SAR Group, makers of the Wynncom mobile handsets, has inked a deal with the Indian subsidiary of the UK -based Meridian group to acquire 55% stake in Fly Mobile’s business in India and SAARC regions, reports The Economic Times. The report says that the group intends to keep both Fly and Wynncom as separate brands and it intends to create a separate entity in the future, which will manage its mobile handset business. The total investment in this partnership including additional investments over the next three years ranges somewhere between Rs 200-250 crore, according to SAR Group’s promoter Rakesh Malhotra.
This announcement follows earlier reports of SAR Group being in talks with the Indian arm of Fly Mobiles to either acquire or take a majority stake in the joint venture, suggesting that the SAR group is finding the Indian mobile handset market quite complex to develop an effective logistics and supply chain strategy to build volumes in the presence of larger players like Micromax, Spice and Karbonn.
SAR group currently holds a 72% stake in Wynncom and 80% stake in WorldAce, a third-party after sales service provider for mobile handsets across multiple brands in 640 locations across the country.
In May 2011, the group had acquired a Mumbai-based low-cost phone maker G-Fone for its product development capabilities while incorporating some senior executives into Wynncom’s management, as noted by The Economic Times. Before that, it had entered into an exclusive agreement with the online free SMS service provider 160by2.com to allow users to send free SMS to mobile subscribers in India, UAE, Kuwait, Saudi Arabia, Singapore, Malaysia and Philippines through the pre-installed mobile apps developed by 160by2.
Fly Mobiles currently has operations in the UK, Europe and CIS countries with revenues of $130-140 million with $34 million coming out of its Indian operations, and the combined entity of Fly and Wynncom currently registers a combined sales of nearly 2,00,000 units a month with an annual revenue of Rs 300 crore, as noted by the report.