Saturday, December 22, 2012

India’s most high profile sibling rivalry

It’s slated to be the largest non-pharma deal this year (till date), if successful. But the Bharti-MTN deal is much more than that, for it can potentially be a major game changer in corporate India’s most high profile sibling rivalry – that of the Ambani brothers

Guess who benefited from this public demonstration of the bitter spat and subsequent split? Sunil Bharti Mittal and Airtel because Mukesh and the thousands and thousands of his employees switched over to Airtel connections!

The reverberations of that ‘switch’ are being felt even today; even as the second instalment of the UPA regime settles down to govern the country. You guessed it right again. We are talking about the latest bombshell that was dropped by Sunil Mittal recently when Bharti announced a ‘New Deal’ (You can call it an agreement, a merger, a reverse merger, an acquisition or whatever word takes your fancy!) with MTN, the South Africa-based telecom giant. An excited Sunil Bharti Mittal has said on that deal, “We are delighted at the prospect of developing a partnership with MTN to create an emerging market telecom powerhouse. This opportunity also represents a first of its kind in developing an Indian-African initiative that would serve as a shining example of South-South cooperation.”

One year ago, it looked as if Anil Ambani was all set to steal the thunder from Sunil Mittal when ‘agreement’ talks between MTN and Bharti collapsed and Reliance Infocom emerged as the new and favourite suitor. One year down the road, you could say that the wheel has turned full circle and the lead established by Sunil Mittal and Airtel as the unquestionable number one telecom player from India now looks unassailable.

Some simple facts – most of them known to you by now – will establish why Sunil stands taller than Anil. The $23 billion deal – the largest non-pharma deal in the world in 2009 so far – will create an entity that will automatically become the fourth largest mobile service provider in the world with more than 200 million subscribers. Just recently, when Airtel had announced celebrations to mark the accomplishment of a 100 million subscriber base, Sunil Mittal had already hinted to this magazine (see exclusive interview) that the 200 million milestone will come far more quickly. If the deal goes through – as most analysts and insiders expect it to – what Sunil had hinted at will have already happened! And it will happen thanks to a mind bogglingly complex ‘agreement’ that will involve both cash and fresh equity. Once the deal goes through, Bharti will hold slightly less than 50% of MTN equity while MTN, in turn, will hold a 36% ‘economic interest’ in Bharti. The term ‘economic interest’ is jargon being bandied about right now because there is still some confusion about how much equity foreign investors can hold in an Indian telecom entity. As of today, foreign investors, including the largest shareholder Singtel, hold almost 74% of the equity in Bharti – the limit allowed as per existing rules.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
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Monday, December 10, 2012

Issues that really needed to be urgently addressed

The UPA announced some schemes for the working class, but largely ignored the issues that really needed to be urgently addressed, says vikas kumar

It is deplorable that in most of the states, the minimum permissible daily wage is less than Rs.50; the level of minimum wages rises above Rs.100 only in four states.

It goes without saying that even such low minimum wages are not always paid. Seasonal variations in availability of work and calamities of various kinds – from drought to social conflict to reduction in demand – adversely affect employment and livelihoods on a regular basis. In the tenure of UPA government, Jan Swasthya Bima Yojana was launched, to provide cover of up to Rs.30,000 for workers below the poverty line. But a majority of the working class does not even have any idea about the benefits of the scheme till date. Interestingly, the Congress’ manifesto for this election pledges that, if re-elected, it will cover all families under the poverty line within the next three years. Moreover, as M. K. Pandhe, trade union leader, laments about another problem, “When banks are giving 8.5-9.5% rate of interest for 400 days, it is ridiculous that EPFO is providing 8% rate on 30 to 40 years deposit.”

The manufacturing sector, has been hit in the mid section by age old labour laws like the Industrial Disputes Act of 1947 and the Factories Act of 1948. Provisions like restricted working hours for workers and restriction on contract labour discourage businesses. And ultimately, they are also affecting the labour market. The UPA also failed to address these concerns of the manufacturers, and take the initiative to herald a new era in Indian industry. That is extremely callous. If labour reforms are not done, entrepreneurship is discouraged, and it ultimately hits the workers hard.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Saturday, December 08, 2012

NEDFULNESS: SYMBOL CHANGE

Example of a responsible ministry

And the cost of replacing YTL by TL stood at YTL 1.14 million. In addition, the country is also incurring a cost of YKr 11 to 12 for changing from YTL to TL for each bank note. Iran has also planned to change its currency, Rial. The value of Rial has gone down so much that it has become negligible. 500 Rials is worth mere 5 cents while 50,000 Rials is worth $5.30. Iran wants to change its currency to revalue its Rial.

Considering all these, it seems extremely important to estimate the cost involved with India’s symbolic plan of changing the symbol. Moreover, there seems no regulation that will make sure that the new symbol will not hurt someone’s cultural or religious sentiments which are for some odd reasons too volatile in the subcontinent. There are no any specific guidelines from the government on whether the old notes and coins will remain in circulation with the new ones.In this time of downturn, the decision on a new coin symbol is highly debatable. This may not only dilute the brand equity of rupee but will encompass needless expenditures at a time when government coffers are already drying up.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Friday, December 07, 2012

More blasts from the past...

A recent release of classified documents shows how US has manipulated West Asia. A B&E exclusive

American Presidents have wanted to differentiate themselves from their precursors with abrupt alterations in Middle East guidelines and dubious tactics that have only helped in damaging American integrity in the area. And as far as conflict resolution is concerned, on several occasions, presidential judgments and the out-sized sway of White House advisers and foreign statesmen and their envoys, have defined US policy. Recently, declassified White House documents released by National Security Archive reveal how knee-jerk actions (and inactions) by several presidents of the United States shaped the (mis?)fortunes of Middle-East.

For example, the personal pleadings of Soviet leader Leonid Brezhnev, who tried to convince President Nixon in June 1973 that conflict was imminent in the Middle East and that the lone approach to avert it was by a vigorous ambassadorial involvement by the superpowers, went unheard. The document reveals Brezhnev pressing, cajoling, and nearly beseeching with Nixon to arrive to a concord on Israeli terms. It emerges that Brezhnev's endeavour possibly would have been genuine. But in the summer of 1973, the outlook in the White House appears to have been that given the “Watergate Scandal” on the domestic front, it was politically too hazardous to move into the minefield of Middle East negotiation. And war followed, as Brezhnev had envisaged.

However, when war broke out, Nixon’s resolve of non-intervention melted and the US started arming Israel. The documents released show how, in a propaganda move, US accused USSR of intervention to justify its move.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Thursday, December 06, 2012

ICELAND: PM RESIGNS

Iceland's PM resigns on the back of global economic turmoil

This crisis has been a tremendous let-down for 320,000 Icelanders, whose rising incomes and prosperity had left them quite unprepared for this. "What this essentially means is that this is a country without a government, so it's impossible to say what might happen next,” says Gunnar Kristinsson, Professor at Iceland University. It is anticipated that the economy will shrink by 9.6% in 2009, while unemployment will touch 7.8%.

Bailouts by neighbouring countries and IMF are failing to prop up the economy. The new PM Johanna Sigurdardottir is asking Central Bank governors to resign and is building consensus for a union with EU. As other options fail, this indeed seems to be the best way forward.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Tuesday, December 04, 2012

Theory of creative capitalism...

Bill Gates writes about his theory of creative capitalism... inputs coordinated by B&E’s Ruchika Chawla

 Creative capitalism isn’t some big new economic theory. And it isn’t a knock on capitalism itself. It is a way to answer a vital question: How can we most effectively spread the benefits of capitalism and the huge improvements in quality of life it can provide to people who have been left out? Creative capitalism isn’t an answer to the relatively short-term ups and downs of the economic cycle. It’s a response to the longer-term fact that too many people are missing out on a historic, century-long improvement in the quality of life. In many nations, life expectancy has grown dramatically in the past 100 years. More people vote in elections, express their views and enjoy economic freedom than ever before. Even with all the problems we face today, we are at a high point of human well-being. The world is getting a lot better. Of course, governments in developing countries have to do a lot to foster capitalism themselves. They must pass laws and make regulations that let markets flourish, bringing the benefits of economic growth to more people.

More than 30 years ago, Paul Allen and I started Microsoft because we wanted to be part of a movement to put a computer on every desk and in every home. Ten years ago, Melinda and I started our foundation because we want to be part of a different movement – this time, to help create a world where no one has to live on a dollar a day or die from a disease we know how to prevent. Creative capitalism can help make it happen. I hope more people will join the cause.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

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Monday, December 03, 2012

Indian animation industry

The Indian animation industry desperately needs some brand recall

The fact remains that the Indian animation industry has to grow out of the long shadow of Hollywood and to some extent Bollywood, and to carve its own identity, its own niche, populated with characters which have the same recall and relevance as Mickey Mouse. But sadly, it is in this department that Indian animation has yet to make a real breakthrough. Although Hanuman was a hit, it failed to create an icon, and with Hanuman Returns not doing so well along with outright disasters, like Ghatotkach: Master of Magic and Roadside Romeo, its back to the drawing board (literally) for Indian animation. Mr. Ronal D’mello, Managing Director and CEO of Maya Academy of Advanced Cinematics strikes a positive note, “India has a huge young population and the animation genre will catch up ultimately in all mediums of audio visual entertainment. The industry is quite buoyant in international content outsourcing for the right players and with the constant improvement of quality of animation by Indian animation studios with every passing production on the floor, it won’t be too ambitious to anticipate Indian studios producing entertainment for a global audience.”

Additionally, animation movies from Israel have shown, through their award winning efforts such as Waltz with Bashir and others, that it is possible to get global recognition with a limited budget. And with the forthcoming release of the costliest animation movie ever from India (with an estimated budget of Rs.60 crore), Sultan the Warrior, starring Rajnikanth in the lead role is set to hit the theatres in January, along with UTV’s Arjuna, India will surely be seen on the world animation map.
 

Source : IIPM Editorial, 2012.An Initiative of IIPM, Malay Chaudhuri

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Saturday, December 01, 2012

GOOGLE, YAHOO!: TALKS BREAK DOWN

Yahoo!'s only worthwhile option now seems to be AOL

And Steve Ballmer, CEO, Microsoft has added fuel to the fire by declining any more bid for acquiring Yahoo! which has taken Yahoo!’s stock price to a 52 week low at $11.25 on October 28 (trading at $11.87 on November 10).

The online ad industry is expected to grow manifold in times to come, which makes it all the more lucrative. So, the option available to Yahoo!; at least at this point is that, it should shortly be knocking at the doors of AOL. And if speculation is to be believed, Microsoft will wait for AOL-Yahoo! merger and then buy the merged entity altogether. That's a convenient anti-Google gang up. Besides, it would not catch the attention of the Justice department. Of course; Google may have a few points to ponder then.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
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