SoftBank aims to lead mobile internet industry through Bharti SoftBank venture

The Sunil Mittal promoted Bharti Enterprises, the parent company of India’s
cellular service provider Bharti Airtel, announced its mobile Internet joint
venture Bharti SoftBank Holdings (BSB), a joint venture with SoftBank, ICT
major in Japan.

 

Bharti SoftBank Holdings, a 50:50 joint venture, will invest in three
significant areas of
 mobile internet ecosystem  social
media, gaming and e-commerce. The venture will cater to the most potential
segments of Indian telecom sector, where social media has become a basic need 
after air, water, food, shelter.

 

India is also a booming region for e-commerce. Within
the first three months of 2011, venture capital funds
 have invested over $50 million in seven e-commerce
companies, a 400 percent increase over the same period just last year.

 

The total Indian e-commerce market was approximately 3 percent of the
U.S. market last year ($6.7 billion versus $227.6 billion). Indian youth
is becoming addictive to games with emergence of mobile internet and
smartphones. Indians are also active in social media. One example was the
success of the Anna Hazare campaign.

 

India has more than 600 million active mobile phone users but data
services account for around 12 percent of total revenues of operators. Mobile
internet is expected to boost data revenues. The joint venture plans to work in
India initially. It will expand to other markets later.

 

Bharti SoftBank will work with all operators in the world. Bharti Enterprises’ Comviva, a VAS player, follows a
similar model. Hope Airtel’s competing operators will not have any problem in
associating with Bharti Enterprises company in the mobile internet space.

 

Recently, Softbank announced its investment of $200 million in InMobi, an
independent mobile ad network.

 

This is a major transformation for Softbank. Softbank is transforming
itself from an Internet provider into Japan’s third-largest and fastest-growing
cellphone carrier and now to a global mobile ad major.

 

Softbank and InMobi will have opportunities to explore the fast growing
mobile ad market. It is also expected to generate further synergies between
InMobi and Softbank, given the significant number of prominent Asian Internet
companies in Softbank’s investment portfolio. Softbank sold most of its 4
percent stake in Yahoo, which is said to be looking for a buyer.

 

Over the decades, SoftBank endeavoured to develop new markets for
Internet businesses, starting from the U.S., China and now India, I believe
that through the mobile internet, we can change people’s lives in India and
empower each one of them to contribute to society’s exponential growth. This
partnership represents a significant step in SoftBank’s journey towards
becoming No.1 in the mobile internet industry,” said Atsushi Taira, director of
BSB.

 

Kavin Bharti Mittal, one of the twin sons of Bharti Enterprises chairman
Sunil Bharti Mittal, will head strategy and new product development at BSB.

 

India, which has emerged as the second largest mobile market in the
world, stands at the cusp of another revolution – mobile internet, With a fast
growing economy, a large youth population and access to cheaper and faster
data, there is a unique opportunity to build services ground up for mobile,
especially in a country where the first screen for most is a mobile device,”
 said
Kavin Mittal.

 

Interestingly, Bharti is one of the few companies in India which could
sustain their relationship with foreign partners. Its long term association
with SingTel is an example.

 

The other major partnerships include its venture with Philippine
conglomerate Del Monte forfresh and processed fruits and vegetables; tie up
with
 US-based Wal-Mart for cash-and-carry and back-end supply chain
management operations and others.

 

A World Bank report estimates that the average annual growth rate of
India is at about 7 percent in past 20 years which is triple of the US which
has over 2 percent. It’s time to explore Indian market. Most of the tie ups
between Indian and Japanese companies have succeeded.

 

By Rashi Varshney