A glaring lack of infrastructure at times encourages adoption of latest technology since it would be more expensive to start from scratch to support older methods. India has seen this in a big way with the growth in cellular coverage and penetration.
The country is on its way to becoming the second largest cellular market in the world, with cellphones crossing landlines a few years ago. Landlines have actually started declining now. ATMs are another example driven by the urge to avoid contact with workers stuck in a different era.
The leapfrogging is also happening in other small but interesting ways. For too long Indians had to be content with babble on state-run radios. Private FMs were allowed, but reluctantly, with the government controlling the markets they could operate in. Then came satellite radio, specifically Worldspace. Despite its seemingly high cost (at least by Indian standards), people are taking to it in droves. The choice of high-quality, ad-free, 24-hour channels without the government-drivel is just too appealing. From individual homes to restaurants, WorldSpace seems to have become the default radio.
Now, if only some cellphone maker could bundle a satellite radio into a newer model!
BTW, Worldspace is a public company, and trades under WRSP on the Nasdaq.
Friday, January 11, 2008
Thursday, January 10, 2008
A new growth lifeline
Emerging markets, especially China & India have been popular over the last few years among investors. As growth comes to a standstill in much of the developed world, these two are growing at close to double-digit rates.
But investors seemed to have missed a slightly different angle to the new growth story. One need not invest in companies based in India or China to benefit from their growth. In a number of sectors, the expertise that U.S/European companies have built up over the years means that they are likely to get win many of the contracts. In many cases, due to the sheer size of the population, these new wins also tend to be among the largest these companies have seen to date, and it could only get better.
As one example, in an earlier opst I mentioned companies that make ATMs. Another example would be a company like Insituform (INSU), which handles various municipal contracts in the U.S. Insituform just got a $35 million sewer construction contract in Delhi, its largest such contract to date. The stock itself is beaten down, while insiders are buying. The company now seems to be set for a new growth phase. How many will miss it ?
Along the same lines, look at AECOM (ACM), which went public just a few months ago. The stock has already retreated due to slowing commercial activity in the U.S. But AECOM is likely to derive a large portion of its gains outside the U.S. Even today, a substantial part of its contracts are in the Middle-East & Asia. Isn't AECOM a safe & sound way to bet on emerging markets ?
But investors seemed to have missed a slightly different angle to the new growth story. One need not invest in companies based in India or China to benefit from their growth. In a number of sectors, the expertise that U.S/European companies have built up over the years means that they are likely to get win many of the contracts. In many cases, due to the sheer size of the population, these new wins also tend to be among the largest these companies have seen to date, and it could only get better.
As one example, in an earlier opst I mentioned companies that make ATMs. Another example would be a company like Insituform (INSU), which handles various municipal contracts in the U.S. Insituform just got a $35 million sewer construction contract in Delhi, its largest such contract to date. The stock itself is beaten down, while insiders are buying. The company now seems to be set for a new growth phase. How many will miss it ?
Along the same lines, look at AECOM (ACM), which went public just a few months ago. The stock has already retreated due to slowing commercial activity in the U.S. But AECOM is likely to derive a large portion of its gains outside the U.S. Even today, a substantial part of its contracts are in the Middle-East & Asia. Isn't AECOM a safe & sound way to bet on emerging markets ?
Wi-fi amid the chaos
A portable wi-fi detector is increasingly becoming part of personal music/video devices. This helps to avoid having to open a laptop just for checking the presence of a wi-fi network.
With a phone like the new Nokia N95, it is even more simpler. You can detect, and connect/browse. Recently, at the Bangalore Railway Station (Majestic) with not much to do I took out the phone & searched for networks. Imagine my surprise when I found two strong-signal wi-fi networks!
Indian Railways seems to have a small corner where people have received the message. They have set up RailTel to provide such a service, in collaboration with private parties like AirLink & Tata. Convenient, except that there was absolutely no indication that it was a wi-fi zone.
One would expect a bit more professional-quality promotions from AirLink & Tata. I hope they are working on it, while also ensuring a rapid roll-out. If they can blanket every railway station, airport, mall, cafe, bus depot with their network, there will be a lot more willing to sign up assuming there are flexible plans for fixed/limited period users.
Imagine - wi-fi in a decrepit garbge-littered railway platform, with almost no space to handle even one more person. Only in India! Isn't it incredible ? Just don't look at the tracks.
With a phone like the new Nokia N95, it is even more simpler. You can detect, and connect/browse. Recently, at the Bangalore Railway Station (Majestic) with not much to do I took out the phone & searched for networks. Imagine my surprise when I found two strong-signal wi-fi networks!
Indian Railways seems to have a small corner where people have received the message. They have set up RailTel to provide such a service, in collaboration with private parties like AirLink & Tata. Convenient, except that there was absolutely no indication that it was a wi-fi zone.
One would expect a bit more professional-quality promotions from AirLink & Tata. I hope they are working on it, while also ensuring a rapid roll-out. If they can blanket every railway station, airport, mall, cafe, bus depot with their network, there will be a lot more willing to sign up assuming there are flexible plans for fixed/limited period users.
Imagine - wi-fi in a decrepit garbge-littered railway platform, with almost no space to handle even one more person. Only in India! Isn't it incredible ? Just don't look at the tracks.
Incredible dump
Hundreds of thousands have been enticed to come into the country & spend their millions by a promotional campaign that has been branded as being among the most effective nation-branding efforts ever - Incredible India.
The disappointment starts at the rundown airports & rude employees, even at the tourist counter. The latter has people who seem to say I don't know more often than any other useful sentence.
Then comes the attempt to find a way, some way, any way, to get to the hotel without being robbed by auto-rikshaw drivers. If the touts along the way don't push you into the path of oncoming traffic, consider yourself lucky.
After a night's rest, with power outages, bad toilets (even in "Lonly Planet recommended" places; the "lonely" spelling is an authentic copy from a hotel) and hardly any "running hot water", one starts out the next day to the real attraction.
Be ready to be hit with a dense layer of smoke. If that doesn't kill you, the honking can drive you crazy. Dust from the barely paved road will stress test your lungs & eyes. Potholes & road bumps will make your butt hurt. The stench from multiple open sewers will kill all your desire to see whatever wonder you have in mind. Finally, the garbage strewn all over the place at the monument itself will make you depressed.
Welcome, to the Incredible Dump. Don't you wish you had settled for watching all this on the Discovery Channel from your comfy couch ?
The disappointment starts at the rundown airports & rude employees, even at the tourist counter. The latter has people who seem to say I don't know more often than any other useful sentence.
Then comes the attempt to find a way, some way, any way, to get to the hotel without being robbed by auto-rikshaw drivers. If the touts along the way don't push you into the path of oncoming traffic, consider yourself lucky.
After a night's rest, with power outages, bad toilets (even in "Lonly Planet recommended" places; the "lonely" spelling is an authentic copy from a hotel) and hardly any "running hot water", one starts out the next day to the real attraction.
Be ready to be hit with a dense layer of smoke. If that doesn't kill you, the honking can drive you crazy. Dust from the barely paved road will stress test your lungs & eyes. Potholes & road bumps will make your butt hurt. The stench from multiple open sewers will kill all your desire to see whatever wonder you have in mind. Finally, the garbage strewn all over the place at the monument itself will make you depressed.
Welcome, to the Incredible Dump. Don't you wish you had settled for watching all this on the Discovery Channel from your comfy couch ?
Presenting a different view
One easily builds an impression about a country within the first few minutes of landing. Unfortunately for India, that impression is likely to be very bad at best. Take Bangalore (or whatever it is called today). For an IT capital and a city ranked among the fastest growing in Asia, the airport (not to mention the connectivity) is a shame.
Now, in under three months, the airport (though not the connectivity) part is set to be fixed. A brand new international airport will open in March/April. For those interested in more details, here is the official website. This airport happened in spite of the state government. That shows the level of genuine concern for the state, its people and development. Like all projects in India, this has taken way too long to go from an idea to completion. In the process, it has left a few more heartbroken. I do hope the Bangalore Airport CEO, Albert Brunner, writes a book revealing all the villains in the play, and the hurdles they placed.
The connectivity to the airport though is still being worked on, and has barely moved beyond the drawing board. Some foresight & planning!
Around the same time as the new Bangalore airport opening, the new Hyderabad Airport will also open. See more at their website. While bigger & seemingly better than the Bangalore Airport, it also has the same connectivity problems. The only difference being, unlike at Bangalore, active road-building is in progress to solve it.
These two have the potential to alter the first impression of visitors to India. That may sound superficial, but it has the potential to do a lot of things. Most importantly, to show that the country means business, finally.
What is needed now is much more - a massive fast-paced program to build new & efficient airports throughout the country.
Now, in under three months, the airport (though not the connectivity) part is set to be fixed. A brand new international airport will open in March/April. For those interested in more details, here is the official website. This airport happened in spite of the state government. That shows the level of genuine concern for the state, its people and development. Like all projects in India, this has taken way too long to go from an idea to completion. In the process, it has left a few more heartbroken. I do hope the Bangalore Airport CEO, Albert Brunner, writes a book revealing all the villains in the play, and the hurdles they placed.
The connectivity to the airport though is still being worked on, and has barely moved beyond the drawing board. Some foresight & planning!
Around the same time as the new Bangalore airport opening, the new Hyderabad Airport will also open. See more at their website. While bigger & seemingly better than the Bangalore Airport, it also has the same connectivity problems. The only difference being, unlike at Bangalore, active road-building is in progress to solve it.
These two have the potential to alter the first impression of visitors to India. That may sound superficial, but it has the potential to do a lot of things. Most importantly, to show that the country means business, finally.
What is needed now is much more - a massive fast-paced program to build new & efficient airports throughout the country.
Taking them for a ride
The increased confidence resulting from a surging Sensex and economic growth has led to a lot of interesting developments in India over the last few years. Corporate confidence to do overseas acquisitions and the ability to dream big are the good outcomes, when done in moderation.
A few other developments are surreal. Industrialists who were part of the establishment even during the sickening socialist/license raj are now donning new robes using words like innovation and synergy in every other sentence. When it came to using the system to maintain their monopolies they were definitely leaders. But characters to lead the nation forward these are not.
There also have been television programs about bringing grassroots changes in India. The efforts are in the right direction, and some of the guests may indeed be sincere, but the cast of these shows makes one laugh at the irony.
For too long, Indians have been taken for a ride by movie stars, cricket heroes and populist leaders who encouraged idol-worship for their own good. It is close to impossible to find any untainted among them.
An illiterate democracy is never much of a democracy.
A few other developments are surreal. Industrialists who were part of the establishment even during the sickening socialist/license raj are now donning new robes using words like innovation and synergy in every other sentence. When it came to using the system to maintain their monopolies they were definitely leaders. But characters to lead the nation forward these are not.
There also have been television programs about bringing grassroots changes in India. The efforts are in the right direction, and some of the guests may indeed be sincere, but the cast of these shows makes one laugh at the irony.
For too long, Indians have been taken for a ride by movie stars, cricket heroes and populist leaders who encouraged idol-worship for their own good. It is close to impossible to find any untainted among them.
An illiterate democracy is never much of a democracy.
ATM nation
A few years ago it was the sight of a cellphone on every other hand that stunned an outsider in India. These days it must be the mushrooming of ATMs.
In most major cities, but also in Tier-2 cities, you can't walk 500 feet without passing an ATM. In one Tier-2 (or is it Tier-3 ?) city, I crossed 6 ATMs in a distance of around 300 ft.
Estimates vary, but the mean guess is that India now has around 25,000 ATMs as againt just 500 a decade ago. The forecasts also are all over the place, with the most optimistic expecting the number to double in around 7 years. I feel all these predictions will be beat soundly. India is likely to cross 75,000 in 5 years, and may well cross 150 thousand in 10 years. As far as penetration/density goes, India is still way far behind China. So there is definitely room to grow.
ATMs, like cellphones earlier, provide another way for the country and its people to leapfrog older technology and the lack of infrastructure. In addition, not having to deal with frumpy bank staff is always a mood-lifter.
Most Indian ATMs are from Diebold (DBD), Euronet (EEFT) and NCR (NCR). These two U.S companies could see a new growth phase soon. But they trade like value stocks, and for long-term investors they offer very attractive entry points right now.
ATMs in India have also been localized with additional applications like recharging a prepaid cell phone account via debit, and donating to some well known temples without having to visit them personally. Wonder if paying bribes via ATM is next!
In most major cities, but also in Tier-2 cities, you can't walk 500 feet without passing an ATM. In one Tier-2 (or is it Tier-3 ?) city, I crossed 6 ATMs in a distance of around 300 ft.
Estimates vary, but the mean guess is that India now has around 25,000 ATMs as againt just 500 a decade ago. The forecasts also are all over the place, with the most optimistic expecting the number to double in around 7 years. I feel all these predictions will be beat soundly. India is likely to cross 75,000 in 5 years, and may well cross 150 thousand in 10 years. As far as penetration/density goes, India is still way far behind China. So there is definitely room to grow.
ATMs, like cellphones earlier, provide another way for the country and its people to leapfrog older technology and the lack of infrastructure. In addition, not having to deal with frumpy bank staff is always a mood-lifter.
Most Indian ATMs are from Diebold (DBD), Euronet (EEFT) and NCR (NCR). These two U.S companies could see a new growth phase soon. But they trade like value stocks, and for long-term investors they offer very attractive entry points right now.
ATMs in India have also been localized with additional applications like recharging a prepaid cell phone account via debit, and donating to some well known temples without having to visit them personally. Wonder if paying bribes via ATM is next!
Subscribe to:
Posts (Atom)