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Telenor may get fewer than nine 2G spectrum circles
Industry calls for political consensus to sustain reforms
Federation of Indian Chambers of Commerce & Industry president R.V. Kanoria (L) with FICCI vice president Sidharth Birla addressing a press conference on 'Reforms - The Way Forward' in New Delhi on Wednesday. — Tribune photo by Mukesh Aggarwal |
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Reebok ex-MD, COO arrested in
Rs 870 crore fraud case
No express lane for Wal-Mart, global retail rivals in India
Indian BPO industry: Slow growth but bullish outlook
Fiat to complete separation from Tata Motors in sales operations by March
Hero Cycles eyeing European acquisition
Investments through P-Notes rise to $26 bn
Indian cos more optimistic in Q3
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Telenor may get fewer than nine 2G spectrum circles
"We could end up with fewer than nine circles," Richard As said in a presentation to investors. He added he foresaw issues with the pricing of licences in the Mumbai area, and that there was a risk some spectrum could end up unsold. Telenor set ambitious profit targets on Wednesday, banking on the continued resilience of its main Scandinavian and Asian markets in a faltering global economy, rising demand for data services and cost cutting. The state-controlled group, with over 150 million subscribers after an aggressive push into Asia, also said in presentations to investors that it would keep debt down, had no major acquisition plans and would keep a grip on spending in India, even as it takes part in a costly licensing round. ASIA KEY: Telenor has a unique global profile with its European and Asian focus, and competes primarily with local players. Its bigger competitors include TeliaSonera in Scandinavia, Deutsche Telekom in central Europe, Vodafone in India and Singapore Telecom in Southeast Asia. It said growth in Asia has been exceptional over the past few years and it expects the region to remain strong in the years ahead. India, the world's second biggest mobile phone market by subscriber numbers, has been a key growth area but Telenor is now at risk of losing its operating license after courts cancelled 122 regional operating permits held by eight carriers granted in a scandal-tainted licensing round. Telenor faces a costly new licensing round, which risks pushing it above its self-imposed investment cap, but the firm repeated it would not breach that ceiling. The Uninor unit, a JV with Indian property firm Unitech Ltd, had accumulated losses of Rs 127 billion by the end of the second quarter and Telenor said its peak funding cap would remain Rs 155 billion. It estimated the upfront license price for the nine regions it was most keen on, would be at least Rs 24 billion in the auction set to start on Nov 12 and end by Jan 11.
— Reuters In talks with several potential Indian partners
Telenor is in talks with several potential new partners in India, CEO Jon Fredrik Baksaas said Wednesday. "There are talks in many directions, I can assure you, and many who wish to speak to us as well," Baksaas told Reuters on the sidelines of a capital markets event. "There isn’t really anything concrete to say about this yet, but... we wish to go further in India, provided the framework at last will be in place, and that we also can see a profitability developing on a new investment in India," he added. |
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Industry calls for political consensus to sustain reforms
New Delhi, September 19 CII director general Chandrajit Banerjee said opening up FDI in retail and other sectors was an extremely critical step for growth and especially capital inflows. “These reforms must stay on course and any derailment at this stage would send the wrong signals to both global and Indian industry”, Banerjee added. Federation of Indian Chambers of Commerce & Industry (FICCI) president R.V. Kanoria said industry was concerned by the positions taken by various political parties following the recent announcements by the government including calls made for various forms of civil protests including a “Bharat bandh” (countrywide shutdown). FICCI has asked all parties to reconsider such proposed actions as these would result not only in national losses that the country could ill afford but also directly affect people, mainly the poor and daily wage earners. Addressing reporters here today, Kanoria said the government should proceed with much needed deeper reforms, as the steps taken in the past week had signaled just a start to a comprehensive reforms process. He said “some burden had been placed on the common citizen and on businesses due to the decision to address subsidies but some short-term pain would be necessary for long-term gain”. Kanoria added proactive investment measures are essentially in the greater interest of consumers as opposed to narrow benefit of any industry section. “These will go a long way in increasing production, providing economic benefits to both farm producers as well as consumers and reducing wastage of precious produce”, he added. The Associated Chambers of Commerce & Industry of India (Assocham) said the reform measures announced were vitally needed at this point of time and the chamber fully supported the government in its efforts to turn around the economy. The apex chamber said some measures like the revision of diesel prices or restriction of number of LPG cylinders at subsidized prices, can result in rise in prices and higher costs for the households. However, subsidized prices of an essential fuel could not be borne by the government for all times to come, it added.
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Reebok ex-MD, COO arrested in
Rs 870 crore fraud case Gurgaon, September 19 Singh, Bhagat along with the three others — Sanjay Mishra, Prashant Bhatnagar and Surakshit Bhatt — have been arrested and will be produced tomorrow in court where “we will seek their custody”, said Assistant Commissioner of Police Bhupinder Singh, who heads the special investigation team probing the case. Subhinder Singh and Bhagat were booked for fraud, criminal conspiracy and other charges under the IPC for allegedly siphoning off the sportswear maker company's money by creating ghost distributors across the country and generating forged bills over the last five years. When the alleged scam came to light in March 2012, Singh, who had been made the Managing Director of Adidas India last year as a part of an integration of the businesses of both Adidas and Reebok brands, was dismissed from the company. Bhagat’s services were terminated too.
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No express lane for Wal-Mart, global retail rivals in India
New Delhi, September 19 Turning a profit in India for global supermarkets is widely expected to prove even tougher than in China, where Wal-Mart Stores Inc loses money after a dozen years and restrictions are fewer than those imposed by India. Wal-Mart, which has been ramping up its wholesale operation in India, where it operates 17 of the cash-and-carry stores allowed under the old rules, is determined to get its retail business right in a country where even local chains struggle. "We’re able and willing to invest whatever it takes in the supply chain, in the retail formats to move our business forward," said
Jain, days after India unexpectedly threw open its doors to supermarkets in the face of heavy political opposition as part of a broader spate of reforms. Bentonville, Arkansas-based Wal-Mart and rivals such as France's Carrefour and UK-based Tesco Plc did not get everything they wanted. RETAIL DETAIL: Under the new rules, states can opt out of allowing in foreign players — a choice most seem inclined to make, at least for now — and even in those states that welcome them, stores will be permitted only in cities of at least 1 million people. Foreign multibrand retailers will also be required to invest at least $100 million, with half of that going into backend infrastructure in rural areas, and source 30% of goods from small and mid-sized local suppliers. "We sent our thoughts to the government that 30% was very high ... and obviously they looked at that and chose not to amend it," said
Jain, who was previously based in Shanghai as head of emerging markets for Wal-Mart International. "In the short term it's a requirement which probably can be met but as the business starts expanding, the issue will be how ... you continue to comply with it as you’d have many more suppliers than you will desire to have," said
Jain, who expects it takes 12-18 months to open the first India store. India's organized retail market could attract up to $16 billion in foreign direct investment over the next three years, much of that in the farm-to-store supply chain network, according to estimates by Boston Consulting Group. TOUGH MARKET: The restrictions are meant to appease fierce political opposition that forced New Delhi to backtrack from a similar plan late last year, and could yet scupper the latest push. The rules add to the difficulties of a $450 billion market already so tough that even Reliance Industries, India's most valuable company and owner of the second-biggest supermarket chain, has never made a profit in retail. Heavy price competition, expensive real estate, and poor supply chains make for a tough Indian retail environment. "The market has opened up in pieces and so it is crucial retailers evaluate the returns on their investments over a medium to long term," said London-based Himanshu Pal, director of retail insights with consultancy Kantar
Retail. Carrefour, the No.2 retailer, has taken a more cautious approach in India, where it has opened two wholesale
stores. Milos Ryba, senior retail analyst at PlanetRetail, expects it to maintain that approach: "I don't think Carrefour would change its strategy for India in the short-term. The new FDI law is tricky with many conditions." Carrefour has declined to comment on its plans since New Delhi's decision. FRAGMENTED MAP: Only nine of India's 28 states — those governed by the ruling Congress party and its allies — have so far pledged support for the retail reform. Eleven major states ruled by the opposition and some allies of the government have opposed it.
— Reuters |
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Indian BPO industry: Slow growth but bullish outlook
New Delhi, September 19 "The industry (BPO) is growing. It is slower to what people have historically got accustomed to, but it is certainly not stagnant. "It’s consequent to what is happening in other parts of the world. Also, the industry is maturing... maintaining growth rates of mid-2000 is going to be challenge," EXL Service Executive Vice President and COO Pavan Bagai told PTI. "However, we don’t see the industry anywhere close to stagnation...we’re still bullish about it," he added. Bagai said most of the large banks and companies have already outsourced many of their processes. "BPO firms now need to tap into regional or midtier insurance companies/banks/or whichever industry they are playing in, in the existing geography," Bagai said, adding that the players also need to expand into new geographies in Europe or other parts of the world where they see potential. "Forces that provided the initial momentum have now matured and now we need fresh clients, geographies as well as a fresh set of offering," he added. Stating that going forward, healthcare and analytics will be two major areas for the industry, Bagai said the work that BPO firms are now handling is more complex than before and they need to focus on enhancing domain expertise to tap new businesses. "We need to enhance our capabilities and our offering because the new stuff is more complicated and requires greater understanding of the business of our clients... domain knowledge is extremely important to tap into new set of areas and activities that have not been out sourced," he said. The Indian BPO industry contributes to over 37 per cent of total global sourcing BPO revenues. Talking about the industry growth in the near future, Bagai said: "The current growth rate will continue for the next couple of years... depending on what happens to the rest of the world, if they come out of recession and investment activity are aggressive." — PTI
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Fiat to complete separation from Tata Motors in sales operations by March
New Delhi, September 19 The company's wholly-owned Indian arm Fiat India Automobiles Ltd (FIAL) is also in the process of hiring about 100 people for customer facing roles. "We’ve a revival plan for Fiat in India. For that it’s important for us to complete the timely realignment of distribution network. By March 2013, the no Fiat car will be sold under the existing Tata-Fiat joint dealerships," FIAL vice president (commercial) Ravi Bhatia told reporters here on Wednesday. Earlier in May this year Fiat and Tata Motors had announced that they would realign their JV formed in 2006 and the Italian automaker will go on its own for sales and distribution in India, instead of selling its cars in Tata-Fiat branded showrooms. The two firms, however, had retained their partnership in car and diesel engine manufacturing operations. Fiat, which went on a solo journey in India in 1997 after parting ways with the Premier Group, had formed the JV with Tatas as it sought a reversal of fortune in the Indian market. The company has so far remained a marginal player. Bhatia said currently Fiat vehicles are sold in 174 Tata-Fiat branded showrooms in 126 cities in India but these showrooms will go to Tata Motors as part of the parting agreement. The company today introduced new variants of its sedan Linea and hatchback Punto under the 'Absolute' range offering freebies worth up to Rs 78,000 and Rs 67,000 respectively ahead of the festival season. The Linea is priced between Rs 6.96 lakh and Rs 9.35 lakh (ex-showroom Delhi), while Punto comes at a range from Rs 4.96 lakh to Rs 7.36 lakh (ex-showroom Delhi).
— PTI |
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Hero Cycles eyeing European acquisition
Chandigarh, September 19 Though the hike in import duty on bicycles from 16% to 40%, announced in the FY 2012-13 budget, had created a lull in the sale of premium bikes, whose parts are imported, officials in Urban Trail, the newly created company under the flagship Hero brand, are now optimistic, and hope to achieve their sales targets. The company is now introducing new models of these premium bicycles. Urban Trail president Pravin V. Patil said the firm will launch four to six new models of the premium bikes this year. “We already have 18 models of these premium bikes. While the largest selling model of these bikes is manufactured in India, many of the models are imported from China and Taiwan. Though initially the high import duty impacted our sales adversely, the sales have picked up by leaps and bounds, and we are hopeful of achieving a 500% growth by March 2013,” he said. Premium and fancy bicycles in India are seeing a huge surge in demand. While the demand for the standard bicycles is decreasing over the years, the demand for these bicycles is increasing. Last year, as against 55% market share of standard bicycles, the fancy bicycles had a 44% share and premium bicycles had a 0.4% share. “By 2014, we expect the share of standard bicycles will shrink to 45%, while the share of fancy bicycles will rise to 53% and that of premium bicycles to 2%. Thus, we see a huge growth potential in the premium as well as fancy bike segment,” said Patil. Patil said the firm had set up a new plant for manufacturing the aluminum bicycle frames in Ghaziabad, and this unit had been partially commissioned. “We have invested Rs 21 crore in this facility till date, and will be investing another Rs 50 crore in a phased manner over the next three years,” he said, adding so far the company was focused on catering to the domestic market only. |
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Investments through P-Notes rise to $26 bn
New Delhi, September 19
The surge in the investment appears to be largely into the derivatives market, although equities account for more than half of the funds pumped in by P-Note investors into Indian markets. P-Notes, mostly used by overseas HNIs (high networth individuals), hedge funds and other foreign institutions, allow them to put their money into Indian markets through already registered FIIs, while saving on time and costs associated with direct registrations. According to the latest data released by Sebi, the P-Note investments in Indian markets (equity, debt and derivatives) has reached highest level since March, when they had infused Rs 1,65,832 crore. The quantum of FII investments through P-Notes also rose to 12.7%, up from 11.8% in the previous month — the highest since 15% in March this year. Till a few years ago, P-Notes used to account for more than half of total FII investments, but their share has fallen after SEBI tightened its disclosure and other norms for such investments. According to market analysts, after a lull in the last three four months overseas entities have back to India on expectations of the government's fresh initiatives on policy reforms. P-Note investments were on a steep uptrend this year till mid-March, but started declining sharply after the government in its budget proposed new taxation regime of General Anti-Avoidance Rule (GAAR) and certain retrospective amendments for taxing offshore transactions. PNs have been accounting for mostly 15-20% of total FII holdings in India since 2009, while it used to be much higher, in the range of 25-40% in 2008. — PTI
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Indian cos more optimistic in Q3
New Delhi/Singapore, Sept 19 Concerns over global demand are hurting Asia's export engines, with autos, technology and shipping sectors among the least upbeat in the survey. Sectors more exposed to domestic growth were much more optimistic. The results reflect the broad economic trends in the region, where growth in Southeast Asia is holding up much better than in many other countries as domestic consumption picks up. In China growth is widely expected to slide this year to its weakest since 1999. The index surveyed 200 of the Asia-Pacific's top companies in 11 economies. Indian companies were more positive than they were in the previous quarter. Sentiment may have been lifted further last week by government reforms aimed at reviving growth in Asia's third-largest economy, including opening up its supermarket sector to foreign chains.
— Reuters |
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Industry bodies have strongly supported the reforms measures initiated by the UPA government and said derailment of this process would send out the wrong signals.
Oslo, September 19