The way of business

We have been having heartening local business news lately. One welcome bit of news is the restoration of incentives of the Clark Special Economic Zone following its passing by the Bicameral Committee. Now the zone will enjoy the same status as a freeport with Subic. Hopefully, fresh investors will come in to enjoy the perks granted to free zones like these. Still in the area, the new IT Call Center to be built in Camp John Hay in Baguio City, brings fresh hope for employment and business. The UK-based hotel chain Intercontinental Hotel Group is planning to build this one-hectare IT Call Center to accept worldwide reservations for all of the hotels under its umbrella. The project will enjoy the full benefits given by PEZA for the duration of the lease period which is five years, at the minimum. Letís hope this investor is not driven out by shifting government policies, or labor machinations.

Now itís First Pacific Co. Ltd. that is in the news. The governmentís stake in PLDT, owned by Philippine Telecommunications Investment Corporation (PITC) is 6.4 percent.This is hefty if you realize that PLDT shares market capitalization is $9.8 billion, and this 6.4 percent represents about P25.2 billion.

Japanís biggest mobile phone firm NTT DoCoMo owns a seven percent stake at PLDT. Now, PLDTís Manny Pangilinan is negotiating with DoCoMo to purchase the governmentís stake jointly with First Pacific. As I understand it, First Pacific has first option to match the winning bid for the governmentís share because it is a majority stakeholder of PITC. The winning bid for this share is by Singaporeís Parallax Venture Fund. Considering that PLDT reported a net income of P34 billion for year 2005, with bigger prospects for 2006, the deal is interesting for both the Singapore and Japan mobile phone firms.

The dynamic firm, PLDT, indeed has big prospects in the very near future. It has substantial involvement (20 percent) with ACIL (ACeS Intíl Ltd., and if its collaboration agreements with Immarat pushes through, ACIL will be transformed into an important global operator-take note, not just regional but global.

We hope this will be the start of more global developments for our telecoms business. The key is the entry of more foreign private equity. Imagine that in India, they doubled this to $2.2 billion in 2005, and then more than doubled the figure again to $5.4 billion by the third quarter of 2006 the big boys of the global electronics industry are there ó Californiaís Flextronics International, for example, has its operations mostly in India. The same goes for WNS Group which is one of the top outsourcing business processing giants.

Bharti Airtel of India is one of the most dynamic in the fast-growing mobile market of India, and at its helm is Sunil Mittal who was named Businessman of the Year for Asia. Mittal is only 49 years old, but the guy has really earned his stripes in business. He started his entrepreneurial juices flowing at age 18, right out of the university, with a $1,500 loan from his father which he parlayed into a small business making crankshafts for locally manufactured bikes. He soon set up a yarn factory, and another plant making stainless sheets for surgical tools. Realizing the potentials of the steel plant, he let go of his other two plants and concentrated on the third one. Eventually he landed the exclusive dealership of Suzuki electric power generators, until new government legislations caused the banning of all imported generators. This gave rise to another burgeoning industry in India but marked a lost battle for Mittal.

Now Mittal is the biggest name in Indiaís mobile market. As it is, it is already a crowded market, but Mittal stands as the tallest of them all. The key to his leadership is outsourcing. He was not afraid to sell shares in his company to foreign investors like Singaporeís Sing Tel. He also brought in Swedenís Ericsson, Siemens of Germany, and Nokia of Finland, and all of these companies are now handling operations for his entire phone network, which effectively rids him of the headaches of purchasing (and maintenance) of equipment which need to be upgraded regularly, as the technology necessitates. Even IBM has gotten into the picture to handle the firmís information technology services under a revenue-sharing arrangement. These contracts are big ó the contract for operations with the European phone biggies is reportedly for $400 million while that of IBM is for $750 million.

While others have criticized Mittal for ìgiving awayî his business, he has proven them wrong. He defends outsourcing, accepting his limitations in the cutting edge technology of telecommunications. His European and American counterparts are far more advanced in the technology, so why not outsource? If he partners with local businessmen who have as limited an exposure in the technology as he does, where does it take him? So, in ìgiving awayî his network, he has actually expanded it, and Bharti Airtel has ballooned into one of the biggest in the region. Now, the mobile firm runs on its own, without need for much intervention on his part, and he is free to enter into other, newer ventures like the retail partnership with Wal-Mart which is seen to change the retail landscape of India dramatically. No wonder he was named Asiaís Businessman of the Year, for his fearless pioneering approach to business. And at the core of this new aggressive approach is outsourcing.

Business is done in so many ways in so many countries, though the desired end result is the same, it doesnít necessarily come out always as expected.

You can vote at the malls!

Yes, you can vote at the malls but no, not for your favorite senatorial candidate but for your preferred current model vehicles in each different category like sedan, SUV, AUV, Van, Pick-up and Sports Car and in different sizes too. And ultimately you make your choice of a particular model, that for you stands out among the rest of the field, the one thatís best for your needs, the one that satisfies your safety requirements, the particular model that suits your taste and of course that would be the best in value for money-your automobile of the year. The place to go to cast your vote is the SM Megamall, where the audio-visual booth that has the complete info about all the 2007 model automobiles can be found on JVC video screens that offer impeccable resolution up to Wednesday, Feb. 28.

The Petron Xtra Unleaded 2007 Auto Focus Peopleís Choice Awards polls is on and you can vote for your favorite automobiles conveniently on IBM ìtouch screensî in any of the malls in the metro where the display booth and voting center will be stationed for an entire week (SM Megamall up to Wednesday, Feb. 28, Eastwood City in March, The Block at the SM EDSA North in April and at the SM Mall of Asia in May) or ìon lineî via the internet on the voting website www.autofocus.com.ph.

Mabuhay!!! Be proud to be a Filipino.

For Comments: (E-Mail) [email protected]