31/03/2017 Asia Business Report

The State bank of India is swallowing up five smaller rivals.

Will the new mega- bank be able to compete globally? And it is the

final countdown, Singapore turns of its two G wireless network this

weekend, rendering old phones useless. -- 2G.

It's a Friday, everyone, good morning, Asia, hello, world, thanks

for watching the Asia Business Report, I'm Rico Hizon. Does bigger

mean better when it comes to financial institutions? This weekend

five Indian banks will begin the process of merging with the State

bank of India. It's already the country's largest bank but after the

merger it will be one of the largest in the world. The government hopes

the move will clean up the system and get banks performing again. We

take a look. HSBC, Bank of China, BNP Paribas, JP

Morgan Chase they are some of the largest banks in the world and now

an Indian bank will be joining their ranks. The State bank of India,

India's largest public sector bank, is merging with five subsidiaries.

It will create a mammoth bank with 24,000 branches and 500 million

customers. Now, banks are often measured by the

value of their assets. This merged bank will have assets worth $550

billion. To put that into perspective, the new merger will be

five times bigger than India's next largest bank, and the problem in

India is there's lots of small banks. Far too small to break even

let alone become profitable. And for too long many have been weighed down

by non-performing assets and bad loans, and this has hampered the

banks' ability to loan to businesses, impacting the economy.

By coming together these five smaller banks will be able to serve

customers of a growing economy better, giving credit more easily

while cutting costs and losses. Consolidation looks like a good

option to clean up India's banking system. Samira Hashmi on the merger

in India's banking industry. Australia's competition regulator

will stop a group of the country's largest banks or bargaining for

access to Apple's contactless payment function. It stops them

introducing their own services, which could be used instead of the

Apple wallet. That would have enabled banks to circumvent

transaction fees and get customers to engage more frequently with their

own applications. It's a move that could potentially set a global

president. US President Donald Trump has given an indication of the tone

he will take during his meeting with the Chinese president Xi Jingping

next week. In a tweet he said the meeting would

be a very difficult one because the US can no longer have massive trade

deficits and job losses. He said American companies need to be

prepared to look elsewhere. From defence aerospace,

transportation to security, French multinational Thales designs and

builds electroconvulsive systems. The company has six 4000 use and

operates in 64 countries -- 64,000. It is a huge defence contractor and

Asia is a growing market for it. We look at the company with Thales's

chief executive. This part of the world is very

dynamic. It is trend is around 5%, depending on the

country, but broadly for the region. 5% in terms of growth is important

in our business. You said defence spending in Asia has always been

growing but do you think recent territorial disputes, like in the

South China Sea, and threats from North Korea, is that helping boost

defence spending even further? Generally I don't comment on

political aspects, I just look at the defence element of our

customers, but the geopolitical environment is not crucial to our

decisions. In your Ning is you are also seeing recovery in Europe as

well -- in your numbers. That is new. As you said, Europe didn't

consider in the past, in the recent past, that defence of security was a

priority so many of the European countries decided to have a kind of

flat or even decreasing defence budget. Things have changed since

2015, two years ago, Robert Lee because of the geopolitical

environment, Crimea, Ukraine, but also what happened in Europe with

the terrorist attacks -- probably. Overall if you take the 28 EU state

members, 19 out of these 28 have decided to increase their defence

budget. It is kind of a long-term trend in Europe. You said growth in

Asia was about 5%, what are we talking about in Europe? Probably

between 2-3%, that's our best guess, a bit little bit less than Asia but

it's already much better than in the past.

That's two minutes with the Thales chief executive. In other business

news, Toshiba has informed the Japanese defence ministry it will

keep semiconductor operations ifttt and after it sells off its memory

chip business. Shareholders agreed to sell off the flash memory unit to

cover losses from Westinghouse, which filed for bankruptcy

protection on Wednesday. The company behind the biggest blunder in Oscar

history, PwC, will be the accountancy service for the awards

again next year. A backstage envelope mixup led to the wrong Best

Picture winner being announced. Starting 2018, PwC will replace the

counted in the control room to stop mistakes. Our counters will have to

hand over their phones before going backstage. Remember when phones were

just bricks and they were only used just bricks and they were only used

for making calls and sending texts? In Singapore those phones are about

to be rendered useless. Singapore will switch off it's 2G signal on

the first of April and service providers say the move will be

better services for people with newer phones, but they admit a few

people may be caught out. Timothy McDonald has more.

These chunky old devices are 2G phones, and they are a far cry from

today's smart phones, they are really just made to perhaps send a

text or make a voice call. Here in Singapore they are about to switch

off the macro 16 will. For more we are speaking to Patrick from M1. Why

are Singapore's telcos switching off the 2G signal? -- off the 2G signal.

Today's customers are all Internet savvy and they utilise data, 4G is

specifically designed for the efficient carriage of data and hence

the time has come for us to retire the 2G network gracefully and reuse

the bandwidth and spectrum for 2G for 4G. If you are a 4G customer

sitting in a house, maybe on Facebook or playing a game, are you

likely to see an improvement in service? Because it is a low band

frequency, the penetration indoors is better. So, yes, some of the

customers, especially if you're deep inside a building, you will have a

better customer experience. What kind of preparation have you made to

switch over people such as perhaps migrant workers or older people on

2G prepaid plans or corporate customers who have legacy devices

like 2G credit card machines? We started the outreach programme

intensively to an Ahok years ago specifically reaching out to

corporate customers that have legacy devices -- two and a half years ago.

We looked at migrant workers, every weekend we had roadshows in their

language in their dormitories to educate them, advise them on what

was coming up and get them to convert. All three telcos have a

number of low-cost close to zero smart phones available, so when they

convert them, or go across to 3G or 4G, cost wise it is the same plan,

same cost, so it is as easy as possible to do it. That's part of

the outreach across-the-board we have done for the last two and a

half years. When you hit the switch finally, any stragglers? Yes, there

will be stragglers, customer service, sales and marketing,

corporate sales, everyone will be geared up as we approach the first

of April. Thanks, Patrick. In a few days if you have an old macro fine

like this one then it might not be very good for anything but plain

Snake vas an old 2G phone. I have an old 2G phone but I'm sure

I can use it in other countries! -- but playing Snake -- an old 2G

phone. The all Ordinaries is down by a 10th of a percent. Tokyo stocks

opening higher as exporters and banks rise on a weaker yen and those

solid economic growth numbers from the US. As for US equities, they

rallied on the growth upgrade and oil prices rising above $50 per

barrel. Bank is much for investing your time with us. I'm Hizon. Sport

Today is up next to -- thank you