HEADLINES TODAY : PARAMOUNT TO ACQUIRE AEI CABLE

INDUSTRY
ACCEL BAGS JNU DEAL
Chennai
The Economic Times (Bangalore edition)Jawaharlal Nehru University (JNU) has partnered with Accel Frontline, a Chennai-based IT services provider, to develop software-based solutions and applications for its e-governance cell. JNU's e-governance cell was set up during the 10th Plan with a Rs 50 lakh grant by the University Grants Commission.




NASSCOM TO TAP YOUTH POWER
Guwahati
The TelegraphSmart and suave with a flair for English — this is how the information technology industry perceives the youth of the Northeast.

The country's biggest IT body, Nasscom, today rolled out its plans to tap the youth power of the region, which has an abundant talent pool of English-speaking boys and girls.

Over 20,000 youth from the region will sit for the National Assessment of Competency (NAC) test by Nasscom, which is considered to be the first step towards employment in the BPO and IT-enabled services sectors.

The IT industry expects nearly three lakh graduates to appear for the NAC test by 2009.

The first of the series of tests will begin in the third week of September and continue till December. The tests will be held at different centres across the region.




IT PARKS/SEZ

NEW JERSEY-BASED SMES MULL IT PARK
Hyderabad
The Hindu Business LineA consortium of 60 New Jersey-based technology companies have come calling to India with a proposal to set up an integrated technology park which will see initial investment of about Rs 1,200 crore.

The Small and Medium Enterprise Consortium (SMEC) now has about 60 companies as members with a combined turnover of $3 billion. It hinted that about 300 companies evinced interest in being part of the proposed project planned near Hyderabad.

Upendra J. Chivakula, Deputy Speaker of New Jersey General Assembly, along with other members of the consortium, said that the objective of such an initiative was to step up outsourcing work, network and connect with local people, create jobs, and take up social work.

As a part of this initiative, the consortium expects to invest about Rs 120 crore in International Institute of Information Technology, and some model schools, each with an outlay of Rs 12 crore.

The Chairman of SMEC, Mahender Musuku, said that there are scores of technology companies playing a very strategic role in enterprises in the US with employee strength ranging from a couple of hundreds and upwards. All these companies either have outsourcing capability or are in the process of looking at developing such a capability.




TCS, COGNIZANT AMONG 20 SEZS CLEARED
New Delhi
The Hindu Business Line DNA Mint The Tribune The Pioneer The Hindu Tata Consultancy Services and Cognizant Solutions India Pvt Ltd, both in Andhra Pradesh, were among the 20 special economic zones for Information Technology (IT) and ITES cleared for formal approval on Thursday by the Board of Approval for SEZs.

The BoA, which met under the Chairmanship of the Commerce Secretary, Gopal K. Pillai, also gave in-principle nod to seven SEZs, including a multi-product SEZ being promoted by Gitanjali Gems Ltd in Nagpur, Maharashtra, and a 208-hectares textile SEZ in Bidar district, Karnataka, by Jade Holdings Pvt Ltd.

Pillai told reporters here that with today's 20 formal approvals, the number of SEZs with formal approvals has gone to 386 out of which 142 have been notified so far.

Among the notable formal approvals include multi-services SEZ by Gujarat Finance City Development Company Ltd in Gandhinagar, agro and food processing SEZ by Nagaland Industrial Development Corporation Ltd in Dimapur, two IT/ITES SEZs by Andhra Pradesh Industrial Infrastructure Corporation Ltd, and a polymer-based SEZ by Asia Pacific Corporation Ltd in Gujarat's Kutch district.

Among the four SEZs for conversion from in-principle to formal approval include Alok Infrastructure Pvt Ltd for a textile SEZ in Dadra and Nagar Haveli and a multi-product SEZ spread over 1,263 hectares by Sterling Erection and Infrastructure Pvt Ltd.

Welspun Anjar SEZ for Engineering products and Gitanjali Gems Ltd for gems and jewellery SEZ in Aurangabad were the two important SEZs that were given in-principle nod by the BoA on Thursday.

Proposals of AEC Marketing for gems and jewellery SEZ in Dadra and Nagar Haveli and Anant Raj Industries' 10-hectare IT SEZs were not considered by the BoA as the local authorities in the respective regions withheld permissions for these proposals.




IT PARK IN KADAPA SOON
Kadapa
Deccan ChronicleDistrict collector M.T. Krishna Babu said that steps were being taken to construct an IT Park in 50 acres of land near Rajiv Gandhi Institute of Medical Sciences (Rims) on the outskirts of Kadapa city. Krishnababu inaugurated the regional information and public relations office that was shifted to the old Rims office here on Thursday. Speaking to newsmen, the collector said that Chief Minister Y.S. Rajasekhar Reddy would inaugurate Rajiv Gruhakalpa housing complex constructed at a cost of Rs 12 crore here on September 5.




M&A

BT TO EXTEND XANSA DEAL
The Hindu Business LineXansa Plc, a UK provider of information-technology and business services, said BT Group Plc extended a contract valued at £128 million ($258 million) over six years. The contract "covers finance and accounting processing, accounts payable, cash, treasury, payroll, ledger and reporting services," Reading, England-based Xansa said in a statement distributed by the Regulatory News Service today.



PARAMOUNT TO ACQUIRE AEI CABLE
Kausik Datta, Mumbai
Business StandardNew Delhi-based Paramount Communications is close to acquiring Britley, UK-based AEI Cables. An announcement to this effect is expected to come shortly, if not tomorrow.

Sources close to the development said the deal size would be in the range of Rs 250-260 crore. UK-based investment banking firm Elara Capital is the adviser to Paramount. Sanjay Aggarwal, chairman and CEO, Paramount Communications, declined comments.

They added that the power cable maker Paramount would borrow for financing the deal, which would be around 80 percent of the company's sales last year. Paramount last year posted a net profit of Rs 37.5 crore over net sales of Rs 318 crore. Last year, it had raised $15 million (Rs 60 crore) through a GDR issue.

Paramount provides cabling solutions to power, telecom and IT, railways and petrochemical industries. It has a flexible manufacturing capacity to shift focus on manufacturing one type of cable to another.




SOFTWARE

SATNAV TECH SEWS UP $10-M EXPANSION PLAN
V.Rishi Kumar, Hyderabad
The Hindu Business Line Business StandardSatNav Technologies has embarked on plans to expand its domestic and international operations with an investment outlay of $10 million.

The Founder and Managing Director of SatNav, Amit Prasad, said that from a start-up a few years ago, the company has now moved on to the next phase of growth which is reflected in the performance of the company.

Prasad said that the company had consolidated its business in India and now planned to expand its presence in the Asia Pacific region and West Asia with its flagship product 'a-mantra', a facilities management suite.

"Initially, the company was in pursuit of investments from private equity players. But now the strategy has changed. We plan to meet our expansion requirements through a combination of internal accruals and debt," he explained.




TCS BAGS $140-M BSNL CONTRACT
Mumbai
The Economic Times The Hindu Business Line The Times of India Business Standard Deccan Chronicle The Financial Express The Telegraph Deccan Herald The Hindu Software exporter Tata Consultancy Services (TCS) has won a nine-year contract worth $140 million (Rs 574 crore) from Bharat Sanchar Nigam Ltd (BSNL). The deal, covering the north and west of India, includes deploying operational support systems (OSS) and business support systems (BSS) components such as customer relationship management, billing, mediation and directory enquiry.

The first two years of the engagement will involve setting up the new systems in association with its partners and upgrading from the existing systems. The latter will involve operating and maintaining the systems. The revenue flowing in from the project in the first two years will be larger than in the rest of the years. The systems integration involves managing the overall engagement along with a large team of hardware, software and application partners. The $140 million is revenue that TCS will earn from the contract.

HCL Infosystems had won a similar deal of Rs 500 crore for the south and east regions from BSNL.

"The deal is comparable to any other global deal," said TCS head (global sales) N Chandrasekaran. He said it would also serve to showcase the company's capabilities in telecom. Some of the telecom contracts that are coming up globally are in systems integration, 3G, convergent billing and managed services. These are largely in Africa, Latin America and in the Asia Pacific. All these deals are fairly large size and range from $50 million to $200 million.

TCS gets around 9-10 percent of its revenues from the domestic market. "TCS is extremely focused on the domestic market. We will continue to bid for projects in India," Chandrasekaran said. The margins from the BSNL contract would be comparable to global margins, he added.

Earlier, TCS had won a large outsourcing contract for managing the IT infrastructure needs of Tata Teleservices. The agreement, signed in 2005, was valued at Rs 1,000 crore.




EMERSON SETS UP DESIGN ENGINEERING CENTRE IN MOHALI
Komal Amit Gera, New Delhi, Chandigarh
Business StandardEmerson Electric Company inaugurated its Design Engineering Centre at Quark city in Mohali today.

The move can be considered as the revival of the software business in Mohali after Tech Mahindra, Infosys and Tech Mahindra quit the place in the last few years.

The company has taken the premises on rent at Quark and would run under the Software Technology Parks of India (STPI) umbrella.

According to sources, it expects export of Rs 45 crore in the first year and about Rs 400crore-Rs 500 crore after the completion of the project.

The company officials refused to disclose the investment figures but said that the amount would be substantial. This is the second corporate centre of Emerson in India, the first one was set in Pune.

According to Pradipta Sen, president (India region of Emerson Electric Company), "The facility at Pune was set up in year 2003 that now engages 456 people and 34 divisions and we want to replicate the same success in Mohali."




HARDWARE

FAB COMPANIES NOW DRIVE PC DESIGNS
PP Thimmaya, Bangalore
The Economic TimesThe PC market in India has taken the unconventional route with major chipmakers like Intel and AMD coming out with new designs for computers that appeal to masses both in terms of price and value. The conventional PC does not seem to be the preferred bet for those looking at increasing penetration of the Indian market as chip makers and hardware manufacturers are coming out with new form factors which suit Indian conditions.

If Intel has come out with its Classmate PC, which is more of a miniature form of notebook computer, then AMD has designed new form factor PCs where the central processing unit (CPU) has been shrunk to a minimal size. AMD's designed product is being manufactured and marketed by Wipro Infotech under the brand name Protos. AMD India MD Alok Ohrie says: "We are trying to facilitate a computing environment for the masses and thereby create a new market."

These new form factor PCs are not just about design itself, they are competitively priced too. The Protos is priced at Rs 14,000 at the entry level while Intel's Classmate PC comes with a bundled cost of around Rs 17,000.

However, Ashutosh Vaidya, V-P, Wipro personal computing, Wipro Infotech, says it is not just the price which will drive these PCs, but the value and functionality it generates. In case of Protos, it can be run on a 12-volt battery and can withstand extreme weather conditions and has all the features of a normal PC.

Vaidya says the company is looking at adding more applications on Protos and would like to make it a more solution-oriented machine. In the case of Classmate PC, Intel is targeting the education sector, especially schools since the machine is more attuned to children.

According to IDC, the installed PC base in the country recorded a compounded annual growth rate of 32.3 percent from 9.5 million in 2003 to cross 22 million in 2006, thereby more than doubling in a three-year time frame.




ENERGY-EFFICIENT HARD DRIVES FROM WESTERN DIGITAL
R. Savitha, Pune
The Hindu Business Line Western Digital has announced a new line of hard drives designed with energy efficiency in mind. These hard drives are estimated to consume almost 40 percent less power than normal drives.

According to WD, each of these drives will save about 13.8 kg of carbon dioxide per year. For a large data centre, such as a bank, savings could be around 248 tonnes of carbon a year. The first of these 3.5-inch hard drives, the 1TB Caviar GP, hit the global market in July, followed by the 1TB desk-to-pc channel shipment.

Sharad Srivastava, Director - Sales (India and South Asia), talks about the products and the strategy.

What is the potential for green drives in the Indian market? What is the sales target?

Green Power Hard Drives consume almost 40 percent less power than normal drives. In India where power is an issue in terms of demand and supply chain, these drives will conserve power and provide an increased life to power-generation equipment such as inverters and generators.

What is the marketing strategy for this?

Western Digital's market strategy consists of a distributor network. We have channel partners who are responsible for the distribution of our products across India. Additionally, we have an all-inclusive education campaign and service support set-up in India. We have also implemented a three-segment channel model, based on the customer profile and appointed strategic distributors, to address the market.

In an enhancement to its channel strategy recently, WD's volume distribution segment has been further divided into the regional and up-country markets to address resellers and small SI/assemblers. This distributor network is supported by our warranty replacement program – WD Express.

Where is the drive being manufactured?

The green drives are being manufactured in WD factory located in Malaysia and Thailand. For the domestic market too, the drives will be shipped from the manufacturing units in Malaysia and Thailand. As per our Q4 results, unit shipments have grown 32 percent from 73.3 million in the last fiscal year (FY06) to 96.5 million in FY07.




INT/E-COMM

ASSOCHAM: EARLY SPECTRUM ALLOCATION FOR BROADBAND
New Delhi
The Economic Times Assocham today suggested early allocation of spectrum for broadband wireless access.

"Spectrum finalisation has already taken a great deal of time and if further delayed it is going to jeopardize the prospects of broadband and telecom services," Assocham President Venugopal Dhoot said in a statement.

In a communiqué to the Department of Telecommunication, the chamber said the Indian broadband services market is still at a nascent stage in the country, as by end of 2006-07, the subscriber base had not exceeded beyond 2.5 million, with a household penetration being around one per cent only.

According to estimates made by the chamber, the gap between target and achievement in broadband penetration in India will touch 10 million by 2010, until the availability of personal computer at cheaper price with adequate infrastructure is made available in rural and semi urban areas.

The Department of Telecommunication has set a target of nine million subscribers by the end of current year and 20 million subscribers by 2020.

In order to make broadband available all across the country, service providers will have to look into various emerging technologies, mainly wireless, as it is difficult to connect the vast Indian population through wires, the chamber said.

Another major challenge in providing rural broadband connectivity is the non-availability of relevant content for the diversified Indian population, without which the success of broadband in rural areas is very unlikely, it added.




E-GOVERNANCE

COMAT SERVICE CENTRES IN NE
Bangalore
The Hindu Business LineComat Technologies has announced plans to set up common service centres across districts, tehsils and gram panchayats in the North East. The company, in association with 3i Infotech, has already set up around 800 ICT-enabled kiosks in Karnataka. In Haryana, out of the proposed 1,159 rural kiosks, it is close to setting up 292 kiosks (e-Disha Ekal Seva Kendras) in the state's first roll-out exercise in Rohtak division. Similarly, the company will set up 706 centres across Uttarakhand the Uttaranchal state benefiting 6.3 million population in its rural areas. It will soon extend its expertise to north-eastern states, where 140 and centres are going to be set up in Tripura and 45 in centres are going to be set up in Tripura and Sikkim.




IT TRAINING

ORACLE UNIVERSITY CERTIFICATION
Coimbatore
The Hindu Business LineOracle University has awarded certificates to over 42,000 professionals in India, since its inception in 1995. The university offers training and certification programmes by providing Oracle, PeopleSoft, JD Edwards, Retek and Siebel education. In a bid to reach out to the Indian students, it offers these as classroom programmes in Delhi, Mumbai, Bangalore, Hyderabad, Chennai and Kolkata. While such initiatives are aimed at bridging the IT skills gap, it has also designed the 'Workforce Development Programme' for working professionals through a wide education partner network. A release from the company said that over 90,000 Indian students passed the WDP last year June 2006 – May 2007.




IT ENABLED SERVICES

APOLLO HEALTH ACQUIRES ATLANTA BPO FOR $170 M
Chennai
The Economic Times Mint The Hindu Business Line DNA The Indian Express The Times of India The Tribune Business Standard Deccan Chronicle The Telegraph The Hindu Apollo Health Street (AHS), the BPO arm of Apollo Group of Hospitals, has acquired Zavata, an Atlanta-based BPO which operates in the same segment, for $170 million. This synergistic acquisition is not only expected to strengthen AHS' presence in the US market, but is also going to bring in specialised skill-sets, adding value to the company's existing portfolio.

Apollo Hospitals group executive chairman Prathap C Reddy told mediapersons in Chennai on Thursday that "this acquisition will make Apollo Health Street the largest global healthcare BPO company".

The acquisition is to be funded through a combination of debt and equity, broken into $120 million of debt and $50 million equity. Barclays Capital and Bank of India, the funding agencies for the acquisition, have offered an optional draw-out of $140 million (including $8 million refinancing portion of an earlier debt) to the company, including the debt component of this deal. The balance funding will come through internal accruals, Pratap Reddy said. Of $50 million equity, the Apollo Group will invest $25 million while private equity investors — JP Morgan's investment arm One Equity Partners and Temasek Holdings — will fund the rest.

According to AHS CEO Andrew DeVoe, the valuation of Zavata was put at 10 times its EBIDTA. Zavata, which is engaged in end-to-end back office services and emergency transport billing, is the fourth acquisition by AHS. A year ago, AHS had acquired another US-based company, Armanti Financial Services for $30 million, after which AHS' combined turnover touched $50 million.

Zavata has over 100 active customers and employs over 450 people in India and 500 plus in the US, DeVoe said. The combined entity is aiming for a revenue of Rs 400 crore by March 2008.

AHS MD Sangita Reddy said the BPO business has been growing organically at a CAGR of 70 percent. It has operations in Hyderabad and the US, and is building a new facility in Chennai. When completed, the Chennai facility will have 2,000 seats. The first phase — with 400 seats and an investment of Rs 20 crore — will be ready in a year's time, she said.

AHS serves the top three academic health systems and spans across 40 hospitals in the US. It is looking at several avenues for raising capital. On the possibilities of a future listing, Ms Reddy said, "we are working out the valuation". AHS, which started offering platform-based delivery solutions five years ago, has been ahead of the industry in its outcome-based pricing models. "We operate in the high-end business space. The value of each contract ranges from $1 million to $5 million," she said.




INDIAN TECHNOLOGY FIRMS FIND OFFSHORE MERIT IN SOUTH AFRICA
Regina Anthony, New Delhi
Mint A large labour pool with multi-lingual skills, proximity to the Middle East and Europe, and a deep cost advantage vis-à-vis the US and Europe are factors making countries such as South Africa attractive offshore destinations for Indian back office and tech service providers.

Companies that are eyeing or have presence in both countries include all the major players including HCL Technologies Ltd, Wipro Ltd, Infosys Technologies Ltd and Tata Consultancy Services Ltd.

HCL, which had put together a team three months ago to assess the business process outsourcing climate in Africa, has already picked Cape Town and Johannesburg to set up back-office units, details of which will be finalized soon.

Wipro and Infosys declined to comment on their Africa plans, but an industry representative said both firms are exploring the possibility of setting up operations there.

"Representatives of Infosys and Wipro have visited South Africa to invest there, but the process is still at a very nascent stage. Wipro is looking at setting up a manufacturing facility there," said Shipra Tripathi, director, Africa desk, at business lobby Confederation of Indian Industry.

Satyam Computer Services Ltd, which serves six of the largest firms in Africa, already counts more than 120 workers at customer locations in offices at Johannesburg and Cape Town.

The Hyderabad-based firm said in July that it plans to strengthen its presence in South Africa over the next two to three years to leverage untapped business opportunities and local employees.

TCS already has operations in both Johannesburg and Cape Town with 100 employees, and is in the process of setting up a global delivery centre in Morocco. Other Indian tech and back-office companies are also speaking to government officials in African countries to understand the market there.

"Indian tech companies, such as Satyam and TCS, have approached us about possible investments... Other big outsourcing companies, such as Genpact and Convergys, have also been provided with information," said Ray Ngcobo, chief director of the industry development division at South Africa's department of trade and industry, in an email.




ERP

SAP: INDIA KEY TO GLOBAL GOAL OF 100,000 CLIENTS
Bangalore
The Economic Times The Times of India German software giant SAP said on Thursday that its Indian unit will be key to reaching its goal of more than doubling the number of global customers by 2010.

India is the third-biggest operation by headcount for SAP, which plans to invest one billion dollars by 2011 in the country, also its fastest growing market; chief executive officer Henning Kagermann said.

The local unit will play a critical role both as a source of "products and innovations" and as an expanding market as SAP seeks to increase its customer base worldwide from 41,000 to 100,000 by 2010, Kagermann said.

India, where the number of customers has doubled to 2,000 in one year, will be a "very big" market for SAP, reaching the scale of Britain and France, in five to 10 years, he said.

The entire 60-member executive board of Walldorf, Germany-based SAP have travelled to India with the CEO to meet customers and gauge the market as well as interact with local employees.

Kagermann opened a new 350,000-square-feet facility on the campus of SAP Labs in Bangalore that can house 2,000 employees, and announced tie-ups with two Indian technology institutions Thursday to nurture engineering talent.

The company has designated India as a strategic hub and plans to reinforce its global services and support centres in this southern Indian city and Gurgaon, a New Delhi suburb.

The Indian operation is SAP's largest research and development hub and support centre outside Germany.