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The Week That Was:

From: Vartaa Editorial Team on Sep 4, 2016

Saint Teresa

Kolkata's Mother Teresa was officially anointed a saint by Pope Francis this past week. Mother Teresa, who was icon of hope and care for the poor in Calcutta and India, canonized after a process that started 2 years after her death in 1997. The formal announcement of the canonization was made by Pope Francis at the St.Peter's Cathedral in the Vatican. There was also a delegation from Mother Teresa's Missionaries of Charity present at the ceremony. The announcement also led to celebrations in her native Kolkata, where Mother Teresa had settled after coming from Albania and started the Missionaries of Charity.

Electoral chess in Punjab

The state of Punjab continues to see political realignment ahead of the assembly elections in 2017. After Navjot Sidhu announced the formation of his new outfit Awaaze-Punjab, former convenor of the Aam Aadmi Party in the state, Sucha Singh Chotepur is now all set to join Sidhu's outfit. Chotepur had helped expand AAP in the state but his autocratic style of working left many in the party disgruntled. The Congress meanwhile is hoping to attract rural voters with promises of farm loan waivers in Punjab, a state where agricultural yields have been falling and rural indebtedness rising.

PM raises black money call at G-20

Taking the issue of black money all the way to G-20, PM Modi raised a call to the group of countries to take action against tax evaders and remove tax havens around the world. OECD countries have developed norms around information sharing and regulating profit shifting to curb illegal money transfer. Adoption of these norms however remains slow as countries try to please their domestic constituents in the interest of political expediency.

Opinions you must read:

  • Why are Marathas in Maharashtra angry? The Mint examines.
  • The Mint examines the EU ruling relating to the $14bn tax recovery from Apple and finds that the fault lies in the tax regulatory regime in developed countries.
  • On Teachers' Day this past week, the Indian Express reminds us that governments across India have many promises to keep to the teachers

Chart of the Week

Reliance made headlines in India earlier this week with the launch of its cut-rate 4G service. The company's wireless carrier arm Reliance Jio offered customers an incredible package of lifetime free voice and roaming and unlimited data under the Reliance Jio (RJio) Welcome Offer. This is bound to spark a price war and some major carriers have already slashed prices. The already fierce competition in the Indian Wireless market is about to become even more so. Analysts predict that the company may not turn a profit for 4-5 years. Reliance appears to be playing to its strengths- with deep pockets and centralized leadership it is most likely to survive this war of attrition and capture a large slice of the customer base.

We thought we should take a look at the players in this market this week. As you can see from the chart, Reliance is a distant 4th when it comes to subscriber share. Bharti Airtel dominates with a quarter of the subscriber base. It has an incredible 254 million subscribers to Reliance's not insignificant 100 million. However, this is a snapshot in time. Telecom Authority of India's (TRAI) latest release shows that Reliance lost over a million subscribers in May 2016- highest of any major service providers and the decline has been steady. Small wonder then that Reliance delivered such a strong counter punch.

Another thing to note from the chart is that India's wireless market is fairly fragmented. There are 8 major providers compared to just 4 in the US (which maybe reduced to 3 if the US Justice Department changes its stance). Recent developments may precipitate consolidation with the weaker players being bought out or exiting the market. Time will tell which ones will survive. One thing is already clear however- with better internet speeds and cheaper service, customers will come out as winners.