01/07/2013 World Business Report


01/07/2013

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are the latest headlines from BBC World News.

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Now for the latest financial news Roam if you want to and at a much

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cheaper cost in Europe. Charges have been cut by a third today

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thanks to EU regulators. The strong ?I ? The strong

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Australia's manufacturers and tourism industries have had to

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Welcome to World Business Report. I'm Sally Bundock. Also in the

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work. Mark Carney moves into the Bank of England. We assess what is

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in his in-tray. From today it is cheaper to use mobile phones across

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the European Union. Checking email or surfing the web on a mobile

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phone while travelling in the EU will now be a third cheaper under

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cuts to roaming charges enforced by the EU's regulator just in time for

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the summer holiday season. For the past six years, the EU has been

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forcing down prices by placing a cap on the charges providers can

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impose and reducing that limit each year. It says it has achieved

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retail price reductions of over 80% industry and benefiting the

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companies involved. So how much further can it go? I am joined by

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Luca Schiavoni, an analyst in Ovum's regulatory advisory service.

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Tell us more about what has changed. Today, we are having a reduction by

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around 36% in the data roaming prices, the price we pay when we

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browse the Internet from abroad. There are also reductions in what

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we pay for making and receiving phone calls and sending texts from

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other countries. This has been going on since 2007 and the

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regulation was reviewed last year. There will be further price

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reductions in 2014, July. This only covers the European Union countries.

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If you travel elsewhere, you may actually face higher prices because

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operators are free to set the price now for roaming in other

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destinations. We see that in some situations this has happened.

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is good news for consumers. Often we forget to turn our roaming off

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when we go to Europe and we then get stung with a huge bill. The

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regulators also argue it's good for the industry. What do companies

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say? Companies are being quite vocal against roaming regulations.

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In 2010, they lost an appeal before the European Court of Justice. They

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have also been recently very vocal against talks to completely remove

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roaming charges. Of course the fact that markets have been growing, the

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demand for telecoms services have gone up, particularly data traffic,

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helps them have a wider market. Also, it is very competitive.

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Revenue margins are going down. We expect operators to have money to

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invest, to upgrade networks and provide new services and obviously

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they need profits to do so. From today, the charges for roaming go

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down significantly and also the charges for making a call, sending

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a text. Is it still advisable to switch your running off when you go

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overseas? Many people are still finding data roaming prices quite

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costly. Generally, they either turn their data Connection off when

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abroad or by a SIM card on the spot to benefit from a data plan from a

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local operator. So, until now, people have thought this is still

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too expensive. There will be pressure on the market regardless

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of regulation to bring prices down, so operators will have to do

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something to make data roaming more attractive. Thank you for your time.

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Very interesting. Of course we will keep you up-to-date two new changes.

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There's been a big jump in confidence among Japan's large

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manufacturers as they hope the policies of Shinzo Abe will boost

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their fortunes. We can go go live to our Asia business hub in

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Singapore and speak to Rico Hizon. Tell us more.

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This is the first time that they have turned positive in nearly two

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tears. It is based on this survey called the Tankan. Sentiment rose

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from -8 in the previous quarter. This is the first positive reading

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since September out in 2011 and shows the government's economic

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policy, aimed at ending nearly two decades of inflation and falling

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prices, is boosting the morale of business people. The survey also

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showed that large manufacturers plan to raise their spending by

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nearly 6% compared to a forecast of just 3%.

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The news was not so good out of China, though?

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Absolutely. This is reinforcing fears about slowing growth in the

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world's second biggest economy. The government's official purchasing

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index fell from 50.8. A reading above 50 shows an expanding in

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activity while a reading below indicates contraction. But it was a

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different story for the HSBC index, which revealed a more dire economic

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environment. They shrunk for a second straight month and bottomed

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to the lowest level in nine months. New orders fell, despite price cuts.

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The number is a contraction at 48.2. That is down from a Macy reading of

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49.2. We are therefore seen a weaker Chinese economy. -- May.

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For Mark Carney, the former head of the Bank of Canada and the first

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non Brit to run the Bank of England, moves into its headquarters in the

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city of London this morning. He faces a tough challenge. Britain's

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politicians are hoping he can inject confidence and try new ideas

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to revive the flagging economy. Expectations are high but once the

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hype has died down will he deliver the results and what monetary tools

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will he use? We will discuss this further when we look through this

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mornings papers in five minutes. Crowds in the Croatian capital,

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Zagreb, have been celebrating the country joining the European Union.

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Just a few hours ago, Croatia officially became the EU's 28th

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member. Overnight customs posts were removed along the country's

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border with other EU nations. The loss of hundreds of car-making

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jobs in Australia has been blamed of the effects of a strong domestic

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-- domestic currency. Automotive firm Holden sacked 400 workers in

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April, while Ford Australia says it will close its factories in October

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2016, with the loss of hundreds of jobs. Much of the country's

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manufacturing industry has also struggled to cope with a high

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currency. In the first of a series of reports from around Asia taking

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a look at the recent squeeze on the currency markets, Phil Mercer

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reports from Sydney on how Under pressure from competition

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overseas, Australia's manufacturers have had to innovate to stay viable.

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The sector has been baffled by the strength of the Australian dollar

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in recent years. It has made imports cheaper and has sent the

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price of many exports soaring. A factory in Sydney sees cheap metal

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cut by laser to reduce costs. The finished product has a range of

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uses, from submarines to barbecues. Competition from China and Taiwan

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has forced Lifestyle Barbecues, a family-run firm, to shift its focus

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away from the low-cost end of the market to premium sales. There are

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a lot of products available to supply customers who want barbecues

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at low prices. Because of the high Australian dollar, you can go to a

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store and purchase a barbecue for up to $800. That will be perfectly

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adequate. But we sell the equivalent form for up to $3,000.

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Manufacturers say the muscular Australian dollar, which has spent

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much of the past three years valued above its American cousin, has put

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them at a distinct disadvantage. Michael is an analyst in Sydney and

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he agrees. It has changed the landscape of the Australian

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industrial outlook. Manufacturing as a sector has been hit hard. That

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is where Australia is hardly competitive at the best of times.

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The dollar has put Australia in an uncompetitive position. The weight

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of the strong currency has also caused a slump in the tourism

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industry but there are signs that the pressure is beginning to ease.

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In recent weeks, the Aussie dollar has weakened against the major

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global currencies. That could be enough to lure back more stay-away

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foreign travellers. There are many different pressures on the

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Australian dollar, from the strength of the Chinese and US

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economies to interest rates and the softening of the mining boom.

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Predicting where the currency goes next is a tricky business. One

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