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4 Years Through 6 Lenses

Multiple Operators Suffer Damage to Fiber Networks from Hurricane Michael

Factbox Energy demand impacts to linger in wake of Hurricane Michael

Factbox: Hurricane Michael Impact Turns from Production Loss to Demand Destruction

Fast-moving Michael destroys gas demand across US Southeast

4 Years Through 6 Lenses

The Narendra Modi-led National Democratic Alliance government’s efforts to ensure a well-oiled economy could be tested in its fifth year in office as multiple risks materialise, led by exogenous factors such as a runaway rise in global crude oil prices, CRISIL said in its report titled, ‘4 years through 6 lenses’, released today.

The report looks back at the four years of the Modi government as a mixed bag of good luck on oil and monsoon, a raft of reforms and repair, disruptions, and slowing growth.

Low oil prices and distance from elections helped the government pursue a prudent policy stance – choosing ‘trend’ over ‘cycle’, as it were.

The twin deficits – fiscal and current account –also improved, though some of the gains were reversed last fiscal.

However, a runaway rise in oil prices could stir the inflation scourge back to life and impact other macro indicators too. A back-of-the-envelope estimate shows every $10 per barrel increase in crude oil price can shore up India’s fiscal deficit by 8 basis points (bps) as a percentage of GDP and similarly the current account deficit by 40 bps, ceteris paribus.

Adding to the woes is the rupee’s depreciation versus the greenback, which increases the cost of imports, particularly of oil.

All this comes as rural distress is mounting, manufacturing is smarting, and the business sentiment needle hasn’t moved in a material way despite better global competitiveness and ease of doing business rankings, and better macros and reforms,. What’s more, non-performing assets in banking have surged.

The ‘4 years through 6 lenses’ report analyses the Modi government’s performance in the past four years using six lenses, which reflect the true structural health of the economy:

  • Employment, where challenges persist mainly because construction and manufacturing, which generate the most employment among non-agriculture sectors, have underperformed
  • Investments, where a decisive push to the investment cycle eludes despite all the facilitations, and private sector investments remain sluggish and unlikely to revive in a hurry
  • Manufacturing, the share of which in GDP increased only 80 bps between fiscals 2015 and 2018 to 18%, making the ‘Make in India’ target of 25% by fiscal 2022 appear gargantuan as it would entail clocking a whopping 17.5% annual manufacturing growth from here
  • Rural economy, which is beset with challenges such as slower agricultural growth, poor farm price realisation, slowdown in construction activity, and sluggish rural wage growth despite a raft of well-meaning measures in the past four years
  • Financial inclusion and technology, where there has been major improvement thanks to the trinity of Jan Dhan, Aadhaar and mobile connections, though issues such as zero balance accounts, provision of financial services, and upgradation of digital infrastructure need to be addressed
  • Taxation, where direct tax compliance has shown clear improvement in the past two years, following the income declaration scheme and demonetisation, and GST is seen speeding up both formalisation and tax compliance

Visit to purchase the full report

Multiple Operators Suffer Damage to Fiber Networks from Hurricane Michael

Communications providers are working to restore services in areas impacted by Hurricane Michael, but storm debris, power outages and significant fiber damage are hindering progress in those counties most devastated by the storm.

As of Oct. 14, a number of counties along the Florida Panhandle had more than half of their cell sites down, including Bay County — home of Panama City and Mexico Beach, described as "ground zero" of the storm by U.S. Federal Emergency Management Agency administrator Brock Long — where 66.1% of cell sites were down. Similarly, neighboring Gulf County had 69.6% of cell sites down, according to data from the U.S. Federal Communications Commission.

Based on the amount of damage in the area and ongoing power outages, it could be weeks before services are restored. Long said Oct. 12 that after search and rescue, restoring communications in impacted counties is among FEMA's top priorities.

"You have to be able to communicate to appropriately respond and we are trying to do everything we can to get the private sector vendors, the Verizon [Communications Inc.]'s of the world, to get in to try to get their systems back up and running," he said.

Long added, however, that the process is not easy. "There was a tremendous amount of debris. When you look at the damage in Mexico Beach, that is where the ocean rose potentially 14 feet … and shoved buildings out of the way. When you have that type of damage, it takes time to get in and go through," he said.

Hurricane Michael made landfall Oct. 10 near Mexico Beach as a Category 4 hurricane with 155-mile-per-hour winds.

For its part, Verizon said the "vast majority" of Florida and Georgia service has been restored, with 99% of the company's network in Georgia in service and 97% of its network in Florida. But the company noted there are pockets, particularly near Panama City, where the damage is severe.

"The storm caused unprecedented damage to our fiber, which is essential for our network — including many of our temporary portable assets — to work. Our fiber crews are working around the clock to make repairs, and while they are making good progress, we still have work to do to get the fiber completely repaired," the company said Oct. 14.

Fiber is the connecting component of a network that carries data from point to point. It is necessary for Verizon's permanent and temporary cell sites to be operational. The company noted that while it has multiple fiber paths to carry data, "The severity and intensity of the storm caused damage to all duplicate routes in the Panama City and Panama City Beach area."

In terms of wireline services, the FCC said 291,300 subscribers remain out of service as of Oct. 14, including 205,643 subscribers in Florida. The figures were down from a day earlier, when a total of 337,223 subscribers were without service, including 233,843 in Florida.

The top residential video and broadband provider in Bay County is Comcast Corp., according to MediaCensus data from Kagan, a research group within S&P Global Market Intelligence. Comcast, the largest cable operator in the U.S., said in an Oct. 12 statement that it is working to get Xfinity services back online.

"As power returns … and it becomes safe for our technicians and restoration crews, we will work to repair any damages affecting our network," the company said.

As of Oct. 15, more than 162,000 customers in Florida remained without power, including all 27,275 customers served by Gulf Coast Electric Cooperative. The cooperative said in an Oct. 12 Facebook Inc. post that its distribution system "suffered catastrophic damage"

In Gulf County, the top residential video provider is AT&T Inc.'s satellite video service DIRECTV, according to MediaCensus data, while the top residential broadband provider is Mediacom Communications Corp., the fifth-largest cable operator in the U.S.

Mediacom said Oct. 14 that its recovery efforts are underway but its network in Florida has 14 miles of severely damaged fiber near Walton County, as well as 25 miles of damaged fiber east of Panama City that is obstructing video transmission from Gulf County to Walton County.

"Our current priority remains focusing on repairing damage to our high-speed data transport network and main transmission facilities and repairing downed lines where we have access to the area. We have outages from widespread loss of commercial power along with downed lines, and structural damage throughout our systems," the cable operator said.

Factbox: Hurricane Michael Impact Turns from Production Loss to Demand Destruction

Houston, Oct. 11 2018 — Hurricane Michael made landfall at the Florida panhandle as a Category 4 hurricane Wednesday with 155 mph winds, quickly destroying demand for power, natural gas and refined oil products. Shut-in oil production rose modestly from Tuesday to over 700,000 b/d, but the storm has stayed east of much of the region's production, which means supply should be back online quickly.

Meanwhile, the severity of the storm has surprised to the upside, which could a mean longer lasting and more severe impact on demand for power, natural gas, refined products and ultimately crude oil.

"We expect the impact on refined products demand to be below that of previous hurricanes in the Gulf Coast such as Harvey in 2017, as the region impacted by Michael has lower population density than Houston ... Nevertheless, the impacts are favoring the high side of our estimates given the sheer severity of the storm," said Claudio Giamberti, Head of Demand and Refining at S&P Global Platts Analytics.

As of 7 pm EDT, the eye of Michael was moving over southwestern Georgia with maximum sustained winds still at 100 mph, according to the National Hurricane Center. The storm is expected to move northeast across the Carolinas before heading back out to sea Friday morning.