OnMobile Global Ltd, the company which sells value-added services (VAS) such as ringtones to telecom companies, plans to bring its international experience in providing 3G VAS once 3G services gets rolling in India. The firm provides VAS to operators such as T Mobile in Europe and the Americas, and to Orange.
“We are devising some unique services to run on 3G networks in India. We would observe their success and look to emulate them abroad. We are also planning to bring some of the learnings from providing 3G-based VAS in our existing association with T Mobile and Orange in Europe and America,” said a company spokesperson, not wishing to be named.
3G services in India are expected to start in a year after the government auctions spectrum for telecom firms. Telcos in India earn about 8% of their revenue by providing VAS services such as caller ringback tones, wallpaper downloads, etc. 3G VAS includes video calls, live movie streaming, video chats etc.
Arvind Rao, founder & chief executive officer, had in a recent media report said 3G VAS will contribute about 5-10% of the company’s revenue in about five years.
The company’s shares fell 11.24% on Monday. Some industry observers termed that fall as a result of discussions the company management had in an investor call earlier in the day.
Participating in a call with investors, the company management said the recent TRAI directive to get confirmation from subscribers (via fax, e-mail or SMS) for subscription to VAS has already played spoilt-sport in the company’s earnings. OnMobile saw a 7% revenue decline as a direct result of the directive. Analysts consider that to be a temporary phenomenon.
“We believe this would have a short-term impact as our discussions with the management and interaction with a Telecom Regulatory Authority of India member revealed that the telecom regulator is taking a soft stand on the directive, post assurance by telcos and VAS players of minimum customer displeasure,” said Himanshu Shah, analyst with Religare Hitchens Harrison, in a note on Monday. The company has recently incorporated Vox Mobili and Telisma, two firms it bought in France under it’s subsidiary OnMobile Global Europe.
OnMobile Global, which started its development initiative for US and Europe, has seen a thaw in revenue generation from those markets. The company currently earns one-fourth of its revenue from abroad while India and Indian sub-continent market brings a major chunk of revenue.
Mobile value added services (VAS) generated revenues of $1.6 billion as on March 2009 and are expected to grow 30 to 40%per year in India.
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