India's Bharti, Softbank form mobile Internet joint venture

The joint venture will focus on social networking, gaming, and e-commerce

India's Bharti Enterprises has set up a joint venture with Japan's Softbank to focus on social media, gaming, and e-commerce for India's booming mobile market, it said Thursday.

The total investment in the 50-50 jont venture, called Bharti Softbank Holdings (BSB), was not disclosed.

The model of the company appears to be to build teams in-house as well as invest in start-ups that are doing development in the mobile area. The goal is to "Build ourselves/Invest in teams that are building for mobile," said Kavin Bharti Mittal, head of strategy and new product development at BSB in a Twitter message.

India had 866 million mobile connections at the end of August, after adding over 7 million new connections in the month, the Telecom Regulatory Authority of India said on Thursday.

Bharti Airtel, a Bharti group company, is the largest mobile operator in India with about 172 million subscribers at the end of August. It also has a presence in Bangladesh and Sri Lanka, and in Africa after it acquired Zain's operations in 15 countries in Africa in June last year.

The setting up of BSB is in line with the strategies of a number of operators worldwide who have invested in start-ups focused on innovation around the Internet, said Kamlesh Bhatia, a principal research analyst at Gartner. Sometimes the organizations of the operators don't have the capabilities and the mind-set to do the innovation, he added.

Mobile operators are also finding themselves competing with Internet companies like Google and Facebook which are a lot faster, and are getting a lot more connected to the consumer in different ways, Bhatia said. If the operators are to maintain their relevance in the value chain they have to start innovating and creating similar services that improve their "stickiness" with the customer, he added.

With a fast growing economy, a large youth population and access to cheaper and faster data, there is a unique opportunity to build services ground up for mobile, especially in a country where the first screen for most is a mobile device, BSB said in a statement.

Softbank is a more evolved operator in terms of Internet and other value-added services, and will make a good partner, Bhatia said.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com

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