Global Business: HP acquires EDS

- Srinivasan Suresh

Background
HP is a Fortune 500 company and has been ranked fourteenth globally. It was founded in 1939 and is rated among the world’s largest IT companies with revenue streams crossing the $100 billion mark. HP is considered one of the most innovative companies of our times and its mission has been to invent technologies and services that drive business value, create social benefit and improve the lives of customers, while focusing on affecting the greatest number of people possible. HP dedicates more than 4% of its annual revenues, i.e., around $4 billion towards research and development of products, solutions and new technologies. The Company is positioned as world number one, by BusinessWeek, in both the inkjet and the laserjet printer segments and personal computers.

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Inflation and the Indian Steel Industry Is the Government misdirected?

- Srinivasan Suresh

Background
Indian inflation is at an all time high, rates having doubled over the last four months. From 4%, inflation levels increased to 5% during March 2008 and the latest Wholesale Price Index (WPI) based inflation has crossed the 8.5% mark, breaching record levels. Analysts argue that an era of double-digit inflation does not seem to be far away. It is important to note that inflation in India is in reality even higher than the reported indices, as energy prices are suppressed and the consumer is subsidized (with losses being absorbed by the oil marketing companies). The ruling UPA coalition government has blamed international crude prices, the global commodity crisis and the weakening of the US$ for the high level of inflation in the country. But in spite of the various justifications advanced, this does not augur well for the ruling UPA coalition, especially at a time close to elections which are slated for 2009. Opposition parties have squarely blamed the UPA government, and allege that they have failed to take timely steps and policy measures in controlling inflation in the economy.

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The Formalization of the BRIC Block

- The Advanc'edge Business Research Team

Goldman Sachs, the American investment bank, was primarily responsible for coining the term ‘BRIC’, signifying Brazil, Russia, India and China, the fastest growing emerging markets in the world. Goldman Sachs had predicted during the early years of this decade that these four nations are well positioned in terms of national resources and are likely to surpass the developed Western economies in the medium to long term. It was also predicted that the global future of the next half century lies in the hands of these economies, rather than with the American and the European countries. Rightly so, since the four economies today account for not only more than 40% of the global population, but also account for more than 10% of the global gross domestic product (GDP). At this rate of growth, China and India are expected to emerge as the two largest economies in the world by the year 2050.

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Indian Interest in MTN: A Story of Growth Vs Control

- The Advanc'edge Business Research Team

The Indian telecom sector is not only one of the fastest growing markets in the world, but is also very attractive in terms of profitability. The market is currently in a stage of ‘growth,’ whereas other global markets like those in the US, Europe and Japan have already reached maturity. The penetration in the Indian telecom sector, i.e., the proportion of population that is connected to telecommunication is still very low. Further, there are significant opportunities in the rural areas for expanding telecom services. Given the fact of enhanced industrialization and services sector activity in the country, there is widespread economic development, which in turn is driving the demand for telecom services within the country. In this backdrop, and given the current position of the Indian telecom sector in the industry life cycle, global giants including Vodafone, Etisalat, Orascom and Singtel have significantly focused on and invested in the sector with a view to improving the profitability of their global operations.

The competitive intensity in the Indian Telecom market is very high. Bharti Airtel, Reliance Communication (RCom) and Vodafone are key players fighting for market share. Bharti Airtel is the flagship company of Bharti Enterprises. The Bharti Group has a diverse business portfolio and has created global brands in the telecommunication sector. Airtel offers GSM mobile services in all the 23 telecom circles of India and is the largest mobile service provider in the country. Reliance Communications (RCom), predominantly a CDMA operator, is the flagship company of the Anil Dhirubhai Ambani Group (ADAG) of companies. Listed on the NSE and the BSE, RCom is India’s leading integrated telecom company with over 48 million customers and is ranked as the second largest telecom company in India. Both Airtel and Rcom have been very aggressive and have spared no efforts to grow their customer base in the attractive Indian telecom sector. More recently, Indian companies, in addition to their focus on domestic markets, have also started looking into other attractive emerging markets, as in the African continent.  Both Airtel and Rcom have shown serious interest in entering this emerging market.

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