Indian mobile-handset maker S Mobility Ltd. is looking to buy at least one mobile-software company in Africa by the end of March to tap into an expected surge in demand for mobile-software services in the continent.
S Mobility is doing due diligence on two companies, Managing Director Dilip Modi said recently. “I think, by the end of this quarter, we should announce it (an acquisition).”
He didn’t name the target companies.
Based on the outskirts of New Delhi, S Mobility is a part of the diversified Spice Global Group, which has interests in telecom, entertainment and finance.
The company, earlier called Spice Mobility Ltd., makes and sells its own Spice-branded mobile phones and tablet computers through company-owned and other retail outlets. It also provides value-added services to some local telecom operators.
Africa is a growing market for mobile-phone and mobile-software services, enticing companies from markets where user demand has slowed down or stagnated. India’s top mobile-phone operator, Bharti Airtel Ltd., made its foray into the African continent in early 2010 to tap into the growth potential of the continent.
Value-added phone services–such as messaging, mobile Internet, games and music–are expected to be the next trigger for industry growth.
Research firm Ovum expects value-added services to contribute about 11% of the continent’s total mobile-services revenue in 2016, from about 1% now, driven by a successful system of using mobile phones to settle payments. Research firm Informa Telecoms & Media expects revenue from value-added mobile services in Africa to grow to $29.8 billion in 2016, from $11.8 billion at the end of 2011.
S Mobility is in talks with MTN Group Ltd. and the African unit of Bharti Airtel for providing software and services on mobile phones, Modi said. It is also in talks with MTN for building mobile-Internet devices.