Confident of launching direct benefit transfer for kerosene this fiscal: Pradhan
The Ministry of Petroleum and Natural Gas is confident of rolling out the direct benefit transfer for kerosene (DBTK) scheme in the 2016-17 fiscal. “The issue with kerosene is that states will have to compile the consumer list. They have asked for some more time which we have agreed to. But I am confident of rolling out a comprehensive DBTK model in the 2016-17 fiscal,” Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, said on Friday. The Minister was speaking at an event to announce that more one crore households have given up the LPG subsidy under the government’s ‘GiveItUp’ scheme. “The latest figures that we have shows that 1.13 crore people have given up the LPG subsidy voluntarily across states in little over a year since the campaign was launched. Five states – Maharashtra, Uttar Pradesh, Delhi, Karnataka and Tamil Nadu – have contributed to 50 per cent of those who have given up the LPG subsidy,” said Pradhan. As a result of the voluntary foregoing of subsidy, 60 lakh below poverty line families have been provided LPG connections, the Minister said. Under the GiveItUp scheme, consumers foregoing subsidy cannot reclaim subsidy till at least one year is over. “We will look at different models of providing them subsidy if they want it when LPG prices are higher,” Pradhan said. Will Butcher Jersey
Paytm challenges wrongful use of its confidential information by Unicommerce
The ongoing war between e-commerce websites for market share made its way into the courts on Thursday with Paytm, a Noida-based e-commerce company, alleging that Snapdeal-owned Unicommerce eSolutions Pvt. Ltd had wrongfully accessed its seller information. Unicommerce provides services to sellers on various e-commerce platforms, including Amazon, Snapdeal and Flipkart. It also provides such services to sellers on Paytm’s platform despite the latter warning its sellers (through a posting on its site) not to use Unicommerce’s solutions. This warning was prompted by fears that Unicommerce could pass on sensitive information (such as inventory positions) to Snapdeal. Sandeep Sethi, counsel for Paytm, told the Delhi high court that Unicommerce was “using the login information, username, password created by Paytm for its sellers to gain access to details such as orders placed, stock details, seller information”. Paytm also objected to Unicommerce using its logo for promotional purposes—creating the impression of an association between the companies (and presumably encouraging Paytm’s sellers to use its services) when, in reality, there is none. Paytm says it does not work with intermediaries. Justice Vipin Sanghi, who heard the arguments at length, took cognizance of the case and sought a reply from Unicommerce. A Paytm spokesperson declined to comment on the court proceedings. Unicommerce was acquired by Snapdeal (Jasper Infotech Pvt. Ltd) in March 2015 for an undisclosed amount. During the court proceeding, Unicommerce agreed to stop using Paytm’s logo, pull down an older advertisement on YouTube carrying Paytm’s logo and said it would not use the Paytm sellers’ data for any other purpose except for providing service to them, implicitly denying that it was passing on data to Snapdeal. According to Prathiba Singh, counsel for Unicommerce, the data being contested here belongs to the sellers and is being used with their permission. Paytm sought protection of the information because Snapdeal is a direct competitor and use of such information would be detrimental to its interest. Founded in 2012 by three graduates from the Indian Institute of Technology Delhi— Ankit Pruthi, Karun Singla and Vibhu Garg—Unicommerce offers a pay-per-use web-based solution that helps small sellers and e-commerce firms manage their orders on various e-commerce portals from the time they are placed till the products are delivered. The case will be heard next on 11 July. A Unicommerce spokesperson said: “While the matter is sub-judice, we believe that the allegations made are clearly unfounded and speculative.” “Unicommerce provides world class technology tools for tens of thousands of small businesses looking to successfully sell on e-commerce marketplaces. Instead of being restrictive and unfriendly towards these small businesses, they should be encouraged to use best in class solutions from Unicommerce to efficiently manage and grow their business. Any attempt to prevent sellers to improve their efficiencies is an unfairly restrictive business practice and only showcases a company’s misalignment with the goals of online sellers who want to be successful,” the spokesperson added. Reid Boucher Authentic Jersey
Current valuations do not alter the India opportunity: Deepak Shahdadpuri
The only surprise in the recent markdown of Flipkart’s valuation is that it took so long coming, said Deepak Shahdadpuri, founder and managing director of investment firm DSG Consumer Partners (DSGCP), which recently said it had hit the first close of its second fund at $35 million. The private equity (PE) and venture capital (VC) industry had been expecting a correction and insiders knew the enterprise value of e-commerce companies were nowhere near the headline numbers, Shahdadpuri said in an interview. Edited excerpts: India is seeing a huge Series A crunch. Many start-ups that are trying to raise Series A have only been able to raise a seed plus, bridge or pre-Series A rounds. Why has the explosion in seed funding activity not expanded to post-seed funding? This is inevitable. I have been investing regularly in India for 16 years. What we witnessed in 2013-2015 was a period where initial funding for an idea was very easy to raise from a variety of sources: seed funds, angels, family and friends, crowdsourcing platforms, etc. So, we were in an environment where three or four times the numbers of companies were getting the initial capital of $100,000-$750,000 to get going. However, when they tried to raise their next round, they hit a wall. I group them into two buckets—they try and raise a Series A which is too large because others have done so even if they do not need the capital, and they just do not have the fundamentals to become viable and profitable businesses. I had read too many times in the Indian context that the growth in Series A funds has not matched growth in angel and seed funds; but that argument does not hold water. Investors will back businesses that they believe can make money. The more opportunities there are, the larger the pool of capital available. This is the reason we saw many hedge funds participate in the Indian Internet space in the last three years. The reason companies are not getting funds is because they do not deserve to be funded. At seed, it is all about an idea and investors often think of RoI (return on investment) as return on imagination. The seed capital is provided to develop a minimum viable product, the MVP, and to pilot it to test the product market fit. The average investment size over the 21 firms DSGCP has invested in is $750,000 and the pre-money valuation is $2-4 million. After that stage, if there is material traction, they go on to raise the Series A; otherwise, they fail because existing investors stop funding them. It takes discipline to cut your losses early. When it comes to Series A, metrics matter. In fact, they count for a lot. Now for the new investor, RoI becomes return on investment. They look at cash burn, customer acquisition costs, gross and net margins, payback periods and other KPIs (key performance indicators) that are relevant to that business at that stage. With the softening valuation and markdowns for Flipkart, is there still a large Internet opportunity in India? The opportunity has always been there and continues to be there. I am surprised that the markdowns took as long as they did, but insiders knew that the enterprise values of these companies were nowhere near the headline numbers. These are private deals with preference shares, liquidation preferences and other protection mechanism, which allow investors to build in a return profile despite the valuation given. The PE and VC industry has been expecting a correction or reversion to the mean and its is now happening. The valuation numbers do not in any way change the India opportunity, be it Internet or any other sector. Most successful start-ups in India are clones of similar firms in the West. Does this mean the Indian start-up market is more about great execution than about cutting-edge technology? Flipkart and Snapdeal may be generically classified as clones. Bringing a clone does not mean you will be successful, as many have learnt. At DSGCP, it’s always about people who can execute and are looking to solve a real problem. Clone or not, you need to make it work in the Indian context, with Indian economics and Indian challenges. From the DSGC portfolio OYO Rooms and GOQii are examples of business models that have been pioneered in India and are not clones. Even Eazydiner, which has been termed by the press as the Opentable for India, has a uniquely Indian business model that solves multiple challenges that Opentable did not face in its markets including incentivizing diners to book, leveraging call centres and having a concierge service. Successful firms in India will develop solutions for the Indian market. Execution is always going to be key. It is never easy to develop cutting-edge technology or redefine a business but it is also very difficult to execute in a market as complex as India. How do you see the start-ups space in India in 2016? Will there be a shift to conserving cash? The sentiment is neutral to negative. GPs (general partners) are busy looking after their portfolios. LPs (limited partners) are reassessing allocating strategy given the change in distribution profiles from their GPs. Angels and seed funds are bruised, given the larger number of companies that have found it difficult to raise the next rounds. So yes, everyone is looking to ensure that the cash they have lasts as long as possible until they raise the next round of funding. However, good companies always have an eye on the cash balance whilst looking to build a product and launch a business. The Narendra Modi government has been talking a lot about the country’s start-up community. But how much has the government done? It is still very early days for the current government. But credit must be given to the Modi government for working with the industry in attempting to put in place a framework and regulation that supports start-ups and the ecosystem, including
OMCs plan LPG pipeline worth Rs5,000 crore to support Ujjwala scheme
To meet the increasing demand for cooking gas or liquefied petroleum gas (LPG) in the country, the three oil marketing companies (OMCs)—Indian Oil Corp. Ltd (IOCL), Bharat Petroleum Corp. Ltd (BPCL) and Hindustan Petroleum Corp. Ltd (HPCL)—are planning to set up a 1,450-kilometre pipeline to service central India, said three officials aware of the discussion. The pipeline would emerge at Kandla port or Mundra port, both in Gujarat, and will run via Bhopal, Kanpur and Lucknow to terminate at Gorakhpur in Uttar Pradesh. The total cost of the pipeline would be around Rs.5,000 crore and the pipeline would be set up under a joint venture in the next 3-4 years, said the people quoted above, on the condition of anonymity. “We have begun preliminary discussions on this proposal. Details of equity participation and commercial structure are yet to be worked out. We have chosen this pipeline route as many below poverty line (BPL) families live in the Central India belt. This pipeline fits well with meeting demand that would emerge from government’s Ujjwala scheme,” said one of the people quoted above, who is a director at one of the oil marketing companies. He requested anonymity as he is not authorized to speak to the media. The pipeline would be important from an infrastructure development standpoint as most of the LPG in the country is transported through road which not only makes it expensive but also unsafe. Demand for LPG in March reached a record high of 1.835 million metric tonnes (mmt), up 14.16% year-on-year, driven by the government’s push to increase LPG penetration in rural households. Last month, the government approved the Pradhan Mantri Ujjwala Yojana to provide free LPG connections to women from BPL households. Under the scheme, Rs.8,000 crore has been earmarked for providing 50 million LPG connections to poor households. Eligible households will be identified in consultation with state governments and Union Territories. The scheme will be implemented over the next three years. “The proposed pipeline would see 2.5-3 million tonnes per annum of imported LPG. It will help us meet demand in low LPG penetration areas such as Meghalaya, Assam, Jharkhand and Bihar, among others,” said the second person quoted above, who is a senior official at HPCL. Indian oil marketing companies produce as well as import LPG to meet local demand. “LPG has broadly two cost elements: security deposit and cost of stove/connection which together is around Rs.3,500 apart from recurring cylinder cost that a family has to incur. This makes LPG affordability in rural areas difficult. Besides, reach of LPG is poor in many areas and transporting the fuel in many terrains is difficult. Pipelines thus become important,” said Saurabh Kamdar, director, CRISIL Infrastructure Advisory. OMCs are also planning to invest to create LPG import facilities and additional bottling plans. HPCL will spend a total of Rs.1,500 crore in setting up an LPG import facility and another 7-10 bottling units, said the HPCL official quoted above. HPCL is scouting for land to build a new LPG bottling plant of 60 million tonnes per annum (mtpa), he added. Meanwhile, BPCL is building an LPG import terminal at West Bengal’s Haldia, for Rs.800 crore. The company has acquired 35 acres for the purpose and plans to complete the project in three years. “We have prominent presence in the western and southern regions but not the eastern region. Bihar, Northeast, Jharkhand, eastern Uttar Pradesh and West Bengal are where we need to build a market. Our import terminal at Haldia will help us meet demand in the eastern region,” said a BPCL official, one of the three people quoted above. IOCL is already constructing an LPG import facility of 600,000 tonnes per annum at Paradip, Odisha, for Rs.690 crore. In January 2015, it decided to invest Rs.5,300 crore for the facility and for laying pipelines. Josh Kline Authentic Jersey
Move for an action plan on road safety and ease of transport
As part of its ongoing efforts to improve road safety in the country and facilitate ease of transport, the Ministry of Road Transport & Highways has convened a meeting of Principal Transport Secretaries of states and Transport Commissioners to deliberate on various issues in this regard, that need to be addressed urgently. The deliberations will focus on what needs to be done to make road travel safer, bring down number of accidents, facilitate ease of transport and enhance customer experience in transactions with transport and police departments. Today’s meeting is also being attended by stakeholders like representatives of motor transport companies, state road transport undertakings and bus operators among others, so that all areas of concern can be discussed in detail. Speaking on the occasion Shri Sanjay Mitra, Secretary Road Transport & Highways reiterated his Ministry’s commitment to facilitate building of a cogent mechanism for safe and seamless road travel in the country. Today’s meeting is in preparation for a meeting of the Group of Ministers for Transport of states, scheduled to be held in New Delhi on 29th April 2016. The GoM was constituted by the Central Government to suggest a road map for reforming the road sector. As a signatory to Brasilia Declaration, India is committed to reducing the number of road accidents and fatalities by 50 % by 2020. We need urgent reforms to weed out archaic rules and practices so that the road sector can support the high growth rates of the Indian economy. In order to ensure road safety and improve customer satisfaction there is an urgent need to make administrative changes, amend the Motor Vehicles Act and make optimal use of technology to cut down delays. The GoM headed by Shri Yunus Khan, Minister for Transport, Rajasthan and comprising state Transport Ministers, was constituted to suggest a road map for achieving the above objectives. The GoM will have its first meeting in New Delhi on 29th April 2016. The objective of today’s meeting is to crystallize the agenda points for the meeting of the Group of Ministers. These are likely to include issues like safety of non motorized vehicles, pedestrians, automobile safety features, quality control over automobiles, issue of driving licences, fitness of vehicles, public education, strengthening of traffic enforcement, enhancing customer experience in transaction with transport and police department and issues pertaining to improving ease of transport. Marcus Foligno Authentic Jersey
PM Narendra Modi to launch Rs 8,000 crore scheme for free LPG connections to poor
Prime Minister Narendra Modi will on May 1 launch an ambitious Rs 8,000 crore scheme to provide 5 crore free LPG connections to BPL families using the money saved from 1.13 crore cooking gas users voluntarily giving up their subsidies. Modi will launch the Pradhan Mantri Ujjwala Yojana at Ballia in Uttar Pradesh on May 1 and do a repeat function at Dahod in Gujarat on May 15. Though ‘Give-it-Up’ campaign seeking the well-heeled to voluntarily surrender cooking gas subsidies for one year was launched in January, 2015, Modi on March 27 last year officially launched the programme. “Since the launch, 1.13 crore people have given-up LPG subsidies and are buying cooking gas at market price,” Oil Minister Dharmendra Pradhan told reporters here. Maharashtra tops the list with 16.44 lakh consumers giving up subsidies. Uttar Pradesh saw nearly 13 lakh users give up subsidies, followed by Delhi (7.26 lakh). Prime Minister’s home state of Gujarat was way down the list with just 4.2 lakh giving up subsidies. Pradhan’s home state of Odisha was even lower at 1.3 lakh. “Five states of Maharashtra, Uttar Pradesh, Delhi, Karnataka and Tamil Nadu account for roughly half of the people who have given up LPG subsidies,” Pradhan said. Consumers are currently entitled to 12 cylinders of 14.2 kg each or 34 bottles of 5 kg each in a year at subsidised rates. A subsidised 14.2-kg cylinder is currently available at Rs 419.13 per bottle in Delhi while the 5-kg pack costs Rs 155. Market-priced LPG is available at Rs 509.50 per 14.2-kg cylinder. Giving up subsidised LPG will help cut the government’s subsidy bill, which was at Rs 30,000 crore on the fuel last fiscal. Nearly Rs 5,000 crore of subsidy saved through the campaign is being used to provide LPG connection to the poor. “We have released 60 lakh new connection to poor in the last one year,” he said. Modi, Pradhan said, will on May 1 launch the Pradhan Mantri Ujjwala Yojana for providing providing free LPG connections to women from BPL households. “Under the scheme, Rs 8,000 crore has been earmarked for providing 5 crore LPG connections to BPL households,” he said, adding that in the first year 1.5 crore connections will be provided. The scheme provides a financial support of Rs 1,600 for each LPG connection to the BPL households. The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories, he said. Justin Hardy Jersey
Endorsers of dubious ads answerable to law: Paswan
Union minister for food and public distribution Ram Vilas Paswan on Thursday said that once the new Consumer Protection Bill 2015 comes into force, celebrities will be held liable for any fault in the products they endorse. “Till now, celebrities were not being held accountable for the products they advertise. But, with the new Act, the celebrities along with the manufacturers, will be liable in case the products do not match the claims made in the advertisements,” Paswan said that after conducting a review meeting of consumer courts of 12 east and north-eastern states here on Thursday. Expressing concern over differential pricing of bottled drinking water, the Union minister said the MRP of bottled water should be the same everywhere, and not costlier at hotels and malls. “If a consumer is charged more, it amounts to fraud for which action would be taken,” he said. Unhappy with the state of affairs in consumer courts, Ram Vilas Paswan said, “Much improvement is required to make consumer courts robust. Uniformity in salary and perks of officials and better infrastructure will help improve functioning in these courts.” Paswan said the three-member committee, formed by the Supreme Court to suggest ways to improve functioning in consumer courts, would submit its report by the end of this month. Paswan hoped that the Consumer Protection Bill will be passed in the next session of Parliament. “Once the Bill is passed, the process of filing complaints in consumer courts will be simplified. Besides, a regulatory authority would be set up to protect and enforce the rights of consumers,” he said, adding that those using chemicals such as Oxytocin in vegetables or milk will be taken to task after the new Bill comes into effect. “Online shopping and e-commerce will also come under the ambit of the new laws,” the minister said. Asked about rising sugar prices, Paswan said, “The sugar industry was dying as the cost of producing sugar was much higher than the selling price. Now, the prices have almost equalled and we have given instructions to the state governments to impose stock limit on traders.” Paswan asked the state governments to list out their ‘dal’ requirements for the coming months. “We have created a buffer stock of pulses. While 25,000 tonne was imported, 50,000 tonne was bought by FCI. Now, the states need to tell us how much they require. We will not let pulse prices rise this year,” the minister said. Michael Jordan Jersey
A ₹3,000-crore makeover for Buckingham Canal
The 1,095-km-long National Waterway 4, better known as Buckingham Canal, is in for a major makeover to bring it back to its past glory ferrying people and cargo. The waterway, which runs from Kakinada in East Godavari district to Puducherry, where it merges into the Bay of Bengal, cutting through Chennai, has the potential to play a big role in transport of cargo and developing the tourism sector, including offering House Boats as in the Kerala backwaters. The Andhra Pradesh government last week signed a memorandum of understanding (MoU) with the Inland Waterways Authority of India for the development of National Waterway 4 with an outlay of ?3,000 crore. Ajay Jain, Principal Secretary, Energy and Industries, Andhra Pradesh, told BusinessLine, “This is a move to revive the inland waterway network and will play a big role in reviving the economic activity along the waterway. Work on some segments such as dredging of the canal in AP has already commenced.” “Based on the detailed project report to be prepared by a consultant, and potential of cargo movement, Phase One of the waterway is proposed to be completed by 2018-19. The State government will help the Inland Waterways Authority with land acquisition and related issues,” Jain explained. While the NW-4 project was declared national waterway in 2008 and was to be developed by the Inland Waterways Authority of India and scheduled for completion in 2013, it received fresh impetus after the N Chandrababu Naidu government assumed office in June 2014. With about 888 km of the 1,095-km waterway in Andhra Pradesh, its development is seen to play a major role in transport of cargo from East and West Godavari, Krishna, Guntur, Prakasam and Nellore districts. The waterway is seen as having the potential to transport 11 million tonnes of cargo every year, and be especially useful to the agriculture sector in moving produce. While the waterway cost was estimated at ?1,500 crore in 2009, it has doubled now but its scope has been expanded as it seeks to link up Godavari and Krishna rivers and the Eluru Canal. In its efforts to shore up the economy along the waterway, the AP Government and Dredging Corporation of India have inked a memorandum to set up the country’s first dredging equipment repair facility port at Antarvedi near Kakinada, which will see an initial investment outlay of ?1,500 crore. It is also proposed to set up a skill development centre there. The Buckingham Canal started off as an 11-km saltwater navigation channel in 1806 in the erstwhile Madras state was gradually extended up to Vijayawada till the Krishna river. The canal, which was in service up to the late 1970s, was damage by floods and gradually its usage dwindled. Will the waterway get back to its glory days? Cordrea Tankersley Jersey
Scoot India chief: Looking at a flight network out of Chennai, not just to Singapore
Passengers from Chennai will soon be able to fly into Singapore for a one-way fare starting under ?4,500 while a one-way trip to Sydney will be available for under ?15,000. Scoot, the low-cost, medium-haul arm of the Singapore Airlines Group is to start daily services from Chennai to Singapore from May 24. On the same day it will also launch a three-times-a-week flight between Singapore and Amritsar. Bharath Mahadevan, Country Head, Scoot India, spoke to BusinessLine on the airline’s plans in India including offering drop-dead fares every Tuesday just to stimulate the market. When does Scoot start flying to India? We will fly daily into Chennai from Singapore from May 24 apart from launching a three-times-a-week flight between Singapore and Amritsar on the same day. We will go up to four-times-a-week between Amritsar and Singapore from July 1. Besides, from October 2 we will launch a three times a week Singapore-Jaipur flight which will increase to four times a week from October 28. What aircraft will you be deploying? On the Chennai route we will deploy a Dreamliner Boeing 787-800 which offers 21 premium economy seats and 314 economy seats. Jaipur will be the same aircraft while in Amritsar we will deploy the 787-900. The aircraft that we will operate to Chennai is being delivered this week while the one that we will operate to Jaipur is being delivered on September 25. Has there been an enhancement in the India-Singapore Air Services Bilateral agreement which is allowing Scoot to start operations to Chennai? There is no enhancement in the Air Services Bilaterals between India and Singapore. In Chennai we are taking over the flight from Tigerair It will cease operations from Chennai from May 24. Jaipur and Amritsar are part of the 18 points which were exchanged between India and the Association of South East Asian Nations as part of the `Open skies’ agreement in 2003. Will Tigerair withdrawing and Scoot taking over the Chennai route see an enhancement of seats on offer on the route to Singapore? A marginal increase of about 300-odd seats a week. Why the decision for Tigerair to withdraw and Scoot to come into India? Tigerair is 100 per cent owned by Singapore Airlines. To tap synergies there are certain markets where long haul aircraft like a B 787 would work economically better than a narrow body aircraft like the Airbus 320 which Tiger operates. Purely in terms of economics because cost per seat is lower. Also in terms of cargo. Chennai is a huge cargo market for Singapore Airlines. The 787 is better suited to carry cargo. A narrow body aircraft cannot carry that much cargo. How much will the cargo capacity go up out of Chennai? The published capacity of a Boeing 787 is 10 tonnes. We should be able to carry 14-15 tonnes on average per flight. Tigerair is a narrow body so it is not even comparable but the published capacity is about 2 tonnes per flight. Will Singapore Airlines continue to serve the Chennai market after Scoot begins operations? Singapore Airlines has a daily flight which will continue. So apart from Singapore Airlines, its 100 per cent low cost arm will also operate daily from Chennai? Correct. What will the difference be between Scoot and Singapore Airlines flights? In terms of aircraft, we both operate wide-body aircraft. But Singapore Airlines is a completely full service carrier with in-flight entertainment, network connections they have out of Singapore, food and wine and other things. It has a full-fledged business class out of Chennai. We do not call ourselves a low cost carrier because we operate what we call a long haul wide-body aircraft. When we operate long haul we cannot have the same seat pitch, the same traditional low cost offerings. We need to offer the same comfort that the long haul carriers offer. But what we do is unbundle the pricing so if a passenger wants alcohol or in-flight entertainment or food he buys it. In Singapore Airlines it is all included in the price. So if a person buys a base price ticket on Scoot it will not include food, inflight entertainment and liquor? That is correct. Will free baggage be part of the base ticket? We are starting off with a base fare of $64 (?4242 at ?66.29) all inclusive out of Chennai to Singapore one-way that has only cabin baggage (7 kg) and the seat. If a person adds check in baggage and meal how much more will the fare become? Baggage is $20 per sector (?1,326) and meal is $ 12 per sector (?795). How much lower will this be versus a base ticket on Singapore Airlines? Including alcohol and baggage it will be 40-50 per cent lower depending on the sector. Our focus is not Singapore Airlines but Malaysian, Jet Airways, Thai Airways and so on. What is the passenger profile from Chennai? In Chennai, we are looking at changing strategy. Tiger was mainly looking at passengers going to Singapore while we are looking at building the network. So we are looking at passengers going beyond to Australia, Taipei, Korea and Japan. We are looking at both corporate and leisure. Our fares to Australia start at $169 (?11,203) to Gold Coast one-way all inclusive and $189 (? 12,529) to Sydney. We are looking at a network out of Chennai and not just to Singapore which is what a traditional low cost airline will focus on like Tiger and IndiGo. Patrick Roy Jersey
Apple no longer immune to China’s scrutiny of US tech firms
For years, there has been a limit to the success of U.S. technology companies in China. Capture too much market share or wield too much influence, and Beijing will push back. Apple has largely been an exception to that trend. Yet the Silicon Valley company is now facing a regulatory push against its services in China that could signal its good relations in the country may be turning. Last week, Apple’s iBooks Store and iTunes Movies were shut down in China, just six months after they were started there. Initially, Apple apparently had the government’s approval to introduce the services. But then a regulator, the State Administration of Press, Publication, Radio, Film and Television, asserted its authority and demanded the closings, according to two people who spoke on the condition of anonymity. “We hope to make books and movies available again to our customers in China as soon as possible,” an Apple spokeswoman said in a statement. The about-face is startling, given Apple’s record in China. Unlike many other U.S. tech companies, Apple has succeeded in introducing several new products like its mobile payments system Apple Pay in China recently. New resistance from the Chinese government to that expansion could potentially hurt the Cupertino, California, company. To a degree more than many tech companies, Apple relies on the smooth operation of its software including its App Store and services like iTunes, which are tightly integrated with the iPhone and iPad to keep customers coming back to its devices. Apple, which is facing a slowdown in sales of its iPhones, is also reliant on China for growth, so further moves by Beijing to curtail services could crimp sales. The company counts China as its second-largest market after the United States. Its China numbers will be dissected Tuesday, when it reports quarterly earnings. China’s pushback against Apple shows that the company may finally be vulnerable to the heightened scrutiny that other U.S. tech companies have faced in recent years. That scrutiny was spurred by revelations from the former U.S. National Security Agency contractor Edward J. Snowden in 2013 of the use of U.S. companies to conduct cyberespionage for Washington. China has sweeping goals in its move against Apple, said Daniel H. Rosen, founding partner of Rhodium Group, a New-York based advisory firm specializing in the Chinese economy. “They are interested in protecting the content that the Chinese people see, policing its national security and favoring indigenous giants such as Huawei, Alibaba and Tencent,” Rosen said. In this new era, he added, China “is strongly disinclined to accept the dominance of foreign players on the Internet, not least those from the United States.” After the shutdown of Apple’s services, President Xi Jinping of China, who has led a crackdown on Western ideology, conducted a meeting Tuesday in Beijing on China’s restrictive Internet policies. China’s top tech leaders, including Jack Ma, chairman of the e-commerce company Alibaba, and Ren Zhengfei, head of Huawei, were present at the meeting. “China must improve management of cyberspace and work to ensure high-quality content with positive voices creating a healthy, positive culture that is a force for good,” a report by the state-run news service Xinhua quoted Xi as saying. Since the Snowden leaks, China’s state media identified eight U.S. companies that it has labeled guardian warriors and that it has said were too deeply established in the country’s core industries such as energy, communications, education and military. Sales in China for those companies, including Cisco, IBM, Microsoft and Qualcomm, have slid as government oversight has increased. Some have grappled with raids, investigations and fines. Some have also been pressured to sell off holdings, hand over technology and work with local partners to expand their China businesses. Though Apple is one of the eight, it has had a much easier time. In 2013, Apple signed an agreement with China’s largest wireless carrier, China Mobile, to sell the iPhone in the country, after six years of wooing the carrier. Chinese consumers spent $59 billion on Apple’s products in the company’s last fiscal year. Timothy D. Cook, Apple’s chief executive, has made multiple visits to China. And while the company has faced occasional opposition most notably an attack by state and Communist Party media against its customer support it has largely been left alone. There have been some signs of trouble ahead. Xi has presided over a deep freeze on the Internet, increasing censorship and taking aim at online tools used to circumvent China’s system of online filters, known as the Great Firewall. He has also added new policy tools to keep tabs on electronic communications. Xi heads a committee of top leaders set up to streamline tech and Internet policy and turn the country into a “cyberpower.” In addition, the Chinese government proposed an anti-terrorism law two years ago that would require foreign companies to turn over encryption keys the codes that enable otherwise-scrambled information to be viewed for security reasons. Though the language was ultimately dropped, analysts said the government wants to have access to all communications within China. Apple’s recent battle with the FBI over unlocking an iPhone for a terrorism investigation is unlikely to help it in China. Chinese lawyers have pointed out that the country’s anti-terrorism law requires companies to help with decryption when the police or state security agents demand it for investigating or preventing terrorist acts. On Tuesday, at a congressional hearing, Apple’s general counsel, Bruce Sewell, said that the Chinese government had asked the company to share source code in the last two years, but that it had refused. The two Apple services that Chinese regulators shut down, iTunes Movies and the iBooks Store, compete directly with Chinese Internet companies’ products. Beijing has recently added initiatives to support a sputtering economy with new emphasis on industries that require higher skills and command better profit margins, like the Internet. That push may eventually trickle down to other Apple services. Apple Pay, for example, competes with mobile payments systems from some of China’s