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India’s Excise Duty Increase On Mobile Phones Won’t Have Much Impact

Posted by Manish Bahl on the CIOs Blog on March 4, 2013

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Manish Bahl

 

On February 28, 2013, India (as part of its 2013-2014 budget) announced that it would increase the excise duty on mobile phones costing more than $36 to 6%, up from the current level of 1%. Forrester believes that this increase will not affect the mobile industry in India very much because:

  • Sub-$100 smartphones will trigger new kinds of competition in the market. As high-end mobile phones get more expensive, Forrester predicts that smartphones costing less than $100 will be in much greater demand. Moreover, handset manufacturers will absorb a large portion of the price increase to sustain their sales.
  • Explosive mobile Internet growth. With increasing urbanization and improving per capita income, more people will begin to use the Internet, and the use of smartphones will rise quickly. We forecast that the mobile Internet user base in India will grow by more than 30% year-on-year over the next five years.
  • Addicted social media youngsters. With more than 61 million Facebook users, India ranks as Facebook’s third-largest audience in the world after the US and Brazil. Half of these users are between 18 and 24 years of age, and the majority of them use their mobile phones to connect to the world.
  • Rapid eCommerce growth complementing the mobile sector. Forrester estimates that eCommerce revenues in India will increase more than fivefold by 2016, jumping from US$1.6 billion in 2012 to US$8.8 billion in 2016. Mobile-friendly sites from various players and eCommerce website aggregators will help accelerate mobile Internet adoption.
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Misaligned Perspectives Are Driving CIOs And The Business Apart In India

Posted by Manish Bahl on the CIOs Blog on February 15, 2013

Manish Bahl

Data from the Forrsights Budgets and Priorities Tracker Survey, Q4 2012 highlights the increasing gap between CIOs and business decision-makers (BDMs) in India — a gap that originates in misaligned perspectives. The rapid rise of social media, cloud computing, and mobility in India has started to significantly affect how organizations do business in the country. Business leaders’ use of consumer technology has changed their expectations of how enterprise IT should be harnessed. They increasingly seek to use technology in innovative ways in order to gain a competitive edge and drive business growth. However, most CIOs are still caught in the old world of focusing exclusively on IT budgets and project delivery performance issues:

I recently spoke with a few CIOs in India to explore their views on the reasons behind this misalignment. When I shared data from the chart above and asked their opinions on the insights, some interesting findings that came out:

  • There are many “heads of IT” and few “business technology (BT) CIOs” in India. One CIO from a large auto manufacturing firm mentioned that a majority of CIOs in India are actually “IT heads” who think and act mainly from an IT perspective. Even worse, their thinking is generally very hardware-centric. This CIO’s opinion is in sync with my recent  report highlighting the fact that Indian CIOs are at risk of losing business credibility (and eventually their jobs) if they do not improve their understanding of BT.
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The Atlantic Ocean Divides Financial Aspirations For CISOs In 2013

Posted by Andrew Rose on the Security & Risk Professionals Blog on January 15, 2013

Andrew Rose

 

As 2012 came to a close, we studied the financial position of many CISOs and asked about their expectations for 2013. Unsurprisingly, it was apparent that 2012 was another difficult year and that CISOs had been keeping their belts tight once again. When compared with the other IT departments, however, it became clear that this budgetary flat-line actually represented quite a success, as 2012 had seen most other teams face further cutbacks and spending restrictions.

When we looked ahead to 2013, we saw the usual hopeful optimism from the CISOs – proving once again that any allegation of a correlation between ‘pessimists’ and ‘security professionals’ is complete nonsense.  It was interesting, however, to note a marked difference in attitudes dependent upon which side of the Atlantic the respondent was located.  Put simply, North American based CISOs had a much more buoyant view of security related finances in 2013 than their European peers.

 

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What The India 2012-2013 Budget Means For ICT Vendors

Posted by Manish Bahl on the CIOs Blog on March 19, 2012

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Manish Bahl

The Indian government announced its 2012-2013 budget on March 16, 2012. While the announced budget does not contain direct incentives to promote the domestic ICT industry, there will be adequate indirect opportunities for vendors to explore. The excise duty will increase from 10% to 12%; this will have a marginal impact on the sale of PCs (desktops, laptops, and tablets), but the government’s focus on improving infrastructure, creating efficient delivery mechanisms, and improving e-governance will provide substantial indirect opportunities to IT vendors.

The latest budget aims to achieve long-term and inclusive growth for the economy and is in sync with my upcoming report, “India’s 12th National Five-Year Plan (2012-2017) Provides Massive ICT Opportunities.” The report answers questions such as why and how technology will act as a key enabler for the Indian government to achieve its growth target.

The 2012-2013 budget will provide adequate ICT opportunities for vendors, such as:

  • Packaged and industry-specific applications, e-governance, mobile apps, and analytics will support the strong need for sustainable revenue sources to fund investments. A common problem that India faces today is the significant imbalance between expenditures and revenues. The budget categorically highlights the need to deliver more with existing resources; we will witness increased demand for packaged and industry-specific applications, e-governance, and mobile apps to help generate sustainable revenue to fund investments. Also, the outlay for e-governance projects will increase by 210%, from the equivalent of US$62 million to US$192 million; applications from software vendors for e-governance initiatives will present some of the most exciting opportunities in India. And the government will use various analytical tools to improve revenue sources and take corrective actions by identifying gaps.
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