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The ‘Tower’ing Burden Of Telecom

 

Vodafone and Idea are trying to save costs by shedding their tower businesses. Retail inflation has hit a 7-month-high, dimming hopes of a rate cut. The government may be scrambling to meet the fiscal deficit target. Italy, the football nation, failed to qualify for the FIFA world cup, the second time since 1958 edition. And, in tech world, chipmaker Qualcomm rejected Broadcom’s takeover bid.

 

3.58%

What is it? The rate at which retail inflation, as measured by the Consumer Price Index, rose in October from the same period a year ago.

Why is it important? This is the fastest pace in seven months, dimming hopes of an interest rate cut on December 6, when the central bank’s next monetary policy review is scheduled. This was driven by an increase in food prices—combined food inflation was 1.9% in October, against 1.25% in September, while vegetable prices increased from 3.92% to 7.47%–and fuel inflation of 6.36% last month as against 5.56% in September.

Tell me more: Retail inflation in June was the lowest (at 1.46%) since India started publishing these datasets in January 2012 and has been steadily climbing since then. Last month, it was higher in the urban areas (3.81%) than the rural ones (3.36%).

 

12

What is it? The number of state-run companies from which the government is reportedly seeking dividend amounts of 30% to 100% of their 2016-17 and 2017-18 net profit.

Why is it important? This indicates the government is scrambling to make up for the shortfall in tax revenue to meet its fiscal deficit target of 3.2% of GDP (gross domestic product) for 2017-18. It raises questions on how these public-sector firms would be able to shoulder the twin responsibility of handing out dividend payouts to the government as well as stepping up investments in an economic environment where the private sector remains hesitant.

Tell me more: India’s fiscal deficit stood at Rs 499,000 crore at the end of September, which translates to 91% of its full-year target.

 

Rs 7,850 crore

What is it? The total amount for which Vodafone India (Rs 3,850 crore) and Idea Cellular (Rs 4,000 crore) are looking to sell their standalone towers businesses to ATC Telecom Infrastructure.

Why is it important? This would help these telecom firms reduce their debt levels, which are currently straining under a five-year borrowing spree to acquire spectrum and a fierce price war introduced by Reliance Jio in a highly competitive market since 2016. Idea and Vodafone have a cumulative debt of Rs 108,000 crore. This sale is likely to generate property revenue of Rs 2,100 crore and around Rs 800 crore in gross margin for ATC in the first year.

Tell me more: Idea and Vodafone had announced a $23 billion-merger (excluding the latter’s 42% stake in Indus Towers) in March to create the world’s second largest and India’s largest telecom firm by subscribers, which the competition regulator approved about four months ago.

 

0

What is it?  The number of goals scored by Italy in the two legs of its elimination tie against Sweden to decide who will go to the 2018 FIFA World Cup in Russia.

Why is it important? Italy’s 1-0 loss on aggregate to Sweden means this high-profile footballing nation failed to qualify for the football World Cup for the first time since it missed the 1958 edition. Italy, along with Germany has the second-highest number of World Cup tournament participations (18), after Brazil (20).

Tell me more: Italy also has won four World Cup titles, the last one coming in 2006. Here, too, it is at par with Germany and ranked second only to Brazil, which has five titles.

 

78%

What is it?  The percentage of shares of chipmaker Qualcomm that are held by institutions, as of June 2017, according to Nasdaq.

Why is it important? Yesterday, Qualcomm formally rejected an unsolicited $103 billion acquisition bid from Broadcom, in what would have been the largest merger in the technology space. This shifts the attention to institutional shareholders as Broadcom CEO Hock Tan, while announcing the bid last week, said he was open to exploring more aggressive options to acquire Qualcomm.

Tell me more: The 78% institutional shareholding in Qualcomm is fragmented and spread across 1,512 shareholders. Blackrock and Vanguard have the largest holdings, of 7.2% and 7%, respectively.

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Record-breaking women’s cricket

1.54

What is it? The consumer price index for June, 2017 – the lowest in five years.

Why is it important? The inflation is much lower than central bank’s target of 4%. The government is urging the central bank to cut key interest rates to boost the economy. Index of industrial production expanded at a slower rate of 1.7% in May, as compared to 3.1% in the previous month.

Tell me more: Retail inflation was low mainly due to falling falling food prices, as consumer food price index was -2.12 in June, 2017.

 

 

6,028

What is it? The total number of runs scored by Indian cricketer Mithali Raj.

Why is it important? She is the first player to cross 6,000 runs in women’s one day internationals (ODIs). With an average of 51.8 runs per innings, Raj is one among the five women players who have an average of 50 and above.

Tell me more: Raj’s teammate, Jhulan Goswami, is the world’s highest wicket taker in ODIs.

 

 

17,771

What is it? The number of dengue cases in government hospitals and dispensaries in Mumbai in 2016-17, according to NGO Praja Foundation.

Why is it important? The number cases has jumped by over 265% since 2012-13 (4,867). It is a 16.6% rise over last year’s count at 15,244 dengue cases, despite Mumbai having health budget of Rs 3,312 crores for 2017-18.

Tell me more: The incidence of malaria, another mosquito-borne disease, seems to have gone down from 21,939 cases in 2012-13 to 11,607 in 2016-17 (14,631 in 2015-16).

 

 

Rs 900 crore

What is it? The investment by US retail chain, Walmart, in Maharashtra to open 15 modern cash and carry wholesale stores.

Why is it important? After the break-up with Bharti Enterprises in 2013, Walmart has been slow to expand, restarting in 2015. The new slew of stores would be in addition to the 21 stores Walmart operates out of India.

Tell me more: FDI rules do not allow international retail brands to serve end-customers through single-brand retail, except in the cash and carry wholesale format.

 

 

25.1 million tonne

What is it? The sugar output forecast by the Indian Sugar Mills Association for 2017-18.

Why is it important? The estimate is higher than last year’s 20.3 million sugar produced, a seven-year low. Above-average monsoon rainfall and its timely arrival have encouraged sugarcane farmers to plant more crops.

Tell me more: The three major sugar producers — Uttar Pradesh, Maharashtra and Karnataka — are expected to yield over 19.8 million tonne (over 78%) of the estimated sugar output.

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More quit tobacco 👍

2.18%

What is it? The retail price inflation in May, 2017.

Why is it important? The consumer price inflation growth was the lowest since India started publishing it in 2012. This might increase the pressure on the central bank to cut the key rate of repo, on hold since October, 2016, at 6.25%. Rate cuts, however, depend on how RBI sees inflation moving in the quarters ahead.

Tell me more: Food prices in retail markets decreased by 1.05% in May, leading to the low overall price rise. Another government indicator, the quick estimate of industrial production, showed a positive trend of 3.1% growth in April, higher than in February and March, 2017.

 

28.6%

What is it? The percentage of tobacco users (in all forms) in India in 2016-17, according to World Health Organisation’s Global Adult Tobacco Survey.

Why is it important? The prevalence of tobacco users has gone down by 6 percentage points from 34.6% in the same study in 2009, a positive outcome as tobacco contributes to poverty. It translates to a reduction of 8.1 million less tobacco users in the country, which is the second-largest consumer of tobacco products in the world.

Tell me more: Between 54-62% of smokers of bidis and cigarettes have thought about quitting on seeing the warning labels on the packets, while it was 30-38% in 2009.

 

$25 million

What is it? The investment Tata Motors’ Jaguar Land Rover (JLR) will make in the US ride services company, Lyft, to develop self-driving cars.

Why is it important? The mobility services arm of JLR, InMotion, will make the investment as other automakers such as General Motors, Ford, Tesla, Mercedes, BMW and tech companies such as Alphabet and Intel are scrambling to help get the first self-driving prototype out in the market. Car-sharing and hiring apps like Lyft and Uber, too, are conducting their own R&D.

Tell me more: JLR will provide its cars to Lyft for the research and development. Self-driving cars, which saw increased focus from 2016 onwards, is expected to change the way customers buy cars and reduce cost of ride services as well.

 

10%

What is it? The percentage by which pharmaceutical companies can increase the price of non-scheduled drugs every year, according to Drug Price Control Order (DPCO) 2013.

Why is it important? The companies want the cap to be increased to counter the increase in taxation with 12% from 9% for 80% (non-essential) of drugs, under the imminent Goods and Services Tax (GST) system.

Tell me more: Life-saving or essential drugs will have a tax rate of 5% under GST.

 

11,761

What is it? The shortage in Delhi police staff in the lower-middle ranks.

Why is it important? Delhi Police has been plagued by a top-heavy structure, with more senior staff than sanctioned strength but with most of the lower positions remaining unfilled. When nearly 26,000 constables and assistant sub-inspectors were promoted last year, it left a lacuna in the lower ranks. The current requirement is for over 14,000 personnel, from around 81,000.

Tell me more: Last November, there were 76,237 policemen and women in Delhi, against the sanctioned 82,378 posts. The working strength came down from 77,117 the year before, an RTI revealed.

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News in Numbers, Mar 15, 2017: Money travels less 👣

3.65%

What is it? The retail price inflation in February.

Why is it important? The rate of growth, year-on-year, of consumer price inflation climbed up after six months of falling. Prices of fuel and food contribute mostly to the fluctuations, as RBI specified non-food and non-fuel inflation to not have budged from 4.9% since September. CPI mirrors the consumer food price inflation which shows the first increase in seven months by 2.01%.

Tell me more: Wholesale price inflation, too, rose by 6.55% in February, spurred again by positive price rise in food and cost of fuel and power.

 

~500

What is it? The estimated number of employees who will be offered a voluntary retirement scheme by Tata Motors.

Why is it important? Even though it is less than 1% (0.8%) of Tata Motors’ total employee strength of 60,000 people, this is the second time in two years that it resorted to a VRS. As  the automaker’s domestic business drags down the overall profits with its losses, the scheme is being used to cut costs in a restructuring exercise.

Tell me more: While top tier has been approved and decided, the mid-level of its management structure is being discussed.

 

3 times

What is it? The higher energy density in a new solid-state battery compared to today’s lithium ion batteries. It was invented by John Goodenough, father of lithium-ion batteries.

Why is it important? The invention has now been endorsed by Alphabet Inc’s executive chairman Eric Schmidt, who termed it as “promising”. The 94-year-old inventor’s new all-glass batteries could solve the world’s energy storage problems with its higher capacity to hold energy. It could push up electric car adoption.

Tell me more: The batteries are said to be safer as they transmit energy at lower temperatures than lithium-ion ones and can be made at very low cost given ample supply of sodium around the world.

 

5

What is it? The number of Mumbai railway stations that Shiv Sena wants to be renamed

Why is it important? The far-right regional party wants the stations to shed the colonial imprint, underlining how names and symbols have a strong political resonance. Such demands have gained momentum in the last few decades. Mumbai got its official name changed from Bombay in 1995 (followed by Chennai (Madras) and Kochi (Cochin) in 1996 and Kolkata (Calcutta) in 2001)

Tell me more: Shiv Sena wants Mumbai Central to be renamed after Jagannath Shankar Seth, and Charni Road, Elphinstone Road, Curry Road and Sandhurst Road stations to be renamed as Girgaum, Prabhadevi, Lalbaug and Dongri respectively.

 

~ Rs 1000 crore

What is it? The amount spent by Indian telecom players on advertisements in 2016, according to the Pitch Madison Advertising Report.

Why is it important? This is up 50% from the previous year, and reflects the fight for customers last year, triggered by the launch of Jio. Reliance Jio Infocomm, which launched its services last year, had telecom players not only reduce their prices but also step up on advertising to gain, and more importantly, retain customers. Jio’s introductory offer included free call and data till end of March 2017.

Tell me more: Airtel was the biggest spender in 2016, splurging Rs 450 crore to Rs 550 crore on ads. Jio spent Rs 100 crore to 150 crore. Jio is aiming at 50% market share by 2021.

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