OnMobile rejigging products to check operator moves

OnMobile Global Ltd, the Bangalore based value added services’ technology provider, is introducing region- and requirement-specific products and is making them more relevant to counter falling tariffs and demands by telecom firms for changes in the revenue sharing model.

Mobile phone companies want to shift from the present revenue-share model to buying VAS products by paying one-time licence fees. Under revenue share, the VAS technology provider gets a share whenever a consumer purchases value added products such as caller tunes.

 In a June 24 report citing OnMobile’s presentation at Citigroup investor conference, Gaurav Malhotra, an analyst with the broking firm, cited tariff reduction and shift from revenue sharing to licensing model by telcos as twin risks for the VAS provider firm. OnMobile’s revenue-share typically ranges between 15% and 40%, averaging 20-25%.

To counter new strategies from operators, OnMobile is gradually bringing in more relevance to its products. It is ready to enter into licensing model where the VAS services do not involve consumer usage, but wants to continue with the revenue sharing model where the consumer is the end user.

“The business model employed will depend on the nature of the product and the degree of adaptability required. If the product is a core network element with no direct consumer usage (a WAP Gateway for example), which is not likely to change once deployed in the operator network, then a licence model makes sense,” Pratapa Bernard, head, marketing and products, OnMobile, told DNA Money.

The company aims to counter tariff cuts with product innovation. “OnMobile strives to come up with new technology and services that offer value to the consumers, for which they would be willing to pay. Phone backup is an example. Consumers can quickly recover all their data, including music, photos, SMSes and contacts, in the event of losing their phone,” Bernard said.

OnMobile is also seeing a thaw in its Europe and US sales.  Bernard said after the initial focus on India and emerging markets, the company has added a suite of data products to its overseas portfolio bringing the Web 2.0 and mobile worlds together through products such as Phone Book 2.0, social networking gateway.