Dubai: The cross-platform mobile calling and messaging apps have become hugely popular among mobile consumers and it has proven to be a lucrative and profitable business, at least in terms of mergers and acquisitions.
Larger entities are acquiring smaller ones to add and engage loyal consumers.
Facebook acquired mobile-messaging app — WhatsApp — for $22 billion while Viber was swallowed by the Japanese company Rakuten for $900 million, and now a UK-based low-cost fixed line and broadband service provider — New Call Telecom — has taken a 70 per cent stake in Netherlands-based Nimbuzz in a deal valued at $250 million.
Nimbuzz has 210 million registered users, mostly in India, Middle East and North Africa regions while WhatsApp has over 600 million users globally. Nimbuzz processes over one billion VoIP (Voice over internet Protocol) call minutes per month, more than 100 billion messages per month and operates one of the largest mobile advertising platforms in South Asia and Mena region.
It competes with other messaging apps like WhatsApp, Viber, Line, Hike, WeChat and Skype.
“Nimbuzz is proper because of the strong pockets of expat population, mainly to connect the Indian expat community in the Middle East with their families back home,” Vikas Saxena, CEO of Nimbuzz, told in an exclusive to Gulf News.
He said that Nimbuzz is not only monetising internet properties but also telecom properties in India and it will be expanded to other Middle East markets very soon.
The acquisition is also part of a bigger strategy by New Call to invest in India.
“India is the hotbed for tech investment as its mobile subscriber numbers are exploding,” said Nigel Eastwood, CEO of New Call Telecom.
“We see a huge potential for new revenue streams in internet, broadband, instant messaging and data sharing markets in India and hope to generate and expand a number of new revenue streams as e-commerce gathers pace,” he said.
He said that New Call will add Nimbuzz as the latest brand to its portfolio and is acquiring assets in two other verticals — WiFi and fixed line consumer broadband internet service provider. The deals are in final stages and are expected to be closed by end of this month.
“We want to break into the Middle East, North Africa and Indian markets as a penetrated consumer brand. Social messaging still lags in India and the Middle East compared to the west. We see a great opportunity as consumers have started embracing social messaging more,” he said.
Nimbuzz has 50 million registered users in the Middle East and North Africa and 30 million users in India.
In the Middle East region, the usage comes in both the languages — Arabic and English, Saxena said.
To sceptics who doubt whether a small service like this can survive alongside a behemoth like WhatsApp, Eastwood said that Nimbiuzz has already overtaken WhatsApp as it has already differentiated itself from the pack.
“WhatsApp makes $30 million revenues from over 600 million users and Nimbuzz makes $15 million today from over 200 million users,” he said.
“We are going double our growth every year due to ecosystem we are going to bring in together,” he said.
A large part of Nimbuzz’s revenue still comes through advertising — small ad pop-ups that appear at the bottom of the mobile screens.
Saxena said the Middle East is maturing fast when it comes to advertising and particularly in mobile phones in the last two to three years.
“Mobile advertising is growing more than 100 per cent year on year in India and similarly in the Middle East as so much of the usage has gone to mobile that now they [advertisers] have no choice,” he said.
Eastwood added that the ad spend in Mena is $700 million now and it is expected to grow to $2.4 billion by 2018. Nimbuzz is going to be in the “beating heart of that growth”.
Nimbuzz will be adding more entertaining aspect to the platform like gaming, etc.
“Lots of people are willing to engage in gaming on the platform in the Middle East,” Saxena said.
