Proximus guides for rosier outlook after integrating Route Mobile

Proximus aims to generate up to €2.5 billion from international sales after completing its takeover of Route Mobile.

Tereza Krásová, Associate Editor

June 4, 2024

3 Min Read
a digital image of a light blue cloud on a black background.
Proximus sees a sunny outlook for its cloud-based international offering.(Source: Luis Moreira/Alamy Stock Photo)

Belgium's Proximus is targeting international revenues of between €2 billion (US$2.17 billion) and €2.5 billion ($2.7 billion) in 2026 after completing its $722 million takeover of India'sRoute Mobile last month.

That figure comprises revenues from Route Mobile as well as two other Proximus subsidiaries: Telesign, a CPaaS company focusing on fraud prevention; and international carrier BICS. It would mark an increase on pro forma sales of €1.89 billion ($2.06 billion) in 2023, including the pre-integration figure from Route Mobile (India's fiscal year differs from Belgium's).

Route Mobile, in which Proximus now holds an 83% stake, specializes in communication platforms-as-a-service (CPaaS), a type of cloud platform that provides business APIs to integrate real-time communication channels like WhatsApp, SMS and voice calls. It is also used for features like two-factor authentication. 

During an online presentation, Proximus CEO Guillaume Boutin said he also expects €100 million ($109 million) from "synergies" between Route Mobile and Telesign, with the EBITDA (earnings before interest, tax, depreciation and amortization) margin of the group's international segment expected to grow from around 9% to around 14%. 

The company has also updated its outlook, saying it now expects EBITDA at group level to grow by up to 2%, having initially said it would increase by up to 1%. The international segment is, meanwhile, expected to deliver "a mid-to-high single digit growth for 2024."

While the company aims for growth, its most recent results for Q1 saw underlying revenues at the international segment that covers BICS and Telesign fall by 10.3%, despite an underlying EBITDA growth of 8.6%. The decline in revenues seems to have been caused by falling sales of communications and data services products, as well as P2P voice and messaging.

Better days ahead

Back when the deal was announced, Proximus said it expected to realize synergies between Route Mobile and Telesign, which boasted combined revenues of €900 million ($976 million at today's exchange rate). The group also said the combined unit would also be the third-largest CPaaS player in terms of messaging volume.

The group said yesterday its offering now runs the gamut of digital communications, spanning P2P voice and messaging, mobility services, CPaaS and digital identity. It expects the CPaaS market to grow at a CAGR of 10% to 15% in the next three years, with the digital identity market reaching a CAGR of roughly 5%. Proximus also expects to gain market share in P2P voice and messaging, despite declining volumes in what it classifies as a mature market. 

Boutin is upbeat about the future trajectory of the CPaaS business, arguing it will lead to an increase in traffic because of technology advances in generative AI. Those are expected to boost the number of personalized interactions and thus drive demand for CPaaS. 

Boutin also described what he called a "flywheel effect" between the different areas of Proximus' international portfolio. As an example, an increase in messages delivered over its CPaaS platform will generate more data for training AI algorithms used in digital identity services, according to Boutin. Increased use of Proximus' digital identity offerings should help algorithms determine the best channel to reach an individual customer, he thinks. 

In the next three years, apart from growing its revenues, the group seeks to deliver its communication solutions to the world's 50 largest companies by market capitalization. Proximus' CPaaS lead Rajdip Gupta (who is also CEO of Route Mobile) said the company plans to grow its footprint through "unique solutions," citing the example of metro ticketing via WhatsApp. Another goal is to extend the customer base for its network infrastructure, increasing its coverage to over 500 mobile network operators.

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About the Author(s)

Tereza Krásová

Associate Editor, Light Reading

Associate Editor, Light Reading

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