Mar

21

Indian Mobile TV Prospects Look Promising

Filed Under E-Business, Emerging Sectors, India Business, Mobile Telecom, New Media | Leave a Comment

I believe that the entire broadcast space is nicely poised in a balance between different mediums at present. On one hand, we have traditional mediums like TV. On the other hand, we have a newer medium like Internet, which after an initial period of hype and bust, is increasingly understood and integrated as an important channel of delivery by traditional firms. To make this mix more exciting, we now have mobile TV.

Mobile TV works on the concept that mobile devices act as an alternative distribution interface allowing customer to view broadcasts made by providers on their hand set. Although the medium is still struggling to find out the most efficient technology, the signs are encouraging that the industry is moving towards some sort of standardization. Just to take the example of the technologies, in recent times DVH - B technology is getting traction in the industry.

In any case, due to the attractive market size and focus from the providers I think that very soon we shall see emergence of a viable model where mobile TV does become attractive for operators and consumers.

As reported by Sify (”Mobile TV services in for a big leap”"), “Indian mobile phone users are ready for TV on mobile services with the target market size expected to reach $360 million by 2008, according to the recent study by Springboard Research.

According to the report, 84% of mobile phone users are interested in using mobile TV service provided the service is commonly available and affordable.

Almost 60% of these will prefer watching the same content that they get on TV at home. News, sports, music videos and game shows were the four dominant types of content that the surveyed users will prefer watching on mobile TV.”

So on one hand, we have providers using Internet to redefine the ways in which to watch TV (youtube.com) and on the other hand, we have TV on mobile that is providing alternate channel for the broadcasters to reach the viewers. To make it more interesting, internet on mobile is a reality for a large numbers today so in fact viewers can already watch sites like youtube.com that are trying to replace TV broadcasters.

To conclude, there are multiple battles going on in this space and the viewers have abundance of choices. On one level, we have choice between traditional broadcasters and newer internet models in defining what content to watch and how it will be done. On another level, we have choice of where to watch the content between computers, traditional television sets and now mobiles. The providers that can work out the right answers have a lot to gain.

About the Author: Yogesh Dashrath is finance business professional based in Europe. He actively tracks Indian business developments and is a frequent contributor to India-Business-Review.com. He is an alumnus of IIM Lucknow, and can be reached using the Contact page.

Nov

21

Indian Companies Still Lagging in R&D- Why?

Filed Under E-Business, Emerging Sectors, India Business, India Investment Opportunities, Indian Companies, Intellectual Property, Internet in India, Mobile Telecom, Research & Development | Leave a Comment

Innovation remains a key business growth driver and companies worldwide are pouring in millions of dollars each year to stay ahead of the global competition. There is growing evidence to show that the more a company spends on R&D, the better they tend to perform on sales and profit growth. The UK Department of Trade and Industry started a project for making an R&D scoreboard in 1991, with the belief that British Companies were suffering from under-investment in Science and Technology. Today they give scores to a Global top 1250 companies (referred to as G1250).

An example of the benefits of R&D spending for share prices is the performance of the Scoreboard’s “R&D Portfolio”, comprised of companies in the FTSE100 on the London Stock Exchange that spend more than 4% on R&D. Since August 1997, the portfolio has increased in value by 73%, while the FTSE100 has risen only by 16%.

While global R&D spend by G1250 rose by 10% to £244 billion (or nearly $500 billion), it is dominated by companies from just five countries – USA, Japan, Germany, France and UK – which contributed 81% of R&D by the G1250. Firms from India and China have yet to establish themselves as significant players in the G1250, although both countries are increasingly important locations for R&D outsourcing. The pharmaceutical sector has replaced the technology hardware sector as the largest global R&D sector. Pfizer is the global leader in R&D spend, replacing Ford Motors as the highest spender on R&D from 2002. The top 10 list has 4 Automobile Companies (Ford, DaimlerChrysler, Toyota and GM) and 3 Pharmaceutical companies (Pfizer, J&J and GSK). Apart from interchanging positions, the top 10 spenders remained more or less the same.

Talking specifically about Indian business: in 2006, only 3 Indian companies made it to the Global top 1250 – Ranbaxy, Dr. Reddy’s and Tata Motors. Infosys, Wipro and Biocon had not even made it to the cut off limit ($33 million) for the G1250 in 2006. In 2007, 9 Indian companies made it to the list, with Tata Motors as the top Indian Company at 91st place in the G1250 with a net R&D spend of £92 million ($180 million). Mahindra & Mahindra, Ranbaxy, Dr. Reddy’s, Sun Pharmaceuticals, KPIT Cummins Infosystems and Mindtree Consulting were the other Indian Companies to make it to the G1250. Tata Iron & Steel Co. with the acquisition of Corus, and Hindalco thanks to Novelis also appeared on the scoreboard.

The Indian list leader, Tata Motors, has increased its R&D expenditure both in volume and as a percentage of revenue and the profits have been growing at an excellent pace. And with Tata Motors devoting further R&D to the dream project of the Rs. 100k ($2.5k) car, both topline and bottomline should go up.

With an ever-growing middle-class consumer base, India is now in a position to create its own profitable innovations. But then innovation just doesn’t happen because you have a billion of cash in bank. Innovation needs executive level commitment to identify a profitable niche and go for it, and be willing to take the risk of failure at the first attempt. Just like Tata Motors is trying out a low cost car, what prevents Reliance Telecom/ Airtel from creating a very low cost mobile device with an Internet connection (agreed Reliance made a start with low cost handsets in 2002, but a lot more is possible today)? What prevents Wipro from creating the lowest cost laptop? Nothing really.

About the Author: Ishan Sethi is a Sales & Marketing professional with keen interest in emerging sectors and India business opportunities. He is an alumnus of Indraprastha University and IIM Lucknow. He can be reached via the Contact page.

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