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Tanla scans US for a buy

Hyderabad-based network aggregator Tanla Solutions is on the lookout for an acquisition that could help it gain a foothold in the US market.

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NEW DELHI: Hyderabad-based network aggregator Tanla Solutions is on the lookout for an acquisition that could help it gain a foothold in the US market.

“We are looking for a network aggregator like us or somebody with a capability in product verticals like mobile advertising or mobile commerce… price is not an issue for the deal,” a source said.

According to the source, Tanla is in talks with 3-4 US firms with annual revenues in the $30-70 million range and a deal is likely to be sealed next quarter.

Tanla has already soft-launched commercial operations in the US, and indicated its intention to launch on a larger scale.

The US market, with 250 million mobile subscribers, is potentially four times as large for value added services as the UK market, from which Tanla generates 90% of its revenue.

“It (US market) can be penetrated only through an acquisition, which will bring immediate cross-selling opportunities for Tanla’s UK content,” an analyst told DNA Money.

Tanla plans to enter the US market as a secondary aggregator. It will take two quarters to sign agreements with telecom operators there and become a primary aggregator.

“Tanla needs to show volumes to network providers in the US to get business… that can only happen with the acquisition,” the analyst added.

The company’s market share in the UK has gone up from 2.5% to 4.5% in the last 12-18 months and is expected to hit the double-digit level in next two years.

Tanla generates revenue from telecom products, aggregator services, and offshore services. Aggregator services accounts for over 70% of its total revenue.

vivek_s@dnaindia.net

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