The Hindu Business Line : French ad co JCDecaux to enter India

It has set up a wholly-owned subsidiary in India, JCDecaux Advertising India Pte Ltd, in New Delhi, and has signed a 15-year contract with the New Delhi Municipal Corporation (NDMC) to build and operate bus shelters across the Capital. The company would be investing around $10 million in designing and building 200 bus shelters.

According to Mr Jean-Charles Decaux, co-CEO of JCDecaux: "The contract is a major milestone for our development. We expect the Indian outdoor advertising market to grow at 16 per cent in 2006 which is a good opportunity for us."

The company has entered into a revenue-sharing model with NDMC, which in turn gets 10 to 20 per cent of the total revenues generated from the operations.

"It costs around $150,000-$200,000 to design a prototype model, that can be replicated to other sites and we roughly spend around 1.8 per cent of our total revenues on R&D," Mr Decaux said.

Open to more partnerships

Although the company would start its India operations in Delhi, JCDecaux soon plans to look out for opportunities to `team up' with local players to expand its business. "We are open to partnering with more firms and acquisitions too," Mr Decaux added.

The company is also building a team of experts to advise it on "lucrative companies" for advertising on the bus shelters. "Globally, 22 per cent of our revenues come from advert orders placed by luxury brands and the remaining from FMCG companies, banks and leisure and entertainment firms," Mr Decaux said.