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Spice Mobility acquires 26% stake in telecom tech company Creative Functionapps

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Spice Digital, a subsidiary of Spice Mobility, has acquired a 26% stake in telecom technology solutions providers Creative Functionapps Lab Private Limited for an undisclosed amount, the company informed BSE. Following the deal, Creative Functionapps has become an Associate Company of Spice Digital.

Creative Functionapps develops a host of products and solutions for telecom operators, including analytics-based telecom network performance and monitoring to mobile and internet consumer services.

With Spice Mobility’s mobile devices business continuing to post losses, the acquisition of Creative Functionapps could be the company’s attempt to prop up its services business, which has been steadily increasing its share in the company’s total revenues: the segment posted profit before tax of Rs 4.6 crore for the quarter ended March 31, 2015, down 5.35% from Rs 4.86 crore profit in the same quarter last year, and down 7.44% from Rs 4.97 crore profit in the previous quarter. It reported revenues of Rs 50.15 crore for the quarter, up 2.93% from Rs 48.72 crore in the same quarter last year, and up by 6.22% from Rs 47.21 crore in the preceding quarter. Services business accounted for about 10.57% of Spice Mobility’s revenues for the quarter, up from a 8.27% share in the previous quarter.

On the other hand, the company’s mobile devices business continues to post losses: It reported net loss before tax of Rs 69.78 crore for the quarter ended March 31,2015, as compared to a loss of Rs 17.93 crore in the same quarter last year. In the previous quarter, it had posted a loss of Rs 29.21 crore. The segment reported total revenues of Rs 425.38 crore for the quarter, registering a marginal 0.9% growth from Rs 421.59 crore revenues in the same quarter last year. On a sequential basis, revenues in the segment dropped 18.88% from Rs 524.36 crore.

However, the segment still accounted for 89.45 % of the company’s total revenues for the quarter, which was Rs 474.49 crore. The mobile devices segment had accounted for 89.89% of the company’s revenues in the same quarter last year and 91.95% in the preceding quarter.

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Anytime Learning acquisition: In January this year, Spice Digital had acquired a 38.53% stake in the Noida-based online education provider Anytime Learning Private Limited for an undisclosed amount. The company had said that post acquisition, Anytime Learning would become an Associate Company of Spice Digital. It’s worth noting that Spice Mobility chairman Dilip Modi is also the executive board chairman of Anytime Learning, which operates under the brand name Sunstone Business School. It offers an online Post Graduate Program in Management (PGPM) to working professionals along with an AICTE approved two-year full-time PGPM/MBA program at its Greater Noida & Bangalore campuses.

txtBrowser acquisition: In September last year, Spice Digital had also acquired a 26% stake in the Bangalore-based Vavia Technologies that has developed apps like the SMS-based search engine txtBrowser and a Secret-like anonymous social network app Confess. Vavia had earlier partnered Spice Digital to launch txtBrowser, which had claimed to cross 300 million queries as of June 2014. It had claimed to have 4 million unique users globally and 500 developers on its service at the time.

Delisting plans on hold: In May, Spice Mobility’s promoters Smart Ventures Private Limited, informed the stock exchanges that it was putting on hold any step in the direction of the proposed delisting of the equity shares.  In January, Spice Mobility promoter Smart Ventures Private Limited had received board approval to delist the company from the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Also Read: Spice Digital gets a wallet license from RBI

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