07/12/2016 BBC Business Live


07/12/2016

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This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:00.:00:08.

A $50 billion boost for US businesses.

:00:09.:00:13.

Japan's Softbank promises to invest in America.

:00:14.:00:15.

a move Donald Trump says is a result of his election victory.

:00:16.:00:18.

Live from London, that's our top story on Wednesday, 7th December.

:00:19.:00:39.

It is the billionaire bromance - the boss of Japan's Softbank met

:00:40.:00:42.

with the US President-elect to talk trade, investment and

:00:43.:00:45.

Also in the programme, it's the media merger that

:00:46.:00:53.

could be shape the future of the industry.

:00:54.:00:55.

AT and Time Warner will try and convince US

:00:56.:00:57.

politicians their tie-up is a good idea.

:00:58.:01:01.

It was another record close in America pushes

:01:02.:01:03.

It translated into a better start for Europe.

:01:04.:01:13.

Does slow internet access hinder economic growth?

:01:14.:01:14.

We're more connected than ever before, but as our reliance

:01:15.:01:21.

on the web grows, we'll meet the firm that says its services

:01:22.:01:23.

are 128 times faster than traditional connections.

:01:24.:01:25.

A "processing error" by the UK's statistical authority means

:01:26.:01:28.

the trade deficit is actually ?6 billion higher than they thought.

:01:29.:01:38.

What's your biggest miscalculation you've ever made? Don't hold back.

:01:39.:01:45.

Send your confessions. $50 billion - that's how much

:01:46.:01:51.

the head of Softbank says he will invest in US businesses

:01:52.:02:03.

after meeting with President As if that bumper cash

:02:04.:02:05.

injection wasn't enough, he also announced that the firm

:02:06.:02:12.

would create 50,000 Well, the announcement saw shares

:02:13.:02:15.

in the Japanese technology firm jumping 5% when the market

:02:16.:02:20.

opened earlier today. Softbank isn't adverse

:02:21.:02:22.

to splashing the cash. In July, the firm paid $32 billion

:02:23.:02:30.

to acquire the UK technology firm ARM Holdings which makes microchips

:02:31.:02:33.

for the likes of Apple and Samsung. Here's what Donald Trump had to say

:02:34.:02:36.

after meeting with Masayoshi Son, Softbanks billionaire

:02:37.:02:39.

boss and founder. This is someone from Softbank. He

:02:40.:02:55.

agreed to invest $50 billion in the United States and 50,000 jobs and he

:02:56.:02:59.

is one of the great men of industry. I just want to thank you very much.

:03:00.:03:01.

Thank you. For the details we can speak

:03:02.:03:12.

to our Asia business It pay to be in that golden elevator

:03:13.:03:26.

in Trump Tower? It was very apparent that the rapport that the two

:03:27.:03:30.

billionaires shared, it has been called a billionaire bromance, it

:03:31.:03:33.

was evident in the way that they were speaking to one another, and

:03:34.:03:36.

the body language, the arms around one another, but certainly, there

:03:37.:03:39.

are some very real and practical reasons why Softbank, the boss of

:03:40.:03:45.

Softbank, made this decision to invest in the United States at a

:03:46.:03:48.

time when arguably it could be said the US is pulling out of global

:03:49.:03:53.

trade deals that Japan for instance has been such a big backer of, the

:03:54.:03:57.

Trans-Pacific Partnership, the TPP that we have been speaking about, on

:03:58.:04:01.

the channel, and one of the key reasons Sally is because, of course,

:04:02.:04:05.

for many years now Japan has struggled to retain that top slot,

:04:06.:04:13.

the top slot in terms of IT innovation technology innovation and

:04:14.:04:15.

this particular investment, it is thought, will give Softbank the

:04:16.:04:20.

access to Silicon Valley, to the United States and hopefully, create

:04:21.:04:25.

the synergyies that the boss of Softbank believes he needs to keep

:04:26.:04:30.

going and acquiring in terms of his vision for the company and in terms

:04:31.:04:34.

of the internet of things, the grand future that he has designed for

:04:35.:04:37.

Softbank. It goes to show that Softbank and those in charge, they

:04:38.:04:41.

are pretty canny. They snapped up Arms Holdings of the UK, one of our

:04:42.:04:46.

prized IT companies here and just to mention, that Softbank, we get the

:04:47.:04:49.

impression, it is a financial firm, it is not, it is all about IT, isn't

:04:50.:04:55.

it? Absolutely, all across-the-board, its entire vision

:04:56.:04:59.

is very much focussed on the concept of the internet of things, but it is

:05:00.:05:04.

not just in the internet, or those sorts of devices, chips, as you were

:05:05.:05:09.

mentioning earlier, it is about telecommunications, a few years ago,

:05:10.:05:12.

Softbank made a massive investment in the United States, some $22

:05:13.:05:17.

billion worth to acquire a company called Sprint. That investment has

:05:18.:05:22.

not gone very well. To date it lost something like $7 billion worth of

:05:23.:05:26.

its value. Now, there are some who are speculating that this particular

:05:27.:05:33.

move by the Softbank boss at a time when it seems like president-elect

:05:34.:05:38.

Trump is becoming more amenable to future business deals in the United

:05:39.:05:42.

States, maybe particularly savvy because the Softbank boss has been

:05:43.:05:47.

trying to merge or buy another US telecoms company, but it hasn't gone

:05:48.:05:50.

through because of regulations in the United States. The environment

:05:51.:05:53.

maybe a bit more pleasant for him now.

:05:54.:05:58.

For now, thank you for your detail on that story. Interesting.

:05:59.:06:03.

The media mega-deal that could end up being one of the biggest

:06:04.:06:06.

In October, the US telecoms giant AT announced plans to buy

:06:07.:06:16.

entertainment group Time Warner for $86 billion.

:06:17.:06:17.

The deal would be a merger of AT's distribution networks

:06:18.:06:20.

But it is far from signed and sealed.

:06:21.:06:23.

In a few hours the bosses of both companies will appear before a US

:06:24.:06:26.

Senate committee to try to ease fears that the deal

:06:27.:06:29.

AT is the world's biggest telecoms company, according to Forbes.

:06:30.:06:43.

Last year it posted revenues of $146.8 billion.

:06:44.:06:45.

It's mobile phone business has just over 133 million

:06:46.:06:48.

customers in the US and another 10.7 million in Mexico.

:06:49.:06:53.

And AT has TV channels with 37.7 million subscribers

:06:54.:06:57.

They're hoping the tie up will help them add to that

:06:58.:07:07.

by offering Time Warner's vast content including CNN and HBO

:07:08.:07:09.

which makes international hit programmes like The Sopranos

:07:10.:07:11.

It also owns Hollywood's Warner Bros movie studio.

:07:12.:07:22.

The US president-elect Donald Trump has vowed to block

:07:23.:07:24.

the tie-up saying it puts "too much concentration of power

:07:25.:07:26.

Although it's the US Justice Department which will have the final

:07:27.:07:33.

say on whether it can happen or if conditions will be attached.

:07:34.:07:36.

Samantha Tomaszczyk is a Financial Reporter

:07:37.:07:38.

Good morning. So, you know, it is a huge deal if it does go ahead and

:07:39.:07:51.

yet there will be hurdles along the way. Talk us through how it is

:07:52.:07:55.

likely to go today and beyond with the competition authorities? Sure.

:07:56.:07:58.

So today there is a court hearing, I think it is worth pointing out that

:07:59.:08:02.

today's court hearing is just advisory so it will set the backdrop

:08:03.:08:07.

along with Donald Trump's comments to the general public opinion on

:08:08.:08:11.

this deal, but as you said, it is the Justice Department which will

:08:12.:08:14.

have the final say. Do you think the two companies will have to give up

:08:15.:08:19.

much or get rid of certain assets in order for the two to come together

:08:20.:08:23.

because although they are both big players in their respective markets,

:08:24.:08:26.

they do do different things, don't they? They do, but it is a case of

:08:27.:08:31.

bundling content. I think with any deal of this size, access to

:08:32.:08:34.

programming which rivals tends to be quite a big issue. So I think the

:08:35.:08:39.

Justice Department will really look at whether rivals will continue to

:08:40.:08:42.

have good access to programming. That's been a concern by some. I

:08:43.:08:46.

touched on it in the introduction about Donald Trump threatening to

:08:47.:08:49.

block the deal. I suppose the question is can he and what happens?

:08:50.:08:55.

It doesn't go straight to him, but it does go to one of his

:08:56.:09:01.

departments, the DOJ, doesn't under estimate the power of public

:09:02.:09:06.

opinion. So... He hasn't. That's how he got elected. It worked for him.

:09:07.:09:11.

Briefly, before we wrap up, just explain what it will mean for users,

:09:12.:09:16.

consumers, if the two marry up eventually and it could take a long

:09:17.:09:19.

time because of legal issues, but if they come together, will it be

:09:20.:09:23.

better for consumers or worse? It really could go either way and it is

:09:24.:09:26.

up to the regulator to make sure it goes the right way for scunlers and

:09:27.:09:30.

the access to programming continues to be quite widespread. But if they

:09:31.:09:34.

manage to promote direct TV now which is their video product and if

:09:35.:09:38.

it helps them advance that, then it could be good for consumers and for

:09:39.:09:43.

video content competition. Samantha, thank you for your expertise on

:09:44.:09:47.

this. As ever we will keep you up-to-date with every twist and turn

:09:48.:09:52.

on that trying to go up the aisle as it were. I'm talking about the

:09:53.:09:56.

wedding! All the coverage of the wedding!

:09:57.:09:59.

The drugmaker Pfizer has been fined ?84 million -

:10:00.:10:07.

that's about $106 million - here in the UK for "charging

:10:08.:10:10.

excessive prices" to the publicly run National Health Service

:10:11.:10:12.

The competition regulator says the price went up a massive two

:10:13.:10:24.

thousand six hundred per cent overnight.

:10:25.:10:26.

The drug's distributor, Flynn Pharma was also fined.

:10:27.:10:28.

The US company says the decision is wrong and it will appeal.

:10:29.:10:31.

Australia's economy shrank for the first time in five years

:10:32.:10:33.

The dip of 0.5% is being blamed on spending cuts by businesses,

:10:34.:10:37.

The mining boom and high demand for Australia's commodities have

:10:38.:10:40.

kept the economy recession-free for the past 25 years.

:10:41.:10:55.

Shares in the troubled Italian bank have risen amid reports that the

:10:56.:11:00.

Government is poised to take a controlling stake. It is trying to

:11:01.:11:05.

put a 5.5 billion rescue plan in place to help it deal with its huge

:11:06.:11:11.

volume of bad debt. There as been heightened uncertainty since Italy's

:11:12.:11:15.

Prime Minister decided to offer his resignation after losing a

:11:16.:11:25.

referendum at the weekend. The FTSE seeing its biggest rise

:11:26.:11:28.

since the referendum vote in the UK. That was back on 23rd June. So

:11:29.:11:32.

markets doing well. After another record

:11:33.:11:36.

close on Wall Street - It is a similar picture in Europe.

:11:37.:11:55.

The markets are strong in early trade. Traders are looking ahead to

:11:56.:11:58.

the European Central Bank meeting. That's taking place on Thursday.

:11:59.:12:02.

That's expected to bring us some news maybe that it will extend its

:12:03.:12:06.

stimulus programme beyond the March end date. That's always been in the

:12:07.:12:10.

diary, but perhaps it could go longer given the uncertainty and

:12:11.:12:15.

Italy's market doing well yesterday, posting its best levels since the UK

:12:16.:12:19.

referendum vote. Even, of course, as so much remains in doubt about its

:12:20.:12:25.

political future and its banks were the biggest winners.

:12:26.:12:30.

Last month's decision by India's government to withdraw around 80%

:12:31.:12:32.

of the country's banknotes sent shockwaves through the country.

:12:33.:12:35.

And its impact is likely to affect the central bank's

:12:36.:12:37.

interest rate decision - it's due to announce it shortly.

:12:38.:12:39.

There is no doubt that the shortage of cash here in India will have an

:12:40.:12:55.

impact on the economy and that's why, the bank of India's decision on

:12:56.:12:59.

interest rates is being watched closely. Most economists expect

:13:00.:13:04.

there will be at least a quarter of a percentage cut in the main lending

:13:05.:13:07.

rate. People have cut back on spending over the last one month and

:13:08.:13:12.

this has hit businesses across-the-board. One of the sectors

:13:13.:13:16.

feeling the effects of the ban on high currency value notes is the

:13:17.:13:21.

auto industry. Some car makers are reporting a decline in sales. But

:13:22.:13:25.

for the people, a rate cut could bring in some good news. Interest

:13:26.:13:30.

rates for cars and home loans hover around 9% in India. Making it

:13:31.:13:35.

expensive for people to borrow. Companies hope that lower interest

:13:36.:13:38.

rates could help boost consumer demand. There has been widespread

:13:39.:13:43.

criticism that the implementation of the ban on all currency notes was

:13:44.:13:49.

mishandled. Much of it is directed at the governor of the bank of

:13:50.:13:54.

India. He will be holding his first press conference since the policy

:13:55.:13:59.

was introduced a month ago and he could face tough questions on his

:14:00.:14:02.

organisation and the execution of some decisions. But most of all,

:14:03.:14:07.

people will be looking for an answer on how much longer they'll have to

:14:08.:14:13.

wait for this cash crunch to be over.

:14:14.:14:20.

Joining us is Richard Dunbar who is Investment Director

:14:21.:14:23.

So there is a lot going on, we've got Australian growth story going in

:14:24.:14:36.

reverse. We've got the Indian rates and Italy and Softbank and Trump

:14:37.:14:41.

tweets causing reaction on markets. Talk us through what's on your mind.

:14:42.:14:48.

What are you keeping an eye on most? The markets are looking at Donald

:14:49.:14:50.

Trump's positive policy, infrastructure spend and tax cuts,

:14:51.:14:54.

deregulation and that's good. And that talks to the mood music that

:14:55.:14:59.

we're seeing in Europe and Japan and elsewhere and despite rising

:15:00.:15:02.

interest rates, markets are tend to go say on balance that's positive,

:15:03.:15:08.

but there is plenty to think about. Interest rates are going up around

:15:09.:15:10.

the world. They are likely to go up in the US. That is generally

:15:11.:15:14.

unhelpful, but money is cheap and markets are focussing on that at the

:15:15.:15:16.

moment. Markets have got uncertainty by the

:15:17.:15:24.

bucket load and they are shaking it off. We had some uncertainty from

:15:25.:15:29.

Italy over the weekend, but you could argue it is Italy's 63rd

:15:30.:15:33.

Government since the war, so maybe it is business as usual. With Italy,

:15:34.:15:41.

the view about the banks is that one element that could derail the

:15:42.:15:44.

optimism, some kind of bailout on the way? Investors might be thinking

:15:45.:15:51.

there is going to be a resolution to this problem, and we are starting to

:15:52.:15:55.

see it. Richard will return in five minutes

:15:56.:15:57.

with more detail on financial markets.

:15:58.:15:59.

Does slow internet access hinder economic growth?

:16:00.:16:02.

As our reliance on the web grows, we'll meet the firm that

:16:03.:16:05.

says its services are 128 times faster than traditional connections.

:16:06.:16:09.

You're with Business Live from BBC News.

:16:10.:16:20.

That hurts your eyes if you stare at it too long!

:16:21.:16:22.

I try not to stare at it! The Competition and Markets

:16:23.:16:25.

Authority has fined drugs giants Pfizer and Flynn almost ?90 million

:16:26.:16:27.

for raising the price of an anti-epilepsy drug

:16:28.:16:29.

it sells to the NHS. Pfizer was fined a record

:16:30.:16:32.

?84.2 million for their part Flynn was hit with

:16:33.:16:34.

a ?5.2 million fine. Theo Leggett is in our

:16:35.:16:47.

Business Newsroom. Some big fines, especially for

:16:48.:17:00.

Pfizer. A very big fine, although Pfizer is also a big company, and

:17:01.:17:07.

more than able to absorb it. Pfizer was selling an anti-epilepsy drug, a

:17:08.:17:14.

branded drug, and the prices in the UK are regulated according to the

:17:15.:17:16.

pharmaceutical price regulation scheme. What Pfizer did was license

:17:17.:17:24.

it to Flynn, which the branded it, removed the name, and sold it as a

:17:25.:17:30.

generic products. Normally generic products are cheaper, but in this

:17:31.:17:34.

case clinical advice was that patients already using it should

:17:35.:17:38.

continue using the same product, made by the same and a Thatcherite,

:17:39.:17:41.

not even the same one made by somebody else. So Flynn could own

:17:42.:17:49.

brand it, push the price up, and the cost to the NHS of a pack rows of

:17:50.:18:00.

from ?2 83 to ?67 50 overnight. With Flynn taking in the extra income,

:18:01.:18:04.

Pfizer could raise its prices, said they were both able to make money.

:18:05.:18:08.

The authority reckons that this was abuse of a dominant position, and it

:18:09.:18:13.

was wrong, hence the fine, but Pfizer says that before on branding

:18:14.:18:19.

the drug was being produced at a loss, and the deal with Flynn

:18:20.:18:22.

protected the supply for patients of. He said the findings are wrong

:18:23.:18:31.

and they plan to appeal. The interesting latest move, with

:18:32.:18:36.

Pfizer. More on the website. This is the

:18:37.:18:41.

story we have been following about the future for Port Talbot steel

:18:42.:18:45.

working. The ball is in the Court of the unions, is the view there. Full

:18:46.:18:53.

details on the future for steel-making in South Wales.

:18:54.:18:54.

Shares in the Japanese technology firm Softbank have jumped 5%

:18:55.:19:01.

after the company said it would invest $50 billion

:19:02.:19:03.

The announcement came after a meeting in New York

:19:04.:19:07.

between chief executive Masayoshi Son and US

:19:08.:19:10.

Donald Trump is claiming it is a personal victory, he says the

:19:11.:19:23.

investment is only happening because he won the election. One that we

:19:24.:19:28.

will follow very closely. London grabbing the headlines in the

:19:29.:19:35.

markets. The rally is going on and on.

:19:36.:19:41.

Few inventions have changed the world as

:19:42.:19:43.

As consumers, we've never been more connected,

:19:44.:19:46.

and for business it's transformed how and where they operate.

:19:47.:19:50.

But it's the speed of our broadband that in some cases can

:19:51.:19:52.

There are huge differences in the quality of internet services

:19:53.:19:56.

In some countries, old pipes and wires mean firms are battling

:19:57.:20:00.

And so regulators are trying to improve competition,

:20:01.:20:06.

like here in the UK, where the majority of broadband

:20:07.:20:09.

And so that's where new market players,

:20:10.:20:18.

Hyperoptic operates independently from the main telephone exchanges

:20:19.:20:25.

to provide internet directly to people's homes, and that allows

:20:26.:20:28.

the firm to provide speeds over ten times faster than many rivals.

:20:29.:20:34.

Dana Tobak is the founder and chief executive of Hyperoptic.

:20:35.:20:42.

This is so relevant, with UK Government announcing in the Autumn

:20:43.:20:48.

Statement a huge investment in technology. We are so excited that

:20:49.:20:55.

we are seeing movement away from being dependent on the Monopoly and

:20:56.:21:01.

the price competition only, and actually focus on investment and

:21:02.:21:04.

getting to a full fibre solution, which is what the country needs. You

:21:05.:21:09.

have been operating here for many years, I would imagine it has been

:21:10.:21:13.

frustrating, because we have an old infrastructure that has been here

:21:14.:21:18.

for generations, and it has been an incremental slow move to update

:21:19.:21:23.

things. We have seen the incumbents tend to move when small players

:21:24.:21:28.

start to do something different. When we founded in 2005, we were the

:21:29.:21:34.

first to bring up to 24 meg services, and at the time the

:21:35.:21:37.

environment were asking why anybody would need that. It is lovely that

:21:38.:21:42.

here we are with hyper optic ten years later, and when we announced a

:21:43.:21:47.

one gig, it was not so much about why we would need it, but what would

:21:48.:21:52.

we do with it, and that is exciting. What needs to change? Many people

:21:53.:21:57.

will be frustrated that they travel around the country, certain parts of

:21:58.:22:04.

the country are poor with signals, and yet if you go to Hong Kong, they

:22:05.:22:08.

have brilliant services, even underground. Is it just the legacy

:22:09.:22:15.

issue? It is an education. For many years, the regulator focused on

:22:16.:22:24.

price competition, from 2005 until 2011, 2012, it was about providing

:22:25.:22:26.

an infrastructure where there was competition. That is when you saw

:22:27.:22:34.

the low prices. At that time, it was considered a victory. When there is

:22:35.:22:39.

under investment and a perception that price is more important than

:22:40.:22:42.

speed, you will get the wrong long-term results. The good news for

:22:43.:22:47.

us was that it presented an opportunity, we knew better, and we

:22:48.:22:50.

knew that we could create the foundation for tomorrow and still

:22:51.:22:54.

ask people to pay around the same price as the date, but for

:22:55.:23:02.

fundamentally better broadband. It is a fascinating subject. We will

:23:03.:23:04.

keep an eye on it. In a moment we'll take a look

:23:05.:23:09.

through the business pages. But first, here's a quick reminder

:23:10.:23:12.

of how to get in touch with us. Our page is where you can stay ahead

:23:13.:23:19.

with the breaking news. We keep you up-to-date with the latest details,

:23:20.:23:24.

with insight and analysis from our team of editors around the world. We

:23:25.:23:28.

want to hear from you as well. Get involved on the web page. We are on

:23:29.:23:42.

Twitter and on Facebook. On TV and online, whenever you need to know.

:23:43.:23:44.

What other business stories has the media been

:23:45.:23:46.

Richard Dunbar, who is investment director

:23:47.:23:49.

at Aberdeen Asset Management, joins us again.

:23:50.:23:51.

A statistical error at high levels is what is going on? The ONS have

:23:52.:24:01.

miscounted the gold exports and imports in the trade deficit

:24:02.:24:05.

figures, and they are 6 billion worth of we had expected. It is a

:24:06.:24:09.

large error, but importantly, because everybody is looking at it,

:24:10.:24:13.

we hope the figure improves, given weaker sterling and the fact it has

:24:14.:24:19.

gone the wrong way is unhelpful. Somebody is in trouble at the ONS.

:24:20.:24:24.

At least they have owned up and it has been fixed, so we know the

:24:25.:24:29.

number. Maybe there has been more gold imports than we thought. View

:24:30.:24:34.

was getting in touch, talking about their biggest miscalculation. One

:24:35.:24:40.

person says, trusting a bank to fund my business of. One person says,

:24:41.:24:45.

blame it on the latest software update, we always do.

:24:46.:24:49.

Richard, what is your biggest miscalculation? I have made some on

:24:50.:24:56.

airline bookings, one not booking for flights for the family to go on

:24:57.:25:01.

holiday, and finding out the night before, you do not get a good deal

:25:02.:25:07.

with six hours notice! Looking at other stories, what else? The Donald

:25:08.:25:12.

Trump tweets are interesting. They are moving markets. Boeing was down

:25:13.:25:18.

yesterday on the back of him saying he would not rebook the new Boeing.

:25:19.:25:25.

For a full swan. Softbank was up, given the enthusiasm with which the

:25:26.:25:29.

Chief Executive Rosneft. Or all traders now following him? I suspect

:25:30.:25:36.

all traders are and all diplomats have now signed up to his Twitter

:25:37.:25:40.

account as well, given that that is the route through which we find out

:25:41.:25:44.

diplomacy as well as business. It is a brave new world.

:25:45.:25:46.

There will be more business news throughout the day on the BBC Live

:25:47.:25:50.

webpage and on World Business Report.

:25:51.:25:53.

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