AFL Hyperscale Business Development in charge Alan Richardson: Enterprise data centre market very strong, but with cost issues
Data centres figure among the new industries expected to catalyse the economic growth. The industry estimates India, which is expected to be a $4.5-billion data centre market this year, will touch $7 billion by 2020. In the global market, the share of India and APAC is increasing by 4.5 per cent and 12 per cent respectively. One of the players, AFL Hyperscale, looks to cash in on the opportunities available in India. The company, which offers optic fibre solutions to the industry, entered the Indian market in 2017 and is extremely bullish on its plans. Alan Richardson, who is in charge of the business development, discusses the market triggers, caution points and the company’s plans in a chat with Pankaj Joshi.
Can you give a background of your group and what does India represent for AFL Hyperscale?
The parent company of US-based AFL Hyperscale is Fujikura, which is listed in Japan and a global player in technology in fibre and electronics. It clocked a revenue of $8 billion in 2017.
AFL basically stands for American Fujikura and our revenues for FY2018 were $1.2 billion. We offer fibre optic solutions like manage the connections, optimise high-performance levels and enable the client to scale up the transaction level and thereby their business. Our areas of activity are in data centres and co-location businesses. In data centres, we would support the players which are looking at rapid scale-up of traffic (or hyperscalers as we call them). They would typically be in retail, financial services (BFSI space) or similar industries. The co-location industry is the other vertical which again has a strong scalability potential because of its strong business rationale.
From the perspective of both our activity areas, India presented an exciting market and so we have established a presence here out in Bangalore. We see the enterprise data centre market very strong and growing, but with cost issues. At some level, cloud and similar services have helped the market grow but the overall data centre is now getting more difficult and expensive in terms of set up and operations costs. Therefore, the activities are moving to co-location sites. This trend is playing out in India as well, where the co-location industry is also having good roots. So we are seeing a strong market expansion in India. We also have an ambitious plan for the country.
Independent surveys showed India as the second biggest (fastest) growth market worldwide for data centres. In this total industry size, our activity (fibre optic solutions) specifically would account for 4-5 per cent of the total size. For the current year itself, AFL in India is seeing a 70-80 per cent growth over the first year revenues. India is a definite action area.
What are the specific factors which make India exciting?
In the digital sector in totality, Indian companies and people have proven innovation capabilities. We believe that Indians as a whole are capable of creating disruptive growth opportunities, as well as harnessing them. The recent growth in cashless economy is just one example of this. We would want to be a positive force in this kind of disruption. India’s initiative to drive fibre to the village level is extremely commendable and, if it succeeds, will be a landmark achievement. Apart from the obvious client industries mentioned earlier, we are quite enthusiastic about government organisations as a client sector. We believe the government needs to take data centres more seriously in its own plans in four key areas – digitisation, education, handling volume and security of all kinds of transactions and enabling growth of high-value skill sectors in the economy.
Another trigger for it is regulation. We believe that confidentiality norms are on the way which will fuel data centre growth in the local market. A couple of months ago there was a regulation tabled stating that the data of a country must be locally stored.
What are the challenges in the Indian market?
If you look at challenges, the paramount one is power. There are three critical aspects of power for a data centre – the availability, the quality of available power and of course the cost of power. India has issues on all three fronts.
The second challenge is that many large potential clients would want to have their own fibre-based connectivity. That in turn means multiple digging operations in the same path, which presents the danger of cable damage. Similarly, there are laws and stipulations which create restrictions on building networks and data centres.
Another reality for the Indian market is that location, which connectivity is supposed to take out of the equation, is still very important. For instance, Mumbai though expensive, remains a popular location because it has lots of landing stations for the trans-Atlantic or submarine cables which carry data across continents. These cables are a critical part of the global data transmission network and by extension so are the landing stations. The more you move to the hinterland away from the landing stations, the lesser is the strength of connectivity.
Mumbai followed by Chennai especially the port locations are hot by default. Mumbai ranks well both on connectivity and power. Then you look at high usage hubs which again would have landing stations like Bangalore or Hyderabad. The market can develop on the back of greater penetration of landing stations. On the ground, fibre does not fail once it is in place. The reasons for network downtime are generally related to switches, routers, the active devices and the human element.
How do you intend to roll out your business?
Locally, we have partnered with Citadel Intelligent Systems which have enabled us to hit the ground running. The group is active in multiple areas including defence and aerospace, however our collaboration with them is limited to fibre optic connectivity solutions. If you talk of the scale-up blocks, the first priority would be to support our global clients who are active here. Second would be to create a client base of local companies in parallel.
At the back-end, we intend to invest and develop manufacturing capabilities, both through in-house facilities as well as by local sourcing. The difference in operational methods for AFL is that we are more in dealing directly with clients in the marketplace, compared to other peers who operate through the dealer/ distributor channel. We aim to bring to the table a good level of market understanding as well as understanding of the client requirements, and it is in that context we have clearly defined where we want to seek our clients.
Diwali 2018: E-tailing giants Amazon and Flipkart claim record-breaking bumper festive sales
New Delhi: With festive sales drawing to a close, e-tailing giants Amazon and Flipkart have claimed bumper sale on their platforms, and that they were ahead of the competition, as they received orders from customers from over 99 per cent of the pin codes in the country.
Citing a survey by Kantar IMRB and other reports, Amazon India Senior Vice President and Country Head Amit Agarwal said Amazon emerged as “the most visited and transacted shopping destination in India this festive season” (October 10-15, October 24-28 and November 2-5). “With 99.3 per cent of pin codes placing at least one order, 89 per cent of new customers coming from smaller towns, almost 70,000 small and medium businesses getting at least one order and new Prime memberships growing by nearly 2X, we are humbled that India trusts us to find, discover and buy anything online,” he said.
Asked about another report stating that Flipkart cornering 51 per cent share of the festive sale between October 9-14, Agarwal said, “we don’t comment on reports that are based on non-scientific methodologies”. The said industry report had stated that Amazon.in had a 32 per share in the first leg of the festive sale before Dusshera. Both Walmart-backed Flipkart and Amazon have claimed record-breaking sales numbers across categories like smartphones, large appliances and fashion during their festive sales.
“The current sale (November 1-5) is already more than 2X of our Big Billion Days sale this year. We were the clear leaders in the fashion category… we had all brands (of smartphones) except one…competition is no where close to that,” Flipkart Head of Growth Smrithi Ravichandran said. She added that customers on an average spent Rs 7,500 on various purchases during this festive sale and that its gross merchandise value (GMV) was up 90 per cent over last year.
Rupee recovers 21 paise to 72.91 against US dollar
Mumbai: The rupee recovered 21 paise to 72.91 against the US dollar early Tuesday on increased selling by exporters. The dollar’s weakness against some currencies overseas and a better opening of the domestic equity market also supported the rupee, dealers said.
At the interbank forex market, the rupee opened strong at 72.98 and advanced further to trade at 72.91, reflecting a rise of 21 paise over its previous close of 73.12 against the dollar. On Monday, the Indian rupee tumbled 67 paise to close at 73.12 against the US dollar on increased demand for the American currency from importers and unabated foreign fund outflows. Meanwhile, the benchmark Sensex rose 118.44 points, or 0.34 per cent, to 35,069.36 in opening trade Tuesday.
Airtel rolls out ‘alternate e-KYC’ in select circles for new connections
New Delhi: Telecom operator Bharti Airtel Monday began rolling out, in select circles, an ‘alternate digital KYC process’ for new connections, to replace Aadhaar-based electronic verification, a company official said. The alternate digital KYC process has begun with select circles including Delhi, UP (East) and UP (West) and will be extended to other locations in the coming days, the official privy to the development told PTI.
The alternate digital process for KYC entails scanning of the proof of address and identity, embedding live customer photo and online customer acquisition form, the source said adding that the entire process will be digital. The official further pointed out that the company will be phasing out the eKYC process, as the digital KYC system is rolled out to new locations, and stablises. An email sent to Bharti Airtel in this regard remained unanswered.
When contacted, a Vodafone Idea Ltd spokesperson confirmed that a new digital KYC process has been launched for onboarding customers across Vodafone and Idea brands but did not immediately offer specific details. On October 26, the telecom department had asked operators to stop using Aadhaar for electronic verification of existing mobile phone customers as well as for issuing new connections to comply with a recent Supreme Court order. The apex court had, last month, in a landmark verdict restricted the use of Aadhaar by private entities in the absence of a legal provision.
The Department of Telecom (DoT) in its October 26 circular had also taken note of the fact that the industry mooted an alternate process for KYC (know your customer) which entailed customer acquisition forms to be embedded with live photo of the subscriber and scanned images of proof of identity and proof of address, thereby digitising the end-to-end process for on-boarding of new mobile subscribers and making it paperless.
Accordingly, all telecom service providers were asked by the DoT to ensure readiness of their systems and offer the proof of concept of the proposed digital process by November 5 for approval. The DoT had issued detailed instructions to telecom companies on stopping the use of Aadhaar-based e-KYC and report compliance by November 5.
Fuel Price Hike: No respite for common man from surging fuel prices, petrol at Rs 88.29 per litre in Mumbai
New Delhi: Citizens are yet to receive any respite from skyrocketing fuel prices, as the retail rates of petrol and diesel have once again witnessed a hike on Tuesday. In Delhi, petrol is being sold at Rs 82.83 per litre after an increase of 11 paise, while diesel rates have escalated to Rs 75.69 per litre after a hike of 23 paise.
Petrol prices in Mumbai are inching closer to the Rs 90 per litre mark, as petrol is retailing 11 paise higher at Rs. 88.29 per litre. The price of diesel, on the other hand, has been revised by 24 paise to retail at Rs 79.35. Fuel prices have been soaring since the past few months in the country, causing many problems for commuters. While the Opposition has repeatedly blamed the Centre for the steep hike in the fuel price, the latter has maintained that global crude oil prices and other international factors are responsible for the increase in prices of petroleum products.
In a bid to ease the crunch caused by soaring fuel prices, Finance Minister Arun Jaitley had announced a reduction of Rs 2.50 per litre on both petrol and diesel prices after curbing excise duty on the commodity by Rs 1.50 per litre. He had also directed all state governments to slash rates. While the revision in prices was implemented in Gujarat, Chhattisgarh, Bihar, Uttar Pradesh, Tripura, Jammu and Kashmir, Himachal Pradesh, Meghalaya, Assam, Jharkhand and Goa, a number of states are yet to implement the decision.
CCI approves founders additional share purchase in Ola
New Delhi: Fair Trade regulator CCI said Monday it has approved additional share purchase by Ola founders, Bhavish Aggarwal and Ankit Bhati, in ANI Technologies, which owns the cab aggregator. The additional acquisition of 6.72 per cent stake is made through Lazarus Holdings, which is incorporated in Singapore, and is a special purpose vehicle which will be used as an investment holding company.
“@CCI_India approves acquisition of 6.72 per cent shares of ANI Technologies Pvt. Ltd by Lazarus Holdings Pte. Ltd,” the Competition Commission of India (CCI) said in a tweet.
Last month, the founders of the cab aggregator had sought approval of CCI for the combination pertaining to the indirect acquisition of less than 10 per cent of the share capital of ANI by Ankit Bhati, Bhavish Aggarwal and MacRitchie through Lazarus from certain existing shareholders of ANI. MacRitchie Investments is an indirectly wholly-owned subsidiary of Singapore-based investment company Temasek Holdings.
Ola, which competes against US-based Uber, counts among its investors names like Softbank, Tiger Global, Tencent and Sequoia Capital, among others. Merger and acquisitions beyond a certain threshold require the approval of the CCI.
Spicejet to start first Delhi-Shirdi daily direct flight from October
NEW DELHI: Budget carrier SpiceJet will commence flight service on the Shirdi-Delhi-Shirdi sector from October 1, said the airline on Monday.
"Our new flight will offer an immediate boost to religious tourism that the city is best known for," Shilpa Bhatia, Chief Sales and Revenue Officer, SpiceJet, was quoted in a statement.
Besides, it will also launch a new daily direct flight on the Mumbai-Kanpur route from October 8. The airline will also operate first direct flight on the Mumbai-Jaisalmer route starting October 29 and a third direct flight on Mumbai-Kolkata sector from November 1.
Fuel Price Hike: Petrol price hiked by 6 paise per litre, diesel price remains unchanged
Domestic fuel prices continued to scale new heights, while rates were not changed on Wednesday, a 6 paise per litre hike in petrol price was seen on Thursday, according to ANI. While on the other hand, the diesel price remained unchanged. Now petrol in Mumbai costs Rs 89.60 per litre and diesel Rs 78.42 in Mumbai.
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Petrol & Diesel prices in #Delhi are Rs.82.22 per litre & Rs.73.87 per litre, respectively. Petrol & Diesel prices in #Mumbai are Rs.89.60 per litre & Rs.78.42 per litre, respectively.
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Petrol in Delhi now costs Rs 82.22 per litre and diesel is priced at Rs 73.87 per litre. Delhi has the cheapest fuel rates among all metros and most state capitals because of lower taxes. Mumbai has the highest sales tax or value-added tax (VAT). A combination of a dip in rupee value against the US dollar and rise in crude oil prices has led to a spike in fuel prices since mid-August. Petrol price has since risen by Rs 5.02 per litre and diesel by Rs 5.15 — the most in any one-month period since the daily revision in fuel prices was introduced in June last year.
Curbs on non-essential items’ imports in offing
New Delhi : The government will soon announce import curbs on several non-essential items, Economic Affairs Secretary Subhash Chandra Garg said on Wednesday while terming “the 10 per cent depreciation” in the rupee in the last few weeks as a “temporary phenomenon”.
“There are always implications of the dollar and rupee exchange rates … this 10 per cent depreciation in last few weeks that is a temporary phenomenon,” he said at an event organised by PHD Chamber of Commerce here.
To a question about when the government intends to impose import curb on non-essential goods, he replied, “very soon.”
He, however, did not give any timeframe.
Last week, Finance Minister Arun Jaitley announced the government’s decision to relax norms for raising overseas borrowing and impose restrictions on the non-essential imports as part of efforts to check rising current account deficit (CAD) and a falling rupee.
India’s current account deficit deteriorated to 1.9 per cent of GDP in 2017-18 from 0.6 per cent in the previous year and is forecast to rise to around 2.8 per cent in the current year. The trade deficit expanded to $80.4 billion in the first five months of the current fiscal year from $67.3 billion in the year-earlier period.
The rupee has logged year-to-date losses of more than 13 per cent against the strengthening US dollar after trade concerns and firming up crude oil prices. It has dropped close to 6 per cent since August. Garg exuded confidence that the fiscal deficit would be maintained as per the Budget announcement despite pressures.
“Come what may, oil situation, rupee or whatever the fiscal deficit will not be allowed to slip from 3.3 per cent, or better as we go along. I think all the pain points, all the issues which were earlier thought of as something unknown, whether it’s the MSP (minimum support price), all these have now been factored into,” he said.
On the price rise, Garg said, 4 per cent inflation for a developing economy is healthy, it is not something unhealthy or detrimental for the economy.
The Economic Affairs Secretary also explained that since the dependence of 50 per cent of India’s populace is on agriculture, it needs a transition and therefore, required policy steps.
The government has announced various schemes including Ujjwala Yojana, health protection and rural electrification with the intention to bring change in rural India, he said.
Besides, he said, the government has drawn up a programme for increasing the export of agri products from $30 billion to $100 billion. “India’s agri exports potential is as high as $100 billion against a current export of $30 billion.
RBI eases ECB norms to prop up rupee
Mumbai: The Reserve Bank of India (RBI) on Wednesday eased norms for companies in manufacturing sector to raise overseas funds and allowed Indian banks to market Masala Bonds in line with the government’s measures to prop up the rupee. Following a review of the economy by Prime Minister Narendra Modi last week, the government announced an array of measures to check the decline of rupee and curb the widening current account deficit (CAD). Liberalisation of the External Commercial Borrowing (ECB) norms was among other measures announced by the government. “It has been decided, in consultation with the government, to liberalise some aspects of the ECB policy including policy on rupee denominated bonds (Masala Bonds) …,” the RBI said. As per the revised policy, eligible ECB borrowers who are into manufacturing sector, will be allowed to raise ECB up to $50 million or its equivalent with minimum average maturity period of 1 year. The earlier average minimum maturity period was three years. The central bank has also made changes in norms wherein Indian banks can market Masala Bonds overseas.
At present, Indian banks can act only as arranger/ underwriter for such bonds and in case of underwriting an issue, their holding cannot be more than 5 per cent of the issue size after 6 months of issue.
Now, the banks can “participate as arrangers/ underwriters/ market makers/ traders in RDBs issued overseas subject to applicable prudential norms,” the notification said.
The rupee has been losing value against the US dollar, and had almost touched 73 on Tuesday.
However, the domestic unit Wednesday bounced back by 61 paise to end at 72.37 against the dollar.
Rupee recovers 28 paise against US dollar in early trade
Mumbai: The rupee Wednesday rebounded from its all-time low by rising 28 paise to 72.70 against the US dollar in early trade at the Interbank Foreign Exchange market on fresh selling of the US currency by exporters and banks. Besides, dollar-selling by exporters and banks, easing crude prices in the global market and weakness in the dollar against other currencies overseas, helped the domestic currency rebound, forex dealers said.
A higher opening in the equity market also supported the recovery in the rupee, they said. The rupee Tuesday slid further by 47 paise to settle at a record low of 72.98 after scaling an all-time low of 72.99 (intra-day) against the US currency due to surging crude oil prices and escalating trade war worries. Meanwhile, the BSE benchmark Sensex recovered by 142.26 points, or 0.38 per cent, to 37,432.93 in opening trade Wednesday.