The Telecom Industry

Two years ago when hiring hit rock bottom, the telecom space emerged as a silver lining. Today, telecom hiring is headed southwards as telcos are busy focussing on cost cutting, with business sentiments weak and margins being squeezed.

Telcos hired almost a lakh of people each during 2008, 2009 and 2010. Large telecom players like Airtel, Vodafone, Idea, Reliance, Tata Teleservices, Tata Docomo and BSNL and new entrants like Swan Telecom, Datacom (of Videocon Group), S-Tel, Loop Telecom (of Essar Group), Unitech (Uninor), Shyam Telecom (of Sisteme Russia-MTS), Etisalat were bullish given their pan-India roll out activities.

But today, new entrants and existing players, despite having spectrum licenses, are unable to roll out pan-India networks due to high cost of infrastructure and margin pressures. Telcos are also very top heavy, having created new roles and enlarged responsibilities to prevent talent leaving to join competition.

Rohan Mehta, associate vice president, Elixir Consulting, said most telcos would be able to produce the same result even if they cut 25% to 33% of their senior management.

The Tatas have merged their CDMA and GSM divisions and rationalized some 750 positions. Bharti Airtel has gone in for a comprehensive restructuring, compromising around 2,000 job positions. Vodafone, Idea, Aircel and Reliance have frozen hiring and are not filling the existing vacancies.

Elisalat has fired many. Virgin Mobile, which operated on Tata spectrum, has exited , while Loop Telecom could not take off and some 100 people lost their jobs. Datacom (a Videocon venture) too is looking for an exit.

Ronesh Puri, managing director , Executive Access, a New Delhi-based executive search firm, said, ``Telecom hiring has reduced by 70%. Many telcos have put a freeze on hiring, except on a few strategic positions. Companies are redeploying talent or making internal adjustments or firing people.''

Vinay Grover, founder director, Symbiosis Management Consultants, said hiring numbers are almost negligible in the telecom space, though some marginal hiring is visible in areas like network, routers, towers and switches.

Such hiring is being done by companies like Huawei, Nokia Siemens, Alcatel Lucent, ZTE, Ericsson that are laying networks for 3G. Alcatel-Lucent, Cisco and Juniper are also hiring marginal numbers in product development, testing, network, routing protocol, call processing, administration and operation and management areas.

The telecom industry is headed towards a huge shakeout. A consolidation is expected that will reduce the number of players to 4-5 from the current 12. The government is creating an exit policy, and once that is in place operators will have better clarity on exit routes.

Cloud computing: reshaping IT market

Companies in India will increase the adoption of cloud competing technology over the next five years. The total cloud market in India, currently at $400 million, will reach $4.5 billion by 2015. Of which private cloud adoption will dominate and account for $3.5 billion in revenues, growing at over 60 per cent, according to a study. The study, ‘private cloud landscape in India' was done by EMC Corporation, a provider of IT service and solutions, and Zinnov Management Consulting, a management consulting firm.

The study says that private cloud market will create one lakh jobs by 2015 against 10,000 now. Today, companies are under-skilled in addressing cloud computing implementations. It recommends companies to invest in competency building internally to take advantage of cloud computing technologies. The study estimates that the skilling and re-skilling market in India will grow fast as cloud computing becomes critical to IT strategies. Leading public and private educational institutions, along with IT enterprises are expected to play a key role in enhancing workforce skills to match the industry demand for cloud computing.

The growth in cloud computing market is attributed to the increased maturity of Indian enterprises towards cloud computing and the chief executive officer / chief information officer mandate for an enterprise-wide cloud strategy. It adds that with the overall environment of cloud adoption fast evolving in India, cloud computing will account for a significant share in the total IT spend of small, medium and large enterprises. 

The total cloud spends as a percentage of total IT spend as such is expected to rise from 1.4 per cent in 2010 to 8.2 per cent in 2015. 

The study notes that IT/ITeS, telecom, BFSI, manufacturing and government sectors will contribute nearly 78 per cent of the total cloud market, according to Pari Natarajan, Chief Executive Officer, Zinnov Management Consulting.

Private cloud

According to the study, there will be an increase in preference of private cloud over public cloud over the next five years. It also estimates that private cloud deployments can result in potential savings of up to 50 per cent on the IT investments on an average, when compared with a legacy IT model, with cost optimisation in areas such as telecom and networking, facilities and fabric, hardware, software, internal labour and external IT services.

Cloud computing will reshape the Indian IT market by creating new opportunities for IT vendors and driving changes in traditional IT offerings. 

There is every chance that companies that are not adopting IT today and do not have major investments in data centres and server farms will directly move into the cloud model.

IT-BPO Sector in India: Strategic Review 2011

The Indian information technology (IT) industry has played a key role in putting India on the global map and is now envisioned to become a US$ 225 billion industry by 2020.
Over the past decade, the Indian IT-BPO sector has become the country’s premier growth engine, crossing significant milestones in terms of revenue growth, employment generation and value creation, in addition to becoming the global brand ambassador for India.
According to a research report published by National Association of Software and Service Companies (NASSCOM), ‘IT-BPO Sector in India: Strategic Review 2011,’ the sector is estimated to aggregate revenues of US$ 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) accounting for US$ 76.1 billion of revenues.
The report estimates export revenues to gross US$ 59 billion in FY2011 and contribute 26 per cent as its share in total Indian exports (merchandise plus services), employing around 2 million employees.
Within exports, IT Services segment was the fastest growing segment, growing by 22.7 per cent over FY2010, and aggregating export revenues of US$ 33.5 billion, accounting for 57 per cent of total exports.
NASSCOM said that the domestic IT-BPO revenues excluding hardware are expected to grow at almost 16 per cent to reach US$ 17.35 billion in FY2011. Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organisations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are the key drivers for increased technology adoption in India.
The data centre services market in the country is forecast to grow at a compound annual growth rate (CAGR) of 22.7 per cent between 2009 and 2011, to touch close to US$ 2.2 billion by the end of 2011, according to research firm IDC India's report published in March 2010. The IDC India report stated that the overall India data centre services market in 2009 was estimated at US$ 1.39 billion.
India will see its number of internet users triple to 237 million by 2015, from 81 million registered in September 2010, according to a report titled 'Internet's New bn', by the Boston Consulting Group (BCG). BCG said Internet penetration rate in India is expected to reach 19 per cent by 2015, up from the current seven per cent.
TRAI said on December 7, 2010 that it was targeting a 10-fold increase in broadband subscribers to 100 million by 2014. The country has 10.29 million subscribers now. "We will have 100 million broadband subscribers by 2014," J.S. Sarma, Chairman, Telecom Regulatory Authority of India (TRAI) said at the fifth India Digital Summit 2010 organised by the Internet and Mobile Association of India.
India's personal computer market grew 30 per cent in 2010 — the highest since 2007, research firm IDC revealed. Hewlett Packard emerged the top company in India, leading in both notebook and desktop categories. HP regained market leadership after two quarters with a 17.3 per cent market share, taking the pole position from Dell Inc that got 14.2 per cent of the market. Nearly 25 lakh personal computers were shipped to Indian consumers, pushing up the overall sales by 26 per cent. Around 14.5 lakh desktop PC units were sold in the fourth quarter last calender year, a 14 per cent increase over 2009.
Outsourcing
India is a preferred destination for companies looking to offshore their IT and back-office functions. It also retains its low-cost advantage and is a financially attractive location when viewed in combination with the business environment it offers and the availability of skilled people.
Some big deals in the outsourcing space include:
Four Soft Ltd, which offers software solutions for the logistics and transportation industry, has signed a large contract with Jacobson Companies, for implementing its multimodal transport management system and business intelligent tool across Jacobson locations globally.
Information technology (IT) services and solutions provider Patni Computer Systems has signed a five-year contract worth over US$ 32.09 million with UK-based IT services provider 2e2. Patni will provide a range of support services to 2e2's end-user clients and in-house support services.
Firstsource Solutions, a Mumbai-based business process outsourcing (BPO) provider, has announced a five-year outsourcing partnership with Barclaycard, the UK-based credit card and consumer lending business of Barclays PLC.
Vertex, a global customer management outsourcing (CMO) and business process outsourcing (BPO) company, has announced a joint venture with Shell Transource to address the domestic BPO market. Vertex will own over 70 per cent in the joint venture, with Shell Transource holding the rest.
Patni Computer Systems has secured outsourcing engagements from the Scandinavian insurance company Codan Group and the UK-based Serco Learning.
Tata Consultancy Services Ltd (TCS) has announced the launch of its first BPO centre in the Philippines. This is also the firm's first BPO centre in the South-East Asian region.
Domestic Markets
Domestic BPO segment is expected to grow by 16.9 per cent in FY2011, to reach US$ 2.8 billion, driven by demand from voice based services, in addition to adoption from emerging verticals, new customer segments, and value based transformational outsourcing platforms.
Indian software product segment is estimated to grow by 14 per cent to reach US$ 3.46 billion, fueled by replacement of in-house software applications to standardised products from large organizations and innovative start-ups.
Investments
Between April 2000 and December 2010, the computer software and hardware sector received cumulative foreign direct investment (FDI) of US$ 10,601 million, according to the Department of Industrial Policy and Promotion.
The total investments of EMC Corporation, a leading global player of information infrastructure solutions in India, will touch US$ 2 billion (over US$ 2.01 billion) by 2014.
Syntel, an IT company, plans to invest around US$ 50 million in its global development centre in Chennai.
Russian IT security software provider, Kaspersky Lab, will be investing US$ 2 million in its India operations at Hyderabad during 2011.
On the back of 40 per cent revenue growth, Cognizant will invest more than US$ 500 million till 2014 to expand its campuses to add over 8 million square feet to house over 55,000 employees. It will create additional software development and training facilities in regions designated as special economic zones in Chennai, Pune, Coimbatore and Kolkata.
Government Initiatives
Government sector is a key catalyst for increased IT adoption- through sectors reforms that encourage IT acceptance, National eGovernance Programmes (NeGP) , and the Unique Identifi cation Development Authority of India (UIDAI) programme that creates large scale IT infrastructure and promotes corporate participation.
The government has constituted the Technical Advisory Group for Unique Projects (TAGUP) under the chairmanship of Nandan Nilekani. The Group would develop IT infrastructure in five key areas, which includes the New Pension System (NPS) and the Goods and Services Tax (GST)
The government set up the National Taskforce on Information Technology and Software Development with the objective of framing a long term National IT Policy for the country.
Enactment of the Information Technology Act, which provides a legal framework to facilitate electronic commerce and electronic transactions.
Setting up of Software Technology Parks of India (STPIs) in 1991 for the promotion of software exports from the country, there are currently 51 STPI centres where apart from exemption from customs duty available for capital goods there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. But the most important incentive available is 100 per cent exemption from Income Tax of export profits, which has been extended till 31st March 2011.
Government is also setting up Information Technology Investment Regions (ITIRs). These regions would be endowed with excellent infrastructure and would reap the benefits of co-siting, networking and greater efficiency through use of common infrastructure and support services.
Moreover, according to NASSCOM government, IT spend was US$ 3.2 billion in 2009 and is expected to reach US$ 5.4 billion by 2011. Further, according to NASSCOM, there is US$ 9 billion business opportunity in e-governance in India.
Road Ahead
The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy showing rapid growth and promise.
According to a report prepared by McKinsey for NASSCOM called 'Perspective 2020: Transform Business, Transform India' released in May 2009, the exports component of the Indian industry is expected to reach US$ 175 billion in revenue by 2020. The domestic component will contribute US$ 50 billion in revenue by 2020. Together, the export and domestic markets are likely to bring in US$ 225 billion in revenue, as new opportunities emerge in areas such as public sector and healthcare and as geographies including Brazil, Russia, China and Japan opt for greater outsourcing.

Paradigm Shift: Issues top IT cos are stuggling with

For the Indian information technology (IT) sector, it appears to be the best of times and the worst of times, contradictory as it may sound. The best because after the subprime crisis, the world is relying on the outsourcing capabilities of Indian IT firms like never before to transform businesses and stay competitive. And, the worst because the sector is gradually waking up to the fact that not all the top players are on an equal footing when it comes to business momentum.

Some of these firms are grappling with serious issues pertaining to either lack of strategic focus or able leadership or both. This week, ET Intelligence Group takes a closer look at the changing dynamics of the employee-driven sector to identify the ones among both the large and smaller companies which will perform well in the long run.

THE JUGGERNAUT CALLED IT

The IT-BPO sector has been one of the fastest-growing sectors in terms of revenue, exports and employment generation. Data from trade body the National Association of Software and Service Companies (Nasscom) shows that the export revenue of the sector grew at 28% in the past 10 years when compounded annually.

Its share in the country's total exports grew to over 26% from less than 10% during the period.What also makes the sector unique is the rate at which it has generated employment. Unlike most other sectors in the manufacturing industry, the IT sector has been at the forefront in terms of adding jobs. In FY11, IT companies are reckoned to have added 2.4 lakh jobs to take the total headcount to 25 lakh, according to Nasscom estimates.

OLD GAME, NEW CONTENDERS

The sector faced a sharp slowdown due to turbulence on the macro-economy front twice in the past 10 years - once after the dotcom bubble in early 2000 and then in 2008 when the subprime crisis hit the global economy. It, however, bounced back on both occasions.

The rebound was much faster in the aftermath of the global financial crisis twoand-a-half years ago. But it is less secular this time around compared to the post dotcom era wherein most IT companies took advantage of the demand recovery.While demand has improved in the past six-eight quarters, it has not benefited top companies in equal measure. While Tata Consultancy Services , Cognizant and HCL Technologies were at the forefront of the demand uptick, traditional contenders, including Infosys and Patni, looked constrained due to their own strategies adopted in the past.

Take for instance, the comparative growth rate among top three peers, including TCS, Infosys and Wipro. Infosys and Wipro grew their respective net profits at a compounded annual growth rate (CAGR) of 21-22% in the past four years. The growth was much faster at 28% for TCS. A starker picture emerges if we take into account a two-year horizon. Between FY09 and FY11, the net profit of Infosys rose by 4.5% compared with the 11% growth in Wipro's bottomline and 18.6% in TCS's (see graph).

THE DIFFERENTIATORS

What has separated the performance of these companies is the difference in strategies, which each one of them followed over the past five years. Infosys largely focused on margin-driven organic growth with a greater thrust on improving business efficiency. Wipro paid more attention to embedded technologies and infrastructurerelated segments. TCS made investments in increasing onshore presence across Europe, Latin America and Australia. It also acquired a few companies to enhance its vertical presence.

The strategy seems to have worked well because TCS could take advantage of the revival in outsourcing demand over the past six quarters. It commanded the biggest share of the incremental revenue and operating profit during the period. The company also pruned its operating cost structure to improve profitability of its business.

How to get your own unique identity number

With a mammoth exercise on to issue an Aadhar number to each of India's 1.2 billion citizens and interested residents, here is a look at the process involved for getting what will become a unique identity for people in India to access all public or private services.
The Unique Identification Authority of India (UIDAI) - under the chairmanship of Nandan Nilekani - is the nodal agency, which had appointed registrars across the country to facilitate the enrolment process.

Nilekani was one of the co-founders and previously headed IT bellwether Infosys. He enjoys cabinet rank in his present status.

Registrars are typically government departments and public sector organisations. They in turn appoint the agency to collect data. Currently, over 200 such agencies have been named including Wipro, Comat Technologies, Alankit and Virgo Softech.

"Aadhaar guarantees uniqueness and a universal identity. At its core is a centralised online identity verification process," said Atul P. Anand, director at Virgo Softech, which is one of the enrolment agencies involved in the process.

"Biometric information like iris and fingerprints ensure this uniqueness. This is also embedded and hence tamper proof. The authority uses data de-duplication process, which also makes sure that only unique data is stored," said Anand.

Officials explained the enrolment is done in four stages -- verification of documents including address proof, on-the-spot capture of photos, iris and fingerprint scanning -- after which people are given acknowledgment slips at the time of enrolment.

A 12-digit unique identification number is then delivered in 20-30 days at the person's address through speed post after verification of biometrics and demographic data. Data verification is done by the authority under a centralised system.

The system ensures duplicate data is deleted, leaving only one copy to be stored.
"If you try to enrol yourself for the second time by using some different demographic information or data, you cannot do it. That's also because you can't change your iris and fingerprint. So duplicate data automatically gets deleted," said Anand.

There is also no age bar to enrol for the number.But the unique number of a child up to five years of age is linked to that of his or her parents or guardians. On completion of 15 years of age, biometric data is updated, but the number remains the same.

The people who don't remember their date of birth and have no documents to back it can provide approximate age. Transgenders have also been included; so under gender options, there are three categories -- male, female and transgenders.

"The number can be issued to even a new-born and it remains the same throughout the life. The system is also versatile. Both biometric and demographic data can be updated," a Virgo official said. But the authority has not started the updation process.
On concerns over security and privacy issues, officials said it was, indeed, a rather big challenge and that the authority was trying to make sure that the unique identity number is not misused.

Many analysts have raised concerns that the number can be misused by anti-socials such as terrorists, since they can get it issued through fake identities during large-scale enrolments.

And once it is issued, a person can easily apply for a passport and open bank accounts.
The authority issued the Aadhaar number in September 2010 and targets 600 million people over the next four years. It has to issue every resident a unique identification number that can be used to establish the identity of the person anywhere in India.
Currently, on an average 150,000 enrolments are done each day. The number of enrolments is expected to reach six million per day by October. The task, therefore, is daunting, since the latest data places the country's population at 1.21 billion.
 Some frequently asked questions answered on "Aadhaar":

What is Aadhaar:
A tool for social empowerment and inclusion, Aadhaar is a 12-digit number being issued to all residents by the Unique Identification Authority of India (UIDAI). This number is stored in a central database and linked to some basic demographics and biometric information -- photo, 10 fingerprints and iris -- of each individual.

Why Aadhaar:
For applicants, Aadhaar, over time, will be recognised and accepted across the country and become the basic, universal identity of residents for all public and private services. Once enrolled, service providers will no longer face the problem of performing repeated 'know your customer' checks.

Genesis of Aadhaar:
Inability to prove one's 'identity' is one of the biggest barriers preventing the poor from accessing benefits and subsidies given by the government or private agencies. Aadhaar promises an identity to every resident - children, differently-abled people, tribespeople, unorganised workers, the poor and the marginalised can also secure a unique identity.

Who can get Aadhaar:
Every individual, from infants to seniors, who is a resident in India and satisfies the verification process laid down by the Authority can get an Aadhaar.

How to Get Aadhaar:
The resident needs to go to the nearest enrolment camp and register for an Aadhaar, along with certain specified documents. Upon registering, residents will go through a biometric scanning of 10 fingerprints and iris. They will then be photographed. The 'Aadhaar' number will be issued within 20-30 days.

How to track Aadhaar application:
Every resident seeking enrolment is given a printed acknowledgment form with an enrolment number that enables her/him to make queries through any of the communication channels - phone, fax, letter or e-mail.

What use can Aadhaar be put to:
Aadhaar means foundation. It can be used in any system that needs to establish the identity of a person seeking a service. It will particularly help the delivery of programmes on food and nutrition, employment, education, inclusion and social security, healthcare, and other services such as property transactions, election card, tax card and driving licence.

Women CEOs missing in Indian IT

Try to think of a woman CEO in Indian IT and our guess is you will struggle. Neelam Dhawan, MD of HP India , may come quickly to mind. But after that, it’s not easy.

Capgemini recently promoted Aruna Jayanthi, its global delivery officer for outsourcing, as its CEO for India. Akila Krishnakumar has been head of Sungard India for some years now.

At the next CXO level, it’s only a little better. In an industry where over 30% of the employees are women, and which boasts of almost 50% of its new hires in recent times being women, the near absence of women at the top may appear odd. But it isn’t difficult to understand. Most Indian women still value their roles at home. Many times, a woman self-imposes career blocks to prioritize home over work.

“A CXO’s job involves being available 24/7. It’s not the capability issue, but availability issue,” says Kunal Banerji, CEO of Absolute HR. Ganesh Shermon, partner & country head, human capital, at KPMG Advisory , says when it comes to composition of boards, peers impact the choice of other members.

“The senior, aged board members are averse to the younger lot, and definitely women at that. Traditional business houses prefer their own family as board members. They are quite uncomfortable with external women directors on their Board asking them questions,” Shermon says.

But there are signs that situation is changing for women. Sunita Cherian, GM for talent engagement and development at Wipro Technologies , says that as the number of women in the corporate sector has grown, so has their ambitions.

Understanding What exactly you want to do in Stock Markets

Let us discuss the important aspect new beginners must understand what they want to do exactly in stock markets . In this post we will see what are the different types of things they can do . Also lets explore what are the different options available for you .

So, you are new to stock markets and you have heard lots of people make good money . You jump in , open a trading account, read some blogs online which claim to have 80-90% success rate and you jump in to buy some stocks . You make money or loose money , doesn’t matter in short run , What you are concerned is long term is you are serious , if you are not serious , i would recommend go somewhere else, if you take stock market as hobby , its a costly hobby i am telling you .

Below is the way how New comers behave in Stock Markets, click on the pic to enlarge .

Lets see some of the most important things a new comer should ask himself/herself .

Who am I ? A Trader or an Investor ?

This is one of the most important question you have to answer.  Are you are Trader or an Investor ?

Investor is someone who buys the stock for long term . Investing it self is a word which means that you are putting your money in something and you expect it to grow over time . This has to take with fundamentals , company’s potential , long term prospects . Cash flow , profit and losses. See it as owning the firm , where will u put your money in ? Its has to be something which will grow over time from its current levels . You are not concerned about its short term movements .
If the company share prices are providing value over its current price , and it has consistent track record , has good future prospects and many more things like these , you will buy it .

Trader on the other hand is someone who buys and sells the stock for short term . He is not concerned about long term prospects of a company’s much . He is more interested in what stock will do in short term . His decisions are more based on news , technical analysis , gut feeling and things like those .

What will i Trade/Invest In ?
Another important question to ask is What you want to trade or Invest in ?

If you are an investor you can choose from Large Cap companies (NIFTY companies) , MIDCAP companies or very small penny companies . Each of them offer different risk and reward opportunity . But you have to be clear with what you are going to invest in . Because once you are clear with it , you can make some strategy for it and follow it , juggling from one to another will lead to confusion and is not recommended .

If you are Trader , you have to choose from Stocks , ETF’s , Futures or Options . Each of them are different from each other and require specific knowledge about them . Its a critical factor to know what you are going to trade .

Once you know what you are going to be involved with you have a clear road map and then you can move forward to next thing .

What will be my Time Frame ?

Another important thing to consider is the time frame for you .

For Investors It can be very long term (10+ yrs) . Medium term (3+ yrs) , Short Term (1+ yrs) . It depends on your personality , your ability and time to be involved with stock markets . Something which works for a person with short term view may not work with long term view person . So each time frame has its own advantage and disadvantage . you just have to choose one and be clear about it .

For Traders , you again have to choose your time frame and your style of trading . You can be

• Positional Trader whose holds the trades from some weeks to some months
• Swing Trader (few days)
• Day Trader (Buy and Sell on the same day)

You can trade

• Stocks
• ETF’s
• Stock Future’s
• Index Futures
• Stock Options
• Index Options

Understand that each time frame is different and each will yield different result . Two people with different view on market and different time frame can both make money .

Example :

You are bearish on market and you say that Markets are going to fall soon . I say that I am bullish and markets may go up . for next 3-4 days markets move up and I make money based on my judgement and then markets fall heavily and you can make money based on your judgement . So the important thing here is no one is wrong , the only thing is different time frame , So before listening to anyone you also have to understand their time frame . Many analysts on TV channels will give calls like “BUY RELIANCE at 2130 , with target of 2200 , SL 2100″ , Don’t go and buy RELIANCE next day because you have no idea about the time frame of the person , what is the analysis behind it and what are the risk in it . It may work once in a while but its a recipe for disaster for long term .

Conclusion

” A person who wants to do everything eventually cant do anything “

Stock Markets have different kind of things and offer different ways of making money. If you are not clear on how exactly will you do things , Its a tough game then , the first important step is to Identify what you want here , just like in Life we must be clear of what we want to do and then be good at it , learn about it and just consistently improve in it . the same we must do in Stock Markets.