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Bullish on India

Written by Brian Hicks
Posted September 28, 2015

If you’ve been reading my blogs with any consistency, you shouldn’t be surprised by this recent New York Times headline:

“INDIA REPLACES CHINA AS NEXT BIG FRONTIER FOR U.S. TECH COMPANIES”

I’ve been writing about India’s tech sector regularly for the last two years.

At the beginning of the summer, I talked about the communications revolution under Indian Prime Minister Narendra Modi and what the market needed to advance: improved quality of service and cheap smartphones.

Over the weekend, Modi toured the tech hotspots of America, rubbing elbows and signing development deals for his “Make in India” and “Digital India” initiatives. Some of the biggest names in American tech have doubled down on India, broadening the communications revolution.

I’ve talked about Google’s (NASDAQ: GOOG) interest in India several times over the last two years, which has largely been in mobile devices. This week, Google’s Indian-born CEO Sundar Pichai announced another big initiative: Google will be providing free Wi-Fi in 500 train stations in a partnership with Indian Railways.

The first station could open in the next few months, and more than 100 will go online over the next year. 

It will be the largest public Wi-Fi project in India and one of the largest in the world in terms of potential user base.

Microsoft (NASDAQ: MSFT), meanwhile, will strive for low-cost broadband in 500,000 villages across the Indian countryside. Microsoft CEO Satya Nadella — who was also born in India — hosted a dinner in honor of the visiting prime minister to celebrate the collaboration. Microsoft’s cloud services will launch out of Indian data centers as early as next week to begin the project.

San Diego-based chipmaker Qualcomm (NASDAQ: QCOM) said it will invest up to $150 million in Indian start-ups through a new venture fund advised by Qualcomm Ventures. The company’s investments will focus on the Internet of Things and mobile innovation.

The company’s first investment in India was back in 2007, and it began a full business presence the following year.

While India bulls often cite the country’s large population as a principal driver of value, Prime Minister Modi made an interesting and memorable point during a town hall meeting at Facebook’s (NASDAQ: FB) campus yesterday.

It’s a simple mnemonic — 4-D:

  • Demographic dividend
  • Democracy
  • Demand
  • Deregulation

The first item on this list lends an important layer of information to India’s population. It’s a sociological term that refers to a drop in birth rate that occurs when the infant mortality rate also drops. It results in a shift in the population’s age structure where the share of working-age people is greater than non-working-age.

Essentially, it’s a boom in the workforce.

And for American tech companies, a boom in the Indian workforce is a very good thing.

Good Investing,

  Tim Conneally Sig

Tim Conneally

follow basic @TimConneally on Twitter

For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.

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