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On Wednesday 7th November 2007, Blue Label Telecoms and the Microsoft Corporation (Microsoft) announced that they had entered into agreements to establish a strategic relationship in terms of which:
- Microsoft would acquire approximately 12% of the issued share capital of Blue Label Telecoms; and
- Microsoft and Blue Label Telecoms will collaborate on a preferred partnership basis to drive services and products in developing economies and exercise commercially reasonable efforts to provide mutual assistance to one another in exploring new business opportunities.
Rationale and salient terms of the collaboration agreement
The strategic relationship entered into between Blue Label Telecoms and Microsoft brings to the fore a congruence between Blue Label Telecoms' stated strategy of establishing a global transactional services platform in emerging markets with Microsoft's intention to deliver products, services and advertising, through the Blue Label Telecoms distribution network.
The main purpose of the collaboration agreement is for Microsoft and Blue Label Telecoms to derive revenue (through an agreed revenue share model) by the channeling of advertising into Blue Label Telecom's distribution base. Microsoft will support Blue Label Telecoms' effort to increase its global footprint of contact points with customers through an accelerated deployment of a distribution and sales network that includes enhanced-feature point of sale (POS), mobile and other devices and the associated support and service platforms.
Microsoft will provide Blue Label Telecoms with advertising services as well as access and licenses to various web- based and mobile technologies and services. Blue Label Telecoms and Microsoft will exercise commercially reasonable efforts to provide mutual assistance to one another in exploring new business opportunities.
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