SingTel buys U.S.-based Amobee for $321 million to expand into mobile advertising

By Telecom Lead Team: Mobile service provider Singapore
Telecommunications will acquire U.S.-based Amobee, a provider of mobile
advertising solutions, for $321 million.


This will be the company’s first major acquisition since
2007. The acquisition is aimed at expanding into mobile advertising technology
and services.


Global mobile advertising market to reach $32 billion by 2017


According to GIA, the global market for mobile
advertising is expected to reach $32 billion by the year 2017.


For a large section of the consumers in emerging markets
including China, mobile devices constitute the primary means of accessing
digital content. Consequently, advertisers are placing increased emphasis on
such regions, as against the mature markets wherein the penetration rate of
personal computers is significantly high.


Japan, Asia-Pacific and the United States dominate the
global mobile advertising space, as stated by the new market research report on
Mobile Advertising. Asia wields strong influence in the global market driven by
the continuous increase in mobile ad spending.


SingTel holds significant stakes in six foreign mobile
operators: India’s Bharti Airtel, Indonesia’s Telkomsel, Thailand’s Advanced
Info Service, Pakistan’s Warid Telecom, Philippines’ Globe Telecom and Pacific
Bangladesh Telecom.


It owns Optus, Australia’s second-biggest
telecommunications company, which it acquired in 2001 for A$14 billion. In
2007, SingTel bought 30 percent equity stake in Pakistan’s Warid Telecom for
US$758 million.


SingTel will partner Amobee to build a strong
independent company that will serve operators, publishers, advertisers and
agencies with leading edge mobile advertising technology and services. It also
said that Amobee’s management team will remain in control of the Silicon Valley
company,” the company said in a statement.


As of Nov. 30, the unaudited consolidated net asset value
of Amobee was approximately US$600,000.


SingTel is looking at tapping new opportunities beyond
mobile advertising such as targeted deals and coupons as well as
loyalty-rewards programs for customers. SingTel has 434 million mobile
subscribers in 25 countries.


The cash-rich company has been picky about acquisitions
to grow, though its management always reiterates that the company is looking at
opportunities to add value to its shareholders. The company had free cash flow
in the nine months to December of S$2.46 billion, according to a media report.


SingTel Q3 income up 5 percent; Airtel Africa pulls down


SingTel has reported 4.6 percent increase in income at
S$4.83 billion in Q3 2011 against S$4.70 billion in same quarter previous year.
SingTel quarterly profit dropped 9.6 per cent due to losses at its Pakistan
unit and an African telecoms company owned by its Indian affiliate.


SingTel reported a net profit of S$902 million for the quarter ended December,
down 9.6 percent from S$998 million a year ago.


Profit from SingTel’s regional mobile units fell 7.9 per
cent to $449. Indian unit Bharti Airtel’s contribution to earnings dropped 30
per cent because of losses at South Africa’s Zain Telecom, which Bharti
acquired in 2010. SingTel’s unit in Pakistan posted a loss of $15 million for
the quarter.


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