Reliance Communications (RCOM) is all set to acquire UK-based global mobile virtual network operator (MVNO) Vanco. According to sources, RCOM is learnt to have emerged as the highest bidder and both the companies have already finalised 100% buyout deal, in which, RCOM may also take over Vanco’s £123-million debt. Earlier this month its CEO and founder Allen Timpany parted ways with the company, after it came out with a major profit warning, it was put on the block. Trading in the shares was also suspended earlier this month. RCOM will have to pay a very small sum for the troubled telco, which was at its peak (about two years ago) and had a market cap of close to $800 million. The deal is likely to be inked today, sources added. Like in earlier acquisitions, RCOM is expected to retain the workforce including the top management of Vanco.
Vanco is among the leading MVNOs in the world with its services available in over 200 countries.
An MVNO does not own any network assets, but leases infrastructure and bandwidth from others to serve its customers. This acquisition would bring under RCOM’s fold a virtual network in 230 countries across the world with over 800 new product offerings that Vanco has developed over the last 20 years. The ailing telco also has over $650 million worth of secure long-term contracts from its customers that would be accrued over the next 3-5 years.
With Vanco’s business model revolving around virtual networks, RCOM would be able to cut significant costs through routing the traffic on its own network which will result in considerable enhancement in EBIDTA of its global business, which has been looking towards forging alliances with regional and domestic carriers. Vanco has alliances with 700 carriers across the world. The acquisition is also in line with RCom's strategy of becoming one of the world's top five data communications players.
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As global auto majors go for more intelligent cars, the benefits are being reaped back in India by Tata Elxsi, which has the automobile sector as a key vertical in its product design services domain. The research and development of a number of path-breaking features that mark new vehicles are being developed at the company’s development centres, which presently have staff strength of roughly 700. Typically, the high-end cars of the world have as many as 70 little computers, or electronic control units (ECUs), which also mean that about 60% of the cost of automobiles are contributed by the electronics that they feature. This is in contrast to 10 ECUs in high end Indian cars at present.
The company is engaged in some of the cutting-edge work including bending the beam of vehicle lights while taking curves, night vision, elevating or dipping the beam as required and adaptive front lighting system (AFLS) which enabled drivers to prevent light from vehicles coming in the opposite direction blinding them temporarily. Some of the product designs undergoing development included censors that would automatically measure body temperature and pulse of the driver and accordingly adjust air-conditioning in the vehicle, adjust air-conditioning levels according to personal comfort levels of each passenger, and airbags that would open to the levels required for passengers of different weights.
Tata Elxsi has seven global development centers in the country, besides one centre in Japan. The centre here is targeted to have strength of 2,000 software professionals within the next two years. The increasing electronics constituent in automobiles means more business for Tata Elxsi, which has a strong presence in the automobile vertical.
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RCom is believed to have initiated talks with MTN Group, South Africa's largest telecom operator, even as Bharti Airtel decided to pull out of the negotiations citing differences with the management. Reliance is among the four telcom companies that have shown an interest in MTN. Russian telcom company Vimpel Communications, European major Deutsche Telecom and UAE telecom giant Etisalat are the other suitors that have announced their interest in bidding for the South African company. This is the second attempt by RCom to acquire MTN Group. RCom Chairman Anil Ambani had met Nhleko last year, but the talks were not successful.
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