Good is not good enough

Kiron Kasbekar
27 September 2002

Mumbai: Niru Mehta is the quintessential modern manager. Vice chairman of Tata Telecom Ltd and also managing director of Avaya India, he is unconcerned about the baggage of the past, and willing to innovate to ensure success for his company. The only constant on his horizon is the customer.

Concerned as Mehta is with the customer, he also has the shareholder clearly in focus. The company must provide a good return on investment for the investor. "[Tata Telecom] is not a story about technology; it's about developing shareholder value," he says.

That's what Tata Telecom set out to do, and, in order to do it, it has had to revamp its organisation and motivate its people. Getting it all to work together has been a major achievement for the company.

Turnaround
Only a few years ago, Tata Telecom was "caught in the middle," the way Michael Porter would have defined it, with neither a clear cost-competitive position nor a strong differentiation. There were others in the market offering much the same thing, and at a lower cost. The company was going downhill.

Today it is the market leader in India, it is profitable, and it is set to grow rapidly. Profit before tax has shot up to Rs 24.29 crore in the year ended March 2002 from a loss of Rs 14 crore in 1998-99.

In 1998 Tata Telecom was the leader in the EPABX market, with a strong base of over 6,000 customers and over 1 million installed ports. It had solid manufacturing capabilities and a presence throughout the country. With 750 employees, the company had a proven track record of over a decade.