​Telenor snaps up Tapad for $360m to add ad tech to core telecoms

New York startup Tapad looks set to bring its digital marketing expertise to Norway's incumbent telecoms provider, Telenor.

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Telenor Group CEO Sigve Brekke: "Significant value can be created from applying marketing technology to improve the digital capabilities of our core telecom business."

Image: Bo Mathisen

Norwegian carrier Telenor plans to buy New York advertising-tech firm Tapad, so that it can bring digital marketing and analytics to its legacy business.

According to Norway's incumbent telecoms provider, Tapad has more than 160 of the top US brands as customers, together with over 50 data technology licensing partnerships.

"Significant value can be created from applying marketing technology to improve the digital capabilities of our core telecom business. This will improve our understanding of customer behaviour, and supports building a platform for other business areas," Telenor Group CEO Sigve Brekke said in a statement.

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Telenor will be paying $360m for about 95 percent of Tapad "on a debt- and cash-free 100 percent basis".

Tapad is expected to report 2015 revenues of $57 million, up 70 percent on 2014. Telenor expects Tapad, which has160 employees, in offices in 13 US and European cities, to reach EBITDA break-even in 2017.

Tapad was set up in 2010 by Norwegian Are Traasdahl, the firm's CEO, to give publishers, marketers and technology providers an understanding of consumers across all the devices they use. Traasdahl and his Norwegian co-founder, Dag Liodden, together retain a five percent stake in Tapad.

Telenor has also been busy in its more traditional telecoms business, announcing late last year the rollout of voice over LTE, or VoLTE, in its Norwegian mobile network.

Initially, only a few subscribers with the most current handsets could test the service. But this month Telenor is starting the full-scale rollout, making Telenor the first operator in Norway to offers VoLTE, which it describes as "one of the biggest technology boosts for mobile voice communication ever".

VoLTE is the first packet-switched, voice-transfer technology in the mobile world. Until now, voice has been carried circuit-switched, but with VoLTE, voice becomes another data bit, carried by the network as all other data.

Because of this development, Telenor reckons VoLTE promises better sound quality, reduced background noise, and much shorter call set-up time -- down to two seconds from dial to ring tone at the other end. It will also be possible to use voice and data traffic simultaneously when the network supports VoLTE.

Telenor intends to use its 800MHz band frequencies for VoLTE, which also promises better coverage, in particular indoors.

In addition to VoLTE, Telenor plans to launch a VoWLAN this spring, promising voice communication over ordinary Wi-Fi wireless networks, where also SMS and MMS are supported. Telenor has labelled this service Wi-Fi Voice.

"Wi-Fi Voice will initially work as a supplement to voice communication over the regular mobile network. If you've got reduced signal strength, the handset will be able to use the local wireless data network to start or receive voice calls," Telenor Norway CTO Magnus Zetterberg said in a statement.

Indoor coverage problems have been an issue in Norway over the past few years, with many consumers experiencing very low signal quality indoors, particularly in newly-built commercial buildings.

Because VoWLAN is designed to improve indoor coverage, Telenor expects it will be especially popular among enterprise customers.

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