IT Rules, Positively

Ever since Dr Manmohan Singh unleashed the liberalization process, over a

decade ago, India has been carefully moving away from the economic and cultural

isolation to an environment of global competitive market. The country has also

move forward to be part of the one-world-one-people declaration. Interestingly,

this was also the time when the country, led by home grown brands–the likes of

TCSS, HCL, Wipro and Infosys–took the global IT market by storm. They not only

established the country’s prowess and the "made in India" brand in

the segment, but also emerge as the most sought after destination for global IT

brands.

There has been other fallout too. The over-dependence of the IT sector on

export, particularly to the US, has exposed the industry to perils of the global

economy. The-west-sneezes-we-get-the-chills affliction seems to be strengthening

quarter over quarter, and so in this issue of DQ-Cirrus we examine the quantum

and the impact of corporate international news that fights for our attention in

the Indian English media. Interestingly, while the IT industry seems to have

suffered the most due to the US-led slowdown, the international news from the

sector seems to be occupying the maximum column space in the print media–49%

to be precise. Compare this with 16% share of the automotive sector, 6% of the

telecom and FMCG sector each, 5% of media and entertainment and IT clearly

dominates the quantum of international corporate news in the Indian media. While

consumer durable notched 4% and travel 3%, the remaining 11% was shared by the

other segments.

WHO GOT WHAT & HOW MUCH: While the Indian media gave prime importance to domestic news as compared to international news for the overall IT industry, the trend was almost 50:50 in the case of MNC IT companies operating out of the country

At a holistic all company all industry level, from amongst

the 1,100 corporates that Cirrus tracks, it was a ratio of 5:95 for

international and national news. However, like most averages, this cloaks a

number of industries and companies that take succor from (or in some cases bear

the brunt of) the exposure of their parent international companies. Predictably,

the IT sector, with a 20:80 ratio, has by far the highest dependence on

international news closely followed by the office automation sector that has 19%

dependence on international news. The consumer durable and automotive industry

has 8% share of news originating from abroad followed by the chemical and

agro-chemical sector (7%) and media and entertainment sector (6%). The

engineering and the telecom sector, however, were at the industry average of 5%.

Further analysis of the data the ratio of domestic versus

international news for multi national (MNC) IT companies hogging media coverage

in India reveals that Yahoo tops the list of companies with high dependence on

international news. Compared to the 51% industry average for MNCs, 78% of all

Yahoo news in the Indian media had international origin. The other IT MNC

companies that had a higher than average dependence on international news are

Microsoft (69%), Compaq (60%) and HP (57%).

At the other end of the continuum, Data Access topped the

low-dependence-on-international-news list with a mere 2% share of international

news. The other IT MNC companies that had a single digit, low international news

dependence are Adobe (4%) and Cisco (8%). AMD (20%), Dell (22%), Oracle (24%)

and SAP (31%) are the other players on the low dependence list. On the other

hand, Intel with 45%, IBM with 42% and Samsung India with 39% showed average

dependence on international news

The negative feedback



At an all company all industry level, almost a fifth of all international

corporate news is negative as compared to 7% of national corporate news.

However, the difference between these two sets of figures certainly does not

mean that the Indian counterparts have more positive news to share than their

global offices. Instead, what it probably means is that bad news about Indian

companies is only better veiled. Luckily for the IT companies, the negative to

positive news ratio is 17:83. This is not only lower than the overall industry

ratio of 19:81 it is also much lower than the share of other sectors. While 83%

of all international news on companies that operate in the power sector was

negative, the office automation sector had 49% negative coverage. The telecom

sector also had a relatively mush higher percentage of negative international

news (26%).

Of the larger MNC companies who had a high or medium

dependence on international news, Compaq and HP topped the negative

international news list with 35% and 23% respectively. However, this was more

due to the on-going legal battle triggered by the announcement of their merger.

Now that the merger is complete, from a media perspective, both companies would

certainly be relieved and expect better score. While Apple Computers, SAP, AMD

and SUN Microsystems that benefited from international news about their global

counterparts, Yahoo, Microsoft and IBM had an average proportion of negative

news.

SHUBHENDU PARTH in

New Delhi



(For more information on Cirrus, contact: sandeep@agencyfaqs.com
or srinibalram@agencyfaqs.com)