Top 20 business facts you should know about India

Top 20 business facts you should know about India

1. India continues to be the best place to start a business, says a global services location index by AT Kearney.
2. India’s foreign exchange reserves stand at US$ 200 billion.
3. India has displaced US as the second-most favoured destination for foreign direct investment (FDI) in the world after China according to an AT Kearney’s FDI Confidence Index
4. Poised at a phenomenal growth of 500 per cent, the Indian insurance industry is expected to reach US$ 60 billion in the next four years.
5. India adds about five million telephone subscribers every month. The total number of subscribers is expected to reach 250 million by the end of 2007.
6. India has one of the largest road networks in the world, aggregating 3.34 million kilometers. It comprises 66,590 km of National Highways, 1,28,000 km of State Highways, 4,70,000 km of Major District Roads and about 26,50,000 km of other District and Rural Roads.
7. Indian ports handled cargo of around 570 million tonnes in 2005-06.
8. In 2005-06, the passenger traffic rose by 25-30 per cent and is expected to grow by 25 per cent year-on-year over the next five years. While international and domestic air traffic grew by 35 per cent, cargo witnessed a 12 per cent growth.
9. India is the Sixth largest crude consumer in the world.
10. India is the Ninth largest crude importer in the world.
11. India has the sixth largest refining capacity - 2.56 million barrels per day representing 2.99 per cent of world capacity.
12. Estimated to be a US$ 350 billion industry, the Indian retail sector is growing at a growth rate of 47%..Wow !
13. The travel and tourism sector in India is generated a total demand of US$ 55,544.5 million of economic activity in 2006, accounting for nearly 5.3 per cent of GDP and 5.4 per cent of total employment.
14. International Iron and Steel Institute (IISI) has ranked India as the seventh largest steel producer in the world with an overall production of about 40 million tonnes in 2006.
15. India exports US$ 6 billion worth of garments.
16. India is the largest consumer of gold jewellery in the world and accounts for about 20 per cent of world consumption.
17. India is the largest diamond cutting and polishing centre in the world.
18. India is the second largest producer of rice and wheat in the world; one of thelargest producers of sugar, sugarcane, peanuts, jute, tea and an assortment of spices.
19. The Indian pharmaceutical industry, consistently growing at 9.5 per cent in the last 5 years, could zip at 13.6 per cent between 2007 and 2010 and reach a market size of US$ 9.48 billion by 2010 from its present level of about US$ 6.2 billion.
20. Healthcare delivery is one of the largest service-sector industries in India. The country will spend US$ 45.76 billion on healthcare in the next five years.

Source: From Arun Prabhudesai blog on Trak.in (Recommended blog for outsourcing industry professionals)

Cricket Gyaan Time - Interesting Facts

First ball bowled in test cricket was by Alfred Shaw in 1876/77. It was faced by Charles Bannerman from Australia who eventually went to score 165 runs in that test. He became the first man to score century in test cricket.

James Southerton from England has the record for oldest test debut at 49 years 119 days a record unlikely to be eclipsed.He was also the first Test cricketer to die (at 52 years)

The first ever test match was won by Australia...Well they certainly know the art of winning and believe in keeping the wining habit going...Cheers to Australia.

First ever stumping was picked up by the Australian wicket keeper Jack Blackham.

Will come up with more cricketing records that are unheard of..

Sir Don Bradman

Sehwag got to 6000 in 123 innings and our little master Tendulkar got there in 120 innings But Sir Don Bradman did it in 68 innings..... A true legend and a great cricketer....I think he went beyond changed the way gentle men's game was played. To achieve what he did in his era was truly unimaginable, in my opinion none of the current legends come close to him...What a man :)

A Knowledgefaber Article - Destination R&D

In the last few years, market place is abuzz about India as an emerging destination for R&D due to availability of quality talent, people with knowledge of product development process moving back to India, cost arbitrage, MNC R&D centers and several other advantages. This holds true for 'offshored R&D functions' and for 'software products' to a great extent but not beyond that.

While there is some amount of work happening on the non-software front, it is limited to a few players and a few areas. For any country to be termed as an R&D hub, it needs to have companies working on 'complete product' development with several homegrown product companies/technologies. India is at par with the world when it comes to emerging technologies and products development in the 'software' field. The ecosystem for Indian software product companies and start-ups have evolved significantly during this decade. However, telecom industry in India, even though with one of the largest and fastest growing subscriber base, is far behind in terms of development of core products (including hardware) around wireless/wireline technologies or other products compared to its peers like China. China has several homegrown technologies (such as TD-SCDMA) and product companies such as ZTE and Huawei, etc. Leave aside emerging technology areas such as 3G, 4G, WCDMA, LTE, HSDPA, IPTV, etc.

Components
Some of the leading companies in the component space across the world include Qualcomm, Intel, Texas Instrument, ARM, AMD, etc, and some of their products include chipsets, micro-controllers, and several others. All of them have their presence in India in terms of development centers and other functions. India lacks the presence of homegrown companies in the component space, and is dominated by the presence of foreign players. However, IT services firms like Wipro, Sasken, and other IT consulting vendors have provided R&D services to telecom product companies in the component space, with work ranging from low-end to high-end services. This includes:

Testing of various components and products
Development, for example, 7K chipset series boards for Qualcomm
Large parts of product development of almost complete routers, switches, and mobile phones for leading telecom companies
Besides, India does not have any large homegrown original design manufacturer (ODM) company that can support telecom companies and OEMs. MNC's who have ODM/EMS operations in India include Flextronics, Jabil Circuit, Celestica, Elcoteq, Solectron, Hon Hai Precision Industry, Sanmina-SCI, D-Link, etc. A contrasting trend can be found in countries like Taiwan and China, which have large domestic companies in the ODM space providing manufacturing/R&D services to telecom companies. Some of these companies have grown into complete product companies and formidable brands such as HTC and BenQ. Taiwan, for instance, has large domestic companies like Quanta, Compal Electronics, Inventec, Wistron, Lite-On Technology, BenQ, and HTC in the telecom ODM space.



Value chain of wireless (mobile) telecom
Infrastructure and Transmission
The infrastructure includes physical and transmission infrastructure. Physical infrastructure (towers, distributed antenna systems, rooftops, etc) is not a hi-tech area, and hence we are not focusing on that. On the transmission equipment (MARR systems, multichannel digital equipment, opto electronics equipment, subscriber carriage system, BTS, MSC, BSC, etc) front not many Indian companies have been able to stamp their authority on the global stage. Very few homegrown Indian companies like Tejas Networks have build world-class products in the telecom infrastructure space. Other companies like VNL (products like BTS, MSC, BSC), Kavveri Telecom (RF components and antennas), Coral Telecom (wireless infrastructure equipment), Svarn Telecom (switching equipment) have developed innovative products in the telecom infrastructure space, but these are still relatively small in size

Some of these companies are growing at a faster pace and acquiring companies around the world. Kaveri Telecom, for instance, has acquired four Canadian telecom companies and the most recent one was Trackcom Systems International (TSI). China, on the other hand, not only has presence of homegrown companies (Huwaei, ZTE), but has also developed its own technology TD-SCDMA, which is an initiative by Chinese Academy of Telecommunications Technology (CATT), Datang and Siemens AG, in an attempt to create its own wireless technology, thereby reducing its dependence on western technology, and also help in developing products that can support emerging technologies.

India has over 120 telecom R&D captive centers of global telecom giants. MNC R&D centers in India are working on varied products and technologies. MNC companies like Nokia, Ericsson, Nokia Siemens, Qualcomm, Samsung, Infineon, etc, are providing high-end R&D services to their parent companies. Some of the R&D work carried out by telecom captives in the telecom infrastructure/ transmission space includes:

ASIC design and hardware design

Software development for next generation packet-switched mobile technologies
Wireless access solutions for mobile voice and messaging
Product engineering development on IN product on various protocols
Nokia Siemens has plans of bringing in 3G specific research and development projects to its facility in Bengaluru. A couple of Indian institutions like C-DOT (Designing Telecommunication Switches) and C-DAC have purely focused on developing products from India, but have not really made a mark in the industry.

Device
India's device (handset, customer premises equipment) space seems to see some traction, but nothing on a global scale. Indian companies have not been able to capture the domestic market and MNCs still rule the roost. Some of the Indian equipment makers have tried coming up with 'me too' and 'low cost' devices ( i-Mate, XL Telecom, Karbonn, Ray, Maxx, Byond, Spice Mobile, etc) but most of them have not been able to capture the market due to lack of R&D or QA or branding/marketing or all of these.

Comparatively, China has large domestic device manufacturers that have much stronger hold on the domestic market. They spend close to 10% of their annual revenues on R&D, and employ on an average 30% of their total workforce in R&D. Chinese companies are aggressively spending on developing handsets that can support emerging technologies and are customizing these devices for telecom operators to support emerging technologies such as 3G and others (W-CDMA and TD-SCDMA). Some of them have also started working on the next gen technologies like LTE and 4G. Indian device manufacturers can take cues from Chinese makers and focus heavily on R&D, and branding efforts.

While on the other hand R&D captives of leading global device makers like Nokia, Ericsson, Samsung, Motorola etc, have used India as a hub for R&D focusing on user centric technologies and developing devices that can be used in the domestic market. Nokia's India R&D center is working on chipsets for high-end mobile devices and is focused on next generation packet-switched mobile technologies and communications solutions to enhance corporate productivity. Ericsson's R&D center in India is involved in developing mobile prepaid, convergent charging solutions, and mediation products. Similarly, captives are doing a lot of work from China as well. Nokia, for instance, is conducting R&D on a mobile infrastructure and to develop mobile applications based on 3G and IP multimedia subsystem (IMS) for both Chinese and global markets from their Chengdu center. Motorola's China R&D Institute (MCRDI) works on value added applications, 2G, 3G technologies, and 4G (including LTE and related migration solutions).

Indian IT services firms are at the forefront of this technology space with firms like Wipro, Satyam, Infosys, HCL, MindTree, Tech Mahindra, etc, are providing high-end R&D services to telecom companies. Indian IT companies have worked with global device makers on numerous upcoming products such as Nokia on RAC (radio access configuration) for managing elements of 3G networks, for development of latest set-top boxes for companies like Motorola and numerous other projects.

A couple of Indian device makers are trying hard to compete with the global brands and coming up with products that support emerging technologies. Micromax is one such Indian company that has come up with the cheapest 3G enabled device. It has a development center in Gurgaon that works on building customized mobile phones for the Indian market. To compete with the global biggies in the long-run and build sustainable products, Micromax has plans of setting up an R&D center in Shanghai with an investment of $10 mn by December 2009. With the establishment of a new development center in China, Micromax plans to reduce the development time of mobile phones. Initiatives like these from a few more device makers would result in Indian companies competing on the global stage.

Wireless Carrier Network
Globally, operators like BT, AT&T, NTT DOCOMO, China Telecom, Verizon, and France Telecom have invested in developing technologies or through technology tie-ups. Indian telecom operators like Airtel, RCOM, BSNL, Vodafone, Idea, Tata Teleservices do not have a major technology focus. Indian telecom operators don't seem to be building on any expertise in the emerging technologies, and this could affect them in the long-run, especially when it comes to next gen technologies. Instead outsourcing is a big theme in India. Airtel has outsourced management of both their wireline and wireless networks. On the other hand, in countries like Japan and China, telecom operator have focused on technologies and aggressively initiated R&D efforts. One of the Japan's leading telecom operator NTT DOCOMO is spending heavily on R&D of LTE and 4G technology. China's leading operator, China Telecom has made significant investments in R&D space for developing mobile technology, Internet services, and the company also focuses on end customer demands and experiences.

Enabling Software and Services
Carrier class solutions are software products implemented at the carrier/telecom operator centralized systems. These include operational support systems (OSS) to business support systems (BSS). India has witnessed a lot of innovation when it comes to OSS and BSS software applications. The number of homegrown companies have developed cutting-edge products in the OSS/BSS space that have captured market share globally. Subex Azure is one such company. It is globally recognized for its products and its clients including thrity-two of the world's fifty largest telecommunications service providers. Some of the other well known OSS/BSS solution providers from India include Suntec, Bharti Telesoft (now Comviva), Aricent, Elitecore, etc. Interestingly, Indian companies have been able to sell their products globally.



Note: Red color bubble indicates Product Development capability/innovation. Shade indicates the extent or amount of product development/innovation
Note 1: In the Indian wireless telecom market component, device, carrier class solutions space is dominated by the MNC's whereas infrastructure, wireless carrier (Network) and VAS space is dominated by the Indian players
Content and Portal Services
India has seen tremendous growth in the mobile value added services (VAS) space in the last couple of years. A large number of Indian VAS companies have been able to come up with innovative services in the mobile VAS space. Traditionally, what started off from P2P SMS based (Bollywood and cricket) services has moved on to services like m-Search, video clips, m-Commerce, etc, and is going from strength-to-strength. Unlike most of other components in the value chain, homegrown Indian companies dominate the mobile VAS space. But again this is a 'software space'.

Mobile VAS can be split into three categories-information, entertainment, and m-commerce. Indian VAS companies have performed well across all these categories. They have innovated and at the same time have constantly introduced customer centric services. They have also gone global and acquired companies from around the world. Indian VAS companies like Mauj, OnMobile, Cellnext, Indiatimes, Rediff, etc, have been able to develop innovative services and solutions. IMImobile developed DaVinci service delivery platform which integrates and encompasses all messaging platforms, voice and video platforms, operational support system (OSS), business support system (BSS), gateways, and administration and application interfaces. It has also come up with Ad-Ring fully integrated mobile advertising platform in which multi-format ad campaigns can be created and delivered to consumers via SMS, MMS, voice, WAP portal, CRBT and video streaming.

OnMobile has developed VAS product and solutions ranging from contest management and aggregation, m-commerce solutions to voice portals, and voice SMSs. Other companies like Rediff developed search engines on mobile phones and other value added services. This helped them increase their customer base and switch about 25% of the Rediff users to use mobile phones for Internet usage.

Again this shows Indian companies proving their mettle in the software space, but not complete products such as mobile phones and equipments.

Conclusion
India has been able to drive innovation when it comes to developing 'software' products and technologies in the telecom space. But it has failed to develop complete products in the core (especially non-software technologies) in the telecom space. Now, with several years of experience in providing R&D services and gaining financial strength this is the right time for some of the large players in this field to start focusing on building a complete telecom product from India.

The telecom hardware equipment market is much bigger than the telecom software market. To stamp its authority in the global telecom market, India needs to build globally competitive companies across the telecom value chain.

Amit Goel and Gaurav Vasu
The authors are founder, and senior consultants, Knowledgefaber respectively
gaurav@knowledgefaber.com and vadmail@cybermedia.co.in

Satyam saga and the financial frauds

The moment you read Satyam's chief Ramalinga Raju's letter to the Board, you can sense that there is more to it than what you see in the letter. Its unimaginable to see a company with over 53000 employees run with just 3% operating margins. Another thing that was hard to swallow was non-existence of Rs.5,040 crore by inflating profits over seven years. The gap in the Balance Sheet had not arised purely on account of inflated profits over a period of time but it was clear money was siphoned off to buy lands. Money did exist, company did have real clients, real people and it was profitable indeed.

But is this is the only instance where we have failed when it comes to corporate governance. It might not surprise you all that these kind of small financial frauds do exist in India but the only difference is the magnitude and reach. Talk to any small business man in the country and they'll tell you that they know various ways to inflate profits and valuations.

I was reading an interesting article about 12 ways a company can inflate its profits in Mint which was done with the collaboration of Crisil.

These are just a few ways but i am very sure small time business men know much more than this

12 ways a company can inflate profits :

1. Write-off expenses from reserves
2. Show previous year’s expenses as this years income
3. Revalue assets to write off losses/expenses
4. Revalue assets to write off transfer values
5. Show loan waiver as income
6. Transfer loans to associates
7. Transfer fixed assets to current assets
8. Continue with dead projects.
9. Inventory valuation
10. Inflate sales
11. Sale/Lease back of assets
12. Change depreciation policies.

All of you are welcome to share your thoughts on this.

World Economic Forum - CEO confidence plunges around the globe

Well its not taken me long to come up an update from the world economic forum's meeting in Davos. Just before the event could start PricewaterhouseCoopers (PwC) survey finding of 1,100 CEOs from across the globe and industry sector sets a grim backdrop to a four-day meeting of the world's business and political elite. Confidence among the world leaders and people who run the companies and shape the fate of economies has fallen to a new low.

Crisis that started due to banking system has spread to different industry sectors and today only a handful of business leaders are sure about the future of their companies revenues and profits. Survey suggests only 21% of CEOs said they were very confident of growing revenue in the next 12 months, down from 50 percent a year ago. And hopes for a short "V"-shaped recession appear to have evaporated with most business leaders expecting no more than a slow and gradual recovery over the next three years. Only about 34% CEO's see their revenues and growing over three years. "The three-year view is a bit better but the bad news is it is not that much better.

Message is very clear short term scenario is very bad but long term looks good but not as good as what we saw earlier. When economies come out of recession or a slowdown we see a 'V'-shaped recovery but according to some economists the concept of a vigorous recovery is for business cycles of the past but not for this post-crisis business cycle.

One question that came to my mind was about the emerging economies. What is the fate of emerging economies? What can they expect in the coming future? The Picture is equally gloomy for emerging markets as well. According to 'The Washington-based Institute for International Finance', a group of the world's biggest banks, said that it expects private capital flows to emerging markets to drop by nearly two-thirds to $165 billion this year. This clearly signifies the idea of "decoupling" of developed and developing world markets is just a myth.

Wait for more update from World Economic Forum, Davos

World Economic Forum Annual Meeting 2009 - Significant Event in history

The 2009 meeting in Davos at the world economic forum is significant not just for the topics that are to discussed but sheer number of confirmed participation is historic. It seems the whole world is getting together to discuss and decide the fate of world economy. Number of participants at the forum is simply staggering, More than 2500 participants from 96 countries of which over 50% are business leaders, drawn principally from the Forum's Members – the 1,000 foremost companies from around the world and across economic sectors. Over 1,400 chief executives and chairpersons from the world’s leading companies, the highest ever since the World Economic Forum was founded in 1971.

The meeting will be focused on managing the current economic crisis around the world and shaping the entire post-crisis agenda. Leaders will also discuss about the new economic reform and climate change. Lets all hope that the event is a huge success and the integration of all stakeholders of global society is able to transform the state of the world economy.

Keep checking the blog for constant updates from 'The World Economic Forum Annual Meeting 2009'