Telecom Consolidation Turning India Into High-Margin Market: Route Mobile's Gautam Badalia

Route Mobile Ltd. expects to benefit from consolidation among telecom operators and digital transformation of entities as it provides to them email, voice, messaging and analytics services.

India is turning into a high-margin market due to consolidation in telecom space, Chief Strategy Officer Gautam Badalia said, adding most operators require a technology partner to monetise their infrastructure better. The company expects its revenue to grow at 30-35% in the fiscal ending March 2021, Badalia told BloombergQuint in an interview. Its business has grown at an annualised rate of 35% over the last three years.

That, according to Sandipkumar Gupta, promoter and non-executive director, came as the company increased its product offerings from voice and messaging services to an omni-channel enterprise. It also deployed firewall strategy for messages.

Route Mobile has direct connection with 240 telecom companies and more than 800 mobile network operators globally. In 2019-20, almost 97% of its revenue came from messaging services.

The company on Sept. 9 launched its three-day initial public offering. It plans to raise Rs 600 crore via fresh issue of shares and stake sale (offer for sale) by promoters Sandipkumar and Rajdipkumar Gupta. The issue will close on Sept. 11.

Route Mobile, according to a red herring prospectus, will use the proceeds to repay debt, strategic initiatives, purchasing office premises in Mumbai and general corporate purposes.

Here are the some key highlights from BloombergQuint’s conversation with Sandipkumar Gupta and Gautam Badalia.

Gautam Badalia

• The company is looking at growth in North America. Adjoining countries to India and Africa will also be focus areas.
• EBIT margin is expected to improve if more client exposure is added from developed economies, including North America.
• The company has strong presence emerging markets.

Sandipkumar Gupta

• Don’t see concern over client concentration for the top five clients as these are being served across many countries.

Watch the full interview here: