Joint Venture Establishes Tele Atlas Kalyani India Print
Tuesday 22 Apr 2008
Global map maker Tele Atlas has signed an agreement with Indian industrial group Kalyani Group to acquire substantial equity position in Pune-based map maker Kalyani Net Ventures Limited.
Tele Atlas's digital maps are used for a range of personal and in-car navigation, mobile and internet map applications. With this move, the Dutch company is establishing a strong foothold in the Asian mapping market, where demand for personal navigation devices and in-car navigation systems is expected to surge over the next five years.
‘Tele Atlas will position itself as a major player in the emerging but promising Indian market for location based services and navigation products,’ said Mark Steele, the chief operating officer for Tele Atlas Asia Pacific in a company statement.
The company believes the new venture, named Tele Atlas Kalyani India Pvt. Ltd., will ‘significantly strengthen operations in India’ by providing access to map data licensing, GIS and customised mapping projects in the country. ABI Research, which specialises in economic analysis of the wireless market, reported on 1 April that lower-priced PNDs and GPS-enabled handsets boosted the Asian navigation market in 2007, with total shipments exceeding 39 million for the year.
This figure is expected to exceed 185 million in 2012, according to the same data.
Tele Atlas says that the new venture will use its own production platform to develop Indian map and navigable data products. The first products are planned for release in the third quarter of 2008 and will cover all major metropolitan areas and the national and state highway networks of India.
This deal is the latest in a succession of equity bids that began in October last year. This spate of deals, some of which are awaiting approval from the European competition watchdogs, herald important changes to the face of global digital mapmaking.
The wheeling and dealing began with Amsterdam-based PND maker TomTom’s bid for Tele Atlas.
Finnish handset maker Nokia then announced plans to compete in the personal navigation devices market. It punctuated the decision with a $US8.1 billion bid for Tele Atlas’ key rival, Chicago-based digital mapmaker Navteq. The acquisition, signed in October 2007, is awaiting approval from European authorities.
No sooner had the ink on the paper dried than Cayman Island-registered company Garmin, TomTom's bitter rival, bid on Tele Atlas, forcing TomTom to increase its offer for Tele Atlas by almost 50 percent.
Then in mid-November 2007, just over two weeks after making the bid on Tele Atlas, Garmin signed a long-term deal with Navteq, guaranteeing access to Navteq data until 2015. The deal was a significant as it allowed Garmin to secure ongoing access to map data without having to enter an outrageous bidding war for Tele Atlas.
Needless to say, Garmin then dropped out of the bidding for Tele Atlas.
Now TomTom, having finally secured Tele Atlas for $US4.3 billion, appears to be on shaky financial ground. TomTom's share price has halved since November and the company issued a profit warning on 8 April. Analysts say its market capitalisation is now less than the price it is paying for Tele Atlas.
In an interesting twist on the saga, Tele Atlas’ new deal with the Kalyani Group will make Tele Atlas the de facto map provider to Garmin in India. Aerial Services, the exclusive distributor of Garmin products in India, is currently using KNVL-supplied digital maps.
Navteq announced its first map data for India (covering six major cities) in June last year; KNVL currently provides a full map of India, highway coverage and detailed intracity data for 50 cities. Tele Atlas Kalyani India plans to expand this database to include additional urban centres and more detailed points of interest content. The joint venture will also offer a range of additional products such as 3D landmarks and detailed city maps.
Tele Atlas and Kalyani’s announcement coincides with the signing of a new multi-year contract between Tele Atlas and Infotech Enterprises in India, which continues a relationship that began in 1994.
Under this deal, Tele Atlas will continue to provide map database and software development services to Infotech. Infotech employs hundreds of data conversion specialists to enter map data information into Tele Atlas' digital map database. This data is gathered from sources such as Tele Atlas' international fleet of Mobile Mapping Vans.
Infotech will now also work on the production of Tele Atlas’ India database.
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