With the average revenue per user (ARPUs) falling for major telecom companies, all kinds of initiatives are being taken to rake in more revenue through content and value added services (VAS). While some companies are going the organic way, some are also acquiring companies. Earlier in October 2007, Nokia acquired Navteq, a provider of digital map information for mobile navigation devices- a big acquisition considering that the deal valuation was a good 8.1 billion dollars. There was news that Google was eyeing Navteq for some time.
OnMobile also acquired French VAS company VoxMobili for Rs 150 crore in September 2007.
Now Motorola has decided to acquire online digital music retailer Soundbuzz. The acquisition is total. Soundbuzz has a catalogue of 750000 full tracks and 500000 ring tones. Motorola had also invested in Canvas M through a joint venture with Tech Mahindra some time back, to launch coloured notes, meant to enable senders to animate their text messages via emoticons.
In response to queries sent by
, Soundbuzz responded by saying, "Soundbuzz now has access to Motorola's massive install base of mobile handsets in the Asia-Pacific and the opportunity to deliver our online and mobile music services to those customers. Motorola is looking to capitalise on Soundbuzz's tried and tested online and mobile music delivery platform in India, South East Asia and Australia to enhance its consumer offerings, primarily in the shape of its motomusic service." The company declined to divulge the details of the deal, including the valuation.
A company release said that the acquisition, is subject to customary conditions, and is expected to close in the first quarter of 2008. Speaking to
, Gavin D'abreo, chief marketing officer, Saregama India said, "The logic is clear. All telecom players have realised that content and VAS are the only ways they can hold on to their ARPUs. Music is one of the ways to offer VAS among others like games, animation etc."
D'abreo also remarked that the falling prices of handsets are making telecom handset companies think about ways to retain customers and this recent move by Motorola may be just that. Motorola intends to maintain Soundbuzz's Singapore headquarters, which will be an integral component of Motorola's digital music development strategy in Asia.
According to Manoj Dawane, CEO, People Infocom (Mauj), a content creator and aggregator in the VAS space, "The move is certainly a positive one. Nokia on its part is also developing its specialised services in VAS through Nokia Development Forum and Nokia catalogue.
OnMobile's IPO, which is slated for February 2008, will give an industry status to the VAS domain."
He estimated the VAS market size to be Rs 5000 crore, of which Rs 3200 crore would be the operators' share while the rest would be shared between content owners, content aggregators and technology platform providers.