Xurpas sees IPO on PSE paving way to grow in Southeast Asia

It will be easier for Xurpas Inc., the local developer of digital products and services for mobile phones, to penetrate the markets of Southeast Asia if it is a publicly-listed company on the Philippine Stock Exchange, its top official told GMA News Online.

 

The tech company wants to grow from its Philippine roots as a tech company and take advantage of the growing number of Internet users and growing smartphone penetration Southeast Asian, president Nico Jose Nolledo said in an interview Tuesday in Makati City.

 

"Ultimately for us, we see ourselves as a global company. And by going public, we feel – from a capital perspective – we'll have more drive to invest and expand our reach to a new market," he said.

 

"From a branding perspective,  it's a different conversation if we approach a foreign partner or a foreign telecom company and say we're a listed company," he added.

 

Xurpas applied for an initial public offer (IPO) before the Securities and Exchange Commission (SEC) in August and got the approval mid-October.

 

It plans to offer up to 344 million common shares at P4.19 apiece or P1.44 billion in IPO proceeds.

 

The offer period is from October 27 to 31, and the listing is targeted on November 5.

 

Nolledo said they have seen an exponential drop in Internet connection and smartphone costs in Southeast Asia.

 

"The access to internet, with all these unli plans, have made it very affordable for the base of the pyramid to avail of Internet access," he said.

 

"The cost of smartphones has dropped significantly. We're talking now of larger populations that can access the Internet," he added.

Similar demographics

 

In the 12 months to August, about 120 million or $16.4 billion worth of smartphone units were sold in Southeast Asia – which represents a 44-percent increase in volume and 30-percent rise in value year-on-year, market research group Gfk said Tuesday.

 

Post-IPO, Nolledo said they are targeting the Indonesian, Thai and Vietnamese markets to grow Xurpas.

 

"Those are the types of markets we're looking at, with very similar demographic profile to Philippines, which is predominantly a prepaid market and a lot of users of certain smartphones," he noted.

 

"A lot of the services that have worked for us here can be replicated in those markets from business and content standpoints. But there will have to be some localization done like language, translation etc.," he added.

 

To be able to penetrate these markets, Xurpas will need to partner with local telcos, the company official said.

 

"It is necessary. We won't enter the market unless we are able to connect with at least one telecom company," Nolledo said.

 

"The reason for this is we leverage off the telecom's billing infrastructure to allow subscribers to pay us for services," he added.

 

While the company has started talks with local telcos pre-IPO, Nolledo said no agreement has yet been signed.

 

"I hope in the next three years, we'll be able to do it. The sooner, the better," he added. – VS, GMA News