You Telecom, Red Snapper set up JV for wireless network

Mumbai: You Telecom, owned by Citigroup Venture Capital International, has entered into a 50:50 joint venture with Malaysia's wireless technology and Voice over Internet Protocol (VoIP) major Red Snapper.

YouSnapper, the JV, will focus on providing wide area wireless connectivity in India. The Mumbai based company, which had been focusing on the wireline segment till date, has already begun a pilot in Thane (Maharashtra).

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With the JV, You Telecom will be a part of the convergence space by providing mobility to its voice, video and data services, said the firms's CEO EVS Chakravarthy.

Citigroup Venture Capital International, which launched a $1.6 billion fund in 2005, had acquired an 85 percent stake in the broadband company (formerly known as Iqara Telecoms) from British Gas in 2006.

You Telecom's fibre optic network offers internet solutions for data and voice services across 12 cities in India. Chakravarthy plans to have a pan-India presence (26 cities) over the next 18 months. Currently, You has over 175,000 registered subscribers.

For Red Snapper, on the other hand, the JV will help get a foothold in the Indian broadband market that is on a growth path.

In addition to creating a wireless broadband footprint, the JV will also bring innovative voice packages of Malaysia to the Indian consumer, said Red Snapper CEO Braham Singh.

Red Snapper is a wireless technology player with prime focus on Wi-Fi in Malaysia. It has got the funding from Malaysian government to promote the growth of wireless broadband in that country.

"In Malaysia, Jaring is the face of the joint venture since we cannot offer the services directly. We do the systems integration and have a revenue-sharing (30:70) agreement with Jaring," said Singh.

You Telecom, incidentally, had recently acquired an Ahmedabad-based internet service provider IceNet. It has also set up a subsidiary company, Digital Outsourcing, to kick off cable TV operations in India (started operations in Bangalore, and next in Vizag).

You Telecom holds 49 percent in Digital Outsourcing, with the balance 51 per cent by other Indian shareholders. The capital restructuring in the cable TV company was essential as the government prescribes a 49 percent foreign direct investment cap in the sector.