sing while on a swing. Most of those swing states went for Trump and he tasted victory. Clinton failed to understand the pain points and she focused on other majority states ignoring swing states hoping that they will go all out and vote for her - Mistake # 5.

In business it’s better to have a fall back plan from the beginning. Your existing customers might change their mind anytime and shift loyalty to your competition. Don’t ignore your customers or depend too much on your prospects.
  

WINNING AGAINST THE ODDS

Clinton had the best of the advantage against Trump on various parameters. Had she won, she would have been the first women president and the past ‘First Lady’ becoming the president in the history of America. Backing of his husband as a former president, backing of the outgoing president, experience as a former secretary of state, senator – Some how all didn’t work.

I read somewhere “Donald Trump is a reminder that you should just apply for that job you want even if you don’t have the experience”.

He is an outlier - a true outsider with no backing even from his own party and without any military or diplomatic experience. He was neither a Senator nor an ardent party worker. But he is a businessman – one who understands what a country/company needs and what keeps him on his toes.

Come and blow the Trumpet and let the party begin!


Antony Konnoth













































Saturday, 12 January 2013

With the CEO of Kompass International & Coface International



Mr. Bertrand Macabeo, CEO of Kompass International and Coface International was in Dubai last week and visited 'Express Print Publishers LLC'. During his visit new business plans and strategies for Kompass were revealed and also reinstated the business relationship with the Express Group.

Mr. Abdul Qadir Mohammed, Chairman of the Express Group received him at Express HO and welcomed on behalf of the Board of Directors. Mr. Abdul Wahab, Director was also part of the discussion. Mr. John McIssac, CEO of the yellow pages division of the Express offered a view of the market conditions prevailing in GCC and also opined to explore ways and means to co-exist and inter leverage the opportunities available for Yellow pages and Kompass directory.

I had the opportunity to present the 2013 Business & Campaign plan for Kompass in UAE. Mr. Bertrand has shared some of the successful business models and best sales practices of the Kompass associates in other countries and were able to gather a global overview on all related areas.

Mr. Bertrand also invited me for the Global Meet planned for Kompass associates in March 2013 in France.

Antony Konnoth




















Saturday, 1 September 2012

2nd in series of the article sent to GN for publishing in their properties section. First view exclusively for my friends and followers....


2nd in series of the article sent to GN for publishing in their properties section. First view exclusively for my friends and followers....



KNOW YOUR NEIGHBOURS, THEY MAY BE YOUR SAVIOUR DURING CRISIS

"Neighbours envy owners pride" was a celebrated punch line of a famous television brand (ONIDA) for several years. If streamed again it is highly unlikely that the same reverberations may happen with the ad viewers these days. We have gone past those 'envy-bubble' days and no one considers their material possessions as true luxury or worth any real praise. A gentle reminder-- it is high time they value the true worthiness of their neighbours these days.

UAE is a country where the age-old mantra of unity in diversity is practically visible. Perhaps no other country can boast of nesting this cultural dynamics of different communities. A typical residential building in UAE may possibly contain different nationalities from around the world. Though community living among expats is minimal in this country many are constrained to live in apartments and high-rise buildings. Due to work commitments and job timings many of us are isolated from our neighbours. It is quite strange that many of us keep only a HB (Hi bye) relationship with our neighbours. An ideal neighbour relationship may help one at the time of a crisis. A case in point is the recent fire accidents in some of the high-rise buildings.

1.    Establish at least a talking term relationship with your neighbours. Probably your children can start of the relationship process with their friends in the next door.
2.     It is always better to exchange the phone numbers (Office & Mob) based on the comfort level you mutually enjoy. This will help to alert one another at the time of any impending crises.
3.     If the building has got a common meeting place you may frequently exchange pleasantries during a walk around. Meeting outside home are always advisable for a free flow of talk. A Gym, Swimming pool or sometimes parking space in the building would be an ideal choice.

A strong relationship with your neighbours will only payoff in the long term if you have exercised your options carefully to choose them. Keep in mind that when a hell like crisis strike, a known devil relatively will be rescued faster than an unknown angel. Don't play stranger with your neighbours. Neighbours envy is no more owners pride.



                                                      xxxxxxxxxxxxxxxxxxxxx

Saturday, 4 August 2012

WANT A LIFE LONG CAREER OR SIMPLY A JOB? CHOOSE WISELY



First view of an article i had sent to Gulf News for publishing. Read below. 



WANT A LIFE LONG CAREER  OR SIMPLY A JOB ?  CHOOSE WISELY


A job or profession becomes a career only when it is followed as ones lifework. An employer or an agent can only offer you a job not a career after a successful interview. After all we apply for a job and not for a career and we don't even go for a career interview but only job interviews. But It is up to the aspirant to pursue it further and transform his job to a full fledged career. Jobs are short lived and careers oftentimes outlive jobs when one follows it religiously.

Give it a test by yourself and find out the real situation. Have you reached your optimal career growth or still at the cross roads and doing the 'jobs'?  You may be surprised at the findings. Check it out.


  1.  How many times you changed your company or Industry in the last 3 years? If it is 5 or more then you are career disoriented. 
  2. Do you contribute to your department regularly apart from your routine job requirements? 'Blame it on time' attitude will take you nowhere. 
  3. Where do you keep your job in the priority list? Number one, two or three? Beyond this a disaster awaits in the form of a life long job doer. 


One need to set his/her career goal at the beginning itself. Your choice of education, industry, company and the job itself will be a deciding factor. Once that is aligned with your desire and needs, you will seldom seek and do a job. Instead you will always live your career.

                                                             xxxxxxxxxxxxxxxx

Saturday, 12 May 2012

Olympus Corporation Scandal & its aftermath ?


Olympus Corporation is a Japanese manufacturer of Optical equipment and is considered one of the leaders in the industry. It flagship products include Cameras and Endoscopes in addition to all other related products. For the year ended 31 March 2011 the consolidated net sales were US$ 10589 million. The total shareholders’ equity is US $ 3281 million. The group employs close to forty thousand people around the world. Its assets were estimated at US $ 13295 million. On the remarkable aspect is the good will of Olympus Corporation which is valued at US $ 2194 million. Another significant achievement until recent is the ability of the management to sustain the profit level relatively constant at 35 billion yen for several years.


PROFIT MAKING STRATEGY OF THE CORPORATION

Being a Japanese company, Olympus used to have a clear strategy in all the areas of operation. The management has come up with a new idea called FINANCIAL ENGINEERING where they look up the financial aspects from a different angle. The objective of the exercise is to maximize profits for the company from all departments. Olympus Corporation relied on investments to boost profits. There were instances that the investment arm of the corporation was inclined towards financial derivatives and other risky investments. The aftereffect of this strategy was very evident from the books. In 1991 Olympus lost 2.1 billion yen on the value of its investments. By 1998, it suffered sizable trading losses on derivatives. Share market responded unfavorably and the value eroded to a great extent. Score card says the shares plunge by 11% at that time.

In September 2011, Olympus announced it had written off a part of 45 billion yen investment in emerging market bonds. The company also revealed that it had lost a significant amount from interest rates and currency swaps.

PRESS REPORTS

Bloomberg reported that the annual financial reports of Olympus showed a US$ 201 million prior period adjustment entry for “loss related to the purchase of preference share from a third party”.

Financial Times commented that the equity ratio of Olympus is the lowest and at below 14% when compares against the peer group. Olympus is the only Nikkei 225 constituent whose intangible assets exceed net assets. Its goodwill was valued at 168 billion yen and the net assets were only 151 billion yen. This information sent wrong signal to the investors and market alike.

On 1 April 2011 Olympus came up with a big announcement.  Michael Woodford, a Brit, was promoted as President and CEO for the group. He was an Olympus veteran and was in charge of the companies European operation. He was the MD of Olympus Medical Systems (Europe). There were rumors that he was selected to head the company because he was an easy to control guy. Company picked a bottom ranked foreign executive director for some reasons. It was obvious that the company was overlooking other capable managers for this position and there were raised eyebrows from many quarters.

Woodford himself had a bitter experience with the top management when he was heading the European operations. The company went into acquisition of Gyrus Medical Equipment Company in UK without the actual involvement of Mr. Woodford. In fact, it should have come under his purview but got ignored for obvious reasons. The then president Mr. Kikukava pacified him and promised to compensate later. He was then given the overall in charge of European operations in addition to the inclusion as Board member of the main group.

While his stint with the main group, Woodford started noticing some discrepancies in the financial side of the company. He could see that there were significant irregularities in the 2008 acquisition of Gyrus Medical Equipment Company. Upon realizing that he sent few letters to the auditing firm Earnest & Young to get clarity but failed to obtain anything. He then sent the details to another accounting firm PwC and sought some clarifications. His assumptions proved right and the accounting firm confirmed certain facts which made Woodford to think in the line of accounting fraud happened within the company.

PwC examined the earlier write down transaction of US $ 600 million. It came evident that Olympus paid US$ 687 million as an intermediary fee (success fee) to a third party. There were two beneficiary companies on this list. Two US based small firms are involved here - Axes America LLC & Axam Investments ltd (Cayman Island based). Wood ford’s suspicion founds to be right. The success fee of US$ 687 million paid is an all-time record until that time and not heard of in the industry circles.  In fact there was no need for such an exorbitant amount to be released for any consultancy job.

Woodford raised his objections and sought more clarity from the then president Mr. Kikukava but found no avail. Sensing the danger, Mr. Kikukava asked Woodford to step out from the current role he enjoyed. Unrelenting to this, Woodford was removed from the post forcefully and he was stripped of his powers. He was not allowed to speak or vote in the board meeting. Woodform himself said that an junior level executive, upon the instruction from Mr.Kikukava, taken all his belongings including laptop and mobile phones which contain important documents. Kikukava got re appointed as the president and CEO for the group and Mr. Woodford was ousted with immediate effect.


Woodford then took a flight and reached London where he called for a press meet and exposed the whole affair at the Olympus. He produced the relevant documents and other materials with was enough to incriminate the directors at that time especially Mr. Kikukava.  Market responded negatively to this happenings and the share value plunged to a great extent. It almost lost 45-50% of its value hearing the irregularities with Olympus. The share was trading at US$ 38 and was found trading at US$18 after this incident.

WHERE DID THE MONEY GO?
Due to investors demand, the government constituted a committee and its finding were relevant to note. The fees paid as part of the M&A of Gyrus, were exorbitant. The excess money was used to cover up the losses incurred from the earlier investments in derivatives and other dubious investments. This was done to improve the financials in the records.


AFTERMATH
Recent development being, Mr. Kikukava was removed from the post of the president and CEO due to the pressure from the investors especially institutional investors. He apologized before everyone and promised to look into the whole affair by appointing an independent agency. The government was quick to take control of the situation and Mr. Kikukava was arrested and remanded in custody pending enquiry.

Khaleej Times, on 21 April 2012 reported in its business section that the security exchange authorities in Japan approved of the new board to take control of the company. Some of the investors insisted to re-instate Mr. Woodford as President and CEO but did not get much support from others. Woodford himself announced from London that he is not willing to fight a proxy war to take control of the company.

HOW THIS CASE IS IMPORTANT TO US?
Financial irregularities can happen with any company especially when their fundamentals are dubious. This may occur when there are people in the top management who keep their interest before their companies. It is important for any finance student to sense the smoke and be aware of the possibility of these kinds of irregularities or else they will be caught up unaware of the actual situation.

Antony Konnoth, Dubai

Monday, 7 May 2012

RACE FOR SPACE ( Khaleej Times v Gulf News - Some marketing facts)



RACE FOR SPACE (Khaleej Times v Gulf News)

Of late, there was huge media cry to find out who dominates the UAE news world. The focus was predominantly shifted to two major players in this region. Gulf News (GN) is the proclaimed leader with high readership and circulation figures. But things have changed ever since. Challenger Khaleej Times (KT) started giving Gulf News run for their money and territory.

To understand more, let’s dig the history and try to unearth some hidden facts. Khaleej Times is the first ever English daily to publish from UAE. It started in the year 1978 and was owned by Galadhari Brothers. Another publishing group Gulf News, formed a while later, took no time to sense the opportunity and started their’ own newspaper from the country. Two groups were in fact contemporaries if we apply the timeline principle here.

Market did not react favorably at the beginning. For various reasons, KT took the absolute dominance in the mind of readers and was the designated winner. GN was struggling to get customers at that point of the time. In one of the high profile event in 1984, Al Nasr Publications, a prominent business group took over the management of GN. New machinery, new technology and a brand new marketing team worked round the clock to put GN at the top of the mind of the intended readers. The formula worked pretty well. Gulf News attained the top spot in short time by clinching the maximum readers in UAE and gulf.  

Ever since they tasted the victory, there was no look back. It is official now – as per the available stats GN claims a print run of 109 thousand per day in UAE. Khaleej Times was no were near to it. Guessing game continued for a while and the media estimated the KT figures below 50 thousand, not even half of GN's circulation.

Fast forward 2011 - business took an about turn. Quite a few happenings in KT have changed the game overnight. New rules were set in. Numbers started changing in favor of KT. GN subscription figures were stagnant or lost significantly against the overall circulation growth of KT.  Khaleej Times once again rose to fame, this time, for achieving the highest increase in subscribers for the year.

What went in favor for KT? How GN lost its subscribers to the marketing efforts of KT? Let’s get into the gut of the story. Ever since KT began loosing its market share, there were concerted efforts from the management to revisit its strategic plans. Government of Dubai through its investment arm, a holding company, acquired the majority of the shares of the newspaper. The management got revamped and editors were changed. Mr.Rahul Sharma of Hindustan Times fame was given the charge of chief editor. The company also appointed Mr.Didier Brun, the then VP of International Herald Tribune, as CEO. The marketing department was brains stormed and urged to devise a new strategy to grab the readership.

 Media analysts and marketers state many reasons for this turnaround but I personally feel the below FIVE STRATEGIES adopted by KT has killed the competition at point blank.


 
STRATEGY 1
FOCUS ON READERSHIP THAN PER DAY CIRCULATION

News paper companies globally give prominence to per day circulation numbers than the total readership. The water tight business model followed by these companies in relation to their revenue earning capability always insists to abide by this principle. Traditionally, news papers earn 60% - 70% of their revenue from advertising and the rest 30% - 40% from daily sales and annual subscriptions. Advertisers used to focus on per day circulation, but this tread had witnessed a dramatic change. Marketers in various industries started asking for split up details of the newspaper reach in different segments. Mass marketing is passé. Targeted distribution is the new mantra. Anymore it’s not the total circulation number which matter most, but the actual reachable figures. It’s the readership figures now marketers weigh before they advertise their products or insist media guys to do so as part of their media plan. KT got it right, and they kept this as one of their prime strategy to get the mind share of the prospects. The underlying principle is - Circulation numbers automatically increases when readership improves. KT firmly believed on this and it paid off. 

GN always focused on circulation numbers rather than readership and they still wonder what is so important in readership figures if the per day circulation don’t match up and collections don’t click. Only after they started losing subscribers, it seems vital  for them to look up in the readership area and I presume they are serious. They better.....


 
STRATEGY 2
COMMODITIZE THE PRODUCT

This is unheard of in the newspaper industry despite it has some of the features of a mass product. In fact, newspapers cannot be classified as one such. But this has become a ‘food for thought’ line for those inside the KT, especially the marketing bench. This thought process has made the marketing to believe that a product can only be successful if it is made available at all major centers. Soon the product found its place in all educational institutions, gas stations, malls, libraries, ministries and all places where public show up. There were distribution ties up with various agencies, supermarkets, book shops corporate and institutional centers. The idea worked well and the visibility soared to new heights. People started noticing this new trend and in fact bought many copies from these centers to get the real feel of the news, supposedly, to know the another version of the story. Once again the readership increased significantly and the circulation numbers followed. 

On the other hand, GN were known for monetizing every opportunity and the revenue per copy was the most important thing for the company. To see the product from the above angle was something they could not digest.

  
STRATEGY 3
NEW DESIGN – SLIM AND TALL VERSION

It was a jaw drop moment for the readers to see a slim and tall version of the newspaper on their door steps and news stands. KT has become the first newspaper to adopt this new standard in size ( 6 column) & design keeping in mind of the 'ease of reading' and 'handling side' of the news paper. It has followed the foot steps of some of the international newspapers here. The new version showed increased acceptance from the public and readers alike. There is no mystery that the numbers started showed up in the board- Circulation almost doubled.

GN still believe in 8 column newspaper and the marketing sees no threat and still publish the old version but with some design change. What they don’t realize is that the new gen readers prefer concise and capsule news in a newspaper which is manageable and easy to handle while reading on the go or stationary.

STRATEGY 4
STRATEGIC TIE UP WITH IHT (International Herald Tribune)

IHT, The international version of New York Times is a global print winner in the race for space. The strategic tie up of KT with the IHT has increased the acceptance level of the newspaper in the minds of readers. A global touch is always welcomed. People started perceiving that the content is customized to world standards along with the local news.

 GN don’t believe in any strategic tie ups, but interested only in distribution tie ups for some reputed magazines and EXPAT specific language news papers like Malayala Manorama in UAE.


STRATEGY 5
COMPLETE REACH OUT - UNBELIEVABLE PROMOTION OFFERS

KT has come up with some unbelievable subscription offers last year. Pay AED 400 and get AED 250 voucher of DG Sharaf, AED 100 coupon for Baskin Robins and AED 100 coupon which can be redeemed at Yellow Hat showrooms in UAE. You pay 400 Dhs for subscription and get back 500 dhs in return... Wow... In short, this translates in accounting language to free bonus earning - Free newspaper subscription for one year and a bonus of AED 100 !!!


 
The grapevine is that KT now commands a widespread circulation in the market and the revenues have shot up to a meteoric level. No of advertisers have increased dramatically. Ad revenues showed multifold increase from all quarters. International brands like McDonalds entered into long term contracts with KT to publish their advertisements. A new ad item like full cover page (before the actual front page of the newspaper) has become an all time success ad item. Marketing has reaped the benefits. New strategy paid off. GN may be still wondering where their clients have gone hiding.

Let the guessing game continue……


Antony Konnoth, Dubai. 



















  


Friday, 4 March 2011

How Etisalat's Efforts To Operate In India Met With A Set Back??

At the outset, let me apologize to all my readers for not posting since last December since I had to complete some assignments related to my job in Dubai. Thanks to all my readers, blog followers and friends who sent  messages and encouraged me to continue writing. I am humbled that I could make a point bold enough to accelerate your thought process. Thank you all once again.


Etisalat's hope of entering to Indian market is now being thwarted by the authorities there legally and  I see no hope in the near future for a come back. I had mentioned in my earlier posting about the mighty position of Etisalat in the Gulf region. It's next only to Saudi Tel in the Arab world and has operations in 18 countries. Soon after it's inception in UAE and enjoying the monopoly status for many years, it had pocketed enough moolah to invest in foreign markets. The reason being, a further expansion in a significant way in the UAE market in terms of new customer acquisitions was not possible as the client base got exhausted fast. And with the arrival of the second operator in 2007 (Du) the matter got further complicated. The only option with Etisalat then was to expand beyond its territorial regions.  The last 5 years we saw Etisalat spreading its wings beyond its limit to  grab shares in some of the major telecom companies in MENA and other Asian countries.

Etisalat has now a controlling stake in Mobily of Saudi Arabia. It enjoys more that 26% share in Pakistan Telecommunications Corporation Ltd (PTCL). Nigeria is the most prominent among the African nations who has the presence of Etisalat. The recent faltered attempt by Etisalat to acquire Zain's (Kuwaiti Telecom conglomerate) share in its Saudi operation and the latest news of its failure to complete due diligence process prior to the acquisition is doing the rounds now in Telecom circles questioning the genuine business interest of Etisalat. Being cash rich and having deep pockets has helped Etisalat surpass all adverse situations but only until recently.

It bite the dust with its plan of foraying into India. It's needless to mention that doing business in India unlike other places has no comparison. It's a different platform altogether. To grab a decent market share is more painful than a camel passing through a needle. Being just a Camel is not enough! There are around 6-9 existing players in each circle to compete with. There are other tricks to be played for keeping afloat which is unique to Indian business environment. Despite knowing this, Etisalat has put a wrong foot in its own shoes.

India's company laws says a foreign company will not get an exclusive start up licence in specific fields of industry. Telecommunication is one such. Government has its own reasons to restrict the operation. We all know security issues are paramount for every nation. These restrictive clauses did not stop the acquisitions hunger of Etisalat.   It has decided to go for a joint venture with an existing Indian operator. The search has ended with the spotting of SWAN TELECOM, the then licence holder for few north eastern regions in India. The Swan Telecom never had any existing operation but only has the licence from TRAI (Telecommunication Authority of India). Within a stipulated period of 6 months it has to start test service and then to full fledged operation. To the surprise of all, Swan Telecom then entered into a joint venture pact with Etisalat. For Etisalat that was the only available opportunity. In fact Etisalat was looking for a strong partner like Aditya Birla Group or Reliance. To its dismay not many Indian companies were willing to shed its stake to a foreign buyer at that point of time. A right valuation could be a significant reason for them to stay away. They knew once operational they could demand multi fold.

Etisalat continued the partnership for few more years and meanwhile tried to get the final licence for operation. By the time it has realised how difficult is to cope with bureaucratic hurdles. Initially it got a stinker from the home department against the continuance of the JV in India as it has a controlling stake in Pakistan Telecom. Policy of the Indian Government forbids granting Telecom license to a company who has operations in Pakistan ,its hostile neighbour based on strong security reasons. Etisalat's local partner somehow kept the issue under the rug but eventually could only delay the process. Local press drummed up the news 24/7and a huge uproar was there in the parliament forcing the then Telecom minister to scrutinise the whole deal.

A probe proved that Swan Telecom is under a holding company of Reliance Group owned by Anil Dhirubai Ambani. Reliance being an existing Telecom service provider for various circles in different states of India has no right to own another Telecom company under a different name and operate in same circles or other regions. That would tantamount to serious conflict of interest.Within few months the media witnessed the change of name from Swan Telecom Etisalat to Etisalat DB. It seems Swan has sold its share to another company called Dynamix Balwas (DB). This is a company owned by Shahid Balwas. There are press reports and classified documents with home department pointing Shahid's deal with Swan and Etisalat is indirectly linked to Dawood Ibrahim's business interest in India and abroad. I presume my readers need no introduction to Dawood Ibrahim and his interests. Sources confirm Millions in Dollars have rolled in and out of India to complete the transaction. The deal is now under the scanner of Indian authorities.

The latest news is Mr. Shahid Balwas , MD and Vice Chairman of Etisalat DB was arrested few weeks back by CBI and currently being probed of the 2G scam links. Investigation suggests his aquittal may not happen  easily under the current circumstances since the then minister Mr. Raja himself is too under arrest and being probed of the scam links.  Governement under Dr. Manmohan Singh is determined to grab the culprits of the 2G scam and bring before the justice system to clear the blot in its white paper.


Etisalat has few options now. If it want to run a Telecom business in India, it has to quit its Pakistan operations completely (hope i am not cynical). Furthermore it should come out unscathed of its image from the imbroglio surrounding the business venture with DB Group. Etisalat should search for a new partner who is genuinely interested in doing business in India. If that happens we could see some pyrotechnics in the sky. But the developments suggest otherwise. Let us hope Etisalat may review the whole business model and think of starting from square one. It will be good for Etisalat in the long run as a corporate, its prospective clients and for the great nation India.

Antony Konnoth
bizsense.blogspot.com