Vox uses cash boost for India expansion

A Dubai telecommunications services company will use a new infusion of private equity cash and expertise to grab a bigger share of India's booming demand for new networks. Vox Spectrum, which has been active in the region in different forms for more than 25 years, works with telecoms companies, governments and private businesses to build communications infrastructure. Sunday, the company announced it had received a US$7 million (Dh25.6m) investment from Delta Partners, a Dubai-based private equity investor focused on telecoms businesses in high-growth markets. The investment was a step towards a possible initial public offering (IPO) for Vox, both companies said. Vox provides communications equipment and services to a number of military and government customers, including the governments of Bahrain, Kuwait and Saudi Arabia, as well as 16 state governments in India. But it considers its business units that build and maintain mobile phone networks as the most promising for the future. "We are in a business that is supported by very strong fundamentals, in terms of demand for telecoms services, demographics, population trends and penetration rates," said Abdulmohsen al Touq, a director at Vox. "We've reached the stage where a growth capital investment is due for us to successfully build a regional, maybe international, telecommunications platform." India, where Vox already has a foothold working with network equipment makers and operators, is expected to more than double its mobile user base to almost 650 million people by 2011. As part of the boom in users, companies such as Etisalat are rolling out new national networks. Vox predicts that more than 150,000 mobile transmission towers will need to be built to handle the growth, and hopes to win a major share of the construction market. Delta Partners will take a minority stake in Vox, and through its management advisory business will help it target the lucrative market for telecoms network services. As mobile operators look to cut costs and streamline operations, many are outsourcing functions such as infrastructure maintenance and network planning, both areas where Delta has management specialists. Last year, Delta took part in the $180m purchase of Orasinvest, the network services wing of Orascom Telecom, one of the region's largest telecoms companies. Like Vox, Orasinvest has a network-building unit, and Delta said the company would consider collaboration between the businesses. "They are in some similar spaces, but they are very different companies," said Kristoff Puelinckx, Delta's managing partner. "We will always look for synergies between our portfolio companies, but this goes beyond that, because there are opportunities for collaboration across the entire industry." Delta Partners has raised an $80m fund to invest in telecoms businesses in the region, and will look to build Vox into a much larger business in the long run, Mr Puelinckx said. "We don't like to flip our investments in the short term, that is not our approach at all," he said. "As the company looks towards an IPO, we can certainly help in preparations for that." tgara@thenational.ae