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Vodafone May Exit India Operations, Amazon Pumps $630mn into India Business, US Rejects a Fourth of H1B Visa Applications

Professor of Financial Economics and Part-time Value Investor, Transfin.
Oct 30, 2019 1:03 PM 6 min read

Vodafone may exit India operations on back of mounting losses. Amazon pumps $630mn into India business to take on rivals. US rejected a fourth of H-1B visa requests from October to June. CCI to probe OYO, MMT over deep discounting and unfair business practices.  



Vodafone may exit from India, reports allege.

Incoming: Rumours in telecom circles allege that Vodafone could "pack up and leave any day now" as losses and debt mount and subscribers leave in droves. Confirmation and more details regarding this are yet to be revealed. Business Insider 

Who is to blame for the mess in the telecom sector? 

Let’s Play the Blame Game: It’s no secret that the telecom sector in India is in an unenviable position right now. Average revenue per user (ARPU) has been falling consistently. Data rates have plummetted – especially since Reliance Jio disrupted the industry with its dirt-cheap offers and sparked a price war. Then there’s the mounting debt which runs into billions of dollars.
When even one of these factors hits a company, it’s terrible news. When all of them strike together, it’s a disaster. And now, to top everything else, the Supreme Court’s recent verdict on AGR has imposed more due payments – a total of $13bn – on telcos.
Who is to blame for the telecom mess? This is a polarising question. An argument can be made that telcos are responsible for the mess they’re in, that by offering untenable rates they lampooned unsustainable debt onto themselves. But the opposing argument points to the steep spectrum prices the sector had to pay to the government, the adverse regulation, and the SC verdict which had been appealed by the state all the way to the apex court. BS

Shares of Vodafone Idea and Airtel rise on news of panel on bailout package.

Meanwhile: Shares of Vodafone Idea zoomed by 8.57% and those of Bharti Airtel by 3%. The positive trends followed reports that the government had constituted a panel to work out a bailout package for the telecom sector. Firstpost



MX Player raises $110.8mn in Tencent-led funding round. 

Money Matters: Times Internet-owned over-the-top (OTT) video platform MX Player has reportedly raised $110.8mn in a funding round led by Chinese tech giant Tencent. This is the first investment in the video platform, which will use the capital raised to expand its content catalogue by acquiring and providing original programming.
MX Player’s valuation, post-Tencent funding, would stand at $500mn. VCCircle
Legal Action: In what it said was the first time an encrypted message provider had taken legal action of such a kind, WhatsApp said it is seeking a permanent injunction against Israel’s NSO Group from using its service.
WhatsApp accused NSO Group of sending malware of roughly 1,400 mobile phones for surveillance. The targets apparently included 100 members of civil society from several countries, including Bahrain, Mexico, and the United Arab Emirates.
NSO Group, which makes software for surveillance, refuted the allegations and said it would “vigorously fight them”. BBC

WhatsApp sues Israel’s NSO Group over surveillance allegations. HBO’s streaming service to be launched in May.

Streaming Soon: AT&T and WarnerMedia have announced the pricing of their HBO Max streaming service. It will cost $14.99 per month, which is the same price as HBO Now.
Details about new content were also revealed. A Game of Thrones spin-off called House of the Dragon has been greenlit. And creators like Elizabeth Banks and Mindy Kaling will be developing new shows to be streamed.
HBO Max will launch in May 2020. TechCrunch


Vodafone May Exit India Operations, Amazon Pumps $630mn into India Business, US Rejects a Fourth of H1B Visa Applications 



PhonePe losses more than double in FY19. 

A Hill of Losses: Walmart-owned digital payment platform, PhonePe more than doubled its losses to INR1,905cr in FY19 vs INR791cr last year and INR129cr in FY17 on account of higher expenses.

Revenue rose fivefold, to INR245.8cr in FY19. 

Meanwhile, its competitor Google Pay posted a x2.5 increase in revenue to INR1,119cr. Livemint

Airtel reports fall in ARPU in the September quarter, releases unaudited operational highlights for India business.

Sneak Peak: Indian telecom major, Bharti Airtel has deferred the release of its audited Q2 results to November 14 to get “more clarity” on the implications of the SC order that upheld the definition of adjusted gross revenue (AGR) for telcos to include their non-core income streams.

However, Airtel yesterday released unaudited operational highlights for its India business, which showed signs of continued recovery in core mobile services during the July-September quarter.

Revenue from India mobile services grew 7.4% YoY and 0.8% QoQ to INR10,812cr as it added 2.6 million subscribers and data usage continued to grow. The net addition in customers comes four-straight months after losing users.

However, the telecom operator reported a fall in its average revenue per user (ARPU) in the September quarter, with growth in its subscriber base outpacing revenue growth from mobile services in India.

Airtel recorded an ARPU of INR128 in the September quarter, down from INR129 in the June quarter.

Rival, Reliance Jio also recorded a drop in ARPU in the September quarter. Its ARPU fell to INR120 with 355.2 million users as of September end, from INR122 with 331.3 million users as of June end. ET Earnings



Mukesh Ambani's RIL becomes sixth largest global energy firm by market cap. 

Mukesh Ambani's RIL becomes sixth largest global energy firm by market cap. Amazon invests another $630mn in India business.

King of the Jungle: Mukesh Ambani's Reliance Industries Limited has become the sixth largest global energy firm by market cap, overtaking British oil major BP Plc.

RIL today hit a market cap of $130.76bn vs BP Plc’s $128bn. Interestingly however, RIL’s rise in market cap was largely on the back of its retail and telecom businesses. Livemint

Amazon invests another $630mn in India business.

Money Incoming: Ecommerce giant Amazon has invested another $630mn in three of its Indian businesses, Amazon Pay, Amazon Retail and Amazon Sellers as it plans to take on its local rival, Flipkart.

As per the regulatory filings made to the Corporate Affairs Ministry, two entities - 'Amazon Corporate Holdings' and 'Amazon.Com Incs Ltd' are pumping in INR3,400cr in Amazon Seller Services (marketplace unit), INR900cr in Amazon Pay (India) (payments arm) and INR172.5cr in Amazon Retail India (food retail business). Moneycontrol



US rejected a fourth of H-1B visa requests from October to June. 

Your Application Has Been Rejected: The Donald Trump-led US administration has rejected nearly a fourth of all fresh H-1B applications through the third quarter of this year (from October to June), as per a US body.

Cognizant saw over 60% of its initial applications rejected, followed by Capgemini, Accenture, Wipro and Infosys.

Interestingly, Indian nationals account for nearly 70% of all H-1B permit holders.

The rejection rate has jumped over three times in 2019 compared to 2015, according to an analysis of H-1B data from US Citizenship and Immigration Services (USCIS) by National Foundation for American Policy, since USCIS has changed the standards for approval without new regulations or Congress passing a new law, alleged Stuart Anderson, Executive Director of NFAP. ET Tech

CCI to probe OYO, MMT-Go for unfair business practices, deep discounts.

Guilty As Charged: Following a complaint from the Federation of Hotel & Restaurant Associations of India (FHRAI), against OYO Hotel & Homes and MakeMyTrip (MMT-Go),and a preliminary probe into various aspects of their businesses, the Competition Commission of India (CCI) has concluded that "prima-facie" there are violations of competition law.

A CCI order says there is enough substance to warrant a probe, on evidence that the two are charging excessive commissions from hotel partners and demanding deep discounts which have led to the destruction of competitive pricing in the market.

The CCI has therefore, has launched an investigation against OYO and MMT-Go on charges of predatory pricing, creating a monopoly and deep discounting. Moneycontrol


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