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We commissioned four top journalists in four of the world’s highest growth markets and asked them to report on digital life and how it’s shaping the way people live. With a sharp focus on four ...

We commissioned four top journalists in four of the world’s highest growth markets and asked them to report on digital life and how it’s shaping the way people live. With a sharp focus on four megacities – São Paulo, Mumbai, Jakarta and Guangzhou – our white paper turns statistical abstracts into real stories told by real people. And the difference here is that there’s no rose-tinting of any kind.



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Megacities Megacities Document Transcript

  • Mega-citiesBT’s on-the-ground intelligence from four global locations
  • Contents It’s boomtown-style business in Brazil 4 Sao Paulo One country, many facets 8 The quiet charms of China’s Guangzhou shopping paradise 10 This white paper is a bit different Staying ahead of change 15 How working on the move has got Jakarta Indonesia going 16 For a start you might be shocked to read in a centres of growth, opportunity and than 40 million, second only to the US)? Passionate about business 21 How we chose our megacities business publication that the world out there innovation. They are harnessing the digital And Indonesian ‘Facebookers’ have a high isn’t perfect. revolution to get ahead. But they are places number of friends online – averaging nearly The word megacity applies to any city with a Mumbaikars use technology to cut where you need some knowledge to get 200 each. population of more than ten million people. Mumbai through the blockages 22 But these are challenging economic times around. There are currently 21 of these and at least half and we think that, in times like these, you “Indonesians love to hang out in whatever need a little plain speaking. Our writer Andrew Downie in Brazil quotes form,” financial advisor Ligwina Hananto of them are in high growth markets. Less rush, more time 26 the advice of Caio Bonilha, the president of told the writer Jeremy Wagstaff, and as a Sources disagree about which are the largest And while a lot of businesses are looking Brazil’s state-controlled telecommunications business you would be wise to either work cities in the world. One reason for this is that to the world’s high growth markets and company Telebras, when he says: “Get to with this fundamentally sociable nature, or some countries count the number of people living their booming megacities, we know that it’s know the rules, get to know the market.” lose out, in this high growth market. within a defined city area, and others extend not always straightforward to enter these And Downie shares with us the story of a their counting to the surrounding urban and markets. start-up business run by three Frenchmen Lastly, we go to India. If São Paulo shows suburban areas. who had to work hard to get set up. the economic shift, then Mumbai shows the So this is a challenging white paper. There social shift brought by the digital revolution. The United Nations has identified the cities it are bits that are uncomfortable reading But now their business is underway and In recent years India’s commercial capital believes to be the largest. Top is Tokyo with an for any business looking to set up in our they are part of the São Paulo success story. has been rocked by a series of terror attacks. astonishing 36.6 million people. Next come Delhi, featured cities. Dubbed “the city that cannot stop” back in Yet with every attack people became more Mumbai, São Paulo and Mexico City, although the 1950s, today São Paulo illustrates how creative in using social networks to provide they are well behind Tokyo at around the 20 But our message for you is that we’ve been Brazil made the economic shift to become information about what was happening, and million mark. there. We know the issues and our Global the seventh biggest economy in the world. It to coordinate relief and volunteers. Services teams are there now, ready to can now afford to lend the IMF money and For this white paper, we chose two of the United navigate the megacities with you. is investing in infrastructure – airports and We took these journalists’ reports back to Nations’ top five cities in Mumbai and São roads – to be ready for the 2014 World Cup our BT country managers and they enjoyed Paulo. Then we picked Jakarta, which is on the So in this white paper we’ve set out to get and 2016 Olympics. the insights and the chance for a bit of plain brink of achieving megacity status: its daytime a bold, realistic snapshot of digital life in talking. You can see their responses on the population, with additional people travelling into four of these global megacities. We’ve gone Our China report is about Guangzhou, a following pages too. the city for work, certainly makes it qualify. beyond the boundaries of the business world growth story of epic proportions. This city of and commissioned experienced journalists, more than 12 million people, the capital of What we all agree on is that these high And we chose Guangzhou, which, in contrast with backgrounds reporting for the Wall the southern Guangdong province, was the growth cities are going to play a major part to the UN figures, has declared its population Street Journal, Time, the BBC and the first part of China to open to foreign trade in the future of our world. The research to be over 10 million people. It is also part of China Economic Review amongst others, to and to get rich. Today the city boasts high- company Frost & Sullivan predicts that by the new phenomenon of megaregions. In 2010, give us on-the-ground reports of life in their speed 3G connectivity even in its subway 2025 half the world’s population will live in UN-HABITAT, the agency for human settlements, patch. system, and it is a test bed for the new megacities in the high growth markets. This described how megacities were spreading and fourth-generation connection which would will bring great challenges but also great merging with other cities to form what it called They take us to the streets of São Paulo, double download speeds. opportunities. megaregions. These “endless cities” can extend Guangzhou, Jakarta and Mumbai, to hear for hundreds of kilometres and be home to huge real stories of innovators and entrepreneurs. Next stop Jakarta, and welcome to the So megacities – bigger, better, and with BT, populations. The largest is the Hong Kong- And they take an honest look at the Facebook capital of the world. Did you easier – welcome to the future. Shenzhen-Guangzhou megaregion where 120 challenges and advantages for businesses know that Indonesia has the second largest million people live. operating there. These megacities are Facebook user base in the world (more2 Megacities 3
  • Andrew Downie has been based in Brazil since 1999 and has written about the countrySão Paulo for publications including Time magazine, the New York Times and the Christian Science Monitor. He’s also worked as a consultant for the World Economic Forum and business organisations. hamstring a business in Brazil. This is a nine years ago went cap in hand to the IMF nation where a whole culture has developed is rich enough to be loaning the troubled to avoid bureaucracy and where consumers institution money. pay the highest taxes in the developing world. It is also a place where a simple task Its abundant commodities are fuel for Asia like getting an established mobile phone – it was one of the only western nations company to comply with that most basic part not laid low by the economic crisis, and of the contract – to provide a working service it has just started developing some of the – can make your life miserable. biggest oil finds in years. To cap it all, the country will celebrate its coming out on “Doing business in Brazil is war,” says the international stage by hosting the 2014 Alexis Manach, one of the two other French World Cup and 2016 Olympics. natives who conceived of and runs zarpo. “Everything takes ten times longer than it Entrepreneur Leo Kuba, the owner of a should. Everything is a mess.” B2B start-up called Inkuba, is riding the wave. “The path to growth is much broader because of the World Cup and the Olympics. Budgets are greater. Global and local brands have more money to spend because of these events.” The founders of, a start-up in Brazil that offers cut price hotel rooms to Brazil is a hot destination travellers, got a surprise one day when they right now not just for start- couldn’t get a mobile phone signal in their downtown São Paulo office. ups but for just about every other forward-looking It’s boomtown-style The three French entrepreneurs, along with the five others in their small staff, had company, big and small. mobiles from a Brazilian firm. Then all of a sudden they stopped working. Out in the The almost palpable sense that Brazil is on corridor, their phones worked. Outside on the up was crucial to zarpo’s decision to go business in Brazil the street, their phones worked. But no live with their site in May. Some 48.7 million matter where they went inside their five- Brazilians have jumped into the middle room office, they couldn’t get a signal. and upper classes since 2003, according to Numa Sales de Paiva (top) and Alexis Manach of zarpo government estimates, and with credit more “Our office was like a black hole,” says readily available than ever before they have Numa Sales de Paiva, one of the company’s money to spend. Zarpo aims to sell them three managing partners. “It was as if In spite of that damning verdict, Brazil is a reduced rate hotel rooms at exclusive places By Andrew Downie someone had suddenly moved the aerial.” They spent hours on the phone to the hot destination right now not just for start- ups like zarpo – who took the plunge on the not just in Brazil but in Europe, North America and even as far away as French São Paulo, Brazil mobile operator trying to work out what advice of Sales de Paiva, then working for Polynesia. happened and find a solution that would the Boston Consulting Group – but for just make their phones usable again. Like about every other forward-looking company, “When you look at Europe, the growth millions of people who’ve contacted Brazil’s big and small. For decades the joke was that curve is flat, but here it is growing fast,” says mobile phone companies, they discovered Brazil was the country of the future – and Manach. “This is one of the places to be.” it was a time-consuming, frustrating and always would be. But Brazilians are now the ultimately useless exercise. After days of ones laughing. They are adding clients at a rapid rate but fruitless negotiating they ditched their they also face a host of problems, some of company and moved to a rival firm. The seventh biggest economy in the world, which are particularly acute for outsiders. its currency is at its strongest level against Not only is it much easier to get things That all-too-common story is indicative the dollar since 1999, foreign reserves are at done with personal contacts, which is tough of how even the most basic things can an all-time high, and the country that just if you don’t know anyone, there are also 4 Megacities 5
  • São Paulo Not only is it much easier to get things done with personal contacts, there are also obstacles so notorious they are known as the Brazil cost. São Paulo city data Average income per inhabitant 39 New York = 100 Cost of living 110 New York = 100 Livability index 96 Ideal = 100 Office rent per square meter USD $725 obstacles so notorious they are known as the Brazil cost. Brazil is gearing up to host take such promises with a pinch of salt. the 2014 FIFA World Cup. The government promised a bullet train Length of mass transport network TBC “The big three liabilities in Brazil are between São Paulo and Rio in time for In terms of city area, km/km2 that it is very bureaucratic, the tax burden the World Cup and it is still to get off the is excessive and legislation hampers drawing board. Infraero, the government entrepreneurs,” says Leo Kuba. “Brazil is Superior public transport networks TBC corporation that manages Brazil’s airports, km/km2 on the cover of Time and the cover of The promised free wi-fi at the country’s main Economist but the gap between starting airports, only to change their minds and a business here and starting in the US is leave passengers unconnected. Most Fixed telephone lines per 100 inhabitants 21.6 enormous.” glaringly of all, the city of Rio won the right to host the 2007 Pan American Games by Perhaps the most pressing challenge for promising a ring road system, a new state Brazil is building the infrastructure to cope highway and 54km of new metro line, none of Mobile phone subscriptions 202,944,033 with the rapid rise in living standards, as which was ever built. Post-paid and prepaid well as events like the World Cup and the Olympics. The money is there but planning The lack of planning is also evident when “There’s been a serious delay in the The men behind zarpo are well aware of is atrocious and construction is slow. it comes to airports, hotels, public transport expansion of networks over the last few those limitations. But they are even more Number of 3G subscribers 35,000,000 Corruption is a constant drain on finances and, of course, telecommunications. years,” Moura said. “People want broadband. aware that Brazil in 2011 feels very much and morale. According to the Brazilian Association of They are buying smartphones. But although like being in the right place at the right time. Infrastructure and Basic Industry, Brazil demand is big, investment has been small.” They are content right now to keep fighting Speed of 3G coverage High The prestigious opening match of the World invested $76.7 billion in telecoms those daily battles in the hope of seeing off Cup, for example, was originally planned for infrastructure between 2003 and 2010 As if that were not enough, the quality of their rivals. the city’s 80,000-capacity Morumbi stadium. and must invest a further $55.9 billion by the lines that do exist is poor and the cost is The Morumbi, however, was ruled out 2015. This year, companies are expected high. Zarpo has a line run by Spanish firm Fixed broadband subscribers 14,540,937 because of petty personality clashes and to pump $11.3 billion into their broadband Telefónica – which has a monopoly in the organisers now expect it to take place at the networks, the biggest annual investment centre of São Paulo – but it opted to base its ground of São Paulo’s biggest football club, since 2001. servers in the US because it was easier than Corinthians. Online banking users (national) 14,436,580 dealing with the Brazilian bureaucracy. But that is still less than is needed to The problem is, Corinthians don’t have a meet the growing demand, according Entrepreneur Leo Kuba knows the problems stadium. The club designed one last year to João Moura, the executive president only too well. “The speed with which Facebook users 4,068,940 after the Morumbi debacle and building of Telcomp, the Brazilian association of infrastructure is being added is not as fast as started in May 2011. It is so late that it won’t telecoms companies. European and US the speed at which the market is growing,” be ready for the warm-up tournament, the companies customarily invest around 15 per he said. “The problem is the cost, the 2013 Confederations Cup, and so small cent of revenue on updating and adding to performance and mostly, the reliability.” Twitter users 2,940,000 that extra temporary seating will have to be networks, Moura said. In Brazil, the figure is And while the government has promised to installed to meet demand. just ten per cent. improve broadband, many Brazilians might © 2011 The Economist Intelligence Unit Ltd. All rights reserved. Whilst efforts have been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor its affiliates can accept any responsibility or liability for reliance by any person on this information. 6 Megacities 7
  • São Paulo We supply the IT network for Brazil’s lottery system across 11,000 sites, and will be supplying services to the Brazilian post office across Diversity applies to some areas of the Harnessing complexity 7,200 sites. economy too. For large businesses like those How do you connect showed that access to broadband internet countries, and three times the OECD in the finance sector, we operate levelled with best in class. For small and medium This heterogeneity is part and parcel of in Brazil was expensive, that speeds were average, according to a 2009 study by the doing business in Brazil. It’s in harnessing 190 million people? well below those of developed countries Diálogo Regional sobre la Sociedad de la businesses, it is more challenging. it that we can add value for companies and that the concentration of services on Información. The cost of roaming is, in the coming here. offer in major urban centres replicated the words of Communications Minister Paulo For instance, the banking system in Brazil A large number of Brazilians only have country’s unequal distribution of wealth Bernardes, “ridiculously high”. is very advanced, on a par with First World Back in 2001, one of the first things we did access to broadband at their work or at and infrastructure.” countries. The majority of the transactions when we started serving our international LAN houses, primitive cybercafés with For that reason, many poorer Brazilians are done electronically. Regulation is very customers was to act as a manager of carriers. high speed access that are important It is a similar story with mobile phones, buy cheap phones (or chips) from each welcome. Brazil’s largest institutions were Since Brazil’s state-owned telecom monopoly social hubs in poorer parts of the country. with a few companies controlling the different provider and use them to call not as badly affected by the 2008 crisis and was broken and privatised in the early 1990s, Recent figures from the Centre for Digital market and offering substandard services others on the same network. That explains the sector maintains a high level of solvency. many telecoms companies have provided Inclusion show that 45 per cent of at offensive prices. Even the moderate why there are more than 220 million varying levels of service. Thanks to the open cloud pioneers is a major Brazilian business all internet access comes through LAN use of mobiles costs as much as eight mobile phone lines operational in a nation On the other hand, for small and medium and competitive regulatory framework, our conglomerate, which started in logistics and houses, a number that rises to more than times what it does in neighbouring with 192 million inhabitants. businesses, bureaucracy and taxation customers were able to delegate the job of has moved into petrol stations, restaurants 75 per cent among the less well off. are issues. Setting up a business in most managing them to us to yield the high level and construction. Its CIO has talked about So far, only 23 million of them are countries means a week to go through all the of performance they needed. the savings he got from transferring systems The government has a plan to provide 3G, but that number is expected to paperwork and requirements. In Brazil it can from his data centre to our cloud-based broadband access to 72 per cent of rise exponentially in the coming years. take two months. Recent federal initiatives Now, ten years on, we have grown to provide service. Brazilian communities by 2014. But those Telefónica, Brazil’s biggest mobile phone have reduced certain burdens but there is services like MPLS and public internet on numbers are ambitious and even the operator (through Vivo), says it expects room for improvement. our own infrastructure. We designed and It’s flexible – customers can have as much or government’s own think tank recognised broadband to account for 25 per cent of delivered unified communication solutions as little computing power as they need. For the current service on offer is poor, its revenues in 2013, up from just 15 per for our global customers. Today there are example, instead of buying more computers, especially outside the big cities. cent last year. One country, different 15,000 IPT extensions, provided as managed they can buy more trucks. And our data infrastructures services. Two years ago, we launched a fixed centre is resilient enough to keep service “The discussions prior to the launch The government recently promised a line telephony service. We also have a data levels high – we have power generators, 24- of the National Broadband Program 4G tender for April 2012 and says the This heterogeneity goes for our centre service. And we have one of BT’s hour management and other back-up. Also, (PNBL) in Brazil revealed a scenario in technology, which offers mobile internet infrastructure as well. three global service centres here in Brazil our network is global so we can reach out to which broadband appears lacking not connections up to 180 times faster than with ISO 9000, to deliver managed services some 150 countries. only in relation to the more advanced the present 3G system, will be operational The bulk of the population lives in the south to multinational accounts. Our people economies, but also in relation to its at least a year before the World Cup. It east, which has the best roads. In the north, working on the centre are highly qualified in We’re also proud of our domestic business. Latin American neighbours,” declares a also promised to invest $113.3 million in the Amazon, people only live along the ITIL and the state of the art technologies of Last year we won a contract with one of report by Ipea, the Institute for Applied to guarantee the 12 host cities will have rivers, not in the countryside, where there is our main suppliers. The centre is ISO 9001 Brazil’s state-owned banks, and we’re Economic Research. “The diagnosis internet connections of up to 100Mbps. rainforest. So the roads there are much worse and 27001 certified. helping them roll out banking services to making it more difficult and costly for trucks poor neighbourhoods in 5,600 locations carrying cargo. Some communities have via our satellite networks. We supply the access to banking services on a boat just once Taking the strain IT network for Brazil’s lottery houses every 21 days. connecting 11,000 sites, combining fixed Now we can host customers’ entire IT line, 3G and satellite access technologies infrastructure and last year we set up a integrated into a seamless MPLS network. One country, The situation is similar for telecoms. If a I would like to tell you how we are Diversity everywhere company needs a broadband service in São cloud computing offering. One of our And this year we signed a contract with making a difference in Brazil. How we Paulo, we can provide a 100Mbps internet the Brazilian post office, which will supply many facets are using cloud computing to overcome infrastructure challenges affecting Brazil’s biggest companies. How satellites and São Paulo is our largest city. It is also the centre of our largest metropolitan area combining 39 cities which are home to connection on a fibre network. But in the countryside this is simply not viable, either services to another 7,200 sites across the country. on fibre or cable. Even in the state of fibre networks are helping Brazil’s post around 20 million Brazilians. Like our São Paulo, our richest state with 33 per cent For me, all this is yet another example By Sergio Paulo Gallindo office give services to some of the poorest other big city, Rio de Janeiro, it has wealthy of the country’s GDP, there are about 200 of heterogeneity, Brazil-style, with Country Manager, BT Brazil of our people. But first, let me put the work neighbourhoods, and very poor ones schools that are not connected to any type multinational companies and domestic in context. called favelas, or slums, where people live of network. business, side by side. Our role at BT in in poverty. We all share the same urban Brazil is to provide uniform and effective I can recognise some of my country in infrastructure. Cultural life is vibrant and An explosion in construction means service to corporations, aligned with BT’s Andrew Downie’s report, but that’s not the some services are really good, but public telecom services to corporate clients can global vision and capabilities, backed up by whole story. First and foremost Brazil is a transportation, for instance, is deficient easily be disrupted if road builders or trucks the quality and expertise of our people in an land of contrasts and heterogeneity. relative to the demand. hit cables. Road blocks in Sao Paulo means cloud services are ever easy-to-do business manner. more important to corporate clients. 8 Megacities 9
  • Pete Sweeney is the editor of the China Economic Review,Guangzhou covering Chinese business news and analysis. He’s written about technology, media and telecoms in China and was a Fulbright Scholar researching business policy in China. He is based in Shanghai and took a 750-mile trip to Guangzhou to report this piece. music, smiling and quaffing beers. The man Liuyun Erjie have seen their ground floor was from Hunan, the woman from Henan; apartments taken over by small businesses: they had met in Guangzhou and fallen in DVD stores, funky imported t-shirt shops love. “I do like it here,” the woman told me and restaurants. As in some other Chinese just as the lead singer started on a Cantonese cities, retail explosion has tunnelled ballad. The locals sang along, but the rest of downward into erstwhile bomb shelters and the Chinese – most of whom do not speak subway lines; 7-Elevens and lingerie shops Cantonese – turned back to their beers. are within steps of the turnstiles. Retail capital Whether Guangzhou is socially slow or not, it has retailers hot under the collar. Anthony Tartaglia, founder of a digital media Guangdong province was marketing company in Shanghai who moved one of the first to open to down to Guangzhou to work on the Proctor Guangzhou on a Friday night in August was & Gamble account for UT Starcom, ran foreign trade. It was also hot, steamy and… quiet. Riding in from the airport, a cabbie pointed out various down the advantages: “They invested a lot one of the first to get used of money into cleaning up different areas buildings and quoted stratospheric prices per of the city leading up to the Asia Games. to getting rich, and metre from time to time: this one, $3,100 per square metre, that one $3,900. “Downtown, With that investment you’ve got all this new by extension, to spending storefront in the New Pearl City area, all this it’s worse,” he said. “You can save your nice new retail. The prices for real estate its money. whole life and never afford a house.” are crazy but people are still coming in.” He noted that because Guangdong province To a visitor from Shanghai or Beijing, of was one of the first to open to foreign trade Much of the shopping is low-end, no-name course, this is not news. What is different, – namely through the Shenzhen Special brands – the luxury brands are glanced at very different, is the silence. A city of over Economic Zone that abuts the border with in windows, but rarely purchased. This 12 million people; the capital of Guangdong Hong Kong – it was also one of the first to is not because people can’t afford to buy province in southern China; administrative get used to getting rich, and by extension, to Prada, it’s because of the proximity of Hong The quiet charms hub of the province and de facto traffic spending its money. Kong, which distorts Guangzhou’s top- control terminal for the country’s massive end retail data downward. Hong Kong is export hub, Pearl River Delta (known as However quiet the bars are at night, during only two hours away by train, and many of the ‘PRD’ to expatriates); favoured target the day shopping centres like the Tianhe Guangzhou’s rich head there to buy luxury of nearly a quarter of the foreign direct megamall hum with custom, and old goods to evade stratospheric mainland taxes. of China’s shopping investment into China in 2010… when one leafy historical neighbourhoods like the Once the high-speed train is ready, the dismounts from a cab, one strains in vain to hear a car honk. Plenty of traffic, plenty of people, but they manage to get around without causing too much fuss. Guangzhou paradise has a reputation for being a dangerous hive of motorcycle purse-snatchers, for having excellent dim sum and marriageable wives. But it is not loud, it is not flashy – or at least, it wasn’t. By Pete Sweeney Stepping into Hooley’s, an expat hive that hosts a sliver of Guangzhou’s nascent Guangzhou, China nightlife scene, the energy level increased. A band made up of expats and locals was playing the blues, loud. The crowd was diverse in two ways: a mixture of foreigners The wealthy head to and Chinese people, and a mixture of Hong Kong to buy Chinese people from different regions. At luxury goods to avoid one table a young couple leaned into the paying mainland taxes. 10 Megacities 11
  • Guangzhou Thanks to Guangdong Mobile’s aggressive investment in mobile Guangzhou city data The connection between e-commerce and business was run by telephone calls and mobile telephones in China is intimate. faxes to agents. E-commerce for exporters infrastructure, In the West, e-commerce goes through is still a niche product – although there are Guangzhou is computers, as a rule, but in China, people 9,987 Guangzhou suppliers listed on B2B generally prefer to conduct transactions export portal (correct October famous for and pay for things on their mobile devices, 2011), the platform is still technologically Average income per inhabitant n/a robust especially given that the mobile payment simple, more of an online telephone book New York = 100 systems are more secure than bank cards in than an actual fulfilment system. RFID mobile phone some ways – users can’t have their entire systems are lightly deployed here, and the Cost of living 82 connectivity. bank account drained through a pre-paid internal shipping system, the infamous New York = 100 phone account. The density of Chinese kuaidi, is a fragmented mess that is still characters also helps makes data more easily being consolidated by policy. Small hit- legible on a small screen. The result is both and-run kuaidi operators are known for Livability index 70 an online and offline shopper’s paradise. delivering late, delivering wrong, and Ideal = 100 delivering broken; recently, refrigerated Zhang Qingqing is, in some ways, a typical trucking companies were discovered to be story of the evolution of Guangzhou. First, turning off the refrigeration once they left Office rent per square meter USD $319 she’s not from Guangzhou at all, but hails town to save on gasoline. Technology alone from the frosty northeast – far from the cannot overcome such structural issues, and only internal immigrant who moved to it hampers the development of e-commerce: Length of mass transport network 2.24 Guangzhou to get warm. Second, like so an online retailer is only as trustworthy as her In terms of city area, km/km2 many others in Guangzhou, Zhang got her delivery company is. start exporting OEM (original equipment manufacturer) shoes. The business did very So far it hasn’t hurt Chinese businesspeople Superior public transport networks 0.07 well, and she handed off operations to her too much. And when it comes to trade, km/km2 brother. Their biggest market was in Italy, not all products need high-tech solutions and on a trip to Lombardy she discovered anyway. “I have no need for a website – you Italian wine. “It started as a hobby,” she says. can’t taste wine online,” Zhang pointed Fixed telephone lines per 100 inhabitants 21.9 “But the Italians told me, we are buying so out. And this is a particular challenge for much from you, you should buy something those selling Italian wines, which are far from us. Good for the trade deficit!” less well-known here. In fact, Zhang has a Mobile phone subscriptions 859,003,000 sort of negative marketing strategy. If she Post-paid and prepaid Zhang Qingqing is not running a high-tech puts out too many ads, she gets a bunch of enterprise. Like most Chinese of a certain people who come in, try wine and walk out, class, she has an iPhone and an iPad, but leaving her with an open bottle of expensive Number of 3G subscribers 47,050,000 she uses them largely for gaming. Her shoe Italian wine going stale. Instead, it’s all commute will diminish to around half an points out that thanks to Guangdong word of mouth; she’ll have friends of friends hour, and it will become feasible to commute Mobile’s aggressive investment in mobile over for a tasting at one of her shop’s giant to Hong Kong to work, even. But even so, infrastructure, Guangzhou is famous dining tables, and sell by the caseload if it’s Speed of 3G coverage High the Guangdong government reported that for robust mobile phone connectivity: successful. She also sells into government retail sales of consumer goods in the province “Guangdong Mobile’s networks have always banquets from time to time. rose 17 per cent in 2010. In June of 2011, been notoriously faster, more stable; the retail sales in Guangzhou hit $37 billion, up incidence of mobile search is higher, the To some, her success is anomalous. Your Fixed broadband subscribers 103,641,000 16 per cent year on year, but far below the population that is using mobile phones is stereotypical Chinese wine drinker will pay record $70.1 billion that moved in December much more aggressive here. Guangdong $5,000 for something French, and then pour of 2010 (sales are highly seasonal here). mobile has done a really good job of Coca-Cola into it. Zhang has discovered a Online banking users (national) 141,135,000 packaging their services, having good pricing new demographic: Chinese people who are Yes, life for retailers in Guangzhou is … they’ve just done it right.” This includes so wealthy that they can afford to cultivate pretty good, but they are facing increasing high-speed 3G connectivity running through a taste in something for its own sake, not challenges from online storefronts through Guangzhou’s subway system – and the city just status – and who are willing to pay an Facebook estimated reach 522,920 platforms like Taobao, the Alibaba Group’s is set to become one of the first test beds for absurd tax mark-up just to skip the trip to ubiquitous and market-dominating answer China Mobile’s new fourth generation LTE Hong Kong. to eBay. E-commerce in Guangdong is protocol, which should double download booming, thanks in no small part to the city’s speeds: state media is leaking rumours that Twitter users No data found That’s shopping, Guangzhou-style, and fit status as China’s cell phone capital. Tartaglia trials will begin this year. for a city that’s as hot as its money. © 2011 The Economist Intelligence Unit Ltd. All rights reserved. Whilst efforts have been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor its affiliates can accept any responsibility or liability for reliance by any person on this information. 12 Megacities 13
  • Guangzhou New outlets need IT infrastructure ready straight away so they can connect to their systems. Staying ahead Is Guangzhou’s boom place to be, given the new policy emphasis on stimulating domestic consumption The second front is external: given its dependence on exports, the continuing of change economy coming to and the relentless pace of China’s weakness in western economies hits Guangdong and Guangzhou particularly urbanisation – the largest organised an end? movement of humans from country to city hard. But even as export growth softens, Beijing has cracked down on bank lending By Sun Jun Head of Deal Structuring, BT China in human history. to vent asset price bubbles and consumer Guangzhou has so far benefited from But there may be an adjustment period inflation that has been clocking in above ahead for Guangzhou, and it will not 5 per cent per month – making it harder About 20 years ago, Guangzhou was the first being the administrative centre of the be painless. The PRD is under pressure for the factories to obtain the credit they Chinese city to open its market to the world. Pearl River Delta, but its export role is on multiple fronts. For one, China’s need to survive a potential double-dip in Back then it was a collection of 21 towns limited. “Guangzhou is an automotive “demographic dividend” – namely exports. with a population of around four million. centre, and in supply chain terms it’s a surplus of poor workers willing to With its proximity to Hong Kong and its important as an automotive hub. But in assemble goods for export for dirt cheap Finally, these companies have not, for the command of the Pearl River, development terms of exports, Shenzhen and Hong wages – has expired. The population of most part, managed to build successful took off. Today it’s China’s third largest city, Kong are still the dominant export 15–19 year-olds who make up the bulk of brands that can compete domestically behind Beijing and Shanghai, and it has hubs in the south, and will continue the low-end labour force peaked in 2005. or overseas. Chinese companies still more than 12 million people. to be for the foreseeable future,” says Turloch Mooney, logistics consultant and Add to that inflation and policy, and you compete on price, and price alone, and managing director of Supply Chain Asia. have Chinese wages shooting skywards that’s the inverse of brand strength. So the Simplifying complexity with a Chinese business that’s very good they need the IT infrastructure ready so (projected to rise 20 to 30 per cent for bedrock of Guangzhou’s economy, the on systems integration, which again lets us they can immediately connect back to their But Guangzhou is nevertheless a critical the next two years) even while workers manufacturing sector, is set to take a hit. So, as Pete Sweeney shows in his report, a customise to meet local needs, as does our HQ and their system and make the new component in serving the internal market, become harder to find. These costs are “For companies that use less sophisticated lot of things are changing very quickly. And service centre in north east China. store operate. he said. Guangzhou’s port, while small, punishing the small and medium-sized supply chains – apparel for example, businesses here need to adapt to that and is serviceable enough, and it also runs an important air hub. But its primary role factories that comprise the bulk of the companies like Adidas, Puma – they’re change fast. There’s no time for lengthy Rapid change, rapid response And we work as agents for our customers PRD’s export industry, and by extension all looking at other options to sourcing processes and drawn-out decision making, so with the three state-owned telecoms these days is serving as a distribution much of its economy. beyond China,” said Mooney. “China is what we’re doing at BT is trying to make the These quick, responsive approaches providers: China Mobile, China UniCom centre for internal demand; not a bad still by a long way the biggest sourcing complex simple. appeal to the two kinds of customer we and China Telecom. The telecoms market destination for these companies, but have in China. One group is large Chinese isn’t open to foreign companies because the Vietnam, Bangladesh, Cambodia even, are In China, we’re an IT provider. If a customer companies who have their sights set on government treats it as an area of national becoming more cost effective for them.” opens a new plant, for example, they need a business overseas. Like one of China’s security. He mentioned that the recent free trade lot of things, like a network within the plant, largest white goods manufacturers, Haier, or agreement between China and ASEAN connections to other sites, a data centre one of its largest oil and gas companies. As Keeping up with trends has made it even easier for factories to and video conference facilities. If they a global brand, we can share our experience RMB Guangzhou retail sales figures 2008 - 11 combine all these things it becomes a big of operating in different countries on So life in China for the past 20 years has Billion relocate to cheaper locations. and complex project, and with the market issues such as policies, regulations and been about managing change. And that 500 The necessary economic shift, therefore, changing so fast, requirements can change. infrastructure. We help them build a global doesn’t stop. Now the financial crisis is 450 400 is pushing domestic consumption, as So we split these big complex processes into presence with network, voice, unified affecting what Chinese companies and 350 opposed to investment-led growth, ie smaller projects which match our portfolio. collaboration, contact centres and data multinationals do. Some foreign companies 300 dabbling in real estate; this also means centres. are moving their Asia Pacific headquarters to 250 moving away from manufacturing and into Local needs, local service China. Meanwhile the Chinese government 200 services. None of this plays to the interests We also support a lot of manufacturers in has encouraged domestic companies to 150 of the PRD’s current model. If we can’t do that, we try to supply a Guangzhou, because traditionally this area find business abroad. At BT we have the 100 localised product. Like the one we call is a big base for making goods for export. So expertise and experience to keep up with 50 The answer, of course, is that there is no Retail in a Box. Sometimes a retailer will when a company sets up a new plant we help both trends. 0 crisis just yet. China sits on $3.2 trillion in open a lot of stores in China. They’re small them with their infrastructure, including foreign reserves, and the companies and shops that need a basic connection but from LAN, WAN and all the other parts of the As for Guangzhou, it’s seen it all before. It 2008-1 2008-4 2008-7 2008-10 2009-1 2009-4 2009-7 2009-10 2010-1 2010-4 2010-7 2010-10 2011-1 2011-4 consumers in Guangdong are still for the someone who can provide managed services. portfolio. was an important river and sea port back most part flush with cash. High savings In that situation we’d buy DSL services in 200 BC and it kept prospering as traders rates can only facilitate the transition, and from local telcos and sell or lease equipment Our other main group of customers is came from India, the Middle East and, in the shopping paradise of the delta will to retailers. In BT it’s a complex process, but foreign companies who want to grow in the 16th and 17th centuries, Europe. Today’s continue its relaxed amble to the mall. here we package it as a local product so we China. It might be new shops for luxury world brings a different kind of business can adapt to meet local needs, with one-stop fashion brands, or new restaurants for food boom, but one thing Guangzhou’s people shop management. We have a joint venture companies. When they open a new outlet know is how to adapt. 14 Megacities 15
  • Jeremy Wagstaff is a writer, commentator, broadcaster and consultant on media and technology issues. A formerJakarta correspondent for Reuters and the Wall Street Journal, he is based in Singapore where he runs a technology consultancy called Loose Wire. largest, Istanbul, according to data from says. “From taking photos of the product, ComScore lists Indonesia uploading them to Facebook, taking orders, as having the largest number of Twitter users sending and receiving invoices, and so on. (the report lists countries in terms of reach, And most of my customers have mobile but that equates to 52 million, some seven banking on their handphone, so they can do million ahead of Brazil). And Indonesia is, the payment using their mobile phone too.” according to unofficial figures, the largest BlackBerry market in the world. It’s the advance of communications that has made all this possible for Avriliawati. Reconciling these perspectives – hotbed of Indonesia fell badly behind in the 1990s entrepreneurialism, quagmire of corruption when a lack of investment in landlines and traffic, social media paradise – requires left many without a telephone connection. a visit to Jakarta. There you’ll get a glimpse In 1991 it had roughly the same number at how Indonesians, long used to overcoming of landlines per capita as China – seven In May 2011 the BBC released the results of a survey into entrepreneurship. The poll asked people in 24 countries – among them China, the US, the UK, Germany and Australia – whether their cultures valued individual enterprise and whether people with good ideas could put them into practice. The result: Indonesians believed their country was the best place to start a business. No one seems to be more surprised than people who know Indonesia. Or thought they knew it. How working on Indonesia, the conventional wisdom goes, is not a place to get things done. The country ranks 110th out of 178 on the Transparency International Corruption Perception index. the move has got The capital, Jakarta, ranked bottom of 23 the limitations of government, geography for every 1,000 people. A decade on, and cities for commuters by Frost & Sullivan, and circumstance, adopt and adapt China had 140 lines for every 1,000 people; and 125th out of 140 in The Economist technology. Indonesia had a quarter that. So when Intelligence Unit’s list for 2011 of Most mobiles came along in the late 1990s, they Liveable Cities. Despite more than a decade Eugy Avriliawati has been selling stuff since took off very quickly. Indonesia going of democracy and stability, it still suffers junior high school, from self-decorated from a perception problem. In March Gita alphabets to toy lizards. Now, aged 40, she Wirjawan, the chairman of Indonesia’s sells beautifully designed fashion clothing Investment Coordinating Board, warned for young girls, all with an Indonesian it was in danger of being forgotten. “Not a whole lot of people,” he told interviewer flourish. And it’s technology that has helped make her business more efficient – appealing Jakarta is home to the By Jeremy Wagstaff Charlie Rose, “know where it is.” to both customer and entrepreneur – and second largest Facebook more profitable. user base in the world Jakarta, Indonesia And yet, according to other yardsticks, Indonesia is very visible indeed. It is home The whole enterprise is run via BlackBerry (more than 40 million, to the second largest Facebook user base and a Samsung Galaxy Tab. Her channels? in the world (more than 40 million, second Twitter, BBM, Yahoo Messenger and second only to the US). only to the US). Jakarta is by far the biggest a Facebook page. Stuck in traffic, her Facebook city in the world, with nearly business still runs. “I can do every aspect double the number of users as the next of my business using a BlackBerry,” she 16 Megacities 17
  • Almost half of all IndonesianJakarta internet users access from their mobile phones. When the short message – SMS, or text message – was introduced in 2000, it caught on equally quickly, for exactly the same online banking websites in Indonesia grew by 72 per cent, by far the biggest jump in Southeast Asia. longer to get around the central business district than it did 15 years earlier. and wages are one of the biggest business operating cost. Smartphones and the internet are the most powerful and effective tools for Jakarta city data reason: for many Indonesians, the mobile And it’s not going to get any better. After a one man operation.” phone was the first communication device Business blogger Rama Mamuaya estimates seven years and billions of rupiah in public they’d owned, and they wanted to get the that start-ups now number more than 700, money, the Jakarta government abandoned In the meantime, however, gridlock is Average income per inhabitant 8.7 New York = 100 most out of it. Indeed, Indonesians were the and the most noteworthy ones are those a long-stalled project in late September creating its own commercial opportunities: second biggest sender of text messages after which build on the particular challenges of a 2011 to build the city’s first monorail. Pillars drivers skirt the three-in-one rule (in the Philippines. city teetering on gridlock. and foundations have been left unfinished which a passenger must carry at least three Cost of living 84 since 2007. Jakarta says it will pursue passengers when passing through restricted New York = 100 Similarly, the internet suffered from a lack Jakarta has many more people than its alternatives but even if work starts tomorrow, zones) by picking up “jockeys” – kids, of investment in cables – meaning it too planners hoped for, and not enough nothing will be ready before 2016. In the teenagers, mothers, who stand by the side of only took off when mobile phones became thoroughfares to accommodate them. meantime, some Jakartans are pioneering the road offering to make up the numbers for Livability index 55 smart and web ready. Until 2007 Indonesia a fee. Motorcyclists offer to ferry commuters Ideal = 100 lagged behind much smaller Malaysia and from bus-stop to office or home. Vendors Thailand – wealthier, but mired in regulatory ply the streets selling anything from bottled issues which have hampered the rollout water and cigarettes to inflatable hammers to Office rent per square meter USD $142 of 3G services – in internet users. In that bored drivers stuck in endless jams. year mobile internet started to kick in, and Indonesia embraced it wholeheartedly. There are now several Twitter services for Length of mass transport network 0.19 Within a couple of years internet usage crowd-sourcing the location of the worst In terms of city area, km/km2 overtook its two South East Asian neighbours jams. Koprol has been so successful in – even as fixed broadband subscribers connecting users to others around them – in remain negligible (less than one per 100 the same mall, or neighbourhood – that it Superior public transport networks 0.19 people in 2008, compared with five per 100 was bought by Yahoo! in 2010. Mobile app km/km2 in Malaysia). Almost half of all Indonesian developer SeaTech Mobile recently released internet users, according to data from an app for Jakarta’s biggest and most internet consultancy Nielsen, access the reputable taxi company BlueBird, which not Fixed telephone lines per 100 inhabitants 15.8 internet from their mobile phones, compared only allowed customers to order a cab but, to 35 per cent in Singapore and 21 per cent crucially, used the taxi’s GPS unit to track its in Malaysia. This is partly driven by price: whereabouts. Mobile phone subscriptions 220,000,000 Indonesian mobile entrepreneur Andy Zain Post-paid and prepaid says that Indonesia has one of the lowest – if Jakarta’s biggest problem is its lack of roads, making commuting hard work. Remote working and virtual offices have Another traffic-related service is GO-JEK, not the lowest – cost of mobile data. become essential. which partners with 200 motorcycle taxi drivers (called ojek) to handle phone or text Number of 3G subscribers 10,000,000 Indonesians have learned to work around the Its daytime population is more than 12 what they predict will be an increasingly bookings for moving passengers, delivering limitations of infrastructure and government million, and even at night, when commuters mobile workforce. Take, for example, Budi parcels and other services. While traditional policy, and have turned to technology when have left, it’s still home to 9.6 million, Putra, a journalist and entrepreneur who ojek drivers look somewhat scruffy, it’s available – and when they can afford it. making it the world’s tenth largest city and only accepted a senior position in Yahoo!’s crouching beneath a home-made sign that Speed of 3G coverage High They may not have a computer at home, surpassing the city’s projection for another 14 Indonesia operations on the condition that doesn’t inspire confidence, GO-JEK drivers they may not have a broadband internet years hence. Include its suburbs and sprawl he be allowed to work from anywhere. “A lot have a logo-ed jacket and helmet and a fixed connection. They may not have the fanciest and you’re talking nearly 28 million people. of people are becoming freelancers,” he says. price. The surprise? Instead of ferrying the Fixed broadband subscribers 1,700,000 phone: entrepreneur Zain reckons that up “If employers don’t let them work remotely, ojek’s traditional clients – commuters from to 80 per cent of phones sold cost less than Jakarta’s biggest headache has always been they set up on their own.” their bus-stops to homes or work places – $120. But Indonesians are used to squeezing its roads, or lack of them. According to the GO-JEK has found most of their clients the best out of what they have. Jakarta Globe, they account for only 6.2 Mee Kim, a Korean who runs a regional are corporate. It’s a reflection of how the Online banking users (national) No data found per cent of the city’s area, against 15 to 20 network of temporary offices and meeting small-scale entrepreneurism born out of The mobile phone, in short, is opening per cent in cities like New York, Tokyo rooms from her headquarters in Jakarta, necessity has moved into the digital age and things up for Indonesians. Small, portable, or Singapore. And it’s only getting worse: says companies in Jakarta are slow in the mainstream. reliable, and always connected. And the according to official figures road length – the allowing employees to work flexible hours Facebook users 17,484,300 critical mass has fostered an ecosystem of amount of thoroughfare available to traffic or remotely. But she says she is seeing “My business,” co-founder Nadiem other services; online banking has seen a – will have increased between 1994 and a growing demand for her virtual office Makarim told the news agency AFP, “exists surge in growth in the past year. According 2014 by only a quarter, while the number of services supporting one person businesses because of a lack of infrastructure.” Twitter users 1,160,000 to comScore, between January 2010 and vehicles will have more than doubled. The – an address for mail and a secretary to January 2011 the number of visitors to result is gridlock: in 2000, it took 60 per cent handle voice calls, for example. “Office rents © 2011 The Economist Intelligence Unit Ltd. All rights reserved. Whilst efforts have been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor its affiliates can accept any responsibility or liability for reliance by any person on this information. 18 Megacities 19
  • It’s these networks that not only enable Jakartans to copeJakarta with the unpredictability and frustration of living and working in the city, but also a chance to supplement the relatively low salaries. Passionate Indonesians: and frustration of living and working in the city, but also, for many of them, a chance percussion instrument, which he makes in a workshop in Bogor. He handles all about business sociable by nature to supplement the relatively low salaries most office workers and bureaucrats draw. orders via a combination of BlackBerry and iPhone. “I can get almost everything and by media BlackBerry Messaging (BBM) groups are closed networks through which friends from my mobile phone: checking emails, telephone, updating the website, searching By Wibisono Gumulya Country Manager, BT Indonesia from school, or office colleagues, stay information that relates to my business in touch. But they’re also networks for such as pricing comparisons, displaying There’s no doubt that Indonesia has a selling. the products, and shipping costs if I This is an exciting time for Indonesia and highly sociable culture. So when social need to send the product overseas. I can an exciting time for BT. As an Indonesian, I media came along, out went texting Astrid Anastasia, for example, works for follow up orders, wherever I am, through really think the two can benefit each other. and email and in came the new, more Nokia in Jakarta and lives in Bogor, a town these two gadgets.” His girlfriend runs a And I would like to tell you how. communal ways of being in touch. about 40km south of Jakarta. During her business on the side too, selling clothing commutes and spare time she turns to her through BBM groups. IT capability here is still quite low. Even Dev Yusmananda, who works as a BlackBerry and netbook computer to run today only a few companies have really telecommunications and technology a small online air ticketing service. She Some of these sidelines grow into major grasped that IT should be at the heart of transformation consultant in Jakarta, puts monitors special flight deals via airline businesses: Ligwina Hananto, a jilbab-clad their business. And I think that provides it this way: “People in Indonesia don’t apps on her BlackBerry and broadcasts graduate of Australia’s Curtin University opportunities for BT and for the country. start their communication from a two-way offers to friends and clients via her BBM of Technology, uses Twitter to promote perspective anymore, but from a public groups. Colleagues in her office are all her financial consulting business. Her I joined BT in April to help them start broadcast medium and, when needed, doing something similar, she says, acting seminars sell out just by spreading the offering IT services, and big customers they will go into private mode. This as resellers for products such as handbags, word on Twitter. When she decided to are already listening. For example, we BT is helping companies in Indonesia put IT at the heart of their business. function was not a standard feature for clothes, shoes and baby needs, which write a book she tweeted about the process are working for the third largest telecoms email and SMS.” they will promote, along with photos of to her 40,000-odd followers. The book company and we have designed a ‘green’ the products, through BBM or Facebook. flew off the shelves and has been reprinted data centre for one of the region’s biggest Indonesians not only make up the second “They will progressively invite members four times. She credits early adopters like banks. I want us to represent all the BT values to and they want to set up their own websites largest Facebook population in the of BBM groups and broadcast the most her husband, the infrastructural failures win trust and help us grow. BT’s number one and blogs and businesses. world, they are also some of the most sociable people in the world. On average updated information on latest products that force Indonesians to adapt – and the Making your business work value I think is to be trustworthy; we deliver and always get customers,” she says. culture: “Indonesians love to hang out in what we say we will. Second is heart and Indonesians have taken up social media Indonesian Facebook users have 199 whatever form,” she says. “It used to be in We know our customers will be the passion; we work as a team to understand – as Jeremy Wagstaff writes in his article, friends, according to a report by TNS. For some it’s become more than a sideline. coffee shops, radio chat, then the years of companies that realise their IT network the customer and see the situation from their the country is number two for the most And much of this is mobile: the Jakarta- Ivan Chandra is a corporate attorney and IRC (Internet Relay Chat, an early kind is key to their businesses. These are point of view. Number three is inspiration so Facebook users. And it’s true that a lot of based internet research firm Saling a drummer in the three-man soul band of online chatting). Then Facebook. Now professional, well-led companies that want to that we can meet our goals. And number four my family and friends are using Facebook. Silang found that 43 per cent of Urban Vibe, but most of his income comes Twitter. That’s why local social networks get ahead. We can pinpoint what would help is being straightforward: I think BT is very Indonesians are very sociable people and Indonesian tweets are from UberTwitter, from selling the cajón, a box-shaped grow so quickly.” them in their business – such as data security open and easy to work with. they like to have a network. So the culture is an app particularly popular among and storage – and give them a detailed there and people are using technology. BlackBerry users. proposal of how we can help not just with Our future potential is already hardware but with IT services too. being realised In Indonesia right now there are still some This has made social networks and the mobile phones that drive them negative feelings about the government compulsory accessories for any self- In Indonesia there is a lot of potential to and corruption, but if we look at the global respecting Jakartan. Says Maryam Jamiella, develop BT’s business but also to bring its economy we are very solid. There is a lot of a 25-year old civil servant: “You have to global expertise to help develop this country potential in the domestic market, we have have a BlackBerry, because everyone has ...if we look at the global and develop the people. Other countries may exports to Japan and China, and the crisis in one, and that’s how they keep in touch. be more sophisticated in their technology the US and Europe has not had too much If you don’t have one, you’ll be socially economy we are very solid. use, but we have potential as the technology impact on us. The central bank has cash isolated, you’ll be like an outcast. The first The crisis in the US and is new here and people are excited about it. reserves, the financial system is strong and for the next three to five years I see good question people will ask is ‘what’s your BB pin number?’” Europe has not had too In schools, for example, we have very growth ahead. much impact on us. few computers, students don’t have great It’s these networks that not only enable access to technology. But now we are seeing I joined BT to work with good people with Jakartans to cope with the unpredictability graduates returning to the country, they have good values and to grow. And I hope you will studied at schools in America and Europe, join us. 20 Megacities 21
  • Sidin Vadukut is a writer from India and is currently the managing editor of The New York Times said the Mumbai terror attacksMumbai, a premium online business news service launched in collaboration with of November 2008 “may be the most well-documented the Wall Street Journal. Born terror attack anywhere”. in a small village in Kerala, he has lived in Mumbai on and off for the past 11 years. He is also a columnist and blogger. Berges pauses to think back fondly to the The Mumbai terror attacks of November old days – in particular 2003, when he got 2008, which killed more than 160 people, his first laptop. Back then he used Yahoo! were one of the first instances where real- Messenger with only ten friends and time social networks helped report what was spent most of his time talking to a cousin happening. Locals used Twitter and Flickr in the US. to share information about the ten shooting and bomb attacks across the city. Some Then he switched to Google Talk and in of the first images to be broadcast of the 2008 he got his first phone, a Nokia E Series aftermath of the attacks were those taken by device, with an unlimited data plan. “That resident Vinukumar Ranganathan and changed everything,” he says. “Instant posted on Flickr. Indian bloggers offered messaging went from being something I live updates. did once in a while with a small group of friends, to becoming my primary means of Referring to the huge electronic record of For 22-year-old political science student, communication. Rarely do I get anywhere the attacks from photos, video footage and Berges, texting is slow. And email is close to using my monthly texts and free phone recordings, the New York Times said positively Neanderthal. He is on an Instant calls allowances on the phone now; I send it “may be the most well-documented terror Messenger app all the time. less than five text messages a day.” attack anywhere”. That means he is always connected, and During the latest series of bomb attacks always available: “Every time my phone in Mumbai in July, citizens responded vibrates I pick it up,” he says. with even more sophistication. Besides relaying news and quashing rumours, Berges says this is true for the vast majority Mumbaikars also used networks to arrange of his friends and they all enjoy using IM, transport for those stranded, volunteer although it does have some downsides: “I’m help and coordinate relief. The #needhelp never having one conversation at a time,” and #here2help hashtags were used to he says. “There is someone I’m talking to in consolidate offers and requests. real life, and someone else on my phone. You Mumbaikars use can see this whenever I meet my friends, we What all this indicates is that the are always reaching for our phones.” government should be looking at platforms like IM and mobile telephony to help Even his father has learned that IM is the inform, assist and aid citizens. But the way to stay in touch with his son, ever since Starting from a meagre base just a decade indications so far are not good. technology to cut Berges convinced him to use Whatsapp on or so ago, India has seen an explosion in his Android handset (Whatsapp lets you see internet connections, internet users and “Security is currently a huge priority for the mobile messages from people using different social network usage. Much like Berges, national government,” says Lloyd Mathias, phone platforms). young people throughout Indian cities have President, Corporate and Monitoring at Tata adopted social networks vigorously. Teleservices, one of the country’s major through the blockages Berges is a genuine Generation Y-er, he falls telecom operators. “And they are constantly in the group of 15–34 year olds who have One social media statistics service estimates looking at ways to use regulation to improve grown up with digital technology. By 2020, that India has around 35 million Facebook intelligence and security.” according to the global research consultancy users, with some ten per cent of them in Frost & Sullivan, this group will make up a Mumbai alone. Given that only two per This has led to push back from privacy third of the world’s population. And 37 per cent of the total national population lives in advocates and problems for the telcos cent of those Generation Y-ers will live in the city, this is a sign of its popularity. And themselves. Lloyd explains: “Unlike in By Sidin Vadukut India and China. sometimes these social networks have been the west where governments have the used for more than sharing photos or cheeky equipment to trace and track calls, here the Mumbai, India That their world will be different is certain, status updates. government wants the service providers to and it’s up to Berges and his friends to shape have this facility. This requires investment.” just how different. Already in his short life Over the past ten years Mumbai has span Berges says that the emergence of been hit by a series of bomb attacks and The IT (intermediary guidelines) Rules cheap data plans, reliable networks and good each time the city’s response has been 2011, recently released by the Information software has fundamentally changed his markedly different thanks to the use of new Technology ministry, require hosts, ISPs, social life and the way he uses his phone. technology. social networks, search engines and 22 Megacities 23
  • “Now when something happens in the stock market the first thingMumbai Fast food delivery service I do is text my colleagues. That is how I break the news.” Faasos uses technology to keep an eye on traffic. other intermediaries to not only process complaints, but also proactively keep an eye out for objectionable content. killing 209 passengers and injuring 700. The last bomb exploded at 6:35pm. The train system resumed service at 10:45pm. has 899 phones for every 1,000 people. Businesses have been quick to latch on to Mumbai city data this platform. And they’ve learnt to adapt Which, in times of emergencies, leaves the When the trains stop, so does the city. So to not just the platform itself, but to the job of early response, rumour management they never stop. services that thrive on it. Average income per inhabitant 6.9 New York = 100 and coordination in the hands of enterprising civilians. But the conditions on the trains are Jaydeep Barman is a partner in restaurant excruciating. Nine-car trains designed to chain Faasos that has branches in Mumbai Cost of living 53 And things aren’t much better in the Registry – this is a database where you can carry 1,700 often carry up to 4,500, a situation and Pune. As a food delivery service he New York = 100 everyday world either, says Anupam, a add your phone number and supposedly referred to, technically, as Super Dense somehow has to get food through Mumbai’s 29-year-old stockbroker from Mumbai: opt out of spam calls or texts. So far these Crush Load. Passengers who hang from open traffic. He uses a BlackBerry for mobile “Over the last four or five years the websites measures haven’t really worked. doorways and sit on the roof are particularly email and data, and a Macbook to constantly Livability index 57 of local government bodies have improved susceptible to accidents. Unofficial figures keep an eye on his 16 outlets: “The traffic in Ideal = 100 tremendously. But the data still simply Tata Teleservice’s Lloyd Mathias says estimate that an average ten people die Andheri East is hellish. There is no physical resides on their servers. There has to be a that there is more to this than just leaked every day on the network. way I can checkup on everything. So I use way to push it out more dynamically.” information. “In some cases people the Macbook to access realtime reports Office rent per square meter USD $1075 leave business cards or contact details at Political science student Berges thinks generated by my system.” Anupam loves the new ways of restaurants or shops,” he says. “These can things can and should be improved: “The communicating and says his mobile phone then easily get accumulated and sold to railways keep harping on about how the Barman, who says he is connected every Length of mass transport network 4.98 has changed his life. Each morning he wakes spurious marketers. When we sell databases trains have GPS modules. Why don’t they waking minute of the day, claims that his In terms of city area, km/km2 up and “sometimes even before I’ve gone ourselves we can regulate them. But when leave that data open like they do in places is the first restaurant chain in the world to to the loo”, he switches on his phone and they are procured indirectly, it can be a like the UK?” take delivery orders via Twitter. “We were browses through emails, business news problem. There are benefits in leaving your present on the social network already, and Superior public transport networks 0 headlines and tweets. details at shops. But consumers must be And Tata Service’s Mathias is equally keen using it to interact with customers. So we km/km2 aware of the potential for misuse.” for more information: “Why can’t I go to thought why not use it to actually generate When he first started stockbroking seven a bus stop, send a text message and know sales as well,” says Barman. years ago, he recalls, email was the gold Frustrated by the problem of text spam, when the next bus will come? This can help Fixed telephone lines per 100 inhabitants 2.9 standard for communication. “Now when the Telecom Regulatory Authority of India reduce so much over-crowding and panic,” Initially the company had an employee something happens in the stock market the (TRAI) has now said that from 27 September he says. manually collating orders based on Twitter first thing I do is text my colleagues. That 2011 no user will be able to send more than updates from customers. But later they Mobile phone subscriptions 752,190,000 is how I break the news. The analysis can 100 text messages a day. TRAI is hoping that Faced with such overwhelming systemic hired a local software company to build an Post-paid and prepaid come later via email,” he explains. “We this will curb spammers. (Though this then challenges, people in Mumbai and elsewhere application. The process is simple. Users have come a long, long way from using a fax raises the issue: what if your 101st message have learnt to work around obstructions. need to register on the Faasos website once machine in the trading room.” has to do with an emergency?) That’s why, when mobile telephony was with address details. Then all they need Number of 3G subscribers 9,000,000 first launched in India, it was embraced to do is tweet the Faasos handle with their But Anupam admits that he doesn’t use his But the aspect of his life Anupam would so vigorously. Until that point, consumers order and add a keyword hashtag at the end: mobile phone and mobile networks for much most like to improve through modern were dependent on sluggish public sector #faasosnow. The software picks up orders, more than communicating. Partly, he says, technology is his commute. “There has to companies to lay the copper wires and processes it and then communicates it to Speed of 3G coverage Low this is because of privacy issues. “Service be a way to make the misery end, or at least hardware required to get phones into homes. the Faasos kitchen. “It will never become providers here are extremely lax about bearable,” he says. Wait times could often stretch into years. a huge part of our revenues,” says Barman. privacy and data protection. You don’t want “Twitter is still niche. But we are a brand Fixed broadband subscribers 7,745,710 to leave your address and phone numbers With a population of over 12 million people With wireless mobile phone connections, that dislikes marketing ourselves too much. with shady companies,” he says. and another ten million in the surrounding they were liberated. The Indian mobile This is a good way to make new customers area depending on the city for their phone boom began in 1994 when the curious. When they see friends posting Last year Mint, the business daily, published livelihood, Mumbai’s public transportation government launched the National orders publicly, they will eventually want to Online banking users (national) 35,000,000 a story about how hundreds of thousands system is under huge pressure. Sure, the Telecommunications Policy, or NTP. In ten try it themselves.” mobile numbers complete with personal existing system does its best – the city’s years, by late 2004, the number of mobile details of the user were available for sale suburban train system is the stuff of legend. phones in India overtook the number of Like all major cities, Mumbai’s fortunes are cheaply. In some cases agents had leaked Regardless of natural calamity or terror landlines and reached a total of almost 50 now tied up with new technology. Whether Facebook users 3,672,500 the information directly from telecom attacks, the train system is the last to shut million. it is ordering a chicken tikka roll from Faasos companies. down, and the first to get back to work. via Twitter, or organising emergency relief Today there are 851 million mobile efforts via BBM, the city’s fortunes are being Twitter users 1,172,766 The government has responded with a raft On 11 July 2006, for example, seven bombs connections in the country, and the state of shaped by new ways of communicating. of laws, including a National Do Not Call ripped through the network in 11 minutes Maharashtra, of which Mumbai is the capital, © 2011 The Economist Intelligence Unit Ltd. All rights reserved. Whilst efforts have been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor its affiliates can accept any responsibility or liability for reliance by any person on this information. 24 Megacities 25
  • Mumbai Less rush, Conclusion the approvals they need to get started. Piloting a new culture We’re reliable too. For instance, we have multimedia hosted contact centres outside So we’ve launched a pay-per-use service more time India, located in diverse geographies so our services won’t be affected by emergencies. with no monthly charge, and with full visibility, security and control to the user They’re based in different countries so even from either a mobile phone or a desktop. So a glimpse of digital life from four megacities – each of them By Mridul Srivastava if the main platform is affected, the back-up Still, we found that some people weren’t is always available from another location. thrilling, complex and dynamic. Director of Marketing, BT India open to adopting this way of working. So we and Girish Bhandarkar offered them a pilot with demo user IDs and Less commuting, more said “If you like it, use it”. And we found They have things in common – millions of inhabitants, gleaming Head of Product, BT India conferencing that once the senior management started buildings and high-end culture alongside congestion, lack of using it, it caught on. infrastructure and poverty. But each city is also unique. Unique Technology has opened Mumbai up like On a personal level, we can recognise the problems of the stockbroker Anupam in Any initial concern that the conference call compared with megacities in different countries and unique even never before. There are many examples like Berges, in Sidin Vadukut’s report, who’s the report, when he says the aspect of his costs more than a normal call disappears within their own country. So the feel of Guangzhou is not only made a whole new group of friends via his life he’d most like to improve through because people see how useful it is. How it different to the feel of São Paulo, Jakarta and Mumbai, but also to instant messaging. technology is his commute. Not only are cuts the cost of face-to-face meetings, how it the feel of Beijing. there the physically unpleasant conditions of makes people more productive. But Mumbai knows better than most that packed public transport, but there is also the work-life balance issue. People are getting One world, one service And it is these local differences that we embrace. We employ people security is a huge concern. That’s both physical security, which has come under up at 5am, spending one-and-a-half to two who come from these cities, who know these cities. And we are threat in recent years from a series of terror hours commuting, working late and getting Around 70 per cent of our services are aware that these differences matter. They are the reason why your attacks, and information security. home by 10pm. launched worldwide, although they’re I don’t think we can overcome the problems offered using different local access providers business in these places will succeed or fail. Because of concerns that technology helped of moving large numbers of people through in different countries. So when business coordinate the attacks, the government is cities, but we can offer new ways of working people travel to the UK or the US they But we also provide the security of being a global company, providing extremely stringent about communications that get round this. can use the same technology and be able technology that works around the world, and having a huge level of to do their normal day-to-day job without services in India. At BT, as one of the Take audio and web conferencing, which impacting their productivity. They’ll be expertise in delivering it. This is the reason our employees around country’s leading networked IT services the world want to work for us – because they know BT can make a providers, we’ve kept pace with new laws is only now picking up in India. There are familiar with the product, irrespective of the and requirements on lawful interception Indian companies that still don’t know about local carrier – from one megacity to another. difference. BT can make your company work. And we want to make and monitoring of all our services and its benefits. They’re used to face-to-face it work. communications. meetings and travelling long distances for an appointment. They’re not aware of the service and when they hear about it, they’re Today we have a new uniting power – digital technology has brought Picking the right technology New ways of working are making worried that it may be expensive. business in India more productive. the world together more than we ever thought possible. We use the The geo-political situation, regulatory issues same applications – conference calls, IM, Facebook – everywhere. and the limitations of the infrastructure But in a world of multinationals and globalised thinking, you mean it can be a challenge doing business can forget that things are not homogenous, that differences are in India. And I think that’s where BT really stands out as a neutral provider. We can interesting, and that we can learn from each other. stand above domestic problems and choose the best technology and the best services for And it’s the mixture of the global and the local that is the future of our customers. our world. We know the ground. We know how things work. For example, if a multinational company wants to set up shop in India, our team of experts can advise them on local regulations and compliances. Large companies don’t always know about network compliance issues. We help customers design their network in full compliance with local regulations, help them prepare their business applications and also help them get 26 Megacities 27