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New Call Telecom acquires 70% stake in Nimbuzz for about $175M

nctnimbuzz-logoUK-based ISP New Call Telecom has acquired a majority 70% stake in the mobile instant messaging and VoIP company Nimbuzz Nimbuzz for about $175 million, reports the Economic Times.

While the terms of the acquisition were not disclosed, Nimbuzz will act as a unit of New Call Telecom and will continue to be headed by Nimbuzz CEO Vikas Saxena.

New Call Telecom told ET that this acquisition will enable them to integrate Nimbuzz platform along with a number of new apps, with its home broadband and Wi-Fi services in India and eventually other parts of the world.

It is also considering integrating Nimbuzz with its International calling business to further lower the rates for its existing customers. Note that Nimbuzz already has a VoIP service called NimbuzzOut that is targeted at International markets. In October last year, it had also launched an international calling service HelloIP with Spectranet. Apart from this, Nimbuzz will also apparently act an incubator for New Call Telecom apps.

Nimbuzz currently offers a cross-platform calls and messaging app across Android, Windows, iPhone, Blackberry and on ancient Java based cellphones as well. The app has features like file sharing, VOIP calls, chat rooms, stickers and free messaging among other things. It competes with other messaging apps like WhatsApp, LINE, Hike and WeChat and also VoIP services like Skype.

The ET report says that mobile brand advertising currently generates around 60% of Nimbuzz’s revenues while International calling accounts for 30% of its revenues. (Also readNokia tries Chat Buddy campaign on Nimbuzz).

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The company shifted base to India, that accounts a significant portion of its userbase, in early 2012 and has investors like Naspers and Mangrove Capital Partners. That being said, its worth noting that Nimbuzz no longer features in Naspers’ financial statements, hence we are not quite sure whether Naspers had already exited from Nimbuzz or not and Naspers has not responded to our queries on this.

More acquisition planned

New Call Telecom CEO Nigel Eastwood told ET that it is also closing another acquisition in the Wi-Fi segment in the country and the deal is currently in the final stages of approval from the Foreign Investment Promotion Board (FIPB), however he didn’t disclose any specific details on this. The deal is expected to be announced in a month or so.

In August this year, Eastwood had mentioned plans of investing $100 million towards acquiring four mid-level telecom companies over the next 18 months in India. He said these acquisitions will enable them to enter fixed line connectivity,Wi-Fi and messaging segments in the country.

Other developments:

– Facebook had finally closed its acquisition of the mobile messaging app WhatsApp, earlier this month. The deal, which was originally valued at $19 billion, is now worth about $22 billion because of a 14% increase in Facebook’s share price over the past seven months.

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– Earlier this year, internet telephony and messaging company Viber was acquired by the Japanese membership-based Internet services company Rakuten, for $900 million. The company had launched a calling service Viber Out that lets users make calls to mobile phones and landlines, in December last year.

– Microsoft’s Internet telephony service Skype is discontinuing the ability for Indian users to make Skype calls to landlines and mobiles within India from November 10, 2014.

– Japanese messaging app LINE, which had previously filed for an initial public offering (IPO) at the Tokyo Stock Exchange in July this year at an initial valuation of $10 billion, decided against the initial public offering (IPO) just last month, after it decided that its messaging service has grown fast enough for it to not go public. The company extended its premium calling service LINE Call to India last month.

– India’s largest telco Airtel had launched a Skype clone called Airtel Talk that allows international calls to India, free calls from Airtel Talk to Airtel Talk, instant messaging, video calls and conference calls among others.

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