LTE and Wimax

Understanding Long Term Evolution (LTE)

All about 4G

What is LTE?

LTE, or ‘Long Term Evolution’ , is the latest wireless mobile broadband technology that will power future 4G, or fourth generation, networks designed primarily for data transmission at unprecedented speeds. It uses spectrum to carry data traffic, just as we need roads to carry vehicular traffic. Spectrum may be likened to a highway of airwaves on which mobile signals travel.

Since LTE uses wider chunks of spectrum, data speeds on LTEbased 4G networks are nearly four times faster than on 3G. An iPad user, for instance, will be able to watch videos at LTE speeds of 300 Mbps while a laptop user will be able to download a chunky 25MB file in seconds if adequate spectrum is available. LTE is also a scalable bandwidth technology that works alongside 2G and 3G. So a 3G operator can easily upgrade his network to LTE.

WHEN WAS IT DEVELOPED?

LTE’s genesis goes back to November 2004, when a workshop was held by the 3GPP (3rd Generation Partnership Project) in Toronto to define ‘Long Term Evolution’ . The 3GPP was a global alliance of top telecom associations who tried to identify the next wave of mobile tech after UMTS, the 3G technology based on GSM.

IS LTE BETTER THAN WiMAX?

Wireless communication happens over paired or unpaired spectrum. Paired spectrum is two equal chunks of airwaves for sending and receiving information while unpaired spectrum is a single strip of airwaves meant to either receive or send information.

Voice signals travel over paired spectrum while data communications works better on unpaired spectrum as people download more than upload. WiMAXhad an edge as long as it was the sole wireless technology working commercially over unpaired spectrum . But the WiMAXparty crashed when an LTE variant, TDD-LTE — which also worked over unpaired spectrum — arrived.

What’s more, leading vendors unveiled compatible gear commercially in 2010. This LTE variant was heralded by the world’s top telcos as the coolest technology for highspeed data communications on the go. WiMAXsuffered a body blow when big telcos across China, India and the US also embraced TDD-LTE . Commercialisation of TDD-LTE devices hit fast-track after Qualcomm pitched for wireless broadband spectrum in the 2010 auction and won 20MHz of BWA airwaves in four circles. Even WiMAXbackers like Clearwire in the US and Yota in Russia warmed up to LTE. Ditto with WiMAXgear vendors like Nokia and Cisco.

IS TDD-LTE CATCHING ON IN INDIA?

Not as yet. But that said, the first seeds of an LTE ecosystem were sown when Bharti Airtel joined some of the world’s top LTE backers at Mobile World Congress 2011 in Barcelona to launch the Global TD-LTE Initiative (GTI). Global deployment of this technology was in fact at the heart of last year’s auction of BWA airwaves in India.

But the big challenge to fast-track deployment of TD-LTE in India is the paucity of compatible devices and smartphones. Only Qualcomm has launched TDD-LTE multi-mode devices. NSN is slated to unveil 4G devices by the time LTE network rollouts start happening in India by December ’11 to early-2012 .

Source & Courtesy – Economic Times

Should private airlines be bailed out?

Why are Indian airlines in the red despite rising passenger traffic?

Because of high taxes on fuel and rising operational costs. Moreover, cutthroat competition in the sector prevents airlines from raising ticket prices. Taxes constitute 40% of an airline’s total expenditure, far above the global average of 32%. Besides, revenues barely cover operational costs. For instance, operating margin for Kingfisher stands at 0.12 while it is negative for Jet Airways (-8.25%) and Spice Jet (-6.7%).

Why can’t airlines raise fares to cover these costs?

Fierce competition in the Indian skies prevents them from doing so. In the case of Jet, cost per available seat km (ASKM) rose to Rs 3.31 in the second quarter of this fiscal compared with Rs 2.74 in the previous quarter. In contrast, revenue passenger km (RPKM) has crawled up to Rs 3.63 from Rs 3.5.

So if an airline goes bust, should the government bail it out?

The tempting answer is that those responsible for corporate recklessness must bear the consequence, but in real world things are not so simple. Many experts argue that had Lehman Brothers not been allowed to go bust, the financial crisis could have been less damaging. But, a corporate bailout sends the wrong signal or creates a ‘moral hazard’ of encouraging more recklessness, the cost of which is borne by the taxpayer.

What is moral hazard?

In economic theory, the concept of moral hazard comes from the insurance industry where an individual or a company behaves differently when he is protected from a risk than when he is exposed to the risk. The guarantee of insurance can make the insured less risk averse, as he knows he is protected from the financial consequences of his actions.

How does the concept apply to bailouts?

If a company believes its existence is crucial for the economy or for public good, it may be tempted into taking reckless risks believing that the government will step in to bail it out if it were to land in trouble. Therefore, any rescue of troubled private sector firms makes others believe that they could also be similarly helped out if things went wrong.

Source and Courtesy - Economic Times

What is a Dim Sum Bond?

China’s growing affluence and influence over the world economy has created huge demand for assets denominated in yuan, the basic unit of the renminbi. China is also keen to globalise its currency to offset any losses to its record foreign exchange reserves due to weakness of the dollar. This has led to the creation of the Dim Sum bond market in Hong Kong.  ET explains the concept.

What Is A Dim Sum Bond?

A bond denominated in yuan and issued in Hong Kong. Derived from a traditional Chinese cuisine that offers a variety of small eats, Dim Sum bonds are issued by Chinese government and companies as well as foreign entities.

What Makes Dim Sum Bonds Attractive For Investors?

Investors across the world are looking for opportunities to make money out of China’s phenomenal growth, but the country’s stiff capital controls prohibit them from investing in Chinese debt. Dim Sum bonds offer an avenue to such investors. Investors are rushing to the Dim Sum market on expectations that Beijing will continue to let the yuan appreciate. Exposure to yuan-denominated assets also provides an alternative to bonds issued by western governments and companies and fits well with the Principle of Diversification, that a portfolio containing different assets and kinds of assets carries lower risk.

Lower interest cost is also encouraging companies to raise money through the Dim Sum market. Last month, IDBI Bank became the first issuer of Dim Sum bonds from India. It sold 650 million yuan ($102 million) of three-year bonds priced at a fixed coupon of 4.5% per annum. The bank said it cut a percentage point off its dollar funding costs by going to the Dim Sum market. Reports say infrastructure lender IL&FS is also planning to raise $100 million through yuandenominated bonds.

Is There A Limit On Such Issuances By Indian Entities?

Recently, the yuan was added to the list of currencies in which Indian companies can raise funds overseas, in addition to dollar, euro, pound and yen. Indian firms can raise an equivalent of $1 billion in yuan.

How Big Is the Dim Sum Bond Market?

The Dim Sum market has risen from 10 billion yuan in 2007 to more than 100 billion yuan. Analysts forecast the market to grow beyond 300 billion yuan in 2012.

Where can Indian Issuers deploy The Proceeds?

Indian issuers can deploy the money for capital expenditure within China and use the proceeds for settling trade accounts. They can also enter into swap contracts to get other currencies. However, if the money is to be brought back to India, companies will have to comply with the External Commercial Borrowing guidelines set by the Reserve Bank of India.

Source and Courtesy – Economic Times

World Affairs: Unrest in Middle East and Africa

Here are the latest details of revolts and protests in the Middle East and North Africa:

BAHRAIN: A report by an independent rights commission into unrest said on Wednesday that Bahrain’s security forces used excessive power to suppress pro-democracy protests, including torture and coerced confessions.

- The report could offer the government and opposition the chance to restart dialogue or it could trigger an escalation.

- Troops from Saudi Arabia and other Gulf states went into Bahrain in March to help quell the protests. The panel said 35 people were killed, including five security personnel, in the protests. It also urged a review of sentences handed down to those held responsible for the turmoil.

EGYPT: Street clashes continued in Cairo and other cities in clashes reminiscent of some of the worst violence during the 18-day uprising that toppled Hosni Mubarak last February.

- At least 38 people have been killed according to a Reuters count in five days of violence. The health ministry said 32 people had been killed and 2,000 wounded.

- On Nov. 22 Field Marshal Mohamed Hussein Tantawi, head of the military council that has run Egypt since Feb. 11, promised that a civilian president would be elected in June, about six months sooner than the army had planned.

- Elections for the lower house will start on Nov. 28 and for the upper house on Jan. 22, with each vote being held in three stages, Tantawi confirmed.

- Former President Mubarak is still on trial, accused of conspiring to kill protesters; 850 people were killed in the uprising that ended with Mubarak stepping down.

- Trial proceedings are on hold while the courts assess a request to change the judges’ panel. The next hearing in that case is Dec. 26.

- The military was welcomed in February, but it has revived the emergency law used by Mubarak and is now regarded with suspicion.

LIBYA: Prime minister designate Abdurrahim El-Keib named a cabinet line-up that aimed to placate Libya’s patchwork of tribes and regional interests. However, some of Libya’s clans said on Wednesday they would not recognise the government.

- Announcing the government was the latest step in Libya’s halting progress towards building new institutions, three months after the bloodiest of the “Arab Spring” uprisings ended Gaddafi’s 42-year rule.

- Gaddafi’s son, Saif al-Islam, was captured early on Nov. 19 in southern Libya. Visiting ICC chief prosecutor, Luis Moreno-Ocampo, said Gaddafi’s former intelligence chief, Abdullah al-Senussi, had not been captured.

- Muammar Gaddafi and an another son, Mo’tassim, were buried in the desert on Oct. 25, five days after the deposed Libyan leader was captured, killed and his body put on public display.

- Gaddafi’s death allowed the NTC to declare Libya’s “liberation” on Oct. 23 and meant an end to eight months of war.

SYRIA: French Foreign Minister Alain Juppe said on Wednesday that France is seeking international recognition for the opposition Syrian National Council. He said the council “is the legitimate partner with which we want to work.” Earlier, Turkish President Abdullah Gul warned that Syrian President Bashar al-Assad’s violent crackdown on an eight-month-old revolt threatened to “drag the whole region into turmoil and bloodshed.” A day earlier Turkish Prime Minister Tayyip Erdogan accused Assad of “cowardice”, bluntly telling him to quit.

- Assad said he had no choice but to pursue his military crackdown on street protesters, who have been seeking an end to 41 years of Assad family rule.

- Assad had said in an interview with Britain’s Sunday Times newspaper there would be elections in early 2012 when Syrians would vote for a parliament to create a new constitution that would include provisions for presidential elections.

- An Arab League deadline for Syria to stop its repression passed on Nov. 19, with no sign of violence abating. Arab states met on Nov. 12 and suspended Syria after it failed to implement a deal struck on Nov. 2 to end bloodshed and pull its forces out of cities.

- Syrian authorities have blamed the violence on foreign-backed armed groups which they say have killed some 1,100 soldiers and police. The United Nations has said some 3,500 people have been killed in the unrest.

TUNISIA: Tunisia’s constitutional assembly, elected after a revolution that inspired the “Arab Spring” uprisings, held its opening session on Nov. 22.

- The Assembly, which will sit for a year to draft a new constitution, is dominated by Tunisia’s moderate Islamist Ennahda party and its two coalition partners after the first democratic election last month.

- Ennahda leader Rachid Ghannouchi offered assurances he will not impose a Muslim moral code and that he will respect women’s rights in planned changes to the constitution.

- Tunisia became the birthplace of the “Arab Spring” uprisings that ousted former president Zine al-Abidine Ben Ali.

YEMEN: President Ali Abdullah Saleh arrived in Saudi Arabia on Wednesday and signed a deal brokered by Gulf states that eases him out of power after 33 years. Saleh is the fourth casualty of the Arab spring after Tunisia’s Zine al-Abidine Ben Ali, Egypt’s Hosni Mubarak and Libya’s Muammar Gaddafi.

- Ten months of anti-government protests have paralysed Yemen, pushing it to the brink of civil war. Saleh had three times agreed to sign a transition deal brokered by neighbouring Gulf states only to back out at the last minute. A U.N. Security Council resolution adopted last month called on Saleh to immediately sign the initiative.

Source and Courtesy – Reuters

Politics and the Nation

Cyrus Mistry to succeed Ratan Tata as chairman

• The next chairman of India’s venerable salt-to-software conglomerate Tata Group will be an insider and a family member by marriage.
• India’s biggest corporate house had mounted a global search that lasted more than a year for a successor to Chairman Ratan Tata, but ended up tapping Cyrus Mistry, whose father is the biggest shareholder in the Tata Sons holding company.
• Mistry, 43, was named deputy chairman of Tata Sons and will succeed Ratan Tata when he retires in December 2012 at the helm of a sprawling conglomerate that generates two-thirds of its $83 billion in revenue from overseas.
• Mistry is the younger son of Pallonji Mistry, who with a stake of 18 percent is the single largest shareholder of Tata Sons, and has been a director of Tata Sons since 2006. The future chairman’s sister is married to Ratan Tata’s half-brother Noel Tata, who was also a candidate to be Tata chairman.
• He has big shoes to fill in succeeding Ratan Tata, who has built the group from a $5 billion operation of steel making, commercial vehicles and hotels into a global empire, largely through acquisitions.
• The Tata Group includes Tata Motors, owner of the Jaguar Land Rover brands and maker of the Nano, the world’s cheapest car, as well as Tata Consultancy Services, Tata Steel and dozens of other companies.
• An engineer by training, Mistry is managing director of Shapoorji Pallonji Group, a major construction firm that has been in business for 147 years, and does not have a high public profile.
• Mistry will be the sixth chairman of the 143-year-old group, and just the second not named Tata.
• The Tata group was founded as a textile business in 1868 by Ratan’s great-grandfather, Jamsetji Tata, a member of the close-knit Parsi community — Persian Zoroastrians who fled to India around the 10th century. His older son expanded into steel, insurance and the production of soaps and cooking oil.
• Unlike most of India’s big business houses, the Tata group is not family owned and Ratan Tata is not on the Forbes list of billionaires. Tata Sons holds the bulk of shares in key companies, and philanthropic trusts endowed by the Tata family own 66 percent of Tata Sons.
• Pallonji Mistry, also a member of south Mumbai’s Parsi community, owns about 18 percent of the group, and ranks 9th on the last Forbes India rich list, with a fortune estimated at $7.6 billion.

SC grants bail to 5 executives in 2G telecoms case

• The Supreme Court on Wednesday granted bail to five company executives charged in the 2G telecoms licensing scandal that has rocked the government and businesses of the country, raising hopes that others including some politicians may be freed soon.
• The court panel granted bail to Sanjay Chandra, the managing director of Unitech; Vinod Goenka, chairman of Etisalat’s India partner DB Group; and three executives from billionaire Anil Ambani’s group; who have been held in jail since April.
• The executives are among the three companies and 14 individuals charged in alleged rigging of a 2007/08 grant of lucrative telecoms licences that the Comptroller and Auditor General of India (CAG) said cost the government up to INR 1.70 lakh crores ($39 billion) in revenue.
• Former telecoms minister A Raja, a member of government ally DMK party, and Kanimozhi, the lawmaker daughter of the DMK chief, and several other company executives remain still in jail.
• A lawyer for another accused — Shahid Balwa, also of the DB Group — said he was hopeful that others would also be granted bails.

India moves closer to opening up multi-brand retail sector

• India could decide this week to throw open its retail sector to foreign firms such as Wal-Mart Stores Inc, clearing one of the most hotly anticipated economic reforms of Prime Minister Manmohan Singh’s tenure.
• Policymakers have for years talked about opening India’s so-called multi-brand retail sector to foreign direct investors, a policy aimed at attracting foreign capital, unclogging supply bottlenecks and helping tackle stubbornly high inflation.
• But the move has snagged on protests by opposition parties and many domestic retailers, who say an influx of foreign players, will drive down prices and cause huge job losses. Some voices within the ruling Congress party have opposed the reform.
• The cabinet will discuss opening the sector to a foreign investment cap of 51 percent on Thursday, although it may not take a final decision.
• India currently allows 51 percent foreign investment in single-brand retailers and 100 percent for wholesale operations, a policy that the world’s top retailer Wal-Mart and Carrefour among others have lobbied to free up further.
• A group of senior civil servants approved the proposal to open the multi-brand sector to foreign players in July, although it recommended strict local sourcing requirements and minimum investment levels.
• Small shop owners account for more than 90 percent of India’s $450 billion retail sector.
• Wholesale inflation in India has remained stubbornly high for more than a year and is now close to 10 percent despite 13 interest rate rises by the Reserve Bank of India (RBI) since March last year.
• As much as 40 percent of India’s fruit and vegetable production is wasted because of poor networks and a lack of cold storage facilities.