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Asia’s richest man Mukesh Ambani is handing out free 4K televisions

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Three years after elbowing into the wireless phone market with free calls and data, billionaire Mukesh Ambani is back at it.

This time, Asia’s richest man is handing out TVs to hook users on movies and entertainment shows via internet. The tycoon is wedging into a business teeming with players from rival mobile carriers to Netflix Inc. and Amazon.com Inc.

Ambani’s JioFiber broadband service, scheduled to start Thursday across India, comes with a high-definition television and set-top boxes at no charge for annual lifetime subscribers. The offer by Reliance Jio Infocomm Ltd., the tycoon’s wireless powerhouse, includes subscriptions to most premium streaming services with prices starting from Rs 700 a month.

The fiber-TV salvo comes days after Jio formally swept into the No. 1 spot for wireless services after free calls and cheap data lured hundreds of millions of subscribers and left rivals Bharti Airtel Ltd. and Vodafone Idea Ltd. struggling under mounting debt. Airtel, backed by tycoon Sunil Mittal, and billionaire Kumar Mangalam Birla’s Idea are also trying to lure users by offering access to TV and movie content.

Telecom carriers around the world are adding entertainment content to their offerings as a way to compete for users and add revenue, especially in markets where the number of mobile subscriptions has reached saturation. In India, video-on-demand growth itself is explosive, according to researcher Boston Consulting Group.

The market could leap to $5 billion by 2023 from $500 million last year, BCG estimates. The boom has set Bollywood production houses, carriers and streaming services racing to feed demand for TV shows and movies and compete for users. Paying subscribers will probably rise to as many as 50 million, while users of advertising-supported video-on-demand will reach 600 million, BCG predicts.

To gain the upper hand in the streaming business against well-funded competitors like Netflix, Amazon.com and Walt Disney Co.’s Hotstar, Jio will need to go beyond just offering cheaper access via bundled services, said Shailesh Kapoor, founder and chief executive officer at Mumbai-based consultancy Ormax Media Pvt.

So far, the telecommunications company has relied on alliances with TV and film producers to provide content for its service bundles. JioFiber will also include movies that can be seen by subscribers on the same day they debut in cinemas, Ambani said in a speech laying out the plan on Aug. 12. That part of the service won’t start until the middle of next year, he said.

Own Content

JioFiber, which Ambani said is being offered at “less than one-tenth the global rates,” can also disrupt the streaming market if Jio produces its own content and signs up the best talent for that, Kapoor said.

Airtel, the brand name for Mittal’s carrier, may take the most direct competitive hit from JioFiber because, along with content bundles for its mobile services, it is one of the country’s largest TV service providers. The company’s digital TV segment accounted for about 12% of earnings for the year ended March, data compiled by Bloomberg show.

In a possible attempt to get ahead of JioFiber’s formal introduction, Airtel on Tuesday unveiled upgraded versions of its set-top box and the Airtel Xstream Stick, a USB device that allows an ordinary television to access OTT applications like Netflix, Amazon Prime Video and YouTube, along with Airtel’s other content offerings.

Satellite providers such as Tata Sky Ltd. and Dish TV India Ltd. as well as cinema chains also face competition from Jio, which will offer fiber TV in bundles with its mobile services and free landline calling.

Shares of Dish TV fell 1% in early Mumbai trading Thursday, extending their decline to 12% since Ambani unveiled the plans. That compares with a 2.1% decline in the benchmark S&P BSE Sensex index. INOX Leisure Ltd., a movie-hall chain, has slid 11% in the period.

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India has potential for very rapid economic growth, says Bill Gates

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India has the potential for “very rapid” economic growth over the next decade which will lift people out of poverty and allow the government to invest in health and education priorities in an “exciting way”, billionaire philanthropist and Microsoft co-founder Bill Gates has said.

In an exclusive interview to PTI, Gates, the world’s richest person, specifically complimented India’s Aadhaar identity system and the country’s performance in the financial services and pharma sectors.

The positive outlook by Gates for the Indian economy, Asia’s third largest, comes at a time when it is reeling under major slowdown amid apprehensions that the cycle may last for a longer period.

“I don’t have any knowledge about the near term, but I’d say over the next decade, there’s potential for very rapid growth, which will lift people out of poverty and allow the government to invest in health and education priorities in a really exciting way,” he said.

On Friday, 64-year-old Gates, with a net worth of USD 110 billion, regained the position of the world’s richest person surpassing the Amazon Inc’s Jeff Bezos. The Microsoft co-founder has so far donated over USD 35 billion to the Bill and Melinda Gates Foundation for poverty reduction and social development programmes in various countries.

“… Everybody hopes that there’s really good growth because the potential is certainly there for India to have high growth,” he said.

Gates is currently on a three-day visit to India to review the work of his foundation in the country.

India’s economic growth slumped to an over six-year low of 5 per cent in the first quarter ending June this fiscal due to slower consumer demand and private investment.

The slump in growth has prompted many global agencies to cut India’s GDP growth by various degrees for 2019-20.

Gates also hailed India’s Aadhaar identification system as well as adoption of the UPI system.

“Well, in all of our areas, India’s been a key place where we find innovators and financial services. It’s fantastic the way that the Aadhaar identity system and the overall UPI system is gaining adoption, and there’s some great lessons out of that work,” he said. “We partner with people like Nandan Nilekani to think, okay, how do the lessons from India apply to other countries for things like digital identity or financial services,” he said.

Gates also complimented India’s pioneering work in vaccine manufacturing, saying the country has made impactful contribution in improving peoples’ lives.

“When people think of India, they think of the IT services and the great work done there. Less visible but certainly very impactful for improving the human condition is the great work done by the vaccine manufacturers, whether it’s Serum, who’s the largest, but a dozen others – Bharat Biotech, Bio-E, a number of companies,” he said.

In the last one decade, the Bill and Melinda Gates Foundation has been working in areas of health-care, sanitation, agriculture and financial services for the underprivileged people in India.

The foundation’s partnerships with Indian manufacturers have led to development of affordable efficacious vaccines which has enabled different countries to introduce these vaccines, said an official of the foundation.

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Govt mulls raising insurance cover on bank deposits to above Rs 1 lakh: Nirmala Sitharaman

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Finance Minister Nirmala Sitharman on Friday said the government will bring legislations on raising insurance cover on bank deposits from the current Rs 1 lakh and regulating multi-state cooperative banks.

These legislations will be brought during the Winter Session of Parliament starting coming Monday, the minister told reporters here.

These legislations assume significance in the wake of scam in the Punjab and Maharashtra Cooperative Bank affecting lakhs of customers who are facing difficulties in withdrawing their entire money due to restrictions imposed by the Reserve Bank of India.

At present, bank depositors get an insurance cover of Rs 1 lakh on their amount by the Deposit Insurance and credit Guarantee Corporation.

The finance minister also said the government has no plans to cut spending on welfare schemes and will encourage all the departments of the Union government to spend entire funds provided in the Budget.

When asked about the stress in the telecom sector, Sitharaman said, “We want no company to shut their operations. We want everyone to flourish.” Two major telecom companies — Vodafone Idia and Airtel — have posted a combined quarterly loss of about Rs 74,000 crore as they were hit by statutory dues after a recent Supreme Court ruling.

The minister further said the Committee of Secretaries (CoS), appointed to deal with financial problems being faced by telecom companies, “has not taken final decision yet”.

Days after the Supreme Court ordered telecom companies to pay as much as Rs 1.42 lakh crore in past statutory dues, the government had set up the CoS under the Cabinet Secretary to suggest measures to mitigate financial stress in the sector last month. PTI DP NKD CS MKJ

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Very critical situation for Vodafone in India, says CEO Nick Read

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Vodafone said its future in India could be in doubt unless the government stopped hitting operators with higher taxes and charges, after a court judgment over licence fees resulted in a €1.9 billion group loss in its first half. Chief executive officer (CEO) Nick Read said India, where Vodafone formed a joint venture with Idea Cellular in 2018, had been “a very challenging situation for a long time”, but Vodafone Idea still had 300 million customers, equating to a 30% share of the sizable market.

“Financially there’s been a heavy burden through unsupportive regulation, excessive taxes and on top of that we got the negative Supreme Court decision,” he said on Tuesday.

Vodafone had asked the government for a relief package comprising a two-year moratorium on spectrum payments, lower licence fees and taxes and the waiving of interest and penalties on the Supreme Court case, which centred on regulatory fees.

Asked if it made sense for Vodafone to remain in India without such a relief package, he said: “It’s fair to say it’s a very critical situation.”

India’s top court upheld a demand from the country’s telecoms department for $13 billion in overdue levies and interest last month, hitting the shares of both Vodafone Idea and rival Bharti Airtel.

Vodafone has clashed with Indian authorities over tax and regulatory issues ever since it entered the country with a $11 billion deal to buy 67% of Hutchison Essar in 2007.

The arrival of new entrant Reliance Jio Infocomm in 2016 added to Vodafone’s problems by sparking a brutal price war.

It responded by combining its operations with Idea Cellular, a deal that closed in 2018.

Read said Vodafone was not committing any more equity to India and the country effectively contributed zero value to the company’s share price. As a result of the ruling, it has written down the value of its stake in the joint venture to zero.

It also owns a stake in Indian tower operator Indus Towers, along with Bharti Airtel.

Vodafone’s shares were up 1.7% at 163 pence at 1040 GMT as investors focused on an upgrade to its earnings forecast rather than India.

UPGRADED FORECAST

The world’s second largest mobile operator reported improving organic revenue growth with signs of improvement in Spain and Italy and as it integrates a German cable acquisition.

It said organic service revenue rose 0.3% in the first half, as it returned to growth in the second quarter, while organic core earnings rose 1.4%.

It increased its forecast for adjusted core earnings to €14.8-15 billion from its previous forecast of €13.8-14.2 billion, but said India and lower cash flows following the sale of assets in New Zealand meant free cash flow would be “around” €5.4 billion, rather than the “at least” €5.4 billion previously forecast.

Apart from India, Read said he was pleased with progress.

“This is reflected in our return to top-line growth in the second quarter, which we expect to build upon in the second half of the year in both Europe and Africa,” he said.

Read cut Vodafone’s dividend for the first time in May after tough market conditions and a need to invest in its networks and airwaves caused him to backtrack on his pledge not to reduce the payout.

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