Alstom-Bharat Forge venture cleared

The Union Cabinet on Thursday approved the proposal of Alstom of France to set up a joint venture with Bharat Forge to make power equipment involving foreign direct investment inflow of Rs. 490 crore. The approval was accorded by the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh, based on the recommendations of the Foreign Investment Promotion Board, according to an official statement issued here. Alstom Power Holdings of France, Alstom Technology of Switzerland and Alstom France had proposed to establish joint venture companies in India for manufacturing power equipment.
The proposal is to establish two joint venture companies in India with Bharat Forge or its affiliate companies and to invest 70.5 million euro to manufacture state-of-the-art super-critical and sub-critical power plant equipment in India, the statement said. Alstoms Indian arm has a turnover of over $500 million and employs 4,000 people at its research unit in Bangalore, a technology centre in Vadodara and four manufacturing units. Apart from offering its capabilities in engineering, manufacturing, project management and supply of power generation equipment, the Indian arm has a major presence in the transport sector, providing railway equipment and solutions. Bharat Forge is the flagship of the $2.4-billion Kalyani group, with interests in manufacturing various forged and machined components for the automotive and non-automotive sectors. It is also one of Indias emerging multinationals, with manufacturing operations across 12 locations in six countries four in India, three in Germany, two in China and one each in Sweden, Scotland and the U.S.

Alstom-Bharat Forge venture cleared

The Union Cabinet on Thursday approved the proposal of Alstom of France to set up a joint venture with Bharat Forge to make power equipment involving foreign direct investment inflow of Rs. 490 crore. The approval was accorded by the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh, based on the recommendations of the Foreign Investment Promotion Board, according to an official statement issued here. Alstom Power Holdings of France, Alstom Technology of Switzerland and Alstom France had proposed to establish joint venture companies in India for manufacturing power equipment.
The proposal is to establish two joint venture companies in India with Bharat Forge or its affiliate companies and to invest 70.5 million euro to manufacture state-of-the-art super-critical and sub-critical power plant equipment in India, the statement said. Alstom's Indian arm has a turnover of over $500 million and employs 4,000 people at its research unit in Bangalore, a technology centre in Vadodara and four manufacturing units. Apart from offering its capabilities in engineering, manufacturing, project management and supply of power generation equipment, the Indian arm has a major presence in the transport sector, providing railway equipment and solutions. Bharat Forge is the flagship of the $2.4-billion Kalyani group, with interests in manufacturing various forged and machined components for the automotive and non-automotive sectors. It is also one of India's emerging multinationals, with manufacturing operations across 12 locations in six countries - four in India, three in Germany, two in China and one each in Sweden, Scotland and the U.S.

MTNL Chairman Sinha quits, mum on reason

In a surprise development, telecom PSU MTNL's Chairman and Managing Director R S P Sinha has resigned from the post.

"Yes, I have put in my papers," Sinha told PTI but did not speak about the reasons for stepping down.
Sinha was on an ad-hoc extension after completing his five-year tenure in September last year. However, he is 18 months away from superannuation.

The resignation comes amid a debate over the falling revenues and financial performance of the corporation which is also engaged in a legal battle for buying equipments from Motorola 10 years ago.

At the time of the signing of the equipment contract, Sinha was Director (Finance) with MTNL, which has operations in Delhi and Mumbai.

According to sources, Sinha who went to attend MTNL's Board meeting yesterday received a call from Telecom Secretary P J Thomas asking him to step down, and then he left the venue even before the meeting started.

Huawei sets eye on three ITI factories

Government's security concerns about Chinese equipment makers not a deterrent.
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Chinese telecom equipment maker Huawei is keen to bid for three manufacturing units of state owned Indian Telephone Industries (ITI). It will also invest $500 million in its research centre in India over the next five years. "We are keen to bid for the ITI units as we have been looking to set up a manufacturing unit in India," Huawei Telecommunications (India) CEO Max Yang said.
The interest in the ITI units comes in spite of the roadblocks Huawei has faced in India. Its application to the government in 2005 for setting up a fully-owned manufacturing unit was not approved on security grounds. Last year, the government asked state-owned BSNL not to place orders with Chinese suppliers in border areas owing to security concerns. As a result, BSNL has not handed over the contract to Huawei to supply GSM equipment in south India, though it was the lowest bidder. It has also rejected Huawei from supplying equipment in the west.
The government had in fact mooted a proposal to private operators not to buy Chinese equipment for sensitive border areas, but it was turned down. Private telephone service operators said Chinese companies offer prices which are much cheaper than others, and that helps get better prices from other equipment manufacturers. Huawei has fought back saying that it is not a security threat as it supplies telecom equipment all across the globe and to leading Indian companies like Bharti Airtel and Reliance Communications.
ITI has units at Bangalore in Karnataka, Rae Bareli, Naini and Mankapur in Uttar Pradesh, Srinagar in Jammu & Kashmir and Palakkad in Kerala. Of these, the first three are on the block. These make WiMax modems and optical transmission equipment. All three have been made special purpose vehicle for the purpose of disinvestment. The Department of Telecommunications plans to offer 51 to 74 per cent in each of the three SPVs for sale. It has already invited expressions of interest from global consultants to appoint advisors for the sale.
Set up in 1947 and listed on the stock market, ITI is a loss-making company. It reported a net loss of Rs 78.10 crore in the quarter ended September 2009, down from Rs 154.88 crore in the year-ago quarter. The decision to divest its assets will be subject to a review of the government policy that stipulates that only consistently profit-making companies should be considered for stake sale. A senior government official said: "We may also consider loss-making state-owned companies for divestment."
In July last year, the government had written off the accumulated loss of Rs 2,800 on ITI's books. Earlier, in 2005-6, the government had infused Rs 1,025 crore in ITI to get it out of financial trouble. In December last year, it directed state-owned telecom service providers BSNL and MTNL to place 30 per cent of their orders for equipment with ITI. These companies have also been asked to give 70 per cent advance payment for all orders placed on ITI so that it does not face shortage of working capital.
Apart from Huawei, Alcatel Lucent is learnt to be interested in the three ITI units. However, there has been no official announcement to this effect.

Bharti acquires 70% stake in Warid Telecom

Telecom major, Bharti Airtel, has announced that it has agreed to acquire 70% stake in Bangladesh-based, Warid Telecom. Bharti plans to make $300 million fresh investment in the company, thus taking the overall investment to $1 billion. The new funding will be for capacity expansion, coverage and innovative products.
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Warid Telecom is a wholly owned subsidiary of the Dhabi group and offers mobile services across all the 64 districts of Bangladesh. It has a total customer base of over 2.9 million. Dhabi group will continue to remain a strategic partner with balance 30% stake.
According to a release issued by Bharti Airtel to the BSE, the acquisition would be partly by purchase of existing shares held in Warid Telecom International by Dhabi Group for a nominal cnsideration and balance by way of issue of fresh shares at par.

"This landmark deal underlines our intent to further expand our operations to international markets where we can implant our unique business model and offer quality and affordable telecom services", saus Sunil Bharti Mittal, Chairman and Managing Director, Bharti Airtel. He adds that, at the same time, it is symbol of the growing economic cooperation between the South Asian countries and we would like to thank the government of India and Bangladesh for their support and encouragement.

This will be Bharti's second operation outside India. The company launched its mobile services in Sri Lanka in January 2009 on a state-of-art 3.5G network.

Mobile operators see VAS as growth engine for revenues

Amid fierce competition with per second tariff pulse, which is affecting their top line, the mobile operators are now focusing on value added services, such as, callertunes, ringtones and others to make up for the depleting revenues.
Realising that future growth of revenues would come from value added services(VAS), telecom service provider Aircel, recently tied up with software exporter Infosys Technologies, to launch application store, where users can browse and download applications some for free or others at some cost.
Using the service provided by the mobile application store, users would be able to browse and download applications, such as, songs, videos, games and other informations related to health, finance, entertainment, either for free or at a cost.
Mobile service providers are seeing a steady shift in value from providing connectivity to monetising digital demand, an analyst said.
Even the mobile handset makers, like Nokia, are also sense a great opportunity in VAS and are tying up with the operators to provide such services.
The concept of application store was pioneered by Apple for its iPhone users.
With tumbling voice tariffs contributing to declining Average Revenue Per User (ARPU) rates, mobile operators are actively pushing for growth of the non-voice VAS market, a report by research firm Frost and Sullivan said.
The moves by Bharti and Aircel show that operators do not want to loose market to handset makers or third party content developers.
Nokia has already launched its applications store in 2009.
Another handset maker Motorola has formed a joint venture with IT firm Tech Mahindra called CanvasM to offer VAS services.
The firm is currently, chasing deals worth about USD 30 million in the space.
The market for value-added services (VAS) will grow. We are chasing deals worth USD 30 million in India and overseas and expect to close two such deals by the first quarter of 2010, CanvasM CEO Jadgish Mitra said.
Currently, VAS which includes services such as ringtones, call back tones, games, music, astrology and others form 10 per cent of the revenues earned by the telcos.
Voice still forms 90 per cent of the Average Revenue Per User for any mobile service provider.
However, this equation is going to change, feel the analysts and industry officials.

India requests U.S. not to take action against Satyam


India has requested the authorities in the United States not to take any action against Satyam as it would amount to punishing the shareholders of the IT company the second time.
"The SEBI has marshalled a request and we are monitoring them. On the political level, such signals can be sent and we have already sent them," Corporate Affairs Minister Salman Khursheed told PTI, when asked whether the government has taken up the issue of Satyam with the U.S. authorities.
The American administration would understand the issue, the Minister hoped. "But I am keeping my fingers crossed," he said.

Mittal plans $6.5bn project in Karnataka

New Delhi, Jan. 7: After facing problems in Jharkhand and Orissa, the steel baron, Mr Lakshmi Mittal may move to Karnataka. On Thursday, he met the Karnataka Chief Minister, Mr B.S. Yeddyurappa, to discuss a possible steel project worth Rs 30,000 crore, ($6.5 billion).
"He wants to start within three months and (we) promised to give all the facilities before he starts the work. We are ready," said Mr Yeddyurappa after meeting Mr Mittal.
He said that Mr Mittal has identified land at Bijapur and Bellary for the plant. "I have 100 per cent confidence that our people will co-operate with Mr Mittal," Mr Yeddyurappa said.
The company requires 4,000 acres for its plant, which will include a power plant.
The state government's officials said that the land for the plant will be acquired above market price with farmers' consent.
ArcelorMittal has promised to employ one person from each family which will give its land for the plant, according to state officials.
The steel baron said talks are still in preliminary stages and more work needed to be done before specific details could be given.
ArcelorMittal plans to set up a 12-million tonne per year capacity steel plant each in Jharkhand and Orissia.
But those projects have been stuck in the limbo for the last four years because of delay in land and mine acquisition. Initially, the company planned to invest $20 billion in these two plants.
Mr Mittal said that the country was not ready for mega investments. "Clearly we are not satisfied with the progress what ArcelorMittal has made so far in its commitment to invest in India.
There has also been delays in processes because the Indian government along with the state governments have never received this kind of mega-investment," he added.

IIT Madras team wins New York competition

NEW YORK: An entrepreneur team from the Indian Institute of Technology, Madras has won the NYC Next Idea 2009-2010, an inaugural global business


plan competition launched by New York City last year.

City Mayor Michael R Bloomberg on Thursday announced the winner of the competition in which teams from ten leading international business and engineering schools in Europe, Asia and Latin America participated with teams from India, Spain and France making the finals.

Selected by a panel of judges from New York City's venture capital community, the winning team, Greenext Technology Solutions will receive a $20,000 cash prize.

The IIT team of Aashish Dattani, Sriram Kalyanaraman and Vinayshankar Kulkarni has devised a new system to allow utility companies and energy producers to store and distribute energy through remote sites across the five boroughs safely and efficiently.

"Cities around the world hope to be a place of innovation where entrepreneurs want to go to launch businesses," said Bloomberg announcing the winner at Columbia Business School. "New York City doesn't have to hope, we are that place."

"But it's not enough to be a place entrepreneurs want to go; we also have to make sure our city and our country is a place they can go," he said.

"That's why we are committed to working with the Obama Administration to pursue sensible immigration reform," the mayor said alluding to the difficulties the finalists may face in getting a US visa.

"No one can say for sure whether the finalists' ideas will translate into successful job-creating businesses," Bloomberg said. "What a shame, though, if they and countless others are denied the opportunity even to try."

Greenext Technology Solutions is a clean-technology proposal that is pioneering specialised software and hardware solutions to utility companies, renewable energy producers, energy storage manufacturers, and energy traders.

Their product, XEstor, serves as a common interface to store energy from any source across New York City into large battery storage sites. The product communicates with the electric grid and combines real-time consumer demand information with current energy prices to charge or discharge electricity into the grid.

This flexible mechanism to produce or store energy based on demand can act as a backup power source to bridge supply gaps and maintain the grid's reliability through ancillary services such as regulation and emergency response.

LNM says India hasn't been able to handle surge in big investments

NEW DELHI: L N Mittal successfully fought off French and Spanish governments' resistance to buy Arcelor in 2006, but on Thursday, the Indian



establishment came in for a stinging attack from the London-based steel tycoon for its inability to facilitate his multi-billion-dollar steel projects at home-nearly five years after these were conceived.

In a rare display of frustration at the tardy progress in his projects in India, the billionaire businessman pinned the blame on the country's inability to move things. "The entire country is to be blamed for the delay in execution of the projects," Mr Mittal, among the world's top 10 richest people, told reporters here.

And in venting his ire, he joins a long list of business groups, notably the Tatas, Sterlite and South Korea's Posco, that have all seen their projects get mired in problems related to land acquisition, environmental clearances, red tape and lack of infrastructure. "I am unhappy with the progress achieved so far on the proposed projects in Jharkhand and Orissa," Mr Mittal said.

The CEO and majority shareholder of Luxembourg-based ArcelorMittal, the world's largest steelmaker, announced plans in 2005 to set up a $10-billion steel plant in Jharkhand following Posco's plan to build a steel mill for $12 billion in Orissa, which could have made it the biggest foreign direct investment in India. In 2006, Mr Mittal said he would build a similar plant in Orissa.

But none of these plans has progressed as government departments dither and locals accuse these companies of strong-arm tactics in grabbing land they have lived on for centuries without adequate compensation.

After years of waiting, Mr Mittal rationalises that the problems may be due to the country's inability to handle a surge of big-ticket investment proposals, fuelled by an unprecedented interest in investing in India.