Communal tension hits channel business

HYDERABAD, INDIA: The riots in Hyderabad last week have resulted in the IT channel incurring an estimated loss of Rs 40 crore.

“The old city of Hyderabad is totally under curfew since last Monday and there has not been any relaxation till day. The police has issued shoot at sight notice and the entire old city is paralyzed,” said KVR Menon, President, TCCDA (Twin Cities Computer Dealers Association).

According to Menon, the curfew in old city has resulted in loss in terms of workforce also since most of the employees working in channel outlets and offices come in daily from the old city. “I have no idea when the situation will improve or even when it improves how long will it take to normalize business. Also, local media activities have been curbed from reporting untoward incidents,” Menon concluded.

Commenting on the situation in the city and its impact on business, Vikas Hisariya of Vishal Peripherals said, “The impact of the riots has been bad on the market. Although the market is open across these days on account of it being in the new city, there is hardly any sales activity here. Last year we did excellent turnover during the year-end, however, owing to the situation prevailing now, there has been a huge loss.”

The city has been attracting global investments from leading IT firms, outsourcing and pharmaceutical companies paving the way for a better economy, but communal clashes backed by the Telangana issue has left the image of the city tarnished owing to the series of bandhs and agitations backed by political tensions.

Keeping his identity discreet, one of the leading channel partners in the area said, “Although there has not been any official declaration over the cause of the riot, it seems evident that the opposition, in a bid to pull down the government has been fueling communal sentiments leading to the outbreak.”

However, on the business front, there has been a huge loss in terms of channel trading. “There has been an estimated business loss of nearly 50 percent because of the riots. The riots took place at a crucial time for business as we see more sales around Navratri. Estimates have put up the monetary loss at Rs 20 crore till Tuesday and it is estimated that by Friday, the total loss of business opportunity will shoot up to Rs 40 crore,” elaborated MV Venkateshwara Rao of SV Electronics.

Despite the setbacks the channel community is optimist that the situation will improve. “I expect the situation to improve and normalize soon. However, I do not know exactly when the business will brighten up in the city,” Rao concluded.

While most of the channel partners that The DQ Week spoke to were disappointed with the current turn of events, there were some who opined that the situation is not as grim as it is being made out to be.

“Although there has been a curfew in the old city, the new city has not been affected much. Business is normal and although some employee crunch is being felt these days because of the riots, there has not been a big negative effect on business. The Cyberabad area has not been affected at all and also, the High Tech City is functioning normally but with a lesser attendance percentage,” stated Pulla Reddy of SP Software.

Speaking in the same vein, A Srinath of Shell Networks said, “The situation in the city is under control and business is usual in the new city. During the Telangana turmoil, we had suffered a lot, but not this time. Although we are pulling down our shutters early, around 4pm these days, business is perfect at the normal pace.”