Thursday, May 28, 2009

India’s 2nd-largest CDMA market

INDIA has become only the second country in the world to have more than 100 million CDMA-based (code division multiple access) mobile phone subscribers after the US, which has 157 million CDMA users, according to an industry body.
    While India overtook China to become the second-largest CDMA market, the country's leading service provider Reliance Communications (RCOM) has become the second-largest CDMA service provider behind the USA's Verizon Wireless, the CDMA Development Group (CDG) said here on Thursday. Tata Teleservices is ranked fourth in the list of top global players, behind China Telecom.
    It took CDMA, which competes with the GSM (global system of mobile communication) platform globally, six-anda-half years to reach the 100 million mark in India after being introduced in December 2002. GSM is much more popular, accounting for 80% of the global market, according to its promoter GSM Association. While there are 475 million CDMA users in the world, GSM standard is being used by over three billion people. In India, the GSM user base is close to 300 million.
    CDG executive director Perry LaForge attributed the rapid growth of CDMA users in India to a wide selection of affordable devices and technologies offering CDMA voice and data services in urban and rural areas. "CDMA allows a rich telecom experience, especially on the data side, and we are confident that experience will only get better, especially as 3G arrives and we are able to unleash the full potential of applications and services," Tata Tele MD Anil Sardana said.


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Wednesday, May 27, 2009

India Growth:Infrastructure: The underdog millionaire

THE INFRASTRUCTURE INDUSTRY IS SURELY TO BE WATCHED OUT FOR IN THE COMING YEARS, PROVIDED THE GOVERNMENT RECTIFIES ITS PAST MISTAKES, SAYS SREEHARI NAIR    The unanimous view is that the bureaucratic approach to things will now have to be abandoned, with the government committing itself to some speedy work.

 India's projected realistic GDP for the coming fiscal is estimated to be over the five per cent mark. With the infrastructure industry being the major contributor towards this growth, there is a need for a focused and sustained attention towards this sector.
    Sadly though, it is a known fact that the infrastructure sector in India is much neglected. Despite having the second largest road network, the country is still far behind countries like China and the US. In India, out of the proposed 31,755 km by the National Highways Development Programme, completion achieved is just 28 per cent, or 9,165 km. The Golden Quadrilateral, which was supposed to be operational by 2008, was rescheduled to the year 2012 and now has been further moved, to 2014, citing various reasons.
    "The government is trying hard to push the sector but the pressure is not enough," feels Jayesh Desai, national director, Infrastructure and Real Estate and Government Services. Desai points out that "There are various issues like approvals, land allocations and regulatory problems that need to be dealt with first. Unless we learn from the past, the future cannot be rectified."
    "The real estate sector has also been largely affected due to poor infrastructure development planning," says Anshuman Magazine, chairman and managing director at CB Richard Ellis. "Water supply and the power sector are problematic issues. When it comes to development, demand is high, while the supply is low, due to which land prices are high and there is no relation between the per capita income and property prices," he elaborates.
    Although the government has been trying to boost the sector with various stimulus packages, the fact remains that unless these projects take off, it wouldn't be of much help. "The government needs to have a vision for a better tomorrow. Today, it is functioning in a haphazard manner and if it continues this way, all bullish talks will remain boxed," avers Rajesh Vardhan, managing director, Vardhman group. The infrastructure developments happening around the city will work for the current demand but what about tomorrow? "Clearly, we are in a state of mess," laments Vardhan.
    As per estimates, funds required to finance infrastructure projects from the central government would be to the extent of USD 12 billion, i.e., one per cent of India's GDP in the next three years. Infrastructure financing through centrally owned public undertakings is estimated around USD 35 billion, which would be around three per cent of India's GDP by 2011-12. The state government and their enterprises could generate projects financing to the extent of USD 12 billion and the private sector contribution to it could work out to USD 30 billion, which would be around 2.5 per cent of the national GDP by 2011-12. In totality, the financing for infrastructure projects could work out to be USD 90 billion, or 7.5 per cent of national GDP in the next three years, says a report from the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
    Though most projects are attaining financial closures, the costs are high, due to scarcity of funds. If India has to grow from the current slowdown, rates need to come down, says Desai. "The key is to make investments look attractive. Currently, there is a lot of red tape, which turns off prospective investors," adds Magazine.
    ASSOCHAM has even mooted the creation of an 'Infrastructure Financing Fund', through which states and central departments can access project financing.
    In 1994, it was projected that India would need an additional 50,000 MW, but the developed power as of today stands at 7,000 MW. "The key to growth from here is to have a master plan in place and a realistic timeframe for completing projects. The barricade to the country's growth has been poor planning and today, the time is ripe to crack the whip," says Sandeep Runwal, director, Runwal Group.
    The issues that India is facing, in terms of infrastructure development, today, are: a) Stricter regulatory mechanism. b) Implementation of projects and ensuring they run smoothly. c) Allocations and approvals. d) Easier land acquisition norms. e) Improving financial delivery systems.
    "The public-private partnership (PPP) model needs to be encouraged," feels Hemant Kanoria, CMD, Srei Infrastructure. There is a need to fix accountability, on the projects undertaken. "Policies should be reframed, so as to accommodate foreign investors and make investments in India look viable," adds Runwal.
    Adds Magazine, "It is not that we do not know what the problems are, or what can be the solutions. I would suggest the PM should have a direct monitoring system for major infrastructure projects." There should also be a mechanism wherein incentives are given for projects completed and penalties for those missing it, thus, making the authorities accountable, he suggests.
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Tuesday, May 26, 2009

Govt to fast track Rs 20kcr road projects

HIGHWAY TO GROWTH

Projects spread across country and cost Rs 500-1,000 crore each

WITH elections over, the government will soon consider clearing 21 infrastructure projects, at a total cost of about Rs 20,000 crore, to be implemented jointly by various state agencies and private sector developers. The model code of conduct for public servants during the national polls had forced central and state agencies to put on hold new public private partnership (PPP) projects.
    The PPP appraisal committee, chaired by finance secretary Ashok Chawla, will soon examine these projects, which are spread across the country. All of them are road projects, each at a cost of Rs 500-1,000 crore. About 13 projects have sought financial support from the government to achieve financial closure under the viability gap funding (VGF), said an official who asked not to be named. Under the VGF scheme, the government meets one-fifth of the total cost of the project, which could be doubled if the state agency feels so.
    The government feels spending on large infrastructure projects is crucial for protecting jobs and helping firms remain in business till the good times return. Besides making it easier for infrastructure project developers to access funds, the government had also decided to spend more on the sector last December. Of the Rs 20,000-crore extra Plan spending the government had announced last December to stimulate the economy, a significant part was allocated for building new roads.
    The official told ET that the government will also look into the grievances that infrastructure lenders may have. According to Hemant Kanoria, CMD of Srei Infrastructure Finance, it is difficult for such firms to borrow from multilateral agencies under the existing norms on overseas commercial borrowings. The private sector infrastructure lender wants the norms to be further eased.
    The PPPAC cleared two port and five highway projects in March with a spending of Rs 5,220 crore. Since January 2006, the panel has approved 101 projects, with an estimated cost of Rs 1,00,384 crore. These include 88 highways, nine ports, two airports, a tourism infrastructure project and a railway project.




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Friday, May 22, 2009

India Growth: HITTING THE ROAD EARLY

Rs 60,000 cr to go into laying,upkeep of roads

Our Bureau NEW DELHI


THE government plans to spend about Rs 60,000 crore in the next couple of years to construct and upgrade about 40,000 kilometers of roads as part of another economic stimulus package expected to be announced soon.
    The project, which is aimed at boosting growth in the economy that is bogged down by slowing demand, will be executed through public funds, said an official in the ministry of shipping, road transport & highways.
    "The entire project will be awarded on annuity basis so that there is little possibility of any delay in implementation of these projects," he said, requesting anonymity.
    The Manmohan Singh government in its first term had prepared the blueprint of the project, but stopped short of making it public because of the election code of conduct that was in force at the time.
    Highway projects, constructed under various national highway development programme (NHDP) phases, have seen delays due to the highway development agencies' inability to decide the mode of contract, toll or annuity, in the first instance. The National Highways Authority of India (NHAI) managed to award only eight projects in 2008-09 against the target of 60.
    The decision to award these new projects on annuity basis is a departure from the government's earlier policy of constructing most of the highways under public-private-partnership (PPP) model to save public money. But delay in execution of PPP projects is forcing the government to spend public money.
    The NHAI had invited bids for 29 projects last year after revising project cost upwards, but failed to get any response for 18 projects. It received single bids in at least six projects.
    Highways constructed in this phase are expected to be taken up by the surface transport ministry. The two-lane highways will link major highway networks such as the Golden Quadrilateral, East-West and North-South corridors.
    The NHAI is implementing the country's most ambitious highways project under various phases of NHDP. The entire highway project is divided into seven phases. The present phases — I, II and IIIA — envisage improving more than 25,785 km of arterial routes of the national highway network of the country to international standards.
    While NHDP phases I and II comprising the golden quadrilateral was scheduled to be completed by December 2008, NHDP phase IIIA is scheduled for completion by December 2009. Widening of 6,500 km of existing 4-lane highways into six lanes come under NHDP Phase V.
    The government plans to build 1000 km of expressways under NHDP phase VI at an estimated cost of Rs 16,680 crore.


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Tuesday, May 19, 2009

India operations pump up Vodafone revenues

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Vodafone Essar Adds 93% New Users To Parent Group

INDIA'S Vodafone Essar stole the thunder in the quarterly results of its UK-based parent Vodafone Group, accounting for 93% of new user additions and confirming its status as one of the few bright spots in the empire of the world's largest mobile operator.
    Vodafone, which has operations in over 30 countries and is the world's largest cellphone operator by revenues, added 8.4 million net new users during the January-March quarter, of which the Indian unit accounted for 7.9 million.
    Its Indian arm, the country's second-largest mobile operator by revenues, and in which it holds a 67% stake, also saw revenues jumping 40% to $791 million in the quarter, and now accounts for more than 45% of Vodafone's global traffic.
    "Asia-Pacific and Middle
East revenue growth went up 32.3%, driven by India. In contrast to Europe, results in Africa and India remained robust, driven by continued but lower GDP growth and increasing penetration," the company said in a statement on Tuesday.
    Vodafone Group doesn't disclose profits by country, and Vodafone Essar, in which local conglomerate Essar owns the remaining 33% stake, is an unlisted entity.
    India, the world's largest growing mobile telephony market, had added around 45 million mobile phone users in the last three months. Vodafone Essar had 68.8-million users on its network at the end of the quarter. Market leader Bharti Airtel has 96.6-million subscribers as on March 31, after it added 8.4-million new users during the quarter.
    India also accounted for a fourth of Vodafone's investments — £1.4 billion — during the last year, and the group said it was committed to making higher investments in India during the current fiscal.
    In its guidance for the year ahead, Vodafone said India and Africa were the only bright spots across its operations as it indicated challenging operating conditions in its mainstay European markets. The International Monetary Fund (IMF) had forecast a 4% decrease in GDP in this region.
    "Revenue growth in emerging markets, in particular India and Africa, is expected to continue as we drive penetration in these markets," the company said.
    The company said its roaming revenues in India had picked up in the January-March quarter, albeit at a lower rate, after the terror attacks in Mumbai and the economic slowdown resulted in fewer people travelling in the preceding quarter.
    "Lower effective rates per minute, reflecting price reductions earlier in the year, coupled with the continued market shift to lifetime validity prepaid offerings, led to a reduction in customer churn. Customer costs as a percentage of revenue decreased, benefiting from economies of scale," the company said.
    There were a few blips in the India story too. The average revenue per user dipped 21.7% to Rs 274 in March 9 compared with Rs 350 during the corresponding period last year. On a quarter-onquarter basis, it fell 7%.
    In comparison, India's largest telco Bharti Airtel saw a 6% dip to Rs 305 in March 9 on a quarter-on-quarter basis. Vodafone said the slight fall in usage per customer was mitigated by net customer additions, which averaged 2.1 million per month for the whole of last year, and the launch of services in seven new circles.




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Sunday, May 17, 2009

This could be a turning point in world history




UDAY KOTAK EXECUTIVE VC & MD, KOTAK BANK
    THIS is a proud moment for Indian democracy and a historic opportunity for India to lead the world. Mr Manmohan Singh and his new government are at a turning point in world history. In terms of priorities, the agenda for the new government should comprise reviving growth in a steady manner, building infrastructure, further strengthening the financial sector, reinforcing civil institutions
and uprooting corruption from Indian society. These initiatives will
have to be done in the backdrop of ensuring fiscal stability in a very adverse global situation.
    The new government has the opportunity to unshackle itself from the baggage which the Indian system has carried: to make India a very open and responsible society where merit is rewarded and cronyism is demolished. The pillars of civil society — whether it is the judiciary, the police, educational institutions, or the tax and the revenue administration — have come under increasing pressure as institutions. We need to transform and strengthen each of these institutions of civil society to build India for the next 100 years.
    In the financial sector, our prudence over the last five years has held us in good stead. Let us now consolidate our gains, take appropriate steps of reform, based on our convictions and not necessarily on dogmas of Western financial systems. In particular, we need to spread Indian banking and insurance to every nook and corner of our country. We must develop modern day debt markets with all the checks and balances. The exchange traded mechanisms across equity, debt, commodities, currencies and interest rates must be given wings to make India, and Mumbai in
    particular, a national and an international financial centre.
    Infrastructure is our primary need and in the next five years true 'Bharat Nirman' must take place. Roads, ports, airports, power, access to clean water are our priority.
    One of India's biggest challenges in the years to come is to create employment. More than 10 million people become employable every year and therefore growth which is broad based and job-creating is the key to our future. Appropriate employment creation will need to be the mantra.
    I write this piece with a sense of relief and exhilaration at the same time. Gods have smiled upon us and blessed us with political stability at one of the most crucial times in our history. Let us clasp this unique opportunity. It is truly India's tryst with a new destiny. Manmohan Singh, Jai Ho!

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Saturday, May 16, 2009

INDIA DECIDES: A STABLE, UNIFYING GOVT IN THE WORLD’S LARGEST DEMOCRACY

FINALLY, A FREE HAND

The people have spoken & spoken decisively: voting out confusion, voting in clarity; voting out schism, voting in development; voting against arrogance, voting for ability. 2009 may just be the beginning of India's century. A year when India dumps its old baggage & looks to the future with humility, unity and hope NO HUNG-UPS: CONG, ALLIES STORM DELHI WITH ASTOUNDING VICTORY

PR Ramesh NEW DELHI



    THE CONGRESS ON SATURDAY WAS uncorking champagne like never before in the last two decades. The grand old party smashed the existing political template and roared back to power with a victory margin that was as much an announcement of the return of its lost pride in the country's polity as it was a crushing blow to the BJP and many identity-based formations.
The victory has also set the stage for the eventual smooth transition of the government's leadership to Rahul Gandhi, who spearheaded the Congress' charge. The baton can now be passed on to the Gandhi scion as and when the Congress leadership deems fit.
The scale of its victory, which surprised even die-hard Congress optimists, must be gratifying for the party as it will now be able to perch itself in the driver's seat without distractions from backseat drivers and remote control operators. The dominance of the Congress in the UPA is so total that some of the alliance partners, pesky in the past, have no option but fall in line. Sharad Pawar, who for the past two days revived his latest and perhaps last bid for prime ministership, was among the first to state that "Manmohan Singh is the UPA's undisputed prime minister".
    It is now certain that the Congress will not only have the last word on issues of governance but also get to keep all the plum departments under its charge. The CPM's Prakash Karat has already retreated to his ideological bunker in the Capital's Gole Market, Lalu Prasad Yadav's RJD has enough numbers only to spare itself a fig leaf and Ram Vilas Paswan, 'minister uninterrupted' through several governments, will have to learn to live life without the trappings of even an MP.
    Indeed, the icing on the cake was the Congress' "going solo" approach, which paid rich electoral dividends in Uttar Pradesh and marginalised the Lalu Yadav-Paswan combine in Bihar. Its alliance with the Trinamool Congress ended the Left's stranglehold in West Bengal after 32 long years; it broke the "winner takes it all" pattern in Tamil Nadu; and above all, advertised the lack of depth in the BJP.
    Also, the Congress has emerged as a challenger to the BJP in Madhya Pradesh as well as Uttarakhand and reinforced its numero uno status in Rajasthan and Haryana. Appealing to India as well as Bharat
INDEED, the spread of its influence showed that it is appealing to both India as well as Bharat. The resurgence of the party cannot but be a cause of worry for regional players whose growth over the last two decades has been at the cost of the national parties. The regional parties outside the UPA can be expected to make attempts to regain their vitality and relevance. But a consolidation by the Congress would make their task difficult. On the other side of the political aisle, the outcome is truly morale-sapping for the BJP.
    The high-voltage campaign unleashed by the saffron party proved to be ineffective in the absence of a robust organisation and lack of geographical spread. In the absence of allies in key states like Tamil Nadu and Andhra Pradesh, the party was relegated to the margins in the Indian Political League.
    The BJP's dismal show also is a pointer to the beginning of the end of the LK Advani era in the BJP. At the post-results parliamentary board meeting, Mr Advani expressed his desire to quit. The BJP, which is prone to dissensions, is certain to experience turmoil as leaders train their guns on each other. This would ensure that political momentum stays firmly with the Congress in the coming months.







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