Wednesday, May 04, 2011

Pearson ups education play in India

Pearson India is scouting for private schools across the country where it plans to pick up majority stake. It will add these to the existing 19 schools that it has inherited through its controlling share in Bangalore-based education company TutorVista. The 19 schools, which are currently under the Manipal brand, will also be progressively re-branded along with the new ones that Pearson hopes to take over in the due course.

"We are looking at interesting schools in all brackets — budget schools, middle class schools, premium schools, international schools — schools of all categories which suit our fit and we can pick a majority share in," said Mr. Khozem Merchant, President, Pearson India. The search, he specified, was not restricted to a few states and that the company was exploring options across the country.

"India has a laboratory-like environment for us. Till now we have been providing everything that goes into a school. But here we get the last mile, by having control over the schools. This is something new that has been forced upon us due to the environment and we have responded to it," said Mr. Merchant.

However, the British education major has not fixed any one model for its engagement with the private schools it intends to buy. Though the company is clear that it would like to "purchase management control" in the schools it chooses "in order to drive them", its involvement in each could vary from case to case.
We have a plethora of services to offer — it could be managing the school or providing content, or training the teachers. India is not a common market; we can tailor our offering every 100 miles and for different socio-economic fits. They are all quite attractive as economic propositions," he said, emphasising that the options being evaluated are not only in the premium bracket but across the segment.

He cited the example of Kenya, where Pearson is a significant minority investor in a network of 22 schools established by Bridge International Academies, which provides primary schooling for less than $4 per month. The company views the model as one that has the potential to be replicated for low-cost schooling. "I have personally studied how we can provide English language tuition in rural India at Rs. 25 a month."

For London-based Pearson Plc, the education business brings in 74 per cent of its revenues and 81 per cent of its profits. Though Penguin Books and Financial Times are also high octave brands for the publishing major, in India it is planning its largest play in the education sector.

In the last few years it has invested US$ 157 million in acquisitions and joint ventures in the education sphere to forward its interests.

"Yes, education has taken a lot of our attention and our mind time as that's the big opportunity and it's there that we feel we can bring services, expertise, advice and content. We have been in India for 20 years but only in the content business. Now our ambition is to build an education services business…" Mr. Merchant added.

Source: Business Line, May 4, 2011

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