Wednesday, 19 June 2013

Aircel 'survival' under threat as debt rises

MUMBAI: Forits recent parleys on radical options to get back on track - relief on debt repayments, sale of some assets, sale of everything - Aircel is back to square one,everyone who has something to do with it does not want to do anything more with it than they absolutely have to. 

The glimmer of hope arising the multitude of talks took another beating on June 13, when India's top investigating agency announced it had moved forward in a corruption probe involving Aircel's Malaysian promoter Maxis and its owner T Ananda Krishnan. And India's seventh-largest telecom company, which was once gunning for top-three status, was pushed back into the vicious circle of cash and credibility it has been ensnared in for the past two-and-a-half years. 

After a building spree that went awry and burdened it with Rs 24,000-crore of debt, Aircel needs, according to a banker who is clued into the company's workings but did not want to be named, at least Rs 6,000 crore to start firing again. This could be capital promoters, new loans banks or proceeds an asset sale. But the corruption probe has damaged the company's credibility, and no one wants to commit more. 

Meanwhile, desperation is writtenover Aircel's operations and choices. Aircel declined to participate in this story, but a company official who did not want to be named says that, even with 61 million subscribers, its network is running 60% empty. Further, he adds, at its current rate of growth, it will take five years for the company to fill its network. 

The past few months, Aircel has been selling minutes on its network in Mumbai to rival Reliance Communications at one-third the going market rate. Employees are edgy, the management unsure and the promoters distant. 

A person familiar with the company's financials says Aircel is losing around Rs 1,680 crore annually at the operating level. On top of this, it has to pay interest on its debt and, come January, will also have to start repaying principal. And the root ofits troubles is a case linked to Maxis' entry into Aircel and an unbridled expansion. 

Other people's money
In 2005, Maxis, along with a 26% partner in the Reddy family that runs the Apollo Hospital group, bought Aircel serial entrepreneur C Sivasankaran for $800 million (about Rs 4,390 crore). A year later, it received licences for 14 more circles, besides the eight it had, giving it a pan-India presence. 

Aircel received 2G spectrum, or radiowaves, in 2008-09, along with a few new players such as Unitech and Sistema. "There was an urgency for a full rollout to beat others," says a former official who was part of the Aircel management team, on the condition of anonymity. 

The management drew up a $3.5 billion-expansion plan, of which $1.5 billion was to come in as promoter equity. "It went through without too many questions," recalls a second former official Aircel's management team, who too spoke on the condition of anonymity. "The guys (at Maxis) were on top of what we were doing." 

But the equity infusion kept getting deferred and much of the capital expenditure at the time was built on vendor credit, largely Chinese suppliers ZTE and Huawei. At a meeting of the management team held in Gurgaon, the promoters said the additional equity would come after the 3G auction, scheduled in mid-2010. "We decided to live short term and thought we will finalise the financial structure with 3G and 4G bidding," says the first ex-management team official quoted above. "So, the company had put in $3-3.5 billion of investment without a single dollar of equity investment." 

It started coming back to haunt Aircel. "The (telecom) industry is a long-term play," says Hemant Joshi, partner at Deloitte Haskins & Sells, a consulting and accountancy firm. "Only long-term funds should be used for long-term purposes because it takes huge time for it (telecom business) to mature. In the Companies Act, there is a provision asking auditors to check whether a company has used short-term funds for long-term purposes." 

To generate funds for 3G bids, the management suggested hiving off its tower business. So, it sold its 17,500 towers to GTL Infrastructure for about Rs 8,000 crore, and spent Rs 9,900 crore to buy 3G and BWA airwaves. "3G was the smartest bid because it covered 95% of our revenues," says the first management team official quoted earlier. "It was the additional 4G spend, prompted by promoters that was unwarranted. There was also no separate strategy for 4G. We took the 3G strategy and also used it for 4G, which shows." 

Call drops
According to this official, till this point, the promoters were "very sincere" about India and "committed" to Aircel. The call dropped when what is now called the 2G case, related to the 2008 licence awards, started unravelling. It claimed a former telecom minister, company promoters and executives, and bureaucrats. 

As the scope of the investigation widened, Sivasankaran told the CBI that the then telecom minister Dayanadhi Maran ed clearances to the company and compelled him to sell it to Maxis; further, as a quid pro quo, Maxis invested Rs 550 crore in Sun TV, the direct-to-home (DTH) company belonging to the Maran family. The CBI, in October 2011, filed a case against T Ananda Krishnan, who controls Maxis, Ralph Marshall, a non-executive director at Maxis, and the Marans.of them have denied any wrongdoing. 

"That was the turning point," says the first management team official. "The promoters could not come to India. They kept sending people who did not know the Indian market. Decisions taken would be reversed soon after. They lost complete control." 

This drift affected Aircel's 2G operations, and it started losing momentum. Elsewhere, 3G - on which it had spent a pile - was not taking off. "When you have made the capital expense and revenues are not coming, you bleed badly," says the former employee. "Decision-making became a monthly thing, being a quarterly affair. Everyone came out of those meetings (with Maxis) frustrated." 

Starved of cash, credibility and commitment, Aircel started cutting its losses. It shut operations in five unprofitable circles: Gujarat, Haryana, UP-West, Madhya Pradesh and Kerala. "It was short-sighted," says a former senior Aircel official, not wanting to be named. "Once you shut operations in parts, you start getting seen as a regional player. It creates disorder among ranks, staff and customers." By January 2013, its customer base had shrunk to 61 million, against 66 million a year earlier. 

A fallout between Aircel and GTL over the tower deal added to the bleeding. Aircel had promised GTL it would expand to 60,000 towers, which did not happen. Aircel agreed to refund Rs 1,600 crore to GTL by June 2012, and paid Rs 200 crore and issued a bank guarantee of around Rs 1,000 crore. It has struggled to pay the remainder. The latest is that GTL has claimed Rs 2,000 crore Aircel, which has, in turn, challenged GTL's service quality and is seeking damages. 

An analyst who did not wish to be named sums up Aircel's woes in four points: it remained unprofitable innew circles and never passed the mid-sized category; it splurged to acquire customers, who left before it could generate a profit on their connection; it stepped back when competitors were adding subscribers, opening up a gap; and poor execution. 

"The promoters took good long-term decisions. Only it was with other people's money," says the first former Aircel management team official quoted earlier. BK Syngal, the former head of VSNL and now a consultant, terms this a "systemic problem". "How was the money lent? Who checked what the borrowed funds were used for? Now, they are refusing to put in money and the problem lies on the banks' head," says Syngal, senior principal, Dua Consulting, a telecom consultancy firm. 

Aircel recently initiated informal talks with lenders to restructure its 24,000-crore debt. Banks - not wanting to set a precedent for the telecom sector, to which they have loaned Rs 92,000 crore - have asked Aircel's promoters to put in more money. "Operational excellence cannot turn it around," says the first former Aircel management team official. "Only an equity infusion to retire high debt can." 

Maxis raised $3.3 billion in its IPO in 2009, but it has been reluctant to channel this into India while the future of Aircel is inextricably woven with a legal case. Its 26% partner, Saudi Telecom, has dissented further fund infusion into Aircel. 

Many solutions have reportedly been discussed at the behest of various stakeholders: outright sale to Sistema, merger with Tata Teleservices and the sale of its BWA spectrum for $800-900 million. But ultimately, each comes down to credibility and an assurance that the company's legal woes won't trip such corporate actions. And, today, Aircel and its promoter are in no position to give that.

Germany plans more online surveillance: Report

BERLIN: Germany's foreign intelligence service plans a major expansion of internet surveillance despite deep unease over revelations of US online spying, Der Spiegel news weekly reported.

Spiegel said that the BND planned a 100 million euro ($130 million) programme over the next five years to expand web monitoring with up to 100 new staff members on a "technical reconnaissance" team.

The report came ahead of a state visit to Berlin by US President Barack Obama during which the German government has pledged to take up the controversy over the US phone and Internet surveillance programmes.

Spiegel said the BND aimed to monitor international data traffic "as closely as possible", noting that it currently kept tabs on about five percent of emails, Internet calls and online chats while German law allowed up to 20 percent.

Unlike the US National Security Agency (NSA), Germany's BND is not allowed to store the data but must filter it immediately.

"Of course our intelligence services must have an Internet presence," Interior Minister Hans-Peter Friedrich told Der Spiegel, without confirming the details of the report.

The state must ensure "that we balance the loss of control over communication by criminals with new legal and technological means," he added.

Under the so-called PRISM programme that was exposed this month, the NSA can issue directives to internet firms such as Google and Facebook to gain access to emails, online chats, pictures, files and videos uploaded by foreign users.

Germany,sensitivity over government surveillance is particularly heightened due to widespread spying on citizens by communist East Germany's despised Stasi, said last week it was sending a list of questions to the Obama administration about the programme.

The European has also expressed disquiet over the scheme and warned of "grave adverse consequences" to the rights of European citizens.

Samsung to launch 'faster' version of Galaxy S4

SOUTH KOREA: Samsung Electronics plans to sell a variation of its flagship Galaxy S4 smartphone that will transmit data at nearly twice the normal speed, the head of its mobile business said on Monday. 

JK Shin, also co-chief executive of the world's biggest technology firm by revenue, said the phone would be sold in South Korea as early as this month. 

Samsung was in talks with several overseas carriers to take the phone, Shin told Reuters in an interview at Samsung's headquarters in Suwon, just south of Seoul. He declined to name the carriers. 

"We'll be the first with the commercial launch of the advanced 4G version of the smartphone," Shin said. 

The new S4 will use LTE-Advanced 4G technology, an upgrade conventional 4G called LTE, or long term evolution. LTE-Advanced offers data transmission at up to twice the normal 4G speed. The phones will be powered by Qualcomm chips. 

A movie download that takes 3 minutes with conventional 4G would take slightly more than 1 minute, Samsung said. 

Samsung's shares have lost almost $20 billion since June 7 after analysts cut forecasts for Galaxy S4 sales by as much as 30% on industry data that showed the high-end smartphone market was getting saturated. 

The same problem is hitting sales of the iPhone 5, made by Samsung rival Apple. 

Samsung's market capitalisation is still a hefty $195 billion. Its shares closed down 0.2% on Monday. 

Shin showed little concern about sales prospects for the S4, which hit stores in late April. The mobile devices division is the company's biggest profit generator. 

"S4 sales remain strong. It's selling far stronger than the (Galaxy) S III ... and the new LTE-Advanced (4G) phone will be another addition to our high-end segment offerings that ensure healthy profit margins," Shin said. 

Shin declined to provide forecasts for S4 sales. He said the new S4 would be slightly more expensive than the current one. 

The South Korean firm hopes the addition of hardware offerings such as faster data transmission, along with its widely anticipated move to introduce models with unbreakable or flexible displays, will help it protect margin growth. 

"As operators seek to provide more data-centric mobile services, I think this will become mainstream 4G technology globally in the coming years," Shin said. 

Shin also said sales of Samsung's tablet products in the US market jumped 3.3 times since it installed brand shops within Best Buy's stores in April, and is now considering expanding the format in Latin America and Britain. Samsung declined to name potential retailers. 

Eyes on network business Having conquered the smartphone market that Apple virtually created with the iconic iPhone in 2007, Samsung is seeking to do the same in the network business with the booming 4G mobile equipment market, challenging bigger rivals such as Ericsson, Huawei and Nokia Siemens Networks. 

Many countries need to upgrade mobile base stations to handle not just 3G but also 4G, or build them scratch to support 4G connections. 

Shin said the network gear market was one of Samsung's fastest growing businesses, mainly thanks to 4G equipment sales which had been rising more than 30% a year since 2010. 

The new phone would help this part of Samsung's business, he said. 

"Such technology leadership will set the pace for the competition and help us become a major player in the network gear market," Shin said. 

Samsung has won some 4G network deals major South Korean carriers, US's Sprint Nextel and Japan's KDDI and Hutchison Whampoa's British unit, but it needs to crack China to close the gap with traditional vendors in the overall gear equipment market. 

Shin said there had not been much progress in Samsung's push to penetrate China's 4G equipment market yet, but it was increasing investment in the country. 

China's three mobile operators - China Mobile, China Unicom and China Telecom - plan to spend a combined 345 billion yuan ($56.3 billion) this year on network upgrades. That includes investment in 4G, which multiplies mobile broadband speeds by up to five times for users of iPhone and Galaxy phones compared with 3G. 

Many analysts believe Huawei and ZTE - already big suppliers of China Mobile since only 10-15% of 3G network contracts went to foreign vendors - will be winners, leaving others to fight for smaller bits of the pie. 

Samsung hopes to show Chinese clients that 4G networks with new technology can be built faster and with lower operating costs.

Apple received 5,000 data requests US


Apple, over the last six months, received between 4,000 and 5,000 requests for customer data US law enforcement authorities relating to criminal investigations and national security matters, the company said. 

Microsoft and Facebook published similar data last week after reaching a deal about disclosures with US national security authorities. 

"We have asked the US government for permission to report how many requests we receive related to national security and how we handle them. We have been authorized to share some of that data," Apple said. 

In a statement posted on its website Apple said that the requests were received December 1 2012 to May 31 2013, and between 9,000 and 10,000 accounts or devices were specified in those requests, which came federal, state and local authorities. 

The most common form of request came police investigating robberies and other crimes, searching for missing children, trying to locate a patient with Alzheimer's disease, or hoping to prevent a suicide, it said. 

"Apple has always placed a priority on protecting our customers' personal data, and we don't collect or maintain a mountain of personal details about our customers in the first place," the company said. 

Apple said conversations which take place over iMessage and FaceTime are "protected by end-to-end encryption so no one but the sender and receiver can see or read them. Apple cannot decrypt that data".

Flexible TVs coming soon

WASHINGTON: Japanese engineers have unveiled the prototype of a flexible, plasma television that can roll upa window shade.

Japan's Shinoda Plasma Co demonstrated the plasma screen at the Display Week 2013 conference in Vancouver, British Columbia, last month, winning an award for 'Best Prototype at Display Week'.

The company calls its invention a 'Luminous Array Film', or LAFi. Instead of being made one large, flat sheet of glass, the display uses a thousand tiny glass tubes.

Each tube is 1 mm in diameter and a bit more than 3 feet long. The panel can be rolled into a cylinder less than 4 inches across, Fox News reported.

In spite of their tiny size, the tubes are hollow, and can hold the inert gas and phosphors required to make the light to create an image.

Shinoda already makes larger displays it calls SHiPLA based on 2 metre by 1 metre panels, which have been used to create large, curved displays for museums and other public displays.

The company is working on developing a display with even smaller tubes - going 1 mm to just 0.5 mm - which will make it possible to roll up into an even tighter circle.

Shinoda is positioning the product for digital signage at this point, but intends to come out with a version for home entertainment displays.

How your future TV may look like

WASHINGTON: Japanese engineers have unveiled the prototype of a flexible, plasma television that can roll upa window shade.

Japan's Shinoda Plasma Co demonstrated the plasma screen at the Display Week 2013 conference in Vancouver, British Columbia, last month, winning an award for 'Best Prototype at Display Week'.

The company calls its invention a 'Luminous Array Film', or LAFi. Instead of being made one large, flat sheet of glass, the display uses a thousand tiny glass tubes.

Each tube is 1 mm in diameter and a bit more than 3 feet long. The panel can be rolled into a cylinder less than 4 inches across, Fox News reported.

In spite of their tiny size, the tubes are hollow, and can hold the inert gas and phosphors required to make the light to create an image.

Shinoda already makes larger displays it calls SHiPLA based on 2 metre by 1 metre panels, which have been used to create large, curved displays for museums and other public displays.

The company is working on developing a display with even smaller tubes - going 1 mm to just 0.5 mm - which will make it possible to roll up into an even tighter circle.

Shinoda is positioning the product for digital signage at this point, but intends to come out with a version for home entertainment displays.

Champions Trophy mobile games launched in 3D, 2D


MUMBAI: Reliance Games, the official gaming partner of the International Cricket Council for the fourth consecutive year, has launched a 3D and a 2D mobile game for Champions Trophy 2013. 

Both the 3D and 2D mobile games allow fans to be a part of their favourite cricket team and step into the field to fight for the trophy. 

The cricket game in 3D can be enjoyed by iOS and Android users for a real cricketing experience. The cricket game in 2D can be downloaded by Android, Java and Blackberry users. 

Chaitanya Prabhu, business head - India, Reliance Games, said, "Whenever a popular cricket tournament is going on, we see a rise in demand for cricket-based games. This year we have launched two games - one in 3D and the other in 2D so users ofkinds of mobile phones can continue to be engaged and entertained with the spirit of the sportthrough the tourney."

Micromax unveils Canvas 4 with 13MP camera

NEW DELHI: Indian smartphone manufacturer Micromax has released a teaser of its upcoming handset called Canvas 4. The company has posted two teaser videos of the device on its official YouTube channel. The videos, with tagline "Can Life Be Endless," show a smartphone with a sleek body and 13MP camera. 

Expected to be an update to the popular Canvas HD smartphone, the upcoming Micromax Canvas 4 is speculated to have an eight-core processor,Samsung Galaxy S4. The YouTube channel of Micromax states that pre-bookings for the device will start June 28. 

Micromax in January said that it will launch a total of 30 smartphones this year. Since then, it has rolled out devicesCanvas HD, Canvas 3D, Canvas Music, Bolt A35 and Canvas Viva. 

A vast and diverse range at affordable price points is part of Micromax's ambitious plans to emerge as the largest phone seller in India, ahead of Nokia and market leader Samsung. In January, it claimed to have shipped 1.98 lakh phablets in Q4 2012, as compared to 1.89 lakh units sold by the South Korean manufacturer Samsung. 

In smartphones, Micromax has scored quite well recently with its entry-level Canvas 2 A110 and mid-range Canvas HD A116 phablets respectively. The company is facing a severe shortage of Canvas HD and has not been able to get its supplies in order, leading to a waiting period of up to two weeks.

New iPad app allows users to click telescopic images


WASHINGTON: A new iPad app has been developed, which allows people to click telescope images of celestial objects the comfort of their couch. 

The app created by the online Slooh Space Camera allows people to command and control their robotic network of space cameras, Fox News reported. 

Slooh's professional telescopes click an image of the celestial object and provide user with a time, date and observatory-stamped photo that will be loaded into the digital skywatcher's personal app.

Slooh president Patrick Paolucci said in a statement that it starts out blank until a Slooh Space Camera is commanded. 

He said that the image taken is truly yours and not a picture that was clicked months or years earlier by some one else. 

The app is free to download, but costs 1.99 dollars to command a mission; it also contains info about various celestial objects that they can investigate on the interactive skyt.

Life-like robots showcased in New York

A Japanese scientist has developed a body-double robot which resembles him closely, with tiny humanmovements and blinking eyes. 

Japanese roboticist Hiroshi Ishiguro, director of the Intelligent Robotics Laboratory at Osaka University, has been working on developing lifeandroids. 

The new robot was unveiled at the Global Futures 2045 International Congress in New York, a futuristic conference focused on the technological singularity. 

The new Geminoid, an android resembling a real person was tele-operated controlled remotely by a person offstage. 

Ishiguro has also developed another Geminoid, a fashionably dressed female android, which he has shown off in the windows of clothing stores, LiveScience reported. 

The robot was so popular that the clothing it was modelling sold out immediately, Ishiguro said. 

Ishiguro has also taken his robots on the road as part of a travelling "android theatre,"they act out scenes with humanexpressions. 

The roboticist also made the Telenoid, a pillow-like bot deliberately designed to appear ageless and genderless so that people can project an imagined face onto its neutral appearance. 

Ishiguro has tested the Telenoid among the elderly in Denmark, who took to it very well, he said. 

Another of Ishiguro's inventions is the Elfoid a smaller version of the Telenoid that functions as a mobile phone. 

Today, everyone talks to the "little black boxes" of their smartphones, Ishiguro said, so he wanted to personalize and humanize the devices. 

At the end of Ishiguro's talk, his robotic double spoke up, saying that next time, it would give a much better presentation than the real Ishiguro.

See, what led to recent hike in mobile tariffs

NEW DELHI: The so-called 2G scam,suspected government corruption in the award of telecom spectrum led to the cancellation of 122 service licences across the country by the Supreme Court, is one of the reasons for recent tariff hikes, apart denting the global image of India's flourishing mobile phone industry, experts maintain.

The mobile phone industry, which was adding over 10 million new subscribers to the network every month in the past year, has seen the growth fall to less than five million now, experts say.

"The issue has definitely impacted the cost of telecom services in India," Mahesh Uppal, director of telecom consultancy firm Com First, told IANS.

"When the number of players increased and competition was cut-throat, the tariffs were low. Everybody wanted to lure subscribers. So the new licences did lead to cheaper services," he added.

Now, the reduced competition, he said, has allowed operators to hike telecom tariff.

Experts also said that till recently telecom companies were getting some radio frequency spectrum, or airwaves, free with their licences. More was allotted based on criteria related to the number of subscribers they were serving.

"But now they have to pay for both the licences and the spectrum separately," Uppal said.

As many as 122 telecom licences were ordered cancelled by the Supreme Court, finding that the process followed in 2008 was faulty. Among them Uninor had 22 licences, Loop 21, MTS 21, Videocon 21, Etisalat 15, Idea 13, S-Tel 6 and Docomo 3.

The main reasons for cancellation were that the bids were accepted on a first-come, first-served basis but the last date was suddenly advanced, allegedly suiting some players. The cost of a pan-India licence for 2G auction in 2008 was kept at Rs.1,658 crore and the total money collected on 122 licences was Rs 10,772 crore. Some found this price too little.

Last month, Reliance Communications raised call rates by 20-30 percent across India. Bharti Airtel did away with its promotional offers in January. Idea recently said it is not mulling any tariff hike for the present. Experts stated that bigger players are increasing tariff but the smaller players will still look at the numbers.

The private players in the sector include Airtel, Vodafone, Idea, RCom, Tata DoCoMo and Aircel. Only BSNL and MTNL are in the public sector.

The Indian government lost Rs 1.8 lakh crore in the 2G spectrum allocation scam. Many high profile politicians and officers were arrested in the case. Former telecom minister A Raja was arrested February 2, 2011 along with his personal secretary RK Chandolia and telecom secretary Siddharth Behura. Raja got bail May 15, 2012.

DMK Rajya Sabha MP Kanimozhi was arrested May 21, 2011 as co-accused in the case and has beenged by the CBI for allegedly accepting a Rs 214-crore bribe in the 2G scam. Kanimozhi was granted bail by the Delhi High Court Nov 28, 2011.

On February 2, 2012, the Supreme Court ordered the scrapping of 122 telecom licences issued to nine companies in 2008.

On June 7 this year, a Delhi court dismissed a plea seeking lodging of an FIR against Prime Minister Manmohan Singh and former telecom minister Dayanidhi Maran for their alleged role in the 2G case. It dismissed the plea and fined petitioner Vivek Garg, an RTI activist, Rs 20,000.

Jaidip Ghosh, partner at KPMG in India, said there was pressure on the cost and now the situation had changed after a few telecom players exited the market following the verdict in the 2G issue.

He said tariff was still low in India and there was still some "headroom to increase price". The headline tariff was declining for a few years but the industry reached a stagnation point during 2011-end and 2012.

The situation prevalent between 2008-end till 2011-12 has changed now.

"After the licences were cancelled, these players had to exit the market. This has also led to the regulator and the government fixing a base price of spectrum to make the auction process transparent," said Rishi Tejpal, principal research analyst with Gartner.

"All the operators now consider the new base price quite high and unrealistic," Tejpal told IANS.

"With the increase in spectrum prices, the margins of the telecom firms have been impacted. Their cost of operations went up. They have tried to offset it by passing it on partially to the customers in the form of increased headline tariffs."

Even though the market was still very competitive, the operators were firm on not reducing tariffs, he said. "There will be no reduction in prices in the near future for sure. On the contrary, we may see the tariffs going up."

European cloud computing cos see positives in NSA scandal


PARIS/LONDON: France has its Sovereign Cloud project, while across the Rhine data firms have created the label Cloud Services: Made in Germany,trying to reassure big companies that their information is stored away the prying eyes of US spies.

European firms believe revelations that the US National Security Agency (NSA) has secretly gathered user data nine big US internet companies, including Microsoft and Google, will hand them a competitive advantage as they play catch-up with the dominant American players in cloud computing.

Yet companies and individuals may have to accept that while storing and processing their most sensitive information on servers owned by Europeans and located in Europe could keep it the NSA's eyes, intelligence agencies closer to home may be looking anyway.

"If you are going to have a Big Brother, I'd much rather have a domestic Big Brother than a foreign Big Brother," said Mikko Hypponen, chief research officer at internet security company F-Secure, which also offers cloud services with data stored in the Nordic countries.

Cloud computing - an umbrella term for everything web-based email to business software that is run remotely via the internet instead of on-site - is being adopted by big companies and governments globally to cut costs and add flexibility to their IT departments.

In a Normandy town nestled in a loop of the Seine river lies a huge new data centre, a part of France's Sovereign Cloud project that some in the industry once poked fun at as being out of step with the realities of the borderless internet.

Last year the French government ploughed 150 million euros ($200 million) into two start-ups, including the data centre's owner Cloudwatt, to equip the country with infrastructure independent of US cloud computing giants.

Following the revelations that the NSA's PRISM programme collected user data the nine companies that also include Yahoo and Facebook, the French position now seems prescient to some people.

"People are being spied on without their knowledge, and non-US residents have no legal rights," said Philippe Tavernier of Numergy, another cloud-computing group that got state help. "We feel vindicated that our strategy is right."

As European officials seek answers the US government on PRISM, technology executives, data protection regulators and analysts told Reuters the scandal may prove a turning point for the region's young cloud computing industry.

European companies such as telecoms groups Orange and Deutsche Telekom are trying to exploit the concerns as they build their own cloud businesses.

Government agencies and municipalities, especially in more privacy-conscious countries such as Germany, are more likely to turn to local alternatives for cloud services. Sweden recently banned Google Apps - cloud-based email, calendar and storage - in the public sector over concerns that Google had too much leeway over how the data was used and stored.

"Someone is always watching" Similar changes could also gather pace in Asiacompanies and regulators were already concerned about data security in the cloud before PRISM.

A source at a major Chinese company that provides cloud infrastructure said governments were likely to impose stricter controls ondata was stored, although this would not be a panacea. "Frankly, wherever you put your data, someone is always watching. It could be the US, it could be China," he said.

Some lawmakers in the European Parliament also want rules requiring companies undertaking cloud projects to protect European users' data better, and are using concerns around PRISM to lobby for their cause. They want supervisors or judges to oversee the transfer of personal data to overseas security services, and for customers of cloud companies to be able to opt out of their data being stored in the United States.

Caspar Bowden, an independent privacy advocate and Microsoft's chief privacy adviser 2002-2011, said that before the PRISM revelations the big US cloud companies had been largely able to quell fears about data security with savvy public relations. "The headlines this past week will changethat. The nationality of the company and the location of the data do make a difference," he said.

Even before PRISM, some companies abroad planning cloud computing projects were concerned about the powers given to US intelligence agencies by anti-terrorism laws enacted after the September 11 attacks on the country: the 2001 Patriot Act and the 2008 Foreign Intelligence Surveillance Amendments Act (Fisaa).

A European Parliament body said in a report last year that Fisaa granted the US "heavy-calibre mass surveillance fire-power aimed at the cloud" and had "very strong implications on EU data sovereignty and the protection of its citizens' rights."

Murky Cloud computing companies and their customers globally are struggling to understand when and how governments can access users' data. Many national and international laws are at a play and different interpretations abound. Also since US anti-terrorism laws require that information requests be kept secret, companies served with such warrants cannot disclose them.

This much is clear: a US cloud computing company must comply with US government search warrants and intelligence requests, just as a French or German company would when presented with a similar domestic warrant. Intelligence agencies also co-operate under what are known as mutual legal assistance treaties to gain access to data stored in one jurisdiction but needed in a lawful investigation in another country.

What remains murky, however, is whether the US government can use anti-terrorism laws on a US-based company such as IBM or Microsoft to force its local subsidiaries across the world into handing over user data. Or more simply, can the US government just order a cloud company to use a US-based computer to access data stored abroad?

"When data comes in to the US or is handled in the cloud by US companies, there is a question whether access can be obtained by the US government," said Ellen Giblin, a lawyer who specialises in privacy and data protection at the Ashcroft Law Firm. "It's a very thick and layered concern."

Contacted by Reuters, major US-based cloud providers including IBM, Microsoft, Amazon Web Services (AWS), and Google declined to answer specific questions. Many have built data centres abroad - AWS in Ireland and Australia, IBM in Germany and Ireland for example - to address data privacy concerns among non-US companies.

A spokeswoman for AWS noted that it did not take part in PRISM. On its website, AWS says data stored in the EU never leaves the region unless the customer requests it.

Cloud companies in Europe are taking different steps to meet their customers' needs. Some are putting forward their local credentials such as the state-funded Cloudwatt and Numergy in France. German firms use the Cloud Services: Made in Germany label as a marketing tool if they can certify certain conditions such as contract terms that comply with national privacy laws.

Axel Heantjens, an executive at Orange Business Services, recently advised a French luxury group that needed computer servers in the Americas for a global cloud project but did not want them in the United States because of security concerns. "I told them to consider Costa Rica or Canada," he said.

Others such, as the German lawyers' association, are turning to technological fixes. It now encrypts data that 800 members of its information technology group put in a cloud computing programme provided by T-Systems, the IT services unit of Deutsche Telekom.

Since only the association holds the encryption key and not T-Systems, the product adds an extra layer of security.

Such encryption has been unpopular among companies because the scrambled data crippled the functionality of cloud or Microsoft Office 365.

Now a number of tech companies have got around some of the problems, including California-based start-up CipherCloud. The company's software encrypts data on the fly as it is sent up or retrieved cloud applications. The key to unscramble the files is kept by the customer and never given to the cloud provider.

"We've grown rapidly because so many people around the world are worried about cloud security," said CipherCloud CEO Pravin Kothari.

Guava Soft sets up data centre in India

NEW DELHI: Ludhiana-based IT firm Guava Soft has started e-mail services with complete set-up in India, offering singleacter-based and name-based domains. 

The company has set up its data centre in India and has developed entire e-mail services with its in-house Indian employees. 

"Our complete set-up is in India. We have our data centre in Ludhiana. The services and applications, everything has been developed by our employee and they areIndian. The company is jointly owned by me and my brother Sachin," Guava Soft founder and chief executive officer Anshul Goyal said. 

The company has started services at a time when the US image is marred in controversy of peeping into e-mail accounts of foreign countries. Most of the prominent e-mail services are offered by US-based IT companies. 

Goyal said that within a month, will start offering integrated chat servicesoffered by other top email providers. 

The company has also launched personalize e-mail services that can be registered on 20,000 domain names registered by the firm. 

"We are offering domains in various categorysingleacter based,, then are names based, At present 9,500 such domain names are available for people to use against annualge of Rs 500. We are adding 1,500 to 2,000 domain names every week," Goyal said. 

In premium e-mail services, he added, that the company is providing facility to send e-mails with attachment size of up to 500MB but at some additional price. 

"As an innovative feature we are also providing people to log in to their active email account registered with any of the known website our website. They have to use same e-mail id and password without registering on our website," Goyal said.

'Tech Mahindra, MindTree may raise salaries by 7-12%'


MUMBAI: Mid-tier IT firms such as Tech Mahindra and MindTree may raise salaries by 7-12% this fiscal to ensure they do not lose talent to top players TCS, Infosys and Wipro, according to HR service providers. 

The larger players have announced wage hikes ranging between 6% and 10% for this fiscal. 

"Current environment is challenging and companies are looking at preserving their bottomline. Despite that, keeping employees' interest in mind, organizations have given hikes ranging 8-12%, which is a good development." 

"In general, we can expect 7-12% hikes for employees working with mid-tier IT companies," Randstad India president (staffing) and director (marketing) Aditya Narayan Mishra told. He added that as the demand for IT services increases in the coming quarters, one can expect above-average hikes.

Last week, Infosys said its employees in India will get on an average 8% increase, while Wipro said it has raised salaries by 6-8%. Onsite employees have seen salaries going up by 2-3%. India's largest software services exporter Tata Consultancy Services (TCS) has increased wages by 8-10% in India and 2-4% for overseas workforce. HCL Technologies has started its appraisal process and is expected to make an announcement by July-end. Most Indian IT firms give increments around April or May.

"IT sector has been fairly conservative in terms of pay hike. We recently did a survey,we asked some of our customers on increments this year and almost 46-47% of the respondents said they are looking at wage hikes between 6-15%," CEO Uday Sodhi said.

IT firms are also looking at the global economic scenario, which still has not been very promising and it plays an important role in determining the hike percentage, he added.

Microsoft to 'study' UP's free laptop scheme

LUCKNOW: The dream project of Akhilesh Yadav's government to distribute free laptops to intermediate pass students has attracted fancy an unexpected quarter - software giant Microsoft. 

The world's largest software company has roped in Mumbai-based Indian Market Research Bureau (IMRB) to conduct a study of the scheme launched by the Samajwadi Party government last year. 

"A team of IMRB will be visiting the state capital tomorrow and have a meeting with the officials of Information Technology and Electronics, secondary education departments and UP Electronics Corporation Ltd (UPECL) to delve into details about the scheme," UPECL Managing Director Prabhat Mittal told PTI. 

The team would specially study Microsoft softwares loaded in the laptops and try to find out response on its functioning, he added. 

The scope of IMRB team's study would be: objective of the scheme, its planning, tender process, procurement and distribution. 

"The team will also meet the beneficiaries to whom laptops have been distributed so far and take their direct feedback as to what they feel about the scheme and how they are benefited by it," Mittal said. 

The SP in its 2012 assembly election manifesto had promised to distribute free laptops and tablets to intermediate and high passout students in the state. 

The government has given the contract of supplying laptops to Hewlett Packard (HP) at the rate of Rs 19,058 per piece. 

"The government has set a target of distributing 15 lakh laptops to the students (inter passouts of 2012) in the current fiscal. 

"So far we have dispatched three lakh laptops of which one lakh have been distributed in various districts including Lucknow, Varanasi, Bareilly besides others," Mittal said. 

The senior officials of various department the team would also take feedback the district level officials.

Aadhaar opens new revenue streams for Indian IT

MUMBAI: Information technology companies are tapping into a lucrative opportunity opened up by the government's vote-catching scheme to transfer cash directly to beneficiaries. With the Aadhaar unique identity number at its core, the scheme is heavily dependent on banks, which in turn are relying on technology firms to implement the programme. 

More than half of India's rural population still has little or limited access to banking services, even though the government has been pushing banks to expand beyond cities and towns since 2006. Part of the problem was that banks found it financially unsustainable to set up accounts for rural citizens because of the limited transactions and money in such accounts. But the direct transfer scheme now addresses some of those concerns. 

"With direct benefit transfer, there will be a float, there will be transactions and possible products will take off. It is beginning to start happening," said HCL Infosystems chief executive officer Harsh Chitale. He estimated his revenues projects related to financial inclusion were currently between Rs 25 and 30 crore, but expects the transaction fees paid out on direct transfer to create a multi-thousand-crore banking processing market. 

The Indian market with opportunitiese-governance, financial inclusion and the plan to connectIndian villages to a broadband network is creating more opportunities for IT firms, currently struggling with weak demand in its main markets and the increasing probability of restrictive visa laws in the US. 

HCL Infosystems is gunning for a share of the financial inclusion-related business and has tied up with 26 banks to provide technology such as handheld devices that banking representatives will carry to ensure last-mile connectivity in villages. Wipro, India's third largest IT services provider, is working with banks to implement core banking solutions and creating software interfaces to manage such handheld devices, said Anuj Vaid of Wipro Infotech, the India and Middle East arm.

Technology market researcher Gartner estimated that Indian financial services companies will spend approximately Rs 42,200 crore on IT products and services this year, a 13% increase over 2012. Gartner attributed part of the rise to the Reserve Bank of India's push for financial inclusion. "We do see this as the biggest opportunity for us," said Rajashekara Maiya, who is the lead product manager for Infosys' banking platform Finacle. "Not just in India because the potential for these services is there in some countries in southeast Asia and Africa." 

Maiya said Infosys' technology is being used by more than half the regional rural banks in the country. The company is also working with India Post to connect and manage more than 1,30,000 handheld devices used by rural postal workers for distribution of benefits under the National Rural Employment Guarantee Act and to process money orders. 

Software services companies are also making it easier for banks by offering flexible payment models. Infosys, for instance, lets banks pay for its software based on the number of branches, number of customers, number of accounts or number of transactions and allows banks to buy some features as a utility, and paid for on the basis of usage. HCL Infosystems is also offering similar flexible payment options. 

Smaller companies are also increasingly targeting this space. Prepaid payment card processor ElectraCard Services said it already working with 'several' banks to provide prepaid cards tied to the accounts which can be used at micro-ATMs. Atos India, the Indian unit of a French IT solutions provider, is pitching its 'voice biometric' solution to help banks easily validate the authentication of new customers through voice. Atos is in early talks with five banks, India CEO Milind Kamat told ET. But as with any new market, there are significant challenges for technology providers. 

"If you look at it a technology perspective, it is important to emphasise that this is not just about software. The technology and service providers will have to design products scratch. If they just tweak existing products to fit this market, they will fail," said Piyush Singh, managing director of Accenture's Financial Services Group.

Monday, 17 June 2013

McAfee Transforms Endpoint Security Market with Industry’s First Chip-to-Application Coverage

McAfee Complete Endpoint Protection Suites Uniquely Deliver Hardware-Enhanced Security and Real-Time Security Management 

McAfee introduced two new suites: McAfee Complete Endpoint Protection – Enterprise, and McAfee Complete Endpoint Protection – Business. These suites are the first to link security from chip to OS to applications, protecting against new threat vectors and bringing critical visibility to risk management. The suites are the first to include McAfee Deep Defender, a rootkit protection based on hardware-enhanced security jointly developed by Intel and McAfee, dynamic whitelisting, risk intelligence, and real-time security management. By including mobile device management and support for Macs and Linux, McAfee suites help businesses of all sizes protect devices, data and applications. 

“McAfee is the only security vendor that can provide protection for the endpoint from before the operating system starts, all the way to the cloud,' said Michael Sentonas, Vice President & Chief Technology Officer, McAfee Asia Pacific. 'Unlike competitive endpoint solutions on the market, the Complete Endpoint Protection suites include hardware-enhanced protection uniquely delivered by McAfee and Intel in addition to next-generation security technologies, such as a risk advisor and advanced dynamic whitelisting that help organisations defend against the newest and stealthiest threats.' 

Security staff will benefit by the extended span of coverage managed within a single console. IT administrators can see efficient installation in minutes, not hours, to ease deployment. End users benefit from higher performance scanning that minimizes the potential overhead of effective protection. Competitive pricing meets the needs of budget-minded buyers while delivering significant value for customers with mission-critical security needs. Finally, new incentives and affordable pricing engage the channel to help businesses with different budgets to adopt these unique products for protection and performance. 

New Threats Demand a New Standard of Protection 

Modern threats start with an ever-increasing stream of phishing, malicious web pages, rootkits, and compromised devices. These initial contacts can turn into persistent, multi-stage, targeted attacks. The explosion of devices multiplies the chance of an attack affecting the mobile workforce, who can unknowingly endanger the business and systems when reconnecting to the corporate network. McAfee tackles these obstacles with its Complete Endpoint Protection suites that target every phase of stealthy malware and persistent attacks. 

Tested and Proven 

Dynamic and distributed organizations, especially those with stringent requirements to safeguard data as well as verify and report on regulatory compliance, can rest assured since the new McAfee Complete Endpoint Protection suites include some of the most highly-ranked security technology in the industry. In comparative testing done by AV-Test, McAfee software scored 100% in rootkit protection with McAfee Deep Defender. In the 2013 Corporate Endpoint Protection Group Test by NSS Labs, McAfee software received the highest score in defending against exploit and evasion attacks. Also, in a study conducted by West Coast Labs, McAfee software scored 100% in malware protection with the combination of McAfee Application Control, McAfee VirusScan® Enterprise, and McAfee Host Intrusion Prevention, three of the central products in the McAfee Complete Endpoint Protection—Enterprise suites. 

Below are just a few of the many capabilities offered by products included in the McAfee Complete Endpoint Protection suites: 

-- Real Time for McAfee ePO —uses a specialized design and best practice questions and actions within the workflow to help every administrator understand their security posture up to 1,000 times faster than any other means, and take action easily and immediately to manage potential risks. 

-- McAfee® Enterprise Mobility Management (McAfee EMM)—mobile device management and mobile data security are fully integrated with the McAfee® ePolicy Orchestrator® (McAfee ePO) platform environment. With ePO, customers can use a single pane of glass and policy environment to manage all endpoints, including the suites’ multi-platform package of smartphones, tablets, Macs, Windows, and Linux. To read the full EMM press release, also announced today, click here. 

-- McAfee Deep Defender—endpoints are protected from stealthy attacks through jointly developed Intel and McAfee hardware-enhanced security that goes beyond the operating system, protecting where traditional security tools can’t reach. 

-- McAfee Application Control for PCs—dynamic whitelisting for laptops and desktops reduces the chance of infection or disruption by containing the applications a user can run, including preventing malware from executing. The technology has been shown by West Coast Labs to offer 100% protection rates with very low system overhead. 

-- McAfee Risk Advisor—helps administrators instantly see which assets are at highest risk so they can protect the most essential assets first and accurately. 

“A few years ago, McAfee created the first security suites. We remain a market leader in what is estimated by IDC to be a $2B market in 20131. That’s more than half of all endpoint security sales,” said Candace Worley, senior vice president and general manager of endpoint security at McAfee. “Now, through performance and automation enhancements to our existing market-leading defenses and integration of distinctive and compelling new protections, McAfee suites again define a new level of endpoint protection—one that is firing on all cylinders: speed, security, simplicity, and value.” 

McAfee Complete Endpoint Protection suites incorporate ePolicy Orchestrator software, the world’s leading security management system, a central part of McAfee’s Security Connected management platform. This management system has been enhanced with Real Time for McAfee ePO software, which allows administrators to directly and instantly understand and manage endpoint health across all devices to keep critical assets and data secured and available. 

“With the McAfee ePO platform we receive heartbeat status in real time, while gaining visibility into important background information so that we can conduct comprehensive statistical analysis and reporting,” said Rick Snyder, Endpoint Security Supervisor at Boston Scientific. “As a medical device company dedicated to less-invasive medicine, we see the McAfee ePO platform as the most effective solution for managing our entire environment from a single point.” 

McAfee’s endpoint security provides complete protection technology for all devices, the data that runs through them, and the applications that run on them. Our comprehensive, tailored solutions reduce complexity to achieve multi-layer endpoint defense that won’t impact productivity and blends traditional smart malware scanning, dynamic whitelisting, behavioral day-zero intrusion prevention, unified management and integrated threat intelligence. McAfee uniquely provides a comprehensive approach to devices, protection technology and management. 

-- For the full list of integrated enhancements included in the new McAfee Complete Endpoint Protection suites please visit: 

-- Video: Overview of Complete Endpoint Protection Suites: 

-- Infographic: The Black and White of Endpoint Security: 

-- For specific partner incentives related to the new McAfee Complete Endpoint Protection suites please visit: 


For more information on the McAfee Complete Endpoint Protection - Enterprise Suite and the McAfee Complete Endpoint Protection - Business Suite visit: 

1IDC, 'Worldwide Endpoint Security 2012–2016 Forecast and 2011 Vendor Shares,' doc #235930, July 2012 

About McAfee 

McAfee, a wholly owned subsidiary of Intel Corporation (NASDAQ:INTC), empowers businesses, the public sector, and home users to safely experience the benefits of the Internet. The company delivers proactive and proven security solutions and services for systems, networks, and mobile devices around the world. With its Security Connected strategy, innovative approach to hardware-enhanced security, and unique Global Threat Intelligence network, McAfee is relentlessly focused on keeping its customers safe. 

Note: McAfee, VirusScan, ePolicy Orchestrator, and McAfee ePO are trademarks or registered trademarks of McAfee, Inc. in the United States and other countries. Other names and brands may be claimed as the property of others. 

The information contained in this document is for informational purposes only and should not be deemed an offer by McAfee or create an obligation on McAfee. McAfee reserves the right to discontinue products at any time, add or subtract features or functionality, or modify its products, at its sole discretion, without notice and without incurring further obligations.
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