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Perspectives on building technology businesses and AcceleratorIndia from Cartezia

Tanla and Zed to form a 50:50 joint venture in India

Tuesday, April 7, 2009

Tanla Solutions, based in Hyderabad, India is establishing a 50:50 joint venture with ZED Worldwide Holdings SL, a Spanish digital content and services company after it received approval from India’s Foreign Investment Promotion Board (FIPB). The JV is set up as a limited liability company, to focus on the development and delivery of mobile Value-Added Services in India.

 

Zed is expected to offer marketing reach and its experience in content services to the JV with Tanla providing the underlying technologyand services platform. According to Reuters, joint investment into the venture was 630 million rupees ($12.38 million) and the service will launch in Q1 2010. In a statement, Zed said that the mobile VAS market, or mobile content market for entertainment, advertising, and interactive TV, is estimated to grow to $4billion by 2010, making it the largest in the world.

 

Despite focusing heavily on the UK market in the past, Tanla has recently made inroads into the Indian market. It will provide 3G deployment to MTNL and has signed messaging and billing agreements with Airtel, BSNL,Vodafone-Essar, Reliance Communications and Idea. With a dozen 3G licenses being issued, there is huge growth potential in the Indian mobile market and Tanla’s strategic shift looks to be timely. A recent estimate by analyst iSuppli predicts India's wireless subscribers to grow to 715 million, with VAS contributing more than 25% of the total revenues by 2012.

 

With Zed’s partnership with premium content providers like the NBA, Lionsgate and Disney, among others, Tanla now has a strong partner in gaining access to new customers for its billing services. From Zed’s perspective, this deal not only offers a low-risk way to enter the fast growing Indian market but also provides a strong technology platform that it can deploy globally.