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| 05. INFOTECH |
India witnesses 23% rise in IP addresses in Q3: Survey |
Reflecting the rising Internet penetration in the country, India saw a 23 per cent rise in IP (Internet Protocol) addresses with 2.6 million connections in third-quarter ended September over previous quarter’s 2.1 million, according to a survey by Akamai Technologies. India ranked 20 in terms of IP addresses, while the US with 109 million addresses and China with 38 million connections were ranked at the top two slots, respectively, said Akamai’s ‘State of Internet’ report. India has an estimated 32-46 million active Internet users and the user base is growing at over 25 per cent a year for the past three years.
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“The increase in user base may be attributable to more people turning to the World Wide Web for news and video content related to the Beijing Olympic Games, which took place in August. We also noted a gradual improvement in terms of IP per capita which increased to 2.3 unique IPs per 1,000 people, and believe India is moving in the right direction and is poised for significant growth in Internet adoption in the coming years,” said Mr Sanjay Singh, Managing Director of Akamai’s India operations. Users in India were gradually shifting from dial-up speeds to high-speed connectivity as the country had three fourth of Net connections with speeds above 256 Kbps. Net connections with speeds above 2 Mbps stood at 5 per cent growing at 16 per cent.
Source :
The Hindu Business Line |
Top Indian IT cos to tide over slump |
At a time when customers in the US and Europe are tightening their IT budgets, leading Indian tech firms are betting on their huge pile of cash to steer through the global economic crisis and also to explore M&A opportunities in a world reeling under severe liquidity crunch. Each of the top six Indian software services firms-TCS, Infosys, Wipro, Satyam, HCL Technologies and Cognizant-have cash reserves in excess of $500 million, with Infosys topping the list at $1.8 billion.
This gives these firms flexibility to invest in newer opportunities including M&A possibilities. A comfortable liquidity position is a great resource to quickly acquire a distressed asset, points out Dr T R Madan Mohan, managing partner of Browne & Mohan, a Bangalore-based consultancy firm. Given the global turbulence, many acquisition targets could come at attractive valuations. "A strong liquidity position is a comfort factor not just for a company, but also for clients and employers," says Infosys chief financial officer V Balakrishnan. "This also allows for making the right kind of investment in the current context be it an acquisition, new services portfolio or creating technology solutions."
And it's not just the top six, even mid-tier companies are looking to leverage their cash reserves for M&A opportunities. Patni Computer Systems, with around $270 million in cash, is one such company that's eyeing M&A opportunities. "Cash is a premium in these tough times, and it will come handy," says Patni chief financial officer Surjeet Singh. The company is currently evaluating several firms in Europe for making an acquisition.
Many other mid-tier companies including MindTree Consulting, which acquired Bangalore-based Aztecsoft in May this year for around $90 million, might look at smaller acquisitions for topline growth. Typically around 10-12% of a company's topline translates into cash reserves for the IT companies. However, the cash reserves could also be a misleading number as many of these companies have invested in assets which has the potential to generate a negative returns like the fixed maturity plans of mutual funds or treasury investments.
Source: The Economic Times |
US tower firm slots $500 mn for India buy
US-based American Tower Corporation (ATC) has earmarked an investment of about $500 million to acquire a stake in an Indian telecom tower company. We are open to spending up to $500 million depending on the size of the acquisition," said ATC Global Chief Executive Officer James Taiclet. The telecom infrastructure major is on track to spend $5-10 million a month in the country and is planning to expand its volumes, which would enable it to gain better penetration at a faster rate.
"Acquisitions could vary from small and medium to large ones. For small- and medium-sized acquisitions, it is not particularly about volumes but also about a platform. If we did have a platform today, we probably would’ve grown much faster. So, in the near term we will look at small- and medium-sized companies to expand, he said. The company is looking at setting up 6,000 towers by 2010. "We are setting up anywhere between 50 and 100 towers a month, aiming at a target of 4,000-6,000 towers by the next couple of years and on those towers we expect to have at least two tenants, so that would amount to about 12,000 contracts for us."
India already has a bevy of tower companies and many have spun off their tower infrastructure into a separate company. Last year Bharti, Vodafone and Idea Cellular merged their tower assets by floating a new company Indus Towers, which had over 70,000 towers and is planning to own more than 200,000 towers in the next two to three years. Reliance ADAG has also spun off its tower business into a separate company called Reliance Telecom Infrastructure with over 16,000 towers.
While Essar has floated a company with over 4,000 towers, the Tatas have spun off the business into a separate entity. That apart there are independent tower firms such as GTL and Quippo Telecom Infrastructure, which offer towers to all telcos. Under government policy, telcos are allowed to undertake passive infrastructure sharing (towers) in order to reduce their capital costs.
While ATC is in talks with all the new telecom players for contracts, Taiclet said the existing players are also showing interest even though they might have their own tower companies.
"The companies might not want to go to some region or we might have towers in some areas where they do not want to set up, so they are also showing interest." Of the 200 towers that the company has set up over a span of eight months, most of the contracts are from existing players.
The company is banking on the introduction of 3G services as well as the entry of new players to fuel its growth. |
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India's tech spending seen growing 17-24% by 2010
Asia Pacific's IT spending is expected to grow about 10-16% till 2010, beating developed markets, according to a study by consulting firm Zinnov. India and China, in particular, represent large untapped markets in the region. While India's IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and IT-BPO services comes under IT spending.
"With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China," said Zinnov advisory services engagement manager Chandramouli CS. India's IT spending currently totals $17 billion, while China's IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010. Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don't have scalable IT systems. The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs - nearly one-third of the global total - are located in Asia-Pacific, excluding Japan.
Source : The Economic Times
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SatNav lines up $10 mn
SatNav Technologies, a Hyderabad-based provider of navigation and global positioning system (GPS) technologies, will make an incremental investment of $10 million (about Rs 50 crore) by March 2010. The company, earlier a part of Satyam Computer Services Limited before being spun off into a separate entity in 2004, will make the first tranche of $5 million investment by March 2009 for enhancing the retail presence of its flagship GPS navigation software product SatGuide and for boosting the depth of its map content. The second tranche will see an equal amount being infused into building up its portfolio including 5-inch and 7-inch products and in-dash navigation systems for cars by March 2010.
SatGuide, which guides the user within a particular city or from one city to another across India, is currently available on Windows mobiles, personal digital assistance, personal navigation device, laptop, desktop and on non-Windows phones. Speaking to Business Standard, Amit Kishore Prasad, founder, managing director and chief executive of SatNav, said the company would utilise the $7.5-million capital raised from Sequoia in June this year, besides pooling in the rest through internal accruals, to fund the expansion.“R&D on the in-dash navigation system, which comes equipped with an in-built 7-inch display monitor, AM/FM, DVD player, full-function remote control and USB 1.1 interface, is under way. We are in talks with major car makers who are trying to gauge the market. We expect two to three companies to tie up with us soon,” Prasad said.
Source : Business Standard
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India still prime destination for outsourcing: D&B |
India is expected to remain the prime destination for outsourcing/offshoring, according to a new Dun & Bradstreet (D&B) study. This is not just because it is extremely competitive when it comes to salary costs, but mostly because Indian outsourcing firms have now matured into truly global companies that can offer best in class services at very competitive prices, notes the study.
The fourth edition of D&B’s ‘India’s Top ITeS and BPO Companies 2008’, compares India with leading outsourcing destinations like China, the Philippines, Mexico, Malaysia, Brazil, Czech Republic and Chile. It indicates that India’s ITes industry still hold a cost advantage, banking on low wage and salary cost, states the report. India has the second lowest ITes/BPO salary base of about $7,500-8,500, just little above China’s base of $7,000-8,000.
The Philippines, on the other hand, has an average salary of $9,000-10,000. Besides, it has the added advantage of a large pool of ever-increasing technical graduates. The other positive for India is one of the largest producers of English-speaking graduates, including engineers and management graduates. A high number of such graduates mean that companies can offer higher value-added services to clients. Manoj Vaish, President & CEO – India, Dun & Bradstreet said: “While the ITeS-BPO industry is bound to be impacted by the financial crisis, firms have taken measures to mitigate some of that risk. The industry has started providing services to a wider set of verticals, thus reducing their exposure to any one vertical.
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 For instance, the BFSI sector’s share of the overall pie of services offered by the surveyed ITeS-BPO companies dropped to 28 per cent in FY08 from 31 per cent in FY07. This trend is set to continue.”The study also highlights that ITeS and the BPO segment continues to hire in large numbers. Overall, 177 companies have a total of 4,42,349 employees and covers 63 per cent of the total employee base of Indian ITeS and BPO sector of 7,00,000 (involved in BPO exports), as per the NASSCOM estimate. The profiled companies registered a y-o-y growth of about 23 per cent in terms of total employees base. The revenue per employee of the respondent companies was approximately Rs 600,000. In FY08, the Indian ITeS and BPO companies’ client portfolio included around 26 per cent domestic clients and around 74 per cent international clients.
Vaish further added: “While conventional BPO services continue to form a majority of the total services offered by the surveyed companies, this year’s study has seen conventional BPO services drop by almost 10 per cent from last year. On the other hand, service lines such as KPO, LPO, EPO and eLearning have increased its share considerably. Margins are substantially higher in these services and with companies keen to diversify, revenues from these services are bound to increase.” |
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