Matrix Cellular Services, a Delhi-based provider of SIMs and data cards flogo_matrixor international travellers, is talking to telcos for what could be a distribution partnership or a sell out.

“We have been exploring inorganic options, but it is still a long shot,” said the company spokesperson. The firm is in talks with a ‘handful of telcos’ interested in its offering. No names are being revealed.

The Mobile Store?

Calling the Economic Times story on The Mobile Store looking to acquire the company a rumour, Gagan Duggal, MD, Matrix, told MediaNama that he has been talking to various players since last summer and that the report was not “in the right direction”. Duggal is a major shareholder in the firm. Do note that Bennett, Coleman & Co Ltd (BCCL), which publishes the Economic Times, had invested in Matrix last year.

The Mobile Store  a part of the Essar Group, is a retail chain selling handsets, mobile accessories and VAS with over 1,300 company-owned outlets, employs around 4,500 people. ET reported that an offer has not yet been made and that Matrix is looking at a valuation of at least three times the company’s current revenues, as advised by KPMG.

When asked if Videocon-promoted telco Datacom, was one of the telecom contendors, we got a ‘no comment’ from the spokesperson. Given Videocons retail network, strengthened by its acquisition of PlanetM and its investment in Datacom,  we thought this would be an interesting fit – with both a retail and telecom play.

Consolidation and Competition

The hunt has been on for a while now, and an announcement is nowhere near, from what we understand. It is still unclear whether the company is aiming for a buyer or if it will settle for a distribution partner. If a telco consolidation is on the cards, it would mean a huge jump for Matrix – in terms of resources and reach. The company believes that Bharti Airtels and Reliance Communications‘ global calling cards are not competition as Matrix’s SIM cards business is a wholly different market.

Matrix is a profit making firm and though hit “to a certain extent” by the downturn, its corporate users are helping it tide over, the spokesperson said. The 12 year old company offers roaming in 32 countries is now looking for “other opportunities to grow”. As we see it, the space is just hotting up and the company is only faced with the challenge of growing fast.

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