How well is the Indian economy picking up?

Till a while back, a lot of uncertainty surrounded the rebound of the Indian economy. The June quarter saw a growth of 8.8% due to increase in private demands and investment demands. This rate of growth in expected to last the coming months. The fact that real estate rates are picking up and the car market is regaining momentum reflect this growth rate.

There are two factors that support this assumption. First, that the employment market picking up. Recruitment firm Manpower conducted an Employment Outlook Survey recently according to which the next three months would see robust hiring in India. The public administration, education and services sectors are likely to see the highest rates of hiring. The second is the huge FII inflows that India has been witnessing recently. The Indian Sensex is likely to reach the 20000 mark thanks to the large chunks of cash expected to come in. Overseas investors are showing tremendous interest in India and they would be interested in picking up local stocks.

The flipside is that a number of analysts still believe that India is not there yet when it comes to economic growth. This is primarily because India gets a huge chunk of its business from the US, UK and Japan, which are still reeling under the economic downturn. Equity analysts in particular believe that stocks are overvalued and we must expect a correction sooner or later.

Where the US, UK and Japan are still struggling to bring down unemployment levels, the next three months are likely to see heavy hiring in India. The International Monetary Fund director Dominique Strauss -Kahn has said that for the economic crisis to end, unemployment has to go down.

The challenge will be to see if India is able to maintain this growth despite the recession that the rest of the world is yet to recover from. Countries such as China and Taiwan have witnessed growth along with India. They have an advantage compared to India because of the outsourcing services that Indian economy is heavily reliant upon. The good part is that the Indian economy is growing out of outsourcing. The number of entrepreneurs is picking up and the manufacturing sector has seen a double digit growth.

Certainly, India is going to witness an upturn. And it is going to last. How far it will take the growth story is what we’ll wait and see.

Mobile Broadband in 2011

Indians have many hopes from the emerging 3G and WiMAX scenario that promise high speed mobile broadband services. How successful will it be and what will the scene of mobile broadband in India in 2011?

If figures are any indication, then a report by leading global IT research and advisory firm Gartner says that by the end of 2011 India will have 6.9 Million mobile and fixed WiMAX connections. The flipside is that this report also points out that due to low PC penetration in India there will be a limited demand for WiMAX. This will make WiMAX a niche technology limited to enterprise and high-end residential users in urban India.

This fact is further strengthened by the fact that in January 2008 India had only 3.4 million broadband subscribers as against the 9 million targeted by 2007 by the broadband policy.

The high hopes of Indian masses is based on the way the Indian government is strongly promoting WiMAX as a technology to connect the country with broadband services. Although, if we look at the mobile broadband framework of our country, we can easily see that a nationwide rollout of WiMAX is not a near possibility due to the costs involved. This has acted as a demotivator for operators from rolling out country-wide mobile broadband.

By 2011, the Government can work through bringing WiMAX broadband to rural centres in villages including schools and hospitals. From these access points, individual access can then be made available via a Wi-Fi mesh. This will help achieve higher degree of rural penetration as envisioned by our government. Where urban areas are concerned, WiMAX will offer mobile and semi-mobile broadband to consumers.

3G or WiMAX

The future mobile broadband access market share between 3G and WiMAX will greatly depend on the timeline and bandwidth of 3G and WiMAX licenses. The mobile broadband scene in 2011 will greatly depend on spectrum allocation, ecosystem, and the timeliness of WiMAX and 3G licenses.

On comparison, though, 3G has an upper hand than WiMAX in terms of mobile broadband services. 3G will offer higher processing speeds and make it possible for consumers to use new kinds of value-added services. Adding new dimensions to mobile broadband, 3G will offer everything from mobile banking, micro finance to services providing useful information to farmers and safety information to fishermen. 3G will also enhance the mobile broadband experience of a business laptop user by enabling roaming across heterogeneous networks through single integrated USB/integrated modems.

Marketing of SEZs

The Growth Catalysts

With recession fading away, there is a hope of markets in Europe and North America jumping back to business. This will mean increased business for Indian IT and ITeS and also BPO and KPO companies and need for centralised and better infrastructure. Considering SEZs play an important role in India’s export sector now is the need to plan a marketing strategy that will project them rightly.

What are SEZs?

SEZ or special economic zones are specifically delineated duty free enclaves. These zones are deemed to be foreign territory and are given special privilege for the purposes of trade operations, duties and tariffs. They were primarily promoted for facilitating exports in the country. SEZS also aim to attract export-oriented FDI, enable Indian entrepreneurs to operate under international conditions, implement of global industries and practices, create employment and attract international investment in India. For SEZs to grow, the first requirement is world class infrastructure. This is true for not just IT and ITeS SEZs, but also for manufacturing and industrial SEZs.

Marketing SEZs

While planning any marketing strategy in terms of SEZs, it should be remembered that these areas will be occupied by a mix of mid-sized Indian companies hoping to go global as well as some of the large players from India and outside. This calls for a focussed marketing strategy that should be directed at new domestic as well as international companies. The international companies should particularly be targeted as they will be looking for economically viable areas to set up their units at and will be also be aiming at expanding their operations after deployment.

It is important to send positive signals to potential tenants due to the negative impression that has been created of SEZs by policy flip-flops and land acquisition issues. The marketing strategy of SEZs should aim at showing tenants that inspite of STPI been granted a year’s extension in the last budget, they will be better off than existing STPI-based companies in the end. Those with space in IT and ITeS SEZs definitely stand to gain in the long run when STPI concessions will ultimately cease in future.

There is no denying that marketing activities for SEZs were rather slow till recent times. With companies becoming more aware of different benefits of leasing space in SEZs, the time is now ripe to execute these strategies with full vigour. From large players to start-ups and small entrepreneurs, everyone is waking up to the benefits of SEZs. We can further instil hope in these companies by making them aware of the through tax benefits that SEZs provide and will continue to provide in future.

Sun seems to be rising now for SEZs! Encouraging news of Bharat Forge (BFL) starting its marketing effort for the first phase of its 10,500 acre SEZ at Khed and the Tamil Nadu Industrial Development Corporation (TIDCO) starting marketing space at the multiproduct SEZ in Ennore from April-May are definitely promising a better future for SEZs in India.

3G-India Update

A week after the 3G spectrum auction began in India the country has seen a huge jump of 63% for pan-India licences. The bid has bumped up Rs. 5,710.36 crore (Rs 57.10 billion) over the base price. This implies total minimum revenue of Rs. 22,841 crore (Rs 228.41 billion). As the numbers roll in, Delhi is turning out to be the high-priced circle at a bid value of Rs 626.37 crore (Rs 6.26 billion), followed by Mumbai at a bid of Rs 598.59 crore (Rs 5.98 billion). Gujarat, which was ahead of Delhi in the initial rounds, now stands fourth at Rs 533.40 crore (Rs 5.33 billion). It is preceded by Tamil Nadu at a bid price of Rs 549.24 crore (Rs 5.49 billion). These are the figures at the end of 40 rounds. Six of these rounds were held on Sunday.

Major mobile operators have planned well for the 3G auction in India so they can outdo the others in this battle of bids for the spectrum. Three biggies of the Indian telecom industry have put in their applications for one of the three slots that are available for bids. All companies that had submitted applications to take part in April's 3G and broadband wireless access spectrum auctions have received approval from India's Department of Telecommunications.

After studying the pre-qualification data such as the size of the upfront deposit, the picture is becoming clearer as to who plans to bid for pan-India spectrum. This will mean bidding for spectrum across all of India's 22 mobile service areas or as it is technically called ‘circles’. Out of 9 companies that are bidding in the auction, 6 have placed their bid for a pan-India spectrum. Among the major players in race for spectrum in the 2.1GHz band are some major telecom operators of India. Apart from this, many other mobile operators are bidding for selective circles. Many of these companies will also be bidding for spectrum in the 2.3GHz band under broadband wireless access (BWA). All of them will be vying against each other to pick countrywide airwaves.

Unlike other countries, India took way too long to announce their date of auction, almost three years. This can be attributed to the slow decision-making, something we all are familiar with in India. Apart from the mobile operators, customers also lost out on many benefits due to the delay. The delay deprived them of the benefits of high-speed mobile data services used by many across the globe. Once 3G is rolled out, customers will get to enjoy bandwidth intensive services. 3G will enable high-speed data transfer for services such as live video streaming and other graphic formats. It is also hoped that rural India will also benefit from the coming of 3G. Areas such as telemedicine, virtual marketplace and e-learning will get a boost. As the day of 3G auction nears, we can only hope that all that 3G promises will finally be delivered, though a bit late.