UK's New Call Telecom eyes substantial stake in wi-fi operator Ozone Networks

New Delhi: UK-based New Call Telecom, which started operations four years ago, is making its second acquisition in the country by picking up a substantial equity stake in Delhi-based Ozone Networks, one of India's leading public wi-fi operators.

New Call Telecom bought an over 70 per cent stake in Nimbuzz, an instant messaging and voice-over-internet call and advertising service provider, for about $175 million. Nimbuzz has 200 million subscribers across the world and as many as 50 million in India.

The price at which the Ozone Networks deal has been struck is not known. The application for the deal with the Foreign Investment Promotion Board is awaiting clearance although it was discussed in the last meeting. When contacted, Nigel Eastwood, chief executive officer of New Call Telecom, declined to comment, except to say they would be acquiring a wi-fi company soon.

Ozone Networks founder and chief executive officer Sanjeev Bobby Sarin did not respond to questions from Business Standard. Its chief operations officer, Pallab Mitra, declined to comment on the development.

New Call Telecom is planning to offer Indian customers social messaging services with voice-over-internet calls, public wi-fi hubs and fixed-line broadband with wi-fi at homes and offices. Its strategy is to get into these businesses through acquisitions. It is also in talks with fixed-line broadband service providers, including cable operators, for a third acquisition.

In wi-fi, New Call Telecom is planning to tie up with all leading Indian operators to offer hotspots and also to enable their hubs. The wi-fi hub business is attracting a host of players, including telecom companies Bharti Airtel, Tata Teleservices and Idea Cellular.

There are a little over 30,000 commercial wi-fi hotspots in India, and very few public hotspots. Maravedis Rethink Analytics with iPass had in a study earlier this month predicted there would be more about two million wi-fi hotspots in the country by 2018. There were only 30 municipalities in India with wi-fi hotspots and 105 airports offering wi-fi services, the study noted, but around 400 municipalities would deploy wi-fi hotspots by 2018.

There would be at least 300 million wi-fi hotspots globally by 2018, or one hotspot for 20 people, it added, up from 47 million wi-fi hotspots now.

Ozone Networks recently announced a deal with Ericsson India to provide a neutral carrier-grade wi-fi network across India. In the first stage, Ericsson will provide Ozone Networks 30,000 wi-fi access points and network management nodes and tools, as well as options for monetising the network. These include opportunities for offering telecommunications operators the chance to reduce their data burden by using the neutral wi-fi network to carry some of their traffic.

Ericsson will provide wi-fi technology on a service model, and manage it according to an agreement for a period of five years.

Ozone Networks has struck deals with leading Indian retailers to set up wi-fi hotspots, including Mcdonald's, Haldirams, Subway, GVK, Oberois and The Coffee Bean.

Ozone Networks, founded as a Class 'A' ISP licence holder, offers system integration, services to super luxury hotels and boutique hospitals, public wi-fi hotspots, and international wi-fi roaming.

The company raised its first round of funding in 2008 from Access Industries, an industrial holding company headquartered in New York. Access Industries has a significant portfolio of global telecom, media and television investments, along with chemicals, real estate and the commodity business.

With over 200 million customers, Nimbuzz is a third of the size of WhatsApp, and also smaller than Viber, with 450 million users. But in India, Viber has over 25 million customers compared to over 70 million users of WhatsApp, However it is positioned differently from WhatsApp as it is an incubator for many other services like voice over internet, a platform for advertising services and is also looking at adding in gaming all of which are being monetised.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.