SoftBank to invest $1 billion in US venture OneWeb as part of $50 billion pledge

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SoftBank Group Corp has agreed to invest $1 billion in US. satellite venture OneWeb Ltd, marking the first tranche of a $50 billion US. investment the Japanese telecoms and technology company’s founder Masayoshi Son pledged to President-elect Donald Trump.

 

“Earlier this month, I met with President-Elect Trump and shared my commitment to investing and creating jobs in the United States,” Son said in a joint statement with OneWeb. “This is the first step in that commitment.”

The investment is part of a $1.2 billion fundraising by OneWeb, which is seeking to provide affordable internet access to people around the world with satellites.

The remaining $200 million will be funded by its current investors, which include Qualcomm Inc, Airbus Group and Virgin Group. The transaction is expected to close in the first quarter of 2017.

In making his $50 billion pledge in the meeting with Trump, Son said his investment would create 50,000 new jobs, a move the US. President-elect claimed was a direct result of his election win.

The latest investment will come directly from SoftBank, not from a $100 billion tech fund it is launching with Saudi Arabia, even though Son has said that large-scale investments would be made through the tech fund to avoid a further expansion of its debt.

OneWeb, established in 2012 and based in Arlington, Virginia, plans to use the funds to build a plant in Florida to produce low-cost satellites, creating almost 3,000 new jobs in the United States over the next four years.

Son is steering SoftBank, a diverse company that holds stakes in US carrier Sprint, Chinese e-commerce giant Alibaba and other firms, towards cutting-edge tech investments as the telecoms services markets mature. It purchased U.K. chip design firm Arm Holdings for $32 billion this year in Japan’s largest ever overseas deal.

Source: http://economictimes.indiatimes.com/articleshow/56068014.cms

Private players may reap Rs 1.5 lakh crore revenue bonanza from BharatNet by 2020

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Private sector players could be in for a Rs 1.5 lakh crore revenue bonanza by 2020 if the government accepts the telecom regulator’s proposals on implementing the national broadband project, BharatNet. They, however, are sceptical about potential challenges over right of way (RoW) to lay cables and want these to be ironed out by the Department of Telecommunications (DoT) to ensure their active participation.

“If Trai’s (Telecom Regulatory Authority of India) recommendations are implemented, and the government ensures free RoW to private sector participants, as suggested by the telecom regulator, the revenue potential from broadband services could attain very significant levels by 2020, and be in the Rs 1-1.5 lakh crore range,” Broadband India Forum (BIF) president TV Ramachandran told ET. This estimate though could very easily be exceeded, given the huge potential these services have, said Ramachandran.

The BIF represents companies such as Airtel, Vodafone, Telenor, RCom, Qualcomm, Ericsson, Intel, Marvell, UTStarcom and BSNL. Hemant Joshi, partner at Deloitte, Haskins & Sells, agreed that the revenue potential could be staggering if RoW can be done away with, since it is the biggest hurdle and the costliest part of laying optical fibre across India.

“If the RoW challenge is addressed, BharatNet as India’s principal broadband backbone, can be a potential GDP multiplier, equivalent to 2-4 times the $18 billion that is proposed to be invested in the Digital India project,” said Joshi. This, he said, effectively means BharatNet can be a trigger for adding between $36 billion and $72 billion to India’s GDP in coming years, although the pace of the multiplier effect would hinge on the speed of national broadband network rollout.

In its recent recommendations on speeding up the Rs 74,000 crore BharatNet project, Trai had listed RoW as a factor considered to be a major risk by the private sector, and had urged DoT to pave the way for “a guaranteed provision of free RoW as a necessary and non-negotiable precondition for successful deployment of the national broadband project”.

Bharat-Net is being implemented as the main high-speed Internet backbone for delivering government services to the common man under Digital India initiative. Search giant Google, which had evinced interest in providing inexpensive Internet access across India, called for steps to boost broadband speeds of existing consumers.

Source:  Economic Times