Hello and welcome to World Business Report from the BBC World Service.
I'm David Harper and coming up on this edition, in Nigeria people are reacting to a dramatic rise in mobile data costs, Narendra Modi is heading for Washington and we'll look at what the future might hold for US -Indian trade, can Foxconn use their experience manufacturing computers and smartphones to
make inroads into the auto industry, and I've been speaking to the boss of legendary German toy company Playmobil.
First of all though, some news that's coming to us in the last couple of hours of new US inflation figures.
I'm joined for the programme by Russ Mould, Investment Director at AJ Bell.
Russ, thank you for being with us today.
Inflation higher than expected this time.
Yes, good afternoon, David.
It's the fourth consecutive acceleration in the rate of price growth in the USA to 3%, higher than economists and analysts were expecting.
And the core rate that strips out things like energy and food, important things to us, but economists seem keen to exclude them because they're volatile.
That was also higher than expected as a result of that.
Financial markets are now perhaps suggesting that American interest rates will stay higher for longer than expected.
They won't come down as quickly.
And in response to that, the American stock market is losing around half a per cent as we speak at the moment.
Now you say that, but ever quick to react, President Trump, speaking on Truth Social, posted interest rates should be lowered, something which would go hand in hand with upcoming tariffs.
Let's rock and roll, America.
You beat me to it, David.
One of the biggest complications that Jerome Powell, the chair of the American Central Bank, has got is that Donald Trump has already been saying he wants to see interest rates lower, he berated and attacked the Fed all the way through his first term wanting cheaper money and I'm sure he'll be looking
to do the same again.
He's also been quick to blame the previous administration for this on Truth Social saying Biden inflation up.
In truth though there's a lot of factors into this.
Oh gosh we could we could fill the entire programme talking about the possible reasons for it but certainly one of them is America is running a huge amount of debt, the government's providing a lot of stimulus to the economy, another is the money that was provided to keep the economy going during COVID,
that boosted supply at a time when demand was constrained.
So that's another reason.
You've got wage growth that's pretty strong.
There are lots and lots of different factors, but it does seem as if after 15 years or so of inflation doing nothing, we may be in a different era when it's going to be very difficult to get it back to central bank's 2 % target without maybe some economic pain and higher interest rates for longer.
Russ, good to hear your thoughts on that.
We will be back with you later on in the programme.
First of all, though, to Nigeria.
Now, the prices of food and services have increased dramatically in the country, and this has made a dramatic increase in mobile data charges particularly difficult to cope with.
MTN, which is Nigeria's largest operator, has trebled costs.
The cost of one of its most popular weekly offers, in fact.
Airtel has also increased its tariffs.
This price jump was expected as the telecom regulatory body had approved an increase.
But in an announcement three weeks ago, it said it would be capped at 50 percent.
The phone companies say that they need to boost their revenue in order to cover rising costs.
Well, we've been hearing how people are feeling about the new price hike.
This tariff hike adjustment is coming at such a terrible time when Nigerians are struggling to even get basic amenities.
You know, I mean, with the new hike, it means that for someone who would pay 1 ,000 naira for 1 .5 gig monthly will now have to pay 1 ,500 for 1 .8 gig.
Similarly, that people paying for 15 gig at 4 ,500 now have to pay about 6 ,500.
On a normal day, people would complain about how these data plans do not even last as long as the scheduled period or even how the network isn't so great.
And so now having to face this increase makes everything much more worse.
Well, Nkechi Obona is the BBC's West Africa correspondent.
She's on the line from Nigeria's commercial capital, Lagos, now.
Thank you for being with us, Nkechi, this afternoon.
Let me ask you first about some of these wider cost of living issues, because these are fed into the pain that's being felt with this.
What sort of a position are most Nigerians in at the moment?
Well, Nigerians are in a dire situation.
First of all, there is high inflation, which is over 34%.
Nigeria is going through an economic crisis that has been described as the worst in a generation.
Fuel prices have jumped by over 500 % after President Bolotinobu removed fuel subsidies that were in operation for decades, making fuel cheaper for people.
But now Nigerians are paying a lot more to buy fuel.
And that ripple effect is the increase in the cost of transportation.
Also, the local currency has depreciated by over 300 % against currencies like the U .S.
dollar. And so people's incomes have reduced, people's earnings have been eroded as well.
And moving on to these rise in telecom data charges, obviously people have condemned this.
It's obviously going to be unpopular.
Exactly. Just barely two weeks ago, Labour unions threatened to embark on a nationwide protest against this 50 percent hike in coal tariffs and data charges as well.
But that was suspended after authorities had said they would negotiate to see a common ground because labour unions were saying Nigerians cannot afford, you know, to incur this additional burden in addition to all the other economic issues that people are going through.
We're obviously hearing people who want to see this reversed.
What are the chances that it might be reversed, given that the phone companies are facing pressures as well?
Exactly. The phone companies, you know, in their defense say that the cost of operations, electricity costs to run cell network towers, the cost of doing business generally in the country has increased over the years, owing to all the factors alluded earlier.
And so they justify why this increase is necessary.
They were actually advocating for over 100%, but the regulator only approved 50%.
Now, just yesterday, lawmakers asked the regulators to suspend the increment to allow room for negotiations.
But it's uncertain if the regulator is actually going to go ahead with that move.
But while that is being considered, of course, telecom operators have already implemented the hike.
Nkechi Obona in the commercial capital of Nigeria, Lagos, thank you very much for joining us this afternoon.
Now when the Indian Prime Minister Narendra Modi visits Washington and meets President Donald Trump on Thursday there will be some warm hugs and shared laughs but that will not be all Trump and Modi have developed a strong personal rapport over the years and there have been many high -profile meetings
and joint appearances but since returning to office Donald Trump has threatened to impose tariffs on imports from many countries India included so where does that leave the business relationship between these two economic giants I spoke to A.
Shekhar, the head of the Indo -American Chamber of Commerce.
India is right now offering a lot of services to the United States.
And also with respect to the engineering materials which are going in.
And we are also doing one more thing is to ensure that Indian companies are investing in the United States.
If you see, which was about 22 billion foreign investment into the US has now increased to 40 billion.
And we have almost created another 300 ,000 jobs in the last four years by the Indian companies which have invested in the US.
And we expect this to grow even further.
The other thing is United States would be able to offer us, you know, advanced manufacturing technologies and things like that, which could help us, especially in high tech sectors, both in defense as well as in aerospace or in other electronics and so on.
Let me ask you a little bit about tariffs, because this has been a defining point of the Trump presidency so far.
And this is a real obstacle to international trade, in particular, the news we've heard about potential aluminium and steel tariffs.
How is this likely to affect the trading relationship?
Well, see, as far as India is concerned, you know, our trade relationships on tariffs may not be.
Because significantly, when you talk of steel and aluminum, you would see countries like Canada, Mexico, South Korea and Japan are the ones who have the maximum amount of moving those steel into the U .S.
India is still not in that particular range of products, whatever Mr.
Trump is right now talking of.
As far as India is concerned, we are at an enviable position where what we are having is not affecting United States.
What we are trying to do now is India and United States are working towards how do we have a better supply chain resilience because for us, it's a balanced approach where one is that we have to definitely protect our domestic manufacturing operations, which are important to us.
But at the same time, what we look forward is if that can bring in better technology and better products and improve our manufacturing processes and we become globally competitive.
Those are things I think our government is also working in the right perspective to see that we grow to that level.
And it's a process which will go through time.
And it's been we have been taking care of it pretty carefully on that.
If you look at the policies of Donald Trump, he's very much pushing an America first strategy, and he's looking at who the allies of the United States are around the world.
Now, India trades a lot with the United States.
India also trades extensively with Russia and China.
Is that likely to be a stumbling block in the relationship with the Trump presidency?
I don't see this as a stumbling block.
You know, all these trade parameters are well negotiated and we have different requirements with Russia or different requirements with China and different requirements with the United States.
But it is at a time when the United States is trying to discourage trade with Russia in the aftermath of the Ukraine invasion.
I mean, I think, you know, we have had in the last two, three years also is that they have understood our requirements, which are not in any way hampering the relationships.
You know, so we I don't see much of a problem on all those.
And like, for example, we may we may even buy more U .S.
oil and, you know, our gas, which could offset if there are any misgivings on this.
You know, so that's what that is also possible.
And that sort of brings me on to my next question.
If we're talking about a reciprocal trading arrangement, we've talked a little bit about what India can offer to the United States in terms of the other side of the relationship.
What is it that India can gain from the US?
Oh, well, one of the things is, you know, we have to improve upon our electronics manufacturing, semiconductor manufacturing and, you know, and also the technology towards that.
That is something where the United States is keen to have more, you know, for units being established here.
And second is, you know, our skilled labor, they are offering fantastic solutions for the United States to grow in those areas.
We are at a win -win situation is what I see there.
Are you highly confident about the situation going forward after the change in the White House?
I don't think there's going to be much of a change as far as India is concerned, is that much more stronger growth is what we are looking at, because you're also able to see in the last four or five years, Indian companies have invested also pretty heavily in the United States.
See, India is the most populous country, number one.
And we produce a lot of skilled people out here.
And the second thing is, US is the biggest consumer in the world.
So it's a sort of a situation where both of us need each other, which could be beneficial for both the countries.
That's how I look at it.
Hey, Sheikhar, the head of the Indo -American Chamber of Commerce.
You're with World Business Report from the BBC World Service.
Now, you probably know the Taiwanese firm Foxconn as a major manufacturer of electronics like computers and smartphones.
In fact, if you've got an Apple iPhone in your pocket right now, I'm willing to bet it was made in a factory owned by Foxconn.
But does this expertise transfer into making vehicles?
The company has confirmed it's considering acquiring a chunk of Nissan, a chunk currently owned by Renault, if that's what it takes to get them into the auto manufacturing industry.
Katrina Hamlin is Reuters' Japan auto industry reporter based in Tokyo, and I asked her why Foxconn is trying to enter the EV market.
It's important for Foxconn, I think, because they've been trying to make headway in this area for a few years now as a contract manufacturer.
and in that time growth in the electric vehicles market has slowed but it's still pretty speedy sales of pure electric cars and also hybrids grew by about a quarter last year whereas sales of smartphones are growing by only single digits and there's also this idea that electric cars are like smartphones
on wheels and so I suspect that Foxconn has a degree of confidence and sees this as a great opportunity for them as a seasoned electronics maker.
The auto industry notoriously in terms of technology moves at a very slow pace that that is really going to have to change as they embrace the EV revolution that's right things have been changing very rapidly in the last few years especially in China which is a very big market for Nissan and so really
puts pressure on them to move faster than they have been moving in the past why is Nissan in particular something significant for Foxconn I think Nissan is in a very weak position at the moment its sales are down so is its operating profit and so that puts nissan in a position where they might be more
open to these overtures and i think that is part of the attraction for foxconn the other thing that i think you know is interesting for them is nissan is a big brand it may not have been doing well recently but it's it's a household name and it's got a very large production footprint as well which is helpful
if you're looking at getting into the space and of course we've seen the potential for a merger between Nissan and Honda recently, that now appears to have gone away.
This shows that they are really looking for a partner.
We knew that even before the discussions about a merger with Honda, they were already talking about pursuing some kind of cooperation just because the scale would really help.
It would help them to work more efficiently and to gather the capital to invest in the new technologies they need to try and win back some of their customers.
And from Foxconn's point of view, how realistic is it that they can replicate what they do for things like smartphones in manufacturing for several different manufacturers?
Could they become a similar sort of player in the vehicle market now?
I think for Foxconn solo it's a big leap because even though there is this idea of electric cars being smartphones on wheels actually the reality is cars are a lot more complicated and if something goes wrong with your car and you crash it's a lot more serious than if your phone breaks so the reputational
damage as you try to build a brand is potentially much harder to navigate as well but if foxconn could do this together with another company that has that kind of specific know -how and a brand and an established production base then their chances look a lot better i think they've had some success in in starting
to make their own cars and cars for others but the scale is still very small at this point so there's a long way to go katrina hamlin from reuters speaking to me from tokyo uh well Well, I'm joined today by Russ Mould, investment director at A .J.
Bell. It shows the way that the auto industry is evolving in the EV revolution.
But Tesla, possibly the most recognised name in this world, their share price has been rather volatile lately.
Well, it's down by a third from its December high, David.
You remember it had that huge run after the election victory of President Trump, which I think I frankly found strange at the time.
I guess it was because of the relationship between Mr.
Elon Musk, Tesla's leading light and President Trump.
But Trump said he would end subsidies for electric vehicles.
He would impose tariffs on China, which is a huge customer of Tesla and left it open to retaliation.
There's competition coming from Chinese companies, and if you look at Tesla's 2024 full -year results, they were terrible, profits more than halved.
So quite why the share price got as high as it did, I'm not quite sure.
But I think investors are now reappraising that, particularly when they can see weak sales in California and Europe in the first month of this year.
Some are suggesting that may even be some consumers turning their back on Tesla because of Mr.
Musk's support for President Trump.
Yes, possibly another factor there.
Russ Mould, thank you for that.
Let's move on now because some other news we've heard today.
An international law firm has blocked general access to several AI tools after it found a significant increase in usage by its staff.
In an email seen by the BBC, the Chief Technology Officer of Hill Dickinson, which employs more than 1 ,000 people in offices all around the world, warned of the use of artificial intelligence.
Our senior technology reporter, Graham Fraser, has more.
So, Graham, just tell us a little bit more about this action they've taken.
Well, as you say, the BBC has seen this email that was sent to staff at Hill Dickinson.
It was sent to them by one of its senior directors.
And this email highlighted the use of AI by its staff over the course of a week in January and February.
It found that there was about 85 ,000 hits to the websites of the popular chatbot ChatGBT, its Chinese rival DeepSeek, and the writing assistance tool Grammarly.
Now, it's not clear how many occasions staff were visiting those three websites or indeed how many staff visited them repeatedly, as of course several hits could have been generated by a user during each time that they used those websites.
But in the email, the executive of the law firm said we've been monitoring usage of AI tools, particularly publicly available generative AI solutions, and have noticed a significant increase in usage and of uploading files to such tools.
And he went on to say that most of this usage was against AI policy of the firm.
And now staff have to make specific requests to their bosses before they're allowed to use these AI tools for their work.
This is in a week where we've seen a major AI summit take place in Europe and AI is being scrutinised very closely.
What sort of reaction has there been to this?
Yes, AI is being scrutinised very closely all the time.
And for me, this story highlights how businesses across the world, including law firms, are trying to get to grips with this emerging technology and how they can use it in their workplaces.
I mean, Hale Dickinson, this law firm, they have offices in several parts of England and across the world.
And they told BBC News that like many law firms, they are aiming to positively embrace the use of AI tools to enhance their capabilities while always ensuring safe and proper use by our people and for our clients.
But this story has had a lot of reaction to it as well.
You know, the spokesperson from the Information Commissioner's Office, the UK's Data Watchdog, told BBC News that firms should not discourage the use of AI in work.
They added that with AI offering people countless ways to work more effectively and efficiently, the answer cannot be for organizations to outlaw the use of AI and drive staff to use it under the radar.
Now, Hill Dickinson, this firm, a law firm, they highlighted that the AI policy includes guidance that prohibits the uploading of client information and requires staff to verify the accuracy of the AI tools they use.
As I say, there has been further reaction from the legal world.
Ian Geoffrey, he's the chief executive of the Law Society of England and Wales.
He told BBC News that AI could improve the way that we do things a great deal, but he has said that AI needs human oversight.
And he said that they will support legal colleagues and the public as they navigate this brave new digital world.
And finally, there was a spokesperson from the Solicitor's Regulation Authority.
They regulate solicitors in England and Wales and they told BBC News that despite this increased interest in new technology, there remains a lack of digital skills across all sectors in the UK and this could present a risk for firms.
BBC Senior Technology Reporter Graham Fraser, thank you very much for joining us.
Now let's have a little bit of a look back at a childhood classic.
Somewhere beyond the stars there is a world of pretend adventures just waiting for you with Playmobil people and their action vehicles.
Playmobil makes pretending real, real fun Playmobil, everything from spaceships to pirate ships The German company Playmobil and their fantasy worlds of small plastic figures might be a much -loved memory for many people but they haven't quite managed to keep pace with giants of the toy industry like
Lego They've got some grand plans for the future though but can they cause a stir in the hugely competitive toy market of 2025 I spoke to the head of Playmobil, Barry Kurta and he started by telling me more about the company in their 50th anniversary.
All 50 years was a great success and it fits where I would say to a more traditional what we call role play so that you are playing what you see in reality, you just come back into your home, build it up and you play it there, what you see outside but then you are your own creator and your director as
well in order to live the world that you would like to be.
So it's about small figures and creating little worlds for them to live in, basically.
Exactly. I would say it has two things, you know, on the one hand that it has the play set, you know, that you're building these kind of scenes.
But on the other side, it's the iconic figure, figurine that, you know, gives a face kind of to your world.
It's a hugely competitive world, Toys, with more people coming on the scene all the time.
And I know Playmobil has faced difficulties in recent years.
What are the biggest challenges that you have at the moment?
I would put, you know, 80 % of the issues that we have faced were more internal ones.
And, you know, if I would, you know, summarise it, first of all, we have lost brand relevance.
You know, what is the brand really standing for and how important it is, you know, for our consumers, you know, for the kids and for the parents.
by almost 30 % during the last five to seven years.
And our target group went down as well.
Initially, we were targeting four to 10 -year -old kids, but now it's more like around four to eight years.
And at the same time, we as consumers have changed, and kids have changed as well in the way how they consume.
You know, we don't call it anymore share of play, so we call it actually like share of day.
So you are competing with so many other things that are keeping the kids away from traditional playing.
So the competitors became not only just the other toy marketeers, it's everybody, you know, taking the time away from kids off playing.
And at the same time, you know, we as a society, we want everything just on demand instantly, and we became kind of a snacking mentality, you know, like, you know, starting here, finishing after five minutes, and continuing in an hour again and so on and so forth.
I would say these five factors were really affecting our business model that we had over the 50 years.
You talk about the target age of the product, but if you look at a rival like Lego, they have managed to expand their business tremendously and they're selling to adults increasingly, selling sets, costing an enormous amount of money for a toy.
Is that a market that you can tap into?
We could tap into that, but first of all, we would like to really analyze it.
What does the consumer really expect?
What Lego has done is pretty successful, but we need to differentiate between the toy that you make, but there's the mechanic.
So they have a kind of a building mechanic that enables them to create then something that is feasible for the adult market as well.
Like you have the Ironman in small, but then you can build it even big.
Or the Batmobile that you can build it in small but as well and big as well and becoming more sophisticated for elderly groups.
And Playmobil is going into some of those partnerships as well.
I've read about a tie -in with the European Space Agency.
Yes. Yeah, we are looking into that.
So, you know, space is becoming kind of a topic for us, a theme, but, you know, for the years ahead.
Yeah, that's true. We have German elections just around the corner.
And I've got to ask you about this because we've seen growth in Germany slowing somewhat in recent years.
What are you hoping for that could improve the situation for your company?
You know, what I hope, you know, influencing our company, you know, honestly, you know, what I think regardless of the whoever will be elected, I think I'm sure that the strategy that we now put in place since 12 months will be successful despite anybody actually getting, you know, into power in two
weeks from now. because as i said you know where i see 80 percent of how we are going to be successful today and in the future is really dependent on us and this is about all the uh strategic things that we have down different that we are doing now differently in order to become successful barry kurta the boss
of playmobil russ mould is still with us it's interesting we talk about toy markets evolving and getting high tech but there's a huge nostalgia ship where people wanting to buy their kids the toys that they had?
I must admit, I've done that with Lego, with the James Bond, Aston Martin and some Doctor Who Lego from the BBC, so I've definitely done that as well, but Playmobil our children are now nearly 18 and 16 so they've moved on, it's more cricket bats and hockey sticks now so at least they're active and not just
tied to the computer screen all the time.
That seems to be the key though, you've got to get into the teenagers and adults as well as the kids.
Russ and everybody else, thank you very much for joining us here on World Business Report A reminder, you can always email us world .business at bbc .co .uk and there's plenty more online.
But for now, thanks for joining us.
