Convergence Plus
Thursday, November 26, 2020
U.S. Rural Telecom Networks Need $1.8 Billion To Remove Huawei, ZTE Equipment – FCC

Pre-Bookings open for Samsung Galaxy S20, S20+, and S20 UltraU.S. rural telecommunications networks, which have relied on inexpensive network equipment from China’s Huawei Technologies Co [HWT.UL] and ZTE Corp , have told the government that it would cost $1.837 billion to replace those switches and routers, the Federal Communications Commission (FCC) said on Friday.

In June, the FCC formally designated Huawei and ZTE as threats to U.S. national security, a declaration that bars U.S. firms from tapping an $8.3 billion government fund to purchase equipment from the companies.

The U.S. telecommunications regulator voted last year to propose requiring rural carriers to remove and replace equipment from the two Chinese companies from U.S. networks.

FCC commissioners said the report shows the need for Congress to approve funding to replace that equipment. Congress has authorized reimbursements but has not approved the money.

The FCC said it believes the carriers would be eligible for reimbursements of about $1.62 billion. “By identifying the presence of insecure equipment and services in our networks, we can now work to ensure that these networks — especially those of small and rural carriers — rely on infrastructure from trusted vendors,” FCC Chairman Ajit Pai said, urging Congress “to appropriate funding to reimburse carriers for replacing any equipment or services determined to be a national security threat so that we can protect our networks.”

The FCC identified more than 50 mostly smaller telecom companies with ZTE or Huawei equipment or using services from the companies, as well as a few larger companies like CenturyLink and Verizon Communications Inc

Verizon said its networks do not include equipment from Huawei or ZTE but has a small number of devices, called VoiceLink, made by Huawei that some customers use to make voice calls. Verizon said it expects to retire all VoiceLink devices this year.

CenturyLink said the “legacy equipment at issue cannot be used to route or redirect user traffic” and is not covered under restrictions established by Congress. The company added it has “actively been removing and replacing equipment and continue to work with federal policymakers to accelerate the process.” (Source:News18)

PLI scheme: Centre’s hard stance has put Chinese handset makers like Xiaomi, Oppo, Vivo in dilemma

Sony India Feels the Heat from Chinese Cos, Cuts Over 120 JobsFor global players, incentives would be for phones above $200 as they have a market outside India. In India, phones above $200 have a market share of only 2%. Due to this, the domestic value addition for mobile phones is expected to rise to 35-40% by 2025 from the current level of 2-25%.

Due to this, the domestic value addition for mobile phones is expected to rise to 35-40% by 2025 from the current level of 2-25%.

The border stand-off with China and the government’s hard stance towards Chinese companies operating in the domestic space, has put Chinese handset makers like Xiaomi, Oppo, Vivo, Realme, etc, in a quandary with regard to applying for the Rs 41,000-crore production-linked incentive scheme.

Government officials, however, told FE that since the scheme is for export market, hurdles would not be put in the path of Chinese players and if they apply their case would be considered on merits. The scheme, under which the government will offer incentives to selected firms, is basically aimed to attract global electronics firms to set up manufacturing bases in the country for export purposes. So far, Foxconn and Wistron, the global contract manufacturers for Apple, have registered for the scheme, while among the local players, Lava, Dixon Technologies, and Karbonn have done the same. However, none of the Chinese mobile makers present in the country have so far registered for the scheme and are still reported to be weighing their options.

The government started inviting applications under the scheme beginning this month and the last date for applying is month-end. By early August, the names of selected companies will be announced. Initially, five global and five local companies will be selected to avail of the scheme. South Korean major Samsung and Flextronics are also expected to submit their applications shortly.

The reason the government is likely to consider the applications of Chinese firms favourably in case they apply is because the potential of job creation as a result of the PLI scheme is 15 lakh over a five-year period. Around 90% of the jobs would be at the worker level where an average salary level would be around Rs 22,000. The remaining 10% jobs would be of supervisor levels.

For global players, incentives would be for phones above $200 as they have a market outside India. In India, phones above $200 have a market share of only 2%.

Companies will require to meet incremental investments and produce incremental phones over and above FY20 (which has been defined as the base year). Investment and production targets increase over a three-year period and five-year period, respectively.

The PLI scheme will extend an incentive of 4% to 6% on incremental sales over base year of goods manufactured in India and covered under target segments, to eligible companies, for a period of five years subsequent to the base year as defined. Due to this, the domestic value addition for mobile phones is expected to rise to 35-40% by 2025 from the current level of 2-25%.

According to industry estimates, mobile manufacturing companies have the potential to get an incentive of around Rs 7,500 crore if they scale up production to worth about Rs 1.5 lakh crore over the next five years under the PLI scheme.

The production of mobile mobile handsets in 2018-19 reached 29 crore units worth Rs 1.70 lakh crore from 6 crore units worth Rs 19,000 crore in 2014. While the exports of electronics has increased from Rs 38,263 crore in 2014-15 to `61,908 crore in 2018-19, India’s share in global electronics production has reached 3% in 2018 from 1.3% in 2012. (Source: Financial Express)

Smartphones sales down 30-40% in July so far on import hurdles, production delays

HealthifyMe Shortage of new smartphones due to supply chain constraints has resulted in 30-40% fall week-on-week in sales in July despite robust demand as manufacturers tackle import impediments and production delays.

Smartphone market trackers Counterpoint Research and International Data Corporation (IDC) said both offline and online channels are short of stocks for almost all brands and that the rollover impact of custom clearance delays which started in June will continue to impact sales through July. A leading agency has revised its April-June shipment estimates downward from 16 million units predicted earlier.

“Crests and troughs in the demand-supply equation will be seen throughout July because, for parts to be shipped, assembled and distributed, it takes three-four weeks on average and above that we have regional lockdowns also,” said Neil Shah, research director at Counterpoint.

Amid India-China tensions, the government initiated 100% manual checking of Chinese cargo at ports and airports between June 22-30, which led to a 10-day backlog in supplies of phones and parts.

“Supply constraints continue to prevail with components stuck at the ports, especially for China-based vendors, and factories still running at less than half the capacity,” said Upasana Joshi, associate research manager at IDC, India. “The situation will take longer to improve than expected earlier, with supply bottlenecks clubbed with anti-Chinese sentiments.”

Southern India’s largest multi-brand mobile phone retailer, Sangeetha Mobiles, which had seen 90% recovery in business in May-June as compared to pre-Covid numbers, said July sales fell to 40%.

“Last two months the pent-up demand was high which is now tapering-off, and of course, supply has never been regular since Covid happened,” said Chandu Reddy, director, Sangeetha Mobiles. “We are told by most brands that fresh stocks will be provided in a week or so.”

Vibhooti Prasad, managing director of 75 O-line-O stores in Mumbai, Navi Mumbai and Thane, said the company was able to service only 50 orders per day this week, down from 300 per day in June. “We are facing acute shortages of new devices in Mumbai. One, because of logistics and supply chain breakdown that happened recently and, two, because many zones have again gone into containment where shops are shut,” said Prasad.

Nilesh Gupta, founder of electronics retail brand Vijay Sales, said availability of smartphones in northern India was still better as most of the smartphone factories were in that region, and transportation was easier. Overall, though, he said, “We are able to fulfil 70% of the demand wherever stores are open”. (Source: The Economic Times)

Amidst Covid Lockdown, Cryptocurrency Trading Sees A Boom

Pre-Bookings open for Samsung Galaxy S20, S20+, and S20 UltraBut lack of clarity on regulations, possible ban hindering investments. The national lockdown, along with working from home, seems to have brought in a flurry of new participants and increased trading volumes in cryptocurrency, which was already seeing renewed interest after the Supreme Court lifted the ban on trading. While there have been a number of new players entering the sector, experts and companies also say that there are a lot more retail investors participating in the last three to four months.

“Along with the lifting of the restrictions on trading, the lockdown has also pushed people to stay at home and many people are spending more time on their desktops and many of them are trading more. Trading volumes are quite robust. Daily crypto trading volume in India may be $10-$30 million,” said Ajeet Khurana, former head of the Blockchain and Cryptocurrency Committee of the IAMAI and former CEO of Zebpay, adding that the numbers have become significant enough for this to become a valid asset class and commercial activity. “The regulators can no longer look away and fundamental issues like classification, taxation, need to be addressed,” he stressed.

According to Nischal Shetty, Founder and CEO, WazirX, more entrepreneurs are looking to enter the cryptocurrency sector in the last three to four months.

“At WazirX, we have seen three to four times increase in sign-ups. These are new entrants. Trading volumes have increased 400 per cent in the last few months,” he said, adding that it has been a combination of the lifting of the ban as well as the lockdown.

“The lockdown has been a major factor. People have more time to understand and learn new things. Also, a lot of people are looking for new avenues of making money online, as they don’t have a job right now or their jobs are offline and they can’t go to work. Crypto markets have stayed very strong,” he said.

Need for regulatory clarity
However, the lack of clarity on regulations and reports of a possible law to ban cryptocurrency continue to be a dampener, players said.

Last year, the Subhash Garg-led inter-ministerial panel had recommended banning cryptocurrencies in India, citing risks and volatility in prices.

In March, the Supreme Court had allowed banks to provide services for virtual currencies. But the government has been unable to take a call on how to regulate this segment despite several committees coming up with proposals, including two draft Bills.

“Everything happening today is in a policy vacuum where people are doing business but don’t know what the future holds for them,” said Navin Gupta, Managing Director for South Asia and MENA, Ripple. His colleague, Sagar Sarbhai, Head of Regulatory Relations for APAC and Middle East, said that while trading volumes have gone up, lack of clarity on regulations is hindering progress of the industry. “Without clarity on regulations and a framework in place, companies like us will not launch enterprise use cases for digital assets,” he said.

“Before the ban, India was among the top three or top four countries globally but now it is nowhere near that. With more clarity, a lot of players and exchanges will come and launch in India,” he said. Shetty said the Internet and Mobile Association of India (IAMAI) is working on a code of conduct for cryptocurrencies.

“We, as part of IAMAI, are trying to come out with regulatory pointers. Guidelines such as those on KYC will address concerns on money laundering and illegal activity,” he said, adding that WazirX already follows this. (Source: The Hindu Businessline)

Global Fintech Funding Declined during COVID-19, Investors Now Focused on Mature Fintechs like Robinhood and Stripe: Report

HealthifyMe The global Fintech industry is being transformed by the COVID-19 outbreak and resulting socio-economic problems and challenges, according to a recent report from CB Insights.

As mentioned in the report, the first quarter of this year was quite difficult for the financial services sector – which may be due to changes in consumer behavior after governments began enforcing lockdowns and asking people to observe safe distancing measures.

CB Insights confirms that Fintech funding declined during the Coronavirus crisis, as many investors pulled back from their commitments due to economic uncertainty.

The report noted:
“While regulations and legislation are geographically dependent, there are several noteworthy developments around the world. Firstly, regulators in the US are becoming more amenable to Fintech companies acquiring bank charters, as we’ve seen with Lending Club and Square.”

The report added that the research firm is keeping a close eye on global virtual currency and stablecoin regulations in order to “see how crypto plays out.” CB Insights is also watching the global Open Banking regulations and their potential impact on the Fintech sector.

The report also summarized key trends from the insurance and cybersecurity space, by noting: “Traditional commercial insurance products do not cover data breaches, network interruptions, or other cyber risks. While companies are heavily investing directly in cybersecurity technologies to prevent these attacks, they’re also increasingly purchasing cyber insurance policies to protect themselves in case of an attack.”

The report pointed out that the “complexities of these risks and the lack of extensive historical claims data” have created “uncertainty” in the global cyber insurance market. This emerging market is valued at approximately $20 billion, according to CB Insights.

The report also mentioned that after huge rounds for firms like Stripe and Robinhood, the Fintech funding landscape looks like it’s in “a holding pattern.”

Fintechs appear to be drawing on all available financing resources, such as “extension” rounds (for example, Stripe’s Series G). It seems that investors are focused on remaining liquid and may not be too keen to commit capital to early-stage ventures, the report revealed.

It confirmed:
“[Right now,] investors are putting money in later-stage, more mature companies (like Robinhood) with clear unit economics and paths to profitability. In general, we expect continued uncertainty and funding pullbacks.”

The global Fintech market is expected to grow at a compounded annual growth rate (CAGR) of about 20% and is projected to reach a market value of approximately $305 billion by 2025, according to a June 2020 report from Research And Markets. (Source: Crowdfund Insider)

Covid-19 impact: Q1 to be a washout for IT sector, say analysts

Pre-Bookings open for Samsung Galaxy S20, S20+, and S20 UltraIndian IT firms will face the full impact of business disruption in the US and Europe due to the Covid 19-induced lockdown in the quarter to June, as analysts expect companies to report 5-10 per cent drop in revenue due to clients cancelling or putting off discretionary spending on technology in the three-month period.

Sectors such as travel and transportation, oil & gas and retail have been the most affected due to the lockdown in the three-month period, with several companies declaring bankruptcies due to the loss of their business.

“(It) is a washout quarter that captures the full impact of uncertainty in business from Covid-19 led by lockdown, supply side compression and demand pullback. We expect retail, travel and transport, hospitality and oil & Gas verticals to be severely impacted and do not expect recovery in Q2 also,” Aniket Pande, IT sector analyst with brokerage Prabhudas Lilladher wrote in a report. “We expect the revenue trajectory to show resilience in Q2FY21 before starting growth (<+1 QoQ USD growth) from H2FY21.”

Tata Consultancy Services, India’s largest IT services firm will be the first company to declare first quarter results on July 9. WiproNSE 0.27 %, which will see its new Chief Executive Thierry Delaporte taking over this week, will announce results on July 14.

TCSNSE 1.97 % is expected to see revenue drop by 6 per cent, InfosysNSE 0.81 % by 5 per cent, HCL Technologies 8 per cent, Tech Mahindra by 9 per cent and Wipro by 7.5%, brokerage firms said in their reports.

These companies will also see margins being affected during the quarter, even as they have taken steps to cut costs and rein in expenses, said Madhu Babu, IT analyst at brokerage Centrum.

Analysts, however, believe certain business segments can be immune to the impact of coronavirus and revive demand faster than others.

Banking and financial services industry (BFSI), healthcare, non-discretionary retail such as grocery, and hi-tech verticals will be more resilient, said Prasad of HDFC Securities. William O Neil India, an investment adviser, said though the new order flow may remain low in 2020, post-pandemic technology development can prove a silver lining for India’s IT sector.

“BFSI expects a strong opportunity for cloud, data services, and new digital bank capabilities after the pandemic. In April, JP Morgan released its annual report for 2019. The company disclosed that it would increase its technology spends by 4% versus the last year, despite the pandemic. Of this, 50% would be dedicated to ‘new’ capabilities,” it wrote in a report.

The good revenue numbers of Accenture, which raised the lower end of its guidance last week, has a positive impact for Indian IT, as it indicates more clients are spending on technology and taking their business digital.

Top executives of Indian IT services firms have expressed that demand for technology outsourcing in some sectors has offset slowing growth in a few sectors impacted due to the pandemic.

“I'm pleasantly surprised by the speed with which people are adapting to digital. In a lot of ways that seems to be working to our advantage,” Tech Mahindra CEO C P Gurnani said in a recent interview.. “ Auto, aerospace, travel and transportation businesses are hugely impacted and that part of the business there is degrowth. But there is a lot that is happening in alternate business and service offerings.”

The company’s back office and cloud business, he said, is seeing growth on the back of increased adoption of digital technologies by customers.

Infosys CEO Salil Parekh said while there is a short term impact, the company is confident of growing faster in the medium and long term.

“Sectors like retail, manufacturing and the travel-hospitality are the ones most impacted. Financial services, energy, utilities are relatively less impacted. Communications, hi-tech, life sciences, healthcare have seen slightly better opportunities,” Parekh told shareholders at the company’s AGM on June 27. “There will be some overall negative impact as a result of COVID-related developments, in the near-term, but in the medium and long-term, we see opportunities for clients as they fast-track their digital transformation journey, consolidation of vendors and some captive activity.” (Source: Economic Times)

Huawei controversy opens field for 5G challengers

Pre-Bookings open for Samsung Galaxy S20, S20+, and S20 UltraWashington has pushed allies to bar Huawei, a Chinese telecom giant, from building next-generation 5G mobile networks, claiming its equipment can be used to spy for Beijing. Huawei denies the charges, but US pressure has prompted an about-turn in Britain.

With growing pressure to keep China's Huawei out of 5G network development, it could be time for firms like Japan's NEC and South Korea's Samsung to shine.

Washington has pushed allies to bar Huawei, a Chinese telecom giant, from building next-generation 5G mobile networks, claiming its equipment can be used to spy for Beijing.

Huawei denies the charges, but US pressure has prompted an about-turn in Britain.

The government had already pledged to cut the firm out of the most sensitive "core" elements of 5G that access personal data, and is now reportedly pushing for plans to end Huawei's involvement in Britain's 5G infrastructure by 2023.

But excluding Huawei is not without challenges, because there are currently only two alternatives in Europe for 5G equipment such as antennas and relay masts: Finland's Nokia and Sweden's Ericsson.

Britain has encouraged Washington to form a club of 10 democratic nations that could develop its own 5G technology, but there has been little movement so far.

"The vast majority of the commercial networks sold in the world come from the big three," said Sylvain Chevallier, in charge of telecoms at BearingPoint consultancy, referring to Huawei, Nokia and Ericsson.

"But a world of three is not good for operators, and if it goes down to two it will be worse still," he told AFP.

- Teaming up - That leaves a tempting potential opening for telecoms firms like Samsung and NEC. But building a successful 5G network is no simple task.

That is a lesson Samsung has already learned. Despite being a major player in 3G, it found itself unable to compete with the big three on 4G and struggled to win commercial contracts.

"This has been a challenge for Samsung," said Daryl Schoolar, a mobile technology specialist at consulting group Omdia.

In building its 5G network, Samsung has so far focused on North America and parts of the Asia-Pacific region.

"So while operators may feel uncertain about Samsung Networks, they are much further along in the process of being a global presence than NEC," Schoolar added.

NEC does have some advantages, including a partnership in Japan with mobile operator Rakuten.

The firms have already cooperated on a 4G network and are now jointly developing a 5G system.

The Japanese firm is also a leader on undersea cables, fibre optic networks and -- thanks to its affiliate Netcracker -- logistics management software.

"Netcracker has a strong presence with operators in Europe, which could be a real entry point for NEC," said Stephane Teral, chief telecoms analyst at LightCounting, a market research firm.

- 'A major challenge' - NEC is tightlipped about its contracts for mobile networks, saying only that it is holding feasibility demonstrations for "a number of customers and we are engaged in commercial discussions with others".

Britain's government has reportedly asked both NEC and Samsung to take part in demonstrations as it looks to diversify its 5G options.

And on Thursday, NEC announced a tie-up with Japanese operator NTT intended in part to speed up the development of a 5G network.

Samsung and NEC joined forces two years ago and have launched a joint marketing team to offer 5G products to European and Asian markets.

Still, the path ahead will be tough, said Schoolar.

"I think it's a major challenge for NEC. It requires more than radios, it requires investing in people who can do system integration, sales, customer support, network design and engineering," he said.

"Plus NEC will need to build operator trust that they will be there to support them in five to 10 years as those 5G networks evolve."

Washington has backed the use of non-proprietary technology like Open RAN in 5G development, hoping it will provide an entry point for US firms.

Such a move would open up opportunities for NEC, allowing them to "create an economic model that would shake up traditional equipment manufacturers," said Chevallier. (Source: Economic Times)

After 15 years, Apple prepares to break up with Intel

Sony India Feels the Heat from Chinese Cos, Cuts Over 120 JobsApple’s move shows the growing power of big tech cos to expand abilities & reduce dependence on partners. Silicon Valley is bracing for a long-expected breakup of Apple and Intel, signaling both the end of one of the tech industry’s most influential partnerships and Apple’s determination to take more control of how its products are built.

Apple has been working for years on designing chips to replace the Intel microprocessors used in Mac computers, according to five people with knowledge of the effort, who weren’t authorized to speak about it. They say Apple could announce its plans as soon as a company conference for developers Monday, with computers based on the new chips arriving next year.

Apple’s move is an indication of the growing power of the biggest tech companies to expand their abilities and reduce their dependence on major partners that have provided them with services for years — even as smaller competitors and the global economy struggle because of the coronavirus pandemic.

Facebook, for example, is investing billions of dollars into one of Indonesia’s fastest-growing apps, a telecom giant in India and an undersea fiber-optic cable around Africa. Amazon has built out its own fleet of cargo planes and delivery trucks. And Google and Apple continue to buy upstarts to expand their empires.

Taiwan Semiconductor Manufacturing, the partner Apple uses to build similar components it designs for iPhones and iPads, is expected to make the Mac chips in factories in Asia — an arrangement much like Apple’s use of Foxconn to assemble iPhones.

Intel and Apple declined to comment. Bloomberg previously reported on Apple’s plans. Other big tech companies like Amazon and Google already design some of their own chips, both for performance and potential cost reasons. Some tasks, like artificial intelligence and the rendering of 3D images, can be handled more efficiently on special-purpose circuitry rather than the general-purpose microprocessors that are Intel’s mainstay.

Since 2005, Macs have used effectively the same Intel chips that most PCs do. Making its own processors would give Apple even more control over how Mac computers work. Apple has always designed the chips used in iPhones and iPads, adding features to customize designs licensed by Arm, a semiconductor firm owned by the Japanese conglomerate SoftBank. Apple’s forthcoming Mac chips are also expected to rely on Arm technology, improving compatibility with its mobile devices.

Apple has created a large chip-design team, building on the 2008 purchase of a 150-employee startup, PA Semi. A large number of them once worked at Intel, including Johny Srouji, who reports directly to Apple’s chief executive, Tim Cook.

Apple’s move would be a symbolic blow to Intel, particularly when civilian and military officials are concerned over the weakening of U.S. leadership in chip manufacturing, which they regard as crucial to the country’s ability to retain an edge over China. Legislation introduced in Congress last week, with rare bipartisan agreement, would funnel tens of billions of dollars to bolstering U.S. research and manufacturing in semiconductors.

Intel has long been a U.S. standard-bearer in the semiconductor business, particularly in the complex manufacturing processes that turn silicon wafers into the chips that power computers, smartphones, cars and consumer devices.

The move’s financial impact on Intel would be muted, at least in the short term. Intel sells Apple about $3.4 billion in chips for Macs each year, according to C.J. Muse, an Evercore analyst. That is less than 5% of Intel’s annual sales, and Muse forecast that the blow would be closer to half that since Apple might change the chips on only some Mac models. Apple sells nearly 20 million Macs a year.

“That’s not chicken feed, but it’s compared to total PCs sold of about 260 million” a year, said Tim Bajarin, an analyst who has tracked Apple for nearly 40 years. Intel supplies the chips for just about every PC.

But the long-term effects could still be serious for Intel. The chipmaker’s lofty profit margins have long been linked to its track record of delivering the most powerful computing engines on the market, particularly for laptops and computer servers. But Intel has never done well selling chips for newer tech products like smartphones and tablets.

Apple’s last chip transition for Macs, in 2005, was viewed as a major step in the long-term comeback orchestrated by Steve Jobs, one of the company’s founders, as well as a big victory for Intel. Macs had long relied on a design, called PowerPC, that was a collaboration among Apple, Motorola and IBM. But Jobs bet that Intel could provide much faster performance.

That selling point has been undermined by troubling news from Intel’s huge factories. Much of the company’s success in computers stems from its history of packing more transistors on each square of silicon, which allows the chips to keep carrying out more computing tasks at a lower cost.

But Intel has stumbled badly in that industrywide race to miniaturize. Intel’s latest process for making chips, once expected as early as 2015, did not enter high-volume production until 2019. The delay aided Taiwan Semiconductor and Samsung Electronics, which produce chips designed by multiple companies. The competitors exploited Intel’s lag to take a technology lead.

“Intel has fallen behind by 12 months, maybe 18 months,” said Handel Jones, chief executive of International Business Strategies, which offers consulting services to the chip industry.

Apple was troubled by the production stumble, according to three people familiar with the situation, who were not authorized to speak about confidential dealings between the companies. Intel also ran into stronger-than-expected demand for other types of chips, causing production shortages that crimped sales for some PC makers last year. The combination further tarnished Intel’s image as a reliable producer. (Source: The Economic Times)


Telcos Estimate AGR Dues at Half the DoT DemandWith consumers increasingly depending on online platforms to meet their needs, sellers are also signing up to make their products available to a larger population. Amazon says it has on-boarded 50,000 new sellers between mid-January and June, and seen a 40 per cent increase in search queries from businesses looking to launch on Amazon.

Gopal Pillai, V-P Seller Services, Amazon India, told BusinessLine that the new sellers are from previously untapped geographies, including Darbhanga in Bihar, Barmer in Rajasthan, Mahoba in Uttar Pradesh, Hailakandi in Assam, and Bardhaman in West Bengal.

The lockdown had initially thrown operations out of gear. “There was an impact initially as sellers were unable to deliver non-essential items. This impacted a lot of small businesses because some product deliveries were halted midway while others didn’t reach the customers. But more than 80 per cent of the sellers have come back on the platform in the first week of June,” Pillai said, adding that there has also been a spike in consumer demand.

According to a Nielsen report, in the FMCG segment, the cart value for new customers was 1.3x higher, and for existing customers, it was 1.5x times higher.

The report added that in the medium to long term, “Technology will be a basic need, on par with Roti, Kapda aur Makaan. There will be intensified integration of technology to minimise physical interactions across all activities. Shopping will see a surge in online adoption or larger baskets. There will be even more integration of online shopping and preference of retailers who understand and align with changing consumer needs.”

To tap this trend, Amazon India launched a new programme called Local Shops earlier this year that allows local shopkeepers to scale up their reach with

“More than 90 per cent of our sellers are SMBs and more than 50 per cent of those come from tier 2 and 3 cities,” Pillai said. (Source: The Hindu Businessline)

Jio Platforms set to raise Rs 5863.50 crore from Abu Dhabi Investment Authority by selling 1.16% equity stake

Airtel, Vodafone Idea, Tata Tele likely to pay AGR dues on Monday: DoT source The investment pegs Jio Platforms’ equity value at Rs 4.91 lakh crore and enterprise value at Rs 5.16 lakh crore. With the latest tranche, parent Reliance Industries stands to get Rs 97,885.65 crore from the seven investors in exchange for 21.06% stake, the group said.

Jio Platforms is set to raise Rs 5,863.50 crore from Abu Dhabi Investment Authority (ADIA), the largest investment arm of the government of Abu Dhabi, by selling a 1.16% stake. ADIA is the seventh investor to pick up a stake in the Mukesh Ambani-led company in seven weeks.

The investment pegs Jio Platforms’ equity value at Rs 4.91 lakh crore and enterprise value at Rs 5.16 lakh crore. With the latest tranche, parent Reliance Industries stands to get Rs 97,885.65 crore from the seven investors in exchange for 21.06% stake, the group said in a statement Sunday.

ADIA’s investment follows that by Mubadala, Abu Dhabi’s second-largest sovereign wealth fund, in Jio Platforms. Mubadala’s investment of Rs 9,093.6 crore in Jio for a 1.85% stake was announced on Friday. ET had reported negotiations on both deals on June 2.

“I am delighted that ADIA, with its track record of more than four decades of successful long-term value investing across the world, is partnering with Jio Platforms in its mission to take India to digital leadership and generate inclusive growth opportunities,” RIL chairman Mukesh Ambani said in the statement. “This investment is a strong endorsement of our strategy and India’s potential.”

The Jio Platforms unit comprises mostly its telecom business under Reliance Jio Infocomm, the country’s largest with more than 388 million subscribers, besides other digital properties and investments.

RIL, transitioning to a consumer technology giant, has talked about building Jio Platforms into a digital entity on the lines of Alphabet and Tencent.

“We expect RJio to garner revenue/EBITDA CAGR of 22%/44% over FY20-22E along with healthy EBITDA margin expansion,” helped by “favourable competitive landscape in the Indian telecom sector”, Motilal Oswal said in a report.

ADIA is part of a consortium that has been engaged with Reliance for months to buy into its pan-India fibre network. It is also a rare case of both the UAE funds scoping the same investment opportunity. ADIA manages a global investment portfolio that is diversified across more than two dozen asset classes and sub-categories.

“The rapid growth of the business, which has established itself as a market leader in just four years, has been built on a strong track record of strategic execution,” said Hamad Shahwan Aldhaheri, executive director of the private equities department at ADIA.

The Rs 97,885.65 crore raised from stake sales so far in Jio Platforms and the Rs 53,124 crore from a rights issue will help lower Reliance’s consolidated net debt substantially from Rs 1.61 lakh crore at the end of FY20. Reliance is now well placed to meet its zero net-debt target by March 2021, analysts said. (Source: Economic Times)

IT professionals may move away from Bengaluru's tech suburbs

HealthifyMe About 85% of Bengaluru’s IT services industry workforce is working from home currently. Young technology professionals in India’s IT hub – Bengaluru – may scout for homes away from its preferred tech suburbs as they become cheaper to own or rent following a realignment in the hitherto-seen office culture.

As software companies push their work-from-home model beyond the immediate response to the Covid-19 pandemic, when it had become imperative, techies may choose to move into less congested areas, encouraged by expanding metro connectivity, and away the city’s technology hubs such as Mahadevapura, Whitefield, Electronic City, Bellandur and Sarjapura.

Apartments and plots have commanded a premium in these areas precisely because they have been the first choice for developers planning new residential projects.

Developers will respond with new strategies after waiting for a few more months to see whether the work-from-home culture will catch up and spread among technology companies, sources in the real estate sector said. In the weeks following the lockdown, Bengaluru’s IT services industry began shifting from campuses to homes, with about 85% of its workforce working from home currently, even as industry leaders said it would significantly alter the way services are delivered.

India's largest IT employer TCS has already indicated that three-fourths of its nearly 5,00,000 employees will work remotely by 2025.

Bengaluru makes up for the largest share of India’s export in software services.

This approach of software firms, which has already met with some degree of success, may eventually lead to some equitable development of the city, experts said, as people move into the periphery seeking better standards of living and lower costs.

“The stretch between Central Silk Board to KR Puram in Bengaluru may look deserted if work-from-home picks up and succeeds as a serious work culture," said V Madhu, who headed the Bangalore Metro Rail Corporation, and years later, a private budget housing firm. "The plots of land on either side of this road has been one of the favourite picks for developers."

Kishore Jain, the Bengaluru president of real estate developer body Credai, said people would move into less congested areas only if the government moves to improve infrastructure there. For instance, on Kanakapura Road in the south of Bengaluru, the metro rail network is reaching beyond the city limits, and this type of transit-oriented development would benefit a large number of people, driving real estate investments as well, he added.

According to Madhu, who also headed Karnataka’s infrastructure development department for some time, the government should make haste in encouraging development of socio-economic infrastructure like schools, supermarkets and malls within 6-10 km radius of metro terminals like Challaghatta, Gottigere and Bommasandra.

"The government should revisit its development plan for Bengaluru, align it with changing urban dynamics and encourage private players to participate in creating necessary infrastructure in areas around metro terminals," he said. (Source: Economic Times)

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