TataIndicom

I live in a development called “Magarpatta City” on the southeastern edge of Pune. Like most other recent real estate developments around the country, it is a gated community. It is far from complete and but most services are available, although choices are limited. One service essential to me is internet connectivity. The only service provider within the complex is VSNL TataIndicom Broadband.

It is “broadband” only if you have a sufficiently flexible definition of broadband. (You know, like “2 + 2 = 5” for sufficiently large values of “2”.) It is actually fairly narrowband. But stuck between a rock and a hard place, you takes what you gets and you pays whatever they demands because they are a local monopoly. The choice is simple: take it or leave it. And that is precisely the attitude that TataIndicom takes around here. The system fails fairly regularly and when you call their customer service, you get no service. Your call ends up at some call center. The impression that I get is that these call centers are staffed with people with subhuman IQ. It is a frustrating experience getting them to actually understand what the problem is. But perhaps it is not their fault entirely. The systems that they rely on are pathetic.

The last few times that I called, I was told that I should take up my complaint with billing. At billing they said that they couldn’t help me because the problem was with the service. My service had been interrupted even though I had pre-paid for it. But they would not be able to figure out why because the records are not available as my service has been suspended. The only way for me is to renew my subscription before they can tell me what was the reason that my previous subscription was suspended.

The Tatas are a reputable company. But doing business with TataIndicom is no different from doing business with a public sector monopoly. Last year, I had been a TataIndicom customer when I lived in a different part of the city. I got fed up with their unacceptable service. Fortunately I had a choice. I switched to AirTel and their service was far superior. I had paid a hefty non-refundable setup charge to TataIndicom which I had to write off as a sunk cost. This time I don’t have the luxury of switching suppliers. It is either TataIndicom or nothing.

TataIndicom has market-power in this situation. Standard economic theory predicts that market-power translates to poor service and high prices. The consumers are trapped in a sellers’ market and lacking choice, put up with whatever the supplier deigns to provide and on terms that the supplier chooses. Given sufficient time, consumers re-calibrate their expectations and poor service is accepted as the norm.

Systems Matter

I have been living in India for nearly four years. The previous couple of decades I spent in California. I had gotten used to a system where the consumer is king and the suppliers did their best to get your business. Service quality complaints (which arose relatively infrequently) were dealt with expeditiously and in many cases reasonable compensation was promptly given for the inconvenience caused. The interesting point is that in practically all cases, the calls were handled by call centers in India. There’s a lesson in there. It is not the people but the systems that dictate what the outcome is.

The systems in place to deal with service issues in the US are superior to those in India. When you place a person in the system, irrespective of whether the person is Indian or Croatian, he or she performs as the system allows and/or mandates. An Indian within an American system would be no different from an American in an American system. Conversely, an American in an Indian system will be indistinguishable from an Indian in an Indian system.

Why do Indians born and brought up in India when they arrive in the US just happen to be remarkably successful? There is the matter of selection bias of course. Those Indians who get to the US are more educated, more driven, and more talented than the average Indian (or the average American, for that matter.) Even if you control for that bias, there is a residual degree of above average success among Indians in the US relative to Indians back in India. My conjecture is that the American systems are superior to the Indian systems and that accounts for the difference.

That raises the question: surely, the American system was not designed by god almighty. That Americans designed good systems and Indians did not must speak to the superior system building skills of the Americans compared to the Indians. So in a sense it is not sufficient to just say that Indians and Americans are inherently equally capable, and that the Americans are more successful than Indians because they have better systems. You have to also explain why Americans could build better systems.

Abhi Rulz

I have a tentative answer. Let me tell you a story. One evening I was visiting with my friends Sudha and Vijay, and their two kids Anu and Ahbi, in Rancho Palos Verdes in southern California some years ago. We were watching a video when Abhi, then three years old, had to take a bathroom break. He was promised that we would pause the video while he went and did his business. When he got back, he realized that we had not “paused” the video but had instead stopped it. He was furious. “Paused! Paused!” he yelled. He was hopping mad. He said that the rule was you have to “paused” the video, not stop it. It took a while for us but we all accepted that we had messed up and it won’t happen again. He was placated.

He was in a phase where you could resolve any dispute between him and his older sister, or get him to do something, by merely invoking the appropriate rule. You had to tell him, “Abhi, the rule says such and such . . .” and he was willing to go along with it because that was what the rule said. He was not sufficiently sophisticated to challenge the source of the rule or why it was a reasonable rule. To him, a rule was a rule and it had the force of law and everyone had to abide by it.

I still cannot think of how important rules are without recalling with a great deal of sweet nostalgia that incident of Abhi absolutely insistent that we had broken the rule that we had agreed to. I think rules are important and if you agree to a reasonable set of rules, you can actually build wonderful systems. Let me get to that the next time.