Videocon Indian Electronics Manufacturer in Talks to Buy Motorola’s Troubled Cell BusinessSubmitted by lalit on May 26, 2008 - 10:24pm.
Videocon, Indian electronics and appliances maker is in talks with Motorola to buy the company’s cell phone business. According to Venugopal Dhoot, Videocon’s chairman and managing director the talks are in initial stages and the company stands to benefit from the deal, as it is planning to launch telecom services through its Datacom subsidiary in Indian markets this August. Videocon hopes to capture 10% cell phone carrier market share within next five years in India and the company believes Motorola cellphone business acquisition would help it reach that goal. How buying a troubled cellphone maker will help Videocon in achieving 10% mobile carrier market share, I am not able to understand. But the company says its technical links with other companies would allow it to roll out 3G products soon after the government’s approval of high-speed data network. It is estimated that the Motorola’s cell phone business will cost around $3.8 billion not including the mounting quarterly losses that the company is reporting for past four quarters. Buying a company that is making losses and basing your upcoming business on that purchase is never a good idea.
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