CHRYSTIA FREELAND:
Professor [? Rosling ?]
is also a very active blogger.
So, if you want to continue the
discussion with him after this
session, I urge you to ask him
and converse with him that way.
Our next speaker is also
a Renaissance man.
Sanjiv Ahuja, the
chairman of Orange.
I think this is part of a plot
by Nikesh Auora, our host
today, to prove to me something
I already had believed, which
is that brilliant Indian
technologists rule the
world at the moment.
Sanjiv is a member of
this group of absolutely
fabulously trained Indians.
He has a degree in electrical
engineering from Delhi
University, and has gone on to
work at a number of technology
companies, including IBM.
Most recently he is
chairman of Orange.
He's going to speak to
us about development,
technology and business.
And he'll speak for a few
minutes, and then we'll
have a conversation.
Please, Sanjiv.
[APPLAUSE]
SANJIV AHUJA: Thank you Chrys.
God, what a set up this is.
I wish I had
professors like him.
I'd be smart.
I was going to say
I'd be smarter.
I'm not smart yet.
So that was wonderful.
I will not take
very many minutes.
You started this conversation
saying the other
half of the world.
I just want to share with
us what is our half of the
world, the world we live in.
Western Europe.
Japan.
Korea.
North America.
600 million people out of
over 6 billion people.
This is not the other half of
the world ladies and gentlemen.
This is the world.
And I think most of our
conversations are about
1/10 of the world.
Not the 9/10 of the world.
I want to just share some data
with us and then talk about-- I
will not talk about the
wonderful examples of Grameen
Bank and the success
they have had.
But I want to share something
that was in the recent
edition of The Economist.
Robert Jensen, a Harvard
economist, talked about the
local arbitrage in a fish
market in a southern state
of India called Kerala.
Think about this situation
where you go out every morning
on your fishing boat.
If you're lucky, you catch
a lot of fish, a lot of
sardines that morning.
But if you have done
well, the odds are other
fisherman have done well.
So there's an oversupply
at the local beach.
Prices will be down that day.
You may not be able to sell
your catch, so what do you do?
You go to the local market
and you take your chances.
Or you head up the coast and go
to another market, and who
knows what the situation
would be there.
You get one chance.
One chance a day.
And the fish has to be
sold by dawn, otherwise
it has to be dumped.
And despite the local poverty,
8% of the catch every day was
dumped back in the ocean.
And then came the mobile
phone-- I'm a little bit biased
towards communications.
And fisherman started to call
around to get the best price,
which was eliminated.
Consumer prices fell by 4%
and profits rose by 8%.
That's the power of
communications.
You talk about 50,000 form
ladies in Bangladesh.
In Kenya, their literacy rate
is still not very high.
There's bunch of people in
the towns that read SMS'
for the illiterate people.
In Botswana, we used to send
SMS messages through the mobile
phone reminding people to
take their HIV medication.
In Cameroon, we were
financing-- in my old life, and
it still continues-- mobile
phone booths for the
entrepreneurs to resell
the mobile minutes.
GSMA Association-- that's an
industry association-- says
that 10% increase in mobile
penetration leads to a direct
1.2% increase in annual GDP.
So why don't we have
communications everywhere
in the world?
Why don't we have mobile
communications everywhere
in the world?
Why don't we have internet
everywhere in the world?
Let me just share a couple
of the data points.
23 countries out of 52
countries in Africa today
have less than 10%
mobile penetration.
23 countries ladies
and gentlemen.
Only 2 billion people in this
world out of over 6 billion
people have mobile
communications today.
And just another
interesting point.
There are two countries
in Africa today that
have greater than 10%
broadband connectivity.
2 out of 52.
That's a big challenge.
But if any of this data
regarding correlation between
GDP growth and communications
is even close to right, isn't
that a great opportunity
for all of us?
A secret for wide connectivity.
If we could have
people communicate.
I was in New York a couple
weeks ago and I talked about,
think of a world where we
take the African continent.
Think of a world where we take
the 830 million people in India
and give them mobile phones.
Think of the world where we
takes 700 million people in
China and give them
mobile phone.
Think of the world where we
take billions of people that
have never connected
and connect them.
What transformation this
planet would face.
And the exceleration chart you
walked through from your
great-grandmother to today,
would have a vertical rise if
we look at it 100
years from now.
And I'll just make
the last point.
We talk about commodities.
Some of us that take
interest in a few data that
relates to our industry.
1906, there was a cable.
The first cable.
Marconi created it.
First cable that was sent from
U.S. State Department to
U.S. Embassy in Paris.
The speed at that time was
one bit every six seconds.
You know the speed
that is today.
And the cost of transmission
of that one bit in today's
dollars was the U.S.
President's salary.
Have we seen any other
commodity-- and we look at the
inflation-- any other commodity
that has had a price drop
of this significance?
If we can provide food to
everybody, we can provide
shelter to everybody, and we
can try to provide clean water,
and we can try to provide
health, and we can try to
provide education, why isn't
communications a part of that
basic staple for life for every
man and woman on this planet?
Thank you.
[APPLAUSE]
CHRYSTIA FREELAND: Well,
thank you very much Sanjiv.
And now I'll ask him a few
questions which I hope will be
the ones on everyone's mind.
The first thing that I wanted
to ask about was something
that Professor [? Rosling ?]
touched on, which is that it's
only a small, slightly odd
group of people for whom
maximizing their own economic
welfare is the most important
issue when we think about
these development issues.
But presumably your
shareholders do all fall
into that category.
How much of a commercial
opportunity do you see in
these development areas that
you've been talking about?
SANJIV AHUJA: Chrysita, Africa
to me and developing markets,
are one of the biggest
opportunities mankind has seen.
I'll speak about Orange's
presence in Africa.
We are seeing the year
over year revenue growth
that is north of 30%.
Our margins are some of the
highest margins we see
anywhere in the world
coming out of Africa.
And our tariffs are probably
the lowest in the world
that we see out of Africa.
It's a tremendous opportunity.
It is a demand that exists.
And we as suppliers are
not fulfilling it.
It is because it is a part
of the word we're not
comfortable with.
I mean there are a lot of
issues that we can talk
about government and--
CHRYSTIA FREELAND: Why
aren't you comfortable?
Is corruption a big problem?
SANJIV AHUJA: Corruption
is a problem.
Governments at both
corporate level.
Governments within
government are challenges.
But if you set your mind to
it, you can get over it.
We do business in many African
countries and I can tell you,
this is some of-- those of you
that are interested-- I'm a
U.S. citizen, and under Full
Foreign Corrupt Practices Act,
we are fully conformant.
And we make it work.
I think it's a matter of
principle and it's a matter
of committing yourselves
to doing it right.
And once you do it,
opportunities are there.
And you know, we
talk would Africa.
There is no formalized
distribution of any product or
good in Sub-Saharan Africa.
It's a great opportunity.
Communications is a
wonderful opportunity.
23 countries at less than
10% mobile penetration.
50 countries less than 10%
percent broadband connectivity.
Opportunities like this
doesn't exist anywhere
else in the world.
CHRYSTIA FREELAND: As
Professor [? Rosling ?]
has pointed out, there
isn't a single Africa,
there's huge diversity.
Where do you see the
greatest opportunity?
SANJIV AHUJA: I think
it's Sub-Saharan Africa.
To me, if you take
northern Africa, parts
of northern Africa.
You take Egypt out and you take
South Africa out and maybe
Algeria and Tunisia.
Rest of Africa,
although there's big
diversity, the spots.
Ghana is one that
he talked about.
A few spots.
Most of Africa is full
of opportunities.
Most of India is still full of
opportunities, and most of
China-- outside the coastal
China-- is great opportunity.
That's majority of the
world's population.
CHRYSTIA FREELAND: Is there any
place you wouldn't do business
SANJIV AHUJA: Right now?
No.
I think this planet as
human beings, we should
do business every bit.
And commerce is the
biggest, the easiest
way to cause social--
CHRYSTIA FREELAND: Uzbekistan?
There's no place
that's just too--
SANJIV AHUJA: Let me just--
this is we don't get into
political abuse here.
But the easiest way for us to
include every part of the world
into the global community is
to do commerce with them.
Whether it's Cuba, or
any other regime.
I think more we open up our
markets, more channels of
communication-- How did China's
transformation happen?
Now, this was a long time ago
if you start with the trip
of Richard Nixon to China.
And we started including
China as a part of
the global community.
Now it's still not a democratic
society, and it's still
centralized planning and
all of those things.
But commerce brings the people
a lot more than what might
appear on the surface.
And I think we have to do that.
CHRYSTIA FREELAND: What do you
think the relationship should
be between NGOs and commercial
companies like yours in doing
things like providing
communication to some of the
world's poorest people?
SANJIV AHUJA: NGOs serve a very
noble cause, but I think where
the need is-- and basic
economics would tell you-- if
you serve the consumers need,
people's needs, enterprise's
needs, you would make money.
That's profitable.
And I think if we start in some
ways, stop looking at doing
business and developing markets
as a charitable activity to a
commercial enterprise
that is profitable.
And if I may speak for myself
personally-- not for Orange--
as a private individual.
And if those enterprises do
something to contribute to
the infrastructure, to the
healthcare, to education.
All they're doing-- it sounds
like charity-- but all they're
doing is they're making sure
that their consumers, their
customers today and tomorrow,
are better able to buy the
products and goods
and services.
CHRYSTIA FREELAND: Is there
a danger in these kinds of
relationships that the
very poor consumers are
going to be exploited?
These are often people who
aren't literate, who might
not be very numerate.
SANJIV AHUJA: Chrys, I
don't believe that.
And if you look at the long
contacts, and you have to have
a macro view to this, if there
is a quarter or two or a
few years where quote, the
people might be exploited.
Eventually if there's
more education people
will filter out.
And Nikesh's not
in the audience.
You know, growing up in India
in the late 1960s, early 1970s,
we used to read that Indians
are going to die of starvation.
OK.
This is what every
newspaper would say.
We had a famine here
and a famine there.
And by God, there's still 1.2
billion of those floating
around in this world.
They didn't die of starvation.
I think if they get the
opportunity, people rise
up to the occasion.
And yes, sometimes it takes
longer than we would like to.
But I think it behooves us.
It's a great economic
opportunity for us to get that
part of the world included
in what we all do.
CHRYSTIA FREELAND: You have
an American passport.
SANJIV AHUJA: Yes I do.
CHRYSTIA FREELAND: Given
current hostility towards
America in a lot of parts of
the world, is that something
that you ever experience
as a businessman?
SANJIV AHUJA: I don't
think there's hostility
towards Americans.
If people level.
You know, human beings are
human beings, and I have never
felt hostility towards me-- and
I have done business, and I
have been to all parts of the
world-- based on either how I
look or what password I carry.
I think if you are fair,
straightforward, open minded
direct with people in any part
of the world, people are open
minded, and they accept you.
So no I haven't
experienced that.
CHRYSTIA FREELAND: And
how about being Indian?
Is that a development
experience that you see people
in other parts of the world are
looking too and thinking, well
India has done it, or parts
of India have done it.
How can our country
emulate that?
SANJIV AHUJA: Chrys,
this is interesting.
I'll bring in an example.
When I went to the U.S. in the
late 1970s, and started working
for IBM, I was probably less
than half a dozen people out of
10,000 employees on that site.
I was the first manager, I
was the first executive
of Indian origin.
And people would ask
me that question.
I don't think like that.
You know I said the only time I
recognize I'm an Indian or not
like everybody else is when I
look in the mirror or I
look on that screen.
I think it's inside you.
If you don't feel the
difference, it's not there.
No, I haven't felt
that in any way.
CHRYSTIA FREELAND: And how
about the positive side
of the Indian experience
when you go elsewhere?
SANJIV AHUJA: Yeah, and
it's rather recent.
It's a decade old.
But the parts of Africa
you go there and people
say-- or even Europe.
A head of state of a European
country took me aside recently
and said, you know let's spend
a few hours and let's
understand how Europe competes
with India and China.
That was an interesting
conversation to have.
People in Africa, this is
a question that's often
asked is, talk about your
personal experiences.
And I think-- you know, if I
could speak on this topic--
I think it's a university
system, the education system.
And India could have done a lot
to improve their education
system at primary level, high
school level, and they haven't
done enough even now.
But they built world-class
universities, and the people
that filtered through to
those universities are
the ones that you know.
And I think if the example is
to be followed, I'd probably
do it slightly different.
I would start with the
grassroots education
and build it up.
And then you can't keep
talent out and you
can't keep skills down.
CHRYSTIA FREELAND: You're
wearing an Orange square on
your lapel, but I'm going to
ask you to be fair-minded in
answering this question.
What is more important
for development for a
really poor village.
Some mobile phones or
buying them a computer
and internet access?
SANJIV AHUJA: I
think it's both.
I think it's both.
Because if you can through your
mobile phone connect to the
internet, then that
solves the purpose.
Voice communication is
fundamental, and I said it's
a basic staple of human
life in some ways.
But being a part of the
information society
is critical.
And this arbitrage that people
play by shielding information.
I'll give you an example.
We talk about Kerala.
We used to have
this in Cameroon.
People didn't know which market
to take their products to.
The farmers did not know
until they got mobile phone.
They got their commodity
prices sent to them
through SMS texting.
Now just think a global
world, if I could have
that information online.
Every day I know where
to take my product to.
I know where to take
my services to.
It's there, it's now.
And if we can get $100 PC in
every school on this planet, in
every healthcare facility on
this planet, and hopefully
every household in our
lifetime, we have truly
transformed the world.
And why shouldn't we
take that opportunity?
It's not out of sight.
We could bring mobility
to 2 billion people.
Let's first take the step,
let's broadband to the
2 billion households.
And I think we'll have most
of the households covered.
So I think it's both.
I don't think it's either or.
I think we need to get
both of them out there.
CHRYSTIA FREELAND: OK.
Well on that very upbeat
note, we'll move on
to our next session.
Thank you very much.
SANJIV AHUJA: Thank you.
[APPLAUSE]
