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He reengineered VSNL's business model taking it from a domestic player to a multinational telecom giant in a very short time. Andy van Smeerdijk meets N Srinath.
- By Andy van Smeerdijk
- Published: 00:04 June 22, 2007
- I get very restless on vacations. I hardly take vacations for that matter; I've had four in the past 20 years..., says Srinath.
- Image Credit: Andy Van Smeerdijk/Gulf News
He reengineered VSNL's business model taking it from a domestic player to a multinational telecom giant in a very short time. Andy van Smeerdijk meets N Srinath.
Judging from the words processed from N Srinath's mouth ? there are neither full stops nor commas in his vocabulary ? the CPU outputting this must be vast.
He issues precisely constructed sentences in spiels, like information streaming across a tickertape.
"People accuse me of speaking too quickly," he says. Not such an outrageous claim really, but it's clearly his rapid-fire speech and razor-sharp mind that have shot him to such dizzying heights. At 44, he is the managing director of VSNL and CEO of the VSNL group, an Indian company that has become a global force in telecommunications.
But it's not all fast talk. Srinath is a consummate manager, a concise communicator and a shrewd sales and marketing man. He believes in empowering employees and encouraging them to speak their mind. Really. And he's not work shy. He puts in seven days a week, is single-minded about being the best in the business and shuns holidays.
"I get very restless on vacations," he says. "I hardly take vacations for that matter; I've had four in the past 20 years... I just don't know what to do with myself on vacations; I need to be doing something all the time."
His office in Prabhadevi, Mumbai, has sweeping views of the Arabian Sea. The focus is appropriate as VSNL's submarine cable network connects Asia with the Middle East, Western Europe and beyond and is a keystone of the company's success. The office has some boyish touches: baseball caps, an autographed cricket bat and a cuckoo clock ? quite appropriate for a young gun.
Appointed managing director in February, as executive director Srinath was responsible for reengineering VSNL's business model and played a major role in the transformation of the company from a domestic player to a multinational giant by acquiring overseas assets and diversifying the business. This is even more impressive when you consider that until 2002, it was a wholly government-owned monopoly. In that year the Tata group, which Srinath has been with for over 20 years, bought a 45 per cent stake of its equity and assumed administrative control of the company. Srinath was appointed director (operations) and the rest is history.
"I came into a very different management system and structure. I came into a company that had traditionally been a monopoly, and trying to make that company into a market-driven business was a very interesting challenge," he says. "It was very different to what I'd done in the past. My background was predominantly in sales and marketing and project management. I'd worked in the IT part of our business, in access telecom and the internet part of our business but never in international connectivity."
A cricket lover, when asked which player embodies some of his traits, he responds: "Probably Rahul Dravid. More steady than flamboyant ... keep the pieces together rather than go out and do something amazing individually.
That would be a thread that runs through a lot of the jobs I've done and the way I've done them. Provide the back-end support and keep things moving than actually be the most visible one that you see at the front."
But clearly, it's not all about playing steady. In the dynamic telecom market there's the pressing need to adapt and look for new opportunities.
Among its latest ventures, VSNL is taking part in a new submarine cable consortium (which includes Etisalat and Saudi Telecom among other partners) that will connect India, the Middle East and Western Europe. But this is nothing new for VSNL, which has taken part in many similar consortia. Since 2002, it has also chartered a course of global growth, acquiring the trans-Atlantic and trans-Pacific Tyco Global Network (TGN) and Teleglobe businesses in 2005-06. With the deregulation and opening up of India's communications sector, the company opted to compete on the international market. But, as Srinath explains, they had very little choice.
Starting up
VSNL's rapid transformation was partly due to circumstances. When the Tata group took over the reins of the company, it had to quickly adapt to the end of the monopoly and the imminent arrival of competition.
"We came into the company on February 13, 2002, and the market was being opened up for other players from April 1," says Srinath. "So we had six weeks". Originally, this was supposed to happen in April 2004 but the government changed this policy directive in 2001.
"We were predominantly in one business... we were a one-country international voice operator. We knew the market would open up and new players would come in ... and subsequently that prices would fall. Which happened: prices fell 30-40 per cent within months and kept falling for some time after. So the challenge for us was to find something else we could do that would allow us to make up for any loss in revenue or profitability."
Moving into the mobile phone market wasn't an option as other companies in the Tata group were in that business. "The logical growth for us was in enterprise data business, where we had some of the investments in terms of submarine cable capacity. Therefore, we moved into enterprise services [ie, services for corporate clients], initially mostly around connectivity, then started getting into value-added services."
At the same time, VSNL looked to expand its cable network to deliver such services globally. "We started looking internationally as the way to go.
We acquired the assets of a small IP-VPN [Internet Protocol ? Virtual Private Network] company in the US just to understand: could we play in this market? And based on what we saw, we felt more confident that we could really attempt to address that opportunity, which was when we pursued the TGN acquisition and then the Teleglobe acquisition. And both have given us the ability to take our services globally. For example, if you see what TGN did for us ? most of our submarine cable assets were either to the east or west of India. Our consortium cables ... ran from Western Europe to Southeast Asia, but we never owned a network beyond that. The TGN network was complementary; it starts off as a trans-Atlantic network between the UK and the US. It gave us capacity across the US and then across the Pacific into Asia in Japan.
"The second thing we got was a very strong IP (internet protocol) transit business out of Teleglobe, a strong voice business and an instantaneous reach to more markets than we had in the past."
"Today, we have broadly three business areas: first, a wholesale voice operation, which carries international traffic from one country to another. In this market, we are the largest in the world for wholesale traffic. Second, we have a global carrier and enterprise data business, where we sell bandwidth and other data solutions. We're also one of the largest players in the world in the IP transit market; we provide connectivity solutions for customers in India and the international market and we're now expanding our portfolio to cover value-added services, such as managed services."
Internal change
But before this expansion, VSNL had to be transformed.
"As the focus changed to external markets, so did the need to reskill," explains Srinath. "For example, as we started getting into enterprise business... the requirements of sales and marketing, customer service, backend operations and IT support completely changed. It was a very different operation to take up, compared to being a monopoly wholesale carrier.
"We wanted every aspect of the business to change... the strategy and direction of the company, the inherent capabilities and essential infrastructure, the underlying processes [eg, IT systems] and the skills and technical capabilities in the system. We had to change everything to operate in a very different market."
The company introduced extensive training and recruited specialists in sales and marketing, customer service and IT. "There was also a need for us to look at our cost structure. A lot of emphasis went into cost cutting. For example, we reduced our network cost significantly. We had a lot of investments in satellite capacity, which were used for voice communications at one point in time, but as submarine cable capability became available, a lot of clients converted from satellite to [this]."
The company's underlying processes had to be reengineered too. "Creating an entire quality culture was very important. The process is not complete, because the telecom market changes [so rapidly] ... the organisation has to continue to evolve as the market changes and as customers evolve and become more demanding." Despite the changes, he says VSNL's relationship with the government, a 26 per cent shareholder, is good. "The government has been an active participant, it has supported all the initiatives we've taken. It participates through its representatives in board discussions and deliberations."
The man behind the success
As Srinath strides around the VSNL building, employees glance up then quickly put their noses down. An imposing but courteous figure, he opens doors for others, uses the stairs rather than the lift and takes note of the little things ? something in the canteen isn't right; a poster in the hallway needs attention ...
A single child, Srinath had an itinerant childhood. His parents, from Tamil Nadu, shifted regularly due to his father's work with IBM.
"I was born in Kolkata and lived all over [India]. My dad [Narasimhan] got transferred every couple of years, so I've lived in many, many cities and been to many different schools. I've lived in Delhi, Mumbai, Durgapur, Chennai ... I got quite used to adjusting to different places and people very quickly. I picked up customs and habits and sometimes even languages of different cultures and many of them have stayed with me to this day.
"As a child, I loved to read. I loved gadgets, mostly electronics... music and TV systems and later computers. Most of my high school I did at Chennai and that's where I did my degree in mechanical engineering at the Indian Institute of Technology (IIT), Chennai. After this, I did my MBA in marketing and systems from the Indian Institute of Management (IIM), Kolkata for two years. Then I joined the Tata group in 1986." In 1988. he married Ingrid, a classmate at IIM from Mumbai.
Srinath credits his father, who is deceased, with playing a major role in his life. "He helped me in many ways. I was always clear about what I didn't want to do, but had a difficult time figuring out what I did want to do. And he helped me to choose that which gave me flexibility and options in the future.
"After university, I came to Mumbai to work and I've been here pretty much for the past 20 years, except about three years in Bangalore and about two in Hyderabad."
He joined the Tata Administrative Services as a probationer and has worked in project management, sales and marketing and corporate functions in various Tata companies. After his probation, he became a project executive in Tata Honeywell from 1987 to 1988. He was part of the team that set up a joint-venture with IBM called Tata Information Systems (later Tata IBM) and in June 1992 he moved into this business full-time. "We were looking at setting up hardware and software capabilities across the entire range of the IBM product line. Most of my work was in domestic sales, in which I had responsibility for sales to some of the customers in the manufacturing as well as the banking industry."
A year later, he moved to Hyderabad as chief operating officer of Tata Teleservices. In 2000, Srinath became CEO of Tata Internet Services, a position he held until he moved to VSNL in 2002.
A busy partnership
Srinath and Ingrid have been married for almost 19 years, have no children and live in Mumbai with his mother. It's a busy partnership as both hold senior positions in their respective fields. "She started her career in advertising and market research and for the last eight or nine years has been working with an NGO that works with children, it's called Child Rights and You (CRY), earlier called Child Relief and You. She has been working for them as the CEO for the last few years."
With both of them in executive roles, life can get hectic. "It has been challenging in the sense that it's difficult to manage ... two people who both have active careers. But at the same time, it's been fun since we both do very different jobs and are very different in our interests. I guess that has kept life interesting as well. In many ways, her's is the job I'd like to do one day. I can see myself at some point in time, going into that kind of a role or teaching."
Empowerment
If there's one thing that has clinched his loyalty, it's the freedom he's been afforded at VSNL. And that's something he'd like to instil in the company. "We try very hard to get that sense of ... an entrepreneurial mentality. I don't think we've reached this yet; it's something we have to keep working on. If a person is completely free to think his own thoughts and do what he does best, then ? as long as the system supports him in the long run ? he will be pulling in the right direction."
When it comes to personnel, Srinath favours a direct approach. "I've always encouraged a very open style of communication and encouraged people to break barriers... encouraged them to be risk takers, to be willing to take on the system if they strongly believe something has to be done. I encourage people to fight on issues, not personalities. For example, you can say someone's not doing their job... but not go at him personally." He adds there is a fine balance with this. "If a person makes a mistake, we don't want others to come down on them too hard... it's important to encourage the right behaviour and give people the comfort that as long as they do something with the right intention, the company will support them." While nurturing a supportive environment, how does he himself cope during testing times? "It's entirely internal. When times are tough, just stick it out and keep moving. I will not back down. Period. I just will not back down."
Finding new niche markets
Srinath's tenacity is evident in his achievements, but he's not resting on his laurels ? he's looking to expand VSNL's enterprise services. The challenge, he says, is to convince corporate clients that their business would better served by contracting out telecom and IT services. "Why should companies manage their own telecom or run their own networks? Or manage firewalls? Or security, systems and so on? If we're able to evolve to a point where we can take on some of these functions and convince clients that we can do a better job of managing these than they can ? convince them that it's not critical to their core business... then we're going forward.''
He's looking at going into other countries, investing in select 'in-country' telecom operations and developing these. VSNL is already a partner in the second telecom licencee in South Africa and has an External Gateway Operators (EGO) licence in Sri Lanka.
"The Middle East is also an important market for us. From an Indian perspective, it's one of our major sources and destinations of voice traffic... Second, because of the growing demand for broadband and IT services, we've established a presence in the Middle East for IP connectivity: from there you provide IP services for carriers who, in turn, serve customers looking for internet connectivity."
Loyalty and the future
Srinath says he has never been tempted to work elsewhere.
"It's not that I've not had people talking to me, but I think in terms of the opportunities I've had within the Tata group, touch wood, it's been good. The ability for someone at my age to get to the position that I'm in ? to have the kind of freedom of operation I have ? is something that is extremely attractive. The fit that I have with the Tata group is extremely strong. It has a very strong value system that I identify with, a strong focus on ethics and employees, a very strong commitment to customers and society. These are the main factors why I've stayed in the group."
Despite the long hours, he finds work enjoyable. "I don't feel too much stress, I like what I do. To me, the only way I can do this is to enjoy what I do. If at some point, I stop enjoying it then there's no way I can put in these kind of hours. To me, it's important to be the best at what you do. That's what drives me... to be better and better at what I do."
So does he ever think about what he'll do when he retires? "Oh yes," he laughs. "Many times! But I can't see myself as being inactive. It doesn't necessarily have to be work. I'd like to work with NGOs, work with children, I'd like to teach."
Teach what? "Anything ... to me, the bigger joy is working with uncluttered minds, working with people with their own ideas and a different mindset."
And his advice for newcomers? "Be flexible; keep an open mind and don't get caught in paradigms. In this market, paradigms change practically every month." Then he catches himself; these are the sort of questions that should be posed to an old man, he says. "I haven't seen enough of the world to answer some of these questions!"
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