GSMA Chairman's Award 2008 Presented to India's Sunil Bharti Mittal

Sunil Bharti Mittal, Founder, Chairman and Group CEO of India's Bharti Enterprises was presented with the GSMA Chairman's Award, the Association's most prestigious honour. This Award, established in 1995, recognises outstanding contribution to the growth and development of mobile communications around the world.

Presenting the Award at the GSMA's Global Mobile Awards evening - one of the highlights of the Mobile World Congress - in Barcelona's National Palace, GSMA Chairman Craig Ehrlich said:

"Sunil has built an incredibly successful business from scratch, one which has had a truly transformational impact on our industry, on the customers he serves and on India's economy. His brave and ambitious strategies will continue to resonate across the country, our industry and the business community globally, becoming a benchmark for emerging markets worldwide. We congratulate Sunil, on what has been an immense personal contribution to the vitality of the mobile world."

Bharti Airtel is now India's leading private integrated telecom company. With an innovative outsourcing model, dedicating major resource to customer service and outsourcing the IT and the networks, Sunil was able to reduce tariffs from more than 20 cents a minute to less than two cents, catalysing a real shift in the economic model for emerging markets.

On the receiving the award Sunil Bharti Mittal said, "This is a tremendous honour and I would like to thank the GSM Association for considering me worthy of this award. This award is a tribute to India's telecom growth story, Bharti's vision and the emergence of Indian telcos on the global stage. It has been a privilege for me personally and Bharti Airtel to have been a part of this telecom revolution that has delivered affordable telecom services for all and has transformed the lives of millions across India."

Sunil started his career after graduating from Punjab University, founding Bharti in 1976, with a loan of just US$1500. Today, at 50 he heads a diverse enterprise, among the top five in India, with a market capitalization of over US$ 35 billion employing over 30,000 people. Committed to his vision of connecting people via communication across the broad spectrum of Indian society, Sunil has led a business revolution to achieve his aim of sustainably serving and connecting the lowest income strata of Indian society.

Sunil's other passion is education. In a country, where 300 million people do not have access to education, he has initiated a programme aimed at delivering high quality primary education to poorest of children by setting up hundreds of schools in the most remote villages of India.

"He is now extending his Midas touch to Indian retail and Indian agriculture. I just know he will do for these two sectors what he has done for mobile - and Indian consumers will be the big winners," added Craig Ehrlich.

About the GSMA:

The GSM Association (GSMA) is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world. In addition, more than 200 manufacturers and suppliers support the Association's initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association's members serve more than 2.5 billion customers - 85% of the world's mobile phone users.

India develops £10 mobile

India built the world's cheapest car - the £1,250 Tata Nano - and has now unveiled the telecoms equivalent: the £10 “people's phone”.

The mobile handset, developed by Spice, the Indian telecoms group, is angled at the lowest end of the market. It has jettisoned all non-essential features, such as a screen. “It is just a phone,” Bhupendra Kumar Modi, the Spice chairman, who hopes to sell about 10 million in the next year, said.

Mobile phones priced under £20 account for a fifth of the global market. However, with half the world's population yet to make a phone call and Western markets becoming saturated, companies see huge potential in budget devices aimed at the developing world.

The telecoms industry expects the number of people owning a mobile phone to grow to four billion over the next three years, from three billion. With the people's phone, Spice is joining the race to sell handsets to the up-and-coming new generation of Asian, African and South American consumers dubbed “the next billion”.

The company, which is listed on the Bombay stock exchange and valued at about £1 billion, will begin selling its people's phone in Asian markets from next month. Spice has suggested that a £5 mobile is not far away.

Cheap products from India are already making waves around the globe. Tata, has been inundated with queries from non-Indians asking whether they can buy the “people's car”.

The 33bhp two-cylinder vehicle is priced at 1 lakh (or 100,000 rupees, about £1,250), excluding taxes. Tata will export it to the UK and other overseas markets in about three years.

'Year of Russia' launched in India

The close friendship between India and Russia touched a new high with the launching of the 'Year of Russia'.

Cultural programmes marked the occasion as Prime Minister Dr. Manmohan Singh and his Russian counterpart Viktor Zubkov watched the proceeding at Purana Qila here last evening.

"I am sincerely glad that the year 2008 is marked by such an important event in our bilateral relations as the 'Year of Russia'," said Zubkov.

Dr. Singh took the opportunity to praise Russia for its giant strides in various fields.

"The people of India greatly admire the achievements of the people of Russia in the field of art, culture and sports," Singh said.

Artists from Russia, both folk and contemporary, brought alive the red sand stonewalls of the medieval structure in the more than hour-long concert.

The concert had a spectacular laser show that also involved bringing alive images ranging from monuments like the Taj Mahal to scenes from nature.

The concert had prominent Russian groups such as the Pleageya Band, Moscow dance company Alanta, the Russian folk choir, youth circus of Russia and Alla Dukhova ballet Jodes.

Mackay to lead Canada's business mission to India

Canadian Minister of National Defence and Minister of the Atlantic Canada Opportunities Agency (ACOA) Peter MacKay will lead an Atlantic Gateway- focused business mission to India from February 18 to 22.

The mission will meet key business forums in New Delhi and Mumbai and promote Canada's Atlantic Gateway to Indian shippers, business leaders, and key government figures.

MacKay will be accompanied by provincial government representatives and a private sector delegation representing airports, ports, railways, and transportation- related associations active in Atlantic Canada.

"The development of Canada's Gateways and Trade Corridors is part of our government's commitment to facilitating international trade and increasing our national competitiveness by linking North America to the world," MacKay said in a statement.

"This mission demonstrates our Government's continuing partnership with the four Atlantic Provinces to develop the Atlantic Gateway initiative," MacKay said.

"The Atlantic Gateway is an important part of the Government of Canada's strategy to improve out trade competitiveness through gateways which connect North America with the world," Minister of Transport, Infrastructure and Communities Lawrence Cannon said in support of the mission.

"We consider India to be a priority market and this mission will provide Canadian businesses with the chance to develop and strengthen commercial ties with their Indian counterparts," the minister said.

Ministers from all four Atlantic Provinces will participate in the mission.

LN Mittal & Farallon Capital invests 1,580 cr in Indiabulls Power Services

In the largest private equiy deal in India’s power sector, steel baron LN Mittal and hedge fund Farallon Capital have invested Rs 1,580 crore for a 28.6% stake in Indiabulls Power Services (IBPS). IBPS is promoted by the Indiabulls group to set up power plants across the country. The move comes days after power sector valuations tumbled in the wake of Reliance Power’s listing and concerns over stretched projections prompted global investors to balk at doing similar deals with other power companies.

Mr Mittal — who has already invested Rs 2,000 crore in several Indiabulls companies (6% in Indiabulls Financial Services, and holds 3% in Indiabulls Real Estate and 10% in the Raigarh SEZ project) — will invest Rs 592.5 crore for 10.7% of IBPS, which is 100% owned by Indiabulls Real Estate (IBREL). The North Carolina-based hedge fund Farallon will buy 17.86% for Rs 987.5 crore. The fund has invested about Rs 4,000 crore in the Indiabulls group, so far.

IBPS has laid out plans for 11,400 mw of power capacity in several states including Maharashtra, Jharkhand and Arunachal Pradesh. The deal values IBPS at about Rs 5,525 crore, considerably lower than the figures quoted by other leading power companies such as Essar and Sterlite Energy. Both Essar and Sterlite Energy have been quoting valuations over $5 billion backed by their operational expertise and the fact that they already operate power plants. They are also looking for private equity. IBPS, on the other hand, has no operating power assets.

Worries over stretched valuations have led to delays in closure of some PE deals in the sector. Those concerns have worsened in the past few days due to the poor IPO performance of Reliance Power. Power stocks have tumbled between 2% and 16% in the past one week. The R-Power scrip has fallen 17.77% from its offer price of Rs 450 per share since listing its listing on Monday.

Post-equity dilution, IBREL will hold 71.40% in IBPS. The investment by LN Mittal and Farallon will increase the networth of Indiabulls Power to Rs 2,172 crore making it among the top five private companies in the power sector.

“Except the sentiment, nothing has changed in the power sector. The fundamentals are still strong and the government’s programme for capacity addition of another 70,000-80,000 mw with private sector participation in the next few years is on the cards,” Anurag Purohit, research analyst with Religare Securities said.

“Indiabulls sees a tremendous opportunity to capitalise on the growth of the Indian power generation sector. The Government of India has projected that to sustain the current GDP rates, additional capacity of 78,000 mw and 82,000 mw is needed during the 11th Five Year Plan (2007-12) and 12th Five Year Plan (2012-17), respectively,” Indiabulls Group founder and chairman Sameer Gehlaut said.

IBPS through its subsidiaries has submitted bids for seven projects with a total capacity of 11,440 mw in partnership with leading domestic and international companies, where it holds 74% in each JV.

IBPS JV with Temasek-promoted power firm SembCorp is in the fray for a 4,000-mw ultra mega power project at Tilaiya, Jharkhand. SembCorp, a Singapore-listed firm has a market capitalisation of over $6 billion. Temasek Holdings, an investment fund owned by the government of Singapore holds 49.9% in the company.

Indiabulls and Meiya Power Company, Hongkong, have entered into a JV that has submitted the financial bid for the 1,320 mw pit-head power project at Bhaiyathan, Chhattisgarh.

Through its joint venture with MMTC, a GoI enterprise, Indiabulls has been shortlisted to submit a financial bid for the 1,800-mw power project in Talwandi Sabo, Punjab. Other bids include three thermal power projects in Karnataka of 1,000 mw each.

Indiabulls is also building two mega thermal power plants in Maharashtra with an aggregate capacity of 3,960 mw. This includes coal-fired super critical technology based on two separate projects of 2,640 mw and 1,320 mw each.
The company has also signed an MoU with the government of Arunachal Pradesh for four medium-sized hydro projects in the state, where detailed project reports are being prepared in consultation with reputed international consultants.

Tatas, Boeing to float joint venture for aerospace parts in India

The Tata group and the US aircraft major Boeing are forming a joint venture company for making defence-related aerospace components in India.

The components are for exports to Boeing and its international customers. The joint venture hopes to export components worth $500 million initially.

Under the memorandum of agreement signed by Boeing and the Tata group, it is contemplated that the joint venture company will be established by June, a press release issued today said. A research and development centre for advanced manufacturing technologies is also contemplated, said a statement issued by Tatas.

“This joint venture between Tata and Boeing is an important part of our strategy to build capabilities in defence and aerospace,” said the statement quoting Mr Ratan Tata, Chairman of the Tata Group, in the statement. “I look forward to the joint venture becoming a world-class facility in India.”

The joint venture will bring “real and lasting value to India’s aerospace industry, while making Boeing products more globally competitive,” said Mr Jim Albaugh, President and CEO of Boeing Integrated Defence Systems.
Investment details

When asked about investment details, a Boeing spokesperson said, “this is still under negotiation”. But the sources close to Tatas said that the Indian business conglomerate would hold the majority stake in the joint venture. The Tata Group and Boeing signed the memorandum of agreement in December last year.

Boeing, in December, had signed a 10-year memorandum of understanding with state-owned Hindustan Aeronautics Ltd (HAL) also to source sub-systems for fighter aircraft and helicopters.

“The initial intention of the joint venture is making aerospace components for Boeing and its international customers. Production for the domestic market is not in the plan,” Mr Brian Nelson, Global Director of Communication, Boeing Integrated Defence, told Business Line.

The joint venture will utilise the existing manufacturing capability of Tatas and “develop new supply sources throughout the Indian manufacturing and engineering communities for both commercial and defence applications,” the statement said. However, about manufacturing locations, Mr Nelson said there was no decision yet.

The manufacturing capabilities established within the joint-venture company would in later phases be leveraged across multiple Boeing programmes, including the Medium Multi-Role Combat Aircraft (MMRCA) competition.

In the first phase of the agreement, Boeing would potentially issue contracts for work packages to the joint venture company involving defence-related component manufacturing on Boeing’s F/A-18 Super Hornet for the US Navy and Royal Australian Air Force, CH-47 Chinook and/or P-8 Maritime Patrol Aircraft, the statement said.