Emergence of 5G With Huawei Leading The Way

Huawei leading the 5G revolution

In the past decade, the 4G network completely changed how we consume information and we saw an emergence of the mobile app industry becoming a new norm. The 5G is going to supercharge user experience with smart homes, autonomous driving, cloud control, and numerous such possibilities becoming the new norm. Companies like Ericsson and Qualcomm led the 4G revolution, yet how did Huawei emerge as the frontrunner in the 5G race?

Crux of the Matter

What is 5G?
5G is the next step in mobile technology, which will expand the mobile ecosystem to new industries bringing in more connectivity between people and things. It is a more important jump from the last generation than 4G was to 3G and 3G was to 2G primarily because it will be a unified connectivity fabric that will connect virtually everything around us.

Currently, the problem with 4G is not its technology, it is the networks and the data that are needed are not ready. For instance, Virtual reality, in order to achieve true immersion, needs several hundred gigabits of data, which 4G cannot do wireless right now. With low latency, 10x times download speed, virtually unlimited capacity, 5G will meet diverse Internet of Things (IoT) requirements and enable next-generation user experiences, empower new deployment models, and deliver new services.

According to recent estimates, by 2035, 5G will drive global growth with $13.2 trillion of global economic output, 22.3mn new jobs, and $2.1 trillion in GDP growth. 5G has superior reliability and thus will impact every industry, making safer transportation, remote healthcare, precision agriculture, and digitized logistics a reality.

In India, the concept of smart cities has been established and the 5G network will transform the lives of people living in them by providing greater efficiencies in traffic management, garbage handling, automotive safety, infrastructure, etc. According to the Ericsson Mobility Report 2019, in India, 5G subscriptions are expected to become available in 2022 and will represent 6% of mobile subscriptions at the end of 2024.

If 4G tech built us a road, then 5G tech will build a city.

Wang Xiaoyun, General Manager of Technology at China Mobile

However, only 10 years after the launch of 4G, the world is preparing for the next generation but it comes with high-cost investments in infrastructure by the mobile operators and thus to maximize the returns they need to understand how network infrastructure and the associated cost base will evolve over the next few years.

Role of Huawei in Leading 5G
Huawei Technologies Co. is a Chinese multinational founded in 1987 by Ren Zhengfei. It is the world’s largest supplier of telecom equipment and the number 2 producer of mobile phones. Huawei began researching on 5G way back in 2009 and due to which it has achieved remarkable feats from standardization to global tests and from commercial trials to commercial applications.

It secured polar coding before competitors, introduced the first network splicing router, and has 3GPP standards for eight key technologies, including soft NR architecture, and uplink, and downlink decoupling. Huawei produced the world’s first ASIC chip based small CPE and IPTV@5G with a speed of 2Gbps.

Enabling next-generation of communications, the Balong 5000 which is the first 7nm multi-mode chipset is a stepping stone into a wider field of cloud control and IoT possibilities. In terms of technology development and overall system performance, there is hardly anyone that can compete Huawei.

We estimate that 29 billion devices will be connected by 2021, and 5G will provide the road on which everyone will travel through digitally.

Qiu Heng, President of Huawei Wireless Marketing Operations

According to a 5G patent report published by IPlytics, Huawei ranks second only to Samsung in terms of the number of 5G SEP patents, while it stands first in technology contribution to 5G standards. Huawei with its extensive cooperation with more than 186 industrial partners and 45 collaboration projects across the world has emerged as the only company in the world that offers 5G end-to-end products and solutions.

As telecommunication giants that provide networking services to more than 170 countries around the world, Huawei was among one of the world leaders in rolling out 3G and 4G but in the case of 5G, it is likely to lead the way.

Curiopedia
  • Ren Zhengfei is a Chinese entrepreneur and engineer. He is the founder and CEO of Shenzhen-based Huawei, the world’s largest manufacturer of telecommunications equipment. As of 2019, he had a net worth of $1.3 billion.
  • The China-United States trade war is an ongoing economic conflict between China and the United States. President Donald Trump in 2018 began setting tariffs and other trade barriers on China with the goal of forcing it to make changes to what the U.S. says are “unfair trade practices”. Huawei was also restricted from doing commerce with U.S. companies due to alleged previous willful violations of U.S. sanctions against Iran.
  • On March 6, 2020, the first-ever all-5G smartphone Samsung Galaxy S20 was released. On March 19, HMD Global, the current maker of Nokia-branded phones, announced the Nokia 8.3, claimed as having a wider range of 5G compatibility than any other phone released to that time.

RBI’s New Banking Reforms

Covid-19 has crippled the global economy and it is inexorably headed to a recession wherein central banks have to answer the call to the frontline in defence of the economy. This crisis is likely to shift scenarios and provide new dimensions to the economies and bring banking reforms worldwide.
Complete Coverage: Coronavirus

Crux of the Matter

India has a history of bringing in reforms during the periods of crisis and following the pandemic, the Reserve Bank Of India is making unprecedented monetary and regulatory banking reforms to provide relief and ensure liquidity funds flow to the affected sectors.

RBI reduced the repo rate by 40 basis points or 0.4% to 4%. The reverse repo rate stood at 3.35%. Moreover, it extended the moratorium on term loans by 3 more months till 31st August. RBI has announced other measures in four broad categories: Measures to Improve the Functioning of Markets, Measures to Support Exports and Imports, Measures to Ease Financial Stress, and Debt Management.


Firstly, a refinancing facility for Small Industries Development Bank of India (SIDBI) for funding requirements of the MSME and secondly, Investments by Foreign Portfolio Investors under the Voluntary Retention Route (VRR) shall offer operational flexibility in terms of instrument choices and certain regulatory exemptions. These market improvement measures are intended to ease constraints on market participants and channel liquidity to various sectors of the economy.

Under the second category, the RBI has increased the Export Credit from 9 months to 15 months and also provided an extension of time for payment for imports. Along with that, RBI will also be providing additional assistance and liquidity facility for Exim Bank Of India in order to promote international trade.

The third category is the most important as it will mitigate the burden of debt servicing, prevent the transmission of financial stress to the real economy, and ensure the continuity of viable businesses and households. RBI has permitted a 6-month moratorium on all term loan installments and it has also allowed a deferment of interest on Working capital facilities. The RBI will also undertake Long Term Repo Operations (LTRO) which will allow additional liquidity with the banks.

The central bank has further brought in changes in the Asset Classification, Resolution Timeline, and the Group Exposures under the Large Exposures Framework to ease financial stress. Finally, for effective debt management: guidelines have been relaxed in the Consolidated Sinking Fund (CSF) of state governments.

Global Financial Crisis of 2008
The bankruptcy of Lehman Brothers in the US unfolded the Global Financial Crisis in 2008. It was understood that there is a high amount of risks involved when banks give loans of the entire value for a property assuming that the cost will rise and it will be easily repaid. When a number of banks did so, the banking sector and the economy saw the consequent effects leading to the global crisis.

The Indian banking sector remained largely unaffected but India was compelled to shift its credit demand from external sources to the domestic banking sector. Even though India’s financial system was less developed at that time; it did face serious consequences as the crisis led to the sharp decline in exports and fall of GDP to 6.72% in 2008-09 from 9.32% in 2007-08, giving rise to the expansion of fiscal deficit and extensive Public sector lending.

Due to lack of a framework for bankruptcy, India faced a risk of a large private sector bank going bankrupt with no legal way of dealing with it other than to force a public sector bank to buy it out, an approach that generally weakens the banking system. A number of expert committees recommended banking reforms, changes in regulations, and new frameworks like the Indian Bankruptcy Code. However, following different political scenarios and the legislative framework they could not be brought in which lead to the crisis of NPAs.

NPA Crisis
The 2008 crisis laid the foundation for much of today’s non-performing loans which have plagued the Indian banking sector. A loan given by a bank is classified as a Non-Performing Asset (NPA) if the borrower has stopped making interest or principal repayments for over 90 days. As of 2018, the gross value of NPAs stands at Rs. 10.35 lakh crores, out of which 85% is of Public sector banks.


Post-crisis the public sector banks were under tremendous pressure to lend large amounts to steel, power, and infrastructure projects and the euphoric lending led to a rise in bad loans and the NPA crisis. A number of scams came to the forefront wherein businesses borrowed under shell companies to execute projects in other countries; later the foreign banks invoked guarantees and domestic banks were obligated to pay and they could never recover their money.

NPAs have lowered the bank’s profitability and made them vulnerable to adverse economic shocks and consequently put consumer deposits at risk. This also led to India’s Twin Balance Sheet problem, wherein both the borrower and lender i.e. corporate sector and banking sector come under financial stress.

Thus, to avoid the snowballing effects leading to insolvency and NPA crisis, liquidity management has been given a priority by the RBI while bringing back normalcy in financial markets post Covid-19.

Curiopedia
  • The Reserve Bank of India, which was established on April 1, 1935 during the British Rule, modeled its official emblem after the double mohur of The East India Company. The logo originally featured a sketch of the Lion and Palm Tree but it was later decided to replace the lion with a tiger to represent India better.
  • Ex RBI governor, Raghuram Rajan predicted the 2008 financial crisis in 2005. In his 2005 paper titled ‘Has Financial Development Made the World Riskier?’, Rajan predicted that a financial crisis is in the making and going to hit the economy in the next 3-4 years.
  • The oldest continually operating bank in the world is Banca Monte dei Paschi di Siena, which has been operating as a bank in Italy since 1472. The bank is on record as the first official bank in the world, although the practice of banking has been traced back for several centuries.

India Looking To Park Oil In US

India may park oil in US

India is taking benefits of cheap crude oil by stockpiling its emergency reserves, oil tankers offshore and asking other nations to store oil for India. Historically, India has been buying from OPEC+ nations, but seems to be diversifying by buying oil from US, and even asking it to park oil in its reserves.

Crux of the Matter

India’s Crude Oil Stockpile
Strategic crude oil reserves help a country survive short-term supply disruptions in case of any emergency. Currently India has stored oil amounting to 20% of its annual need. As of now India imports nearly 80% of the annual crude oil need. India majorly depends on the gulf countries for oil.

However, as the price of crude oil has fallen due to less demand due to the Coronavirus lockdown, India seems to be taking advantage of it, just like China, by stockpiling 5.33 million tonnes (MT) in strategic storage. Strategic storage facilities in India are located at Visakhapatnam, Mangalore, and Padur (Karnataka). Looking at the increasing annual demand for fuel post lockdown, India is mulling to expand strategic storage to 6.5 MT. Moreover India has also stored around 8.5-9 MT oil on ships across the world.


Strategy to buy US’ Crude
US WTI crude oil futures stock traded in negative in April before expiring. Thereafter, it has seen a rise, albeit a slow one due to prolonged lockdown and uncertainty. At a time when WTI oil is cheap, India is planning to park oil from America in its own local facilities as India’s storage facilities are full. Recently Australia has also stockpiled oil in the US.

We are exploring some possibility if we can store some of our investment in a different country … we are exploring the possibility in the USA if we can store some of the low priced oil.

Dharmendra Pradhan, Indian Oil Minister
Curiopedia
  • Morgan Downey is an Irish-born New York-based American commodities trader and acknowledged authority on the financial aspects of the oil industry. Downey has been cited in the press as an expert in oil markets and his 2009 book ‘Oil 101’ was called a “must-read” by a Financial Times blogger.
  • Exxon Mobil Corporation, doing business as ExxonMobil, is an American multinational oil and gas corporation headquartered in Irving, Texas. One of the world’s largest companies by revenue, ExxonMobil from 1996 to 2017 varied from the first to sixth-largest publicly traded company by market capitalization.
  • Fossil fuel phase-out is the gradual reduction of the use of fossil fuels to zero use. Current efforts in fossil fuel phase-out involve replacing fossil fuels with alternative energy sources in sectors such as transport, heating, and industry.
Image

NZ’s Biggest Media Company ‘Stuff’ Sold For A Dollar

Curiopedia
  • New Zealand is located in the continent of Oceania. The term Oceania is often used to denote the wider region encompassing the Australian continent, New Zealand and various islands in the Pacific Ocean that are not included in the seven-continent model.
  • Ronald Wayne is a retired American electronics industry businessman. He co-founded Apple Computer Company (now Apple Inc.) as a partnership with Steve Wozniak and Steve Jobs. Just 12 days after founding Apple, Ronald sold his 10% share of the new company back to Jobs and Wozniak for $800. Today, the net worth of those 10% shares is more than $100 billion!
  • In 2016, Yahoo sold its core operating business to Verizon for $4.8 billion in cash. The transaction resulted in the end of the independence of one of Silicon Valley’s most iconic pioneering companies. At its peak, Yahoo was valued at $125 Billion. Forbes magazine called this deal the “Saddest $5 Billion Deal In Tech History”.

Airtel Invests in AI Startup

Airtel is strategically investing in new startups to increase its service quality and revenue. In return, new startups get a platform to explore and expand from the wide range of experience Airtel has. The telco even recorded a rise in Average Revenue Per User, which is a critical measure in the telecom sector.

Crux of the Matter

Telcos’ Modern Warfare: AI
Airtel invested in conversational artificial intelligence (AI) technologies based startup Voicezen. Voicezen is working on developing advanced solutions that leverage machine learning, speech to text, AI, and voice technologies to offer real-time analytics to provide better customer services. Even Vodafone launched VIC, AI-powered digital customer service, and support virtual assistant. Reliance Jio is also working on natural language processing and AI-based chatbot developed by startups like Reverie and Haptik.

Airtel’s Strategic Investments
Airtel’s Startup Accelerator Programme aims to support the startup ecosystem contributing to Digital India. Startups get the benefit from Airtel’s online and offline distribution network, deep market understanding, the ecosystem of global strategic partners, and advisory services from Airtel’s executive team.

Today, early-stage startups in India have some very exciting ideas but face multiple challenges in scaling up. With Airtel’s scale and digital capabilities around distribution and payments, we have the potential to drive accelerated growth of emerging startups that are solving hard problems.

Adarsh Nair, Chief Product Officer of Bharti Airtel

So far Airtel has invested in three startups i.e. Voicezen, Vahan Inc., and Spectacom. Vahan focuses on developing the online platform dedicated to finding blue-collar jobs in India. Whereas, Airtel is helping Spectacom to spread awareness about its health and fitness platform and soon-to-be-launched fitness platform ‘X sport’ similar to the ‘Airtel X stream’ platform. Telcos seem to be collaborating with Tech firms to increase revenue and improve customer services. In recent, Reliance Jio has announced a series of deals with Tech giants or Investors backing tech firms.

Airtel Preparing for Big?
Recent Airtel’s deal with Nokia is expected to lay the foundation of 5G for it. 6.4 billion subscribers of Nokia will help Airtel to expand and enhance its capacity and revenue.

Even AI market size is expected to grow from $4.2 billion in 2019 to $15.7 billion by 2024. Increased working efficiency with the accuracy of AI is a major factor in the increase in its demand across the globe.

Airtel’s Jan-Mar quarter revenue grew by 15% YoY to ₹23,723 crores from ₹20,602 crores compared to last year. Currently Airtel’s average revenue per user is ₹154 which is higher than Jio’s ARPU of ₹130.6.

Curiopedia
  • Sunil Bharti Mittal is an Indian billionaire entrepreneur, philanthropist, and the founder and chairman of Bharti Enterprises. In 2007, he was awarded the Padma Bhushan, India’s third-highest civilian honor. And as of April 2020, he is listed as the 6th richest person in India by Forbes with a net worth of $8.2 billion.
  • The world’s sixth-largest mobile messaging application Hike Messenger was launched on 12 December 2012 by Kavin Bharti Mittal and is now owned by Hike Private Limited. Kavin Bharti Mittal is the son of Sunil Mittal, founder of Bharti Enterprise.
  • Airtel is one of the largest mobile network operators in the world with over 400 million subscribers. Airtel was named India’s 2nd most valuable brand in the first-ever Brandz ranking by Millward Brown and WPP plc.