Cisco in the running to buy FireFly JV from Airtel and Vodafone Idea

cisco firefly
Image by Nessluop | Bigstockphoto

Bharti Airtel and Vodafone Idea are preparing to exit the public Wi-Fi infrastructure market, and to that end are in talks with US networking vendor Cisco Systems to sell their entire stake in their joint venture, FireFly Networks, for an enterprise value of Rs 200 crore ($25 million).

Cisco’s US team was recently in India to discuss and finalize the deal with both telcos and the management of FireFly Networks. The deal is expected to be sealed in the coming days, according to a report by the Economic Times.

The publication reported that Cisco may retain the existing management of FireFly Networks, which is led by its chief executive officer Raj Sethia, a former Vodafone India executive.

The development quickly follows Vodafone Idea CEO Ravinder Takkar’s comments last month indicating that the telco may exit the JV. He told the media at the time that both Airtel and Vodafone Idea were not focusing much attention on Firefly.

The FireFly Networks JV was set up in 2014 at a time when 4G networks were being rolled out and increasing smartphone penetration was putting pressure on 3G networks. Both Airtel and Vodafone Idea wanted to decongest their 3G networks by offloading traffic to Wi-Fi networks. However, Reliance Jio’s 4G services launch at affordable rates spurred Airtel and Vodafone Idea to deploy 4G networks quickly to stay competitive, which reduced the requirement for data offloading.

FireFly has since been focusing on deploying Wi-Fi infrastructure at airports, malls and hotels. It counts Airport Authority of India, Supreme Court of India, GMR, Fortis and DLF Cyber among its partners.

FireFly Networks also has commercial contracts with Airtel and Vodafone Idea to deploy Wi-Fi infrastructure for data offloading in areas where demand is high but cell tower capacity is low, along with indoor public spaces.

As per information available on its website, FireFly has Wi-Fi infrastructure deployed at 650 venues with 10,000 access points across 40 cities in 25 states. It claims to serve 2.5 million users per day including 600,000 users across 29 airports in the country.

The JV counts Cisco and Indus Towers among its partners.

“FireFly’s management has been scouting for investors for the past 2-3 years as Airtel and Vodafone have not been keen on infusing fresh funds due to negligible focus on public Wi-Fi infrastructure,” the report added citing sources.

Market experts are of the view that Cisco might be looking at leveraging FireFly’s network to capitalize on enterprise opportunities in India. FireFly’s Wi-Fi infrastructure capabilities could provide Cisco a faster time to market on the private network side.

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