SECTIONS
Deal Watch
C. Sivasankaran, one of the toughest bargainers of India Inc. sold 100% stake in Aircel Limited, the company offering mobile services in the south Indian state Tamil Nadu. The third largest IT services exporter of India, Wipro, went Austria to shop a chip design firm NewLogic. A comprehensive scorecard on M&As, private equity, VC funds, IPOs or secondary offerings.
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TMT Radar
NASSCOM-McKinsey Report 2005 has estimated that India’s export revenue from offshoring will reach $60 billion by growing at 25% year-on-year till 2010. The report says that India may sustain its edge over competing low-cost destinations provided it addresses critical issues like potential shortage of qualified workers and poor infrastructure.
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Policy Watch
Ahead of the general budget, industry associations have lined up before the government with their list of demands. NASSCOM has asked the government to rationalize the tax on perks introduced last year. Hardware manufacturers have demanded a 5-year income tax exemption, a uniform 8% excise duty and a 4% value added tax (VAT). Mobile operators have asked for extension of tax holiday for another 2 years till 2007 and a reduction in license fee from 7% to 5%.
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Corporate Monitor
The never-ending tariff war in the telecom sector has taken a new twist with the introduction of lifetime validity schemes. With new mobile phone subscribers reaching a record 3.5 million in December, the former fixed-line telephone monoply Bharat Sanchar Nigam Ltd (BSNL) has lowered the monthly rental of its landline connection in order to protect its turf.
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Sector Focus: IT in 2005
While Oracle spent $900 million to buy India’s banking software product company i-flex, India Inc. went on an overdrive to shop abroad in the year 2005. The year also saw the top Indian IT companies to fight directly with EDS, IBM and Accenture to get their share in the mega-outsourcing deals. And of course, the billion dollar plus investments announced by Intel, Cisco, Microsoft and AMD-SemIndia combine placed India’s IT dreams in the next orbit.
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Sector Focus: Telecom in 2005
The fastest growing mobile market, consolidation, large investments, falling tariffs, and intensified competition made the year 2005 another memorable year for the telecom industry. And no doubt, wireless was the buzzword through out the year that saw two old names of industry signing out—Rajeev Chandrasekhar of BPL, and C. Sivasankaran of Aircel. On the other hand, we saw the re-entry of Vodafone in the Indian market with the mega-investment in Bharti Tele-Ventures; a move that followed the policy announcement of hiking the foreign direct investment (FDI) limit from 49% to 74%.
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Sector Focus: Media in 2005
In the print media, monopoly of The Times of India in Mumbai was challenged by its arc-rival in Delhi market The Hindustan Times and a new name in the industry Daily News & Analysis (DNA). On the other hand, the English news broadcaster New Delhi Television (NDTV) faced the toughest competition from its own former brands that had become the face of NDTV over the years. The end of the year also witnessed renewed interest in the FM radio business, as the government went ahead with the bidding for second phase of FM licenses.
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Company Watch: Satyam Computer Services
Satyam Computer Services is the fourth largest software exporter of India, but the market analysts have the highest hopes with the company in the third quarter of the financial year to March 2006. The high expectation has been reflected in the stock price movement of Satyam that outperformed the top-3 companies of Indian IT industry.
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People Watch: Rajdeep Sardesai
At the age of 40, he took the most difficult decision of his life. He quit from the position of Managing Editor of New Delhi Television (NDTV), the English news broadcaster, to launch his own news channel. Turning entrepreneur from a professional was not just a career decision, but breaking the 11-year long relation with NDTV was actually a difficult emotional decision too. But at the end of the year 2005, he was ready with a product that was perceived by critics as the most difficult challenge for the near-monopoly of NDTV.
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Market Watch: Historic Highs in 2005
Sensex, the benchmark index of the Bombay Stock Exchange (BSE), grew by 42.3% to 9398 on 30th December 2005 compared to 6603 on 31st December 2004. The most rapid rise was seen in the month of September 2005, when it reached from 8000 to 8500 level in just 8 trading days.
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