Proximus thinks the route is clear for a 15% margin boost

Mumbai: State-owned Belgian telecom group Proximus is aiming to double its revenue from the digital communications business to $3 billion and operating margins to 15% over the next 3-4 years after buying Route Mobile in India’s biggest in-bound FDI deal in the domestic cloud communications industry.

“We are extremely excited about the synergies emerging out of this deal, that is, leveraging Route Mobile’s India success story to grow our communications business in USA and Europe markets, while also taking our affiliate company Telesign’s digital fraud prevention solution to enterprises in India,” Guillaume Boutin, CEO, Proximus, told ET Thursday.

Proximus has completed the acquisition of 57.56% of RML’s shares held by promoters for EUR 643 million (Rs 5,922 crore) in cash.

Further, it acquired 24.99% shares through a mandatory tender offer for EUR 292.8 million (INR 2,594 crore) taking its total shareholding in RML to 82.70%. This, however, will be brought down to 75% gradually as per Indian markets regulations.

For the CPaaS (communication-platform-as-a-service) business, RML and its sister companies Telesign and BICS will together become the third largest globally in terms of volumes and fifth largest in terms of revenue, the executive said.

“Communication volumes are expected to explode with generative AI powering platforms like WhatsApp, RCS, and even traditional channels such as contact centre services and with the combined access and reach of Proximus and Route Mobile, we are aiming to scale market dominance globally,” Boutin added.

Rajdip Gupta, managing director and chief executive of RML, who will now lead the Proximus group’s global CPaaS business said, he finds immense cross-selling and business development opportunities for RML’s products in regions like Australia, LATAM and Europe.

“Our omni-channel communications stack will now be available to Telesign’s large customer base, which includes nearly 70% of large tech giants and over-the-top players,” Gupta said. “This unlocks vast opportunity for new account acquisitions. Further, our firewall business will witness a big boost, given that BICS is the second largest carrier of international telephony.”

As for the India market, Gupta said that RML will soon start proof-of-concept for large banks in India for Telesign’s fraud prevention services.

“Our generative AI-powered fraud detection solution has blocked 507 million spam calls and robocalls as well as 473 million smishing attacks in 2023, saving customers EUR 87 million in estimated costs of wholesale fraud exposure,” Proximus’s Boutin added.

RML’s founding shareholders including Gupta will reinvest EUR 299.6 million (Rs 2,680 crore) in Proximus Opal to acquire a stake of 12.72% in the next few weeks, partaking ownership in the larger group while surrendering his India stake.