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Coimbatore gears up for IT revolution, Tidel park to be ready by April end
January 14, 2010
Source: IANS
COIMBATORE: As the outlook has brightened for the Indian software services sector in the new year, Coimbatore, the largest Tier-II city in Tamil
Nadu is gearing up to join the IT revolution.
The much-awaited Tidel Park in the IT & ITES special economic zone (SEZ) in the city is expected to be up and running by April-end this year. Nearly 80 per cent of the construction work is over now, said a top official in the company.
The Park is jointly developed by the Tamil Nadu Industrial Development Corporation (Tidco), Electronics Corporation of Tamil Nadu (Elcot), Software Technology Parks of India (Stpi) and Tidel Park, Chennai.
With the state government actively promoting IT and ITES in Tier-II cities, Elcot has also embarked on developing SEZs in cities such as Madurai, Trichy, Tirunelveli, Salem and Hosur.
"Apart from developing common infrastructure facilities in the SEZs, we are building 50,000 sq ft buildings each in Madurai, Trichy and Tirunelveli to house IT companies," said an Elcot official.
He added Elcot would soon call for tender to start construction works at Salem and Hosur. Conceived in August 2006, the foundation stone for the Tidel Park Coimbatore was laid in February 2007, but due to global recession, the civil works contract was awarded as late as September 2008. "The costs escalated and we had to call for tenders twice," an official said.
Coimbatore has already attracted big IT companies including Cognizant, which has created a huge infrastructure inside a private SEZ. IT-enabled services companies such as Perot System, KGiSL and CBay Systems are also present in the city.
Built at a cost of Rs 380 crore, Tidel Park Coimbatore has three basement floors for parking, ground floor for commercial and IT & ITES purpose and four upper floors specifically for IT & ITES companies.
The SEZ is located behind Coimbatore Medical College on the NH 47 and is 3 kms from the airport. With about 9 lakh sq ft of space for IT and ITES companies, the Tidel Park is expected to provide employment to 12,000 professionals in one shift.
Apart from Tidel, Wipro, TCS and HCL too have bought 9.5 acres each inside the 56-acre IT-SEZ . While Wipro stopped its construction works after completing nearly 80 per cent of one block early last year, the other two companies are yet to start work.
But now with the Tidel Park nearing completion, TCS and HCL have requested for a floor each (2 lakh sq ft) to house their offices before building their own space.
A top Tidel official told ET that about 15 companies including government-owned Centre for Development of Advanced Computing and city-based Point Perfect Solutions have booked space inside the Tidel Park.
Many smaller companies including US-based Exterro have evinced interest. "The bookings are made on first come-first service and we lease out on short term (3 years) and long term (15 years) basis," he added.
Apart from housing IT and ITES companies, Tidel Park will have commercial shops catering to the needs of the employees. "Right from cafeteria to saloon to banks, nearly 1 lakh sq ft area in the ground floor will have all such facilities," an official said, adding Archies had already booked space under bookstore facility.
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Indian IT cos set sights on clients' captive operations in US, Europe
January 14, 2010
Source: IANS
NEW DELHI: For India’s top tech firms seeking to acquire an existing back
office business of a large customer, the next big opportunity is emerging in
the markets of the US and Europe as customers seek to sell captive operations
in their home countries.
Having divested their captive operations in emerging countries such as India,
some companies are now in talks with companies such as Genpact, EXL Service
Holdings and Quatrro to sell their assets. Such transactions are lucrative
because they can bring niche expertise at deals worth up to $200 million.
“There are few captives on the block and we are open to acquiring them. Such
deals help get access to new customers besides product knowledge,” said Pramod
Bhasin, chief executive of Genpact, the largest back-office firm.
Indeed, the recent acquisition of American Express’ travel services captive in
India by EXL Service Holdings for $30 million not only provided the latter with
an experienced management team, but also capabilities set in analytics,
exception processing, and transaction processing.
“Several captives in these countries are not only burdened with high cost
structure, but also lack capital to build on offshore capabilities. Moreover,
their ability to add value is limited,” said Rohit Kapoor, president and chief
executive of EXL.
EXL may shortly strike a captive deal in the insurance or banking space in the
US or Europe. “We are in advanced talks with a couple of US and Europe based
captives and onshore companies for a possible buyout. The deal, if successful,
will give us a presence in these markets,” Mr Kapoor said.
Global outsourcing experts say captive centres are a drain on parent companies,
and more so in tough times, and represent a large fixed cost. Their sale can
generate quick cash for the parent company. “Valuation is challenging and far
sweeter than what we thought it to be.
We are working on deals ranging from $20-200 million essentially in the banking
and financial services sector,” said Raman Roy, managing director of Quatrro
BPO Solutions.
“Indian companies gain because even after the sale, they continue to get large
5-7 year deals with the parent firm. This happened in the case of Citi.
Besides, there is the geographic, service portfolio and talent pool expansion
advantage linked to such transactions,” said Uday Parmar, global sourcing
consultant at outsourcing advisory firm EquaTerra.
Citibank sold its Indian back office business to TCS for around $505 million in
October 2008, and Citi Technology Services for around $127 million to Wipro in
December the same year. Both these transactions came with assured outsourcing
business of around $3 billion together for these vendors.
Although demand for IT outsourcing services was subdued in the first half of
2009, the year did see some major deals being sealed. Early last year, EXL
acquired the back-office unit of US-based logistics firm Schneider National in
Czech Republic.
In October, Cognizant Technology signed an agreement to buy out the captive
Indian arm of UBS Group for $75 million. Infosys BPO got into a definitive
agreement to acquire all of the outstanding interests of McCamish Systems, a
small BPO company in Atlanta.
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India to be Motorola's R&D hub on wireless broadband
January 14, 2010
Source: ET Bureau
NEW DELHI: The decision of state-owned BSNL’s board on Wednesday to put its
tender for 93 million GSM lines ‘on hold’ will result in the telco’s $1-billion
IT outsourcing contract also being put ‘on hold,' an executive with the PSU
told ET. This is because, the $1-billion IT contract is linked to the 93
million GSM lines taking off, this executive added.
The delay will impact IT firm HCL Infosystems, which will be supported by HP
and Convergys for the contract and is assured of 50% of BSNL’s Rs 2,000-crore
IT deal, as it was the lowest bidder for all the four zones. The project was
split into four zones to allow companies to bid separately for each zone.
Other IT majors that will be impacted include TCS which can bag the remaining
50% of the contract and the Mahindra Satyam/Spanco combine which stand a chance
to win part of the deal.
As first reported by ET, the BSNL board on Wednesday decided to put the world’s
largest ever telecoms equipment contract worth about $10 billion on hold after
the Central Vigilance Commission (CVC) launched a fresh probe into the telco as
the anti-corruption body’s guidelines forbid post-tender negotiations with
successful bidders.
Sweden’s Ericsson had emerged as the lowest bidder in the North and South East
zones while China’s Huawei was selected for the South and West Zones. The DoT
too had earlier asked BSNL not to renegotiate the price with lowest bidder
Ericsson since the move would violate CVC guidelines.
But, BSNL executives point out that the telco had entered into post-tender
negotiations with Ericsson since this could result in a 20-25% reduction in the
price.
BSNL’s IT outsourcing deal stipulates that a company can be awarded only a
maximum of two contracts which implies that a single firm cannot provide IT
services in more than two regions. This implies, HCL infosystems, for whom HP
which will supply hardware and systems and Convergys will provide billing
solutions, and has been selected as the lowest bidder or L1 in all the four
zones, will have to opt out of two regions.
Tata Consultancy Services (TCS) is the second lowest bidder in three zones -
North, South and West, while the Eastern region Mahindra Satyam/Spanco combine
was chosen as L2 (refer table). This implies, the Mahindra Satyam/Spanco
combine stands a chance only if HCL opts out of the East Zone.
On the other hand, TCS, which is assured of the contract in at least one zone,
can double its deal size if HCL does not opt out of the East Zone.
Controversies around its tenders have resulted in BSNL not being able to place
any significant orders for equipment over the last three years during which the
mobile market in India recorded the highest growth globally.
This has also resulted in BSNL, which was challenging Bharti Airtel for the top
spot in the mobile space in 2006 now being pushed to the fifth spot after
Airtel, Reliance Communications, Vodafone Essar and Idea Cellular. Besides,
Tata Teleservices is also poised to overtake BSNL in mobile customers within
the next couple of months.
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