Naspers` Chinese subsidiary, Tencent, and its Indian counterparts, MIH India Holdings and MIH India Global Internet, are entering into a joint venture to take on the wireless market in India.
Naspers says its Tencent stocks are set to rise over the next two to three years, and it hopes to expand the mobile service provider`s offerings to the rest of Asia.
"There is a lot of growth still in the Asian markets for mobile services," says Antonie Roux, Naspers CEO of Internet operations.
Roux adds QQ, a subsidiary of Tencent, already has a presence in Vietnam, Thailand and Japan. Tencent`s Web site states QQ is a free instant messaging (IM) platform and has been described as the Asian Mxit.
Tencent, in which Naspers has a 36% share, announced at the end of the second quarter it had entered a licence agreement with MIH India Global Internet and an option agreement with MIH India Holdings.
The agreement will allow Tencent to offer its and Naspers` product sets in the Indian market. Tencent has already raised its estimate for third quarter earnings by 7%, due to the expected success of the joint venture.
Carving up the pie
Roux says QQ already has 240 million unique subscribers in China and hopes to expand its subscriber base into India. He notes the difference in the economies and says despite the fact India`s telecoms spend is at a slower rate than China, more people in India are still getting their first taste of the Internet through cellphones.
The multimedia company also owns ibibo, a social networking platform, and has a 30% share in ACLW, a mobile value-added services provider. Both companies are based in India.
Frost & Sullivan analyst Lindsay Mc Donald says India is a big enough market to have more than two mobile service providers. "QQ and ACLW might be looking at two different markets," she explains. "More and more mobile companies are starting to differentiate their market segments, so, while ACLW might be servicing business clients, QQ will focus on individual products."
ACLW states it has a range of mobile services, including community applications such as Chat, IM, social networking and SMS alerts. Naspers says QQ is a branded product offering IM, online gaming and e-mail services across wireless and fixed-line networks.
Mobile future
The International Telecommunications Union (ITU) says more than 233 million people in India owned cellphones in 2007. This translated into 20 people per 100 owning cellphones in a country with a population of 1.1 billion. The ITU further states only 190 000 people in India were Internet and broadband subscribers.
BMI-TechKnowledge analyst Ryan Smit says one in five people in India access the Internet on their cellphones. "If we are looking long-term to when the majority of India`s population is connected, it may very well be that they are using devices other than normal PCs, devices which may not even exist today. This has implications on long-term strategies as the devices of the future may be predominantly mobile," he says.
"We have consistently focused on developing markets and have conveyed this message consistently to our shareholders," says Roux. "And we will continue to focus on developing markets worldwide and hope to find more investment opportunities."
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