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Proximus builds CPaaS scale with $722 million Route Mobile buy

Proximus has agreed to spend more than US$700 million on a majority stake in India's Route Mobile as it seeks to strengthen its position in CPaaS.

Mary Lennighan

July 17, 2023

3 Min Read
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Proximus has agreed to spend more than US$700 million on a majority stake in India’s Route Mobile as it seeks to strengthen its position in CPaaS.

The Belgian telecoms group has brokered a deal through its Proximus Opal arm, which holds the group’s US-based Communication Platform-as-a-Service (CPaaS) business Telesign. Under the terms of the agreement it will pick up a 57.56% stake in Route Mobile for 59.2 billion rupees (that’s €643 million or around US$722 million) in cash.

That deal will trigger a mandatory takeover offer under Indian regulations. As such, Proximus could pick a further 26% of Route Mobile’s outstanding shares at the same INR1,626.4 per-share price and, depending on uptake, could end up with a stake of around 75%, bringing its total bill to not too far off $1 billion.

The final step of the deal will see some of Route Mobile’s founding shareholders plough €299.6 million into Proximus Opal in return for a stake of up to 14.5%. That would value Telesign at €1.4 billion, Proximus noted.

This deal is really all about Telesign, and about boosting Proximus’s CPaaS presence. It has been working hard to build up its business in CPaaS and digital identity via Telesign and this acquisition gives it some valuable additional scale. Proximus notes that together Route Mobile and Telesign generate annual revenues of around €900 million.

Further, it claims that the deal will make the Proximus Group the third largest player in the CPaaS space globally, although that is based on messaging volume, not revenue. Whatever the data source, it’s clearly ticking that ‘scale’ box. The company’s CPaaS portfolio will benefit from the addition of Route Mobile’s omnichannel capabilities in particular, especially factoring in AI-based developments in customer engagement, it added.

Meanwhile, Route Mobile’s TruSense toolkit for combating fraud – launched earlier this year – will be a valuable addition to Telesign’s digital intelligence skillset.

Telesign’s current chief executive, Joe Burton, will lead the digital intelligence side of the merged entity, once the deal closes, while Route Mobile CEO Rajdip Gupta will oversee CPaaS.

“The partnership with Telesign paves the way for Route Mobile to become one of the global CPaaS leaders and achieve a billion-dollar annual revenue run-rate much sooner than the anticipated 3-4 years’ timeframe,” said Gupta.

“Route Mobile, with its strong CPaaS omnichannel product offerings and deep entrenchment in emerging markets coupled with Telesign’s strong presence in developed markets and a very robust digital identity stack, complement each other immensely to create a very strong value proposition for the Proximus Group and its stakeholders,” he added.

Essentially, Route Mobile’s core footprint covers the Indian subcontinent, Africa, Asia-Pacific and Latin America, while Telesign mainly serves Europe and North America. Together, the firms cover more than 200 countries and territories.

“As Proximus Group welcomes Route Mobile to the family, we are encouraged by the opportunities it will bring us as we focus on expanding our global reach and meeting our customers’ digital identity and messaging needs,” added Burton.

Meanwhile, Proximus Group CEO Guillaume Boutin focused on how the deal fits with the telco’s ongoing strategic plan, bold2025, which it unveiled earlier this year. Aside from the usual check boxes, like customer engagement and carbon-reduction targets, the plan covers Proximus’ growth ambitions both in Belgium – 5G and FTTH coverage mainly – and overseas, through BICS and Telesign.

“With Route Mobile and Telesign, Proximus Group now holds two strong and highly complementary global assets, both from geography and product expertise standpoints,” Boutin said. “This will allow us to reap the benefits of scale, considerably reinforce the product suite of both brands and realize synergies generating substantial value for our shareholders.”

It’s fair to say that this deal is right on the money when it comes to growing Proximus’ international activities.

It still requires regulatory and anti-trust approvals, as well as completion of the mandatory takeover offer. Nonetheless, Proximus expects to get it over the line within six to mine months.

 

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About the Author(s)

Mary Lennighan

Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.

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