Convergence Plus
Friday, June 25, 2021
Microsoft Says Its TikTok Buyout Offer Rejected

Airtel, Vodafone Idea, Tata Tele likely to pay AGR dues on Monday: DoT source TikTok has been at the center of a diplomatic storm between Washington and Beijing, and Donald Trump gave Americans a deadline to stop doing business with TikTok's Chinese parent company ByteDance.

US tech giant Microsoft said Sunday its offer to buy TikTok was rejected, leaving Oracle as the sole remaining bidder ahead of a looming deadline for the Chinese-owned video app to sell or shut down its US operations.

The Wall Street Journal and New York Times reported that Oracle had won the bidding war, citing people familiar with the deal, although the company did not immediately confirm the matter to AFP.

The Oracle bid would next need approval from the White House and Committee on Foreign Investment in the United States, a source told the Journal, with both parties under the belief it would meet US data security concerns.

TikTok has been at the center of a diplomatic storm between Washington and Beijing, and President Donald Trump has given Americans a deadline to stop doing business with TikTok's Chinese parent company ByteDance -- effectively compelling a sale of the app to a US company.

Microsoft had indicated at the beginning of August that it was interested in acquiring TikTok's US operations, but said Sunday that bid had been rejected.

"ByteDance let us know today they would not be selling TikTok's US operations to Microsoft," the US tech giant said in a statement.

"We are confident our proposal would have been good for TikTok's users, while protecting national security interests," it added.

In early August, Trump issued an executive order stating that if a purchase agreement were not reached by September 20, the platform would have to close in the United States.

Trump claims that TikTok could be used by China to track the locations of federal employees, build dossiers on people for blackmail and conduct corporate espionage.

Disputed dangers
In late August China's commerce ministry published new rules potentially making it more difficult for ByteDance to sell TikTok to a US entity by adding "civilian use" to a list of technologies that are restricted for export.

ByteDance had vowed to "strictly abide" by new export rules.
"We believe Microsoft would only buy TikTok WITH its core algorithm which the Chinese government and ByteDance was not willing to budge," Wedbush analyst Daniel Ives said in a note.

"Given the need now to get a green light from Beijing after its export rules were changed a few weeks ago, TikTok's days in the US likely are numbered with a shutdown now the next step," the analyst said. Downloaded 175 million times in the United States, TikTok is used by as many as a billion people worldwide to make quirky, short-form videos on their cellphones. It has repeatedly denied sharing data with Beijing.

Microsoft said it would have "made significant changes to ensure the service met the highest standards for security, privacy, online safety, and combatting disinformation."

A deal with Microsoft could also have included Walmart, which joined forces with the tech giant in negotiations.

Ives said that even with Microsoft out of the picture, "while Oracle is technically the remaining bidder, without willing to sell its core algorithm we see no TikTok sale on the horizon."

"Oracle could be a technology partner, but a sale/divestiture of the US operations for TikTok remains the focus," he said.

TikTok meanwhile has filed a lawsuit challenging the crackdown by the US government, contending that Trump's order was a misuse of the International Emergency Economic Powers Act because the platform is not "an unusual and extraordinary threat."

Controversially Trump has demanded that the US government get a cut of any deal, which critics contend appears unconstitutional and akin to extortion.

Washington has accused other Chinese tech firms such as Huawei of working in the interests of the Chinese Communist Party.

Bidding for TikTok comes amid a broader deterioration of relations between the world's top two economies in recent months, with the US and China locked in fierce recriminations over trade disputes, human rights and the origins of the coronavirus pandemic. (Source: NDTV)

Disney testing a new ‘Group Watch’ feature for Disney Plus

HealthifyMe Disney is slowly rolling out a new ‘Group Watch’ feature for Disney Plus users that lets users watch content together. Screenshots of the new feature were shared on Disney Plus’ subreddit which was first reported by the Verge. According to the screenshots, up to six people can watch content together on Disney Plus

The media giant is currently beta testing the feature in Canada according to the subreddit. This was then confirmed by The Verge which reported that the company is likely to roll the feature out to other markets this fall.

All six participants should be Disney Plus subscribers in order to use this feature.

Amazon has been testing a similar feature for users in the US for its Prime members called Watch party, as per the report. Up to 100 members can watch content on Prime Video with friends using the feature provided that each member has a US-based Prime subscription.

Apart from this, streaming platforms have also partnered with third-party service providers for similar group streaming services. For instance, WarnerMedia, Disney, and Netflix have partnered with Scener to let subscribers watch HBO, Disney Plus, and Netflix together. (Source: The Hindu Businessline)

Tax Google, Facebook as telecom companies? Spain considering new law

HealthifyMe Under the proposed rules internet companies such as Alphabet Inc. and Facebook Inc, would have to disclose their sales from messaging services in the country

Spain will seek to tax all companies that operate telecommunications services, such as calls and instant messaging, according to Telecommunications Secretary Roberto Sanchez.

Under a new law proposed by the government, "all operators who provide telecommunication services without having to provide phone numbers, such as WhatsApp" and Telegram would have to register as telecommunications operators and would be taxed based on revenue, Sanchez said in a press conference. Currently, only phone operators that can provide phone numbers need to sign up as telecom operators, he said.

Under the proposed rules, which would require parliamentary approval, internet companies such as Alphabet Inc. and Facebook Inc., the owner of WhatsApp, would have to disclose their sales from messaging services in the country, he said.

For a tech giant like Facebook, sales are largely driven by advertising. Given WhatsApp generates little revenue for the company, the impact in the short-term would be small if the law were to pass, said Ivan Feinseth, chief investment officer at Tigress Financial Partners.

Over the long term, messaging services will look to integrate into e-commerce platforms, creating more opportunities for revenue, he added.

In the past, there have been initiatives to regulate and tax internet services, such as Facebook and Google, like telecom providers. These efforts are fair to some extent because internet-based messaging has mostly replaced traditional texting from phone companies in most markets, according to industry consultant Chetan Sharma.

“But the expectations of delivery, especially for emergency services, is just not there and the burden is primarily on the operators,” he added. Companies such as Google and Facebook “obviously want free rein as any form of regulation makes them accountable which could lead to fines in case of non-compliance.” (Source: Business Standard)

AGR verdict brings certainty; DoT should now focus on ease of business: BIF

Pre-Bookings open for Samsung Galaxy S20, S20+, and S20 UltraThe AGR verdict will allow companies to move ahead with certainty on business plans, and the DoT must now focus on steps to make the telecom sector profitable and attractive to investors through ease of business measures and lowering “onerous” duties and levies, industry think tank Broadband India Forum (BIF) has said.

BIF has also urged the Department of Telecom (DoT) to take quick decisions on a spate of recommendations which have already been forwarded by the sector regulator including major ones like public Wi-Fi networks for broadband proliferation.

BIF said any delay in decision-making on TRAI’s recommendations comes at an “enormous economic cost” at a time when the country has set its sights on massive digital transformation.

Focus on profitability

The Adjusted Gross Revenue (AGR) verdict has brought in finality to the statutory dues issue, and the industry can now move on with business plans, BIF President TV Ramachandran told PTI.

“Government must see how they can make the industry more profitable and attractive to investors. Ultimately, if you want investments to come into the country, you have to make the business case attractive,” Ramachandran added. The immediate focus must be on ease of doing telecom business, and reduction of “onerous duties and levies”, which are amongst the highest, he said.

Earlier this month, the Supreme Court allowed telecom operators to pay 10 per cent of total AGR-related dues this year, and rest of the payments in 10 instalments starting from next fiscal year. Implement recommendations

Ramachandran further said many of the Telecom Regulatory Authority of India (TRAI) recommendations that have already been forwarded to DoT but remain in a limbo, now need to be pushed actively, while the provisions of already-notified National Digital Communications Policy (NDCP) must be operationalised and implemented, at the earliest.

TRAI recommendations that could be very useful once implemented, include reduction in licence fee, USO (Universal Service Obligation) levy and spectrum usage charges, proliferation of broadband through public Wi-Fi networks and enhancement of scope of Infrastructure Providers Category-I (IP-I) registration, said BIF.

Besides, recommendations on captive VSAT CUG (Very Small Aperture Terminal - closed users group) policy issues, suggestions on ease of doing telecom business, spectrum usage charges(SUC) and presumptive-AGR for internet providers and commercial VSAT service providers, would also be helpful, it said.

Other key recommendations pertain to making ICT (Information and Communications Technology) accessible for persons with disabilities; next-generation Public Protection and Disaster Relief communication networks; spectrum, roaming and service quality related requirements in machine-to-machine communications; definition of revenue base (AGR) for the reckoning of licence fee and SUC, and reduction in the rate of GST imposed on the telecom sector. (Source: The Hindu Businessline)

Moody's revises Airtel ratings outlook to 'stable' from 'negative'

Sony India Feels the Heat from Chinese Cos, Cuts Over 120 JobsMoody’s Investor Service has affirmed Bharti Airtel’s Ba1 corporate family rating (CFR) and revised the outlook to `stable’ from `negative,’ following clarity around adjusted gross revenue (AGR) dues payment timelines and improved profitability of the Sunil Mittal-led telco’s India mobile services business.

Moody’s Investor Service has affirmed Bharti Airtel’s Ba1 corporate family rating (CFR) and revised the outlook to `stable’ from `negative,’ following clarity around adjusted gross revenue (AGR) dues payment timelines and improved profitability of the Sunil Mittal-led telco’s India mobile services business.

The global ratings agency said Airtel’s core India mobile business has benefited from a combination of reduced competition, steady 4G customer adds and tariff hikes taken last December.

“The ratings affirmation and change in outlook to stable reflect improving profitability at Bharti's core Indian mobile business, because of a moderation in industry competition, an increase in its 4G customer base, and a tariff hike from December 2019,” Annalisa DiChiara, Moody’s senior vice president, said in a media statement Friday.

A virtual summit that will bring key stakeholders of the telecom industry together to deliberate potential strategies & bottlenecks in India’s Digital Network Transformation.

Staggered payment resolution related to AGR liabilities, she said, “is a positive development,” adding that Airtel’s operating flexibility is improving and that the telco would benefit from a gradual expansion of profitability that provides a buffer against any material deterioration in credit measures and also supports a steady deleveraging.

Moody’s said the staggered AGR payment plan would alleviate pressure on Airtel’s cash flow, which means some of the proceeds Bharti raised earlier this year to fund AGR dues, can instead be applied to debt reduction. “And according to the (Bharti) management, this is already underway.”

Airtel shares closed 1.19% lower at Rs 491.65 on BSE Friday.

Earlier this month, the nation’s top court gave telcos 10 years to pay their balance AGR dues. Airtel pending AGR liabilities are at Rs 25,976 crore.

The telco had reported a consolidated net loss of Rs 15,933 crore in the June quarter, mainly due to one-time expenses related to its AGR dues. But its India mobile services operation continued its recovery, with average revenue per user (ARPU) rising for the fifth straight quarter to Rs 157 even though net 4G user adds slowed down amid the Covid crisis. (Source: ETTelecom)

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