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Ericsson tops forecasts as 5G lifts off

Ericsson beat fourth-quarter core earnings forecasts on Friday, helped by strong sales of 5G equipment and the ban on Chinese rival Huawei in several countries.

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STOCKHOLM (Reuters) – Ericsson beat fourth-quarter core earnings forecasts on Friday, helped by strong sales of 5G equipment and the ban on Chinese rival Huawei in several countries.

FILE PHOTO: The Ericsson logo is seen at the Ericsson’s headquarters in Stockholm, Sweden June 14, 2018. REUTERS/Olof Swahnberg

The Swedish company’s shares jumped 7% in early trading.

Not only is Ericsson is selling more, but it is also earning more from each sale, with gross margins rising to 40.6% in the quarter from 36.8% a year earlier. Margins are now at levels of a decade ago, having recovered from the low-20%s in 2017.

In particular, the core Networks business saw margins at 43.5% from 41.1% a year earlier, on a 20% rise in sales.

“The competition in our industry is always cut-throat and the trick is to be ahead of the cost curve,” Chief Financial Officer Carl Mellander told Reuters. “A lot of the money we invest in R&D not only goes into making better functionality and features, but also to reduce the cost structure.”

The company said its operating margin of 12.5% in 2020 reached the 2022 group target range of 12-14% two years early.

“The 2022 goals are simply too low,” said Christer Gardell, co-founder of Ericsson shareholder Cevian Capital. “Ericsson has much more to give.”

The company’s quarterly adjusted operating earnings rose to 11 billion Swedish crowns ($1.3 billion) from 6.5 billion crowns a year earlier, beating analysts’ mean forecast of 8.58 billion crowns, according to Refinitiv estimates.

Total revenue rose 5% to 69.6 billion crowns, beating estimates of 68.35 billion crowns.

“This reflects continued high activity levels in North America and North East Asia, and also in Europe where we further increased the market share,” Chief Executive Börje Ekholm said.

North East Asia includes China, where Ericsson, unlike Nordic rival Nokia, got 5G radio equipment contracts from China’s three largest telecom operators.

Nokia reports earnings next week.

Ericsson has warned Sweden’s move to exclude Chinese vendors from its 5G networks may create problems for it in China. But Mellander said it hadn’t seen a material impact so far.

Ericsson has criticised the Swedish ban, and there have even been reports it has threatened to leave Sweden over the matter.

Mellander denied there was any talk of this. “We will remain a Swedish domiciled company,” he told Reuters.

($1 = 8.3643 Swedish crowns)

Reporting by Supantha Mukherjee and Helena Soderpalm in Stockholm. Editing by Shri Navaratnam and Mark Potter

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Source: https://www.reuters.com/article/us-ericsson-results/ericsson-tops-forecasts-as-5g-lifts-off-idUSKBN29Y0JJ?il=0

Reuters

EXCLUSIVE Scientists say India government ignored warnings amid coronavirus surge

A forum of scientific advisers set up by the government warned Indian officials in early March of a new and more contagious variant of the coronavirus taking hold in the country, five scientists who are part of the forum told Reuters.

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A forum of scientific advisers set up by the government warned Indian officials in early March of a new and more contagious variant of the coronavirus taking hold in the country, five scientists who are part of the forum told Reuters.

Despite the warning, four of the scientists said the federal government did not seek to impose major restrictions to stop the spread of the virus. Millions of largely unmasked people attended religious festivals and political rallies that were held by Prime Minister Narendra Modi, leaders of the ruling Bharatiya Janata Party and opposition politicians.

Tens of thousands of farmers, meanwhile, continued to camp on the edge of New Delhi protesting Modi’s agricultural policy changes.

The world’s second-most populous country is now struggling to contain a second wave of infections much more severe than its first last year, which some scientists say is being accelerated by the new variant and another variant first detected in Britain. India reported 386,452 new cases on Friday, a global record.

The spike in infections is India’s biggest crisis since Modi took office in 2014. It remains to be seen how his handling of it might affect Modi or his party politically. The next general election is due in 2024. Voting in the most recent local elections was largely completed before the scale of the new surge in infections became apparent.

The warning about the new variant in early March was issued by the Indian SARS-CoV-2 Genetics Consortium, or INSACOG. It was conveyed to a top official who reports directly to the prime minister, according to one of the scientists, the director of a research centre in northern India who spoke on condition of anonymity. Reuters could not determine whether the INSACOG findings were passed on to Modi himself.

Modi’s office did not respond to a request for comment from Reuters.

INSACOG was set up as a forum of scientific advisers by the government in late December specifically to detect genomic variants of the coronavirus that might threaten public health. INSACOG brings together 10 national laboratories capable of studying virus variants.

INSACOG researchers first detected B.1.617, which is now known as the Indian variant of the virus, as early as February, Ajay Parida, director of the state-run Institute of Life Sciences and a member of INSACOG, told Reuters.

INSACOG shared its findings with the health ministry’s National Centre for Disease Control (NCDC) before March 10, warning that infections could quickly increase in parts of the country, the director of the northern India research centre told Reuters. The findings were then passed on to the Indian health ministry, this person said. The health ministry did not respond to requests for comment.

Around that date, INSACOG began to prepare a draft media statement for the health ministry. A version of that draft, seen by Reuters, set out the forum’s findings: the new Indian variant had two significant mutations to the portion of the virus that attaches to human cells, and it had been traced in 15% to 20% of samples from Maharashtra, India’s worst-affected state.

The draft statement said that the mutations, called E484Q and L452R, were of “high concern.” It said “there is data of E484Q mutant viruses escaping highly neutralising antibodies in cultures, and there is data that L452R mutation was responsible for both increased transmissibility and immune escape.”

In other words, essentially, this meant that mutated versions of the virus could more easily enter a human cell and counter a person’s immune response to it.

The ministry made the findings public about two weeks later, on March 24, when it issued a statement to the media that did not include the words “high concern.” The statement said only that more problematic variants required following measures already underway – increased testing and quarantine. Testing has since nearly doubled to 1.9 million tests a day.

Asked why the government did not respond more forcefully to the findings, for example by restricting large gatherings, Shahid Jameel, chair of the scientific advisory group of INSACOG, said he was concerned that authorities were not paying enough attention to the evidence as they set policy.

“Policy has to be based on evidence and not the other way around,” he told Reuters. “I am worried that science was not taken into account to drive policy. But I know where my jurisdiction stops. As scientists we provide the evidence, policymaking is the job of the government.”

The northern India research centre director told Reuters the draft media release was sent to the most senior bureaucrat in the country, Cabinet Secretary Rajiv Gauba, who reports directly to the prime minister. Reuters was unable to learn whether Modi or his office were informed of the findings. Gauba did not respond to a request for comment.

The government took no steps to prevent gatherings that might hasten the spread of the new variant, as new infections quadrupled by April 1 from a month earlier.

Modi, some of his top lieutenants, and dozens of other politicians, including opposition figures, held rallies across the country for local elections throughout March and into April.

The government also allowed the weeks-long Kumbh Mela religious festival, attended by millions of Hindus, to proceed from mid-March. Meanwhile, tens of thousands of farmers were allowed to remain camped on the outskirts of the capital New Delhi to protest against new agriculture laws.

To be sure, some scientists say the surge was much larger than expected and the setback cannot be pinned on political leadership alone. “There is no point blaming the government,” Saumitra Das, director of the National Institute of Biomedical Genomics, which is part of INSACOG, told Reuters.

STRICT MEASURES NOT TAKEN

INSACOG reports to the National Centre for Disease Control in New Delhi. NCDC director Sujeet Kumar Singh recently told a private online gathering that strict lockdown measures had been needed in early April, according to a recording of the meeting reviewed by Reuters.

“The exact time, as per our thinking, was 15 days before,” Singh said in the April 19 meeting, referring to the need for stricter lockdown measures.

Singh did not say during the meeting whether he warned the government directly of the need for action at that time. Singh declined to comment to Reuters.

Singh told the April 19 gathering that more recently, he had relayed the urgency of the matter to government officials.

“It was highlighted very, very clearly that unless drastic measures are taken now, it will be too late to prevent the mortality which we are going to see,” said Singh, referring to a meeting which took place on April 18. He did not identify which government officials were in the meeting or describe their seniority.

Singh said some government officials in the meeting worried that mid-sized towns could see law and order problems as essential medical supplies like oxygen ran out, a scenario that has already begun to play out in parts of India.

The need for urgent action was also expressed the week before by the National Task Force for COVID-19, a group of 21 experts and government officials set up last April to provide scientific and technical guidance to the health ministry on the pandemic. It is chaired by V.K. Paul, Modi’s top coronavirus adviser.

The group had a discussion on April 15 and “unanimously agreed that the situation is serious and that we should not hesitate in imposing lockdowns,” said one scientist who took part.

Paul was present at the discussion, according to the scientist. Reuters could not determine if Paul relayed the group’s conclusion to Modi. Paul did not respond to a request for comment from Reuters.

Two days after Singh’s April 18 warning to government officials, Modi addressed the nation on April 20, arguing against lockdowns. He said a lockdown should be the last resort in fighting the virus. India’s two-month-long national lockdown a year ago put millions out of work and devastated the economy.

“We have to save the country from lockdowns. I would also request the states to use lockdowns as the last option,” Modi said. “We have to try our best to avoid lockdowns and focus on micro-containment zones,” he said, referring to small, localised lockdowns imposed by authorities to control outbreaks.

India’s state governments have wide latitude in setting health policy for their regions, and some have acted independently to try to control the spread of the virus.

Maharashtra, the country’s second-most populous state, which includes Mumbai, imposed tough restrictions such as office and store closures early in April as hospitals ran out of beds, oxygen and medicines. It imposed a full lockdown on April 14.

‘TICKING TIME BOMB’

The Indian variant has now reached at least 17 countries including Britain, Switzerland and Iran, leading several governments to close their borders to people travelling from India.

The World Health Organization has not declared the India mutant a “variant of concern,” as it has done for variants first detected in Britain, Brazil, and South Africa. But the WHO said on April 27 that its early modelling, based on genome sequencing, suggested that B.1.617 had a higher growth rate than other variants circulating in India.

The UK variant, called B.1.1.7, was also detected in India by January, including in the northern state of Punjab, a major epicentre for the farmers’ protests, Anurag Agrawal, a senior INSACOG scientist, told Reuters.

The NCDC and some INSACOG laboratories determined that a massive spike in cases in Punjab was caused by the UK variant, according to a statement issued by Punjab’s state government on March 23.

Punjab imposed a lockdown from March 23. But thousands of farmers from the state remained at protest camps on the outskirts of Delhi, many moving back and forth between the two places before the restrictions began.

“It was a ticking time bomb,” said Agrawal, who is director of the Institute of Genomics and Integrative Biology, which has studied some samples from Punjab. “It was a matter of an explosion, and public gatherings is a huge problem in a time of pandemic. And B.1.1.7 is a really bad variant in terms of spreading potential.”

By April 7, more than two weeks after Punjab’s announcement on the UK variant, cases of coronavirus began rising sharply in Delhi. Within days, hospital beds, critical care facilities, and medical oxygen began running out in the city. At some hospitals, patients died gasping for air before they could be treated. The city’s crematoriums overflowed with dead bodies.

Delhi is now suffering one of the worst infection rates in the country, with more than three out of every 10 tests positive for the virus.

India overall has reported more than 300,000 infections a day for the past nine days, the worst streak anywhere in the world since the pandemic began. Deaths have surged, too, with the total exceeding 200,000 this week.

Agrawal and two other senior government scientists told Reuters that federal health authorities and local Delhi officials should have been better prepared after seeing what the variants had done in Maharashtra and Punjab. Reuters could not determine what specific warnings were issued to whom about preparing for a huge surge.

“We are in a very grave situation,” said Shanta Dutta, a medical research scientist at the state-run National Institute of Cholera and Enteric Diseases. “People listen to politicians more than scientists.”

Rakesh Mishra, director of the Centre for Cellular and Molecular Biology, which is part of INSACOG, said the country’s scientific community was dejected.

“We could have done better, our science could have been given more significance,” he told Reuters. “What we observed in whatever little way, that should have been used better.”

Our Standards: The Thomson Reuters Trust Principles.

The warning about the new variant in early March was issued by the Indian SARS-CoV-2 Genetics Consortium, or INSACOG. It was conveyed to a top official who reports directly to the prime minister, according to one of the scientists, the director of a research centre in northern India who spoke on condition of anonymity. Reuters could not determine whether the INSACOG findings were passed on to Modi himself.

Source: https://www.reuters.com/world/asia-pacific/exclusive-scientists-say-india-government-ignored-warnings-amid-coronavirus-2021-05-01/

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UK invokes national security to investigate Nvidia’s ARM deal

The UK government will look into the national security implications of U.S. group Nvidia’s (NVDA.O) purchase of British chip designer ARM Holdings, it said on Monday, raising a question mark over the $40 billion deal.

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The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. . REUTERS/Robert Galbraith/File Photo

The UK government will look into the national security implications of U.S. group Nvidia’s (NVDA.O) purchase of British chip designer ARM Holdings, it said on Monday, raising a question mark over the $40 billion deal.

Digital minister Oliver Dowden said he had issued a so-called intervention notice over the sale of ARM by Japan’s SoftBank (9984.T) to Nvidia.

“As a next step and to help me gather the relevant information, the UK’s independent competition authority will now prepare a report on the implications of the transaction, which will help inform any further decisions,” he said.

Nvidia said it does not believe the deal poses any material national security issues.

“We will continue to work closely with the British authorities, as we have done since the announcement of this deal,” said Nvidia, the biggest U.S. chip company by market capitalisation.

DEFENCE TECH

ARM is a major player in global semiconductors, a sector fundamental to technologies from artificial intelligence and quantum computing to 5G telecoms networks. Its designs power nearly every smartphone and millions of other devices.

Semiconductors also underpin critical infrastructure in Britain and are in technology related to defence and national security matters, the government said, adding that officials from the security community had informed the decision to intervene.

The Competition and Markets Authority (CMA) will assess the competition, jurisdiction and national security impact of the deal, with a report due by July 30, the government said.

Dowden will then decide whether to clear the deal, either with or without undertakings from the companies involved, or refer it for a longer, in-depth investigation.

The CMA has been looking into the deal since January, focusing on whether ARM could raise prices or reduce services to customers that compete with Nvidia.

Nvidia announced the deal in September and has pledged to retain ARM’s neutrality and has offered guarantees to retain its headquarters and staff in Cambridge.

CORPORATE CONCERN

Similar commitments from SoftBank in 2016 persuaded Britain to allow the takeover of the country’s leading tech company.

The Nvidia deal, however, puts a vital supplier to multiple silicon chipmakers under the control of a single player.

As well as prompting regulatory scrutiny, the deal has raised concern among global technology companies including Google (GOOGL.O), Qualcomm (QCOM.O) and Microsoft (MSFT.O) at a time when multiple industries are being hit by a worldwide chip shortage.

ARM, which was founded and is still based in the English university city of Cambridge, does not make chips but has created an instruction set architecture on which it bases designs for computing cores.

Its chip designs and technology is licensed to customers such as Qualcomm, Apple (AAPL.O) and Samsung Electronics (005930.KS).

Our Standards: The Thomson Reuters Trust Principles.

“We will continue to work closely with the British authorities, as we have done since the announcement of this deal,” said Nvidia, the biggest U.S. chip company by market capitalisation.

Source: https://www.reuters.com/world/uk/uk-intervenes-nvidias-takeover-arm-national-security-grounds-2021-04-19/

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Judge in Texas lawsuit against Google issues protective order

The judge hearing the Texas antitrust lawsuit against Alphabet Inc’s Google put limits on what the search giant’s in-house lawyers can see in an order aimed at ensuring that confidential information used in an upcoming trial remains secure.

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FILE PHOTO: The brand logo of Alphabet Inc’s Google is seen outside its office in Beijing, China, August 8, 2018. Picture taken with a fisheye lens. REUTERS/Thomas Peter

WASHINGTON (Reuters) – The judge hearing the Texas antitrust lawsuit against Alphabet Inc’s Google put limits on what the search giant’s in-house lawyers can see in an order aimed at ensuring that confidential information used in an upcoming trial remains secure.

The issue is a key one for companies that have not been identified but that gave information to the Texas attorney general’s office for its investigation and fear that their confidential data, like strategic business plans or discussions about negotiations, could be disclosed to Google executives.

The order issued by Judge Sean Jordan of the U.S. District Court for the Eastern District of Texas allows Google’s in-house counsel to see information deemed “confidential” but they are then limited in advising on some competitive and other decision-making for two years regarding the companies whose data they see.

In-house counsel for Google is barred from seeing “highly confidential” information under the order unless it is given permission by the court or the affected company.

The Texas lawsuit accuses Google of violating the law in how it dominates the process of placing ads online. It alleges Google quietly teams with its closest online advertising competitor, Facebook Inc, and that it uses the excuse of protecting users’ privacy to act unfairly. Publishers complain that one result has been lower revenues.

Google denies any wrongdoing.

It is one of three big antitrust lawsuits filed against Google last year.

The protective order also requires people who receive confidential and highly confidential information to agree to allow electronic devices used in their work on the lawsuit to be searched if needed as part of a forensic investigation into a potential leak.

Reporting by Diane Bartz in Washington; Editing by Matthew Lewis

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Source: https://www.reuters.com/article/tech-antitrust-google-texas/judge-in-texas-lawsuit-against-google-issues-protective-order-idUKL1N2M7329

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