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Maritime GSM growth continues with Philippines deal

  • Thursday, 21 March 2013 | News

Irish maritime GSM provider Blue Ocean Wireless (BOW) has announced that SMART Communications, a Philippines-based wireless services provider, has agreed to acquire a 30 per cent equity interest in BOW for $15.9 million. The investment now values Blue Ocean Wireless in excess of $55 million.

SMART, through its wholly-owned subsidiary SmartConnect Holdings PTE Limited, will take control of a combination of primary and secondary shares under the deal, and has negotiated a further option to acquire an additional 19 per cent of BOW within the next 3 years, should it wish to do so.

This move follows another previous investment of $4.8 million by Bank of Scotland in BOW in June of this year, for a ten per cent equity stake. The valuation implied by the SMART acquisition reflects an increase of $7 million in the value of the company in the two months since the previous deal.

The potentially huge market of Filipino seafarers, who would be able to connect with their families using the Blue Ocean GSM network at sea tied with SMART's terrestrial GSM network in the Philippines, would seem to be one of the major drivers of this move by SMART.

"The global merchant maritime fleet is currently populated by 1.2 million seafarers, of which 40 per cent are Filipinos," said Napoleon L Nazareno, president and CEO of SMART.

"Their communications needs are currently served by satellite-based, bridge-mounted or shared fixed phones that tend to be expensive, inconvenient and lack privacy. Moreover, these types of phones allow only a limited number of incoming calls and do not provide for SMS or texting."

"This is an exciting opportunity and a natural extension of our Philippines GSM service, but also one which allows us to offer services, in a cost competitive way, to seafarers across the world."

"A partnership with (SMART) is a natural choice for us, given that a significant portion of the world's seafarers are Filipinos," added Robert Johnson, Blue Ocean Wireless CEO.

"SMART also has a world-class software development team who are constantly bringing new and innovative products to their existing GSM customers. Working with them, we can progressively add additional services for Blue Ocean Wireless customers."

The deal would seem to have straightforward immediate benefits for both parties " BOW will have a direct link into the Filipino market through the SMART network, while SMART can extend the previous geographical limitations of its market base, while still utilising its core strengths in its home market.

Under the terms of the deal SMART will provide GSM network facilities and call/text terminations for the BOW service, and will also become a major reseller of BOW SIM cards and prepaid value cards.

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