The Hindu Business Line : Tanla buys 85% stake in Finland’s Openbit

Hyderabad, June 5 Mobile value-added services provider Tanla Solutions Ltd today announced the acquisition of 85 per cent stake in Finland-based Openbit OY, a mobile device payment services provider, for $15.81 million.

The all-cash deal, made from internal accruals, was executed through the company’s subsidiary Tanla Mobile Asia Pacific.

Tanla has decided to acquire the remaining 15 per cent stake in two tranches — 5 per cent later during this year and the remaining 10 per cent by the end of 2009.

Openbit, a closely-held private equity funded company based in Tampere, Finland, with revenues of $15.88 million and cash reserves of $3 million, is valued at $18.60 million. It has 117 employees.

New capability

The Chairman and Managing Director of the $119-million Tanla, Mr Uday Kumar Reddy, said the acquisition adds a new mobile payment capability to company services. “And we are in talks with several operators globally and in India to offer these services.”

Addressing a press conference here after the board approval of the acquisition, Mr Reddy said “the company expects to launch these services in India within a couple of months. Through Openbit we will be able to address the smart phone market, where people are increasingly using them for payments.”

The Chief Executive Officer of Openbit, Mr Arto Lehtonen, told Business Line , “this move will expand the current business and also take advantage of Tanla’s capability to develop software and tap their customers while enabling us to enter new markets.”

“Openbit’s payment software has an installed base of 20 million phones through Nokia. Other customers include some of the largest independent software vendors such as Symantec, F-Secure, QuickOffice and gaming companies such as 3D Arts and Gemelion. Through this merger with Tanla, we can offer similar services to more operators,” Mr Lehtonen said.

Pooling resources

According to Mr. Reddy, “after merger, both companies will integrate their R&D and product development capabilities by pooling their resources.”

Tanla, which serves customers such as O2, Vodafone, Singtel, Airtel and MTN with its value-added services, now employs about 500 people in India and over 40 people in sales and marketing overseas.

Openbit services help in payment through mobile phones and also in digital rights management for mobile applications.

Its customers across operators are Symbian operating system-enabled Nokia and Samsung phones. Openbit is adding about half a million new users on an average per month, Mr Lehtonen explained.

Asked about revenue projections from the acquisition, Mr Reddy said that the company would refrain from making any forward looking statements on financials.

Openbit software helps content distributors and mobile phone users in payment through mobile phones.

The company has billing agreements that allow payment for mobile content with nearly 90 telecom networks and with all major credit cards such as Visa, Master and Amex. The company gets a revenue share per every transaction that a user undertakes.

When people use their mobile phones for downloading content, the Openbit software helps in completing the payment process.

According to Mr. Reddy, “after merger, both companies will integrate their R&D and product development capabilities by pooling their resources.”

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