Circles said to be considering a potential sale of its MVNO operations – Circles Life

The Singapore-based company whose backers include private equity firm Warburg Pincus, is working with a financial adviser, evaluating a potential sale that could value Circles Life at a few hundred million dollars, sources asking not to be identified told The Straits Times.

Circles Global plans to retain Circles-X, the software-as-a-service platform, it acquired for up to U$6 million in debtor-in-possession (“DIP”) financing, two years ago from the U.S company Pareteum who had filed for a chapter 11.

Pareteum themselves acquired the platform in 2016 from the Dutch company Elephant Talk.

The deal with Circles acquiring Pareteum’s MVNE platform, created a “circle of interest” in the Singaporean market.

In 2019 – before the Circles/Pareteum deal, the mobile operator M1 in Singapore had selected Pareteum’s platform, as part of its plan to deploy MVNOs, among the MVNOs deployed on the platform was Circles’ MVNO Circles Life.

Imagine how the other MVNOs felt about having their business and data enabled and stored, on a platform belonging de facto to their competitor.

Going in circles yet? Lets add some fuel to that. Prior to becoming M1’s CEO in 2018, Manjot Singh Mann, actually served as CEO for Pareteum in Asia.

In 2023, Bloomberg reported that Circles had steadily been cutting jobs across departments including human resources, engineering, marketing and Circles X. Key executives, including the chief growth officer left the company, and Co-founder Abhishek Gupta, stepped down from the company’s management team.

A group of investors (Warburg Pincus, Peak XV Partners = formerly Sequoia Capital India and South-east Asia; EDBI and Founders Fund) has poured large sums into the company, but besides the MVNO Circle Life reaching a 5% market share in Singapore in 2019, its copy and paste projects in Taiwan and Australia has been less successful.

Work was also done to try to enter the middle-eastern market but the company failed to satisfy the local regulatory authorities, who picked other contenders.

Last year, Circles name emerged in Pakistan when various social media posts and marketing indicated a new mobile operator entering the market. However, Pakistan’s Telecommunication Authority released a statement saying:

“With reference to recent misconceptions amongst the public and social media users regarding a new operator launching mobile services in Pakistan under the name “ONIC”, Pakistan Telecommunication Authority (PTA) clarifies that no new operator has been awarded mobile cellular license to offer mobile services in Pakistan.”

Turned out Circles and partners, had teamed up with  Pakistan Telecommunication Company Limited (PTCL) to launch a sub-brand named ONIC, which may or may not include the platform of Circles X.

Would the sale of Circles Life MVNO(s) be able to bring in “a few hundred million [Singapore] dollars”?

Yes it would! Given the history of MVNO acquisitions in other markets, also similar in size to Singapore, it is doable. I do see 1-2 potential buyers “beyond one” (hint), who could be interested to expand into Singapore, at a time where M1 is also rumored to be up for sale – Yes, going full circle + Taiwan, Japan, Australia and Indonesia. Although the latter looks very interesting, the problem is that Indonesia is currently NOT open for MVNOs. The setup Circle has in Indonesia, is as, a “sub-brand app”.

The road ahead for their platform business seems to be the joint venture they entered with Etisalat (e&) in May 2023, where the strategy is to come in, and tell other mobile network operators how to make their business and launch a sub-brand. However, so far the the one in Pakistan (ONIC), which was launched on August 14, 2023, is the only example of such.