Tablet man swallows a bitter pill
His first tryst with doing business in India ended with a whimper. In 2008-09, the bearded but soft-spoken boss of Datawind, Suneet S Tuli won a contract to sell their flagship pocket surfers—a small internet-enabled device to HCL-Perot. But the product did not set the country on fire and Tuli remained unknown in India.
But the 44-year old civil engineer from University of Toronto, who was born in north India, was not ready to give up his attempt to make his presence felt here. Last year, Tuli came under the media limelight as well as under controversy when Communications Minister Kapil Sibal announced in a press conference that he was launching the country’s cheapest tablet for only Rs 2,500. Sibal said that the Government would buy it from Tuli and distribute it to students. A virtual non-entity in India, with unknown credentials, Tuli landing this lucrative contract raised many eyebrows.
Tuli’s company Datawind said it had won a contract after no one participated in a tender floated by IIT Jodhpur—which was the key mover of the project—to make 1,00,000 tablets. It roped in a local manufacturer to deliver the product. Tuli made some aggressive claims—that he had got expression of interest from corporates for over 2.2 million pieces and that individuals had already pre-booked orders numbering more than 100,000.
Yet, it’s been a rough month or so for Tuli who has been able to deliver only 10,000 tablets so far, failed to pay his suppliers who are threatening to go to court (he says IIT Jodhpur has not paid him ) while his product has come under severe attack from competing mobile phone manufacturers, experts and consumers who complain that his tablet is a sluggish machine with poor battery life and outdated technology. Their advice: scrap the product. Tuli defends it: “The product is based on specifications given by IIT Jodhpur. We are working on an upgraded model also,” he says.
Stung by the attack, Sibal this week acknowledged that there have been some problems with Aakash and as a result, he has now decided to rope in the Centre for Development of Advanced Computing (C-DAC) and state-owned telecom equipment manufacturer Indian Telephone Industries (ITI) to further the development of the tablet computer. The minister said improved version of the tablet would be fully indigenous and would be launched soon at the same price.
Meanwhile, Datawind has maintained that they have not heard from the Government and would go ahead with their improved version of the Aakash as well as bid for any fresh tenders floated by the Government. In a press statement, Datawind said that the statement quoting Sibal “appears to be false and is a deliberate attempt by some negative elements to stall the ambitious project.”
So why has Tuli made so many enemies? Very little is known about his Canadian company except that Datawind makes various internet connected devices which include tablets and PCs. In London, Datawind sells a mobile internet device, the UbiSurfer9 3G, offering users free internet access and low-cost roaming in Europe and USA.
After a brief stint in the construction business, Tuli started his carrier in his brother Raja Tuli’s company, WideCom Group Inc, which manufactured a range of scanners as well as copiers. He is also involved in other companies which have come out with innovative products like battery-operated as well as thin scanners amongst other things. Tuli says he played a key role in setting up WideCom ‘s JVs in England , Israel and Japan and helped list the firm publicly. His father, who is also an engineer and runs his own business, is also an inventor with 33 patents under his belt.
Financial details about Datawind are not easily available. All that is generally known is that Tuli raised initial financing of only $2 million to start the company and has secured distribution agreements with two large cellular operators. The company’s size can be gauged from the fact that it says it has secured orders and inventory of over $3 million from distributors. Surely, India and Aakash is a big deal for him. And though Tuli might not be a known entity in the business circles in India he has kept contact with Indian IT investors by virtue of being a founder of the TIE chapter in Toronto.
But big mobile manufacturers have questioned his technology and also the lack of any investment or manufacturing capability in India. They have instead suggested that there should be parameters like minimum turnover of Rs 500 crore or a net worth of Rs 100 crore before the Government hands such projects out—which if implemented will virtually rule him out. The Indian cellular Association has suggested that big companies like Samsung and Nokia should be roped in for such projects.
Still, Tuli says his technology meets specifications. “Of course we are working on an upgraded version. They are most welcome to participate in the tenders which the Government will float. The problem is their products at their price is not suited for 97 per cent of the Indian masses”.
It’s a challenge on which the Government has to take a final decision.
Interview with CFO, TCS