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Oil Prices Spike More than 3% on Reports that US will End Waivers for Iran Sanctions, Jio Reports Fall in Average Revenue Per User, Tata May Bid For Jet, But Conditions Applied et al.

Professor of Financial Economics and Part-time Value Investor, Transfin.
Apr 22, 2019 1:39 PM 4 min read

Oil prices spike more than 3% on reports that US will end waivers for Iran sanctions. Jio reports fall in Average Revenue Per User. 
Tata may bid for Jet, but conditions applied. Telecom regulator to hold discussions on regulatory framework for over-the-top communication services. Tesla to reveal strategy for development of self-driving car technology.


Moving on to the top Business stories of the day. 



Oil prices spike more than 3% on reports that US will end waivers for Iran sanctions.

Your Request Has Been Declined: Brent crude futures surged more than 3% to over $74 per barrel on Monday morning during Asia hours, while US crude futures rose around 2.33% to $65.49 per barrel, on back of reports that the US will no longer grant sanctions waivers to any country that is currently importing Iranian oil.

What You Need to Know: The US re-imposed sanctions in November on exports of Iranian oil after US President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington, however, granted waivers to Iran’s eight main buyers - China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece - that allowed them limited purchases for six months.

A Head-on Collision: An end to the exemptions is likely to hit the Asian buyers the hardest. Iran’s biggest oil customers are China and India, who have both been pushing for extensions to sanction waivers.

The news comes in the backdrop of an already tightening global oil supply, with OPEC leading supply cuts since the beginning of this year.



Jio reports fall in average revenue per user. Reliance Jio GigaFiber commercial roll-out to begin soon as beta testing concludes.

Progressive Degenration: Jio’s average revenue per user (Arpu) has been falling progressively. From INR154 in the December 2017 quarter, its Arpu fell 15.6% to INR130 in the same quarter in 2018. It further declined to INR126.2 in the March 2019 quarter.

A waning Arpu suggests that every user added contributes less to the total revenue. This in turn, may pressurise Jio to raise tariffs.

Meanwhile...: Interestingly, as Jio sees massive user additions and falling Arpu, Bharti Airtel and Vodafone Idea have started weaning low-paying customers by putting in place minimum recharge plans starting at INR35.

Consequently, Airtel’s Arpu improved to INR104 in the December 2018 quarter from INR100 in the preceding quarter - the first such increase after nine straight quarters of decline.  

Also This: Reliance Industries has announced that the beta testing of the Jio GigaFiber is now complete and it will be rolled out for commercial use in the coming days in more than 1,600 cities.



Tata may bid for Jet, but conditions applied. 

Waiting in the Wings: Tata Group may once again seek to bid for Jet Airways if the airline goes to the bankruptcy court.

Last year the Tata Group withdrew from talks to buy the airline as Jet's Founder, Naresh Goyal, was unwilling to cede control and had opened parallel negotiations with existing investor Etihad Airways PJSC of Abu Dhabi for a potential equity infusion.

Wait and Watch: Interestingly, despite its early interest in Jet Airways, Tatas chose to skip an ongoing sale process to find a buyer for the airline.

Assume the Mantle: Jet Airways last week announced temporary shutdown of its services after lenders declined to provide emergency funds. Within this backdrop, employees of Jet had discussed internally the idea of taking over the airline, however, the plan was not pursued due to lack of consensus. 

The union of Jet Airways' pilots stands in union to work with the new investor and extend cooperation for the revival of the airline.



Twitter appoints Manish Maheshwari as India MD. Tesla to reveal strategy for development of self-driving car technology.

New Boss in Town: Twitter has appointed Manish Maheshwari, former CEO of Network18 Digital, as the Managing Director of its India operations.

Prior to Network18, Maheshwari has worked with Flipkart, txtWeb, Intuit, McKinsey and P&G.

Tesla’s Robot-Taxi Fleet: Electric-car maker, Tesla is set to reveal its latest efforts to develop self-driving car technology and his strategy for deploying it ahead of the announcement of its quarterly financial results. 

The development comes as demand for the Model 3 compact car is waning. 

Bonus: Read this exclusive interview of Flipkart Group CEO Kalyan Krishnamurthy where he talks about the next phase for the e-tailer, synergies with Walmart in grocery & supply chain and getting Flipkart IPO-ready.



Telecom regulator to hold discussions on regulatory framework for over-the-top communication services. 

Today's Agenda: The Telecom Regulatory Authority of India (TRAI) is set to hold an open house discussion on the regulatory framework for over-the-top (OTT) communication services. 

TRAI is reportedly looking to tackle the “regulatory imbalance” between mobile phone companies and OTT applications such as Facebook, WhatsApp and Google through an ongoing consultation process.

Telecom players have time and again complained that they have to comply with the law enforcement agencies and licensing rules unlike the OTT players who do not currently have a regulatory regime, causing an imbalance.

View the Consultation Paper on Regulatory Framework for Over-The-Top (OTT) Communication Services here.


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