Associated XXX Companies

Many of the current problems have solutions from the past, In India in the past when there were too many fragmented unviable capacities in cement,  eight of these companies came together and created the Associated Cement Companies. This made the entire operation viable and the resultant company grew from strength to strength.

We have two industries which have many players with high debt, high operating costs and massive negative cash flows and no plan to become cash positive. They are insurance and telecom. This is not a good situation for lenders, employees, customers or shareholders or government.

Can the leaders of these companies sit together and create an Associated Insurance Company or an Associated Telecom company ?

Bandwidth we can create, Oil we cant

India is finding it difficult to create oil supplies. Oil is used mainly for transport, energy and as a building block for chemical industry. In this post, we shall look at the what we can do to reduce the oil use for transport.

India finds it difficult to create oil reserves  but we can alternative for oil namely bandwidth.  The movement of people could be reduced by the efficient use of bandwidth.

We have another problem on our hands, namely Bharat Sanchar Nigam Ltd which has become a chronic loss making operation. Rail capacity is very inadequate and air travel is expensive.

CISCO has a product called Telepresence which essentially slices a meeting room into two parts which could be halfway around the globe form each other. They are then connected by a 15mpbs lline. While Telepresence is expensive, it can be made cheaper by reducing the user experience. Telepresence software has become open-source in 2010.

Combining these problems and ideas  together, we could use BSNL to  strategically to reduce our oil dependence. Here are some ideas for the same.

BSNL has large buildings housing exchanges in good areas. We should give it additional Floor space index (FSI) to build more virtual meeting rooms and try and reduce both domestic air travel and international air travel. We also have additional real estate built and having no demand. Many of these funded by banks and these loans are going bad.

We should create lakhs of Video-meeting rooms on BSNL premises and at surplus real estate sites and sell at a very low price and eliminate travel which can reduced (such as business travel). This way we could save many problems in one stroke.

Defence economy : A new engine

Recently I met a veteran banker who said that sometime after the emergency the leading party of the country decided it was too painful to raise poll funding in small amounts from Indian businessmen and decided to raise it from few Arms contracts from foreign parties. He said that from that day domestic businessmen lost clout with the said political party which it had since pre-independence. Left unsaid was the fact that there was then no incentive to develop a domestic arms industry to protect our nation.
Recent press reports confirmed that the Bofors Gun order of the 1980s included a technology transfer agreement in which drawings were transferred to India. However no action was taken to learn how to produce this for over two decades. Recently when the government tried to place fresh orders for such guns, CAG raised this issue. Once adequate pressure was out in the system, the drawings came up from two decades of cold storage.

It is a sad story and a criminal negligence of the nation's interests but we as a nation dont have the time for crying now.  This situation provides an opportunity to create a new industry, competences, save forex and also create export opportunities.

It is time to rectify this mistake.