Singapore Telecom yesterday said it would buy US mobile advertising start-up Amobee for US$321 million to expand group revenues from ads and marketing across Asia.
SingTel, Southeast Asia’s biggest telecom firm by revenue, said its 100 percent buyout would boost mobile ad sales in India, Thailand, the Philippines, Indonesia, Bangladesh and Pakistan, where it has large affiliates.
“A vast majority of our 400 million [clients] are in emerging markets,” said Allen Lew, chief executive of the SingTel Group’s newly formed “digital life” unit announced yesterday as part of a top-level reorganization.
EXPLODING MARKET
Citing data from technology research firm Gartner, Lew said the global mobile ad market is likely to exceed US$20 billion by 2015 from about US$7 billion this year, with 35 percent of it generated in Asia-Pacific.
Amobee, founded in 2005 and based in Redwood City, California, has offices in Europe, Asia and Latin America.
Its management team will remain in control and Amobee and will “serve operators, publishers, advertisers and agencies with leading edge mobile advertising technology and services,” SingTel said in a statement.
Despite Amobee having unaudited net assets worth only US$600,000 as of November last year, Lew told a news conference SingTel was not overpaying for the firm with the all-cash acquisition.
“The way we value this company is not based on the net tangible assets. We value this company based on what we think is eventually going to be worth,” he said.
EXPANDING REVENUES
SingTel has been expanding its revenue base beyond its small domestic market, where the mobile phone penetration rate stood at nearly 150 percent as of Dec. 11, according to Singapore government data.
SingTel has a wholly owned subsidiary in Australia called Optus.
It also owns strategic stakes in India’s Bharti Airtel, Thailand’s Advanced Info Service, Globe Telecom of the Philippines, Indonesia’s Telkomsel, Pacific Bangladesh Telecom Ltd and Warid Telecom in Pakistan.
Lew said it would take time for the buyout of Amobee to bear fruit.
“The company is currently a start-up so we are going to have to do a lot of things for it to achieve its potential,” he said. “We don’t normally discuss how long it takes for these things to break even but you know it all depends on how good we are at delivering a solution, it all depends on how fast the market grows.”
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