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| Prithvi Info plans VAS foray via buyout |
| K Rajani Kanth / Chennai/ Hyderabad Mar 09, 2010, 00:11 IST |
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Prithvi Information Solutions Limited, a Hyderabad-based software consulting, outsourcing and business solutions provider, is planning to foray into the domestic value-added services (VAS) space through the inorganic route during the next financial year.
“The Indian telecom space would see four to five more operators getting added to the present 10-12 players. With plenty of fingers in the pie and the average revenue per user (ARPU) getting thinner, operators are now looking at VAS services to supplement their revenues. We believe this is a right time to tap the VAS segment, which would open new revenue streams for us,” Sobhan Partha, head (TES – Asia Pacific region), of Prithvi Information, told Business Standard.
The VAS market in India is currently pegged at Rs 2,500 crore and is projected to cross Rs 21,000 crore by 2013. At present, ARPU is around 9 per cent, which is expected to rise to 12-14 per cent on the back of VAS services.
“We are currently evaluating a few companies that are into the VAS space in India and will be acquiring one of them in the next financial year, even as we grow organically in the non-VAS business,” Partha said, adding the company was targeting to garner revenues of Rs 20 crore from VAS in the first year. He, however, declined to give the probable size of the acquisition.
Prithvi Information, which registered revenues of $433 million (approximately Rs 1,991.8 crore) in the last financial year, reported a net profit of Rs 52.25 crore on revenues of Rs 1,045.02 crore for the nine-month period ended December 31, 2009. The company’s scrip ended the trade at Rs 65.40 on the BSE on Monday, up 4.31 per cent over the previous close of Rs 62.70.
Stating that Prithvi was betting big on the telecom engineering services (TES) – offered around products like switches, networks and wireless telecom equipment for original equipment manufacturers (OEMs) like Nokia and Ericsson and one operator BSNL – Partha said the company was looking at adding two-three operators to its portfolio in the next financial year.
“Our current focus is on India and Brazil and we expect our TES order book pipleline – currently at over Rs 100 crore – swelling to Rs 500 crore in the next financial year, of which about Rs 200 crore will flow in from Brazil,” he said. The TES market in India, including wireless networks, towers, electronics, operational maintenance, optimisation and software, is currently pegged at $1 billion.
Of the 3,500 employees of Prithvi, 600 professional work for the TES division across the four southern states. The company is also planning to enter north India (Punjab and Haryana). “About 400 people will be coming on board next year,” Partha said.
Prithvi Information is currently entangled in legal issues including a case filed by Deutsche Bank in a Bangalore court accusing Prithvi promoters of a Rs 40-crore fraud and an alleged fraud involving unpaid dues to a Japanese company.
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