mega-cities: bt’s on-the-ground intelligence from four global locations

Mega-citiesBT’s on-the-ground intelligence from four global locations

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than 40 million, second only to the US)? And Indonesian ‘Facebookers’ have a high number of friends online – averaging nearly 200 each.

“Indonesians love to hang out in whatever form,” financial advisor Ligwina Hananto told the writer Jeremy Wagstaff, and as a business you would be wise to either work with this fundamentally sociable nature, or lose out, in this high growth market.

Lastly, we go to India. If São Paulo shows the economic shift, then Mumbai shows the social shift brought by the digital revolution. In recent years India’s commercial capital has been rocked by a series of terror attacks. Yet with every attack people became more creative in using social networks to provide information about what was happening, and to coordinate relief and volunteers.

We took these journalists’ reports back to our BT country managers and they enjoyed the insights and the chance for a bit of plain talking. You can see their responses on the following pages too.

What we all agree on is that these high growth cities are going to play a major part in the future of our world. The research company Frost & Sullivan predicts that by 2025 half the world’s population will live in megacities in the high growth markets. This will bring great challenges but also great opportunities.

So megacities – bigger, better, and with BT, easier – welcome to the future.

centres of growth, opportunity and innovation. They are harnessing the digital revolution to get ahead. But they are places where you need some knowledge to get around.

Our writer Andrew Downie in Brazil quotes the advice of Caio Bonilha, the president of Brazil’s state-controlled telecommunications company Telebras, when he says: “Get to know the rules, get to know the market.” And Downie shares with us the story of a start-up business run by three Frenchmen who had to work hard to get set up.

But now their business is underway and they are part of the São Paulo success story. Dubbed “the city that cannot stop” back in the 1950s, today São Paulo illustrates how Brazil made the economic shift to become the seventh biggest economy in the world. It can now afford to lend the IMF money and is investing in infrastructure – airports and roads – to be ready for the 2014 World Cup and 2016 Olympics.

Our China report is about Guangzhou, a growth story of epic proportions. This city of more than 12 million people, the capital of the southern Guangdong province, was the first part of China to open to foreign trade and to get rich. Today the city boasts high-speed 3G connectivity even in its subway system, and it is a test bed for the new fourth-generation connection which would double download speeds.

Next stop Jakarta, and welcome to the Facebook capital of the world. Did you know that Indonesia has the second largest Facebook user base in the world (more

For a start you might be shocked to read in a business publication that the world out there isn’t perfect.

But these are challenging economic times and we think that, in times like these, you need a little plain speaking.

And while a lot of businesses are looking to the world’s high growth markets and their booming megacities, we know that it’s not always straightforward to enter these markets.

So this is a challenging white paper. There are bits that are uncomfortable reading for any business looking to set up in our featured cities.

But our message for you is that we’ve been there. We know the issues and our Global Services teams are there now, ready to navigate the megacities with you.

So in this white paper we’ve set out to get a bold, realistic snapshot of digital life in four of these global megacities. We’ve gone beyond the boundaries of the business world and commissioned experienced journalists, with backgrounds reporting for the Wall Street Journal, Time, the BBC and the China Economic Review amongst others, to give us on-the-ground reports of life in their patch.

They take us to the streets of São Paulo, Guangzhou, Jakarta and Mumbai, to hear real stories of innovators and entrepreneurs. And they take an honest look at the challenges and advantages for businesses operating there. These megacities are

It’s boomtown-style business in Brazil 4

One country, many facets 8

The quiet charms of China’s shopping paradise 10

Staying ahead of change 15

How working on the move has gotIndonesia going 16

Passionate about business 21

Mumbaikars use technology to cutthrough the blockages 22

Less rush, more time 26

Contents

This white paper is a bit different

How we chose our megacities

The word megacity applies to any city with a population of more than ten million people. There are currently 21 of these and at least half of them are in high growth markets.

Sources disagree about which are the largest cities in the world. One reason for this is that some countries count the number of people living within a defined city area, and others extend their counting to the surrounding urban and suburban areas.

The United Nations has identified the cities it believes to be the largest. Top is Tokyo with an astonishing 36.6 million people. Next come Delhi, Mumbai, São Paulo and Mexico City, although they are well behind Tokyo at around the 20 million mark.

For this white paper, we chose two of the United Nations’ top five cities in Mumbai and São Paulo. Then we picked Jakarta, which is on the brink of achieving megacity status: its daytime population, with additional people travelling into the city for work, certainly makes it qualify.

And we chose Guangzhou, which, in contrast to the UN figures, has declared its population to be over 10 million people. It is also part of the new phenomenon of megaregions. In 2010, UN-HABITAT, the agency for human settlements, described how megacities were spreading and merging with other cities to form what it called megaregions. These “endless cities” can extend for hundreds of kilometres and be home to huge populations. The largest is the Hong Kong-Shenzhen-Guangzhou megaregion where 120 million people live.

Sao Paulo

Guangzhou

Jakarta

Mumbai

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In spite of that damning verdict, Brazil is a hot destination right now not just for start-ups like zarpo – who took the plunge on the advice of Sales de Paiva, then working for the Boston Consulting Group – but for just about every other forward-looking company, big and small. For decades the joke was that Brazil was the country of the future – and always would be. But Brazilians are now the ones laughing.

The seventh biggest economy in the world, its currency is at its strongest level against the dollar since 1999, foreign reserves are at an all-time high, and the country that just

hamstring a business in Brazil. This is a nation where a whole culture has developed to avoid bureaucracy and where consumers pay the highest taxes in the developing world. It is also a place where a simple task like getting an established mobile phone company to comply with that most basic part of the contract – to provide a working service – can make your life miserable.

“Doing business in Brazil is war,” says Alexis Manach, one of the two other French natives who conceived of and runs zarpo. “Everything takes ten times longer than it should. Everything is a mess.”

The founders of zarpo.com, a start-up in Brazil that offers cut price hotel rooms to travellers, got a surprise one day when they couldn’t get a mobile phone signal in their downtown São Paulo office.

The three French entrepreneurs, along with the five others in their small staff, had mobiles from a Brazilian firm. Then all of a sudden they stopped working. Out in the corridor, their phones worked. Outside on the street, their phones worked. But no matter where they went inside their five-room office, they couldn’t get a signal.

“Our office was like a black hole,” says Numa Sales de Paiva, one of the company’s three managing partners. “It was as if someone had suddenly moved the aerial.”They spent hours on the phone to the mobile operator trying to work out what happened and find a solution that would make their phones usable again. Like millions of people who’ve contacted Brazil’s mobile phone companies, they discovered it was a time-consuming, frustrating and ultimately useless exercise. After days of fruitless negotiating they ditched their company and moved to a rival firm.

That all-too-common story is indicative of how even the most basic things can

It’s boomtown-style business in Brazil

By Andrew DownieSão Paulo, Brazil

Andrew Downie has been based in Brazil since 1999 and has written about the country 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.

nine years ago went cap in hand to the IMF is rich enough to be loaning the troubled institution money.

Its abundant commodities are fuel for Asia – it was one of the only western nations not laid low by the economic crisis, and it has just started developing some of the biggest oil finds in years. To cap it all, the country will celebrate its coming out on the international stage by hosting the 2014 World Cup and 2016 Olympics.

Entrepreneur Leo Kuba, the owner of a 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 almost palpable sense that Brazil is on the up was crucial to zarpo’s decision to go live with their site in May. Some 48.7 million Brazilians have jumped into the middle and upper classes since 2003, according to government estimates, and with credit more readily available than ever before they have money to spend. Zarpo aims to sell them reduced rate hotel rooms at exclusive places not just in Brazil but in Europe, North America and even as far away as French Polynesia.

“When you look at Europe, the growth curve is flat, but here it is growing fast,” says Manach. “This is one of the places to be.”

They are adding clients at a rapid rate but they also face a host of problems, some of which are particularly acute for outsiders. Not only is it much easier to get things done with personal contacts, which is tough if you don’t know anyone, there are also

Brazil is a hot destination right now not just for start-ups but for just about every other forward-looking company, big and small.

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Numa Sales de Paiva (top) and Alexis Manach of zarpo

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take such promises with a pinch of salt. The government promised a bullet train between São Paulo and Rio in time for the World Cup and it is still to get off the drawing board. Infraero, the government corporation that manages Brazil’s airports, promised free wi-fi at the country’s main airports, only to change their minds and leave passengers unconnected. Most glaringly of all, the city of Rio won the right to host the 2007 Pan American Games by promising a ring road system, a new state highway and 54km of new metro line, none of which was ever built.

The men behind zarpo are well aware of those limitations. But they are even more aware that Brazil in 2011 feels very much like being in the right place at the right time. They are content right now to keep fighting those daily battles in the hope of seeing off their rivals.

obstacles so notorious they are known as the Brazil cost.

“The big three liabilities in Brazil are that it is very bureaucratic, the tax burden is excessive and legislation hampers entrepreneurs,” says Leo Kuba. “Brazil is on the cover of Time and the cover of The Economist but the gap between starting a business here and starting in the US is enormous.”

Perhaps the most pressing challenge for Brazil is building the infrastructure to cope with the rapid rise in living standards, as well as events like the World Cup and the Olympics. The money is there but planning is atrocious and construction is slow. Corruption is a constant drain on finances and morale.

The prestigious opening match of the World Cup, for example, was originally planned for the city’s 80,000-capacity Morumbi stadium. The Morumbi, however, was ruled out because of petty personality clashes and organisers now expect it to take place at the ground of São Paulo’s biggest football club, Corinthians.

The problem is, Corinthians don’t have a stadium. The club designed one last year after the Morumbi debacle and building started in May 2011. It is so late that it won’t be ready for the warm-up tournament, the 2013 Confederations Cup, and so small that extra temporary seating will have to be installed to meet demand.

The lack of planning is also evident when it comes to airports, hotels, public transport and, of course, telecommunications. According to the Brazilian Association of Infrastructure and Basic Industry, Brazil invested $76.7 billion in telecoms infrastructure between 2003 and 2010 and must invest a further $55.9 billion by 2015. This year, companies are expected to pump $11.3 billion into their broadband networks, the biggest annual investment since 2001.

But that is still less than is needed to meet the growing demand, according to João Moura, the executive president of Telcomp, the Brazilian association of telecoms companies. European and US companies customarily invest around 15 per cent of revenue on updating and adding to networks, Moura said. In Brazil, the figure is just ten per cent.

“There’s been a serious delay in the expansion of networks over the last few years,” Moura said. “People want broadband. They are buying smartphones. But although demand is big, investment has been small.”

As if that were not enough, the quality of the lines that do exist is poor and the cost is high. Zarpo has a line run by Spanish firm Telefónica – which has a monopoly in the centre of São Paulo – but it opted to base its servers in the US because it was easier than dealing with the Brazilian bureaucracy. Entrepreneur Leo Kuba knows the problems only too well. “The speed with which infrastructure is being added is not as fast as the speed at which the market is growing,” he said. “The problem is the cost, the performance and mostly, the reliability.”And while the government has promised to improve broadband, many Brazilians might

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 39New York = 100

Cost of living 110New York = 100

Livability index 96Ideal = 100

Office rent per square meter USD $725

Length of mass transport network TBCIn terms of city area, km/km2

Superior public transport networks TBCkm/km2

Fixed telephone lines per 100 inhabitants 21.6

Mobile phone subscriptions 202,944,033Post-paid and prepaid

Number of 3G subscribers 35,000,000

Speed of 3G coverage High

Fixed broadband subscribers 14,540,937

Online banking users (national) 14,436,580

Facebook users 4,068,940

Twitter users 2,940,000

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© 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.

Brazil is gearing up to host the 2014 FIFA World Cup.

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cloud pioneers is a major Brazilian business conglomerate, which started in logistics and has moved into petrol stations, restaurants and construction. Its CIO has talked about the savings he got from transferring systems from his data centre to our cloud-based service.

It’s flexible – customers can have as much or as little computing power as they need. For example, instead of buying more computers, they can buy more trucks. And our data centre is resilient enough to keep service levels high – we have power generators, 24-hour management and other back-up. Also, our network is global so we can reach out to some 150 countries.

We’re also proud of our domestic business. Last year we won a contract with one of Brazil’s state-owned banks, and we’re helping them roll out banking services to poor neighbourhoods in 5,600 locations via our satellite networks. We supply the IT network for Brazil’s lottery houses connecting 11,000 sites, combining fixed line, 3G and satellite access technologies integrated into a seamless MPLS network. And this year we signed a contract with the Brazilian post office, which will supply services to another 7,200 sites across the country.

For me, all this is yet another example of heterogeneity, Brazil-style, with multinational companies and domestic business, side by side. Our role at BT in Brazil is to provide uniform and effective service to corporations, aligned with BT’s global vision and capabilities, backed up by the quality and expertise of our people in an easy-to-do business manner.

Harnessing complexity

This heterogeneity is part and parcel of doing business in Brazil. It’s in harnessing it that we can add value for companies coming here.

Back in 2001, one of the first things we did when we started serving our international customers was to act as a manager of carriers. Since Brazil’s state-owned telecom monopoly was broken and privatised in the early 1990s, many telecoms companies have provided varying levels of service. Thanks to the open and competitive regulatory framework, our customers were able to delegate the job of managing them to us to yield the high level of performance they needed.

Now, ten years on, we have grown to provide services like MPLS and public internet on our own infrastructure. We designed and delivered unified communication solutions for our global customers. Today there are 15,000 IPT extensions, provided as managed services. Two years ago, we launched a fixed line telephony service. We also have a data centre service. And we have one of BT’s three global service centres here in Brazil with ISO 9000, to deliver managed services to multinational accounts. Our people working on the centre are highly qualified in ITIL and the state of the art technologies of our main suppliers. The centre is ISO 9001 and 27001 certified.

Taking the strain

Now we can host customers’ entire IT infrastructure and last year we set up a cloud computing offering. One of our

Diversity applies to some areas of the economy too. For large businesses like those in the finance sector, we operate levelled with best in class. For small and medium businesses, it is more challenging.

For instance, the banking system in Brazil is very advanced, on a par with First World countries. The majority of the transactions are done electronically. Regulation is very welcome. Brazil’s largest institutions were not as badly affected by the 2008 crisis and the sector maintains a high level of solvency.

On the other hand, for small and medium businesses, bureaucracy and taxation are issues. Setting up a business in most countries means a week to go through all the paperwork and requirements. In Brazil it can take two months. Recent federal initiatives have reduced certain burdens but there is room for improvement.

One country, different infrastructures

This heterogeneity goes for our infrastructure as well.

The bulk of the population lives in the south east, which has the best roads. In the north, in the Amazon, people only live along the rivers, not in the countryside, where there is rainforest. So the roads there are much worse making it more difficult and costly for trucks carrying cargo. Some communities have access to banking services on a boat just once every 21 days.

The situation is similar for telecoms. If a company needs a broadband service in São Paulo, we can provide a 100Mbps internet connection on a fibre network. But in the countryside this is simply not viable, either on fibre or cable. Even in the state of São Paulo, our richest state with 33 per cent of the country’s GDP, there are about 200 schools that are not connected to any type of network.

An explosion in construction means telecom services to corporate clients can easily be disrupted if road builders or trucks hit cables.

How do you connect 190 million people?

A large number of Brazilians only have access to broadband at their work or at LAN houses, primitive cybercafés with high speed access that are important social hubs in poorer parts of the country. Recent figures from the Centre for Digital Inclusion show that 45 per cent ofall internet access comes through LAN houses, a number that rises to more than 75 per cent among the less well off.

The government has a plan to provide broadband access to 72 per cent of Brazilian communities by 2014. But those numbers are ambitious and even the government’s own think tank recognised the current service on offer is poor, especially outside the big cities.

“The discussions prior to the launch of the National Broadband Program (PNBL) in Brazil revealed a scenario in which broadband appears lacking not only in relation to the more advanced economies, but also in relation to its Latin American neighbours,” declares a report by Ipea, the Institute for Applied Economic Research. “The diagnosis

showed that access to broadband internet in Brazil was expensive, that speeds were well below those of developed countries and that the concentration of services on offer in major urban centres replicated the country’s unequal distribution of wealth and infrastructure.”

It is a similar story with mobile phones, with a few companies controlling the market and offering substandard services at offensive prices. Even the moderate use of mobiles costs as much as eight times what it does in neighbouring

countries, and three times the OECD average, according to a 2009 study by the Diálogo Regional sobre la Sociedad de la Información. The cost of roaming is, in the words of Communications Minister Paulo Bernardes, “ridiculously high”.

For that reason, many poorer Brazilians buy cheap phones (or chips) from each different provider and use them to call others on the same network. That explains why there are more than 220 million mobile phone lines operational in a nation with 192 million inhabitants.

So far, only 23 million of them are 3G, but that number is expected to rise exponentially in the coming years. Telefónica, Brazil’s biggest mobile phone operator (through Vivo), says it expects broadband to account for 25 per cent of its revenues in 2013, up from just 15 per cent last year.

The government recently promised a 4G tender for April 2012 and says the technology, which offers mobile internet connections up to 180 times faster than the present 3G system, will be operational at least a year before the World Cup. It also promised to invest $113.3 million to guarantee the 12 host cities will have internet connections of up to 100Mbps.

I would like to tell you how we are making a difference in Brazil. How we are using cloud computing to overcome infrastructure challenges affecting Brazil’s biggest companies. How satellites and fibre networks are helping Brazil’s post office give services to some of the poorest of our people. But first, let me put the work in context.

I can recognise some of my country in Andrew Downie’s report, but that’s not the whole story. First and foremost Brazil is a land of contrasts and heterogeneity.

Diversity everywhere

São Paulo is our largest city. It is also the centre of our largest metropolitan area combining 39 cities which are home to around 20 million Brazilians. Like our other big city, Rio de Janeiro, it has wealthy neighbourhoods, and very poor ones called favelas, or slums, where people live in poverty. We all share the same urban infrastructure. Cultural life is vibrant and some services are really good, but public transportation, for instance, is deficient relative to the demand.

One country, many facets

By Sergio Paulo GallindoCountry Manager, BT Brazil

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 7,200 sites.

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Road blocks in Sao Paulo means cloud services are ever more important to corporate clients.

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Liuyun Erjie have seen their ground floor apartments taken over by small businesses: DVD stores, funky imported t-shirt shops and restaurants. As in some other Chinese cities, retail explosion has tunnelled downward into erstwhile bomb shelters and subway lines; 7-Elevens and lingerie shops are within steps of the turnstiles.

Much of the shopping is low-end, no-name brands – the luxury brands are glanced at in windows, but rarely purchased. This is not because people can’t afford to buy Prada, it’s because of the proximity of Hong Kong, which distorts Guangzhou’s top-end retail data downward. Hong Kong is only two hours away by train, and many of Guangzhou’s rich head there to buy luxury goods to evade stratospheric mainland taxes. Once the high-speed train is ready, the

music, smiling and quaffing beers. The man was from Hunan, the woman from Henan; they had met in Guangzhou and fallen in love. “I do like it here,” the woman told me just as the lead singer started on a Cantonese ballad. The locals sang along, but the rest of the Chinese – most of whom do not speak Cantonese – turned back to their beers.

Retail capital

Whether Guangzhou is socially slow or not, it has retailers hot under the collar. Anthony Tartaglia, founder of a digital media marketing company in Shanghai who moved down to Guangzhou to work on the Proctor & Gamble account for UT Starcom, ran down the advantages: “They invested a lot of money into cleaning up different areas of the city leading up to the Asia Games. With that investment you’ve got all this new storefront in the New Pearl City area, all this nice new retail. The prices for real estate are crazy but people are still coming in.” He noted that because Guangdong province was one of the first to open to foreign trade – namely through the Shenzhen Special Economic Zone that abuts the border with Hong Kong – it was also one of the first to get used to getting rich, and by extension, to spending its money.

However quiet the bars are at night, during the day shopping centres like the Tianhe megamall hum with custom, and old leafy historical neighbourhoods like the

Guangzhou on a Friday night in August was hot, steamy and… quiet. Riding in from the airport, a cabbie pointed out various buildings and quoted stratospheric prices per metre from time to time: this one, $3,100 per square metre, that one $3,900. “Downtown, it’s worse,” he said. “You can save your whole life and never afford a house.”

To a visitor from Shanghai or Beijing, of course, this is not news. What is different, very different, is the silence. A city of over 12 million people; the capital of Guangdong province in southern China; administrative hub of the province and de facto traffic control terminal for the country’s massive export hub, Pearl River Delta (known as the ‘PRD’ to expatriates); favoured target of nearly a quarter of the foreign direct investment into China in 2010… when one 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 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.

Stepping into Hooley’s, an expat hive that hosts a sliver of Guangzhou’s nascent 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 and Chinese people, and a mixture of Chinese people from different regions. At one table a young couple leaned into the

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uPete Sweeney is the editor of the China Economic Review, 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.

Guangdong province was one of the first to open to foreign trade. It was also one of the first to get used to getting rich, and by extension, to spending its money.

The quiet charmsof China’s shoppingparadise

By Pete SweeneyGuangzhou, China

The wealthy head to Hong Kong to buy luxury goods to avoid paying mainland taxes.

12 Megacities 13

business was run by telephone calls and faxes to agents. E-commerce for exporters is still a niche product – although there are 9,987 Guangzhou suppliers listed on B2B export portal Alibaba.com (correct October 2011), the platform is still technologically simple, more of an online telephone book than an actual fulfilment system. RFID systems are lightly deployed here, and the internal shipping system, the infamous kuaidi, is a fragmented mess that is still being consolidated by policy. Small hit-and-run kuaidi operators are known for delivering late, delivering wrong, and delivering broken; recently, refrigerated trucking companies were discovered to be turning off the refrigeration once they left town to save on gasoline. Technology alone cannot overcome such structural issues, and it hampers the development of e-commerce: an online retailer is only as trustworthy as her delivery company is.

So far it hasn’t hurt Chinese businesspeople too much. And when it comes to trade, not all products need high-tech solutions anyway. “I have no need for a website – you can’t taste wine online,” Zhang pointed out. And this is a particular challenge for those selling Italian wines, which are far less well-known here. In fact, Zhang has a sort of negative marketing strategy. If she puts out too many ads, she gets a bunch of people who come in, try wine and walk out, leaving her with an open bottle of expensive Italian wine going stale. Instead, it’s all word of mouth; she’ll have friends of friends over for a tasting at one of her shop’s giant dining tables, and sell by the caseload if it’s successful. She also sells into government banquets from time to time.

To some, her success is anomalous. Your stereotypical Chinese wine drinker will pay $5,000 for something French, and then pour Coca-Cola into it. Zhang has discovered a new demographic: Chinese people who are so wealthy that they can afford to cultivate a taste in something for its own sake, not just status – and who are willing to pay an absurd tax mark-up just to skip the trip to Hong Kong.

That’s shopping, Guangzhou-style, and fit for a city that’s as hot as its money.

The connection between e-commerce and mobile telephones in China is intimate. In the West, e-commerce goes through computers, as a rule, but in China, people generally prefer to conduct transactions and pay for things on their mobile devices, especially given that the mobile payment systems are more secure than bank cards in some ways – users can’t have their entire bank account drained through a pre-paid phone account. The density of Chinese characters also helps makes data more easily legible on a small screen. The result is both an online and offline shopper’s paradise.

Zhang Qingqing is, in some ways, a typical story of the evolution of Guangzhou. First, she’s not from Guangzhou at all, but hails from the frosty northeast – far from the only internal immigrant who moved to Guangzhou to get warm. Second, like so many others in Guangzhou, Zhang got her start exporting OEM (original equipment manufacturer) shoes. The business did very well, and she handed off operations to her brother. Their biggest market was in Italy, and on a trip to Lombardy she discovered Italian wine. “It started as a hobby,” she says. “But the Italians told me, we are buying so much from you, you should buy something from us. Good for the trade deficit!”

Zhang Qingqing is not running a high-tech enterprise. Like most Chinese of a certain class, she has an iPhone and an iPad, but she uses them largely for gaming. Her shoe

points out that thanks to Guangdong Mobile’s aggressive investment in mobile infrastructure, Guangzhou is famous for robust mobile phone connectivity: “Guangdong Mobile’s networks have always been notoriously faster, more stable; the incidence of mobile search is higher, the population that is using mobile phones is much more aggressive here. Guangdong mobile has done a really good job of packaging their services, having good pricing … they’ve just done it right.” This includes high-speed 3G connectivity running through Guangzhou’s subway system – and the city is set to become one of the first test beds for China Mobile’s new fourth generation LTE protocol, which should double download speeds: state media is leaking rumours that trials will begin this year.

commute will diminish to around half an hour, and it will become feasible to commute to Hong Kong to work, even. But even so, the Guangdong government reported that retail sales of consumer goods in the province rose 17 per cent in 2010. In June of 2011, retail sales in Guangzhou hit $37 billion, up 16 per cent year on year, but far below the record $70.1 billion that moved in December of 2010 (sales are highly seasonal here).

Yes, life for retailers in Guangzhou is pretty good, but they are facing increasing challenges from online storefronts through platforms like Taobao, the Alibaba Group’s ubiquitous and market-dominating answer to eBay. E-commerce in Guangdong is booming, thanks in no small part to the city’s status as China’s cell phone capital. Tartaglia

Guangzhou city data

Average income per inhabitant n/aNew York = 100




Length of mass transport network 2.24In terms of city area, km/km2

Superior public transport networks 0.07km/km2







Facebook estimated reach 522,920

Twitter users No data found

Thanks to Guangdong Mobile’s aggressive investment in mobile infrastructure, Guangzhou is famous for robust mobile phone connectivity.

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they need the IT infrastructure ready so they can immediately connect back to their HQ and their system and make the new store operate.

And we work as agents for our customers with the three state-owned telecoms providers: China Mobile, China UniCom and China Telecom. The telecoms market isn’t open to foreign companies because the government treats it as an area of national security. Keeping up with trends

So life in China for the past 20 years has been about managing change. And that doesn’t stop. Now the financial crisis is affecting what Chinese companies and multinationals do. Some foreign companies are moving their Asia Pacific headquarters to China. Meanwhile the Chinese government has encouraged domestic companies to find business abroad. At BT we have the expertise and experience to keep up with both trends.

As for Guangzhou, it’s seen it all before. It was an important river and sea port back in 200 BC and it kept prospering as traders came from India, the Middle East and, in the 16th and 17th centuries, Europe. Today’s world brings a different kind of business boom, but one thing Guangzhou’s people know is how to adapt.

with a Chinese business that’s very good on systems integration, which again lets us customise to meet local needs, as does our service centre in north east China.

Rapid change, rapid response

These quick, responsive approaches appeal to the two kinds of customer we have in China. One group is large Chinese companies who have their sights set on business overseas. Like one of China’s largest white goods manufacturers, Haier, or one of its largest oil and gas companies. As a global brand, we can share our experience of operating in different countries on issues such as policies, regulations and infrastructure. We help them build a global presence with network, voice, unified collaboration, contact centres and data centres.

We also support a lot of manufacturers in Guangzhou, because traditionally this area is a big base for making goods for export. So when a company sets up a new plant we help them with their infrastructure, including LAN, WAN and all the other parts of the portfolio.

Our other main group of customers is foreign companies who want to grow in China. It might be new shops for luxury fashion brands, or new restaurants for food companies. When they open a new outlet

Staying ahead of changeBy Sun JunHead of Deal Structuring, BT China

About 20 years ago, Guangzhou was the first Chinese city to open its market to the world. Back then it was a collection of 21 towns with a population of around four million. With its proximity to Hong Kong and its command of the Pearl River, development took off. Today it’s China’s third largest city, behind Beijing and Shanghai, and it has more than 12 million people.

Simplifying complexity

So, as Pete Sweeney shows in his report, a lot of things are changing very quickly. And businesses here need to adapt to that and change fast. There’s no time for lengthy processes and drawn-out decision making, so what we’re doing at BT is trying to make the complex simple. In China, we’re an IT provider. If a customer opens a new plant, for example, they need a lot of things, like a network within the plant, connections to other sites, a data centre and video conference facilities. If they combine all these things it becomes a big and complex project, and with the market changing so fast, requirements can change. So we split these big complex processes into smaller projects which match our portfolio.

Local needs, local service

If we can’t do that, we try to supply a localised product. Like the one we call Retail in a Box. Sometimes a retailer will open a lot of stores in China. They’re small shops that need a basic connection but from someone who can provide managed services. In that situation we’d buy DSL services from local telcos and sell or lease equipment to retailers. In BT it’s a complex process, but here we package it as a local product so we can adapt to meet local needs, with one-stop shop management. We have a joint venture

Is Guangzhou’s boom economy coming to an end?

Guangzhou has so far benefited from being the administrative centre of the Pearl River Delta, but its export role is limited. “Guangzhou is an automotive centre, and in supply chain terms it’s important as an automotive hub. But in terms of exports, Shenzhen and Hong Kong are still the dominant export hubs in the south, and will continue to be for the foreseeable future,” says Turloch Mooney, logistics consultant and managing director of Supply Chain Asia. But Guangzhou is nevertheless a critical component in serving the internal market, he said. Guangzhou’s port, while small, is serviceable enough, and it also runs an important air hub. But its primary role these days is serving as a distribution centre for internal demand; not a bad

place to be, given the new policy emphasis on stimulating domestic consumption and the relentless pace of China’s urbanisation – the largest organised movement of humans from country to city in human history.

But there may be an adjustment period ahead for Guangzhou, and it will not be painless. The PRD is under pressure on multiple fronts. For one, China’s “demographic dividend” – namely a surplus of poor workers willing to assemble goods for export for dirt cheap wages – has expired. The population of 15–19 year-olds who make up the bulk of the low-end labour force peaked in 2005. Add to that inflation and policy, and you have Chinese wages shooting skywards (projected to rise 20 to 30 per cent for the next two years) even while workers become harder to find. These costs are punishing the small and medium-sized factories that comprise the bulk of the PRD’s export industry, and by extension much of its economy.

The second front is external: given its dependence on exports, the continuing weakness in western economies hits Guangdong and Guangzhou particularly hard. But even as export growth softens, Beijing has cracked down on bank lending to vent asset price bubbles and consumer inflation that has been clocking in above 5 per cent per month – making it harder for the factories to obtain the credit they need to survive a potential double-dip in exports.

Finally, these companies have not, for the most part, managed to build successful brands that can compete domestically or overseas. Chinese companies still compete on price, and price alone, and that’s the inverse of brand strength. So the bedrock of Guangzhou’s economy, the manufacturing sector, is set to take a hit. “For companies that use less sophisticated supply chains – apparel for example, companies like Adidas, Puma – they’re all looking at other options to sourcing beyond China,” said Mooney. “China is still by a long way the biggest sourcing destination for these companies, but Vietnam, Bangladesh, Cambodia even, are becoming more cost effective for them.” He mentioned that the recent free trade agreement between China and ASEAN has made it even easier for factories to relocate to cheaper locations.

The necessary economic shift, therefore, is pushing domestic consumption, as opposed to investment-led growth, ie dabbling in real estate; this also means moving away from manufacturing and into services. None of this plays to the interests of the PRD’s current model.

The answer, of course, is that there is no crisis just yet. China sits on $3.2 trillion in foreign reserves, and the companies and consumers in Guangdong are still for the most part flush with cash. High savings rates can only facilitate the transition, and the shopping paradise of the delta will continue its relaxed amble to the mall.

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Guangzhou retail sales figures 2008 - 11

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New outlets need IT infrastructure ready straight away so they can connect to their systems.

16 Megacities 17

says. “From taking photos of the product, uploading them to Facebook, taking orders, sending and receiving invoices, and so on. And most of my customers have mobile banking on their handphone, so they can do the payment using their mobile phone too.”

It’s the advance of communications that has made all this possible for Avriliawati. Indonesia fell badly behind in the 1990s when a lack of investment in landlines left many without a telephone connection. In 1991 it had roughly the same number of landlines per capita as China – seven

for every 1,000 people. A decade on, and China had 140 lines for every 1,000 people; Indonesia had a quarter that. So when mobiles came along in the late 1990s, they took off very quickly.

largest, Istanbul, according to data from SocialBakers.com. ComScore lists Indonesia as having the largest number of Twitter users (the report lists countries in terms of reach, but that equates to 52 million, some seven million ahead of Brazil). And Indonesia is, according to unofficial figures, the largest BlackBerry market in the world.

Reconciling these perspectives – hotbed of entrepreneurialism, quagmire of corruption and traffic, social media paradise – requires a visit to Jakarta. There you’ll get a glimpse at how Indonesians, long used to overcoming

the limitations of government, geography and circumstance, adopt and adapt technology.

Eugy Avriliawati has been selling stuff since junior high school, from self-decorated alphabets to toy lizards. Now, aged 40, she sells beautifully designed fashion clothing for young girls, all with an Indonesian flourish. And it’s technology that has helped make her business more efficient – appealing to both customer and entrepreneur – and more profitable.

The whole enterprise is run via BlackBerry and a Samsung Galaxy Tab. Her channels? Twitter, BBM, Yahoo Messenger and a Facebook page. Stuck in traffic, her business still runs. “I can do every aspect of my business using a BlackBerry,” she

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.

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 capital, Jakarta, ranked bottom of 23 cities for commuters by Frost & Sullivan, and 125th out of 140 in The Economist Intelligence Unit’s list for 2011 of Most Liveable Cities. Despite more than a decade of democracy and stability, it still suffers from a perception problem. In March Gita Wirjawan, the chairman of Indonesia’s Investment Coordinating Board, warned it was in danger of being forgotten. “Not a whole lot of people,” he told interviewer Charlie Rose, “know where it is.”

And yet, according to other yardsticks, Indonesia is very visible indeed. It is home to the second largest Facebook user base in the world (more than 40 million, second only to the US). Jakarta is by far the biggest Facebook city in the world, with nearly double the number of users as the next

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Jeremy Wagstaff is a writer, commentator, broadcaster and consultant on media and technology issues. A former correspondent for Reuters and the Wall Street Journal, he is based in Singapore where he runs a technology consultancy called Loose Wire.

Jakarta is home to the second largest Facebook user base in the world (more than 40 million, second only to the US).

How working onthe move has gotIndonesia going

By Jeremy WagstaffJakarta, Indonesia

18 Megacities 19

and wages are one of the biggest business operating cost. Smartphones and the internet are the most powerful and effective tools for a one man operation.”

In the meantime, however, gridlock is creating its own commercial opportunities: drivers skirt the three-in-one rule (in which a passenger must carry at least three passengers when passing through restricted zones) by picking up “jockeys” – kids, teenagers, mothers, who stand by the side of the road offering to make up the numbers for a fee. Motorcyclists offer to ferry commuters from bus-stop to office or home. Vendors ply the streets selling anything from bottled water and cigarettes to inflatable hammers to bored drivers stuck in endless jams.

There are now several Twitter services for crowd-sourcing the location of the worst jams. Koprol has been so successful in connecting users to others around them – in the same mall, or neighbourhood – that it was bought by Yahoo! in 2010. Mobile app developer SeaTech Mobile recently released an app for Jakarta’s biggest and most reputable taxi company BlueBird, which not only allowed customers to order a cab but, crucially, used the taxi’s GPS unit to track its whereabouts.

Another traffic-related service is GO-JEK, which partners with 200 motorcycle taxi drivers (called ojek) to handle phone or text bookings for moving passengers, delivering parcels and other services. While traditional ojek drivers look somewhat scruffy, crouching beneath a home-made sign that doesn’t inspire confidence, GO-JEK drivers have a logo-ed jacket and helmet and a fixed price. The surprise? Instead of ferrying the ojek’s traditional clients – commuters from their bus-stops to homes or work places – GO-JEK has found most of their clients are corporate. It’s a reflection of how the small-scale entrepreneurism born out of necessity has moved into the digital age and the mainstream.

“My business,” co-founder Nadiem Makarim told the news agency AFP, “exists because of a lack of infrastructure.”

longer to get around the central business district than it did 15 years earlier.

And it’s not going to get any better. After seven years and billions of rupiah in public money, the Jakarta government abandoned a long-stalled project in late September 2011 to build the city’s first monorail. Pillars and foundations have been left unfinished since 2007. Jakarta says it will pursue alternatives but even if work starts tomorrow, nothing will be ready before 2016. In the meantime, some Jakartans are pioneering

what they predict will be an increasingly mobile workforce. Take, for example, Budi Putra, a journalist and entrepreneur who only accepted a senior position in Yahoo!’s Indonesia operations on the condition that he be allowed to work from anywhere. “A lot of people are becoming freelancers,” he says. “If employers don’t let them work remotely, they set up on their own.”

Mee Kim, a Korean who runs a regional network of temporary offices and meeting rooms from her headquarters in Jakarta, says companies in Jakarta are slow in allowing employees to work flexible hours or remotely. But she says she is seeing a growing demand for her virtual office services supporting one person businesses – an address for mail and a secretary to handle voice calls, for example. “Office rents

online banking websites in Indonesia grew by 72 per cent, by far the biggest jump in Southeast Asia.

Business blogger Rama Mamuaya estimates that start-ups now number more than 700, and the most noteworthy ones are those which build on the particular challenges of a city teetering on gridlock.

Jakarta has many more people than its planners hoped for, and not enough thoroughfares to accommodate them.

Its daytime population is more than 12 million, and even at night, when commuters have left, it’s still home to 9.6 million, making it the world’s tenth largest city and surpassing the city’s projection for another 14 years hence. Include its suburbs and sprawl and you’re talking nearly 28 million people.

Jakarta’s biggest headache has always been its roads, or lack of them. According to the Jakarta Globe, they account for only 6.2 per cent of the city’s area, against 15 to 20 per cent in cities like New York, Tokyo or Singapore. And it’s only getting worse: according to official figures road length – the amount of thoroughfare available to traffic – will have increased between 1994 and 2014 by only a quarter, while the number of vehicles will have more than doubled. The result is gridlock: in 2000, it took 60 per cent

When the short message – SMS, or text message – was introduced in 2000, it caught on equally quickly, for exactly the same reason: for many Indonesians, the mobile phone was the first communication device they’d owned, and they wanted to get the most out of it. Indeed, Indonesians were the second biggest sender of text messages after the Philippines.

Similarly, the internet suffered from a lack of investment in cables – meaning it too only took off when mobile phones became smart and web ready. Until 2007 Indonesia lagged behind much smaller Malaysia and Thailand – wealthier, but mired in regulatory issues which have hampered the rollout of 3G services – in internet users. In that year mobile internet started to kick in, and Indonesia embraced it wholeheartedly. Within a couple of years internet usage overtook its two South East Asian neighbours – even as fixed broadband subscribers remain negligible (less than one per 100 people in 2008, compared with five per 100 in Malaysia). Almost half of all Indonesian internet users, according to data from internet consultancy Nielsen, access the internet from their mobile phones, compared to 35 per cent in Singapore and 21 per cent in Malaysia. This is partly driven by price: Indonesian mobile entrepreneur Andy Zain says that Indonesia has one of the lowest – if not the lowest – cost of mobile data.

Indonesians have learned to work around the limitations of infrastructure and government policy, and have turned to technology when it’s available – and when they can afford it. They may not have a computer at home, they may not have a broadband internet connection. They may not have the fanciest phone: entrepreneur Zain reckons that up to 80 per cent of phones sold cost less than $120. But Indonesians are used to squeezing the best out of what they have.

The mobile phone, in short, is opening things up for Indonesians. Small, portable, reliable, and always connected. And the critical mass has fostered an ecosystem of other services; online banking has seen a surge in growth in the past year. According to comScore, between January 2010 and January 2011 the number of visitors to

Almost half of all Indonesian internet users access from their mobile phones.

Jakarta city data

Average income per inhabitant 8.7New York = 100





Superior public transport networks 0.19km/km2






Online banking users (national) No data found



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Jakarta’s biggest problem is its lack of roads, making commuting hard work. Remote working and virtual offices have become essential.

20 Megacities 21

and they want to set up their own websites and blogs and businesses.

Indonesians have taken up social media – as Jeremy Wagstaff writes in his article, the country is number two for the most Facebook users. And it’s true that a lot of my family and friends are using Facebook. Indonesians are very sociable people and they like to have a network. So the culture is there and people are using technology.

In Indonesia right now there are still some negative feelings about the government and corruption, but if we look at the global economy we are very solid. There is a lot of potential in the domestic market, we have exports to Japan and China, and the crisis in the US and Europe has not had too much impact on us. The central bank has cash reserves, the financial system is strong and for the next three to five years I see good growth ahead.

I joined BT to work with good people with good values and to grow. And I hope you will join us.

I want us to represent all the BT values to win trust and help us grow. BT’s number one value I think is to be trustworthy; we deliver what we say we will. Second is heart and passion; we work as a team to understand the customer and see the situation from their point of view. Number three is inspiration so that we can meet our goals. And number four is being straightforward: I think BT is very open and easy to work with.

Our future potential is already being realised

In Indonesia there is a lot of potential to develop BT’s business but also to bring its global expertise to help develop this country and develop the people. Other countries may be more sophisticated in their technology use, but we have potential as the technology is new here and people are excited about it.

In schools, for example, we have very few computers, students don’t have great access to technology. But now we are seeing graduates returning to the country, they have studied at schools in America and Europe,

Passionate about businessBy Wibisono GumulyaCountry Manager, BT Indonesia

This is an exciting time for Indonesia and an exciting time for BT. As an Indonesian, I really think the two can benefit each other. And I would like to tell you how.

IT capability here is still quite low. Even today only a few companies have really grasped that IT should be at the heart of their business. And I think that provides opportunities for BT and for the country.

I joined BT in April to help them start offering IT services, and big customers are already listening. For example, we are working for the third largest telecoms company and we have designed a ‘green’ data centre for one of the region’s biggest banks.

Making your business work

We know our customers will be the companies that realise their IT network is key to their businesses. These are professional, well-led companies that want to get ahead. We can pinpoint what would help them in their business – such as data security and storage – and give them a detailed proposal of how we can help not just with hardware but with IT services too.

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Indonesians: sociable by nature and by media

There’s no doubt that Indonesia has a highly sociable culture. So when social media came along, out went texting and email and in came the new, more communal ways of being in touch.

Dev Yusmananda, who works as a telecommunications and technology transformation consultant in Jakarta, puts it this way: “People in Indonesia don’t start their communication from a two-way perspective anymore, but from a public broadcast medium and, when needed, they will go into private mode. This function was not a standard feature for email and SMS.”

Indonesians not only make up the second largest Facebook population in the world, they are also some of the most sociable people in the world. On average Indonesian Facebook users have 199 friends, according to a report by TNS. And much of this is mobile: the Jakarta-based internet research firm Saling Silang found that 43 per cent of Indonesian tweets are from UberTwitter, an app particularly popular among BlackBerry users.

This has made social networks and the mobile phones that drive them compulsory accessories for any self-respecting Jakartan. Says Maryam Jamiella, a 25-year old civil servant: “You have to have a BlackBerry, because everyone has one, and that’s how they keep in touch. If you don’t have one, you’ll be socially isolated, you’ll be like an outcast. The first question people will ask is ‘what’s your BB pin number?’”

It’s these networks that not only enable Jakartans to cope with the unpredictability

and frustration of living and working in the city, but also, for many of them, a chance to supplement the relatively low salaries most office workers and bureaucrats draw. BlackBerry Messaging (BBM) groups are closed networks through which friends from school, or office colleagues, stay in touch. But they’re also networks for selling.

Astrid Anastasia, for example, works for Nokia in Jakarta and lives in Bogor, a town about 40km south of Jakarta. During her commutes and spare time she turns to her BlackBerry and netbook computer to run a small online air ticketing service. She monitors special flight deals via airline apps on her BlackBerry and broadcasts offers to friends and clients via her BBM groups. Colleagues in her office are all doing something similar, she says, acting as resellers for products such as handbags, clothes, shoes and baby needs, which they will promote, along with photos of the products, through BBM or Facebook. “They will progressively invite members of BBM groups and broadcast the most updated information on latest products and always get customers,” she says.

For some it’s become more than a sideline. Ivan Chandra is a corporate attorney and a drummer in the three-man soul band Urban Vibe, but most of his income comes from selling the cajón, a box-shaped

percussion instrument, which he makes in a workshop in Bogor. He handles all orders via a combination of BlackBerry and iPhone. “I can get almost everything from my mobile phone: checking emails, telephone, updating the website, searching information that relates to my business such as pricing comparisons, displaying the products, and shipping costs if I need to send the product overseas. I can follow up orders, wherever I am, through these two gadgets.” His girlfriend runs a business on the side too, selling clothing through BBM groups.

Some of these sidelines grow into major businesses: Ligwina Hananto, a jilbab-clad graduate of Australia’s Curtin University of Technology, uses Twitter to promote her financial consulting business. Her seminars sell out just by spreading the word on Twitter. When she decided to write a book she tweeted about the process to her 40,000-odd followers. The book flew off the shelves and has been reprinted four times. She credits early adopters like her husband, the infrastructural failures that force Indonesians to adapt – and the culture: “Indonesians love to hang out in whatever form,” she says. “It used to be in coffee shops, radio chat, then the years of IRC (Internet Relay Chat, an early kind of online chatting). Then Facebook. Now Twitter. That’s why local social networks grow so quickly.”

...if we look at the global economy we are very solid. The crisis in the US and Europe has not had too much impact on us.

It’s these networks that not only enable Jakartans to cope with the unpredictability and frustration of living and working in the city, but also a chance to supplement the relatively low salaries.

BT is helping companies in Indonesia put IT at the heart of their business.

22 Megacities 23

The Mumbai terror attacks of November 2008, which killed more than 160 people, were one of the first instances where real-time social networks helped report what was happening. Locals used Twitter and Flickr to share information about the ten shooting and bomb attacks across the city. Some of the first images to be broadcast of the aftermath of the attacks were those taken by resident Vinukumar Ranganathan and posted on Flickr. Indian bloggers offered live updates.

Referring to the huge electronic record of the attacks from photos, video footage and phone recordings, the New York Times said it “may be the most well-documented terror attack anywhere”.

During the latest series of bomb attacks in Mumbai in July, citizens responded with even more sophistication. Besides relaying news and quashing rumours, Mumbaikars also used networks to arrange transport for those stranded, volunteer help and coordinate relief. The #needhelp and #here2help hashtags were used to consolidate offers and requests.

What all this indicates is that the government should be looking at platforms like IM and mobile telephony to help inform, assist and aid citizens. But the indications so far are not good.

“Security is currently a huge priority for the national government,” says Lloyd Mathias, President, Corporate and Monitoring at Tata Teleservices, one of the country’s major telecom operators. “And they are constantly looking at ways to use regulation to improve intelligence and security.”

This has led to push back from privacy advocates and problems for the telcos themselves. Lloyd explains: “Unlike in the west where governments have the equipment to trace and track calls, here the government wants the service providers to have this facility. This requires investment.”

The IT (intermediary guidelines) Rules 2011, recently released by the Information Technology ministry, require hosts, ISPs, social networks, search engines and

Berges pauses to think back fondly to the old days – in particular 2003, when he got his first laptop. Back then he used Yahoo! Messenger with only ten friends and spent most of his time talking to a cousin in the US.

Then he switched to Google Talk and in 2008 he got his first phone, a Nokia E Series device, with an unlimited data plan. “That changed everything,” he says. “Instant messaging went from being something I did once in a while with a small group of friends, to becoming my primary means of communication. Rarely do I get anywhere close to using my monthly texts and free calls allowances on the phone now; I send less than five text messages a day.”

Starting from a meagre base just a decade or so ago, India has seen an explosion in internet connections, internet users and social network usage. Much like Berges, young people throughout Indian cities have adopted social networks vigorously.

One social media statistics service estimates that India has around 35 million Facebook users, with some ten per cent of them in Mumbai alone. Given that only two per cent of the total national population lives in the city, this is a sign of its popularity. And sometimes these social networks have been used for more than sharing photos or cheeky status updates.

Over the past ten years Mumbai has been hit by a series of bomb attacks and each time the city’s response has been markedly different thanks to the use of new technology.

For 22-year-old political science student, Berges, texting is slow. And email is positively Neanderthal. He is on an Instant Messenger app all the time.

That means he is always connected, and always available: “Every time my phone vibrates I pick it up,” he says.

Berges says this is true for the vast majority of his friends and they all enjoy using IM, although it does have some downsides: “I’m never having one conversation at a time,” he says. “There is someone I’m talking to in real life, and someone else on my phone. You can see this whenever I meet my friends, we are always reaching for our phones.”

Even his father has learned that IM is the way to stay in touch with his son, ever since Berges convinced him to use Whatsapp on his Android handset (Whatsapp lets you see mobile messages from people using different phone platforms).

Berges is a genuine Generation Y-er, he falls in the group of 15–34 year olds who have grown up with digital technology. By 2020, according to the global research consultancy Frost & Sullivan, this group will make up a third of the world’s population. And 37 per cent of those Generation Y-ers will live in India and China.

That their world will be different is certain, and it’s up to Berges and his friends to shape just how different. Already in his short life span Berges says that the emergence of cheap data plans, reliable networks and good software has fundamentally changed his social life and the way he uses his phone.

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Mumbaikars use technology to cut through the blockages

By Sidin VadukutMumbai, India

Sidin Vadukut is a writer from India and is currently the managing editor of Livemint.com, a premium online business news service launched in collaboration with the Wall Street Journal. Born 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.

The New York Times said the Mumbai terror attacks of November 2008 “may be the most well-documented terror attack anywhere”.

24 Megacities 25

has 899 phones for every 1,000 people.

Businesses have been quick to latch on to this platform. And they’ve learnt to adapt to not just the platform itself, but to the services that thrive on it.

Jaydeep Barman is a partner in restaurant chain Faasos that has branches in Mumbai and Pune. As a food delivery service he somehow has to get food through Mumbai’s traffic. He uses a BlackBerry for mobile email and data, and a Macbook to constantly keep an eye on his 16 outlets: “The traffic in Andheri East is hellish. There is no physical way I can checkup on everything. So I use the Macbook to access realtime reports generated by my system.”

Barman, who says he is connected every waking minute of the day, claims that his is the first restaurant chain in the world to take delivery orders via Twitter. “We were present on the social network already, and using it to interact with customers. So we thought why not use it to actually generate sales as well,” says Barman.

Initially the company had an employee manually collating orders based on Twitter updates from customers. But later they hired a local software company to build an application. The process is simple. Users need to register on the Faasos website once with address details. Then all they need to do is tweet the Faasos handle with their order and add a keyword hashtag at the end: #faasosnow. The software picks up orders, processes it and then communicates it to the Faasos kitchen. “It will never become a huge part of our revenues,” says Barman. “Twitter is still niche. But we are a brand that dislikes marketing ourselves too much. This is a good way to make new customers curious. When they see friends posting orders publicly, they will eventually want to try it themselves.”

Like all major cities, Mumbai’s fortunes are now tied up with new technology. Whether it is ordering a chicken tikka roll from Faasos via Twitter, or organising emergency relief efforts via BBM, the city’s fortunes are being shaped by new ways of communicating.

killing 209 passengers and injuring 700. The last bomb exploded at 6:35pm. The train system resumed service at 10:45pm.

When the trains stop, so does the city. So they never stop.

But the conditions on the trains are excruciating. Nine-car trains designed to carry 1,700 often carry up to 4,500, a situation referred to, technically, as Super Dense Crush Load. Passengers who hang from open doorways and sit on the roof are particularly susceptible to accidents. Unofficial figures estimate that an average ten people die every day on the network.

Political science student Berges thinks things can and should be improved: “The railways keep harping on about how the trains have GPS modules. Why don’t they leave that data open like they do in places like the UK?”

And Tata Service’s Mathias is equally keen for more information: “Why can’t I go to a bus stop, send a text message and know when the next bus will come? This can help reduce so much over-crowding and panic,” he says.

Faced with such overwhelming systemic challenges, people in Mumbai and elsewhere have learnt to work around obstructions. That’s why, when mobile telephony was first launched in India, it was embraced so vigorously. Until that point, consumers were dependent on sluggish public sector companies to lay the copper wires and hardware required to get phones into homes. Wait times could often stretch into years.

With wireless mobile phone connections, they were liberated. The Indian mobile phone boom began in 1994 when the government launched the National Telecommunications Policy, or NTP. In ten years, by late 2004, the number of mobile phones in India overtook the number of landlines and reached a total of almost 50 million.

Today there are 851 million mobile connections in the country, and the state of Maharashtra, of which Mumbai is the capital,

Registry – this is a database where you can add your phone number and supposedly opt out of spam calls or texts. So far these measures haven’t really worked.

Tata Teleservice’s Lloyd Mathias says that there is more to this than just leaked information. “In some cases people leave business cards or contact details at restaurants or shops,” he says. “These can then easily get accumulated and sold to spurious marketers. When we sell databases ourselves we can regulate them. But when they are procured indirectly, it can be a problem. There are benefits in leaving your details at shops. But consumers must be aware of the potential for misuse.”

Frustrated by the problem of text spam, the Telecom Regulatory Authority of India (TRAI) has now said that from 27 September 2011 no user will be able to send more than 100 text messages a day. TRAI is hoping that this will curb spammers. (Though this then raises the issue: what if your 101st message has to do with an emergency?)

But the aspect of his life Anupam would most like to improve through modern technology is his commute. “There has to be a way to make the misery end, or at least bearable,” he says.

With a population of over 12 million people and another ten million in the surrounding area depending on the city for their livelihood, Mumbai’s public transportation system is under huge pressure. Sure, the existing system does its best – the city’s suburban train system is the stuff of legend. Regardless of natural calamity or terror attacks, the train system is the last to shut down, and the first to get back to work.

On 11 July 2006, for example, seven bombs ripped through the network in 11 minutes

other intermediaries to not only process complaints, but also proactively keep an eye out for objectionable content.

Which, in times of emergencies, leaves the job of early response, rumour management and coordination in the hands of enterprising civilians.

And things aren’t much better in the everyday world either, says Anupam, a 29-year-old stockbroker from Mumbai: “Over the last four or five years the websites of local government bodies have improved tremendously. But the data still simply resides on their servers. There has to be a way to push it out more dynamically.”

Anupam loves the new ways of communicating and says his mobile phone has changed his life. Each morning he wakes up and “sometimes even before I’ve gone to the loo”, he switches on his phone and browses through emails, business news headlines and tweets.

When he first started stockbroking seven years ago, he recalls, email was the gold standard for communication. “Now when something happens in the stock market the first thing I do is text my colleagues. That is how I break the news. The analysis can come later via email,” he explains. “We have come a long, long way from using a fax machine in the trading room.”

But Anupam admits that he doesn’t use his mobile phone and mobile networks for much more than communicating. Partly, he says, this is because of privacy issues. “Service providers here are extremely lax about privacy and data protection. You don’t want to leave your address and phone numbers with shady companies,” he says.

Last year Mint, the business daily, published a story about how hundreds of thousands mobile numbers complete with personal details of the user were available for sale cheaply. In some cases agents had leaked the information directly from telecom companies.

The government has responded with a raft of laws, including a National Do Not Call

Mumbai city data

Average income per inhabitant 6.9New York = 100





Superior public transport networks 0km/km2




Speed of 3G coverage Low





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“Now when something happens in the stock market the first thing I do is text my colleagues. That is how I break the news.”Fast food delivery service

Faasos uses technology to keep an eye on traffic.

26 Megacities 27

Less rush,more timeBy Mridul SrivastavaDirector of Marketing, BT Indiaand Girish BhandarkarHead of Product, BT India

Technology has opened Mumbai up like never before. There are many examples like Berges, in Sidin Vadukut’s report, who’s made a whole new group of friends via his instant messaging.

But Mumbai knows better than most that security is a huge concern. That’s both physical security, which has come under threat in recent years from a series of terror attacks, and information security.

Because of concerns that technology helped coordinate the attacks, the government is extremely stringent about communications services in India. At BT, as one of the country’s leading networked IT services providers, we’ve kept pace with new laws and requirements on lawful interception and monitoring of all our services and communications.

Picking the right technology

The geo-political situation, regulatory issues and the limitations of the infrastructure mean it can be a challenge doing business in India. And I think that’s where BT really stands out as a neutral provider. We can stand above domestic problems and choose the best technology and the best services for our customers.

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

the approvals they need to get started.We’re reliable too. For instance, we have multimedia hosted contact centres outside India, located in diverse geographies so our services won’t be affected by emergencies. They’re based in different countries so even if the main platform is affected, the back-up is always available from another location.

Less commuting, more conferencing

On a personal level, we can recognise the problems of the stockbroker Anupam in the report, when he says the aspect of his life he’d most like to improve through technology is his commute. Not only are there the physically unpleasant conditions of packed public transport, but there is also the work-life balance issue. People are getting up at 5am, spending one-and-a-half to two hours commuting, working late and getting home by 10pm.I don’t think we can overcome the problems of moving large numbers of people through cities, but we can offer new ways of working that get round this.

Take audio and web conferencing, which is only now picking up in India. There are Indian companies that still don’t know about its benefits. They’re used to face-to-face meetings and travelling long distances for an appointment. They’re not aware of the service and when they hear about it, they’re worried that it may be expensive.

Piloting a new culture

So we’ve launched a pay-per-use service with no monthly charge, and with full visibility, security and control to the user from either a mobile phone or a desktop. Still, we found that some people weren’t open to adopting this way of working. So we offered them a pilot with demo user IDs and said “If you like it, use it”. And we found that once the senior management started using it, it caught on.

Any initial concern that the conference call costs more than a normal call disappears because people see how useful it is. How it cuts the cost of face-to-face meetings, how it makes people more productive.

One world, one service

Around 70 per cent of our services are launched worldwide, although they’re offered using different local access providers in different countries. So when business people travel to the UK or the US they can use the same technology and be able to do their normal day-to-day job without impacting their productivity. They’ll be familiar with the product, irrespective of the local carrier – from one megacity to another.

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ConclusionSo a glimpse of digital life from four megacities – each of them thrilling, complex and dynamic.

They have things in common – millions of inhabitants, gleaming buildings and high-end culture alongside congestion, lack of infrastructure and poverty. But each city is also unique. Unique compared with megacities in different countries and unique even within their own country. So the feel of Guangzhou is not only different to the feel of São Paulo, Jakarta and Mumbai, but also to the feel of Beijing.

And it is these local differences that we embrace. We employ people who come from these cities, who know these cities. And we are aware that these differences matter. They are the reason why your business in these places will succeed or fail.

But we also provide the security of being a global company, providing technology that works around the world, and having a huge level of expertise in delivering it. This is the reason our employees around the world want to work for us – because they know BT can make a difference. BT can make your company work. And we want to make it work.

Today we have a new uniting power – digital technology has brought the world together more than we ever thought possible. We use the same applications – conference calls, IM, Facebook – everywhere. But in a world of multinationals and globalised thinking, you can forget that things are not homogenous, that differences are interesting, and that we can learn from each other.

And it’s the mixture of the global and the local that is the future of our world.

New ways of working are making business in India more productive.

mega-cities: bt’s on-the-ground intelligence from four global locations

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