IPL the Indian Paisa League

Is IPL the Indian Paisa League?

Barely two years ago, when Mukesh Ambani's Reliance Industries Ltd made the highest bid for an Indian Premier League franchise (Rs 441 crore for Mumbai), many termed it as a massive gamble on a risky concept. The IPL sure has come a long way in a short time, with the Sahara group recently bidding Rs 1,702 crore for Pune and a little known Rendezvous Sports backed by the State Minister for External Affairs Shashi Tharoor forking out Rs 1,533 crore for Kochi. These two bids, worth a total of about Rs 3,235 crore, add up to more than the Rs 2,853 crore collectively paid by the existing eight franchise owners in the first auction, on January 24, 2008. Talk about the power of IPL.

Little did we know that the addition of new franchisees would open a can of worms. Now the Tharoor-Modi row prominently appearing on every news media and TV channels, the focus is well off the foreign cheer leaders and the cricket field.

Who represents Rendezvous Sports?

Interestingly the only connection in the Kochi Franchise for a Malayalee is Vivek Venugopal, a builder from Kerala who holds 1% stake in the Franchise. However, it is learnt that the group also includes Anchor Switches, Rosy Blue Diamond, Mukesh Patel, and Ravi and Sanjay Gaikwad. Anchor Switches is a company from Gujarat and is owned by Mehul Shah. Rosy Blue Diamond is one of the world's largest diamond manufacturing companies. Dilip Mehta is the CEO of this company, which owns jewellery brand 'Orra'. Ravi and Sanjay Gaikwad are Mumbai-based businessmen. Sanjay Gaikwad is the CEO of UFO Moviez. Mukesh Patel is an education baron who runs technology, management and engineering institutions.

With big money involved in procuring an IPL franchise one wonders how the franchisees' recover their money. For the franchisees' the main source of revenue comes from selling broadcast rights. Apart from that other source of income include proceeds from selling merchandise, sponsorship and selling tickets. BCCI takes a cut of 20% of broadcast revenue and 40% of advertisement revenue.

Brand IPL is currently estimated to be worth $4.13 Billion. The football championship English Premier League is worth $12 Billion, but IPL has reached $4 Billion in less than 3 years and will soon catch up other sports like football and Formula 1.

Now let us look closely at the ongoing row between IPL Chairman Lalit Modi and the union minister Shashi Tharoor after the later negotiated the deal for Rendezvous Sports to procure the Kochi Franchise. What began as a juicy side-show to the IPL is now threatening to dwarf the tournament itself. The Lalit Modi-Shashi Tharoor spat turned ugly with the junior minister and his aide accusing Modi of‘‘breaching all propriety’’ in his efforts to discredit the Kochi franchisee.

The minister’s aide accused Modi of trying to buy out the consortium with an “offer” of $50 million, while Tharoor himself decried Modi’s ‘‘contemptible efforts’’ to ‘‘drag in matters of my personal life’ ’―a reference to his alleged romantic ties with Sunanda Pushkar, a Dubai-based socialite-businesswoman , who reportedly holds a ‘free equity’ stake in Rendezvous Sports worth Rs 69 crore.

As the plot rapidly thickened, Lalit Modi, currently under a gag order from BCCI, kept below the radar. However, his associates denied all the allegations.

Meanwhile, political parties too jumped into the fray. The BJP has demanded Tharoor’s sack for ‘‘ improper behaviour’’, while the Congress seemed interested in the drama but disinclined to get involved in it. The IPL governing council will meet in 10 days where Modi is expected to deny that he tried to muscle out Rendezvous to help other interested parties.

Would the Shashi Tharoor-Modi row affect the future prospect of IPL? If the dirty linen is washed in public it indeed seems possible. But what turn of events can ease the tension? Would getting Sunanda Pushkar out of the Rendezvous stake help? Or would it take turning over the ownership altogether to another aspiring franchisee? Whatever may be the case, the stakes are high for Shashi Tharoor to clear his name and Congress high command would not go easy on the tweeting minister this time around.

Rajesh Kumar

The sorry state of Malayalam film industry

Malayalees love their movie superstars indeed. Nearly 3 decades old in the industry the 2 M's still rule the roost.

We love them like they are part of our family. We go and watch their movies no matter how terribly it was made and how absurd the subject was. We give them awards year after year so much so that they lost count of how many awards they have received.

We are almost up to the point where at any award function, while handing over awards to the M's, we are in a position to forecast the award for them for the next 5 to 10 years with certainty. If one M is the best actor in a given year, then the other M will not be left behind. We give the other M award for actor of the decade or millennium or people's favorite actor. We make sure that no dark horses enter their territory and steal the lime light from them. The so called Malayalam film lobby discouraging upcoming actors in the industry has resulted in fan clubs for Hindi, Tamil and Telugu actors mushrooming through out Kerala.

Recently we started noticing a slight change in trend in the award shows though. As the award organizers felt that it is boring for the audience to see the 2 Ms steal the lead awards, they ventured out and got hold of actors from Tamil and Telugu film industry and brought them here to award them. We make them feel home by entertaining them with Bollywood and Kollywood songs and dance performances on stage, often making them wonder if they are attending an award show back home.

Mallus are full of praises for the M's and even at their 50s we can't get enough of them. The M's are sparing no effort to look good and stay younger thanks to the hair fixing and other cosmetic treatments. Taking into account their age and continuous churn out of flops, our M's are insecure about release of other language films coinciding with their film releases.

If the recent whistle blowing against the M's by veteran actor Thilakan is anything to go by, it is only a matter of time before more and more art lovers come out to support Thilakan. People like Sukumar Azhikode will shout out that the emperor is walking naked reminding us of the fairy tale.

It is high time the industry stops making scripts around super stars and start making films around scripts. Otherwise it is a sure sign that the death knell of the industry is not far. Let us hope that a new breed of film makers come forward and give a breath of fresh air to the Malayalam film industry.

Rajesh Kumar

3G launch in India faces uncertainty

Back in August 2007, when India announced plans to auction off licenses for superfast 3G phone service, the country's mobile-phone companies cheered. It was at a time their stocks were at all-time highs as more than 8 million new customers signed up every month. These companies thought, 3G would surely make them richer, faster.

Now, after several delays, the auctions are likely to take place in coming months, perhaps as soon as March. The reaction of India's mobile carriers? More fear than cheer. While the government still hopes to collect a total of $5.5 billion for four national and 22 regional licenses, a price war has driven calling rates to well under 1 paise per second, slowing the industry's profit growth and denting stock prices. Carriers will need cash to bid on spectrum, and building a nationwide network will cost each as much as $4 billion. "Operators need to be realistic and not overbid," says an analyst.

The 3G track record doesn't inspire confidence. In Europe, overbidding nearly bankrupted many operators. India's state-owned BSNL, which the government allowed to launch 3G a year ago, now offers service in 300 cities, has just 700,000 customers, and has cut tariffs at least twice. BSNL's 3G record certainly doesn't encourage rivals.

While market leader Airtel with 116 million customers is eager to offer 3G to the Indian masses an executive within the company grumbles, "now we have to spend billions of dollars on a network that 2% of the country will use?" It's not like everybody in a village is carrying a BlackBerry".

The auctions may lead to consolidation and greater foreign control of India's cellular business. The top three operators hold just over half the market, while dozens of smaller players scramble for the rest. Foreigners, meanwhile, are eager to buy in. In 2008, Japan's DoCoMo paid $2.7 billion for 26% of Tata Teleservices, the country's No. 4 operator, and Russia's MTS bought 74% of Shyama TeleServices. Norway's Telenor took an interest in another small player last year.

To raise cash for the auctions, Essar Group, which owns a third of No. 2 carrier Vodafone Essar, is in talks to sell an antenna tower subsidiary to Boston-based American Tower for $420 million. Aircel, a smaller player controlled by Malaysia's Maxis Communications, on Jan. 14 sold 17,500 of its towers to a Mumbai company for $1.8 billion. Idea Cellular, the third-largest carrier, says it has raised $2 billion in cash and loans for the auction―a move designed in part to squelch rumors that the company may be a takeover target.

Most Indians seem content to use phones for voice calls and texting. Only 40,000 or so iPhones are being used in the country, and smartphones make up well under 5% of the handset market, India's government estimates. Of India's 530 million-plus subscribers, only 2 million regularly use the mobile Net, mostly to download pictures of cricket players and Bollywood stars, according to the Internet & Mobile Association of India, a trade group.

3 Idiots Movie review

I watched this much talked about movie this weekend. The movie is indeed getting tremendous reception and the critics have given thumbs up. After having watched, I have mixed feelings about the movie.  

I will not attempt to write a full blown review for much is already written about the movie. Instead I will just point out the highs and lows of the movie.

Challenging the education system, the message the movie gives out is that excellence is achieved through recognizing your area of expertize and perfecting the craft. One's academic interest is not dictated by one's parents. The film makers give a new definition to Idiot which is “I'll Do It On my Terms”.  

3 Idiots takes light-hearted jabs at the Indian education system, raising pertinent questions about the relevance of learning by rote, the obsession with high grades, and the dangerous repercussions of parental pressure to pursue traditional streams.

Rajkumar Hirani or otherwise known as Mr. Feelgood did a Patch Adams (A Robin Williams flick) in his Munna Bhai MBBS film. In the second installment Lage Raho Munnabhai, he brought back Gandhian values through Gandhigiri. In 3 Idiots, Hirani challenges the education system through 3 underdogs aka 3 Idiots.

Now let us look at the highs. The biggest high is the narration of the story. The search for Rancho develops the curiosity on the audience as if the audience is on a journey with the other 2 idiots Farhan and Raju through some of the most exotic locations in India. Chatur's (the 'brainy' student) hilarious speech. After asking for a 5 minutes extension from the examiner, Rancho messing up the answer papers to confuse the examiner who refuses to accept their answer papers. Chatur's rants after he fares second place after Rancho. Millimeter mimicking Viru the college principal during the principal's welcome speech to the students.

And finally the lows. Rancho played by Aamir had no chemistry with Pia played by Kareena Kapoor. The Munnabhai hangover was found throughout like poking fun at Kareena's arrogant elite boy friend and “Jaadu ki jhappi” is replaced by “all izz well”. Mona Singh's delivery episode was unnecessary. The biggest let down is Rancho's disguise act at the college. It is hard to imagine a preachy yet brilliant student would sneak into a college and would graduate as a proxy for someone else. It questions the credibility of the lead character.

Hirani's screenplay dilutes the underlying message about following your dreams. 3 Idiots could have been a wonderful light-hearted story about India's education system and the ever-increasing tribe of aspiring engineers. While the idea might have been to narrate a serious thought in a funny manner - the execution of many sequences is more superfluous than clever.

Verdict: 3 Idiots is a feel good film with a positive message. But you never feel for or root for its characters. Watch it for truckloads of laughter and its very relevant messages.

Happy New Year 2010

Farewell 2009. Welcome 2010. A new year and a new decade has just begun. As usual for many, resolutions lined up at the beginning of each year goes awry so much so that it ends up in their wish list promptly again the following year.  

It's part of the new year ritual – an annual attempt to start afresh and turn over a new leaf. But making resolutions is a near pointless exercise, psychologists say. We break them, become dispirited in the process and finally more hopeless than we were before.

Resolutions are not something you make on Jan 1st, resolutions are something you make every single day of your life. There is no start date from which you can magically change things and no end date when you have completed the change. If you want to change something in your life you change it from the moment you have the realization and continue to make that change every day thereafter.

So, what are your resolutions this year? Losing that extra pound? Making more money? What ever that may be, hold on tight and do make it happen.

Wishing you all a happy and prosperous New Year 2010.

Events that made headlines in 2009

As we say good bye to 2009, here is a look at the events that made headlines around the world.  

2009 undoubtedly belongs to Barack Obama who was sworn in as the 44th, and first African American, President of the United States. He received Nobel prize for peace for no apparent reasons raising many eye brows. Perhaps his order to close within a year the Guantánamo Bay detention camp in Cuba, where the US had held non-citizens whom it accused of terrorism, did the trick?

In February, the deadliest bush fires in Australian history began; killing 173, injured many, and left 7,500 homeless. The fires came after Melbourne recorded the highest-ever temperature (46.4°C, 115°F) of any capital city in Australia. The heat was so unbearable the Aussies turned to poor Indian students and beat the hell out of them.

Tiger woods became the first sports person in history to admit transgressions. He decided to take time off from golf to concentrate on adult movies.

The death of American entertainer Michael Jackson in June triggered an outpouring of worldwide grief. Online, reactions to the event crippled several major websites, as the abundance of people accessing the web pushed internet traffic to unprecedented levels. It turned out that most of the people were searching the internet to figure out if he was Black or White.

Swine Flu is deemed a global pandemic and even terrorists are looking at ways to take it to their advantage.

Dubai sneezes and the world catches a flu. In November, Dubai requested a debt deferment following its massive building projects, as well as the late 2000s economic crisis. The announcement caused global stock markets to drop.

Copenhagen climate meeting began with a bang but ended up with the world leaders banging up each other. Leading Bollywood actresses threatened to drop their clothes potentially pushing up global warming if a resolution is not made at the summit.

2009 also witnessed earth quakes, Tsunami, plane crashes, solar eclipse, terrorist attacks and a Hollywood movie telling us that the world will end in the year 2012. Finally, James Cameron the director who gave us the movie Titanic returning after 12 years with the mother of all movies Avatar with a $400 million budget. The movie is receiving rave reviews and the initial sign is that it is going to be a mega block buster.

That said, my personal favorite event is the rise of an unexpected star. YouTube announced that its 2009 star was Susan Boyle, the frumpy Scottish woman who mesmerized the world with a heartwarming rendition of "I Dreamed A Dream" on a British talent show in April.

Boyle, now 48, ended up taking second place in that competition, but no one came close to outshining her on YouTube. Her "Britain's Got Talent" videos attracted more than 300 million views worldwide.

Entertainment weekly said that Boyle's performance was a victory for talent and artistry in a culture obsessed with physical attractiveness and presentation. New York's Daily News said that an underdog being ridiculed or humiliated but then enjoying an unexpected triumph is a common trope in literature, and the stark contrast between the audience's low expectations and the quality of her singing made Boyle's performance such an engaging piece of television.

Boyle's first album, I Dreamed a Dream, was released on 23 November 2009. The album made it to No. 1 spot in UK, Ireland, US, Australia, Canada, New Zealand and Switzerland. 

As we embark ourselves to say good bye to 2009 and welcome a more exciting 2010, enjoy Susan Boyle's performance at Britain's Got Talent and be inspired.

Mobile tariff war to hit revenues

With the entry of mobile operator Uninor in Dec 2009  into India's crowded mobile market, the competition takes a new turn in an already heated market. Uninor launched their operation with an unprecedented 29 paise per minute for local calls and 49 paise per minute for STD calls. Uninor is a collaboration of Unitech wireless and Telenor Norway in which Telenor holds 67.25% stake. 

The tariff war by new telecom entrants in India and the likely retaliation by incumbent operators, will have a significant impact on industry revenues and profitability. The reduced tariffs will lower the average revenue per user (ARPUs) and operating margins for all industry players. The latest figures indicate average revenue per user (ARPU) remains below Rs 200. Keep in mind that this is a significant decline comparing to figures early in 2005 when the operators enjoyed an arpu of Rs 400. Despite the significant drop in arpu, operators still enjoy a margin due to continuous addition of new subscribers. 

As per rating agency Fitch, the Indian telecom industry is witnessing price wars with the entry of the new telecom operators, which were allotted universal access service licenses (UASLs) in February 2008 by the Department of Telecommunication (DOT). The new entrants (Aircel, Sistema Shyam Teleservices Ltd (SSTL) and Tata Docomo (GSM)) have launched aggressive tariff plans in an effort to garner subscriber market share. These new entrants have launched per second billing, either selectively or throughout their networks forcing incumbent operators to follow suit, while Tata CDMA has launched tariffs on a per call basis, irrespective of duration (Re 1 and Re 3 per call on local and STD, respectively). Following this trend, Reliance communication has reduced the tariff to 50 paise per minute for local, STD, roaming and SMS, for both off-net and on-net calls.

However, Fitch expects new entrants to face increasing difficulties in garnering any meaningful market share, with already low tariffs leading to lower ARPUs, a lack of adequate spectrum quality and restrictions on spectrum sharing. Fitch believes that the reduced industry profitability will likely expedite industry consolidation in the medium to long term reducing the number of players in the market.

As of end Oct 2009, mobile subscriber base in India stood at 482 million with Airtel leading the pack with 23.45% market share.

Here is how the picture looks like in terms of market share as of 31 Oct 2009.

Rajesh Kumar