Despite controversies, India’s taxi-app industry booms

Despite controversies, India's taxi-app industry booms


MUMBAI: India’s ultra-competitive app-based taxi-hailing market has quickly become a multi-billion-dollar industry, but controversy surrounding safety, rejected licences and protesting cabbies threatens to slam the brakes on its spectacular rise.

Domestic company Ola Cabs and US-based Uber are booming, fuelled by a rising number of professionals wanting an easy-to-book, clean and air-conditioned cab in India’s rapidly growing and congested cities.

“We have barely scratched the surface. We need to be in every corner of India and it is a huge country, so the potential is huge,” Ola spokesman Anand Subramanian said.

But it hasn’t been a completely smooth ride, with Indian authorities rejecting Uber and Ola’s applications to operate in New Delhi, even impounding their cars, and both firms facing angry protests from traditional taxi drivers.

Ola Cabs has soared from fledgling internet startup to the leader of India’s smartphone taxi-hiring industry in just five years and is now worth an estimated $2 billion.

It recently bought up domestic competitor TaxiForSure for a reported $200 million and is also outperforming web and mobile app-based rival Meru Cabs in a crowded marketplace.

Private but often shoddy and uncomfortable cabs have long plied India’s notoriously vehicle-and-animal-congested roads, filling a void created by patchy and unreliable public transport networks.

But in 2010, two young entrepreneurs in Mumbai — Bhavish Aggarwal and Ankit Bhati — decided that India’s tech-savvy and wealthy middle-classes wanted the convenience of a comfortable ride with just a couple of clicks of their smartphones.

They founded Ola and started operating with only a handful of vehicles before increasing the number of cars on its network to 10,000, across ten cities, by 2014.

An aggressive recruitment drive over the past 12 months has resulted in its operations rising more than tenfold and Ola now operates 150,000 vehicles in 100 cities stretching the length and breadth of India.

Ola notched 200,000 rides a day in January and predicts it will record over a million a day in June. They have also started to offer auto-rickshaws for hire and are to start delivering groceries too.

It doesn’t own the majority of the cars itself but helps drivers acquire loans which are then repaid in small sums.

Some of those drivers joined hundreds of others working for Ola and Uber at a demonstration in New Delhi, saying the city government’s crackdown on the industry had forced them off the roads.

Drivers said police had been impounding their cars, forcing them to pay fines and go to court to get them back, ruining their livelihoods after local authorities started to put pressure on the companies following their defiance of a state-wide ban.

The companies were banned in the capital in December after an Uber driver was accused of raping a woman passenger in a case that sparked uproar.

But they resumed operations in January even though the government rejected their applications for a licence to operate.

“We are doing an honest job, there is 100 percent transparency here, why are we being treated like criminals?” said Petrick William, 35, whose car was impounded.

Drivers told of borrowing heavily to buy their cars so that they could drive for Uber and Ola, allowing them to build their own business and earn more money than working for regular Indian taxi companies.

“This is honest money that we are making. And for the first time in our lives, we can send our children to good schools, pay our rent on time, something we have never had before,” William said. “Why are they taking that away from us?”

Delhi’s Ola and TaxiForSure drivers were given an reprieve last week when the High Court overturned the government’s ban. Uber has now filed a similar petition in the court in the hope of winning a similar ruling.

Subramanian, Ola’s spokesman, said his company planned to hire 50,000 women drivers over the next three years to ease safety fears among female passengers.

“It would also create work for those women who otherwise do not get those opportunities,” he added.

Ola already uses an investigative agency to look into candidates’ background to ensure their suitability while Uber has also tightened up its security checks following the alleged rape.

While Subramanian is bullish about Ola’s future, some analysts are sceptical about its long-term viability.

“From a customer convenience angle, startups which deliver services at your doorstep on demand are great, but from an investor angle they do not appear to be that impressive since they do not give returns,” Paras Adenwala, head of Mumbai-based Capital Portfolio Advisors, said.

“Once interest rates start rising they are going to start facing money problems,” he added.

In $8 billion Samsung bid, some Koreans break ranks to side with foreign activist


In $8 billion Samsung bid, some Koreans break ranks to side with foreign activist

SEOUL: In a country with a record of hostility towards foreign capital, some local investors are breaking with tradition as they side with a US hedge fund opposing an $8 billion merger seen vital to the transfer of leadership at South Korea’s top conglomerate.

Hundreds of Samsung C&T’s small stakeholders have converged on a public web forum in recent days to protest what they say is a low-ball all-stock takeover offer from Cheil Industries, an affiliate of Samsung Group and the conglomerate’s de facto holding company.

Heirs of Samsung’s founding Lee family want the merger to consolidate holdings of key affiliates including Samsung Electronics into a company under their control. Opponents say the Lee family should pay a higher price.

The online protest is unusual in a culture where South Korea’s big family-controlled conglomerates, or chaebol, are seen as pillars of the country’s economy and typically get their way. Simply appealing to a sense of patriotism to get a deal done is no longer acceptable, the protesting investors say.

“This is my retirement money,” one investor claiming to own 7,000 Samsung C&T shares said on the forum, hosted by Naver, South Korea’s top web portal. “I have to protect my assets.”

The exalted position of chaebol in Korean society wobbled last year when a Hyundai Motor Co-led group paid 10.6 trillion won ($10 billion) for real estate in Seoul that was more than triple the property’s appraised value.

The deal angered shareholders and led several domestic institutional investors to publicly criticize the conglomerate – a rare event in a society that values consensus.

Now, the prospect of what critics say is a bad deal for Samsung C&T shareholders has made some retail investors – known as “ants” in local trading circles for the size of their shareholdings – unusually vocal.

Some of them say they will side with Elliott Associates LP, Samsung C&T’s third-biggest stakeholder, which opposes the deal. Some of the “ants” are even offering to make the US hedge fund their proxy at the Samsung C&T shareholder meeting to vote on the deal in July.

“The practice of demanding sacrifice from only the ants needs to change,” one investor said on Paxnet, a popular site for retail investors.

Elliott has filed two court injunctions seeking to block the deal. It has also sent letters to major Samsung C&T shareholders including South Korea’s National Pension Service and Samsung SDI – another Samsung Group firm – urging them to vote against the merger.

Yoon Suk-keun, CEO of Seoul-based Ilsung Pharmaceutical, which owns about 2.1% of Samsung C&T, said Cheil’s offer undervalues C&T. But his firm hasn’t decided how it will vote and does not plan to act in concert with Elliott, Yoon told Reuters in an e-mail.

Uncertainty about the deal pushed Cheil shares down more than 6% as of midday on Monday, their lowest since May 22, the last trading day before the takeover offer was announced on May 26. Samsung C&T shares were down over 2%.

Samsung C&T sold treasury shares to KCC Corp, a move that C&T said will defend shareholders against what it called “an attack by a foreign hedge fund seeking short-term trading gains”.

Even if Samsung gets its way, the level of outcry against the deal could make South Korea’s powerful families tread more carefully in the future, investors and analysts say.

Changing perceptions

Local support for the foreign fund’s stance is unusual given South Korea’s long-running suspicion towards foreign private equity and hedge funds. The stereotype of the money-hungry foreign opportunist is a staple of local media coverage.

US-based private equity firm Lone Star remains the archetypical villain, often portrayed as a greedy investor that took advantage of the country in the aftermath of the 1997-98 Asian financial crisis, profiting massively from its investment in Korea Exchange Bank.

Cheil and Samsung C&T, a construction arm of the Samsung group, insist that the offer, made last month, is in accordance with the law.

Critics complain that it is unfair because the book value of Samsung C&T’s stakes in listed firms such as Samsung Electronics was around 13 trillion won at the end of March – 46% higher than the valuation assigned to the company by Cheil.

Samsung may nonetheless muster the votes to get its way.

Some investors want to trade in their Samsung C&T shares, given what is widely considered a weak outlook for its core business. The merged company will have the full backing of the group’s resources as the de facto holding company – which may in the long run lead to much better returns.

“From a shareholder value perspective, it’s better for Samsung C&T to merge with Cheil rather than remain a construction company,” said Huh Nam-kwon, chief investment officer at Shinyoung Asset Management, a Samsung C&T shareholder.

Also in the deal’s favour: many institutional investors count conglomerates like Samsung among their top clients, and voting against such a crucial deal could be seen to be bad for business.

“We who live in this country have to be careful speaking about Samsung, but when someone from the outside is this vocal, we can then say ‘yes, this is right and Elliott is doing the right thing,'” said Nam Dong-woo, equities head at Eastspring Asset Management, a Samsung C&T shareholder .

“Someone has belled the cat, and in the long run this is a good thing.”

HTC: Not considering merger with Asus

HTC: Not considering merger with Asus


TAIPEI: Taiwan’s HTC Corp will not consider a merger with larger rival Asustek Computer Inc, HTC said, responding to comments made by Asustek’s head during its annual general meeting.

“HTC has not made any contact with Asus regarding this matter, and it will not consider a merger with Asus,” the company said in a posting on the website of Taiwan’s stock exchange.

Asus chairman Johnny Shih said last week the company would not rule out the possibility of acquiring the struggling smartphone maker. Its chief financial officer later told Reuters Shih had “chatted about the topic internally.”

Asus later clarified it has no current investment plans in HTC.

HTC has suffered a steep fall in its stock price since downgrading its earnings outlook for the current quarter. Shares rose by the 10% market limit on Monday, however, in response to the buyout speculation.

The firm, which once sold one in 10 smartphones globally, has seen its market share dwindle in the face of heated competition from Apple Inc and Samsung Electronics Co Ltd.

Asus, more well-known as a laptop brand, has been making inroads into the smartphone market with its ultra low-priced ZenFone series.

According to a recent HSBC report, Asus could see 89% on-year smartphone shipment growth in 2015, the highest among major vendors.

Free roaming for BSNL users to start today


Free roaming for BSNL users to start today

NEW DELHI: Telecommunications company Bharat Sanchar Nigam Limited (BSNL) will begin its free roaming service today, under which customers will not have to pay to use mobile services while travelling outside the circle to which their connection belongs.

Apart from this, BSNL shall also be setting up 5,000 base transceiver station (BTS) towers across the country to provide better services to its customers.

According to reports, 1,250 of the BTS towers will be erected in Bihar to improve that state’s connectivity.

Samsung Galaxy S6 plus to be part of Note series?


Samsung Galaxy S6 plus to be part of Note series?

There seems to be a lot of evidence that Samsung is planning a super-sized version of the S6 Edge — not least the pictures that leaked a couple of weeks ago — and now we have a few more hints to go on.

First up are reports from Galaxy Club in the Netherlands that Samsung has trademarked the S6 Note name in South Korea, suggesting that the upcoming Plus device will in fact join the Note family.

Based on what we know so far, there doesn’t seem to be any other device that could be the S6 Note. The device would probably feature an Edge-style curved screen to distinguish it from the upcoming Galaxy Note 5.

Extra inches
We also have some new updates on the specs of the S6 Note (or S6 Plus or some kind of variation on that theme). SamMobile says the phablet will have a huge 5.7-inch screen, bigger than previously thought.

It will indeed have the distinctive curved edges of the Galaxy S6 Edge and it’s going to come with Android 5.1.1 out of the box, according to the sources SamMobile spoke to.

That’s all the new information we have right now, but with a Q3 2015 launch date rumoured (July, August or September) it shouldn’t be too long before we see the handset confirmed.

Here’s Apple India’s plan for the next 3 years

Apple 13


KOLKATA: Apple is planning more than a twofold expansion of its retail reach in India to double iPhone sales in each of the next three years to achieve fresh targets set by the company’s US parent amid stiff competition in the premium smartphone segment from a reinvigorated Samsung.

The company has signed a distribution deal with the Delhi-based Optiemus Group, which is also a distributor of Samsung and HTC smartphones, three industry executives said. More such deals are in the pipeline, they said. With this, Apple will have a fifth iPhone distributor, the others being Redington, Ingram Micro, Rashi Peripherals and Brightstar, the last of which was appointed in January.

Optiemus has been given a specific mandate to expand the distribution of iPhones in neighbourhood cellphone stores. The group distributes Samsung smartphones in large retail chains and HTC smartphones through separate companies.
“Since shipment figures are one of the indicators of success in the smartphone industry, any new distributor Apple appoints will lead to an instant surge in shipments, which will help it to achieve the target fixed by headquarters and will also lead to a significant jump in retail reach,” an industry executive said.

Apple is pushing for sales of two million iPhones in India in this (October-September) financial year after notching up one million last year. In the seven months ended April 30, the company sold a million iPhones in India. Another executive said Apple India had been under pressure since Samsung has become more aggressive and wants to ensure that volume sales grow at twice the existing pace in the country.

“Apple’s distributors are now reaching out to even local consumer electronic dealers and mobile phone stores for stocking iPhones and setting up dedicated space in such stores,” he said. There was no response to an email sent to Apple. Attempts to reach Optiemus Group promoter Ashok Gupta on his cellphone were unsuccessful.

While Apple has been a longtime leader in the Rs 30,000-plus smartphone market in India, South Korean rival Samsung overtook the American firm in January-April quarter, as per the latest data from market tracker Counterpoint Research. Samsung’s renewed vigour stems from the success of its latest flagship Galaxy S6, S6 Edge and Note Edge.

By value, Apple is the number two brand in the overall Indian smartphone market after Samsung. By volume, Apple ranked lower with a share of about 2%, compared with market leader Samsung at 28% followed by Micromax at 15%.

Govt to revamp sourcing, testing of telecom gear


Govt to revamp sourcing, testing of telecom gear

NEW DELHI: The government is looking at a major overhaul of telecom equipment sourcing and testing in India as it fears that unfettered supplies from foreign vendors, including Chinese companies, are making the system susceptible to spyware and malware from unfriendly countries and anti-national activists.

A Cabinet note is under preparation to work out standards and order in-country testing of critical telecom equipment as these have the potential to become easy conduits for spying and leakage of information, official sources told TOI.

India imported telecom equipment, including electronic devices, to the tune of nearly Rs 70,000 crore in 2013-14 (Rs 57,000 crore in 2012-13). Alarmingly, a little over 60% of these imports emanated from China.

Apart from the various electronic devices that make their way from the dragon land, Chinese vendors such as Huawei and ZTE also sell crucial telecom equipment in India. Other foreign players that supply sophisticated telecom equipment include Sweden’s Ericsson and Finland’s Nokia Networks.

Recognizing potential threats to national security due to any breach into the sensitive networks, the government has already issued various amendments to telecom licences, mandating that operators need to procure equipment which has been tested according to relevant Indian or international security standards in any accredited lab.

However, India is still to develop concrete standards, procedures and tools for testing the equipment. The government has set up a pilot lab at IISc, Bengaluru even as a group of officers is preparing the processes and systems for security certification and testing of telecom equipment and accrediting the certification and test labs.

With huge delays in laying out the contours for such testing, the government is also understood to have extended by a year its proposal to have all the certification done by local agencies and labs from April this year. Once the testing standards and tools are put in place, the government intends to even allow private sector players to set up certification labs. A note to this effect will also be presented before the Union Cabinet, the sources said.

Telecom operators are currently free to purchase equipment from vendors across the world. However,

operators have been made responsible for ensuring security of their respective networks. They have to ensure measures like network forensics and conduct network penetration tests to ascertain robustness of security apparatus. Also, they have to conduct an audit of their security preparedness once a year.

The current norms stipulate the operators to inform the government immediately in case they monitor intrusions, attacks and any frauds across any wing of their network. The government has mandated a penalty of Rs 50 crore for any security breach that has been caused due to inadvertent inadequacies in precaution on the part of the operator.

Apart from security threats, the government also feels that domestic manufacturing of equipment will lead to creation of jobs and prevent a huge outflow of foreign currency from the country. Also, it is felt that technical knowledge and IPR creation will also have a spill-over effect on other allied industries.

The government has already announced a host of incentives to promote local manufacturing as it looks to create electronic manufacturing hubs across the country.

BSNL to launch free roaming starting Monday


BSNL to launch free roaming starting Monday

NEW DELHI: State-run BSNL will launch free roaming, starting tomorrow, which will allow all its mobile customers across the country to receive incoming calls at no cost.

“Now BSNL mobile customers will not need to carry multiple SIMs and handsets during roaming. They are free to talk as long as they want without worrying of any charges during incoming calls.

“In fact, it is like a dream of One Nation One Number’ coming true,” BSNL CMD Anupam Shrivastava said in a statement.

On June 2, Telecom Minister Ravi Shankar Prasad had announced that the telco would be launching free roaming scheme from June 15.


The company also clarified that it has not received any communication from sectoral regulator TRAI regarding the roaming scheme.

READ ALSO: BSNL to offer free national roaming from June 15

“We have not received any such communication from TRAI. BSNL has announced this scheme with the consent of Minister of Communications & IT, Ravi Shankar Prasad who himself had announced it in a press conference held on June 2. TRAI has no objection to it,” Shrivastava said.

Vodafone hikes prepaid data tariffs by up to 47%

Vodafone hikes prepaid data tariffs by up to 47%


NEW DELHI: Telecom services provider Vodafone has increased pre-paid data tariff for 2G and 3G services in Delhi NCR by up to 47%, while MTS hiked rates of post-paid data pack by 8%.

The increase comes in the aftermath of March spectrum auction wherein telcos had paid around Rs 1.1 lakh crore to acquire airwaves.

However, Sistema Shyam Teleservices, which operates under the MTS brand, did not participate in the March auction.

Earlier, Bharti Airtel and Idea Cellular had increased the tariffs for mobile data.

Vodafone has increased the price of its 3G pack of 10 GB data to Rs 1,847 with a validity of 28 days from Rs 1,255 earlier.

The country’s second-largest mobile operator has increased the price of its 1 GB pack of 3G data to Rs 297 from Rs 255.

Also, it has increased price of 1 GB 2G pack to Rs 195 from Rs 175 earlier.

A Vodafone spokesperson did not reply to queries in this regard, while a MTS spokesperson said, “We have increased mobile data rates by up to 8% for post-paid customers.”

Vodafone has also made changes in most of the pre-paid plans and has also reduced validity of various packs.

Idea was the first telecom operator that increased data tariffs after the March spectrum auction.

Airtel also recently increased rates for mobile Internet packs, both 2G and 3G, sold online for pre-paid customers across the country.

The company has withdrawn discounts that it was offering for online purchase of mobile data packs, bringing the prices at par with Internet packs sold offline through retailers.

In a bid to improve profitability, telcos have been cutting back on discounts and freebies. Last year, firms including Bharti Airtel, Vodafone and Idea had increased data as well as call tariffs.

After the March spectrum auction, industry associations had said there would be hike in tariffs as operators have to meet the commitment to the government.

Telcos have enough spectrum, must address call drops: Prasad


Telcos have enough spectrum, must address call drops: Prasad

New Delhi: Doing some plain speaking on call drops, Telecom Minister Ravi Shankar Prasad today asked mobile operators to walk the extra mile to reinforce their systems as they have enough spectrum to provide telephony services without interruption.

The minister said he has asked sectoral regulator TRAI to suggest a disincentive mechanism to tackle the problem, though he refused to share if it will be a financial disincentive.

“The point is, as of now, let me tell you as a minister that I would like all the telecom operators to reinforce their system, to avoid call drops, to properly run their operations. Once we are willing to walk the extra mile, they also walk the extra mile,” Prasad said in an interview to . Government put the highest amount of spectrum to auction in March, some of which remained unsold, he said, adding that therefore the argument given by operators that not enough spectrum is available with them does not hold substance. “…this argument I don’t appreciate, enough spectrum is available, what is important for them is to reinforce…call drop issue needs to be addressed by the operators, whether BSNL or private ones because consumers want no call drops. Now I would appreciate if telecom operators earnestly addressed this problem,” he said.

The government is willing to walk the extra mile to address the concerns of the telecom sector but in turn, the industry should also improve its services and avoid problems like call drops, he said. The minister said that to revise merger and acquisition (M&A) guidelines for the sector, the Department of Telecom is meeting stakeholders and a final call will be taken once the recommendations are finalised. “A committee headed by Telecom Secretary is working on it. They have had a lot of meetings with stakeholders. Let them finalise their whole recommendations then we will take a call. Time is not the factor at all, if there is need for immediate pushing, surely we will do it. I shall be very frank with you,” Prasad said.

The minister also put his weight behind the industry’s concern over installation of mobile towers by saying that call drop allegations and campaign against tower installation can’t go hand in hand. “I have already spoken publicly about this campaign on the tower issue and I want to repeat that there is no tangible evidence of any harmful effect. Therefore, call drop allegations and campaign against tower installation can not go hand in hand,” he said.