Telecom giant Telenor has entered the online classifieds market in Asia and South America.
Telenor will pick up a 33.3 percent stake in Southeast Asia focused 701 Search, an existing venture between Singapore Press Holdings and Norwegian publishing house Schibsted.
The telecom service provider will also set up a 50:50 joint venture with Schibsted to create SnT Classifieds with a focus on South America.
Telenor pays around 145 million euros in cash for its 50 percent share in SnT Classifieds and 33.3 percent stake in 701. The parties have committed pro rata funding of the joint ventures until estimated cash flow breakeven.
As part of the deal, Schibsted will contribute its existing South American assets, including Yapo in Chile and Bomnegocio in Brazil. Telenor will meanwhile contribute its Bangladeshi asset Cellbazaar to the Southeast Asian venture.
While Schibsted brings experience from the online classifieds business, Telenor contributes with significant emerging market experience and insight into mobile internet technology and usage.
Through its strong media presence in Singapore and across Southeast Asia, SPH will continue to bring substantial value to the partnership through extensive local insight and a strong regional network.
Over the next six to seven years, close to three billion people are expected to access the Internet using their mobile phone as the primary or only interface.
“Being one of the largest mobile operators in the world with a strong footprint in emerging markets, it makes perfect sense for Telenor to team up with two world class companies like Schibsted and SPH to create a leading online classifieds player. The combined Asian scope of SnT Classifieds and 701 also overlaps well with Telenor’s Asian presence,” said Rolv-Erik Spilling, EVP and head of Telenor Digital.
Schibsted and SPH’s Internet services in online classifieds reach around 100 million people worldwide. Telenor’s Internet services reach 150 million customers in Europe and Asia.
The CEO of the new company will be Andries Oudshoorn, currently the CEO of Schibsted’s online classified site Bomnegocio.com in Brazil.