Raja Jasti’s Blog - Renaissance Thinking

There is a tremendous amount of innovation happening in the mobile space as the platform is being made more open by iphone, android etc. This is happening mostly despite the carriers, not because of them. In India smart phone usage is rather small though growing. SMS is the killer platform in India. There is a healthy innovative ecosystem developing in India around SMS apps fueled in part by low SMS costs. Now that is being threatened by greed of some carriers, namely airlet and tata indicom, who have started charging exorbitant interconnect charges.

India’s push SMS industry is facing a challenge with operators Airtel and Tata Indicom increasing the interconnect charges applicable on application to person (A2P)  SMSs on each other’s network. A2P SMSs include marketing information text messages relayed by enterprises such as banks, airlines, theatres, or by content aggregators.

These push SMSs, when sent via telecom networks are being charged an ‘interconnect’ fee by the receiving operator. With the change, the cost of SMS is expected to increase from around 4 to 5 paise per SMS, to as high as 10-15 paise. Tata Indicom’s increase in interconnect fees to Airtel network has been effective since November 1, 2009. Harsh Janeja, Head of Bulk Business, Tata Indicom, confirmed to Medianama that the hike was instituted 5 days ago and that a mail was circulated to all aggregators informing them of the new pricing: 15 paise per A2P (application to person) SMS delivered to an Airtel number via the Tata Indicom network.

This stepping up of prices, the matter of intense discussions amongst telecom industry executives, will hit off-deck mobile marketing companies and enterprises, which may not absorb it and choose to pass on the cost to the consumer or advertiser. Prabhat Kumar, Director at ACL Wireless, said that “In terms of pricing, this will affect our contracts with customers and the fixed prices some had established. Also, alerts for customers will be impacted. It is a tough time and now, aggregators with most operator partnerships will be the ones who will gain.” ACL Wireless will be passing on  40-50% of the costs to customers and will be looking at new avenues such as IVR or enterprise solutions to keep margins balanced.

The push SMS market which used to be only 500 million messages has grown into a 3 billion messages industry. “The market is getting hotter but stagnating,” is how Kumar puts it. Smaller companies, Kumar felt, that have been using it for marketing promotion to reach large number of users will be impacted the most and might have to reconsider their mobile advertising strategy and compare it with other advertising channels such as the Internet and radio now.

“After all, what cost Rs. 30 lakhs to reach 10 million customers, after interconnect prices, would shoot up to Rs. 80 lakhs,” he explains. He believes that companies with A2P such as Netcore and Way2sms will be affected most.

Vaishnavi said, “Advertisers will get highly impacted and we have to see if they are willing to pay the premium.”

So what used to be simple uniform pricing model has overnight become complex, carrier specific and expensive. I am afraid the promising SMS ecosystem will die unless tata indicom and airtel stop this stupid move and cancel interconnect charges. If they do not see the light then TRAI should step in and fix this mess before it is too late.

Om Malik has a top ten list for tech CEOs. Reed Hastings, Netflix CEO tops the list.

When I wanted to find out who were technology sector’s top ranked CEOs, I reached to Glassdoor, a Sausalito, Calif.-based company that that tracks employee satisfaction. They obliged and sent us a list of top ten top ranked CEOs of publicly traded technology companies. CEOs are included on the list if and only if they have garnered 50 or more votes on Glassdoor’s website. Reed Hastings, CEO of DVD rental service, Netflix ranks the highest followed by Steve Jobs of Apple and Eric Schmidt of Google. The CEO list doesn’t surprise me — these companies are doing reasonably well despite a very bleak economy giving the troops confidence that comes from stability.  I wonder which CEOs can one include in a similar list for non-public/private technology companies?

Tapped is a new documentary by Stephanie Soechtig about the dangers and the false information perpetrated by the bottled water industry.

Here is the trailer:

Now everything is google’s fault.

Henry porter at the guardian says that google is a just an amoral menace.

If indeed a new era of global responsibility has come into being with measures that actually restrain banks and isolate tax havens, it may be time for the planet’s dominant economic powers to focus on the destructive, anti-civic forces of the internet. Exactly 20 years after Sir Tim Berners-Lee wrote the blueprint for the world wide web, the internet has become the host to a small number of dangerous WWMs - worldwide monopolies that sweep all before them with exuberant contempt for people’s rights, their property and the past.

Google is the most prominent WWM.

Google presents a far greater threat to the livelihood of individuals and the future of commercial institutions important to the community. One case emerged last week when a letter from Billy Bragg, Robin Gibb and other songwriters was published in the Times explaining that Google was playing very rough with those who appeared on its subsidiary, YouTube. When the Performing Rights Society demanded more money for music videos streamed from the website, Google reacted by refusing to pay the requested 0.22p per play and took down the videos of the artists concerned.

It does this with impunity because it is dominant worldwide and knows the songwriters have nowhere else to go. Google is the portal to a massive audience: you comply with its terms or feel the weight of its boot on your windpipe.

Despite the aura of heroic young enterprise that still miraculously attaches to the web, what we are seeing is a much older and toxic capitalist model - the classic monopoly that destroys industries and individual enterprise in its bid for ever greater profits. Despite its diversification, Google is in the final analysis a parasite that creates nothing, merely offering little aggregation, lists and the ordering of information generated by people who have invested their capital, skill and time. On the back of the labour of others it makes vast advertising revenues - in the final quarter of last year its revenues were $5.7bn, and it currently sits on a cash pile of $8.6bn. Its monopolistic tendencies took an extra twist this weekend with rumours that it may buy the micro-blogging site Twitter and its plans - contested by academics - to scan a vast library of books that are out of print but still in copyright.

One of the chief casualties of the web revolution is the newspaper business, which now finds itself laden with debt (not Google’s fault) and having to give its content free to the search engine in order to survive. Newspapers can of course remove their content but then their own advertising revenues and profiles decline. In effect they are being held captive and tormented by their executioner, who has the gall to insist that the relationship is mutually beneficial. Were newspapers to combine to take on Google they would be almost certainly in breach of competition law.

Media rebellion against google may be gaining momentum. Rupert murdoch has some takers to his rally cry.

Whether or not google is violating copyright laws or whether the current copyright laws need to be rewritten post internet are worthy topics for debate. But to blame newspapers’ cratering business solely on google is to miss the point and silly. Blame the internet for that. But wait! It is like blaming the electricity. So blame yourself for not being able to adapt and innovate.

Fred Wilson says google is the new newsstand. You don’t want to take the paper out of the newsstand.