Publication: The Times of India (TIMES BUSINESS - Delhi)
Date: April 12, 2007
Section & Page: 25

Sobha acquires US telecom solutions co
R Raghavendra | TNN

Bangalore: Bangalore-based Sobha Renaissance Information Technology (SRIT) is acquiring California-based Agilent Technologies’ stake in Objective Systems Integrators Inc (OSI), a global supplier of telecom operations support systems (OSS).

Sobha declined to disclose the cost of acquisition, but sources peg the deal to be around $ 100 million.

Madhu Nambiar, cofounder and CEO of SRIT, said the acquisition has been funded through internal accruals and bank loans. “OSI’s flagship product in this space is the strongest brand in service assurance and fulfillment space. Until now, telecom contributed for close to 25% of our topline. We now expect this to go up to 40%. With OSI’s 92 customers, SRIT will now serve 150 customers,’’ he said.

The $ 5-billion Agilent acquired OSI in December 2000 for $ 665 million. According to analysts familiar with Agilent, “The value of OSI has depreciated over time. It could be to the extent of 20-25% per annum. Agilent’s move to sell this business is quite obvious.’’
 
Eleven months ago, SRIT acquired Billing Components AG, a German telecom business support systems (BSS) company. With the acquisition of OSI, SRIT would be venturing deeper into the OSS space and thus gaining critical expertise in the telecom vertical. OSI’s NetExpert family of modular software lets users integrate and manage their networks, and performs such tasks as network traffic reporting, crew dispatch and billing data collection.

OSI comes with 120 people. According to OSS Observer, a leading research firm for the telecom market, Agilent holds a 12% market share in the OSS space. IBM, Lucent and HP follow Agilent in this space. Quite clearly, SRIT can leverage on this chart-topping brand.

SRIT’s acquisition of OSI comes close on the heels of another big acquisition in the telecom-IT space — the Subex-Syndesis deal. In January this year, Bangalore-based Subex-Azure acquired Syndesis, a Toronto-based company that specializes in service activation for telecom subscribers, at a cost of $ 164.5 million, the largest acquisition made in the Indian IT sector.
 
SRIT will now have five distinct strategic business units— OSI Telecom, BC (Billing Components) Telecom, Integrated Healthcare Group, ODC Group and Enterprise Solutions Group.
 
According to the OSS Observer, in 2006, the total addressable market size in telecom for the combination of fraud and revenue assurance, interconnect, service assurance, and service fulfillment segments was $ 2.5 billion. It is expected to touch $ 5  billion by 2010.