Kerala garners Rs 2,240 crore IT investments

Kerala is on an IT high. The state attracted investments to the tune of Rs 2,240 crore last week during the highly successful IT Kerala 2000 event here. Bulk of these investments, to be made by leading telecom players, is to set up state-wide networks of optical fiber (OF) backbone to provide high quality, high capacity bandwidth for IT companies.

These investments, which will make Kerala one of the most networked state in the country, were announced during an Investors' Meet organized as part of the IT Kerala 2000 show here, in the presence of EK Nayanar, the Kerala Chief Minister. These projects were cleared after the Kerala state government announced a 'Right of Way' clearance for laying underground cables.

Reliance Infocom tops the list of investors with plans for Rs 700 crore to set up an OF underground cable crisscrossing the state. "It will be then linked to the Reliance Group's proposed nationwide Internet backbone network," said Ajit Verma, Senior VP, Reliance

Infocom.

Kerala-based satellite TV major, Asianet Communications, will invest Rs 500 crore to network the state besides setting up a data center in Cochin. Asianet is also setting up a Rs 200 crore international satellite gateway in Thiruvananthapuram. The network will connect all educational institutions, announced CM Radhakrishnan Nair, MD, Asianet. The project will be completed in 30 months.

The other leading investors are: Zee Interactive (Rs 250 crore), Dishnet (Rs 250 crore), Escotel (Rs 250 crore), BPL (Rs 150 crore) and Bharat Telesonics (Rs 65 crore). G Gopalan of Bharti Telesonics said that it will install a 1,000 km OF network in the state with data and switching centers in Cochin. It will then be linked to its network connecting Mangalore, Mumbai, Thiruvananthapuram, Trichur, Palakkad and Coimbatore. A new Kerala-based player, Exatt Communications, intends to wire up the state with a 2 MBPS link, which will provide the backbone for the state's e-governance project connecting all administrative units.

"The potential offered by the availability of such widespread connectivity for economic growth and social benefits is indeed immense and I hope this will pave the way for enhanced investments flows into the state in future," remarked Nayanar.

These investments are likely to create immediately 6,000 jobs in the IT sector, besides substantial indirect employment, particularly in the growth of IT-enabled services and decentralized IT units.

Kerala's showpiece IT park, Technopark, now has over 50 companies. The park is being expanded rapidly to cater to increasing demand for space. Besides, three big IT parks are being set up in Cochin and Calicut by the state government through KINFRA, its infrastructure development agency.

A high-profile investor, J Menon, CEO, Toonz Animation India Ltd and US Software, was highly appreciative of Kerala's IT facilities. Besides the availability of talented human resources, Menon said that the cost of operations was low and the employee attrition rate was very low compared to the national average.

"After we started operations, we expected to complete the first year with 100 people, but actually we have 325. And we expect to double the number in the current year," he said. "We were able to complete our software projects on time and with full satisfaction."

"Kerala is a good place to invest in IT," gushed TK Mathew, CEO, IBS, a transportation software developer. "We started with 65 people in October 1997. We have had a five-fold growth and hope to have 700 software programmers in 2002 and 1,500 in 2005."

"The people here have fantastic potential. Companies, should however, be prepared to invest in people and training and come with long term view, so that they can deliver the goods," he added. However, Mathew advised that the state should strive for a cosmopolitan culture, better hotels, roads, airports, parks and amusement centers to make it better for potential investors.

Kerala government officials have made a strong pitch for investments. Dispelling the notion that militant trade unionism is a hindrance to investments in the state, Jiji Thomson, MD, Kerala State Industrial Development Corporation (KSIDC), said, 'strikes' were an aberration in Kerala. "There were 28 industrial strikes in 1997 leading to a loss of 5.39 lakh mandays. This has reduced drastically to 16 strikes and only 24,000 mandays loss this year."

Meanwhile, the IT Kerala 2000, organized by Cyber Expo India Ltd, on behalf of the Kerala government, was a huge success. Almost all the roads in Thiruvananthapuram led to the Technopark venue from November 23 to 26. Public visiting hours were characterized by thousands of people, including families, school children, college students and IT enthusiasts, who eagerly visited the 1,800 square meter venue, showcasing latest IT technologies. Participating companies reported good business inquiries. IT Kerala 2000 was the first such mega show to be held in

Kerala.