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VC-backed PrimeTel Raises $60M From Asian Telco

02 May, 2012

Communications technology firm Prime Telesystems (Ltd) or PrimeTel has raised Rs 300 crore (~$60 million) from an Asian telecom firm by selling less than 10 per cent stake, as it prepares to launch its premium-priced communications services in India, a company spokesperson told VCCircle.

He did not disclose the name of the investor but said it is an Asian government controlled tier I telco.

Some of the firms which fit the bill include Singapore Telecom (a public listed firm in which Singapore’s sovereign wealth fund is a large shareholder) besides Axiata (formerly Telekom Malaysia). Both these Asian telcos have an India exposure through their strategic investments in Bharti Airtel (SingTel) and Idea Cellular (Axiata).

The deal puts an implicit value of over Rs 3,000 crore ($600 million) on privately held PrimeTel.

PrimeTel has recently launched its by-invitation premium services in USA, western Europe and Japan, positioned as a high end service with an average revenue per user (ARPU) of around 1000x of the average ARPU of telcos in India. This translates into around $3,000 to $4,000.

The spokesman said PrimeTel is working on a stripped down version for India and the firm will initially target only around 50,000 subscribers in Mumbai and later aim at 1 million nationally. “It is a bullet proof-Mercedes positioning compared to a Maruti 800 positioning of the large Indian telcos,” the spokesperson said.

The service would come bundled with a mix of standard and premium offering including caller ID barring, concierge, automated caller ‘voice and number identification’ based discrete screening, pass-code access, one touch call divert to secretary, multi-language real time translation, 85-country local numbers in one SIM card besides full package DTH and Slingbox functionality and high speed broadband as complementary services.

The service would also have a dedicated communication manager and a remote confidential research service for net browsing/ email/curated media.

This would entail on an average $25,000 signup charge besides a fixed ‘eat-all-you-can’ monthly fee.

PrimeTel is currently awaiting final license terms and conditions before applying for an India service licence.

PrimeTel, which was started nearly two decades ago by academician and technocrat B Nag, along with a group of his ex-students from the IIT (Bombay), is backed by various early stage investors. These include Intel Capital, SCSI Capital (a China-based Asian venture capital firm, founded by a British professor and focused on opportunities in the digital space), Citicorp and Cheekotel (domestic equity fund house operated by IIT Mumbai alumni).

Earlier, the firm was in talks with a clutch of investors including few venture capital and private equity firms for raising the fund. Last year, some of its angel investors including octogenarian R K Jerath, who put in money nearly 15 years ago had exited the firm.

Some of the existing institutional investors who were earlier looking for an exit by December 2011 as their investments have matured, have decided to extend the exit by a year. Intel Capital, SCSI Capital, as well as Citicorp, are believed to have invested in the firm way back in 2001.

PrimeTel grew as a private sector telecom R&D company and one of the early firms focusing on convergence services, using packetised technologies or IP technologies. It is looking to roll out its triple-play or a combination of audio-video-voice services in India, based on its proprietary technology HDVSL, which is built around the HDVSL standard, uses special high power HDVSL compound semiconductors and involves a new network architecture.

PrimeTel has in the past been involved with implementation of government projects such as the first defence satellite network, satellite TV jamming project and the national Internet backbone. It also helped design India’s first cellular network for Sterling Cellular in Delhi Circle. A little over nine years ago, PrimeTel commenced operations in Israel for packetised real-time applications and in China, for low-cost wireless applications.

Also Read:

PrimeTel To Raise Rs 300Cr; Existing Investors Opting For Partial Exit


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VC-backed PrimeTel Raises $60M From Asian Telco

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