The Week That Was: 6-10 July
A roundup of the week's stories
This is a weekly feature that brings to you a summary of all the stories we did in the week. So in case you miss something during the week, you know you can find it here.
At the outset, the purchase of a bankrupt satellite operator by Bharti (of Airtel fame) may sound rather esoteric, but this story brings together Brexit, Softbank and Indian Government policy as well.
To summarise - WeWork IPO collapses. So SoftBank gets conservative. And they refuse to further fund a high-tech investment that is nowhere close to bringing in returns. So this investment goes bankrupt.
Brexit denies the UK participation in EU’s Galileo sat-nav project. Bharti brings in a massive customer base thanks to Airtel and its investments in Africa. So they get together and win a bid to buy OneWeb. Very coincidentally, at the same time, the Narendra Modi government opens up the space sector in India.
PayTM is involved in M&A as well, with its latest acquisition being a seemingly obscure general insurance firm. We take a look at PayTM, the battle between mobile wallets and UPI and the overall payments scene in India.
The ease of payments of the UPI protocol means that it has now largely taken over merchant payments as well. In May 2020, the total volume of money transacted through UPI was ₹2.2 trillion. To put that in perspective, the total money transacted through credit cards in the month was ₹322 billion, and through debit cards ₹480 billion. In other words, UPI is nearly 3 times as big as credit and debit cards put together (albeit in a covid-19 induced contactless environment).
The US has been forever trying to deal with the unintended consequences of the 1965 visa reform. And they’ve done some things now, which are going to have their own share of unintended consequences.
Meanwhile, it seems like some of these changes to the American visa law were anticipated by Indian IT companies, which have stepped up offshoring of work and local hiring in the US. Also the move to remote working in the wake of the pandemic is likely to ease the impact of the visa ban.
When Facebook recently made a massive investment in Reliance Jio, maybe they did not anticipate that Jio would copy WhatsApp itself.
Facebook, over the years, has developed a reputation for being an excellent copycat. Instagram’s history of copying features from Snapchat is legendary (Instagram is owned by Facebook). In February this year, Facebook launched a Pinterest clone. In April, Facebook launched a Zoom copycat. As a story in the Wall Street Journal (paywalled) puts it, Facebook doesn’t even hesitate to copy startups.
And who is copying Facebook now? Their newest partners in India - Reliance Jio!
There is talk that the Indian economy is returning to normal, and that there are “green shoots”. While agriculture is likely to do well this year, signals from elsewhere are unclear.
So are there really green shoots? In agriculture, there appear to be. The automobile sector is picking up, though supply issues remain (paywalled). Retail sales are down 67% compared to last year, and malls 77%. However, 90% energy consumption in June compared to last year isn’t bad. And as we said earlier, whether this represents “almost back to normal” or “definite recession” is out of the scope of this newsletter.
We’ll be back on Monday with a fresh story.