(by Apurva Chaudhary and Nikhil Pahwa) The vagaries of regulation: Canaan Partners wrote off its investment in Cellcast India late last year, MediaNama had learned from reliable sources. Alok Mittal, General Partner at the VC firm declined to confirm or deny this development to MediaNama. In 2007, Canaan Partners had invested $5.25 million in Cellcast Asia. In May 2013, UK based Cellcast PLC announced that it offloaded its entire investment in Cellcast India, in return for a partial settlement against the sum of £585,000 overdue under its IP licensing agreement. It had announced plans to do this last year. The Cellcast PLC sell-off and Canaan Partners write-off was following a regulation that significantly crippled Cellcast's business last year. A notification from the Indian telecom regulator TRAI had placed an upper limit on premium SMS businesses at four times of the corresponding local call/SMS charges in the Tariff plan opted by the subscriber. Which meant that if a cellular phone customer had opted for a plan wherein the cost of a call is Rs 0.5, she could only be charged Rs 2 per call for a premium call. Cellcast bought TV air-time and ran shows like Bid2Win, astrology, Tambola, monetizing those through premium messages, which used to be around Rs 15 per minute. A reduction to Rs 2-5 per minute would have significantly hampered their business. The TRAI had reversed its ruling in October last year, but it appears that enough damage had been done. When contacted by MediaNama earlier this month, Pankaj Thakkar, founder of Cellcast India said that the business…
