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Govt Eyes Over Rs 350B Revenue from 3G Auction | Wipro's Wins Global Product Excellence 2010 Award | TCS: Profits Up 29% | ADOBE: E-Governance Opportunity | INFOSYS: Quarterly Profit Up | NOKIA: Unlimited Music Download | CDMA, GSM Handsets | Deals Too Risky

Govt Eyes Over Rs 350B Revenue from 3G Auction

The Indian government hopes to raise from the ongoing 3G spectrum auction more than Rs 300-350 billion, an amount estimated earlier, India’s Telecom Minister A Raja said April 19.

"Earlier I said the auction could fetch Rs 30,000-35,000 crore, but now I'm optimistic that it may go up," Raja said on the sidelines of a function here.

He, however, declined to quantify the rise expected.

Till April 17, which was the seventh day of the ongoing 3G spectrum auction, the government was assured of a minimum revenue of Rs 228.41 billion.

The seventh day of 3G spectrum auction saw a huge jump of 63 percent in the bid price for all-India license at Rs 57.10 billion over the base price of Rs 35 billion.

Delhi, after losing its top position to Gujarat earlier, has emerged as the most valuable circle at a bid value of Rs 6.26 billion followed by the Mumbai circle at Rs 5.98 billion.

On April 17, 40 rounds had been completed, of which six rounds were held on the same day.

Tamil Nadu logged in the third highest bid price of Rs 5.49 billion, followed by Gujarat that experienced negative demand at Rs 5.33 billion.

According to the details available with the Department of Telecom, Maharashtra, a western state, got a bid of Rs 5.33 billion, while the southern states of Karnataka and Andhra Pradesh received that of Rs 5.07 billion and Rs 4.93 billion, respectively.

The Indian government is auctioning three slots of 3G airwaves in 17 telecom service areas. Only two slots are up for sale across the country for broadband airwaves, which will begin after the 3G auction.


Wipro's Wins Global Product Excellence 2010 Award

Wipro Technologies, the global IT services business of Wipro Limited, April 19 announced that its identity access management solution IDAM-in-a-Rack has won the Global Product Excellence Award 2010 in identity management solution category recently in San Francisco.

The award, instituted by Info Security Products Guide, the world's leading publication on security-related products and technologies, recognizes security and IT vendors with advanced, ground-breaking products and solutions that help set the bar higher in all areas of technologies, a company statement said.

“IDAM-in-a-Rack” has been built by Wipro Enterprise Security Solutions team gleaned from Wipro's experience in successful IDAM implementations for various global customers over the years. The solution's architecture, market leadership, profitability and revenue growth were strong positives for the award.

"As cyber security threats continue to affect businesses worldwide, the protection of networks remains a critical requirement for any organization," says Sana Madan, executive editor of Info Security Products Guide.


TCS: Profits Up 29%

Tata Consultancy Services Ltd., India's largest outsourcing company, said April 19 that its net profit for the 2009-10 financial year increased by 29.01 percent to $1.45 billion, describing it as a stellar performance.

Revenue for the financial year that ended on March 31 was $6.34 billion, up by 5.38 percent year-to-year, under U.S. accounting standards, the company said.

N. Chandrasekran, TCS chief executive officer and managing director, said the ability to react to growth opportunities and increase efficiency helped the company deliver a superior performance for the fourth successive quarter.

“Our volumes have grown and our margins are at near historic highs. Strong volume growth of 17 percent during the year has rounded off an exceptional year for the TCS,” he said.

The company said in a statement that the fourth quarter net profit surged by 59.69 percent to $420 million year-on-year and 9.69 percent quarter-on-quarter basis.

The TCS result has fueled optimism that India's outsourcing industry — hit hard by the global downturn— has bounced back and may soon see a surge of new business.


ADOBE: E-Governance Opportunity

With the government pushing e-governance in a big way, software firm Adobe India sees a huge opportunity in this segment.

"With the government going forward with e-governance, we have very big opportunities here," Adobe India sales director Sandeep Mehrotra told reporters in Mumbai.

Adobe has made its mark in the Indian market in document management system and document rights management, he said, adding that "we are pretty successful in document management system and document rights management in the country."

"We are also part of a few projects like MCA 21 (an e-governance initiative of the corporate affairs ministry), where a lot of companies are involved," Mehrotra said.

Two other sectors in which Adobe has a strong presence are finance and education, he said. "Over 300 universities worldwide are using our services which means millions of students are getting their benefit."

Adobe has a very strong system in controlling leakages as well. "We have a very strong control over the leakages. In digital rights management, if somebody wants to control the content of a mail after sending it, it is also possible," Mehrotra said. The company's major clients are from the media, publication and broadcast sectors, he said.

Adobe India is a subsidiary of the U.S.-based leading software maker, Adobe Systems Inc.


INFOSYS: Quarterly Profit Up

Infosys Technologies Ltd., India's bellwether information technology outsourcing company, said April  13 quarterly profit rose 8.7 percent in dollar terms as a revival in demand for services spread to European and manufacturing clients.

The company said revenues this fiscal year would grow 16 to 18 percent, but cautioned that a strengthening rupee, pricing pressures from still-cautious global clients and wage hikes would cut into margins.

Net profit for the January-March quarter was 16.0 billion rupees ($349 million), or 0.61 cents per American Depository Share. It was a 4.5 percent increase in dollar terms over the previous quarter.

Revenues were 59.4 billion rupees ($1.3 billion), up 15.6 percent from a year ago and up 5.2 percent from the prior quarter in dollar terms.

Both measures beat analyst expectations in dollar terms.

“I strongly believe that unless something dramatic happens we are again back on a growth curve,” chief executive S. Gopalakrishnan told reporters.

The company, which usually exceeds its forecasts, said it expects revenues for the fiscal year ending March 2011 to rise 16 percent to 18 percent to $5.6 billion to $5.7 billion. It expects earnings to rise 4.3 percent to 8.6 percent to $2.40 to $2.50 per American Depositary Share.

India's export-driven IT services companies, which develop software and manage back office operations for many Fortune 500 companies, were hard hit by the downturn, as budgets froze and a wave of consolidation swept through Wall Street.

Few expect revenue growth to return to the 30 percent-plus yearly gains of the boom, but business began to revive late last year as global firms sent more work offshore to cut costs. Now the recovery is spreading from U.S. and financial services companies to European and manufacturing clients.


NOKIA: Unlimited Music Download

The world's largest cellphone maker Nokia will launch its unlimited music download service in India soon.

Nokia recently launched its unlimited music downloading service in China in a move to strengthen its position in the world's biggest mobile market.

The unlimited music download offering in China will add further momentum to Nokia's leadership in the world's highest growth markets, including Brazil, Russia and Indonesia, the company said in a statement.

"The forthcoming launch of the service in India will add significant scale and differentiation in another critical market," it added.

Nokia is a major mobile phone maker in India and had the highest handset sales after China in the country in 2009.

With the launch of the “Comes With Music” service in China, the Finland-based firm would drive further innovation in the music space by introducing the first device and PC-based free, legal, DRM (digital rights management)-free music download service.

The service would be available to consumers across China via a broad range of devices and through an extensive nationwide retail network.

At launch, consumers can get unlimited music downloads with the purchase of any one of eight devices, to include the Nokia X6 32GB and Nokia X6 16GB, Nokia 5230, Nokia 5330, Nokia 5800w, Nokia 6700s, Nokia E52 and Nokia E72i.

Entry level prices will start from 140 Euro, excluding local taxes and subsidies, the statement added.

"Globally, we have expanded the reach of our music service to 30 markets in just 18 months. We are excited to see consumers building collections of music they love through our service, and we are firmly on path to delivering legal digital music to all parts of the world," Nokia global head of music Liz Schimel said.


CDMA, GSM Handsets

Chinese telecom firm ZTE will start selling handsets in the open market and will launch 10-12 models in both the GSM and the CDMA space in India under the ZTE brand in the next 2-3 months.

"We are in the process of retailing mobile handsets in the market and our products will become available across India in the next two to three months," ZTE chairman and managing director D.K. Ghosh said.

In CDMA, it will be open market handsets, a segment which is gaining momentum as they are not operator dependent.

Ghosh said the company's aim is to sell at least 2-3 million units in the first year of retail operation with the help of distributors who in turn will reach dealers.

Sale of CDMA handsets through telecom operators will also happen simultaneously, Ghosh said.

ZTE Worldwide has plans to launch high-end handsets on Microsoft and Android platforms as well.

Though Chinese telecom players were under the scanner by the government on security concerns, Ghosh said he did not foresee any hurdle in the company's plans.

The Department of Telecommunications recently issued a directive asking operators to get security clearance before placing orders to procure equipment or software from foreign firms.

Ghosh said the company was looking at huge business opportunities arising from 3G and Wimax services, for which spectrum will be allocated in the near future.

"We hope to garner 10-15 per cent share of this market, which is estimated to be $4 billion," he said.


Deals Too Risky

For the past few years, India’s outsourcing giants, sitting on piles of cash, have watched global rivals IBM and HP take a definite inorganic route without attempting a single billion-dollar deal of their own. As TCS, Infosys and Wipro seek to raise their profile and compete better with bigger rivals, they are caught in a dilemma of whether to sacrifice profitability and gain market share by buying large firms that can boost their topline multi-fold.

And with companies such as Infosys sitting on $3.5-billion in cash, it’s definitely not about the size of war chest “but more to do with their risk averse, profit-obsessed and India-centric growth strategy,” said the chief executive of a multinational outsourcing firm which competes with Indian software exporters. Until last year, investment banking firms were holding hectic parleys with TCS, Infosys and Wipro proposing M&A opportunities such as CapGemini, Atos Origin, and Logica, among others. Now, Indian technology firms are realizing that such acquisitions will not only be too heavy to pull off, but also bring several complexities that may affect their profitability and double-digit growth rates.

“Why would they acquire troubled companies, all you would be getting is headaches and huge cultural disconnect,” argues John McCarthy, principal analyst and vice-president at U.S.-headquartered Forrester Research.

Already, large European services firms are struggling to trim their high-cost payroll and increase offshoring to cheaper locations such as India. “In Europe, when you lay off someone it’s very expensive and you try to delay it, that has a weight on margin. We at Capgemini said with offshoring it will move to double digits pretty soon,” says Paul Hermelin, the group chief executive of Capgemini. The company, which serves top government customers such as UK’s tax authority HMRC, aims to have nearly 36 percent of its staff in offshore locations including India by this year-end.

“We do not plan to build large empires of hardware and services, and it’s not about being risk averse. We want to bite what we can chew,” says chief executive of a top Indian technology firm. He requests anonymity because his company is in a financial silent period.



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