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Facebook’s Libra Suffers as Paypal Pulls Out

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  • Facebook’s Libra Suffers as Paypal Pulls Out

Paypal Inc has officially pulled out of Facebook’s cryptocurrency project, Libra, amid rising regulatory scrutiny and opposition.

Paypal was one of the companies that invested at least $10 million in the project when it was unveiledĀ earlier this year, however, none of them anticipated the level of opposition and scrutiny that trailed the announcement.

Regulators across the world are worried about trusting Facebook with financial details of their citizens following its failure to protect users’ data in the past and its reluctant to even report the stolen data.

The 29 companies that initially signed up for the project are now sceptical, and with Paypal out, others may start pulling out to limit regulatory scrutiny and negative impact on their overall branding.

A move that could hurt the entire project as Facebook would lose more bargaining power and its ability to convince regulators that the project is a collective effort and not a move to monopolise global financial service.

In a statement released by Paypal, the company decided to focus on advancing its existing mission and business priorities.

ā€œPayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations,ā€ PayPal said in an emailed statement to TechCrunch. ā€œWe remain supportive of Libraā€™s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.ā€

Earlier this week, WSJ reported that Mastercard, Visa and other companies may also pull out ahead of the scheduled meeting to elect the first board of directors for the project this month in Geneva.

Facebook, however, responded to the Paypal announcement: ā€œIt requires a certain boldness and fortitude to take on an endeavor as ambitious as Libra ā€“ a generational opportunity to get things right and improve financial inclusion,ā€ said a spokesperson. ā€œThe journey will be long and challenging. The type of change that will reconfigure the financial system to be tilted towards people, not the institutions serving them, will be hard. Commitment to that mission is more important to us than anything else. Weā€™re better off knowing about this lack of commitment now, rather than later.ā€

The only CEO who has spoken regarding the project, Al Kelly, Visa, said: ā€œItā€™s important to understand the facts here and not any of us get out ahead of ourselves,ā€ Kelly said in the companyā€™s most recent earnings call. ā€œSo we have signed a nonbinding letter of intent to join Libra. Weā€™re one of ā€“ I think itā€™s 27 companies that have expressed that interest. So no one has yet officially joined. Weā€™re in discussions and our ultimate decision to join will be determined by a number of factors, including obviously the ability of the association to satisfy all the requisite regulatory requirementsā€¦ Itā€™s really, really early days and thereā€™s just a tremendous amount to be finalized. But obviously, given that weā€™ve expressed interest, we actually believe we could be additive and helpful in the association.ā€

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Starlink Pulls Plug on Ghana, South Africa, and Others

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Starlink, the satellite internet service operated by SpaceX, has announced the cessation of services in countries including Ghana and South Africa.

This decision comes as a significant blow to users who have come to rely on Starlink for their internet connectivity needs.

The decision, set to take effect by the end of April 2024, will disconnect all individuals and businesses in unauthorized locations across Africa, including Ghana, South Africa, Botswana, and Zimbabwe.

While subscribers in authorized countries such as Nigeria, Mozambique, Mauritius, and others can continue to use their kits without interruption, those in affected regions face imminent loss of access.

One of the reasons cited by Starlink for the discontinuation is the violation of its terms and conditions.

The company explained that its regional and global roaming plans were intended for temporary use by travelers and those in transit, not for permanent use in unauthorized areas. Users found in breach of these conditions face the termination of their service.

Furthermore, Starlink’s recent email to subscribers outlined stringent measures to enforce compliance.

Subscribers who use the roaming plan for more than two months outside authorized locations must either return home or update their account country to the current one. Failure to do so will result in limited service access.

The decision to discontinue services in certain countries raises questions about the future of internet connectivity in these regions.

Also, concerns have been raised about Starlink’s ability to enforce the new rules effectively. Reports indicate that the company has previously failed to enforce similar conditions for over a year, raising doubts about the efficacy of the current measures.

Starlink’s decision to pull the plug on Ghana, South Africa, and other nations underscores the complexities of providing satellite internet services in diverse regulatory environments.

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Nigeria’s Broadband Penetration Stalls at 42.53% Amid Connectivity Challenges

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Nigeria’s broadband penetration has stalled at 42.53% as of January, according to the latest report.

Subscriptions currently stand at 92.19 million, indicating a significant gap in connectivity, particularly in rural areas.

The Nigerian National Broadband Plan 2020-2025 aims to increase broadband penetration to 70% by 2025, with the ultimate goal of achieving 96% mobile broadband coverage by 2030.

However, this ambitious target requires substantial investmentā€”approximately $461 million, according to a recent report by the Global System for Mobile Communications Association (GSMA).

While the country’s major telecommunications companies, such as MTN Nigeria and Airtel Africa, have invested heavily in expanding their network infrastructure, much of this development has been concentrated in urban areas. Rural and underserved regions face a significant coverage gap, exacerbating the digital divide.

Despite these challenges, Nigeria has made progress in improving its broadband infrastructure. Since 2012, the mobile broadband coverage gap across Africa has decreased from 56% to 13% in 2022, due to significant investments in network capacity and new technologies.

Nonetheless, millions of Nigerians, particularly those in rural regions, remain without access to essential telecom services.

To address this issue, Nigeria’s government established the Universal Service Provision Fund (USPF) in 2006, aimed at bridging the connectivity gap and expanding broadband access to unserved and underserved areas.

The fund provides resources for deploying telecommunications infrastructure in economically unviable regions.

The success of these initiatives, along with increased investments in broadband infrastructure and policies to incentivize internet expansion in remote areas, will be crucial in closing the connectivity gap and improving digital access for all Nigerians.

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iPhone Shipments Drop Amid Resurgence of Android Rivals

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Apple iPhone 14

Apple Inc. reported a significant drop in iPhone shipments during the March quarter, reflecting a downturn in sales across China amid the resurgence of competition from Android-powered rivals.

According to market tracker IDC, the tech giant shipped 50.1 million iPhones in the first three months of the year, a 9.6% year-on-year decline that fell short of the average analyst estimate of 51.7 million.

The steep decrease in iPhone sales marks Apple’s most significant quarterly dip since 2022, when Covid-19 lockdowns disrupted supply chains.

This time, the Cupertino-based company faces challenges from resurgent competitors such as Huawei Technologies Co. and Xiaomi Corp.

These firms have rebounded strongly in recent quarters, and their innovative product lines have begun to reclaim market share from Apple in China.

Samsung Electronics Co. regained its position as the top smartphone supplier globally, while Apple ranked second. Xiaomi closed the gap on Apple, shipping 40.8 million units, an impressive 33.8% increase year-on-year.

Transsion Holdings, another key player in the budget smartphone segment, nearly doubled its shipments, showcasing the competitive environment Apple faces.

Nabila Popal, research director at IDC, highlighted the broader shift in the smartphone market, which has recovered from the supply chain disruptions and challenges of recent years.

“While Apple has demonstrated resilience and growth in recent years, maintaining its pace and share in the market may prove challenging as Android manufacturers make strides,” Popal commented.

Apple has a strong brand and loyal customer base, yet its market position may be tested further by the aggressive pricing and innovative products offered by Chinese rivals.

The company’s efforts to sustain its premium pricing strategy may also be challenged as more customers consider switching to Android alternatives.

As the tech industry looks ahead to the rest of the year, Apple’s upcoming earnings report and strategic moves to address this competitive pressure will be closely watched by investors and industry observers alike.

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