Convergence Plus
Monday, July 22, 2019
Israel holds 5G mobile network tender, aims for 2020 launch

Israel holds 5G mobile network tender, aims for 2020 launch. Israel launched a tender for fifth-generation (5G) cellular frequencies on Sunday, hoping discounts to cash-strapped mobile phone operators battling fierce competition will entice bids.

The telecoms regulator expects three groups to bid, including a combination of operators to cut down on costs. It expects to announce winners by the end of the year with a commercial launch to start in 2020 and continuing through 2023.

"We are aware of the companies' current financial situation and the tender takes this into account," said Communications Minister David Amsalem. The ministry has said 5G is necessary to develop health, agriculture and education, as well as smart cities and self-driving cars.

Israel's three main telecom operators -- Cellcom, Partner Communications and Pelephone -- are struggling to stay profitable in a country with 9 million people and nine mobile providers after a sector shake-up in 2012.

In the shake-up a host of new operators sparked a price war that led to steep drops in subscribers, revenue and profit at the three incumbents. All-inclusive calling, surfing and text packages are on offer at a price of 29 shekels, or $8, a month.

Revenues in the mobile sector fell 5.6% in 2018 but the carriers will probably invest in 5G to bolster their networks to meet growing demand, analysts say.

Despite its vibrant tech sector, Israel lags countries like South Korea, Switzerland, Britain and Spain that have already started to roll out 5G services, which are at least 10 times faster than 4G.

As part of the tender, Israel is auctioning frequencies ranging from 700 MHz and 2100 MHz, which are also used for 4G, to 2600-3800 MHz that will solely be used for 5G services, such as self-driving cars.

Israel is offering incentives of up to 500 million shekels ($141 million), including delaying the need to pay for the licence until 2022. The Communications Ministry will give grants to operators who deploy at least 250 5G antennas.

"We built the tender so it might not cost anything to the companies," said Ofer Raz-Dror, deputy director general of the ministry, adding Israel will not follow the high-priced tenders in Italy and Germany.

Cellcom and Partner, declined to comment on their plans but smaller rival Golan Telecom said it would bid together with Cellcom. Another provider, HOT Telecom, is believed to be bidding with Partner. Pelephone, a unit of Bezeq Telecom, also said it would participate. "Golan will participate in the frequency tender because ... it is important for us to be at the forefront of progress and to give our customers a quality network," the company said. (Source: ETTelecom)

TechM is Eyeing a Spot in ‘Stable’ Bangladesh

Tech Mahindra is eyeing opportunities in Bangladesh, as India’s fifth largest IT services exporter considers it a politically stable and growing economy. The IT firm receives more than 5% of its overall business from India currently, and is looking to create more opportunities in neighbouring markets.

Bangladesh was one of the most prominent among emerging markets in the Asian region and its technology projects are similar to those in India, said Sujit Bakshi, President, India Business at TechM. “Bangladesh… economy is growing 6-7% consistently, the currency is stable, and there is political stability. That gave us a message that we should focus on that market,” Bakshi told ET. (Source: Economic Times)

Facebook’s digital currency Libra may flourish where banks don’t

In developing countries, many tens of millions still live far from a bank or money transfer center, or currently use a currency prone to inflation or volatility.

Europeans and Americans have their Visa and Mastercards. For everyone else, Facebook’s new Libra digital currency is aimed at a huge potential market for financial services — the entire developing world, with billions of people in areas such as India and Sub-Saharan Africa, where financial services are often less sophisticated and many people don’t use traditional banking accounts.

Whether or not these billions will want to make the switch is anyone’s guess.

The US, Europe and most developed economies already have large, efficient payment systems.

These allow people to buy and sell goods in real time and send money person-to-person through services like Zelle, PayPal and Venmo.

That’s why the companies that joined Facebook’s Libra association, as well as nonprofits involved with similar projects, say Libra’s potential lies elsewhere.

In developing countries, many tens of millions still live far from a bank or money transfer center, or currently use a currency prone to inflation or volatility.

Libra could address this issue by providing a universal, stable currency that is easily transferrable between persons or businesses without involving setting up an entire payment infrastructure. It also potentially could work at a lower cost.

In the last decade, citizens of developing countries have widely adopted cellphones as a way to store money, sending text message-based payments either to businesses or persons.

It’s been a broadly heralded development among policymakers and nonprofits focused on poverty because bank accounts are hard to come by or are too expensive.

“The entire continent of Africa skipped right over cards and went straight into mobile payments,” said Sanjay Sakhrani, an industry analyst with Keefe, Bruyette & Woods, who covers Visa, Mastercard, PayPal and Western Union.

But these payment systems are often constrained by the type of cellphone carrier each person is using. It’s not uncommon in places like Africa to carry multiple cellphones in order to have the necessary access to the right money transfer system.

Libra could solve this problem by creating a universal currency that can be transferred across multiple cellphone networks and across borders. There’s also the issue of cost, which is cited by the World Bank as being the biggest issue with financial systems outside of developed markets. Facebook says Libra would have a near-zero cost attached to it.

The Colombian border city of Cucuta, is one of the places where Libra could make a difference.

Every day, thousands of needy Venezuelans cross into this sweltering town to buy food and medicines that are scarce at home.

For many the first stop is Western Union, where they line up for hours to pick up cash sent by relatives living in abroad.

The demand for cash remittances is so big in fact that migrants sometimes line up outside Western Unions the night before the branches open, sleeping on the sidewalk to keep their place in the queue.

Digital currencies could make it easier to transfer funds to these migrants with no bank accounts, and save them hours of their time. Using them is also safer, says Typson Sanchez, a local software developer, because it prevents robberies.

But despites its obvious benefits, merchants in Cucuta have been slow to adopt digital currencies, and only a handful currently accept it. “Merchants worry about the volatility” of currencies like bitcoin, says Sanchez, a software developer and co-founder of Panda Exchange, a digital payments start up. Other merchants find existing digital wallets difficult to use, and worry about its legality.

Sanchez hopes that Facebook’s Libra could help to overcome some of those obstacles. “They already have a very powerful platform with lots of users” Sanchez says.

“They will be able to reach everyday people who are not into technology. And that’s something that many companies haven’t been able to do yet.” Vodaphone, the Europe-based cell carrier, has a large presence in Africa and other developing countries and operates its own mobile wallet system known as M-Pesa. Already a dominant carrier in Africa, Vodaphone sees the potential in Libra to enable customers to send money across borders at a much lower cost.

There’s a lot of room for improvement. The average fee on a cross-border remittance is around 7%, according to the World Bank, with places in Sub-Saharan Africa charging as much as 10% to send a money transfer. Companies like Vodaphone and organizations involved with Libra like Mercy Corp and Women’s World Banking said they’ve joined at least in part to make sure they have a “seat at the table” in case Libra does take off as a payment method.

Libra’s real-life use cases are still at least a year off, and much likely longer.

Some would argue that Facebook’s Libra is the wrong solution to the issue of accessing financial services in developing countries.

In China, the dominant way to pay are WeChat and AliPay, two mobile apps that use messaging to send money either to a business or another person, at extremely low cost. Both apps are used by more than a billion people.

“That to me is the simplest solution for developing countries,” said Nicholas Economides, a professor of economics at the Stern School of Business, an expert in electronic commerce and payment systems. (The Hindu BusinessLine)

Amazon invests Rs 450 cr in India payments unit

American retail giant Amazon has infused Rs 450 crore into its payment’s unit in India — Amazon Pay, according to regulatory documents.

Amazon Pay (India) has allotted 45 crore shares of Rs 10 each aggregating to Rs 450 crore to Amazon Corporate Holdings and Ltd, documents filed with Corporate Affairs Ministry showed.

The documents, sourced by business intelligence platform Tofler, said the date of allotment was June 6, 2019.

Amazon Corporate Holdings has pumped in Rs 449.95 crore, while the remaining came from Ltd.

E-mails sent to Amazon India did not elicit a response.

The funding comes at a time when companies like Paytm, Flipkart-owned PhonePe, Google Pay and others are making significant investments to tap into the booming digital payments market in India. Many of these firms have been offering significant cashbacks to woo customers to use their platforms to make payments for utilities and shopping. (Source: The Hindu BusinessLine)

IBM sees opportunity in collaborating with telcos, media marketplace in India

The US-based technology company is holding talks with Indian telcos to bring in technologies and expertise around digital engagement with artificial intelligence and au-tomation, enterprise modernisation, and hybrid cloud

The nature of IBM’s information technology outsourcing that deals with Indian mobile companies has evolved into business enablement than just cost savings, and it is helping the carriers transform their business amid pressure on business and profitability, a top executive at the US firm said.

“We have seen what has happened with ARPUs (average revenue per user) in the marketplace and the battle happening on the consumer side … there is an opportunity for us to collaborate closely with telcos and media marketplace in India because they are under enormous pressure to continuously improve and change,” Steve Canepa, managing director of IBM's global telecommunications, media and entertainment industry business, told ET.

The US-based technology company is holding talks with Indian telcos to bring in technologies and expertise around digital engagement with artificial intelligence and au-tomation, enterprise modernisation, and hybrid cloud.

The nature of IBM’s partnerships with Indian telcos has primarily become business enablement and the focus is to prepare networks for enterprise services, Canepa said. “The real measures are to help bring product and services to the market quicker,” he added.

IBM recently renewed a five-year technology outsourcing deal with Vodafone Idea, India’s top telecom company. It also received an extension for a similar contract with Bharti AirtelNSE -1.36 % till January next year and bagged a blockchain deployment deal with India’s No.2 telecom company for curbing of pesky calls.

IBM is aggressively pushing technologies like artificial intelligence and automation of customer experience.

It is also working with telcos to build “next-gen network cloud” with an open hybrid cloud capability, aimed at shoring up their enterprise revenue. “The enterprise modernisation piece is what we have seen with Vodafone Idea through the new deal,” Canepa said.

As per IBM estimates, 80% of enterprises globally haven't moved to the cloud, which offers a trilliondollar market opportunity.

“We can help telcos create a hybrid cloud platform and integrate their network services in an open and efficient way, and help create new capabilities that have business values for customers,” he said.

IBM is betting big on its recent $34 billion acquisition of Red Hat to build more open-source systems and platforms as the telecom industry globally prepares to adopt the 5G technology. “To create that open-platform architecture, the network opportunity is tremendous even in India,” Canepa said.

Open-source systems in the telecom space will allow telcos to seamlessly integrate IT and network services as they deploy 5G technology.

Canepa said agility brought by networks powered by open-source technologies will allow telcos to capture the advantages of 5G, such as low-latency based services like autonomous driving, real-time medical services and video services. (Source: Economic Times)

Xiaomi component supplier, Holitech, to invest $200 mn in country over 3 years

Expanding its manufacturing base in India, Xiaomi on Saturday announced that Holitech Technology, a global component supplier, has inaugurated its first component manufacturing plant in India.

Holitech Technology has established its operations in Greater Noida and was first invited by Xiaomi in Q1 2018 to investigate local manufacturing opportunities during its ‘Supplier Investment Summit’.

Holitech Technology is to invest nearly $200 million over three years in the country and would manufacture Compact Camera Modules (CCM), Capacitive Touch Screen modules (CTP), Thin Film Transistors (TFT), Flexible Printed Circuits (FPC), and fingerprint modules, locally. The local manufacturing plant is ready and would commence production within Q3, 2019 and it aims to generate 6,000 jobs in three years.

The component manufacturing plant is spread across four factories and spans over 25,000 sq m in Greater Noida and will start mass production with a capacity of over 300 million components annually. The plant also boasts of class 1000 and class 100 clean rooms, an industry first. A clean room is a contained space where provisions are made to reduce particulate contamination and control other environmental parameters such as temperature, humidity and pressure.

Holitech Technology in partnership with the Uttar Pradesh government is also organising a Supplier Investment Summit with Holitech Technology component suppliers on Sunday, when over 15 of its suppliers would visit the state. Uttar Pradesh has extended several incentives for the establishment of manufacturing plants in line with the UP Electronics Manufacturing Policy.

Muralikrishnan B, Chief Operating Officer, Xiaomi India said, “Xiaomi has witnessed significant growth in the country and we are positive that Holitech’s plans for India will herald a new stage of evolution for the electronics manufacturing industry in India.”

Chenguisheng, CEO, Holitech Technology said, “The phenomenal growth of Xiaomi along with their initiatives to promote local manufacturing has encouraged us to explore component manufacturing for Xiaomi in India. We are pleased to bring several industry firsts to Uttar Pradesh with the manufacturing of camera modules, CTP, TFT, FPC and fingerprint modules and propel the growth of component manufacturing in India. We hope to further boost this initiative by setting an example for other component manufacturers, and being a part of Xiaomi’s growth in India. (Source: The Hindu BusinessLine)

Cash-strapped Urban Ladder lays off hundreds of employees

40% of workforce given pink slips in Jan-March quarter. Omnichannel furniture retailer Urban Ladder has been trimming flab to sustain its operations, but its leadership team claims it is just a couple of months away from turning EBITDA (earnings before interest, tax, depreciation and amortisation) positive.

Industry sources as well as former Urban Ladder employees told BusinessLinethat the start-up let go of 40 per cent of its headcount in the quarter that ended in March.

Elusive profitability
Urban Ladder’s inability to raise more funding and a struggle to turn profitable were the major reasons cited by the management to the employees who were handed pink slips.

The layoffs, which were carried out across levels, functions and geographies, have brought the Ratan Tata-backed company’s headcount down to 700, said the sources, adding that this is the second time that Urban Ladder has resorted to job cuts after 2016.
Asked why the company resorted to a second round of layoffs, Ashish Goel, co-founder and CEO of Urban Ladder, said it was absolutely necessary. “We had no other option. We would have shut down if we hadn’t asked them to leave,” he said.

Top-level exits
A retail veteran of 30 years, Ajit Joshi, who was hired as President and COO in July 2017, is learnt to have resigned in March citing personal reasons. Other top executives, who were heading various functions, including Operations and Supply Chain, Sales and Marketing, Product, Engineering and HR, have also moved on.

Last year, the company had told BusinessLine it was close to raising $25 million. Goel said it may now no longer require the funds.

Refusing to comment on the number of employees fired, he said: “We have made more than our share of mistakes and have made some tough, painful decisions and gone through a reset from January to March. Now, we are on track to be profitable at the EBITDA level next month and our goal is to deliver ₹8-10 crore of EBITDA this fiscal. It’s not a big number, but it is a start.”

Urban Ladder, which will turn seven next month, doubled its revenue to ₹204.7 crore in FY18 from ₹101.9 crore in FY17. It pared losses from ₹459.1 crore in FY17 to to ₹117.3 crore in FY18, per its RoC filings accessed by

New outlets
The company notched up revenues of ₹345 crore net of cancellations and returns in FY19, Goel said. With 11 stores in Bengaluru and Delhi, offering products ranging from ₹2,000 to ₹1.5 lakh, the start-up plans to open stores in Chennai and Pune in six months.

Urban Ladder’s inability to raise funds from new investors since its last funding round 18 months ago is largely attributed to the new FDI rules in e-commerce, which make potential investors cautious. “With little or no resources to continue with operations till things played out, Urban Ladder was forced to resort to mass layoffs,” said one of the sources.

Tough rivals
The start-up has raised $112.8 million to date, compared to rival Pepperfry, which also turned seven this January and has raised $197.5 million to date. The latter has established over 45 experience stores pan-India.

The entry of Swedish furniture major IKEA, which recently invested in home interiors and renovation platform Livspace, has further toughened competition for Urban Ladder.

On his plans to raise more funds, Goel said: “At some point, we will. We have cash in the bank, we generated ₹1 crore in cash in the business last month and expect to generate cash in the September quarter. On a core operating basis, the cash we have is adequate for us.” The furniture market in India is worth about $18 billion, of which nearly 90 per cent is unbranded. (Source: The Hindu Business line)

Lenovo bags order from Tamil Nadu for 1.5 million laptops

It is meant for free distribution to students in the state Lenovo India has bagged an order from the Tamil Nadu government for providing over 1.5 million laptops to students in the state, according to a company official.

“We have won a large order from the Tamil Nadu government for supplying over 1.56 million laptops for free distribution to students in the state. This entire order is expected to be completed over the next few months,” Lenovo India Director (Commercial Named Account Business) Stephen Sequeira told PTI.

He, however, declined to comment on the financial details of the deal. Sequeira said state-owned ELCOT - the nodal agency for procuring electronic hardware and software for the state government and its schemes - finalised the tender where Lenovo outbid the other brands.

Launches ThinkShield cyber security solutions

Talking about the other initiatives, Sequeira said, the company has launched the second variant of its ThinkShield cyber security solutions. ThinkShield is Lenovo’s portfolio of secure ‘Think’ devices, software, processes, and services.

“ThinkShield goes beyond simple endpoint security, with solutions that create huge efficiencies, streamline IT administration, improve the end-user experience, and provide a platform for businesses to compete safely,” Sequeira explained.

The latest version gives IT admins more visibility into endpoints, offer self-healing capabilities and one-click fixes, provide easier and more secure authentication, and use intelligence to assess risk, he added. (Source: The Hindu Businessline)

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