Google has a secret rival
Also in this edition: Zenoti gets an add-on, Colonial Pipeline ransom recovered, Tata Digital's new boss.
Good morning! We were a little shook yesterday, we’re not going to lie. Everything was down, Vice, New York Times, Twitter’s functionality was reduced. And this happened just when we read reports that the Indian government had asked Twitter to restrict access to several accounts, including two rappers. Could it have happened? No, it didn’t. Pesky server issues caused outages across the world. As you were. Except if you’re L-Fresh The Lion and Jazzy B. No Twitter for them.
Anyway, on to today’s stories.
Cops hack into a messaging app and bust international organised crime networks.
Company formation in India went through the roof. Yay for entrepreneurship?
Fast fashion is killing our planet.
The Illusion Of Digital India
Last week, Kantar released a report on internet penetration in 2020. It had some interesting headline numbers. India’s internet grew by 8%. Rural India’s internet growth was higher than in urban India. But nuance is where the real story lies. India’s internet story is slowing down.
A little deeper: While urban India’s internet growth was slower than rural India’s (4% compared to 13%), it was from a much higher base. Over 65% of the urban population uses the internet regularly.
Deeper still: Rural India presents a slightly less cheerful picture. Internet penetration is just about 31%. The pace of growth fell year on year. In 2018, India saw a 13% growth in rural internet users, 2019 saw a 45% growth, which crashed to 13% in 2020.
But why: The pandemic meant infrastructure growth slowed down. The Covid-19 lockdowns also meant people did not have enough to spend on top-ups.
And then there is Jio: For years, Jio gave away internet connectivity for free (or almost free). This helped Jio gain customers but crashed its average revenue per user (ARPU). This meant that even though Jio led the trailing pack of Airtel and Vodafone-Idea on the number of customers, it lagged behind Airtel on key performance metrics like ARPU.
Jio has reached this place even after consistently raising its prices. Investors have started to nudge Jio to raise prices even more to keep up revenue growth numbers. But these raised prices have come at a cost. Rural India has been priced out of the internet.
Animal Spirits Or Tax Planning?
The pace of entrepreneurs setting up companies has picked up despite the Covid-19 virus ravaging the country in a brutal second wave through the summer. New company registrations with the ministry of corporate affairs jumped fourfold in April this year. It was 12,554 that month compared to 3,209 in April 2020. The number for March 2021 at 17,324 was triple that of the same month a year earlier.
Digital boom: It is quite unusual to see elevated entrepreneurial activity at the peak of a pandemic. Long lockdowns and restricted mobility, however, gave a boost to internet companies, digital enterprises, and online services, which could partly explain the rise in the number of new firms.
Less taxing: A more likely reason is the tax regime introduced in the 2019-20 Union Budget to revive the sagging economy. It sharply cut corporation tax for new manufacturing companies to 15% with a rider that they should be up and running by March 31, 2023. The benefit is also available to companies formed to buy sick businesses. Plenty of such firms are likely to be on sale now. The low rate might have also encouraged manufacturers who wanted to expand capacity to set up new companies instead of new units under the same roof.
We’ll Give You Some Privacy
Apple’s annual Worldwide Developers Conference is underway in an all-digital avatar, and the keynote hit some interesting notes. The biggest emphasis was probably on iOS 15, scheduled to release around September.
P for Privacy: The latest iPhone operating system, Apple says, comes with major upgrades for productivity and privacy. Especially the latter, as it pitches a new encrypted browsing feature — Private Relay — which may be better than VPNs for protecting your identity online. The feature will, however, be unavailable to customers in China, Saudi Arabia, and some other countries.
Apart from that, Apple announced OS updates for MacBooks and iPads, as well as updates to Siri which will now make fewer unwanted audio recordings. Tim Cook, Apple’s CEO, caused a flutter of excitement with upgrades to memoji.
How much do you hate ads? Speaking of privacy, Neeva, an ad-free search engine, is set to launch in India next year. It offers a subscription-based service which it’s betting will appeal to people who are done paying for ‘free’ services with their eyeballs.
What sets Neeva apart is its founders, Sridhar Ramaswamy — who was a Senior VP of Ads & Commerce at Google — and Vivek Raghunathan — who led engineering for YouTube monetisation. They are among a spate of ex-Googlers championing privacy in recent years. A famous name among them is John Giannandrea who is now Apple’s senior vice president of Machine Learning and AI Strategy.
Apple is doubling down on acquiring a reputation as ‘the’ tech company that respects your privacy and therefore merits a premium. It has stood up to pressure from advertising giants such as Facebook and Google to provide iPhone users the choice not to be tracked online. Now it’s taking things one step further, although stopping short of stepping on some governments’ toes. Google is following suit, for Android users.
But privacy isn’t free. Apple’s also going to keep its cut of earnings from the app store at 30%. The question is whether users and developers are willing to pay for it. Will online privacy become a searing need rather than a luxury?
What You Gonna Do When They Come For You?
It was early morning. Just when it gets truly dark and things go still, police in 18 countries busted through doors of people sleeping, unaware of what the morning was to bring. This is how we imagine it went down. It probably was slightly less dramatic. But cops across 18 countries arrested hundreds of people who were part of organised crime networks. All they did was hack into an encrypted messaging app, An0m. This app is almost exclusively used by people in organised crime.
Operation Ironside: This crackdown was three years in the making. The FBI took control of the messaging app when it was gaining popularity across the seedy underbelly of the US, Australia, West Asia, and South America.
This operation unearthed information on the international narcotics trade, money laundering and murder plots. Officials seized weapons, luxury vehicles, drugs, cash and even cryptocurrencies.
BFD: Operation Ironside resulted in Australia issuing the largest number of search warrants in a single day. As many as 525 charges have been slapped on various suspects, including drug traffickers and outlawed motorcycle gangs. More warrants are expected in the weeks ahead.
Fast Fashion & A Fast Dying Planet
Your penchant for cheap, beautiful and trendy things, or fast fashion, is killing the planet. How? Because while the things you buy are beautiful and cheap, they are simply not sustainable.
What’s fast fashion? It’s what mid-range clothing brands do. They replicate in-trend styles of high-end brands, but use low-quality fabric so it’s affordable for you and profitable for them. But what about the planet?
Environmental impact: According to a 2020 World Economic Forum (WEF) study, production of clothes has doubled since 2000, and ~85% of these garments end up in a dump. The garment industry is also responsible for 10% of human carbon emission, is the second-largest consumer of water, and is notorious for polluting rivers and oceans.
Next time you buy something, ask yourself: Is it durable or will I discard it next season?
Catching Up With Covid
86,498: The number of new cases of Covid-19 reported in India for Monday.
2,123: Deaths due to Covid-19 reported in India for Monday.
INR 800 billion: The anticipated cost of the free vaccination and free ration schemes announced by Prime Minister Narendra Modi yesterday.
New guidelines: The central government has released new guidelines for Covid-19 vaccination, and will allot doses to states based on their population.
It gets worse: Many reports in India of unusual symptoms such as gangrene and hearing loss in patients afflicted by the Delta variant of Covid-19, first discovered in India, are raising concerns that it might be more severe than initially thought.
Phuket off: The Thai government has invited tourists who have been fully vaccinated to come and stay in Phuket from July onwards. The price of the room, in some hotels, is as low as $1.
What Else Made The Signal?
Cutting it short: Tesla has cancelled production of the long-range variant of its Model S Plaid, the Plaid+, since the regular one is “just so good”.
Crime doesn’t pay: The US Justice Department announced it has recovered most of the money paid to the Colonial Pipeline hackers by seizing 63.7 Bitcoin, worth ~$2.3 million at present, from an electronic account.
Add on: Zenoti, the provider of software for large spa and salon chains that turned unicorn with Series D funding last December, is adding $80 million to that round, raising its valuation to $1.5 billion.
Bejeweled prices: UK-based De Beers has raised the stakes on some rough-diamonds, hiking prices by ~10%. The diamond market is dazzling again, with demand from cutters and polishers rising after a lull during the pandemic.
Tata’s new boss: Tata Digital has appointed Curefit CEO and co-founder Mukesh Bansal as the president of the company. The fitness startup got $75 million as an investment from the behemoth.
Public opinion: French President Emmanuel Macron was slapped in the face by a man while greeting the public waiting to meet him during a visit to a small town.
Who’s better than Messi? Indian football captain, Sunil Chhetri. With a brace against Bangladesh on Monday night, the diminutive striker moved ahead of the Argentine on the number of goals scored in international fixtures. Chhetri’s tally of 74 is two better than Messi's and puts him second on the list of active international goalscorers in the world. He’s only behind Cristiano Ronaldo, who has 103 international goals to his name.
Bitten by wanderlust: China has new stars that are quickly becoming an international sensation: a herd of 15 elephants. They’ve travelled more than 300 miles from a wildlife reserve in Yunnan province to its provincial capital of Kunming. Chinese authorities have deployed more than 410 emergency personnel, 374 vehicles, and 14 drones along with two tonnes of elephant food to keep a watchful eye on these gentle beasts. There are adorable videos of them getting into all sorts of adventures on the way: slipping into irrigation ditches, visiting car dealerships, and even peeking into rooms in retirement homes.
The southern titan: Something exciting is brewing in Australia. Scientists there have classified a new species of dinosaur, called the “Australotitan cooperensis” or the “southern titan” as the continent’s largest dinosaur. The species was discovered in 2007 on a farm in southwest Queensland and is among the 15 largest dinosaurs to ever roam planet earth. These titanosaurs are apparently “as long as a basketball court”, measuring 21 feet tall and about 98 feet long.