Smart acquires Chikka Holdings

MANILA, Philippines - Smart Communications Inc. has entered into a sale and purchase agreement to acquire 100 percent of Chikka Holdings, Ltd.

The transaction is expected to be closed sometime in late December, subject to the fulfillment of certain conditions, Smart officials said.

Sources told The STAR that this will entirely be a cash transaction.

However, both Smart and Chikka have refused to divulge the purchase price.

They also revealed that Smart and Chikka will mutually benefit from the purchase, saying that Chikka was acquired primarily for its ability to develop products.

Chikka, on the one hand, will benefit from partnering with a telecommunications company that has regional operations as well as tie-ups with more than 200 telecom operators worldwide.

“It is wise to partner with a telecom company like Smart. The environment has changed and teaming up with a strong partner will open up doors for us,” a source from Chikka said.

The source also revealed that Chikka’s products will continue to be available to other telecom operators in the country. “It will be business as usual but now, as a subsidiary, we will have to focus on developing products for Smart,” the source said.

Smart rival Globe Telecom earlier acquired Chikka’s competitor Entertainment Gateway Group (EGG) for P351 million in line with Globe’s strategy to drive growth through expansion in adjacent spaces, such as mobile content creation and distribution.

Chikka Holdings owns 100 percent of Bidshot Wireless Services Crush Cow Asia, and Chikka Asia which covers Chikka operations in the Philippines.

Bidshot is the creator of the original text messaging-enabled auction site Bidshot.com. Bidshot Wireless Services is Smart acquires... From B-1

an online auction site that has also patented mobile-enabled auctions with actionable SMS alerts, wireless item message boards and location-based classifieds. In 2002, Chikka acquired 100 percent of Bidshot Wireless Services.

In the same year, patented technologies allowed Bidshot to successively launch interactive television, mobile-enabled games and polls, SMS marketing promos and made an entry into mobile content. Bidshot today has over 100,000 registered users.

Meanwhile, Crushcow is a mobile-enabled personal ads and matchmaking site which allows users to create profiles, get alerted on their matches and chat anonymously via mobile phone.

Chikka is a leading provider of enhanced mobile messaging services to mobile carriers around the world.

Owners of the company were a group of young entrepreneurs trying to devise a customer service application that would connect Internet-to-mobile communities. This application was originally intended for a small e-commerce business that catered to an overseas community for the delivery of gifts to their home country, in this case, the Philippines.

The company is a wireless applications and services provider to over 30 networks in 17 countries including the US, UK, Spain, Italy, Japan and the Philippines. The Chikka Messenger has 38 million registered users, including mobile subscribers from network operators worldwide.

It is a pioneer in wireless applications services development, having created the world’s first mobile instant messenger to run on SMS (text messaging).

Flagship Chikka Txt Messenger is the breakthrough combination of instant messaging and text messaging, allowing PC users to send text messages for free. The recipient of the free text is charged a fee if he or she opts to reply.

Chikka Asia powers services for mobile instant messaging and email accessible via SMS, mobile payment systems utilizing call credits, Free-Reply SMS for prepaid mobile subscribers in need of “top-up,” mobile-enabled auctions and matchmaking, as well as text, voice and visual mobile content.

Chikka has since become a multi-platform company, creating mobile portals, and other value -added services that its partner GSM carriers offer to their subscribers and corporate customers.

In 2003, Chikka entered into franchising agreements with partners in Thailand and in Indonesia that brought its services to major network operators in those countries. It went on to break records for daily VAS SMS volume generated by existing providers, quickly establishing Chikka as a major content provider in these markets.

Subsequently, Chikka also signed up with carriers in Singapore, Hong Kong and Japan for messaging and celebrity-texting services catering to overseas Filipino communities.

In 2005, the Chikka Messenger connected to major US carriers Cingular Wireless, Verizon Wireless, and AT&T Wireless, the top three mobile network operators in the US. Together with Sprint, Alltel and other carriers today, Chikka gained connectivity to 100 percent of US mobile subscribers.

Also that year, a partnership with Times Internet Ltd. (TIL), the new media arm of India’s media conglomerate BCCL, launched the Chikka Messenger to all major operators, to cover 90 percent of mobile subscribers in India.

The first quarter of 2007 saw the launch of Chikka Messenger in the United Kingdom all major mobile carriers, making the service available to over 70 million mobile subscribers.