Communications Platform-as-a-Service is hitting its second wave, powered by network APIs, AI and other capabilities, moving away from its reliance on SMS and email
Belgium’s Proximus Group completed the acquisition of a majority stake in Route Mobile, a global Communications Platform as a Service CPaaS company. Route Mobile is listed on the National Stock Exchange of India, one of the country’s largest, and the Bombay Stock Exchange, which is the oldest stock exchange in Asia.
Proximus describes the acquisition as “a transformational step forward in the Group’s International strategy to become a worldwide leader in digital communications and digital identity”.
CPaaS gets its second wind
The CPaaS sector was overhyped then had a bumpy ride, not helped last October by Ericsson devaluing its acquisition Vonage by 50% (see market analysis in that piece) after less than two years after its purchase. It paid €6.2 billion for CPaaS firm in November 2021, to widespread surprise.
As CPaaS moves away from its first generation that relied heavily on bulk emails and SMS, it appears to be increasingly in vogue: in October last year, Fazil Balkaya, Principal Analyst of Synergy Research Group, said, “We are at a pivotal point of the CPaaS market where usage and API-based interactions can prove further value during the current macroeconomic conditions. The CPaaS market maintains a strong double-digit growth and the market is poised to exceed $10 billion run rate in 2025.”
This was underlined earlier this month when Infobip and Nokia announced they are partnering to enable the global developer community to leverage both companies’ API platforms. The aim is to build a wider array of telco applications faster for consumer, wholesale and enterprise customers, powered by the network.
Major enabler
The operator group says that the Route Mobile transaction is “a major enabler for Proximus Group’s international strategy, expected to generate substantial value, improve the overall risk profile of the Group and drive profitable growth and cash generation”.
It points out that its US-based affiliate Telesign, acquired in 2017, has already enabled it to build up “a significant presence in the CPaaS and digital identity markets”.
Now, “the complementary expertise, in combination with the global reach of Route Mobile and Telesign, will allow [Proximus] to reap the benefits of scale, accelerate growth as a truly worldwide group and generate shareholder value,” according to a press statement.
Proximus Group will provide in-depth information on the transaction and its potential in a dedicated webcast in early June.
It started last year…
Proximus signed a definitive agreement in July 2023 with the founding Route Mobile shareholders to acquire 57.56% of the CPaaS through Proximus Opal, a Proximus Group subsidiary that holds 100% of Telesign for INR 59.224 million (€643 million). Some of the founding shareholders committed to reinvest €299.6 million in Proximus Opal, which translates into a shareholding of 12.72% in the subsidiary.
After this reinvestment, the total net cash-out amounts to €636.3 million. The finance for the acquisition is covered by the €700 million bond transaction issued on 20 March 2024.