There is, surprisingly (?) an overwhelming level of confidence within the company it will survive through the oncoming onslaught. So far all it’s been is a war of hype.
Like a playground bully threatening unbelievable physical damage if the lunch box is not handed over, but never really having to go through with it due to the fear induced in his victims, the mere news of Airtel, biggest player in India, massively profitable, phenomenally experienced etc entering the market has succeeded in turning the telecom sector upside down over the past few months. rates have dropped to hitherto unheard of levels. Dialog’s revenues have dropped, share prices have dropped further and they reported a loss for Q3 2008 for the first time ever after 40 quarters of operations.
Truth be told, Mobitel would have played a much bigger role in bringing down Dialog’s profits than threats of new entrants. Propelled by big capital infusions, great marketing campaigns and technological innovations Mobitel had started gaining a substantial chunk of Dialog’s market share by the time the giant actually woke up to realize that Jack was out the door and fast on the way to the beanstalk already.
Also, major reasons for cuts in revenue are attributed to diversification strategies that are yet to turn into cash cows which require a substantial amount of group revenues to maintain. DTV, CDMA and Broadband segments are performing well, and there is expectation that they will soon break even and yield profits.
Some would say the timing is bad, that Dialog needed all its financial clout to focus on a suddenly volatile market. Time will tell if it was a stupid move or a brilliant one. And now is the time that the mettle of Dialog’s charismatic leaders Dr. Hans Wijayasuriya and Nushad Perera will be really tested and proven. Anyone can lead when cruising, but real leaders shine out during a crisis.
There is however, a lot of readjustment required. Dialog suffers from a bureaucratic and heavily process driven culture and some may say that it’s already too big for its own good. Airtel, on the other hand is rumored to sport and extremely lean operation outsourcing everything from customer service to engineering and are said to be entering the local market with around 200 direct staff vs. Dialog’s 4000 or so. They operate in India with 2000, for a customer base of 80 million or so.
Heavy reorganization started taking place inside Dialog Telekom more than a year ago, but a fully operational smooth internal culture is yet to emerge.
So if you chaps are licking your lips waiting for December’s end when Airtel is finally supposed to launch with a massive event including Shah – Rukh Kahn and A.R. Rahman and think they’ll sweep the floor with the existing players with one blow, wait and see, and I will join you. These are interesting times indeed for those working in the telco sector.