Declaring that 'India will get there', India's Sports Minister M.S. Gill told parliament Thursday that the stadia and other infrastructure will be ready much before the Commonwealth Games (CWG) begins Oct 3. 'Have faith in India. India will get there,' Gill told opposition members led by Prakash Javdekar of the Bharatiya Janata Party (BJP) and Brinda Karat of the Communist Party of India-Marxist (CPI-M) who raised the issue of delays and alleged corrupt deals related to the CWG in the Rajya Sabha, parliament's upper house. Former sports minister Mani Shankar Aiyar demanded an apex body at the earliest to oversee the CWG work. He said the Group of Ministers (GOM) on the CWG had been a 'blatant failure'. Regarding alleged corruption in CWG, Gill said his ministry had written to various ministries, including the external affairs and finance ministries, to take action on persons found guilty of misappropriating funds.
Javdekar said the government should make it clear whether the games would be conducted properly.Karat said the CWG had turned into a 'game of corruption' and it was not 'justifiable to give license to corruption for two more months in the name of conducting the CWG'. The Games will be held Oct 3-14. It will have participation from 71 countries and territories that are members of the Commonealth of Nations that were at one time part of the British Empire.
The Tata group, India's oldest and best-known conglomerate, is looking for a successor to its chairman, Ratan Tata, and is considering people from overseas to lead a business empire ranging from salt and steel, to cars and software. Ratan Tata, who took the company global and made the world's cheapest car, will retire by the end of 2012. The firm's holding company has set up a panel that will search for a replacement within and outside the group within the group, for Tata, who is also Chief Executive. With annual revenue of more than $70 billion, and with 357,000 employees worldwide, Tata group's 98 operating companies derive more than 65 percent of revenue from overseas.
Given that base, the firm, synonymous with India's industrial growth, could see its first non-Indian chief executive. No other Indian family run conglomerate has looked overseas to fill the top spot. Even though Ratan Tata has said he will look outside India for his successor, speculation is building that his half-brother, 53-year-old Noel Tata, may succeed him. The announcement of the panel comes less than a week after Noel Tata was appointed to the top spot at Tata International, which trades in leather, steel and sponge iron. Some analysts expect Ratan Tata's immediate successor will be from outside the family. Another name in the frame is Arun Sarin, former chief executive of British mobile phone giant Vodafone. "This announcement makes it almost certain that the group will have a professional running the show. A family member can then be groomed over the next 10 years," Arun Kejriwal, director at Mumbai-based research firm KRIS, said. "The group may have realised that Noel Tata doesn't have the experience to run such a large group, but he has been substantially elevated."
BIG FIRM, BIG DEALS
The group, founded in 1868, runs India's top vehicle maker, Tata Motors, top software services firm Tata Consultancy Services, top private sector power producer Tata Power and the world's seventh-largest steel maker by output, Tata Steel.In 2007, Tata Steel paid $13 billion for Anglo-Dutch steel maker Corus, the largest acquisition by an Indian company, which catapulted the unit to the world's sixth-largest steelmaker spot at the time. In 2008, Tata Motors paid $2.3 billion to acquire Jaguar and Land Rover from Ford Motor Co, the first time an Indian automaker bought brands from a U.S. automaker.
While those decisions were praised by many, Tata also drew criticism for the pricey deals. The chairman, who is a descendant of the conglomerate's founder, was the driving force behind the Nano, the world's cheapest car at 100,000 rupees ($2165), which it unveiled in 2008. Ratan Tata, who was ranked No. 59 among the 2009 Forbes list of the world's most powerful people, serves on the boards of Fiat SpAand Alcoa and is an advisor to Mitsubishi Corporation, American International Group, JP Morgan Chase and Rolls Royce.
Research In Motion(RIM.TO) unveiled a new BlackBerry aimed at wooing consumers away from Apple's(AAPL.O) iPhone and other rivals, but analysts said the handset won't blow away the competition. Even though the main features of the BlackBerry Torch, including a touchscreen and slideout keyboard, were well-known within the industry, investors registered their disappointment, driving RIM's Toronto-listed shares down 4 percent. The Torch will go on sale in the United States on Aug. 12 for $199.99 with a two-year contract -- about the same price as an iPhone. The new BlackBerry uses a revamped operating system and has a faster and easier-to-use Web browser.
Underscoring RIM's intention to compete head to head with the iPhone, the Waterloo, Ontario-based company will launch the phone in the United States with AT&T Inc (T.N), the same carrier that has exclusive U.S. rights to the iPhone. Analysts at Tuesday's launch event in New York said the Torch does not represent a major advance but that its consumer-friendly features were enough to help RIM to catch up to rivals. "RIM is playing catch-up. This is clearly the upgrade for BlackBerry users, but otherwise not a lot here is super exciting," Altimeter analyst Michael Gartenberg said. The Torch does not represent a "leap forward", but will help RIM compete with rivals such as iPhone and Google Inc's Android software, used in phones from several vendors including Motorola Inc, said NPD analyst Ross Rubin."This gets the experience competitive again -- if they can do that with the efficiency and stability that RIM is known for, then it's a positive," Rubin said. Some analysts have said the Torch's success will depend how heavily it is promoted by AT&T, which said it collaborated with RIM on the device for thousands of hours.
AT&T described the device as the best BlackBerry ever but declined to say how much advertising the company will spend on the phone or how it would compare to the amount of money it spends on iPhone advertising. "It will be as big a campaign as you've seen in some time," Chief Marketing Officer David Christopher told Reuters. BlackBerry's nearly air-tight encryption has come under scrutiny in several overseas markets recently. The United Arab Emirates threatened on Sunday to ban some BlackBerry services unl ess RIM gives it access to encrypted messages. India's Economic Times reported that RIM will allow Indian security authorities to monitor BlackBerry services.
RIM Chief Technology Officer David Yach declined to comment on discussions with specific governments. "I believe they'll have trouble pulling the trigger to shut down BlackBerry," Yach said. "Most governments in the world rely on BlackBerry." While the BlackBerry has long been the gold standard for corporate and government customers because of its speedy, secure email service, critics said it needs a big overhaul to expand its popularity beyond business customers. One of the new features RIM touted is the ability to search any application, media content or contact by typing a word on in Torch's "universal search" function.
BlackBerry Torch users can type messages on the screen or a slide-out keyboard. It comes with a 5-megapixel camera with a flash and a built-in GPS for location-based applications. The new BlackBerry 6 operating system also offers an inbox where users can access updates from social networking sites like Facebook and Twitter in the same place as their emails. "It's a really special product because so much new goodness has been a dded to it." said Mike Lazaridis, RIM's president and co-chief executive. The August launch was earlier than some analysts expected.
"I'm glad to see they got it out sooner rather than later," said Nick Agostino at Mackie Research Capital. RIM's success will depend on positive industry reviews and adoption by developers of applications, he said. The Torch's success could also hinge on RIM's ability to convince software developers to create applications for the device. Analysts say a big part of the iPhone's appeal is the huge choice of applications that it has to offer. "Developers want to go where the consumers are and consumers want to go where the developers are. RIM is going to have to tell a very compelling story to attract the first batch of developers," he said. RIM fell 2.7 percent to $55.44 on the Nasdaq stock market. Its Toronto-listed shares fell 4 percent to C$56.75. AT&T shares rose 5 cents to $26.64.
Indian Hotels Co Ltd(IHTL.BO), owner of the Taj luxury chain, plans to selectively expand across the globe but would have to improve its profit margins further, Chairman Ratan Tata said on Thursday.
"The company proposes to continue its expansion plans on a selective basis for both business and leisure globally, so that we can build the brand on a global basis," Tata said.
Tata, who heads the salt-to-software Tata Group, India's oldest conglomerate, was addressing shareholders of Indian Hotels during its annual general meeting. (AGM).
He is set to retire by end 2012 and the group has launched the search for a successor to a business empire ranging from salt and steel, to hotels, cars and software.
The Taj group at present has 104 hotels across the globe, including the budget hotel chain 'Ginger'
Indian Hotel's firm's April-June net profit plunged to 33.3 million rupees from 164.4 million rupees last year.
The firm is restoring the property and hopes to reopen the renovated wing by the middle of August 2010, Tata said.
Indian Hotels has said it is looking to increase its room rates by September or October this year, its first hike after almost two years and looking to add close to 1,500 new rooms in FY11 across 13 hotels in India and South Africa.
Tata said he was upbeat about the growth prospects about the Indian hotel and tourism industry which has seen a revival since October 2009.
India's hotel and tourism industry is currently recovering from a near two-year economic slow-down worsened by a militant attack in November 2008 on Indian Hotels' Taj Mahal Hotel and EIH owned Trident-Oberoi in southern Mumbai.
India requires investments worth 600 billion rupees over the next five years to cope with the unmet demand for about 150,000 rooms, according to FICCI-Evalueserve.
Shares of the firm ended down 3.21 percent at 96.55 rupees in a weak Mumbai market.
Reliance Industries(RELI.BO), India's biggest-listed conglomerate, will aquire a 60 percent stake in a joint venture with Carrizo Oil & Gas(CRZO.O) at the booming Marcellus Shale region, marking its third shale gas purchase in the United States this year. Reliance has been investing in new areas such as shale gas as it seeks a foothold overseas and seeks to expand its businesses beyond petrochemicals, refining, oil and gas exploration, and retail. The conglomerate, controlled by billionaire Mukesh Ambani, the world's fourth-richest man, recently bought significant stakes in the shale gas assets of U.S. firms Atlas Energy Inc and Pioneer Natural Resources.
"Why Reliance is going so aggressively into shale gas is because reports indicate shale gas output will replace about 25 percent of conventional gas production in the U.S. over the next decade," Sonam Udasi, head of research at IDBI Capital, said on Thursday. "This is a longer-term plan to be one of the key five to six companies in the shale business in the world's biggest energy market, the United States," he said.
Oil companies including BP Plc, Total, Statoil and Mitsui & Co have bought into shales, rock formations that could hold vast amounts of natural gas. Under the latest deal, Reliance will pay $392 million, comprising of $340 million of cash and $52 million to develop assets in the Marcellus Shale gas project -- one of the most promising natural gas deposit regions in the United States. The region, according to some geologists, could hold enough natural gas to satisfy U.S. demand for a decade. Under the deal with Carrizo, Reliance is paying about $6,200 per acre for its share of the Marcellus acreage. The company, at the forefront of India's push in shale gas, had paid around $14,000 an acre under its deal with Atlas. Reliance shares traded flat on Thursday in a Mumbai market up 0.2 percent. Carrizo shares closed flat at $20.1 on Nasdaq on Wednesday.
While the shale formations have proven to be lucrative, they are also very expensive to develop and environmentally sensitive. Joint ventures have given the independent oil companies, who own much of the acreage in these areas, access to capital and should allow foreign oil firms to pick up expertise in new drilling techniques developed for the shales.
COSTS
Reliance's $52 million contribution to drilling costs will provide for 75 percent of Carrizo's share of development costs over an anticipated two year development program, the Indian company said in a statement on Thursday. The deal is expected to close by mid-September. The joint venture will have about 104,400 net acres of undeveloped leasehold in the core area of the Marcellus Shale in Central and Northeast Pennsylvania, of which Reliance's 60 percent interest will represent about 62,600 net acres. Reliance will buy 20 percent of Carrizo's interest in a JV the U.S. company has with an affiliate of private-equity firm Avista Capital Partners. Reliance will buy all of Avista's interest in the JV.
Carrizo will serve as the development operator for the joint venture and Reliance has the option to act as a development operator in certain regions in the coming years as part of the joint venture. Jefferies & Co Inc acted as lead financial advisor and Vinson & Elkins LLP acted as legal counsel to Reliance. BNP Paribas and Credit Agricole Corporate and Investment Bank provided strategic advice to Reliance.
U.S. cable television companies wooed home Internet users from rivals in the second quarter, helping offset a trend that has seen their television customers flee to top satellite player DirecTV Group(DTV.O).
Time Warner Cable Inc (TWC.N) and Cablevision Systems Corp (CVC.N) reported on Thursday, like Comcast Corp (CMCSA.O) last week, that they successfully added Internet subscribers in what is now a key focus for companies that were originally built on the back of cable TV programming.
Time Warner Cable Chief Executive Glenn Britt said on a conference call that successfully marketing Internet access is as important, if not more so, as selling bundles of TV shows.
"Broadband is still growing nicely and becoming a more important part of people's every day lives and we're seeing tangible evidence the consumers are willing to pay more for the speed and reliability," Britt said.
Time Warner Cable added 85,000 broadband subscribers during the quarter, while Cablevision added 27,000. Comcast, the No.1 U.S. cable company added 118,000.
With rising programming costs in their video businesses, cable companies see broadband, with its relatively fixed costs, as a more profitable business to grow.
Cablevision for instance said it plans to offer more video applications to customers who use Internet-enabled devices at home and free Wi-Fi connections to its customers around major spots in its local area.
"Broadband is increasingly important for cable companies," said Collins Stewart analyst Thomas Eagan. "It has become the strategic focus, with TV following."
The top two cable companies both lost video subscribers during the quarter: Comcast lost 265,000, while Time Warner Cable lost 111,000. Cablevision which has been competing aggressively with Verizon Communications (VZ.N) in its New York area managed to buck that trend in the quarter by adding 2,900.
DirecTV Group added 100,000 U.S. subscribers, beating the forecasts of most analysts, some of which had worried the company might lose customers due to the slow economy and competition from cable and newcomers to the pay-TV market like Verizon's FiOS and AT&T Inc's U-Verse.
"For years, questions have swirled about DirecTV's ability to sustain subscriber growth in the U.S. Not to worry. Today's results suggest that subscriber growth is just fine, thank you," said Bernstein Research analyst Craig Moffett in a client note.
PROFITS
Both Time Warner Cable and Cablevision posted financial results ahead or in line with expectations.
Time Warner Cable's net income rose to 95 cents a share, beating average Wall Street forecasts for 93 cents. While its revenue rose 5.8 percent to $4.73 billion, ahead of average forecasts of $4.68 billion, according to Thomson Reuters I/B/E/S.
"Overall they struck a good balance between customer and financial growth," said Eagan of Collins Stewart.
Cablevision's net income was 20 cents a share sharply missing an average Wall Street forecast of 40 cents, mainly due to the one-time loss on extinguishment of debt. Bernstein Research said excluding that loss, Cablevision's profit was in line with consensus.
Revenue rose 5.8 percent to $1.802 billion ahead a forecast of $1.769 billion, according to Thomson Reuters I/B/E/S.
Bernstein's Moffett said Cablevision's second quarter had shown "almost no discernible weak points".
DirecTV, which also added 415,000 subscribers in Latin America, posted an adjusted profit of 60 cents a share, in line with expectations. Its revenue rose 12 percent to $5.85 billion.
Shares in Time Warner Cable and Cablevision have risen more than 40 percent and 30 percent respectively since the start of the year as investors have bet that cable will be a leader in future communications thanks to its broadband strength.
U.S. regulators halted closed-door negotiations about net neutrality rules with phone, cable and Internet companies on Thursday after reports of a side deal between two participants, Verizon Communications Inc(VZ.N) and Google Inc(GOOG.O), surfaced.
"We have called off this round of stakeholder discussions," said Edward Lazarus, chief of staff for Federal Communications Commission Chairman Julius Genachowski.
The collapse means Genachowski may have to decide how to regulate Internet access without further input from the industry. His decision will likely be challenged in court.
"It has been productive on several fronts, but has not generated a robust framework to preserve the openness and freedom of the Internet," Lazarus said of the meetings in a statement. "All options remain on the table."
An analyst warned that the series of private meetings among industry stakeholders could implode due to the deal between Verizon and Google over a set of Internet traffic principles, called net neutrality.
"Any outcome, any deal that doesn't preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable," Genachowski told reporters.
His comments and the decision to halt the meetings were lauded by public interest groups.
"We're relieved to see that the FCC now apparently finds dangerous side deals from companies like Verizon and Google to be distasteful and unproductive," Derek Turner, research director at the public interest group Free Press, said.
Under the deal, Verizon would not block or slow Internet traffic over land lines, but could do so to wireless devices, one source told Reuters on Wednesday.
A Verizon spokesman on Thursday denied that the deal represents a business arrangement between the two companies.
The agreement was reached while the private FCC meetings involving the two companies, AT&T Inc (T.N) and oth er Internet companies to set rules for the industry were taking place.
According to several people who have been briefed on the FCC meetings, no consensus was imminent and it would have been unlikely for Congress to pass any such agreed-upon framework in a bill in this session, especially with the looming elections.
CLASSIFYING BROADBAND
The FCC voted in June to collect public comments on whether the agency should reclassify broadband regulation under existing phone rules -- typically considered a stricter regulatory regime.
Any compromise on net neutrality could have staved off reclassification, a move aimed at giving the FCC more power over broadband access after a stinging court loss.
Earlier this year, a U.S. appeals court ruled that the FCC lacked authority to stop cable television company Comcast Corp (CMCSA.O) from blocking bandwidth-hogging applications.
The deal between Verizon and Google was not a complete surprise for the industry because the two companies have worked closely in the wireless device area.
Verizon Wireless, a venture between Verizon Communications and Vodafone Group Plc (VOD.L), depends heavily on phones based on Google's Android software for growth.
It is not known if the other stakeholders would find the deal an acceptable framework for their businesses but AT&T said it is not a party to the deal.