Convergence Plus
Tuesday, December 11, 2018
Indian IT gears up for $50 billion renewals

Indian IT gears up for $50 billion renewalsAbout 196 IT deals worth more than $100 million each, and adding up to $51 billion, are coming up for renewal in 2018. Of these, some 12 are multi-billion-dollar deals, the largest of which is Siemens' $7.2-billion contract with French IT giant Atos, according to research firm Everest Group. As in previous years, this is an opportunity for Indian IT firms that have been steadily increasing their share of global outsourcing contracts. Of the 196 deals, only four are currently led by Indian IT firms, though these firms may be present as secondary partners in some of the other deals.

Also, the opportunity for Indian IT sector is rising because many of the large deals today are being broken up into smaller contracts. Barring TCS, the others are typically not considered for billion-dollar deals, but if these same deals are broken up, the others get to pitch.

IT research firm ISG did a study in 2016 that analysed 180 deals to see what happened to incumbent vendors when a contract came up for renewal. It found that where clients choose to do competitive re-negotiations (and that's 66% of all contracts), the incumbents lost the entire contract in 47% of the cases. And in 32% of the cases, the incumbents witnessed a drop in scope with clients moving some part of the contract to new service providers.

ISG found that Indian service providers are also gaining through consortia deals that are led by large MNCs. "We found that large Indian providers managed to get around 30-35% of the share that the incumbents lost," said Rajesh Gupta, partner in ISG's India operations.

Jimit Arora, IT analyst in Everest Group, said the billion-dollar deals coming up for renewal have the following characteristics: Infrastructure transformation to cloud, government and defence contracts, integrated contracts (that combine application development & maintenance, analytics, etc), large, multiyear BPO or BPaaS (business process as a service) deals in relatively mature areas, and deals with asset/people transfer (such as the takeover of a global in-house centre of an MNC).

"The vendors that will tend to continue to win will be the traditional global majors that can structure asset-intensive infrastructure deals (IBM, Atos, DXC, NTT Data). In the government and defence sector, you would not expect the Indian service providers to be as relevant. But you will likely see them succeed in categories like integrated deals, BPO/BPaas contracts or deals with huge asset or people transfer (think of TCS-Nielsen, Wipro-Atco)," Arora said.

However, the challenge for Indian IT service providers is the changing character of contracts, as clients move towards newer digital offerings where there are a number of newer players, and where some big players like Accenture are seen to have built greater expertise than the Indian providers.

London-based research firm Ovum's estimates for Indian IT's share of the global services market in 2017 suggests that there was at best a marginal growth from 2016. "A lot of the workload is being moved to cloud and that market is in the hands of vendors like AWS, Microsoft Azure, etc. The Indian providers and other systems integrators are doing the integration work and building things like analytics on top of these cloud-enabled workloads but the decline in traditional lines is eating up the double-digit growth rates they enjoyed during the last decade," said Hansa Iyengar, IT analyst with Ovum. (Source : Economic Times)

Essar’s AGC Networks to enter new markets

Essar’s AGC Networks to enter new marketsAt a time when IT companies are shrinking their geographical presence, Essar Group company AGC Networks is foraying into new shores, starting with the UK this year. Further, the systems integrator will also set up facilities in Malaysia, Thailand and Indonesia.

AGC Networks is a subsidiary of Essar Telecom (holding arm for Essar Group’s investments), and the group is now incubating smaller companies such as AGC Networks, after it sold its BPO firm Aegis in 2017.

“We will add UK to our portfolio and the next journey would be to augment some of our APAC theatres. These countries - Malaysia, Thailand and Indonesia – are some of the larger markets and a lot of companies have presence there, and the plan is to expand to these places in 2018,” said CEO and Executive Director Sanjeev Verma.

“The process of new forays have started. We call it follow the customer. We have landed up in a few countries where our customers have opened their hubs,” he said. At present, the IT company has operations across nine countries. Its global customers — mainly banks, large technology companies and top hospital chains — are from BFSI, IT and ITeS and healthcare sectors.

The company’s investments will be mainly to recruit personnel for these centres.

Headcount addition

AGC Networks is also looking at increasing its manpower by more than 20 per cent and will add about 100 personnel in India and 50 overseas to its existing total of 750 employees. “Most of the hiring will happen in India to support our overseas customers. The headcount addition will come on the back of our growth in India, and also through the organic and inorganic growth,” Verma said, adding that the company is also open for inorganic opportunities.

AGC Networks is now expecting its business to grow at about 15-20 per cent organically this year. The growth will be 50:50 from both domestic and global markets.

The company’s journey started in 2010, when Essar Group acquired the entire 59.13 per cent stake held by the US-based Avaya in India-listed AGC Networks for ₹206.19 crore. (Source: The Hindu BusinessLine)

Airtel Payments Bank removes 1,000 retailers from network

Airtel Payments Bank removes 1,000 retailers from network Airtel Payments Bank has terminated relationships with nearly 1,000 retailers for not following the due process while signing up customers, after the banking arm of the country's largest telecom carrier conducted internal investigations to zero in on errors and lapses that led to its Aadhaar-based e-KYC licence getting suspended. People familiar with the matter said the company levied a penalty of around 50 times the commission paid on several retailers who violated the guidelines for the first time, and removed repeat offenders from the network besides imposing a fine on them.

All retail partners have been warned of strict action for any violation of the guidelines. The company launched the probe after the Unique Identification Authority of India in mid-December suspended AirtelBSE -3.13 % and Airtel Payments Bank from conducting Aadhaar-based verification of customers following complaints of the telecom company using the Aadhaar-eKYC based SIM verification process to open payments bank accounts of its subscribers without taking their 'informed consent'. Such accounts were also linked to get subsidy from the government.

During the probe, "it was observed that some of the retailers that were also acting as designated banking points had not informed customers about savings account opening and direct benefit transfer (DBT) receipts in an upfront manner. Wherever multiple violations have been found, relationships have been terminated," said one of the people.

About 1,000 retailers have been removed from the network and penalised as of December, and the number is likely to rise as investigation continues. Bharti Airtel and Airtel Payments Bank did not respond to emails seeking comment. The subsidy-transfer issue came into the limelight after state-run oil companies and the oil ministry claimed thatRs 167 crore of LPG subsidies had been deposited in accounts in Airtel Payments Bank without the knowledge of customers.

UIDAI, while suspending the e-KYC licence, had imposed a fine of Rs 2.5 crore on the payments bank. It later allowed Bharti Airtel to resume Aadhaar-based e-KYC verification of telecom subscribers till January 10 to facilitate linking of Aadhaar with mobile SIMs as per a Supreme Court directive.

UIDAI also asked the Reserve Bank of India, Department of Telecommunications and audit and consultancy firm PricewaterhouseCoopers to conduct audits of Bharti Airtel and Airtel Payments Bank to see whether their systems, processes, applications, documentations and other aspects were compliant with licence conditions. The reports are expected to come in by January 10, a senior official at UIDAI said. The e-KYC licence of the payments bank remains suspended, the person cited earlier said.

Airtel's chief executive, Gopal Vittal, had admitted to lapses in governance in its customer authentication process. The fiasco had led to the exit of the payments bank's chief executive officer, Shashi Arora.

Airtel has deposited Rs 2.5 crore as penalty with the authority, its executives had said, and added that almost the full Rs 167 crore with a 7.25% interest had been returned to the original DBT accounts of some 55.63 lakh beneficiaries.

"It is a scar; the brand value can get affected ... and it's a long-term issue," said brand consultant Harish Bijoor, adding that competition had the ability to stoke the fire further. "It is extremely important that the brand stand up and say that it's honest and forthright, and that these are business issues that can happen. The brand should not just be honest, but appear to be honest as well," he added.

The payments bank arm of the company was the first to launch services in January 2017, offering basic banking services excluding loans. Kotak Mahindra owns 20% in Airtel Payments Bank. (Source: Economic Times)

Trai chairman R.S. Sharma: Policies need to nudge telecom firms to improve tech

Trai chairman R.S. Sharma: Policies need to nudge telecom firms to improve techTrai chairman R.S. Sharma on the regulator’s agenda for the coming year and the issues faced by the telecom industry. For the next seven months until the end of his 40-year career with the government, R.S. Sharma, chairman of the Telecom Regulatory Authority of India (Trai), has a busy schedule. In various roles, Sharma introduced major changes in telecom regulations, played a key role in India’s unique identification programme and worked to maintain law and order in some of the most notorious districts of Bihar, where he served as magistrate in several districts during the 1980s. He seems to believe he has solved most of the troubling issues in the telecom sector in the past two years.

Now, Sharma has set a target of finishing all pending consultations before July, and the coming few weeks will see the regulator issue new rules on tariff assessment, announce the new international mobile termination charge and come out with a new consultation paper seeking inputs on regulation of over-the-top (OTT) services. Edited excerpts from an interview:

What is the regulator’s agenda for the coming year?

There are some pending papers in the advanced pipeline, those we will finish off. Whatever papers are out (in consultation stage), those I plan to complete before July. We are going to have meetings with industry bodies. We will meet broadcasting players on 12 January and telecom players on 23 January to decide the agenda for the year. We will also review what was discussed last year, how much has been completed, how much is left to be done.

What all is left from last year’s agenda?

We have sorted out most things. I don’t think there are any major immediate issues left, but there may be is a developing is progressing very fast.

Internet of things (IoT), machine-to-machine, cloud, all that we have done. 5G we have not done but (for the) rest, we have brought out policies. We have given recommendation on net neutrality also.

So, most of the stuff is done and the rest, for example the principles of tariff assessment, all those things are going to come in the next one or two weeks. Rest we will ask the industry “what do you think are the issues to be considered”.

What are the issues?

I will not like to give my list. Let me first ask the industry what their priorities are. My broad overarching thing had been that India should not be behind the technology curve. I will always think of policies and direction in which we nudge the players to improve technology.

How do you see the sector?

This is one sector whose area of applications are increasing by leaps and bounds. It has now become central to every sector.
Previously, your telecom was only for talking. Then, telecom also became a means of accessing internet. Now, it has become a means of delivering services in agriculture, health, transport, smart cities, sewage disposal, etc. So it is now becoming all-pervasive. So, information and communication technologies have become central to the growth story of any country. And that will require these networks and pipes and data and everything.

So here is one industry which has no demand slack. The more data you produce, it will be consumed. Today, our data consumption per capita is the highest in the world. Today, wireless data consumption per month is 1.5 exabytes, which is more than what the US consumes. This industry in near future is not going to suffer demand slump.

Will the traditional architecture of the industry change?

Another thing which is happening is essentially unbundling. Unbundling is extremely important. In a way, net neutrality is also a part of unbundling. We are saying you don’t bundle the content with the pipe. These are two independent things. Similarly, what is happening in this space also is that the number of players is going to become more.

You have now virtual network operators. In IoT, the guys who are providing applications for, say, smart transport will not be telcos. They will be some other entities who will be buying data from telcos. So, they will be using the telco’s pipes but at the end pipe, the last mile may not be telco’s but may be those entities. So the industry’s delivery structure changes. (Source: Mint)

Indian Railways to equip all 8,500 stations with Wi-Fi

Indian Railways to equip all 8,500 stations with Wi-Fi All railway stations -- nearly 8,500 across the country, including those in rural and remote areas -- will be equipped with Wi-Fi facilities at an estimated cost of Rs 700 crore ($110 million). As part of the government's ambitious Digital India initiative, the national transporter has currently commissioned Wi-Fi services at 216 major stations enabling about seven million rail passengers to log on to the free Internet facility. "Internet access has now become an important requirement in day-to-day working and we shall be providing this facility at all railway stations in the country," a senior Railway Ministry official said.

As per the plan finalised at a recent meeting, while 1,200 stations have been identified for this facility to primarily cater to rail passengers, about 7,300 stations have been earmarked to not only serve passengers but also local people in rural and remote areas.

The Wi-FI facility at these stations in rural and remote areas will be offered to the local population as part of the digital makeover of rural India to promote e-governance.

Railway stations in rural areas will have kiosks with Wi-FI that will become digital hot spots offering services like digital banking, Aadhaar generation, issuing government certificates, including birth and death certificates, and filing taxes and paying bills, among others.

The kiosks will also enable the local populace to order and receive goods from e-commerce portals.

"These kiosks will be operated at stations with private participation for the local population," said the official, adding, "The modalities of setting up such digital hot spots are being worked out with the Telecom Ministry."

As per the timeline, while 600 stations are targeted to be provided with the Wi-FI facility by March 2018, the Railways aim to cover all 8,500 stations by March 2019.

Our aim is to ensure that more and more people get connected to the rail Wi-FI system as the Wi-Fi broadband access to these rail users will aid in implementing the government's Digital India initiative, he said. (Source: Economic Times)

Mera Hoardings launches mobile app

Mera Hoardings launches mobile appMera Hoardings, an outdoor online booking company launched a mobile app ‘Mera Hoardings’, which gives access to billboard- advertising marketplace.

Available on Android and iOS platforms, the app allows agencies to set up their own marketplaces. Different hoarding companies and agencies can sign up and register themselves to sell their vacant billboard and hoardings for their customers.

“The Mera Hoardings OOH Multi Agency board- booking module is a one-stop solution for billboard space buyers. They can access billboard spaces from different firms,” Saikrishna Gajavelly, Founder and Chairman of Mera Hoardings said.

The firm has operations in 20 States with an aggregate offering of over 10,000 billboards and hoardings from over 5,000 vendors. (Source: The Hindu BusinessLine)

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