As technology evolves and advances, scammers continue to discover ways to cheat people out of money. One latest scam that is duping telecom companies out of billions of dollars is the SIM box fraud. In this, international numbers pretend to be local, thereby robbing telecom operators of hefty international call fees. As per Communications Fraud Control Association's 'Fraud Loss Survey' report for 2021, globally the SIM box fraud has cost the telecom industry around $3.11 billion, or approximately 7.8 per cent of the industry's total revenue. During the past few years, it has actually emerged as one of the top telecom scams.

How does it work?

This is a bypass fraud. Scammers use Sim Boxes to redirect international calls over the internet and make them look like local calls.

Also read |&nbsp;<a href="https://www.wionews.com/science/chatgpt-ai-chatbot-fails-upsc-exam-will-it-do-ma-next-568340">ChatGPT AI chatbot fails UPSC 'exam', will it do MA next?</a>

As per Infosys, "a SIM box fraud diverts international calls to a cellular device through the internet. This device, called a SIM box, routes the connections back into the network as local calls, using hundreds of low-cost or even unpaid SIM cards, which are often obtained with forged identities."

They thus benefit by exploiting the "difference between local and international charges by paying just local rates or none at all to cell carriers after billing international rates from the source."

Also read |&nbsp;<a href="https://www.wionews.com/science/indian-start-up-cynlr-is-helping-industrial-robotic-arms-gain-vision-and-intelligence-567796">Indian start-up CynLr is helping industrial robotic arms gain ’vision and intelligence’</a>

While the caller still pays the higher international call rates, the middleman gets away with paying the local rates and the local telecom operator suffers revenue loss.

Additionally, the end users get affected by poor service quality, which also reflects badly on the telecom operator. Infosys warns that these frauds can also become a threat to national security as they can bypass legal intercepts which monitor criminal activity. 
&nbsp;

(With inputs from agencies)

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As technology evolves and advances, scammers continue to discover ways to cheat people out of money. One latest scam that is duping telecom companies out of billions of dollars is the SIM box fraud.

As technology evolves and advances, scammers continue to discover ways to cheat people out of money. One latest scam that is duping telecom companies out of billions of dollars is the SIM box fraud. In this, international numbers pretend to be local, thereby robbing telecom operators of hefty international call fees. As per Communications Fraud Control Association's 'Fraud Loss Survey' report for 2021, globally the SIM box fraud has cost the telecom industry around $3.11 billion, or approximately 7.8 per cent of the industry's total revenue. During the past few years, it has actually emerged as one of the top telecom scams. How does it work? This is a bypass fraud. Scammers use Sim Boxes to redirect international calls over the internet and make them look like local calls. Also read | ChatGPT AI chatbot fails UPSC 'exam', will it do MA next? As per Infosys, "a SIM box fraud diverts international calls to a cellular device through the internet. This device, called a SIM box, routes the connections back into the network as local calls, using hundreds of low-cost or even unpaid SIM cards, which are often obtained with forged identities." They thus benefit by exploiting the "difference between local and international charges by paying just local rates or none at all to cell carriers after billing international rates from the source." Also read | Indian start-up CynLr is helping industrial robotic arms gain ’vision and intelligence’ While the caller still pays the higher international call rates, the middleman gets away with paying the local rates and the local telecom operator suffers revenue loss. Additionally, the end users get affected by poor service quality, which also reflects badly on the telecom operator. Infosys warns that these frauds can also become a threat to national security as they can bypass legal intercepts which monitor criminal activity. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

SIM box fraud costs telecom sector $3 billion. Here's what it is

An Australian court has ordered three telecom companies to pay A$33.5 million ($22.08 million) in fines for making false news regarding the speed of NBN internet plans.

According to the Australian Competition &amp; Consumer Commission (ACCC), the country's federal court fined Optus, Singapore's Telecommunications A$13.5 million and ordered Telstra to pay A$15 million. Further, a unit of TPG Telecom has also been ordered to pay A$5 million.

<a href="https://www.wionews.com/world/cyberattacks-rise-four-fold-in-australia-says-government-report-531148">Also read |&nbsp;Cyberattacks rise four-fold in Australia, 76,000 complaints registered last year: Govt report</a>

The ACCC claimed that the false and deceptive statements regarding their 50 or 100 Megabits per second (Mbps) fibre to the node plane were made at least 12 months in the year 2019 and some believe that it might have continued till 2020.&nbsp;

The three telecom companies have admitted in the court of providing false or misleading claims which might have affected nearly 120,000 subscribers.&nbsp;

<a href="https://www.wionews.com/world/australia-to-bring-legislation-for-tougher-penalties-on-data-breaches-527711">Also read |&nbsp;Australia to bring legislation for tougher penalties on hackers for data breaches</a>

In a statement, Telstra admitted that from April 2019 to April 2020, it was unable to fully check the highest achievable speed of the NBN services of nearly 48,000 individuals. The company said, "We've gone through an extensive remediation and refund process. We've also taken a number of steps to ensure we better meet our regulatory obligations."&nbsp;

However, in response to the issues raised, representatives of TPG and Optus told Reuters that they have sent separate emails mentioning that they have modified their systems and procedures. Optus said that it will personally get in touch with its customers who qualify for remediation.&nbsp;

(With inputs from agencies)

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An Australian court has ordered three telecom companies to pay A$33.5 million ($22.08 million) in fines for making false news regarding the speed of NBN internet plans.

An Australian court has ordered three telecom companies to pay A$33.5 million ($22.08 million) in fines for making false news regarding the speed of NBN internet plans. According to the Australian Competition & Consumer Commission (ACCC), the country's federal court fined Optus, Singapore's Telecommunications A$13.5 million and ordered Telstra to pay A$15 million. Further, a unit of TPG Telecom has also been ordered to pay A$5 million. Also read | Cyberattacks rise four-fold in Australia, 76,000 complaints registered last year: Govt report The ACCC claimed that the false and deceptive statements regarding their 50 or 100 Megabits per second (Mbps) fibre to the node plane were made at least 12 months in the year 2019 and some believe that it might have continued till 2020. The three telecom companies have admitted in the court of providing false or misleading claims which might have affected nearly 120,000 subscribers. Also read | Australia to bring legislation for tougher penalties on hackers for data breaches In a statement, Telstra admitted that from April 2019 to April 2020, it was unable to fully check the highest achievable speed of the NBN services of nearly 48,000 individuals. The company said, "We've gone through an extensive remediation and refund process. We've also taken a number of steps to ensure we better meet our regulatory obligations." However, in response to the issues raised, representatives of TPG and Optus told Reuters that they have sent separate emails mentioning that they have modified their systems and procedures. Optus said that it will personally get in touch with its customers who qualify for remediation. (With inputs from agencies) WATCH WION LIVE HERE

Australian court orders three telecom companies to pay $22.08 million for making false internet speed claims

India's No.2 telecom carrier by subscribers Bharti Airtel reported a bigger-than-expected increase in second-quarter revenue on Monday, helped by 4G subscriber additions and higher revenue per user.

The company's consolidated revenue from operations rose nearly 22 per cent&nbsp;year-over-year to 345.27 billion Indian rupees ($4.17 billion) in the three months that ended September 30.

Analysts, on average, were expecting revenue of 339.21 billion rupees, according to Refinitiv IBES data.

Airtel, as the company is popularly called, said revenue from its India mobile services, which has 328 million subscribers, rose nearly 25 per cent&nbsp;to 189.58 billion rupees.

Its 4G data customers increased by five&nbsp;million from the previous quarter to 210 million in the latest quarter.

Airtel's average revenue per user (ARPU), a key performance indicator for telecom firms, was 190 rupees, clocking a 3.8 per cent&nbsp;sequential rise and a roughly 24 per cent&nbsp;year-on-year increase.

<a href="https://www.wionews.com/india-news/indian-government-pressing-mobile-manufacturers-to-release-5g-updates-524464">Read more:&nbsp;Indian government pressing mobile manufacturers to release 5G updates</a>

Earlier this month, market leader Reliance Jio, the telecom arm of conglomerate Reliance Industries said its ARPU rose just under one per cent&nbsp;sequentially to 177.2 rupees in the quarter.

Airtel's net profit for the September quarter climbed to 21.45 billion rupees from 11.34 billion rupees a year ago, but missed analysts' estimates of 24.67 billion rupees. Its expenses surged by 16.7 per cent&nbsp;in the quarter.

<a href="https://www.wionews.com/videos/wion-business-news-watch-out-for-5g-scams-in-india-526329">WATCH |&nbsp;WION Business News | Watch out for 5G scams in India</a>

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The New Delhi-based company said mobile data consumption surged by 19.6 per cent, with consumption per mobile data customer at 20.3 GB per month.

Analysts expect telecom firms to announce tariff hikes by the end of fiscal 2023, having spent billions of dollars in the country's recent 5G auction. Airtel spent 430.84 billion rupees and launched its 5G services earlier this month.

<a href="https://www.wionews.com/world/indian-regulator-greenlits-govts-proposal-to-convert-vodafone-ideas-192-billion-dues-to-equity-527206">Read more:&nbsp;Indian regulator greenlights govt proposal to convert Vodafone Idea's $1.92 billion dues into equity</a>

ARPU needs to be at 200 rupees and ultimately at 300 rupees for a financially healthy business model, Airtel said last November, when it raised tariffs. The stock hit a record high of 833.80 rupees earlier in the day and has risen nearly 22 per cent&nbsp;this year through Monday's close.

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India's No.2 telecom carrier by subscribers Bharti Airtel reported a bigger-than-expected increase in second-quarter revenue on Monday, helped by 4G subscriber additions and higher revenue per user.

India's No.2 telecom carrier by subscribers Bharti Airtel reported a bigger-than-expected increase in second-quarter revenue on Monday, helped by 4G subscriber additions and higher revenue per user. The company's consolidated revenue from operations rose nearly 22 per cent year-over-year to 345.27 billion Indian rupees ($4.17 billion) in the three months that ended September 30. Analysts, on average, were expecting revenue of 339.21 billion rupees, according to Refinitiv IBES data. Airtel, as the company is popularly called, said revenue from its India mobile services, which has 328 million subscribers, rose nearly 25 per cent to 189.58 billion rupees. Its 4G data customers increased by five million from the previous quarter to 210 million in the latest quarter. Airtel's average revenue per user (ARPU), a key performance indicator for telecom firms, was 190 rupees, clocking a 3.8 per cent sequential rise and a roughly 24 per cent year-on-year increase. Read more: Indian government pressing mobile manufacturers to release 5G updates Earlier this month, market leader Reliance Jio, the telecom arm of conglomerate Reliance Industries said its ARPU rose just under one per cent sequentially to 177.2 rupees in the quarter. Airtel's net profit for the September quarter climbed to 21.45 billion rupees from 11.34 billion rupees a year ago, but missed analysts' estimates of 24.67 billion rupees. Its expenses surged by 16.7 per cent in the quarter. WATCH | WION Business News | Watch out for 5G scams in India × The New Delhi-based company said mobile data consumption surged by 19.6 per cent, with consumption per mobile data customer at 20.3 GB per month. Analysts expect telecom firms to announce tariff hikes by the end of fiscal 2023, having spent billions of dollars in the country's recent 5G auction. Airtel spent 430.84 billion rupees and launched its 5G services earlier this month. Read more: Indian regulator greenlights govt proposal to convert Vodafone Idea's $1.92 billion dues into equity ARPU needs to be at 200 rupees and ultimately at 300 rupees for a financially healthy business model, Airtel said last November, when it raised tariffs. The stock hit a record high of 833.80 rupees earlier in the day and has risen nearly 22 per cent this year through Monday's close. WATCH WION LIVE HERE:

India's second largest telco Bharti Airtel posts strong Q2 numbers as users increase

Alphabet Inc`s Google will invest up to $1 billion in Bharti Airtel in a move that could help bolster the Indian telecom operator`s digital offerings, the companies said on Friday.

The investment includes a $700 million equity investment in Airtel at a price of 734 rupees ($9.77) per share and up to $300 million towards implementing commercial agreements, including investments in scaling Airtel`s offerings, the companies said.

The share issue is subject to regulatory and shareholder approval and comes months after Airtel raised up to 210 billion rupees through a sale of shares to existing shareholders.

Airtel shares were up 0.54 per cent at 711 rupees after the announcement.

Google announced plans less than two years ago to infuse $10 billion in India via its digitisation fund over five to seven years through equity deals and tie-ups.

Conglomerate Reliance Industries Ltd`s digital unit Jio Platforms, which houses Airtel`s telecom rival Jio, received an investment of $4.5 billion from Google in July 2020. In return, the US&nbsp;tech behemoth got a seat on Jio`s board.

Alphabet Inc`s Google will invest up to $1 billion in Bharti Airtel in a move that could help bolster the Indian telecom operator`s digital offerings, the companies said on Friday.

Alphabet Inc`s Google will invest up to $1 billion in Bharti Airtel in a move that could help bolster the Indian telecom operator`s digital offerings, the companies said on Friday. The investment includes a $700 million equity investment in Airtel at a price of 734 rupees ($9.77) per share and up to $300 million towards implementing commercial agreements, including investments in scaling Airtel`s offerings, the companies said. The share issue is subject to regulatory and shareholder approval and comes months after Airtel raised up to 210 billion rupees through a sale of shares to existing shareholders. Airtel shares were up 0.54 per cent at 711 rupees after the announcement. Google announced plans less than two years ago to infuse $10 billion in India via its digitisation fund over five to seven years through equity deals and tie-ups. Conglomerate Reliance Industries Ltd`s digital unit Jio Platforms, which houses Airtel`s telecom rival Jio, received an investment of $4.5 billion from Google in July 2020. In return, the US tech behemoth got a seat on Jio`s board.

Google to invest up to $1 billion in India telecom company Bharti Airtel

US telecom companies and airlines have been fighting for weeks over the potential impact of 5g services on aircraft. Here's some background on the dispute and a detailed report on the problems..

United States: Telecom companies and airlines been fighting for weeks

In a big setback for telecom companies, the Supreme Court on Friday dismissed their plea seeking correction of alleged errors in Adjusted Gross Revenue (AGR) calculation. 
 
A bench headed by Justice L&nbsp;Nageswara Rao said all applications were dismissed. On Monday, the apex court already said it would pass its order on applications filed by, Vodafone Idea, Bharti Airtel and Tata Tele Services Ltd, alleging arithmetical errors in the calculation of AGR dues payable by them. 
 
The top court, citing an earlier order in the matter, had noted the order clearly point out that no re-assessment of AGR related dues can be done. The telcos submitted that arithmetical errors can be rectified and there are cases of duplication of entries.

Also read |&nbsp;Will not hear arguments on reassessment of AGR related dues "even for a second": SC to telcos 
 
Senior advocate Mukul Rohatgi, representing Vodafone Idea, had submitted they were not blaming the Department of Telecommunications (DoT) for it, and there are arithmetical entries. Rohatgi added that they want to bring these errors to the attention of the concerned department, for their rectification. 
 
The bench reiterated that the apex court order had made it clear that there can't be any re-assessment. 
 
Rohatgi responded figures are "not cast in stone" and added, tribunals don't have the power of review but they can correct arithmetical errors. He submitted that they were not seeking an extension of time. 
 
Senior advocate Arvind Datar, representing Tata Tele Services Ltd, submitted rectification of errors in calculation can be done. 
 
Solicitor General Tushar Mehta, representing the Centre, submitted he has not received any instructions from the DoT on allowing correction of errors. 
 
The bench had said that it has said not just once, but twice and thrice that AGR demand can't be recomputed. 
 
Senior advocate AM Singhvi, representing Airtel, said there are cases of duplication and also of payments made but not accounted for. He submitted, "I don't want to pay thousands of crores on account of these errors". 
 
Mehta said he can take instructions on this within two days. "It may be little hazardous for me to make statement without taking instructions..", said Mehta.

Also read |&nbsp;<a href="https://www.wionews.com/india-news/supreme-court-gives-vodafone-idea-airtel-10-years-to-pay-agr-dues-to-government-324447">Supreme Court gives Vodafone-Idea, Airtel 10 years to pay AGR dues to government</a> 
 
In September last year, the top court had given 10 years'&nbsp;time to telcos, who were struggling to pay Rs 93,520 crore in AGR dues outstanding amount to the government. 
 
The apex court had said that telecom operators shall make the payment of 10 per cent of the total dues as demanded by DoT by March 31, 2021. The bench had said the rest of the amount was to be paid in yearly instalments commencing from April 1, 2021, to March 31, 2031.

In a big setback for telecom companies, the Supreme Court on Friday dismissed their plea seeking correction of alleged errors in Adjusted Gross Revenue (AGR) calculation.

In a big setback for telecom companies, the Supreme Court on Friday dismissed their plea seeking correction of alleged errors in Adjusted Gross Revenue (AGR) calculation. A bench headed by Justice L Nageswara Rao said all applications were dismissed. On Monday, the apex court already said it would pass its order on applications filed by, Vodafone Idea, Bharti Airtel and Tata Tele Services Ltd, alleging arithmetical errors in the calculation of AGR dues payable by them. The top court, citing an earlier order in the matter, had noted the order clearly point out that no re-assessment of AGR related dues can be done. The telcos submitted that arithmetical errors can be rectified and there are cases of duplication of entries. Also read | Will not hear arguments on reassessment of AGR related dues "even for a second": SC to telcos Senior advocate Mukul Rohatgi, representing Vodafone Idea, had submitted they were not blaming the Department of Telecommunications (DoT) for it, and there are arithmetical entries. Rohatgi added that they want to bring these errors to the attention of the concerned department, for their rectification. The bench reiterated that the apex court order had made it clear that there can't be any re-assessment. Rohatgi responded figures are "not cast in stone" and added, tribunals don't have the power of review but they can correct arithmetical errors. He submitted that they were not seeking an extension of time. Senior advocate Arvind Datar, representing Tata Tele Services Ltd, submitted rectification of errors in calculation can be done. Solicitor General Tushar Mehta, representing the Centre, submitted he has not received any instructions from the DoT on allowing correction of errors. The bench had said that it has said not just once, but twice and thrice that AGR demand can't be recomputed. Senior advocate AM Singhvi, representing Airtel, said there are cases of duplication and also of payments made but not accounted for. He submitted, "I don't want to pay thousands of crores on account of these errors". Mehta said he can take instructions on this within two days. "It may be little hazardous for me to make statement without taking instructions..", said Mehta. Also read | Supreme Court gives Vodafone-Idea, Airtel 10 years to pay AGR dues to government In September last year, the top court had given 10 years' time to telcos, who were struggling to pay Rs 93,520 crore in AGR dues outstanding amount to the government. The apex court had said that telecom operators shall make the payment of 10 per cent of the total dues as demanded by DoT by March 31, 2021. The bench had said the rest of the amount was to be paid in yearly instalments commencing from April 1, 2021, to March 31, 2031.

SC dismisses telecom companies' plea seeking correction in AGR calculation

The Supreme Court Monday said it will not hear "even for a second" arguments on re-assessment of Adjusted Gross Revenue (AGR) related dues of telecom companies which approximately run into Rs 1.6 lakh crore.

A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah reserved its verdict on the issue of timeline for staggered payment of AGR-related dues by telecom companies.

The Centre had earlier urged the top court that up to 20 years be given to telecom companies for the payment of dues in staggered manner.

''We will not hear arguments for re-assessment (of AGR related dues) even for a second,''&nbsp;the bench said.

During the hearing, the bench observed that 15 or 20 years is not a reasonable time period and the companies should come forward with appropriate time frame.

The top court said it would also examine the bona fides of some telecom companies going into insolvency.

On June 18, the top court was informed by the Centre that the Department of Telecommunications (DoT) has decided to withdraw 96 per cent of the Rs 4 lakh crore demand for AGR related dues raised against non-telecom PSUs like GAIL.

The court had asked the private telecom companies including Bharti Airtel, Vodafone Idea to come out with a reasonable payment plan, make some payment to show their bona fide&nbsp;and file their books of accounts for the last 10 years. PTI

The Supreme Court Monday said it will not hear "even for a second" arguments on re-assessment of Adjusted Gross Revenue (AGR) related dues of telecom companies which approximately run into Rs 1.

The Supreme Court Monday said it will not hear "even for a second" arguments on re-assessment of Adjusted Gross Revenue (AGR) related dues of telecom companies which approximately run into Rs 1.6 lakh crore. A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah reserved its verdict on the issue of timeline for staggered payment of AGR-related dues by telecom companies. The Centre had earlier urged the top court that up to 20 years be given to telecom companies for the payment of dues in staggered manner. ''We will not hear arguments for re-assessment (of AGR related dues) even for a second,'' the bench said. During the hearing, the bench observed that 15 or 20 years is not a reasonable time period and the companies should come forward with appropriate time frame. The top court said it would also examine the bona fides of some telecom companies going into insolvency. On June 18, the top court was informed by the Centre that the Department of Telecommunications (DoT) has decided to withdraw 96 per cent of the Rs 4 lakh crore demand for AGR related dues raised against non-telecom PSUs like GAIL. The court had asked the private telecom companies including Bharti Airtel, Vodafone Idea to come out with a reasonable payment plan, make some payment to show their bona fide and file their books of accounts for the last 10 years. PTI

Will not hear arguments on reassessment of AGR related dues "even for a second": SC to telcos

Disruption-the term and practice in vogue- in the business world is usually associated with startups. The ‘story’ goes as: Young and dynamic startup firms disaggregate the value chains of existing industries or firms, find a niche and build a robust business. (The problems usually associated with startups are that of scaling up). But contra the prevailing and conventional wisdom, established firms- especially conglomerates, can be disruptive too.&nbsp;

One example of a conglomerate disrupting an industry is Reliance that essentially totally disrupted India’s telecommunications industry leaving competitors scrambling.

Before dwelling on the nature and form of Reliance’s disruption of the telecommunications industry, it may be useful to recall some concepts and practices that pertain to conglomerates. Often times, these firms, in an attempt to expand took recourse to vertical integration (VI). This meant buying and owning both or either upstream and downstream activities of the industry. The well-known example of VI is that of oil firms. Many big ones like Exxon, Shell, bought and owned but the input, supply and refining side of the industry and the upstream one of retailing.&nbsp;

These firms kept these aspects and functions in the house with the aim of efficiency, effectiveness, cost savings, and economies of scale.

While the rationale of VI sounds eminently sensible, but barring episodic attempts at this in the 1970s and 1960s, the overall success of conglomerates is debatable. Obiter dictum, it is held that conglomerates work well mostly in developed or emerging economy contexts.

Another strategy that firms usually of a larger size took recourse to was diversification. The rationale and the premise was growth and expansion. Diversification could be related or unrelated. With respect to the former, a given firm diversified into a related industry and in terms of the former, the diversification was totally unrelated. The doyens of business and industry held that related diversification offered a greater opportunity as opposed to unrelated diversification.

Against the generic backdrop of vertical integration, conglomerates, related and unrelated diversification, it is interesting to posit Reliance’s strategy of being all of the above and disrupting the Indian telecommunications industry. How did the firm do it?

It would appear that Reliance – being a family-controlled conglomerate- created an internal capital market, aggregated cash flows from its extant (sometimes unrelated businesses) and ploughed them into its telecommunications arm, Reliance Jio. Essentially, the firms cross-subsidised Reliance Jio from its various businesses. With such ‘deep pockets’, Reliance not merely took on extant competition in the telecommunications space but created what Chan Kim and Renee Mauborgne, in their book, ‘Blue Ocean Strategy’ call uncontested market space by making the competition irrelevant. While some competition in the Indian telco space exists like Airtel and some other minor players, but these firms are totally on the defensive and struggling to catch-up with Reliance Jio. In this sense, Reliance strategy does not entirely fit Chan Kim’s and Mauborgne’s premise but approximates it.

Reliance made both data services and calling extremely cheap forcing incumbents and competitors to catch up. The only option left for incumbents was to engage in a price war with Reliance Jio, but they could only do this at great cost to themselves. While Reliance could absorb initial losses with the aim of gaining and capturing market share from competitors, for the incumbents it could only mean bleeding extensively in the rules of the game set and created by Reliance. While at some point in time Reliance Jio will raise the Average Revenue per User (ARPU), but for now for its competitors, it was a blood bath as more likely than not competitors like Airtel match or craft a new strategy to overcome Reliance -which seems unlikely. Shorn of something drastic, Reliance Jio is likely to emerge as the leader in the telco space of India, if it already has not.

The key takeaway or even lesson of the disruption caused by Reliance strategy is that disruption can also be caused by established players – even conglomerates. And that it is not only the prerogative of startups. If, ultimately, the name of the game in a given industry, by a given firm, is to create value, the disruption could be a viable strategy for large firms and might be even more potent given that these firms, by virtue of deep pockets, can scale up faster and without hassles than startups. All this is not to discredit startups.&nbsp;

They remain important in their own right especially as drivers of innovation and path-breaking practices. It is only that disruption can be taken recourse to by conglomerates as well. Reliance Jio and its disruption of the telco space proves the point. 
 
(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL) &nbsp;

Disruption-the term and practice in vogue- in the business world is usually associated with startups. The ‘story’ goes as: Young and dynamic startup firms disaggregate the value chains of existing industries or firms, find a niche and build a robust business.

Disruption-the term and practice in vogue- in the business world is usually associated with startups. The ‘story’ goes as: Young and dynamic startup firms disaggregate the value chains of existing industries or firms, find a niche and build a robust business. (The problems usually associated with startups are that of scaling up). But contra the prevailing and conventional wisdom, established firms- especially conglomerates, can be disruptive too. One example of a conglomerate disrupting an industry is Reliance that essentially totally disrupted India’s telecommunications industry leaving competitors scrambling. Before dwelling on the nature and form of Reliance’s disruption of the telecommunications industry, it may be useful to recall some concepts and practices that pertain to conglomerates. Often times, these firms, in an attempt to expand took recourse to vertical integration (VI). This meant buying and owning both or either upstream and downstream activities of the industry. The well-known example of VI is that of oil firms. Many big ones like Exxon, Shell, bought and owned but the input, supply and refining side of the industry and the upstream one of retailing. These firms kept these aspects and functions in the house with the aim of efficiency, effectiveness, cost savings, and economies of scale. While the rationale of VI sounds eminently sensible, but barring episodic attempts at this in the 1970s and 1960s, the overall success of conglomerates is debatable. Obiter dictum, it is held that conglomerates work well mostly in developed or emerging economy contexts. Another strategy that firms usually of a larger size took recourse to was diversification. The rationale and the premise was growth and expansion. Diversification could be related or unrelated. With respect to the former, a given firm diversified into a related industry and in terms of the former, the diversification was totally unrelated. The doyens of business and industry held that related diversification offered a greater opportunity as opposed to unrelated diversification. Against the generic backdrop of vertical integration, conglomerates, related and unrelated diversification, it is interesting to posit Reliance’s strategy of being all of the above and disrupting the Indian telecommunications industry. How did the firm do it? It would appear that Reliance – being a family-controlled conglomerate- created an internal capital market, aggregated cash flows from its extant (sometimes unrelated businesses) and ploughed them into its telecommunications arm, Reliance Jio. Essentially, the firms cross-subsidised Reliance Jio from its various businesses. With such ‘deep pockets’, Reliance not merely took on extant competition in the telecommunications space but created what Chan Kim and Renee Mauborgne, in their book, ‘Blue Ocean Strategy’ call uncontested market space by making the competition irrelevant. While some competition in the Indian telco space exists like Airtel and some other minor players, but these firms are totally on the defensive and struggling to catch-up with Reliance Jio. In this sense, Reliance strategy does not entirely fit Chan Kim’s and Mauborgne’s premise but approximates it. Reliance made both data services and calling extremely cheap forcing incumbents and competitors to catch up. The only option left for incumbents was to engage in a price war with Reliance Jio, but they could only do this at great cost to themselves. While Reliance could absorb initial losses with the aim of gaining and capturing market share from competitors, for the incumbents it could only mean bleeding extensively in the rules of the game set and created by Reliance. While at some point in time Reliance Jio will raise the Average Revenue per User (ARPU), but for now for its competitors, it was a blood bath as more likely than not competitors like Airtel match or craft a new strategy to overcome Reliance -which seems unlikely. Shorn of something drastic, Reliance Jio is likely to emerge as the leader in the telco space of India, if it already has not. The key takeaway or even lesson of the disruption caused by Reliance strategy is that disruption can also be caused by established players – even conglomerates. And that it is not only the prerogative of startups. If, ultimately, the name of the game in a given industry, by a given firm, is to create value, the disruption could be a viable strategy for large firms and might be even more potent given that these firms, by virtue of deep pockets, can scale up faster and without hassles than startups. All this is not to discredit startups. They remain important in their own right especially as drivers of innovation and path-breaking practices. It is only that disruption can be taken recourse to by conglomerates as well. Reliance Jio and its disruption of the telco space proves the point. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

How Reliance Industries strategised its growth in the telecom sector

The Indian telecom department issued orders directing telecom companies such as Bharti Airtel, Idea and Vodafone to clear dues before Friday (February 14) midnight.

Indian govt asks telecom companies to pay Rs 1.47 lakh cr

Indian shares inched higher on Tuesday, driven by banking and telecom stocks after two major mobile network service providers said they planned to raise tariffs from next month.

The NSE Nifty 50 index rose 0.2 per cent&nbsp;to 11,906.25, while the S&amp;P BSE Sensex gained 0.4 per cent&nbsp;to 40,455.36.

"Markets are in a consolidation phase after the recent rally," said A.K Prabhakar, head of research at IDBI Capital.

The Nifty main index has risen over 12 per cent&nbsp;since hitting a six-month low mid-August, supported by government measures to boost investor confidence as Asia's third-largest economy faces slowdown.

Tariff hike announcements by telecom companies will benefit banks as they have a huge exposure to the sector, Prabhakar said.

On Monday, Bharti <a href="https://www.wionews.com/business-economy/airtel-vodafone-idea-shares-jump-after-on-hopes-of-govt-help-262309">Airtel and Vodafone</a> Idea said they would increase mobile tariffs from December, after posting record quarterly losses.

Airtel shares rose 4.8 per cent&nbsp;and were among the top gainers in the Nifty index, while Vodafone shares jumped 18 per cent.

Banking and IT stocks led gains, rising 0.2 per cent&nbsp;to 0.4 per cent.

The Nifty has an immediate support in the range of 11,700-11,800, said Amit&nbsp;Shah, technical research analyst with Indiabulls Ventures, in a note.

The index is poised to hit an all-time high above the 12,100 zone, Shah added.

Indian shares inched higher on Tuesday, driven by banking and telecom stocks after two major mobile network service providers said they planned to raise tariffs from next month.

Indian shares inched higher on Tuesday, driven by banking and telecom stocks after two major mobile network service providers said they planned to raise tariffs from next month. The NSE Nifty 50 index rose 0.2 per cent to 11,906.25, while the S&P BSE Sensex gained 0.4 per cent to 40,455.36. "Markets are in a consolidation phase after the recent rally," said A.K Prabhakar, head of research at IDBI Capital. The Nifty main index has risen over 12 per cent since hitting a six-month low mid-August, supported by government measures to boost investor confidence as Asia's third-largest economy faces slowdown. Tariff hike announcements by telecom companies will benefit banks as they have a huge exposure to the sector, Prabhakar said. On Monday, Bharti Airtel and Vodafone Idea said they would increase mobile tariffs from December, after posting record quarterly losses. Airtel shares rose 4.8 per cent and were among the top gainers in the Nifty index, while Vodafone shares jumped 18 per cent. Banking and IT stocks led gains, rising 0.2 per cent to 0.4 per cent. The Nifty has an immediate support in the range of 11,700-11,800, said Amit Shah, technical research analyst with Indiabulls Ventures, in a note. The index is poised to hit an all-time high above the 12,100 zone, Shah added.

Nifty, Sensex edge higher; bank, telecom stocks gain

The charity founded by<a href="https://www.google.com/url?q=http://www.wionews.com/entertainment/on-prince-charles-70th-birthday-the-new-family-portrait-speaks-of-familial-bliss-177326&amp;sa=U&amp;ved=0ahUKEwjw4Iy2qIbgAhXMuI8KHTYdBNgQFggFMAA&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw0Lw3PFFlm3ZDpnTSXLwtaF"> Prince Charles</a>, heir to the British throne, said it would no longer accept donations from Huawei, the latest blow to the Chinese telecoms company in its fight against global accusations of espionage.

Huawei, the world's biggest producer of telecoms equipment, is facing scrutiny in the West over its ties to the Chinese government and concern its equipment could be used by Beijing for spying. It has repeatedly denied the allegations.

But the move by the Prince's Trust, coming just one week after Oxford University also dropped <a href="https://www.google.com/url?q=http://www.wionews.com/world/will-pursue-extradition-of-huaweis-meng-wanzhou-confirms-us-justice-department-192267&amp;sa=U&amp;ved=0ahUKEwji49fEqIbgAhWIknAKHQ2_D0sQFggFMAA&amp;client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;usg=AOvVaw0wELayai5KZN5ZKblcq1w0">Huawei</a> funding, shows how the tide is turning in Britain, where the company has played a central role for more than 10 years in building broadband and mobile networks.

"At present, we are not accepting new donations from Huawei in light of public concerns," the Prince's Trust said in a statement. "Future donations will continue to be reviewed by our Ethical Fundraising Committee."

The Prince's Trust, founded by the eldest son of Queen Elizabeth in 1976 to help disadvantaged young people in Britain, said it had received 490,000 pounds from Huawei since 2007.

"We regret that decisions of this sort are being taken as a result of ill-informed and unfounded discourse about Huawei," Huawei said in a statement.

The company is battling to defend itself in Western nations bent on shutting it out of their markets.

In the most serious move, Meng Wanzhou, its finance chief and daughter of Huawei founder Ren Zhengfei, was arrested in Canada on December 1 at the request of the United States over alleged violations of US sanctions on Iran.

She is currently under house arrest. China is demanding that she be freed.

Polish authorities earlier this month also arrested a Huawei executive on spying allegations, fuelling Western suspicion against Huawei.

The United States and allies including Australia have restricted Huawei from working on next-generation 5G mobile networks. Germany is debating whether to follow suit.

Britain had previously welcomed Huawei's involvement after BT, the leading mobile and fixed-line provider, started incorporating its equipment into networks in 2006, helping it to ramp up internet speeds.

John Browne, a former boss of oil giant BP and one of Britain's highest-profile businessmen, is the non-executive chairman of Huawei Technologies UK. The group worked with leading universities to further research and development.

However, British officials have lately followed the US in voicing concern.&nbsp;

In December, BT said it would remove Huawei equipment from the core of its existing 3G and 4G mobile operations and not use the Chinese company in central parts of the next 5G network.

The charity founded by Prince Charles, heir to the British throne, said it would no longer accept donations from Huawei, the latest blow to the Chinese telecoms company in its fight against global accusations of espionage.

The charity founded by Prince Charles, heir to the British throne, said it would no longer accept donations from Huawei, the latest blow to the Chinese telecoms company in its fight against global accusations of espionage. Huawei, the world's biggest producer of telecoms equipment, is facing scrutiny in the West over its ties to the Chinese government and concern its equipment could be used by Beijing for spying. It has repeatedly denied the allegations. But the move by the Prince's Trust, coming just one week after Oxford University also dropped Huawei funding, shows how the tide is turning in Britain, where the company has played a central role for more than 10 years in building broadband and mobile networks. "At present, we are not accepting new donations from Huawei in light of public concerns," the Prince's Trust said in a statement. "Future donations will continue to be reviewed by our Ethical Fundraising Committee." The Prince's Trust, founded by the eldest son of Queen Elizabeth in 1976 to help disadvantaged young people in Britain, said it had received 490,000 pounds from Huawei since 2007. "We regret that decisions of this sort are being taken as a result of ill-informed and unfounded discourse about Huawei," Huawei said in a statement. The company is battling to defend itself in Western nations bent on shutting it out of their markets. In the most serious move, Meng Wanzhou, its finance chief and daughter of Huawei founder Ren Zhengfei, was arrested in Canada on December 1 at the request of the United States over alleged violations of US sanctions on Iran. She is currently under house arrest. China is demanding that she be freed. Polish authorities earlier this month also arrested a Huawei executive on spying allegations, fuelling Western suspicion against Huawei. The United States and allies including Australia have restricted Huawei from working on next-generation 5G mobile networks. Germany is debating whether to follow suit. Britain had previously welcomed Huawei's involvement after BT, the leading mobile and fixed-line provider, started incorporating its equipment into networks in 2006, helping it to ramp up internet speeds. John Browne, a former boss of oil giant BP and one of Britain's highest-profile businessmen, is the non-executive chairman of Huawei Technologies UK. The group worked with leading universities to further research and development. However, British officials have lately followed the US in voicing concern. In December, BT said it would remove Huawei equipment from the core of its existing 3G and 4G mobile operations and not use the Chinese company in central parts of the next 5G network.

Now, Prince Charles charity to stop taking Huawei donations

US President Donald Trump said Friday he had reached a deal to keep Chinese telecoms giant ZTE running, rolling back some penalties in exchange for security guarantees -- a move that infuriated Democrats and some in his own party.

The news comes as the US prepares to send a trade delegation back to Beijing next week to continue talks aimed at defusing a potentially serious trade dispute with China after the countries exchanged huge tit-for-tat threats on imports.

In a tweet Friday evening the US president praised his plan while lambasting Democrats as well as the Barack Obama administration, who he said: "let phone company ZTE flourish with no security checks."

"I closed it down then let it reopen with high-level security guarantees, change of management and board, must purchase US&nbspparts and pay a $1.3 Billion fine. Dems do nothing."

In a follow-up tweet, he called the "so-called Trade Deals" struck by Democrats "the laughing stock of the world!"

The New York Times had reported earlier of a deal with China's ZTE that would lift crippling sanctions slapped on the company.

The reported terms of the deal closely match the conditions US President Donald Trump and Commerce Secretary Wilbur Ross described earlier this week as a means for the firm to escape the export ban that nearly shuttered its operations.

It provoked a harsh reaction among some members of Congress, however, as lawmakers have been critical of the administration for signalling it might ease the pressure on a company that violated US sanctions on Iran and North Korea and repeatedly lied to US officials.

Democrat Nancy Pelosi, the House Minority Leader, slammed Trump's deal as "a staggering betrayal of the American people."

"Trump pledged to fight for Americans, but he's now using US&nbspgovernment resources to enrich ZTE (a foreign company designated a national cybersecurity risk)," Pelosi tweeted.

ZTE was fined $1.2 billion in March 2017, but last month Washington banned the sale of crucial US components to the company after finding it had lied multiple times and failed to take action against employees responsible for sanctions violations.

Under the new deal brokered by the Commerce Department, according to the Times, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team.

Even while US officials said the ZTE penalties were a national security issue separate from the trade talks with Beijing, Trump said Tuesday he was looking at easing the tough sanctions on ZTE "as a favour" to Chinese President Xi Jinping.&nbsp

Alternatives&nbsp

On Thursday, Ross said that at Trump's request, his department was looking at alternatives to the harsh penalty he chose to impose.

But, he said, "if we do decide to go forward with an alternative, what it literally would involve would be in planting people of our choosing into the company to constitute a compliance unit and that unit would report back to the Department of Commerce."

Top Republican and Democrat senators have denounced the compromise and one even vowed to block it.

The reprieve for ZTE came just after Washington and Beijing called a halt to a spiralling trade dispute sparked by US accusations of China's unfair practices and the alleged theft of US technology, with Washington suspending plans to impose tariffs on as much as $150 billion in Chinese imports.

Trump also faced accusations of quid-pro-quo after pledging to soften sanctions on ZTE just days after AFP reported a Chinese state firm would pour cash into a Trump-tied real estate venture in Indonesia.

Lawmakers were incensed by Trump's offer last week to rescue the company and Chinese jobs, which came via Twitter in the midst of the trade talks with Beijing. The president angrily denied back-pedalling.

Top Republican Senator Marco Rubio of Florida, who chairs a key subcommittee on foreign relations, denounced the move and vowed lawmakers would work on "veto-proof legislation" to stop the deal.

Tweeting again on Friday, Rubio again accused the administration of reaching an agreement that was beneficial to China.

"It is a great deal... for #ZTE & China. #China crushes US companies with no mercy & they use these telecom companies to spy & steal from us," he said on Twitter.

Senate Minority Leader Chuck Schumer also decried the deal.

"If the administration goes through with this reported deal, President Trump would be helping make China great again. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump," he tweeted. "Both parties in Congress should come together to stop this deal in its tracks."

Asked by AFP for comment, a Commerce spokesman said no information was available.

US President Donald Trump said Friday he had reached a deal to keep Chinese telecoms giant ZTE running, rolling back some penalties in exchange for security guarantees

US President Donald Trump said Friday he had reached a deal to keep Chinese telecoms giant ZTE running, rolling back some penalties in exchange for security guarantees -- a move that infuriated Democrats and some in his own party. The news comes as the US prepares to send a trade delegation back to Beijing next week to continue talks aimed at defusing a potentially serious trade dispute with China after the countries exchanged huge tit-for-tat threats on imports. In a tweet Friday evening the US president praised his plan while lambasting Democrats as well as the Barack Obama administration, who he said: "let phone company ZTE flourish with no security checks." "I closed it down then let it reopen with high-level security guarantees, change of management and board, must purchase US&nbspparts and pay a $1.3 Billion fine. Dems do nothing." In a follow-up tweet, he called the "so-called Trade Deals" struck by Democrats "the laughing stock of the world!" The New York Times had reported earlier of a deal with China's ZTE that would lift crippling sanctions slapped on the company. The reported terms of the deal closely match the conditions US President Donald Trump and Commerce Secretary Wilbur Ross described earlier this week as a means for the firm to escape the export ban that nearly shuttered its operations. It provoked a harsh reaction among some members of Congress, however, as lawmakers have been critical of the administration for signalling it might ease the pressure on a company that violated US sanctions on Iran and North Korea and repeatedly lied to US officials. Democrat Nancy Pelosi, the House Minority Leader, slammed Trump's deal as "a staggering betrayal of the American people." "Trump pledged to fight for Americans, but he's now using US&nbspgovernment resources to enrich ZTE (a foreign company designated a national cybersecurity risk)," Pelosi tweeted. ZTE was fined $1.2 billion in March 2017, but last month Washington banned the sale of crucial US components to the company after finding it had lied multiple times and failed to take action against employees responsible for sanctions violations. Under the new deal brokered by the Commerce Department, according to the Times, ZTE would pay a substantial fine, hire American compliance officers to be placed at the firm and make changes to its current management team. Even while US officials said the ZTE penalties were a national security issue separate from the trade talks with Beijing, Trump said Tuesday he was looking at easing the tough sanctions on ZTE "as a favour" to Chinese President Xi Jinping. Alternatives On Thursday, Ross said that at Trump's request, his department was looking at alternatives to the harsh penalty he chose to impose. But, he said, "if we do decide to go forward with an alternative, what it literally would involve would be in planting people of our choosing into the company to constitute a compliance unit and that unit would report back to the Department of Commerce." Top Republican and Democrat senators have denounced the compromise and one even vowed to block it. The reprieve for ZTE came just after Washington and Beijing called a halt to a spiralling trade dispute sparked by US accusations of China's unfair practices and the alleged theft of US technology, with Washington suspending plans to impose tariffs on as much as $150 billion in Chinese imports. Trump also faced accusations of quid-pro-quo after pledging to soften sanctions on ZTE just days after AFP reported a Chinese state firm would pour cash into a Trump-tied real estate venture in Indonesia. Lawmakers were incensed by Trump's offer last week to rescue the company and Chinese jobs, which came via Twitter in the midst of the trade talks with Beijing. The president angrily denied back-pedalling. Top Republican Senator Marco Rubio of Florida, who chairs a key subcommittee on foreign relations, denounced the move and vowed lawmakers would work on "veto-proof legislation" to stop the deal. Tweeting again on Friday, Rubio again accused the administration of reaching an agreement that was beneficial to China. "It is a great deal... for #ZTE & China. #China crushes US companies with no mercy & they use these telecom companies to spy & steal from us," he said on Twitter. Senate Minority Leader Chuck Schumer also decried the deal. "If the administration goes through with this reported deal, President Trump would be helping make China great again. Would be a huge victory for President Xi, and a dramatic retreat by Pres Trump," he tweeted. "Both parties in Congress should come together to stop this deal in its tracks." Asked by AFP for comment, a Commerce spokesman said no information was available.

White House reaches deal to lift sanctions on China's ZTE

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