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Global Airlines Financial Monitor: May 2O16

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Aeroplane

Key Points:

· Global airline share prices fell by 3.0% in May, and have now fallen by nearly 11% since the start of the year;
· However, the latest financial results continue to indicate a robust Q1 2016 for industry profitability;
· Brent crude oil prices broke through the $50/bbl mark at the end of May, although the market still expects prices to remain at reasonably low levels for the foreseeable future (below $55/bbl until mid-2018);
· Airfares have fallen by around 5% year-on-year in constant exchange rate terms in 2016 so far. But with oil prices up more than 80% since January, the stimulus to demand from lower airfares is likely to fade in H2 2016;
· Premium airfares continue to offer an important buffer for overall airline financial performance, and have held up better than their economy counterparts on many of the key premium routes so far this year;
· Disruption from the Brussels terrorist attacks weighed on annual growth in air passenger traffic in April, although the global market has made a robust start to 2016 this year to date;
· Annual growth in freight volumes jumped to 3.2% in April, as the one-off boost to air freight from disruption at US west coast seaports in Q1 2015 dropped out of the annual comparison.
· However, rising capacity and low freight loads are keeping intense pressure on cargo yields and revenues.

FOR THE RECORD

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The Speech of the President of the Association of Telecommunication Companies of Nigeria (ATCON), Mr. Olusola Teniola, on the occasion of ATCON NEC’s visit to the Lagos State Infrastructure Maintenance and Regulatory Authority (LASIMIRA) on Thursday, June 9, 2016.

I would like to thank the General Manager/ Chief Executive Officer of Lagos State Infrastructure Maintenance and Regulatory Agency for creating the opportunity for the National Executive Council of the Association of Telecommunication Companies of Nigeria to meet with the management of LASIMRA.

ATCON Objectives
The core objective of ATCON is to help create the right enabling environment for member companies to do their business in Nigeria.
We do this through various means including:

1. Policy advocacy – This entails engagement with Government organs like the National Assembly, Ministry of Communications and (MDA(s) such as LASIMRA; particularly during policy formulation and during legislative processes. We are proud to have contributed substantially to the development of most policies and laws that guide the operation of Telecommunication Services rendered in Nigeria today.

2. Human capital development – ATCON believes that the strength of an industry lies in the capacity of the workforce within that industry. We have constantly embarked on several Training programs that have substantially raised the competence of professionals within the industry.

3. Other Capacity development programs – ATCON is known to organise regular conferences, seminars and workshops. Our flagship event is the Telecoms Executives and Regulator Forum where top management of our member companies and top management of the regulator (including the EVC of the NCC) meet and deliberate on contemporary issues affecting the industry.

4. Telecoms Industry Advisory Council – A telecoms Industry Advisory Council was inaugurated on October 28, 2015 with membership including all past ministers of communications, and eminent contributors to the industry over the decades

Concerns and Recommendations

We would like to express our delight over the positive development in our industry, which has been identified as the fastest growing sector of the Nigerian economy and which presently contributes more than 8% to the nation’s GDP.
This success is not without the slash in telecoms levies by over 40 percent and charges on right of ways 90 percent which your organisation, LASIMRA supported and we are pleased to report some sort of relief to our members that are operating in Lagos State.
We also want to appreciate the professional way in which LASIMRA has been regulating the industry. We thank the LASIMRA for being steadfast and being professional. We particularly thank the new management of LASIMRA for sustaining the tradition of excellence in the organisation.
Inspite of these positive developments, our association has some concerns, some of which are listed below:

1. Unstable Foreign Exchange Rates- The free fall of Naira against Dollar has constituted a serious source of worry to our sector and as a matter of fact our member companies have tried to make sure that Lagosians and Nigerians as a whole have access to qualitative communications service but the continuous depreciation of the Naira is not encouraging from a CAPEX roll out perspective

2. Revenue Derived from Voice is seriously being challenged – To worsen the situation we are as an industry, the telecommunication companies are barely making any money from voice (due to ARPU rates dropping considerably) and the direct implication of this is that the revenue that is generated from data is now being challenged by the cost of operating the business which is increasing on a daily basis and may lead to laying off (of further) staff

3. Unified Duct System proposal – nervousness about the implications of the introduction of this system in place of RoW and work already achieved in setting a NGN500 / linear meter rate with Lagos State Government. Our members would like to be fully engaged in the process to avoid prohibitive charges creeping back in!
Generally, our request is for a further slash in telecoms levies by over 60 percent and charges on rights of ways by 95 percent. This would enable our members to build more base stations and accelerate the roll out of much needed fibre (ICT passive infrastructure) for the good of all Lagosians and by extension, Nigerians.

Thank you for your kind attention.
Mr. Olusola Teniola
National President, ATCON

Internet of Things to Overtake Mobile Phones by 2018

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The Internet of Things (IoT) is set to overtake mobile phones as the largest category of connected device by 2018.

Between 2015 and 2021, the number of IoT connected devices is expected to grow 23 percent annually, of which cellular IoT is forecast to have the highest growth rate. Of the 28 billion total devices that will be connected by 2021, close to 16 billion will be IoT devices.

Western Europe will lead the way in adding IoT connections – the number of IoT devices in this market is projected to grow 400 percent by 2021. This will principally be driven by regulatory requirements, for example for intelligent utility meters, and a growing demand for connected cars including the EU e-call directive to be implemented in 2018.

Rima Qureshi, Senior Vice President & Chief Strategy Officer, Ericsson, says: “IoT is now accelerating as device costs fall and innovative applications emerge. From 2020, commercial deployment of 5G networks will provide additional capabilities that are critical for IoT, such as network slicing and the capacity to connect exponentially more devices than is possible today.”

Smartphone subscriptions continue to increase and are forecast to surpass those for basic phones in Q3 this year. By 2021, smartphone subscriptions will almost double from 3.4 billion to 6.3 billion.

Also revealed in the report, there are now 5 billion mobile subscribers – unique users – in the world today, which is testament to the phenomenal growth of mobile technology in a relatively short period of time.

Detailed in the report is a dramatic shift in teen viewing habits: use of cellular data for smartphone video grew 127 percent in just 15 months (2014-15).

Over a period of four years (2011-15) there has been a 50 percent drop in the time teens spend watching TV/video on a TV screen, and in contrast an 85 percent increase in those viewing TV/video on a smartphone. This, and the fact that the upcoming generation of mobile users are the heaviest consumers of data for smartphone video streaming (Wi-Fi and cellular combined), makes them the most important group for cellular operators to monitor.

In 2016, a long anticipated milestone is being passed with commercial LTE networks supporting downlink peak data speeds of 1 Gbps. Devices that support 1 Gbps are expected in the second half of 2016, initially in markets such as Japan, US, South Korea and China, but rapidly spreading to other regions.

Mobile users will enjoy extremely fast time to content thanks to this enhanced technology, which will enable up to two thirds faster download speeds compared with the fastest technology available today.

Further highlights from the Ericsson Mobility Report include:

A global growth story: mobile broadband subscriptions will grow fourfold in the Middle East and Africa between 2015 and 2021; mobile data traffic in India will grow fifteen times by 2021; and despite being the most mature market, mobile traffic in North America will grow 50 percent in 2016 alone.

Data traffic continues unabated growth: global mobile data traffic grew 60 percent between Q1 2015 and Q1 2016, due to rising numbers of smartphone subscriptions and increasing data consumption per subscriber. By the end of 2021, around 90 percent of mobile data traffic will be from smartphones.

LTE subscriptions grew at a high rate during Q1 2016: there were 150 million new subscriptions during the quarter – driven by demand for improved user experience and faster networks – reaching a total of 1.2 billion worldwide. LTE peak data speeds of 1 Gbps are anticipated to be commercially available in 2016.

Additional spectrum harmonisation needed between countries planning early 5G deployment: 5G is expected to start more quickly than anticipated, and spectrum harmonization is needed between countries planning early roll-outs. This is in addition to the current process for WRC-19, which focuses on spectrum for commercial 5G deployments beyond 2020.

UBA Reaps $150m Line of Credit from ADB

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The Board of Directors of the African Development Bank Group (AfDB) through its private sector window has approved a $150-million line of credit (LOC) to United Bank for Africa Plc (“UBA”) in Nigeria.

UBA, one of the largest commercial banks in Nigeria, was incorporated in 1961 and operates in a total of 19 African countries whilst providing a wide range of products and services.

UBA Nigeria has been the leading financial institution to support various infrastructure projects, particularly power, telecom, transport and also social infrastructure such as hospital and education facilities, and received the African Investor (Ai) Social Infrastructure Deal of the Year Award in 2015.

UBA Nigeria operates in all of the country’s 36 states through more than 450 branches supporting 3,700 SMEs.

In 2009, the AfDB provided emergency liquidity facilities to address the surging liquidity constraints, which helped trade finance and other lending activities of UBA contributing to key economic sectors, particularly during the financial crisis.

The LOC will help finance infrastructure and SME projects, including women-owned enterprises in Nigeria. It will support infrastructure development, particularly the power sector, which is a major constraint for Nigeria’s economic diversification and also inclusive growth. The power sector financing gap in Nigeria remains enormous and almost 50% of its population does not have access to electricity.

By leveraging UBA’s branch network, the LOC will also scale up lending to SMEs and women enterprises in both urban and rural areas to create more jobs and to promote inclusive growth for Nigeria’s economy by stimulating the various sectors such as manufacturing, construction, agriculture, education and services.

Facebook CyberXchange Hackathon Berths in Nigeria

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facebook

First ever CyberXchange Hackathon sponsored by Facebook to touch Nigerian soil. Come not just by yourself but your team to compete against other university and young professionals with less than 2 years experience throughout Nigeria. You will have the opportunity to build a hack against a cyber security issue.

So what’s in it for you besides being part of the CyberXchange 2016, the largest cyber security conference to set foot in Nigeria? prizes, worldwide exposure of your company and university team, and so much more.

The pre-qualifier registration closes August 30th. Notifications to those who are accepted will be sent out by end of day on September 24th. The final competition will hold on November 2nd-3rd 2016 at the Landmark event Center Lagos.

Qualifiers will be required to start brainstorming ideas & form a team of up to 4 people.

Refreshments, fun diversions, prizes, and some expert guidance from Facebook’s team of experts will be provided. All participants need bring is a laptop, appetite, skills and ideas.

Judges include; Regina Wallace-Jones Head of Security Operations Facebook, popular celebrity, Eldee amongst others.

According to Facebook; sponsors of the competition “We hope to discover new talents, methods and ideas; and to encourage development in the field of information security. It is our hope that besides discovering gifted hackers and cyber-defenders, the CyberXchange 2016 Hack-a-thon will inspire the development of West Africa’s Information security professionals of the future.”

Hack-a-thon is a competition geared towards finding the best prototypes by starting from scratch to build a workable idea with the help of collaborating colleagues on their teams.

This event tests the skills of the brightest and best within programming, cyber security, information assurance, security engineer, and other IT fields within teams of 4 to 6 people.

Sub-Saharan Africa Growth Declines 2.5% in 2016

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The World Bank Group says growth in Sub-Saharan Africa is forecast to slow again in 2016, to 2.5%, down from an estimated 3.0% in 2015, as commodity prices are expected to remain low, global activity is anticipated to be weak, and financial conditions are tightening.

Oil exporters are not likely to experience any significant pickup in consumption growth, while lower inflation in oil importers should support consumer spending.

However, food price inflation due to drought, high unemployment, and the effect of currency depreciation could offset some of this advantage. Investment growth is expected to slow in many countries as governments and investors cut or delay capital expenditures in a context of fiscal consolidation.

Meanwhile, the World Bank is downgrading its 2016 global growth forecast to 2.4% from the 2.9% pace projected in January. The move is due to sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows.

According to the latest update of its Global Economic Prospects report, commodity-exporting emerging market and developing economies have struggled to adapt to lower prices for oil and other key commodities, and this accounts for 40% of the downward revision. Growth in these economies is projected to advance at a meager 0.4% pace this year, a downward revision of 1.2 percentage points from the January outlook.

“This sluggish growth underscores why it’s critically important for countries to pursue policies that will boost economic growth and improve the lives of those living in extreme poverty,” said World Bank Group President, Jim Yong Kim.

“Economic growth remains the most important driver of poverty reduction, and that’s why we’re very concerned that growth is slowing sharply in commodity-exporting developing countries due to depressed commodity prices.”

Ethiopian Airline Plans 15 Boeing 777-8s for Fleet

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Ethiopian Airlines plans to buy between 10 and 15 Boeing 777-8s to increase the size of long-range fleet, announced the CEO of the firm, Tewolde Gebremariam, on June 2.

A Boeing 777 is considered as standard in terms of long-range large carriers. Launched in 1995, the 777 series includes six versions of which a cargo plane.

Ethiopian Airlines which currently serve close to hundred destinations worldwide plans to bring its fleet, which presently comprises 77 planes, to 140 planes by 2025, when the firm projects a turnover of more than $10 billion.

According to the International Air Transport Association, Ethiopian Airlines is presently top African firm in terms of profits and turnover.

The company which is based at the Bole International airport recorded a record net profit of $165.4 million during its 2014-2015 fiscal year, up 12% from the previous year.

Standard Chartered Bank Result Slumps 85% in 2015

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In Botswana, the net result of Standard Chartered Bank’s subsidiary slumped by 85.26% in 2015 to 47.3 million Pula ($4.34 million), from 311 million Pula ($28.5 million) in 2014, financial results published at the end of last week shows.

The firm’s management said the poor performance is due to fall in commodity price which affected mining companies, that contributes significantly to Botswana’s economy.

In detail, operating income was impaired by huge interest rates (385.6 million Pula in 2015 against 246.26 million Pula in 2014), leading to net interest revenues slumping by 21% to 471.3 million Pula.

Meanwhile, earnings for commissions and charges dropped by 7% to 252 million Pula and other earnings reached 156.6 million Pula, against 207.18 million Pula in 2014.

In this context, the bank’s net banking product over the considered period was 880 million Pula ($80.6 million) against 1.073 billion ($98.4 million) in 2014. In addition to the low-performance, Stanchart Botswana had to pay greater operating fees, as administrative costs increased to 425.7 million Pula during the reference period.

Operating in Botswana for close to 120 years, the group is quite optimistic about the ongoing year, 2016.

Most of its heads estimate that most governmental projects which should restart growth of the country’s GDP, will require financial support and thus give banks the opportunity to increase their revenue.

ATCON: Broadband Penetration Low in Nigeria

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Mr. Olusola Teniola, President, Association of Telecommunications Companies of Nigeria [ATCON] has lamented the current low penetration of Broadband in Nigeria, saying that Broadband today is only accessible to few Nigerians.

“Broadband is at infancy level in Nigeria. It is only accessible to low strata of Nigerians. Affordability is a big issue with Broadband. At the moment, market conditions are responsible for the price gap on Broadband as the government is not in the business of building Broadband. The government only creates the enabling environment”

Teniola listed the three key challenges of Broadband development in the country as accessibility, affordability and availability. He added that the 30 per cent penetration target contained in the National Broadband Development document was mainly for the starting process.

“Now-what of return on investment?. We need content to drive Broadband. The immediate challenge is to get the necessary data to fill the pipes and also overcome the problem of bandwidth price.”

NMMA Invites Entries for 2016 Media Awards

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The Nigeria Media Merit Award [NMMA] has officially invited entries from media professionals in Nigeria for the 2016 media awards. The award is for works done in 2015.

According to the NMMA, all entries from print, radio and TV professionals practicing journalism in Nigeria must reach its secretariat latest on June 30, 2016.

The NMMA was established in 1990 for the promotion, recognition and celebration of professionalism in media practice in Nigeria.

To fulfil its noble objectives, the NMMA relies on the goodwill of the Fourth Estate of the Realm, respectable individuals and corporate organisations as stakeholders that appreciate the laudable role of media in national development.

Union Bank Unveils New Branch in Lagos

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As part of efforts to deliver simpler and smarter banking to its teeming customers, Union Bank of Nigeria Plc has unveiled a new branch with modern technology. The branch is situated at Muri Okunola Street, Victoria Island, Lagos.

The branch is one of Union Bank’s locations that will offer premium service to Elite Banking Customers. This service is unique to the branch and while customers can access all the bank’s products and services, they can also experience premium service via the Elite Banking lounge.

The architectural design and aesthetics is the evidence of the transformation the bank commenced three years ago. The bank will roll out more Elite Banking Lounges in major cities like Abuja, Lagos, Port Harcourt, and others in the coming days.

Speaking at the event, the Chief Executive Officer, Union Bank, Mr. Emeka Emuwa, while delivering an address, said the new branch is a reflection of the bank’s journey towards satisfying its customers.

“Many of you may know that next year, Union Bank will be a 100 years old. So what we are doing today is a reflection of the journey to modernise the bank and get ready for the future.”

“It’s important that as the environment evolves and as the market evolves, we should remember to re-fashion our heritage and our values. Union Bank has been automated which is part of what we have worked through over the last few years.

“This location is one of the first that reflects our refreshed identity. You would see that the Stallion is different from what it used to be. Again, it’s a reflection of the bank and I know we’re coming from somewhere and we’re going somewhere. You have seen in the media in the last few months how we have worked on our brand identity and we know that you will continue to be with us on the journey we’ve embarked on. “In addition to refreshing and remodeling our network, what we have done is introduce simpler and smarter products. We have also unveiled our online and mobile banking platforms” Emuwa explained.

Commending the management for their effort in repositioning the financial institution, some of the customers testified to the improved customer service and efficiency of the bank. The Chief Executive Officer, Wiseduo Investment Limited, Alhaji Idris Suleiman said: “This is a new Union Bank. I must commend the management for all the efforts they have put in transforming this bank. I have also told the management here that you have a nice edifice. Because if you fail to develop good branches, the people in head office will bear the brunt and they have to pass it back to you. I wish you all the best and I’m proud once again to be associated with Union Bank.”

“What I have observed in the bank is the culture of warmth and understanding between the employees and the customers of the bank. Now if the level of warmth and understanding that I have with them matched the amount of money I have in the bank, I would be a billionaire by now,” the CEO, Morin Leather Works, Mrs. Morin Obaweya.

“But at the same time, I must appreciate the bank for upholding that culture; I felt enough welcome for dealing with the bank. So for this I say thank you to Union Bank,” she added.

Also, the Founder and CEO, Lady Mechanic Initiative, Mrs. Sandra Aguebor said: “Union Bank has really supported me in my business even at my early stage. They gave me the job of repairing their trucks. We have four accounts with them and the bank has been very supportive to the Women Mechanic Initiative which has trained 1000 women. So I’m happy to be with them and I will continue to be with them.”

About Union Bank of Nigeria Plc
Established in 1917 and listed on the Nigerian Stock Exchange in 1971, Union Bank of Nigeria Plc is one of Nigeria’s long-standing and most respected financial institutions. The Bank is a trusted and recognizable brand, with an extensive network of over 320 branches across Nigeria.

In 2012, a new Board of Directors and Executive Management team were appointed to Union Bank and in 2013 the Bank embarked upon a Transformation Programme designed to re-establish it firmly as a respected provider of quality financial services in Nigeria.

The Bank currently offers a variety of banking services to both individual, commercial and corporate clients including Current, Savings and Deposit Account services, Funds Transfer, Foreign Currency Domiciliation, Loans, Overdrafts, Equipment Leasing and Trade Finance.

The Bank also offers its customers convenient electronic banking channels and products including Online Banking, Mobile Banking, Bank Cards, ATMs and POS Systems.

West Africa Economy for 7.2% Growth in 2016

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In 2016, the member-countries of WAEMU (West African Economic and Monetary Union) should record an economic growth of 7.2% against 7% in 2015.

This is what revealed forecasts published on June 1, 2016 by the Central Bank of West African States (BCEAO).

Expected growth should result from the “consolidation of activity in secondary sector and good performance of tertiary sector”, the same source said.

Currently, Cote d’Ivoire is WAEMU’s economic driver. The nation has in fact been recording a substantial growth since the end of the 2011 civil war.

World’s top cocoa producer has recorded the following economic growth rates in 2012, 2013, 2014 and 2015 respectively: 9.8%, 8%, 8.5% and 8.6%.

WAEMU consists of eight nations knowingly Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.

Africa to Record 238m Smartphones by 2020

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mobile phone

Annual smartphone sales in Africa and the Middle East are forecast to grow by a CAGR of 15% to reach 238 million units by 2020.

According to Pyramid Research, this will surpass the 204 million unit sales in North America and 201 million unit sales in Latin America.

Following significant network investments by African operators to capitalize on the rising demand for data services, operators are increasingly becoming concerned with increasing the number of smartphone users on their networks.

Device financing – a direct approach to boosting smartphone usage.
Operators providing device financing schemes is one of the four direct strategies detailed in the report. In a region characterised by low income levels, smartphone prices can be prohibitively expensive.

To overcome this, African operators have partnered with banks to address this barrier to purchasing smartphones, such as Tigo Ghana’s partnership with Stanbic Bank to provide financing schemes for the Samsung Galaxy range of devices.

“However, a key limitation is the large unbanked population in Africa. To overcome this, operators need to consider financing schemes using mobile money,” says Mak Rahnama, Senior Analyst at Pyramid Research.

It is not just about just selling more devices.
Indirect strategies, which focus on increasing mobile data usage to drive smartphone adoption, are also found to be essential given the majority of consumers in African markets purchase their devices from various retail channels (e.g. informal sector, independent retailers) rather than directly from operators.

Rahnama states that “by providing OTT localised content, operators can incentivise consumers to purchase smartphones, and in-turn increase smartphone penetration on their networks.”

The report provides an in-depth analysis of three indirect strategies that operators can deploy to boost smartphone usage on their networks.

Huawei Probed by US for Sanctions Busting
China’s Huawei has been served with a subpoena by the US Commerce Department investigating allegations that it may have broken US sanctions on Cuba, Iran, North Korea, Sudan and Syria.

The subpoena calls for Huawei to turn over information related to shipments to those countries over the past five years.

Huawei has not yet been accused of wrongdoing. In a statement, it said that it was committed to complying with laws and regulations where it operated.

“In particular, Huawei has a strict code of conduct, rigorous training, and detailed policies relating to export control compliance and actively cooperates with the relevant government agencies, including the Department of Commerce, regarding Huawei’s compliance with export control laws,” a company spokesperson said in an email.

The investigation appears to be similar to one which ensnared ZTE, which sold equipment to the embargoed countries based on components supplied by US suppliers.

The investigation into ZTE highlighted an unnamed rival company which ZTE executives were said to be copying in their efforts to sell to the embargoed countries.

The semi-official China Daily newspaper cited an official as claiming this was a sign of US protectionism against Chinese rival companies.

Huawei Probed by US for Sanctions Busting

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Huawei

China’s Huawei has been served with a subpoena by the US Commerce Department investigating allegations that it may have broken US sanctions on Cuba, Iran, North Korea, Sudan and Syria.

The subpoena calls for Huawei to turn over information related to shipments to those countries over the past five years.

Huawei has not yet been accused of wrongdoing. In a statement, it said that it was committed to complying with laws and regulations where it operated.

“In particular, Huawei has a strict code of conduct, rigorous training, and detailed policies relating to export control compliance and actively cooperates with the relevant government agencies, including the Department of Commerce, regarding Huawei’s compliance with export control laws,” a company spokesperson said in an email.

The investigation appears to be similar to one which ensnared ZTE, which sold equipment to the embargoed countries based on components supplied by US suppliers.

The investigation into ZTE highlighted an unnamed rival company which ZTE executives were said to be copying in their efforts to sell to the embargoed countries.

The semi-official China Daily newspaper cited an official as claiming this was a sign of US protectionism against Chinese rival companies.

Saudi Arabia: Expect Crude $60 Oil by Year End

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oil rig

That’s what powerful new Saudi Energy Minister, Khalid Al Falih told CNNMoney’s John Defterios in an exclusive interview.

Al Falih was speaking just after OPEC wrapped up a summit in Vienna. During the meeting OPEC decided against implementing a cartel-wide production quota range, once again failing to reach an agreement to cap oil production.

“The right thing to do is continue to monitor the market and let the market do its thing. It’s working in our favor now,” Al Falih said, alluding to declines in non-OPEC production and rising oil prices.

Al Falih, who replaced longtime Saudi oil minister Ali al-Naimi in May, said $60 oil by year end is “very possible” and higher prices in 2017 are also likely. He said supply and demand have “converged” and prices have been lifted by supply outages.

Recent supply disruptions in Nigeria, Canada and Colombia have helped lift oil to $50 a barrel, up nearly twofold from mid-February.

Higher oil prices will be greeted by groans from many American drivers. Already, crude’s big rebound has lifted gasoline prices to $2.32 a gallon, compared with $1.70 in February, according to AAA.

But Al Falih warned that $50 oil is not high enough to attract the investment needed to maintain the world’s aging oilfields. Longer term, the new Saudi energy minister is concerned over a potential shortage that causes a price “spike” that is “counterproductive to the long-term stability for oil.”

More immediately, Saudi Arabia is at odds with Iran, its longtime OPEC ally that is ramping up production to pre-sanctions levels despite ample supply.

Al Falih reiterated Saudi’s stance that Iran must be part of any future OPEC agreements to curb output. “If everybody freezes, Iran will freeze like everybody else,” he said.

But Al Falih seemed to offer a softer position than his predecessor, acknowledging that “every country has the sovereign right to manage its own oil production.” He also called Iran a “key member” of OPEC and pledged Saudi Arabia will “cooperate with all” member countries.

The OPEC meeting and interview came a day after Saudi Arabia announced a $3.5 billion investment in Uber. The money came from the Public Investment Fund, Saudi Arabia’s main investment fund, at a time when the kingdom has announced a big diversification strategy.

Al Falih said the Uber stake is “symbolic of the new thinking within the kingdom” and is “only the beginning.”

“Saudi Arabia is opening up,” he said.