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Cisco Systems has moved an inch further to buy out Airtel-Vodafone Idea's WiFi joint venture (JV), Firefly Networks for a value of ₹200 crores.
The Joint Venture was set up in 2014 under the name FireFly Networks with a mutual understanding of investments from both parties. However, the collaboration failed to take off since neither of them was committed to putting in their investments.
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According to sources, Cisco will continue with the existing management of FireFly Networks, managed by its chief executive officer (CEO) Raj Sethia, who was also a former executive at Vodafone.
Vodafone Idea's CEO Ravinder Takkar last month indicated “The Telco may exit the JV and both the companies are not focusing much attention on the Firefly Networks.”
FireFly focuses on the B2B market and considers the Airport Authority of India (AAI), Supreme Court of India, GMR, Fortis, and DLF Cyber among its partners.
Firefly Networks, along with its partners, has deployed its infrastructure at 650 venues providing 10,000 access points in more than 40 cities across 25 states. It claims more than 2.5 million users per day are using its WIFI services which also includes 600,000 users over 29 airports in India.
"Public WiFi is not price competitive in India and is not a priority for telcos. While public WiFi is important and needed in India, the business case for it has always been poor. One hopes that Cisco can improve the business case," Mahesh Uppal, a telecom analyst, and director of Com First (India) said in an interview.
FireFly networks, facing fierce competition from US-based Boingo Wireless, has received contracts from its parent companies Airtel and Vodafone Idea for which it deploys WiFi infrastructure for data off-loading areas when demand is high but operates with lower cell tower capacity and indoor public spaces.
Airtel and Vodafone Idea both closed in red, at Rs. 686.80 and Rs. 8.45 respectively.
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