The personal investment vehicle of Sheikh Al-Maktoum is also rumored to be in trouble, now this should not be surprising. He’s been spending on all types of goodies, such as the 2nd largest yacht in the world. Dubai Holding owns a ton or properties from hotels, real estate and telecom.

The basic theme of Dubai was that it had very little oil and needed to diversify and create businesses that could generate revenue once the oil dried up. And the unwritten rule was that big brother Abu Dhabi would bail it out if anything happened.  The Abu Dhabi Investment Authority (ADIA) at one point was worth close to USD 900 billion, so it seemed it had cash if things went south. Well, things are going south and ADIA is not saying much, which is a bad thing.

All of this is not surprising to people that have been following Dubai from a distance.  It comes down to the fact that it’s a desert and Dubai Inc. was trying to portray the image of people living in million dollar pads, shopping like a king and making it a mini vegas minus the gambling. I visited Dubai about 10 years back for work and back then the common theme was “make a lot of money in Dubai and hopefully move to a place like the US.” I believe the same thing still holds true, their is no character to Dubai it’s all plastic or in this case sand.

So, who is next?  I read an article talking about Bombay being the next city to go belly up. Granted I live in Bombay and a bit biased, but I’m pretty sure there is a hugh difference between Dubai and Bombay.  Take housing for example, in Dubai you had lots of supply and very little demand as we are now seeing.  In Bombay, you have very little supply and lots of demand so much so that housing prices are up 15% in the past 6 months.  Yes, prices are up 15% in this pathetic market. Commercial real estate in Bombay may take a hit, but nothing like what we are seeing in places like Mid-town Manhattan or Dubai.

Or could it be China?  One thing I’ve always said about China, it’s a communist country and with that the press is 100% controlled and managed by the central government. We will NEVER know what is truly happening, even their projected GDP numbers are always suspicious.

In the end, I think Dubai did a great marketing pitch for the world but just never could live up to the hype.

Ratan Tata is the head of the Tata Group and for someone who has the authority to buy companies such as Corus Steel, Jaguar and Land Rover, I’m surprised he’s not on the list. Not to mention he is building a bungalow on Altamount Road – blocks away from Mukesh Ambani and Kumar Mangalam Birla.

Pallonji Mistry is the head of the Shapoorji Pallonji Group which owns over 18% of the Tata Group and therefore it’s single largest shareholder.

Raghav Bahl who runs Network18 a massive media conglomerate which includes many TV outlets and magazines such as Forbes India.

Part of the omission for the above 3 is that they may not be Indian citizens and hence excluded. Pallonji Mistry is an Irish citizen.

But, the big 800 pound gorilla in the room is the fact the list does not have a SINGLE politician from the Indian government on the list. Of course, we all know the money was gained illicitly but THAT would be the list everyone would talk about.

Getting back to the title of this post, Indrajit Gupta, Editor of Forbes India, summed it up best

Should we be celebrating the individual wealth of a 100 Indians in a country where more then 75% of the people earn less than Rs. 20 (50 cents) a day?

During the past 4 years what drove the mutual fund industry was the “entry load” that was paid to distributors.   The fee was as high as 2.25% paid by the consumer and then sometimes the AMC would throw in some additional coin to generate more sales.  The biggest distributors were banks and independent financial advisors (IFA).

The writing is on the wall, most of these AMC’s will have to steamline their operations and look at technology to enable their sales growth. I see two options:

1. Go directly to an AMC’s website and get their products, such as Fidelity.co.in

2. A low cost mutual fund online aggregator, which makes money directly from the AMC or supported via advertising

Both have potential but India has a small number of internet users, the reason the mutual fund industry grew was because of the IFA’s in the Tier 2/3 cities and villages.

To be honest 2.25% upfront was a complete joke and really lined the pockets of everybody but the consumer.  And when the markets were going up, many financial advisors were telling customers to switch to Product X because it was better.  In reality, the advisor wanted to get the 2.25% entry load on Product X – not much of a financial advisor.

The real winner in all of this could be brokerage firms. SEBI recently issued guidelines which allow mutual fund products to be bought and sold through brokers. The real losers will be the independent financial advisors who in a span of 9 months have gone from gravy train to derailed train.

NOTE: The above image is the SEBI logo, which could possibly be the worst logo ever designed.

From my perspective there are 6 players in the battle to be Number 1, I’ll go through each one:

6. Nokia/Symbian – Wow, these guys have really lost there way.  10 years ago Nokia was the phone to have in Asia/Europe but now they are quickly losing market share.  Even more pressing for them is that their Symbian software is withering, no real programmer is programming for the platform. And in today’s environment it’s all about the apps that run on a phone. Symbian reminds me of the IBM OS/2 days – Big company, no new customers and zero apps.

5. Palm WebOS – Not even former Apple exec Jon Rubinstein, current CEO of Palm, can save them.  The OS is stunning and slick, but they don’t have a chance with some of the bigger players down the list.  They should just open source it and work with the smaller cellphone makers.

4. Windows Mobile – Bloated.

3. BlackBerry – About a year ago, I was singing the “BlackBerry will die in 18 months” song, but I’ve changed my tune.  BlackBerry seems to have really put the pedal to the metal and appears to be doing well. I recently had the chance to configure a new BlackBerry for email and it took me 5 minutes, compare that to the first BlackBerry I bought 5 years ago where it took me 30 minutes and my current iPhone which takes about 7 minutes.  Kudos to the kids from Canada…welcome to North America.

2. Android – 2009 was supposed to be the year of the Android, that didn’t really pan out. The recently launched Motorola DROID phone is a customized version of Android and is said to be making waves. I expect a ton of new phones from Samsung, LG and HTC to flood the market and bring the prices down, which are currently hovering around USD 400-500 for a phone. The Android Marketplace has not taken off but that’s also driven by the fact that not many Android phones are in the hands of the consumer. 2010 seems to be the year for the Google Gang.

1. Apple iPhone – Beyond being an Apple fan there are some real business justifications for it being the king of the OS. First, they completely changed the game with the app store, this is not only a way to keep people on the iPhone platform but also another revenue stream for them – 30% to Apple and 70% for the developer.  Symbian, BlackBerry and Windows have been around for years and not one of them thought about offering a store but once Apple announced, they all announced their intentions.  Where Apple excels is that developers not only create programs for the iPhone but also the iPod touch (I believe over 80 million devices combined). Since both devices have the same screen size and resolution the user experience is the same and saves on development costs. Whereas, if you program for the Symbian/BlackBerry/Windows/Android every device is different – screen size, resolution, physical keyboard, etc…which leads to long development timeframes. The iPhone OS still has a way to go in terms of features but is quickly gaining and in the meantime grabbing hugh chucks of the market share.

Once again, with all these options the consumer is the real winner and should lead to lower prices and more features in the future.

The latest building to go on sale is Sky Forest. The marketing info talks about 10,000 to 22,000 sq/ft for either a duplex or triplex.  I called and asked about pricing, it starts at Rs. 20,000 a sq/ft plus Rs. 50 per floor rise and Rs. 1000 sq/ft for a Worli view. So the math for a 30th floor 10,000 sq/ft pad is:

Base price = Rs. 20,000
Floor rise @ Rs. 50 x 30 = Rs. 1,500
Worli view = Rs. 1,000
Total 22,500 x 10,000 = Rs. 22.5 CR (approx USD 4.7 million)

The kicker is that the 10,000 sq/ft is really super built-up area, whereas the livable carpet area is more like 4,430 sq/ft. Why such a hugh difference? That’s because of the crazy Bombay real estate math that includes things like the lobby and other common areas of a building and quoted as “super built-up”, exceptionally stupid I must say.

So the price is really more like Rs. 45,000 sq/ft or around USD 1,000 which is quite spendy.

I tried the service for about 5 minutes and soon realized how much it sucks…for me. I really don’t want to get over 100 SMS tweets via my phone.  I was thinking WTF, what was Twitter and Airtel thinking when they struck this partnership, but then it dawned on me that this is India.  And when something is free, Indian’s will figure out a way to use it or monetize it.

The first use of this service would be around stock picks. Since people sign-up for a stock picking service to receive updates this would be an ideal use and free for the person receiving the pick. This is one instance and I’m sure we’ll see many more in the coming months.

The official Twitter @ Airtel site. Doesn’t have much info, which is par for the course for most product launches involving an Indian company.

So what is Mint?  Mint takes your personal financial data and makes recommendations on your spending habits, investments, insurance, etc… Mint makes money via the service providers who want to sell products to the Mint audience. Simple and Sweet.

To get access to all that financial data they went to a single provider – Yodlee.com  and then enticed users by slapping an amazingly simple user interface on the data.

It’s a remarkable story and exit for CEO Aaron Patzer. He recently talked about the journey, the video is below and I would highly recommend viewing the whole thing.  I love his quote (about 5 minutes into the clip) about outsourcing the development to oDesk or India…”dead wrong.” The last 3 1/2 minutes are also really good.

In the past I’ve run for fun, but this time I wanted to work towards a certain time.  So I’m going on record with my goals and looking to achieve them.

My Goals:

1. Finish the half in under 2 hours.  My previous times for the Bombay half-marathon were 2:15 (2006), 2:15 (2008) and 2:07 (2009). In order to achieve my goal I need to run 9:10 min/mile (5:41 min/km).
2. 100 push-ups in one stretch by January 17
3. Drop to 176 lbs. (80 kg)

Currently:

1. My pace is around 9:41 min/mile (6:01 min/km)
2. 64 push-ups
3. 187 lbs. (85 kg). This time a year ago, I was around 200 lbs. Due to yoga, diet and nutritional changes I was able to shed the pounds.  I’ve been able to maintain it for a year and reached a plateau at 184 lbs. and need to break through it.

Its been a busy week in Indian telecommunications and my frustration with the government grows. After the Indian general elections in May, the press had a love fest with the new government saying everything would change and the economy would be back on track.  And one of the first things to get fast tracked would be the 3G auction. News trickled in this week that the much awaited 3G auction for high speed mobile data services would be delayed yet again.

For me the 3G auction should be one of the easiest policies to implement and to show the Congress Government has indeed arrived and changing the way business is done.  There are no slums to move nor environmental impact surveys to conduct.  The government is acting like most stock markets investors, they want to see those previous all-time highs and then auction off the spectrum. In the meantime, companies are losing revenue and the government is losing out on taxes. It all comes down to money, who gets what and how much – hence the title of the post.

All is not lost for the consumer, this week the government said they wanted to look at implementing per second billing for all carriers as opposed to the current per minute billing.  This all came about when Tata DOCOMO launched their service with per second billing. I have a feeling it will happen because Reliance Mobile launched their “Simply Reliance” plan which offers 50 paise (USD 1 penny) per minute for local, long distance and SMS’s.  Since Reliance is pretty well connected to the government, they probably have better insight to what policies will get implemented and threw down the pricing gauntlet.  The “Simply Reliance” plans reminds me of the AT&T Digital One Rate launched in 1998, that really was the game changer for the US mobile market by eliminating “roaming” charges.

Sequoia Capital is one of the oldest and most well connected venture capital firms in the world, they have invested in companies like Atari, Cisco, Google, LinkedIn and PayPal to name a few. It was started by Don Valentine who had the balls to invest in Cisco Systems back in December 1987, which was just weeks AFTER the October 1987 stock market crash.

Back to the low income housing project. Sequoia Capital is investing in Tata Housing which has a project outside of Bombay in Boisar. The flats will most likely sell for between USD 8,000 to 10,000. So why would Sequoia get involved? I’m betting there are a couple reasons:

1. Sequoia Capital is first and foremost a technology VC firm and unfortunately the number of technology deals that are in play in India is a fraction of what they see on a global scale.  Which means instead of funding entrepreneurs they have to be entrepreneurial themselves.

2. There is a HUGH potential to streamline the construction industry in India.  I’m guessing Sequoia will try and see if they can inject some technology into the process and see how it scales with Tata Housing.  If it works, then they can target the entire industry and get a piece of the action.   I’ve seen people bring foreign building products to India which are priced 25-50% more then a local product and that just won’t work. You need to innovate within India so you can understand the cost constrains and get the locals comfortable with the product.

If this works out, I would expect them to go after the agricultural space and drop some knowledge there as well.