Indian acquisitions abroad on the rise
New Delhi: In the increasing mergers and acquisitions game, Indian companies are getting to the forefront.. In the year 2000 alone, corporate India has acquired companies abroad at an estimated cost of $711.43 million.

Predictably, the majority of this acquisitions are in the infotech sector, with other ‘old economy’ sectors like drugs and pharmaceuticals, paints, telecommunications, petroleum and broadcasting, coming a close second. These include companies like Wipro, Infosys, Zee Telefilms, Leading Edge Systems, BPL Software and Tata Tea.

In a recent acquisition, software giant, Infosys Technologies Ltd. has taken a stake in the US-based Cidra Corporation for an estimated price of $3 million. Cidra is a a privately held company, which develops agile photonic devices for high precision wavelength management and control devices for new generation optical networks.

On the anvil now are strategic investment in e-commerce, broadband wireless and optical networks companies abroad.

The largest acquisition in recent times has been by Zee Telefilms, followed by BPL Software, Leading Edge Systems and Tata Tea.

The size of the acquisitions cannot be large at present because the government regulates this activity by setting a limit on acquisition.
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Only three ISPs will be left in the running
Mumbai: The Hong Kong-based head of Merrill Lynch Internet Research, Asia-Pacific, Mr. Matei Mihalca, who has closely monitored the fledgling Indian market, has predicted that "the messy ISP market in the country is soon heading for a consolidation."
The savvy Mr. Mihalca goes on to say that, in the end, there would be only three strong players which will account for almost 80 per cent of the market. Two of the three, he predicts, will be VSNL and Satyam. He is cagey about hazarding a guess about the third.

According to him the critical issue for the ISP market in the medium term is revenue sharing with telecom companies. This revenue sharing, he believes, will allow the introduction of free internet access in India as a sustainable business model, which it currently isn’t.

Mr. Mihalca also predicts that free ISP models may not be feasible in India, due to paucity of bandwidth, little ad revenue and poor e-commerce transactions, which make it a difficult proposition. He also foresees a lot of mergers and acquisitions taking place in the Indian internet arena.

On the e-commerce front, his report states that Indian portals handle less than 100 orders daily on an average against say a daily average of 30,000 plus orders being handled by Amazon.com.

He is, however, very optimistic about the Indian market and firmly believes that the Indian government is quite progressive and has done pretty well in liberalising the market, allowing entry to many players.
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Telecom JV in the offing for broadband network
New Delhi: Four large state-owned enterprises, Power Corporation of India, Gas Authority of India, Indian Railways and National Highway Authority of India, are said to be planning to form a joint venture telecom company for setting up nation-wide broadband network and provide all ranges of telecom services.

If constituted, the new JV – which plans to use the existing fibre network and right of way possessed by these companies -- will provide competition to the department of telecom operations in the National Long Distance Services.

The proposal also states that, since the four state-owned entities possessing right-of-way do not have experience in the telecom business, the joint venture should also include a telecom company as a joint venture partner. It has also mooted that the selection procedure for the private telecom partner should be based on the highest bidder for the RoW.

The new company, according to the proposal, will sell bandwidth on a wholesale basis to the customers providing data services and internet services. It will also function as provider of the entire telecom package of telecom services upto the last mile.
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