The Infosys-incubated and Indiaâ€™s largest value-added services (VAS) operator OnMobile is acquiring Voxmobili SA, Franceâ€™s leading telecom solutions company, for about Rs 150 crore. The acquisition will help the Bangalore-based OnMobile expand its operations in Asia to the Pacific, Australia and the US. A formal announcement is expected as early as next week.
Voxmobili, headquartered in Paris, specialises in personal data management and wireless synchronisation. Its software solutions primarily cater to mobile operators, fixed line players, internet service providers and cable operators. When contacted on this issue, OnMobile CEO and co-founder Arvind Rao declined comment.
This is OnMobileâ€™s second acquisition after ITfinity Solutions, which it had bought last December, after receiving $27.8 million as part of its third round of funding from Deutsche Bank, Goldman Sachs and Polygon Investment Partners.
The acquisition of Voxmobili will help OnMobile access the technological expertise of the French VAS major, which includes world-class â€˜phone backupâ€™ solutions used by some of the largest operators in the US. Additionally, OnMobile will inherit an experienced team of software developers with extensive experience in developing 3G solutions. The company feels that this would give it a headstart against its competitors in this sector, even as telecom operators roll out 3G services in the Asia-Pacific.
The VAS industry in the country is witnessing an explosion, as over Rs 600 crore has been invested in startups in this sector by private equity players over the last 12 years. The catalyst for VASâ€™ takeoff is the record growth in Indiaâ€™s telecom sector, the fastest growing mobile market in the world with over 7 million subscriber additions every month.
The country, which had just over 100 million mobile users in June 2006 has nearly doubled this number now. The VAS industry, which had revenues of about Rs 2,850 crore in 2006, is expected to cross Rs 4,500 crore this fiscal.
OnMobile is also learnt to be readying an initial public offering and raise about $150 million from its listing, which it plans to use for future acquisitions.
Industry experts are of the view that the VAS sector, which at present has more than 20 players, will see major consolidation over the next 12-18 months. â€œTwo years from now, it is unlikely that there will be more than four major players in this space in India. While most startups in the segment receive active support from VCs, these models may not be viable in the long run,â€ a top executive of a leading VAS company said.
In India, OnMobile competes with Cellebrum, One97 Communications, Bharti Telesoft, IMI Mobile, Mobile2win, Mauj, Cellebrum and Bharti Telesoft have also announced that they are on the lookout for acquisitions. For instance Bharti Telesoft is learnt to be in talks with acquire Bangalore-based software firm Jaatayu.