Hindujas reject Hutchinson offer to buy 5.11%
Hutchinson which is in a major clean-up operation before its proposed IPO offered to buy Hindujas 5.11% stake in Hutch @ Rs2025 crores($450 Million). At the current offer price Hutch is valued at $9.0 Billion. At the end of March-2006, Hutch had a subscriber base of 90 Lakhs(9 Million) which translates to Rs45,000/subscriber, precisely the same amount which Egyptian Telecom major, Orascom paid to Huthch’s promoter, Hutchinson Whampoa group in January 2006. Hindujas valuation of Hutch is at the higher end, $12 Billion, which translates into Rs60,000/subscriber.
India’s numero uno integrated mobile service provider, Bharti Telecom enjoys a market capitalization of $17 Billion and has subscriber base more than twice that of Hutch and is also growing at a faster rate than Hutch. Also Bharti-Airtel offer Landline and Broadband services. Bharti-Airtel mobile business valuation translates to approximately Rs35,000/subscriber. Considering the valuation and growth rates Bharti-Airtel enjoy, Hindujas price tag of $12 Billion for Hutch is ridiculously high.
VSNL expanding in South Africa.
Tata’s controlled VSNL is planning to launch fixed line telecom services in South Africa reports PTI. Tata’s already own 26% stake in South African telco, SNO. It is hard to understand why Tata’s are in such a hurry to expand in South Africa when their is tremendous growth potential in the Indian Market, where they are far behind Bharti Telecom, Reliance Infocom and BSNL. Tata’s are well known to legally launder money from group companies. Only a microscopic view of Tata group balance sheet will expose which company is at loss for Tata’s expansion in South Africa. No Offence.
MobileNXT chain of retail stores to open in India
Romy Juneja’s MobileNXT wants to setup country’s first chain of mobile retail offering mobile products, services and value addition through mobile stores. MobileNXT is targetting all tier-2 and tier-3 cities in India as Romy believes they are underserved. MobileNXT expects to achieve a turnover of Rs350 crores within the next 3 years and is backed by consortium of investors with $5 Million in investments. Their websites MobileNXT.com / MobileNXT.IN are still under construction.
Asian corridor(Bridge Mobile Alliance) reaches India.
I had earlier reported about the Asian corridor deram which Maxis, Singtel, Bharti and others are pursuing. It was formed under the brand name Bridge Mobile Alliance(BMA). BMA partners include CSL (Hong Kong), Globe Telecom (Philippines), Maxis (Malaysia), SingTel Mobile (Singapore), SingTel Optus (Australia), Taiwan Mobile (Taiwan) and Telkomsel (Indonesia). It is interesting to see that Hutch has not yet joined the alliance nor their are any members from Japan. The alliance partners are pooling in $40 million to upgrade their infrastructure to be comaptible.
What BMA means to you ? As a subscriber, if you travel to any of the member countries, you are entitled for support on roaming and other technical issues. All the operators are sharing their content library for entertainment, with India’s Airtel leading the pack.
Mobile search market – not so hot
I have to agree with Om over Piper Jaffray projections of $11 billion for mobile search market. Atleast half the cell phone users in the US do not use SMS actively. Atleast 75% of the users have outdated handsets and are locked in a year or two agreement. Its only users like Om who jump onto the latest handset in the market 
What are your thoughts on mobile search and which technology would you bet on in the mobile search domain?
Just like how Google is unveiling Writely, the Web Word Processor, which is speculated to be a cool and different from our routine MS-Word, so also, for the Mobile space it will be a totally different app. My experience suggests that its not just “e-”, “v-”, or “m-” nabling of technologies, it has to undergo some kind of transformation to be cool to use which ultimately makes it HOT in the market.
Finally, I don’t think US is the best market for m-search & commerce. With just 207 Million subscribers in the US at the end of 2005, it is way behind the number subscribers in the East(Japan, China, Malaysia and India). The East and the Europe have worldclass 3G & 4G infrastructure with highly affordable subscription rates for the mobile savvy consumers. While for the internet era, it was the opposite. I guess Mobile 1.0 is a whole different game than Web 1.0 and Web 2.0.
Tata Idea, says Mumbai based Tata group
Idea Cellular, Tata’s and Birla’s JV(after exit of AT&T) for providing GSM cellular service ran into rough weather when, Kumar Birla declared that Telecom was a thrust area for the A V Birla group. Tata’s kicked off their telecom venture in early 90s with investment in Idea and later when Reliance opted for CDMA licenses, Tata’s joined the bandwagon too conflicting their earlier investments being done by diverting money from different group companies. [Take this link on SuchetaDalal.com]
Insiders say that Tatas needed cash to expand its Tata Indicom services and hence they decided to sell out their 48% stake in Idea to Maxis Telecom. Not a bad timing considering the SENSEX at 11,600 & the fair valuations the Telecom stocks are enjoying. Due to joint venture clause, Birlas matched the Maxis offer and bought Tatas stake at Rs4406 crores(approximately USD 1.0 Billion) making Birlas the sole owners of Idea cellular(C Sivsankaran holds 1.7%). So is the Idea cellular with 7.72% GSM cellular market share valued at just $2.0 Billion ?
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