SingTel to Buy Amobee for $321M

Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY) plans to buy mobile advertising platform specialist Amobee Inc. for US$321 million as part of a corporate revamp that will see the creation of a digital media division and a greater focus on customer experience. (See SingTel to Buy Amobee.)

The reorganization will also see the operator, which has access to more than 430 million mobile customers across Asia/Pacific and Africa through its stakes in the likes of Bharti Airtel Ltd. (Mumbai: BHARTIARTL), split into three groups as of April 1:

The new structure is needed to take advantage of "some of the largest and most exciting opportunities that have ever existed in this industry," SingTel's CEO Ms Chua Sock Koong said in the press release. Those opportunities include mobile marketing, which is where Amobee fits into the equation: SingTel says it wants to "help brands better reach their target audience and deliver relevant offers, rewards and promotions to customers."

SingTel is making it clear, though, that it doesn't intend to utilize Amobee's capabilities merely for its own benefit. "SingTel will partner Amobee to build a strong independent company that will serve operators, publishers, advertisers and agencies with leading edge mobile advertising technology and services," the company said. Amobee will remain headquartered in the Silicon Valley and its management team will keep active control of the company.

Why this matters
SingTel's revamp and acquisition highlights some of the key areas where traditional communications service providers (CSPs) need to focus in order to stay relevant to their customers.

The operator, like all its peers, wants to maintain a direct relationship with its customers and avoid becoming a dumb pipe that delivers other companies' services and applications. It believes it can achieve this by focusing on customer experience, so that individuals and businesses will want to have their primary services and payments relationship with SingTel and its associates, and bolstering its digital service delivery capabilities, which will be key to enabling a multitude of new value-added capabilities.

SingTel's investment in digital service capabilities mirrors the plans of other major operators such as Telefónica SA (NYSE: TEF). (See Telefonica Restructures, Creates New Units and Telefonica Holds Key to Digital Model.)

For more
Read more on the shift from traditional to digital services, the growing availability of ad-delivery platforms and an increasing focus on customer experience management (CEM) by CSPs:

— Ray Le Maistre, International Managing Editor, Light Reading