Wednesday, November 13, 2019

Number of the day: 140

The government spent Rs 36 lakh to buy 140 air purifiers between 2014 and 2017. The beneficiaries: the PM’s office and six other government departments, including health, agriculture, tourism, home, external affairs and NITI Aayog. Twenty five were installed in the PM’s office. As one health analyst rightly says, “This initiative is like giving gumboots to city officials when the drainage system collapses and the city is covered in muck. This is just not the response we are looking for.” The number of air purifiers bought for the 45 government-run Kendriya Vidyalaya schools in Delhi: zero. 

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The biggest news story today, explained.

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Vodafone walking right out of India

Hit with heavy losses, a price war and a crippling Supreme Court judgement, Vodafone may roll up its India operations if the government doesn’t step in to help.  

Wait, what is this about? Vodafone’s India operations are in big trouble—a reason why its global CEO Nick Read told reporters “the situation is critical.” Also: “If you’re not a going concern, you’re moving into a liquidation scenario—can’t get any clearer than that." And the company’s dire numbers in India tell the sorry tale:

  • Announcing its six-month global numbers yesterday, Vodafone declared a $2.1 billion loss—largely due to its India operations.

  • Vodafone-Idea—the Indian arm where Vodafone has a 45% stake—is currently $14 billion in debt. 

  • Plus: Vodafone India lost $1.1 billion in its book value (when an asset loses market value, its value correspondingly drops on the company’s books). As Read put it, "It's been a very challenging situation for a long time and, if you look at the share price in India, it is effectively has zero value."

  • Read also said that his company would not invest any more money in India if the situation does not improve. Vodafone is the largest direct foreign investor in India.

Why is Vodafone doing so badly? Two big reasons: Jio and the Supreme Court.

  • When Reliance Industries launched Jio in 2016 at super-cheap rates, it unleashed a price war. As its rivals struggled to stay competitive, their profits plummeted. For example, Vodafone reported a net loss of Rs 4,067 crore in its first quarter this year, compared to Rs 2,757 crore during the same period last year.

  • The company also haemorrhaged customers—losing nearly 90 million subscribers over the past year.

  • The final straw: a Supreme Court’s ruling in October that ordered Vodafone to pay $4 billion in fees and penalties.

What SC ruling? The case dates back to 2005 and concerns a dispute over how much money telecommunication companies owe the government. Here’s what happened.

  • Telecommunication companies have to buy spectrum licenses from the government.  

  • What is spectrum? Bands of airwaves a company needs to transmit —be it for radio, mobile or wifi. The government ‘owns’ the spectrum and licenses it to companies— typically in an open auction. (lots more on this here)

  • In 2005, Vodafone and Airtel were awarded these licenses. And in return, they agreed to pay the government a share of their revenues. But what kind of revenues?

  • The government decided that companies ought to pay a part of all their revenues, including rent etc. But Airtel and Vodafone argued that they ought to pay fees only on revenues accruing from their telecom operations.

  • The result was a 14-year case that the companies lost last month. The court has ordered them to shell out the unpaid dues plus interest plus penalties.

  • Vodafone now owes Rs 28,308 crore ( $4 billion) to the government. Airtel’s bill: Rs 21,682.13 crore (about $3 billion).

  • OTOH, Jio’s owed amount: a piddly Rs 13 crore. The reason: it has only been around for three years.

So Jio got lucky? Yes and no. Its rivals claim that the Ambani-owned company gets special treatment—specifically designed to undercut its rivals. Hence, CEO Read’s oblique remark: “It is tough to justify the risks where powerful billionaires enjoy such good luck.” Some instances of this good luck:

  •  In 2005, the government inexplicably allowed Jio to use the 4G spectrum—allocated specifically for broadband—to be used for voice call services. The benefit as per a government audit: Rs 3,367 crore.

  • Jio kickstarted “test trials” of its 4G services from May 2016 by giving out SIM cards to only its staff, their friends and family. But by the end of August 2016, the company had between 2.5 million and 3 million users—without ever having launched its service!

  • Last year, the government doubled import duties on telecom equipment—spiking costs for everyone but Jio. The reason: Jio buys its gear from Samsung—which is tax exempt thanks to a trade deal the government struck with South Korea just months before the duties were hiked.

  • Also super coincidentally, a cash-rich Jio will be sitting pretty for the upcoming 5G spectrum auction while its competitors reel with losses and a giant court-awarded bill.

So is Vodafone leaving? The company wants a break on that Supreme Court deal: waive all interest and penalties; spread the rest of the payments over a ten-year period. The ultimatum: "Either they should take their boots off the neck of the industry and allow it to better compete with Mukesh Ambani on 5G, or Vodafone Idea is destined for a potentially chaotic final act with potential repercussions for India's international standing." If the government fails to oblige, then yes. 

How will it affect me? With Vodafone’s one foot out the door, your choices for phone and data may be reduced to two: Airtel or Jio. But Airtel ain’t doing well either. The company’s made a net profit of Rs 97 crore net profit in the first quarter last year. Its corresponding figures this year: a Rs 2,866 crore loss. 

The bottomline: Unless the government changes course, the future of our phone and broadband connections and bills may be subject to the whims of a single all-powerful company. 


Learn more: The Wire offers an excellent round-up of Jio’s ‘good luck’. Caravan did a deep dive into its cosy relationship with the government. Economic Times explains why the Supreme Court judgement may push out Vodafone. The Telegraph (sign up required) has a scathing take on Vodafone’s misfortunes in India. NDTV has everything you need to know about spectrum and auctions.

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admiring the gorgeous colour of your skin

Your Maha drama update is here: The state is now officially under President’s Rule—which puts it in “suspended animation” for six months. 

  • How it happened: NCP was given until 8:30 pm to stake its claim; it asked for an extension in the morning; the governor instead requested the imposition of president’s rule by late afternoon. 

  • Sena, NCP and Congress are still working on an alliance, and can technically approach the governor any time over the next six months. 

  • Sena is moving the Supreme Court, claiming that the governor showed unseemly haste and a pro-BJP bias. 

  • Congress is keeping its MLAs in Rajasthan to avoid losing more of its ranks to the BJP. But they have managed to persuade Sonia Gandhi to accept a milan with the Sena.

  • If it’s any consolation, BJP says it prefers fresh elections instead.

  • Need background on this soap opera? Here’s yesterday’s explainer.

Delhi is gasping for air… again! The AQI index hit 425 yesterday afternoon, and it is likely to get worse over the coming days. Reminder: anything above 300 is considered ‘hazardous’. The reasons haven’t changed either: cold temperatures, lack of winds and stubble burning in Punjab and Haryana. The number of fires came down to 151 on November 7, after hitting a high of 4,824 fires on November 5. But by November 10, the number climbed back to 2,289—an increase of 1415.89 per cent. But as one farmer told News18: “There is no other option. Either we burn the stubble, breathe in the smoke and die slowly. Or we don't and we starve." (Need a pollution refresher? Read our recent explainer

In other pollution-related reads: One undercovered aspect of pollution is government subsidies for rice farming: “Guaranteed prices have encouraged farmers to grow so much rice—one of the most water-intensive crops and a major source of greenhouse gases—that India has become the world’s largest exporter of the grain and government stockpiles are now more than twice the required level.” The long-term solution: switching to crops like soybean, pulses and corn. Meanwhile there are no good remedies. (Economic Times)

A second whistleblower complaint against Infosys: A new undated letter of complaint has leaked to the press. The writer is most worked up about CEO Salil Parekh’s commute between Mumbai and Bengaluru on company dime. He also includes a Rs 22 lakh itemised bill: “Four business class tickets per month plus home to airport drop in Mumbai, airport pick-up in Bengaluru and drop on the return journey”—noting, “As all our employees are paying for their transport from their homes to office and back, expecting the same from the CEO is not wrong.” Clearly this person didn’t ask for the right reimbursement package. (Hindustan Times)

A red flag for Purana Qila: The Archaeological Survey of India (ASI) is set to launch a second excavation at the 16th-century fort in little over a year. The reason: to “carry forward research from the previous excavation.” The objective of that previous excavation: find a link between the Purana Quila and the epic Mahabharata. Coming soon: #IndraprasthaYahinBanega (The Print)

Boris Johnson wants you to vote Labour! Yup, that’s right. An advocacy group cleverly used deepfake technology to create two campaign ads featuring Tory PM Johnson and Labour chief Jeremy Corbyn—each seemingly endorsing one another 😂 Watch the BBC video.

Thousands of birds dead in Lake Sambal: More than 1,000 birds have been found dead along the shore of India's biggest inland saltwater lake in Rajasthan. The reasons are still unclear, and conservationists worry that the final count may rise to 5000. The dead include both local and migratory birds that flock to the lake each year. (BBC News)

A very ‘green’ funeral: Cremation has long been seen as an eco-friendly alternative to burial. But it still requires a lot of fuel, and contributes millions of tons of carbon dioxide emissions per year. The new green trend in last rites: aquamation or water cremation—which has a tenth of the carbon footprint of conventional cremation. Alkaline hydrolysis essentially liquidises most of the flesh but leaves the bones in a white phosphorus form that crumbles to the touch—and are turned into ‘ashes’ which can be spread or preserved by the family. The other upside: the remnants also include a liquid which “is an excellent fertiliser.” (Daily Mail)

Did Russia meddle in a New Zealand election? No, not the one that brought PM Jacinda Ahern to power—but the election to pick the nation’s bird of the year. Kiwis are up in arms because they suspect a ‘foreign hand’ may have rigged voting in the beloved and fiercely contested annual contest. Btw, the winner this year was totally legit: hoiho, the world’s rarest penguin described as “gorgeous,” “charismatic” and “very antisocial.” See it here or read more about it here

Stave off babies and cancer! A jab of the contraceptive injection Depo Provera could protect against cervical cancer, shrink existing cancer cells, and stop them from growing. (Daily Mail)

Why do babies hiccup: sometimes for eight minutes at a time? Why it helps them learn to control their breathing, of course! (Daily Mail)

Bollywood’s brown skin problem: After decades of touting a fair-skinned ideal, the movie industry has foisted a brown-faced Bhumi Pednekar and is selling it as ‘wokeness’. This Huffington Post piece by a dark-skinned writer lays bare the very real price we’ve paid for its gori chamdi obsession. 

Your daily quota of sunshine items: includes the following:

  • The 💃 news that an unscripted ‘Friends’ reunion is in the works.

  • These lovely photos of the Vietnamese mouse deer—spotted decades after it was thought to be extinct.

  • Michelin-starred chef Gaggan Anand’s new restaurant that is almost sold out for this year.

  • The first person to run a marathon in every country in the world!

  • The excellent news that Bangalore is now the scooter-sharing capital of the world—its rental fleet of scooties is 15,000-plus. 

  • This lovely interview with Bill Gates who gets super-stressed because his kids force him to use tech—i.e. Insta and WhatsApp. 

  • Chetan Bhagat’s joke about the Maharashtra election… which is kinda funny. 

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Everything we don't know about human desire

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Welcome to the world of audio porn

Can listening to sex be as hot as watching it? The wild success of audio porn certainly suggests so. In 2019, audio erotica startups have collectively raised over $8 million. Oh and you can choose either the amateur variety on Reddit. Or check out this handy list of audio porn sites and apps. (Bonus reads: Mel Magazine on why men are switching from video to audio porn; Jezebel on Reddit’s GoneWildAudio.)

Read: 6 audio porn sites and apps for erotic sex stories | Cosmopolitan

Sex, Love etc 2

Losing a friendship to love

Love ain’t always grand. Certainly not for that best friend who soon feels left out and left behind. Did you know we lose an average of two friends every time we get into a new relationship? Here’s why it happens—and how to deal with it if you are the abandoned friend.

Read: How To Cope When Your Best Friend Falls In Love And Pulls Away From You | Mashable

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