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

US, Europe combined infra spending less than China’s

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Despite a crying need for better infrastructure, investment in it has actually fallen in 10 major economies since the financial crisis, including the US, according to a new study by the McKinsey Global Institute. Meanwhile, China is still going gangbusters on roads, bridges, sewers, and everything else that makes a country run.

“China spends more on economic infrastructure annually than North America and Western Europe combined,” according to the report published Wednesday.

Economists around the world have been arguing that now is a great time to invest in infrastructure because interest rates are super-low and the global economy could use the spending jolt. “Is anyone proud of Kennedy airport?” Harvard University economist Lawrence Summers likes to ask.

The MGI report cites 10 countries where infrastructure spending fell as a share of gross domestic product from 2008 to 2013: the US, UK, Italy, Australia, South Korea, Brazil, India, Russia, Mexico, and Saudi Arabia. The study counts 11 economies, but that’s because it lists the European Union as a separate entity.

In contrast to the widespread declines, the institute says, infrastructure spending grew as a share of GDP in Japan, Germany, France, Canada, Turkey, South Africa and China. The chart from the MGI report shows China’s strength in infrastructure spending. Its bar is the highest. There’s such a thing as too much infrastructure spending, of course. At current rates of investment, China, Japan, and Australia are likely to exceed their needs between now and 2030, the McKinsey & Co-affiliated think tank says. To fund more public infrastructure, the report favours raising user charges such as highway tolls, among other measures.

To encourage more private investment in infrastructure, MGI argues for increasing “regulatory certainty” and giving investors “the ability to charge prices that produce an acceptable risk-adjusted return.”

 

Source:  http://www.business-standard.com/article/international/us-europe-combined-infra-spending-less-than-china-s-116061600030_1.html