Will he preside over the last rites? Jones isn't saying anything

Iin December 2005, when chairman Craig Barrett visited India, he announced that Intel would invest, over the next five years, an additional $1 billion (Rs 4,700 crore) in the country. Now, the $39-billion (Rs 1,83,300-crore) chipmaker may be doing the exact opposite. The company is reported to be carefully scrutinising the costs and efficiencies of its 3,000-people Intel India Development Center At best, some of the employees of the centre, founded in 1999, could be retrenched. At worst, and this is unlikely to happen, the company could down the shutters of the facility. However, the downsizing, which is looking more a question of when than if, will likely not affect either the marketing operations of the company (some 100 people man this function) or Intel Capital, its venture capital arm that has invested in some 40 India-based companies, including Sasken, Rediff, Indiainfoline, Maya Entertainment and MobiApps.

An Intel spokesperson says that the company is conducting an in-depth review of its organisational structure in order to become more efficient. "We are seeking to improve significantly not just in costs, but in the essentials-what we do and how we do it. We have said that Intel is likely to have fewer employees as a result of attrition, redeployment and changes to Intel's business. Actions like the sale of our handheld business to Marvell and the reduction of 1,000 management positions worldwide have already been made, for example." The company adds that it would continue to invest in India.

So, how did Intel's India dream, one in which it has invested close to $700 million (Rs 3,290 crore) until now, sour? It could well be that Whitefield, a multi-core Xeon processor for servers that was being developed at the centre, was the turning point. In December 2005, the company officially abandoned the project; the reason proffered was a change in the product roadmap.

Critics say IIDC was unable to deliver the product (the truth is likely to be halfway between the two). Intel claims that this abandonment was not unique to "this team or this site. Project resources are very fluid in an ever-changing, dynamic industry like ours". The spokesperson adds that the Intel Centrino Duo platform had significant contributions from the India development team. "One of our development teams is also working on the development of next generation multi-core platforms. This reflects our confidence in the hi-end silicon R&D Indian talent."

Earlier, in October 2005, Intel sacked several hundred employees of the centre citing 'ethics' violations ranging from fudged expense reports to fake medical and LTA claims. "Intel expects very high standards of employee conduct and business ethics. Intel does not publicly discuss personnel matters, so we will not comment on any individuals or specific actions taken. We can say that we conducted this process thoroughly, professionally and in compliance with the law," the company adds. Soon after, Franklin Jones, an Intel veteran, was sent in to clean up the Indian operations. The development comes at an inopportune time for Intel; a newly invigorated AMD has taken market share from the company, and is gathering ammunition for what it calls Intel's monopolistic practices.

-Venkatesha Babu

Righting Wrongs
The new copyright law has to get it right.

It may come as a surprise to most people, but India does have a copyright law (The Indian Copyright Law, 1957). And this may come as news, again, to most, but the law is in the process of being amended. The amendment itself was long overdue: the world has changed since the law was passed and it is time it factors in such things as digital media. The Copyright Board, the agency responsible for the amendment, is doing a good job recognising this; the process itself, has also been transparent. The catch? The amendments have been suggested (and encouraged, and driven) by industry: companies in the areas of publishing, software, and entertainment who stand to gain the most. That's only fair: after all, these companies spend lots of money generating content and have a right to, er, copyright it. Only, in doing so, they could be infringing on the public's access to knowledge. For instance, one of the suggested amendments seeks to extend the copyright term of all works beyond the minimum specified in the Berne Convention and trips (India is a signatory to both, and this is one of those amendments that is driven more by greed than a desire to protect intellectual property).

The Alternative Law Forum, a Bangalore-based organisation, is challenging some of the proposed amendments and has, along with several research organisations, consumer bodies, and disability rights groups, submitted revisions to the Copyright Board. "Copyright is meant to promote the dissemination of knowledge by balancing rewards to knowledge producers with the public's right to access that knowledge," says Achal Prabhala, Associate, ALF. "Copyright laws should not prevent knowledge dissemination." For instance, a DRM (Digital Rights Management) clause could prevent an instructor from copying a document from a protected CD to circulate among students or someone from making an audio version of the content for use by the blind, both of which are legitimate ways to access knowledge. Balance, as Prabhala puts it, is the key.

-Vaishna Roy

Flying Doctors
Boeing and EADS set to expand in India.

Coming soon: An investment wave, promises Enders

With India becoming an important market for companies such as Boeing Corporation and EADs (the parent of Airbus, ATR, Eurocopter, and the European Space Agency), this was a move waiting to happen. That reference, of course, is to the maintenance and repair operation (MRO) facilities being put down by both firms. Boeing, which recently predicted that India will need a whopping 865 commercial jets over the next 20 years, is investing $200 million or Rs 940 crore in its facility (thereby, meeting part of its counter-trade over the $11.5-billion or Rs 54,050-crore order it bagged last year from Air India). EADs, which predicts that the number will be higher, at 960 aircraft, is looking to invest m2 billion or Rs 11,800 crore in India, across all aviation sectors over the next 15 years. This number "is a rough figure and can easily expand", says Tom Enders, Co-CEO, EADs. The company's investment doesn't stop with a MRO, although a facility to service turbo-props (operated by Jet Airways, Air Deccan, Alliance Airlines, and Kingfisher) is very much on the cards; it is also investing in a full-fledged engineering resources centre that will be operational sometime in 2007. That shouldn't surprise anyone who has looked closely at EADs financials. In 2005, 23 per cent of its revenues, and 43 per cent of Airbus' fresh orders came from the Asia Pacific region. "We believe that the region, especially India and China, will contribute 30 per cent of our revenues in a few years and for our own sake, we will have to become more Indian or Chinese," says Enders. That's not to say Boeing has missed the Indian engineering boom; almost the entire avionics software suite for the next generation 787 Dreamliners is being designed by HCL Technologies. Both companies are also looking to win an Indian Air Force order for 126 multi-role fighters and EADs has signed a deal with antrix, the commercial arm of Indian Space Research Organisation, to jointly market low-power satellites. Life in India, the two companies have discovered, has more to it than planes.

-Kushan Mitra

The Economist With A Cure
Harvard's Sendhil Mullainathan says Prescriptive Economics is the answer.

Psychology matters: In economics

At 33, Sendhil Mullainathan, doesn't look like an economist. The man who was born in a small village in India, and moved to the US (Los Angeles) when he was seven, looks more like a code-jock. Strangely enough, he was good in math at school and computer science was one of the things he flirted with. Yet, it was economics that appealed to him. Mullainathan has been in the news (at least, in the circles where economists move) because of his claims to having evolved a new branch of creative economics that he calls Prescriptive Economics.

At one level Prescriptive Economics is just an extension of another branch, Behavioural Economics, that tries to explain economic phenomenon by understanding the psychology of individuals. Prescriptive Economics 'prescribes' solutions based on its understanding of the behavioural factors that drive economic phenomenon. These, argues Mullainathan, can be used for the betterment of society and particularly improving the lives of the poor. The power of economics to work towards poverty alleviation was what attracted him to it in the first place. Today, Mullainathan is a professor of the subject at Harvard; he moved to the university from MIT because it had a "good psychology department". "Economics and social sciences were generally detached," says Mullainathan. "It is easy to sit in the comfort of an air-conditioned room and theorise without knowing ground realities," he says, "but policies framed that way are not going to make an impact."

India is a good place to test out the logical economic corollary (or precursor, depending on how you look at it) to management guru C.K. Prahalad's by-now-famous fortune-at-the-bottom-of-the-pyramid theory. And so, Mullainathan spends a lot of his time in India, where he has several projects in Prescriptive Economics running. One, in Udaipur, linked poverty to poor education to teacher-absenteeism, and eventually, through several linkages, arrived at the conclusion that one reason teachers absented themselves was because they were under-appreciated. Another set out to look at a lower-than-expected yield of sugarcane on fields where everything, including the use of fertilisers, had been done by the book. The reason? Most farmers borrow money (from a bank usually) to fund the purchase of fertiliser. However, the application of fertiliser has to be done over several installments, and by the time the last one comes around, the farmers have used the money for something else. Mullainathan is working with icici Bank to explore the possibility of launching innovative loan products that address this issue and other such.

The professor, who gives himself, and his branch of economics, between six and nine months to find solutions, rattles off questions: Can these loans be staggered in installments every month like salaries, or given just in time, every time? Can loan repayments be made automatic, coinciding with weekly salary inflows? Can loan payments be devised in such a way to take into factor seasonal variation in incomes? The research may not have the 'wow' value of an earlier project in South Africa where Mullainathan discovered that male customers were willing to pay marginally higher interest rates (up to five basis points) when the loan-offer from the bank was on a letter with a generic photograph of a woman in a corner, but it is, the man insists, rewarding. "I can easily figure out how to increase the net profit of 50 firms from the comfort of my room," he says. "People do not realise how difficult these exercises (being carried out in India) are." Mullainathan's work, which seeks to use psychological insights to explain economic and financial decision making, and then identify solutions, is still young, and will likely engender some debate on its relationship to economics, but "the result," its creator smiles, "is very satisfying."

-Nitya Varadarajan

e-mail Everywhere?
Not yet, despite the best efforts of telcos.

When Bharti tele-ventures and research in motion (rim) tied up in October 2004 to offer the Canadian company's BlackBerry push-email solution over the Airtel network, many people thought that it was a match made in heaven. After all, the BlackBerry was so addictive that it was dubbed the 'Crackberry' in the US. And Airtel was India's largest mobile telco. Now, almost two years on, the companies have decided to break-off the 'exclusive' tie-up.

In an arrangement more akin to an open marriage, Bharti and rim will be free to ally with other companies. Bharti was the first off the blocks, announcing a major initiative with Microsoft supporting its Windows Mobile push-email solution over i-mate and hp handsets. Greg Wade, Director (Asia-Pacific), rim, denies that rim company is in talks with other operators, "There is an exclusive timeframe attached to the distribution of BlackBerry and, we cannot in the interest of business, disclose the timeframe." However, according to execs in the telecom industry rim is already talking to Hutch and Reliance Infocomm. Chakrapani G.K., Country General Manager, Nokia Enterprise Solutions, believes that this has happened for "growth reasons", as the exclusive tie-up might not have delivered the numbers both operators hoped for.

So, is Windows the magic pill for Airtel? Jai Menon, Director (it & Innovation), Bharti Tele-Ventures, certainly hopes so. "We have taken a decision to give our customers a variety of solutions to address their enterprise needs," he says. "You must understand that for us, it isn't just about e-mail, but a comprehensive enterprise-level solution that includes sales force automation, enterprise management and customer management and Windows is an ideal platform for that." Airtel isn't dumping BlackBerry just yet, he hastens to add, and insists that the BlackBerry is just the thing for 'pro-sumers' (professional customers).

Are captive e-mail solutions offered by operators the way forward? Chakrapani does not think that operators themselves will play the key role. "I believe that enterprises will want a level of control over their e-mail," he says. "I will not be surprised if large turnkey system integrators start offering their own solutions to corporate e-mail." For many years operators, manufacturers and companies have looked for the holy grail of the next 'killer app', they believed they have found it in e-mail. However, the Indian consumer still isn't biting, as moves on proprietary e-mail systems have shown. Unless a device independent and platform independent solution is successfully deployed, e-mail on the go might continue to remain low key.

-Kushan Mitra

NOT CLEAR AT ALL

The Jones Lang Lasalle real estate Transparency Index is a measure of several things: professional and ethical standards, regulations, the applicability of law, quality of financial disclosure and governance, the availability of market information, and the enforceability of data. In the 2005 index, India fared badly (low transparency); it has done far better in 2006 (semi transparency). The company says that, "India's improvement from low- to semi-transparent was helped by the availability of market information, improved general accounting and reporting processes, and substantial improvement among market participants about the legal process that relate to contract enforcement and legal relief."

That may well be the case; yet, across the country buyers are paying for more space than they actually get. Reason? These days, all buyers pay for what is called super-built up area. "The builders first add 20-25 per cent on the carpet area to get to built-up area and then another 20-25 per cent over the built-up to arrive at the so-called super built-up area. If I am paying for a 1,900 sq. ft apartment, I am actually getting not more than 1,100 sq. ft," says Tushar K. Chatterjee, a senior manager with an S.K. Birla Group firm, who has been shopping for an apartment. "There is no technical definition of super built-up area. What to do, if some one wants to take undue advantage of that?" asks Amit Ukil of leading architect firm, Amit Ukil & Associates. That's opaque.

-Ritwik Mukherjee