Weekend Reading

• 4 D's of Investing
• The growing use of Robotics
• Master the Leadership
• Why Warren Buffet never bought Google stock 
• The One Metric that Identifies Qualified Buyers
• The B2B Lead Gen Stumbling Block
• The India Opportunity

Telecoms - IT Strategy, Managed Services and Implementation View

 

Telecom Verticals - IT Strategy, Managed Services, and Implementation View on 1Page.

(source: Gartner)

Hype Cycle for the CSPs Network Infrastructure 

Post COVID - FY22 Australian Economy Update

 

Export to China primarily iron ore is bringing Revenue 3 times what was estimated in the budget (from USD $55/tonne to $200/tonne). 

Once Brazil overcomes labor supply and Chinese mines open for business in Africa, Australia will see the impact.  

While household debt and savings are rising. Frequent and strict lockdown in major cities of Australia means less spending by people.

Australia is still behind other OECD countries when it comes to green energy.

Australian Vaccine rollout is abysmal compared to US, UK, Canada and EZ. This means a conservative approach of the elongated lockdown applied, threatening its economy in a globally connected world.    

Frequent and elongated lockdown in major cities of Australia, primarily Sydney and Melbourne threatening FY22 Q1 and Q2 (likely) with downward growth.

Source: CBA

B2B Sales Journey Context and Background

 

Weekend Reading

 

• What is required in Sales Process for Startups  
• Strategies Buyers Use to Negotiate Price
• Weekly Habit that will push you to peak performance
• You Don't have to Memorize the Presentation
• 3 Networking mistakes that you need to avoid
• Map your buyer in prospective Journey

Vodafone will get a lifeline from Retrospective Tax Withdrawl

Key Players in the Indian Telecom Industry

 

Vodafone Tax Issue Timeline

   

 Indian Govt Decision on Retrospective Tax 

   

Key Issues and Arguments

• Vodafone acquired Hutchinson/Idea/Max in 2007 - 67% share by $ 11Bn
• Hutchinson Vamco, based out of HKG sold 67% of shares driven by assets in India
• Indian Tax Department called out that Vodafone has to pay Capital gains Tax (calculated as Rs 7K Crore in 2007, today it's Rs 20K Crore liability)
• Vodafone said the transaction was made by 2 foreign entities (Hutch/Vodafone) in a tax haven country
• When challenged by the Tax department, Vodafone went to the Supreme Court  (SC) and won the case by saying that assets transferred in a foreign country can be taxed
• FM Pranab Mukherjee was hurt (probably ego) by this SC ruling, and hence he applied his power in the government and legislation to circumvent the SC ruling and prevent the tax from being backdated retrospectively

Removal of Retrospective Tax by the Indian Govt. will give a lifeline to Vodafone India, which is struggling financially in a JV with Hutch/Idea. The tax was ill-conceived by FM Paranb Mukjherjee, even though it was opposed at the time by PM Manmohan Singh and his cabinet colleagues like P Chidambaram and Kapil Sibal (law minister) in 2007. The tax was imposed from the backdate (can claim nearly 60 years) after Vodafone won the case in the Supreme Court (as described by Shekhar Gupta from ThePrint). By rolling out the retrospective tax, FM exercised typical abuse of power, intimidation, and legislative superiority to ensure Vodafone fell in line.

Why Vodafone is Indispensable
 
India has a few major players in the Telecom sector. The failure of any key player is detrimental to Telecom and is key to India's IT-driven Service Sector. Besides this, it will cause twin balance sheet issues for the financial sector as Indian Banks will lose their invested capital.

For Vodafone India, on the verge of bankruptcy in FY 22, Rs 20K crore liability will give a lifeline and infuse cash to survive in a capital-intensive industry during these challenging times, when the demand profile has changed.

In short, this decision by the government is late, but sometimes politics can weaken strong leaders resolute to reform. As Shekhar Gupta (from ThePrint) called out correctly, if a mistake goes long, it does more damage, but it needs to be welcomed if it's corrected.

Credit: Shekhar Gupta from The Print, ET, The Hindu, WSJ.

Update on Liability for Vodafone India is around 60K crore, (share price is around - Rs7).  

India's telecom sector is mismanaged by bureaucrats and is destroyed by some of the ludicrous policies on taxation, like AGR for spectrum. The amount of money owed to the government and banks by 3 telco companies (VI, Airtel) is around 1Lakh crore. The government needs to assist this sector, which has laid the pathways for the future. Time is running out before it's too late.