the-south-asian.com July / August 2006
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China & India - Major global economic players by 2025
First published in January 2002
Foreign Investors in Indiaís Information Technology
1.Bharti Telecom & Singapore Telecom - $ 650 million.
Singapore Telecom, as one of the best Telecom carriers in Asia, has invested $ 650 million in Bharti , which is one of the largest private Telecom carrier in India with 1 million mobile subscribers. The project involves setting up the broadband infrastructure between India and Singapore. The venture, called the Network i2i [ $ 170 million] , is a sub-sea fiber- optic cable from Singapore to Chennai [ 3,200 km] and from Singapore to Bombay around Sri Lanka [5,600 km]. The first part is already completed and the second to Bombay will be completed in mid-2002. This allows SingTel to get access to Bhartiís own Indian fiber network [ 10,00 km in 23 cities in Maharashtra] and 35,000 km connecting 25 cities in Andhra Pradesh, and Karnataka.
The rest of the funds [ SingTel get 20 % of Bharti Telecom and 15 % of Bharti Televentures].
2. Himachal Futuristic & Kerry Packer Group Australia - $238 million.
Ever since the first round of Telecom circle [states] fixed line telephone licenses were caught up in a scandal that involved Sukh Ram, the Congress communications minister running off to London and then having to come back and give up the bribes he got , HFCL has been under the leadership of Mahendra Nahata and Vinay Maloo, an example of how not to do business . After trying out various partners [ Bezeq of Israel, and a Thai company ] and trying to raise funds in UK by showing blank Telecom licenses , this is one venture which has not taken off.
Currently McKinsey is doing a management review of the HFCL operations.
3. Venture Capital - Carlyle Group - $ 250 million.
Biggest Private Equity firm in the world . The Current Funds total about $ 15 billion with 325 staff world wide. It is active in Buyouts , venture and technical investment. The former lawyer and founder David Rubenstein was Deputy Domestic Policy assistant to US President before founding the Carlyle Group. They have been in Bangalore, India, since June 2000. So far, Carlyle has invested in 6 companies, for about $ 20 million .
The companies are Placement.com [ IT job portal] IT nation.com- a B2B IT products exchange and Ritechoice Technology - an online software for stock market / brokering industry, Manmar Technology [ healthcare software ] and Convergence Software[ software solutions] and Educomp Datamatics [ content, technology and solutions for the education marketplace ]. They see opportunities in Telecom , networking, support, payment, gateway, services, security and encryption companies.
Carlyle exit time frame is from 4 to 7 years .It aims to invest about $ 750 million in Asia - mostly in China over the next three years.
4. CISCO- $ 200 million:
Since 1996 Cisco has invested $ 75 million in India and plans to increase its investment by another $ 150 million and its staff strength from 500 experts to about 1500 in the next two years .
Cisco has some 700 partner employees who are dedicated to the R & D work with Infosys , Wipro, and HCL at Bangalore and Chennai[ Madras] .
5. INTEL Capital - $10 million in 2000 , $ 100 million.
The fund has invested in 15 companies in the last 18 months. Among the companies Intel invested in the last year in India were Rediff, Network Solutions, Eastern Software, Ritechoice, Bharati, Indus Software and Silicon Automation Systems.
It has sold its 5 % Rediff.com stake to Warburg Pincus for $ 3.5 million. It is also selling its 15 % Bharti Telespatiale [ ISP] and 10% Bharti Telesoft since SingTel invested $ 650 million in Bharti.
Intel will expand its India Development Center in Bangalore from the present 50 to over 500 in the next three years. Intelís recent acquisition of Bangalore-based Thinkit technologies would supplement design capability sourcing from India; Pramati Technologies in Hyderabad also got investment from Intel in the Java technologies area.
6. SUN Microsystems - $ 20 million.
Sun believes that the current phase of computing has moved from the PC to the network to the Services centric wave. It has increased its Indian investments from $ 25 million to 50 million.
7. Computer Sciences Corporation:
CSC MD & CEO in India is Arun Maheswari [ IIT, IIM, MS Computer Science, Stanford, MBA Columbia, Ph.D. Wharton School of Business, CSC started its base in Indore, Madhya Pradesh and plans another center in Noida. CSC has about 400 people and plans to double the number. Plan to work in services and maintenance in areas of SAP , Peoplesoft, implementation, Insurance segment, E-Commerce, Healthcare.
8. SAP [ Invested $ 125 million to date , $ 25 million in 2001 and $ 125 million up to 2004:
SAP Labs , Bangalore India is the main development center for Asia Pacific and was set up in 1996; it is also the fastest growing SAP subsidiary in the world. The MD is Ruth Conolly and staff strength is going up to 500 to 1000. About 250 Indian corporates currently use SAP in their business operations. Products include E- CRM [ customer relationship management] , localizing R/3 products to the Indian industry sectors
9. STAR $ 50 million :
STAR, the multimedia satellite channel has acquired Indya.com with a total of 180 people working for Indya.com; initially STAR had a 37 % stake at a cost of $ 50 million. STAR has bought up the shares of ICICI and Chase Capital. Besides Indya.com STAR has taken a stake in portals such as indiaproperties.com, bazee.com. egurucool.com with about 25 % in each of these. Indya.comís CEO is Sunil Lulla, and the founder is Pradeep Kar [ also Microland chairman].
10. Computer Associates - $ 130 million :
Computer Associates [CA] Sri Lankan born president & CEO Sanjay Kumar plans to increase CA investment from existing 4 ventures to 7 ventures, focusing on security and storage management, network , event and performance market . The total to be invested is $130 million venture fund.
11. Texas Instruments TI - $ 10 million:
TI has a R & D center at Bangalore in 3G wireless , with plans to expand its workforce from 500 to 1000 professionals . The group works on analog and Digital Signal Processor DSP chip design.
12. Tektronix $ 16 million :
Started Bangalore operations in 1997 in the software technology park with software comprising 100 % of its exports.
13. IBM - 2001 $ 25 million , $ 100 million more by 2004.
IBM has a joint venture with Tata Consultancy Services . At Bangalore it runs a SEI- CMM level 5 accreditation Software Testing center . Thomas Abrahams is the India IBM CEO . IBM has a Hindi version of Lotus Notes Domino, and a Hindi version of the Data Base DB2 and the WebSphere Application Server is available. It has about 400 professionals. At Pune there will be 500 developers supporting WebSphere Application Server on Linux , NT, AIX, Solaris, HP-UX.
American Companies using Off Shore Programming in India .
American Express, Aetna U.S. Healthcare, Compaq, Ford Motor Company [ $10 million], General Motors, Home Depot, IBM, Microsoft, Motorola, Shell, Sprint, 3M, General Electric [ 4 Indian partner companies with 3,200 staff and account for 8 % of Indiaís $ 6 billion export] ; GE used Mascot systems to web-enable its legacy backbone and create an online invoicing system for its client base. Disney used Pentafour for advanced animation work. Diamler-Chrysler uses Infosys for E-commerce applications. Nortel Networks uses Wipro to write software for high-speed Optical switches.
ARIBA , Analog Devices, Computer Vision, Cadence Design Systems, DELL Computer Corp., -Verifone, Intergraph, Novell , Baan, SCO, SAS Institute, Hughes Software systems, Seagate Technologies and Korean electronics giant LG also are in India for software development.
Pakistan IT Investments - Total of $ 150 million in 2001
A major investor has been CISCO, which has set up 50 training academies. A large call center at Lahore with about 10,000 staff will be implemented by Align Technologies. The driving force behind the Pakistan Information Technology Plan is Dr. Attta-ur-Rehman a University of Karachi Professor in Chemistry . He is in the same evangelist mode as Dewang Mehtha of Nasscom , India.
E- Government is planned with the establishment of 30 web sites in various government departments. An ambitious IT plan has been set with an investment of $ 30 million [ Rs. 2 billion] ; attempts are under process to attract professors from overseas and also to raise the Internet penetration. Execution will be the key to a positive result.
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