@MoMo Delhi: MediaNama Discussion On “Mobile Advertising On WAP, SMS, Voice, Video and Apps”

Tie-Ups: Snapfish- Indiaplaza; AOL India-AutoIndia

– Snapfish, HPs Online Photo Printing co has inked an exclusive deal up with online retailer Indiaplaza.in. The tie-up gives Snapfish access to Indiaplaza’s customer base - they’re claiming over 1 million customers. Snapfish charges Rs. 2.95 per 4×6 sized print.[via release]

– AOL India has launched an Autos section, which, by the looks of it, is being powered by AutoIndia.com. The site offers videos, tips for buying cars and bikes, has reviews. From a business perspective, the site features vehicle listings and loans and insurance. We’d explained the auto portal business model here.

IMI Mobile To Close $10 Million European Acquisition; Ad-Ring;$60 Million Revenue Target; CRBT In Latin America

Acquisition In Europe
IMI Mobile is in advanced stages of talks for an acquisition in Europe, VR Vishwanath, Chairman and CEO of the company told MediaNama. The size of the deal is expected to be around $10 million, and IMI is looking at it as a means to enter the European market. “Technology acquisitions are out of question for us - we don’t look at those. Market entry and customer base…that works for us”

The acquisition will be funded through internal accruals and equity; IMI Mobile is not looking to raise money to fund the acquisition.

Ad Ring
Vishwanath sees Europe and US as two key markets, apart from India, for Ad-Ring, a mobile advertising platform that the company has developed, for ads across SMS, WAP Portal, SMS, RingBack Tones, Videos and CRBT. “No one has gotten the mobile advertising game quite right so far - most are just looking at it as an extension of advertising in the online world - based on content. That is not right. On mobile, it is possible to track usage patterns via multiple channels. But you must have an advanced content management system which is able to unify voice, video and data. We’ve created access channels and integrated with operator billing records, usage history, and check usage patterns on the fly.”

Frankly, this product sounds remarkably similar to Morpheus, a platform that OnMobile has showcased at a conference once, but Vishwanath would not be drawn into a comparison with specific VAS companies, despite our repeated questions, particularly on AdRBT. These platforms use operator data, and I don’t see why other VAS companies cannot leverage the same data. On issues around privacy of data, Vishwanath said the data belongs to the operator, and it’s a regulatory issue.

On Caller Ringback Tone plans and Revenues - (more…)

Reports & Numbers

Locked iPhone Priced At 18.5% Premium At $710-$830 In India; iPhone Clone

“Design In California. Assembly By China. Apple Hold All The Power”
- Inscription on the back of an iPhone Clone that I tried out in Delhi a couple of days ago.

*

The Apple iPhone has been priced at Rs. 31,000 for the 8GB ($710), and Rs. 36100 ($830) for the 16 GB version in India. Apart from a select early adopters - that is, those who haven’t yet bought the 2G iPhone from the grey market, off Ebay (delivery by FedEx) or directly from the US - it’s likely to receive a lukewarm response. I’d be very surprised to find buyers queued up outside retail showrooms, which is something of a norm in the US.

Why At A Premium?
The problem is that instead of being priced cheaper than the US version, or at least on par, the iPhone has been priced in India at a premium. From what we’ve heard, the iPhone will be locked-in, but the tariffs will remain unchanged: hence, the price is only comparable with AT&Ts no-contract version, the pricing for which was announced last month:

Therefore, the iPhone is at a 18.5 percent premium, while most people have in mind the prices for a new iPhone 3G with a 2 year plan - $399 price for 8GB and $499 for 16 GB model. The other problem is that 3G won’t be launched for at least another year in India, and unlocked 2G iPhones are available in India for between $400-$500.

Unlocked iPhones
While no numbers are available for iPhones already active on Airtel and Vodafone networks - there are many, and the operators are well aware of them. The question is - will Airtel and Vodafone disable access to unregistered iPhones in India?

iPhone Clone
I tried out an iPhone clone a few days ago - bought from China for around Rs. 5000 ($115). While the interface wasn’t as smooth as that of an iPhone, it had all the features, and then some more: by shaking the phone in a particular direction, one could change the wallpaper, or change song being played. There was an Apple logo at the back, and the inscription mentioned above. At even double the Rs. 5000 price, it’ll easily outsell the Rs. 31000 iPhone.

SeventyMM Gets $11.4 Million In Series C Round Led By NEA-IndoUS Ventures; Change Of Business Model?

SeventyMM, the online movie rental business, has made another pit-stop, and will chug along for a few more laps. Refueling the business with close to Rs. 50 crores ($11.4 Million) are NEA-Indo US Ventures, and VCs from earlier rounds - Matrix Partners India, Draper Fisher Jurvetson and ePlanet Ventures. Vani Kola of NEA-Indo US Ventures has joined the board. [via Television Point]

In the movie rentals space, SeventyMM competes with BIGFlix from Reliance ADA Group and Showtime from Nimbus. In the world cinema downloads space, they’re competing with Gaurav Dhillons Jaman.

SeventyMM has changed tracks: they were probably being lapped again and again by the movie pirates, and the web 1.0 model has been replaced a one which has a bit of both - user interactivity and movie rentals. Some of you may remember that the Web 2.0 model was deemed a waste of time last year by investor Avnish Bajaj of Matrix Partners, an investor in SeventyMM.

The brand new look - with video clip promos, a photo, audio and video gallery, also allowing users to upload content in these formats. I do hope they’re not penalized for users uploading copyrighted content since the Digital Millenium Copyright Act isn’t applicable in India. Apart from that they also have quizzes and other features, trying to involve the fan base. But there isn’t any advertising yet on SeventyMM, so it appears that they’re currently seeking to convert those discussing movies and browsing promos, into customers.

What SeventyMM hasn’t done yet, is launched the online movie streaming and movie downloads they had mentioned here in September last year, and neither do we see any edutainment services.

So far, they’ve raised around $21.4 Million - $11.4 million in this round, and around $10 million in previous rounds (pdf). Note that SeventyMM had acquired Delhi based movie rental business MadHouse, a little over a year ago. Madhouse founders have since quit to launch Morpheus Venture Partners.

@MoMo Mumbai: Things To Do, Short Codes, Safe Harbor, Bikini Content

What Needs To Be Done
– Single Point Access: Arvind Rao, CEO of OnMobile emphasised the need for a single point window for short codes, so that the short code is operational within 30 days on all operators; a central point for getting connectivity and access for off-deck services
– A central independent auditor for content downloads
– It’s important to get the DOT to remove the 15 percent tax on mobile VAS; it will kill the micro-payments sector

Short Code Issues
Both Rao and Viren Popli, SVP & Head of Mobile Entertainment for STAR, mentioned the issues around short codes - it used to take 2 years to get a short code from BSNL at one point in time. Popli said that even when a short code is given, one still does not get connectivity - having to fly around the country (with different circle heads, I presume)- it just adds tremendous cost to a startup. Imagine what will happen when you have to deal with 20 mobile operators.

Content Issues

Quality Of Service: Popli said that those who are providing branded services are very cognizant of the quality of service. “We have a very strong third party audit for every large show - KMPG, Deloitte etc. We have published rules and regulations. If there’s a failure on the network side, we are not liable.” For the show Paanchvi Pass, they set up a call center for complaints and…”we record each and every call - in one of our data vaults we have every call we’ve recorded for KBC 1 - so we can pull it out and say that at so and so time, and so and so date, this is what you said. That’s something that we as an organization do invest in.”

On Liability, Exclusive Deals, Lottery and Bikinis, Telcos and Marketing -

(more…)

@ MoMo Mumbai: Arvind Rao’s Solution For Mobile Content Billing Issues In India

Arvind Rao, CEO of OnMobile has no issue with regulation of the VAS industry, but only for preventing fly-by-night operators, and limiting regulation to the quality of service issues. “I have a severe problem with licensing,” he said, speaking at the Mobile Monday Mumbai earlier this week.

Over the past few years, the issue of billing reconciliation and auditing has been raised repeatedly - that for content, telecom operators do not give audited downloads, and there are “billing leakages” (i.e. underreporting of downloads), and content owners not being paid in time.

Rao believes that one needs to understand the complexity of the billing system, and cut the operator some slack - “Today OnMobile handles 8 Billion calls a month. For every call, the length of the call, which content, who should be paid the royalty - Hungama, PPL, Saregama…it’s a monumental task. We have a huge software for billing and MIS. On an average, the error is not more than 2-3 percent. But that is only when you’re operating at a very huge scale such as ours. We have to understand the nuances which are typical of the operators.”

His solution: “there could be some regulation wherein the operators have to pay up 90 percent of the bill within 30 days, and the remaining 10 percent can be dealt with later.”

Related:
“Don’t Compare The US Market For VAS To The Indian Market”, Says Viren Popli, SVP & Head (Mobile Ent), STAR India

@ MoMo Mumbai: “Don’t Compare The US Market For VAS To The Indian Market”, Says Viren Popli, SVP & Head (Mobile Ent), STAR India

“Don’t compare the US Market (for Mobile VAS) to the Indian Market,” said Viren Popli, SVP & Head of Mobile  Entertainment For STAR India, responding to a question at Mobile Monday Mumbai (MoMo Mumbai). “The US market is built on a $3 ringtone, while the Indian market is built on a Rs. 7 ringtone. When you are told in the US that you’ve got a 100,000 ringtone downloads, you are paid for a 100,000 ringtone downloads after 1 month. In India, if you have 700,000 ringtone downloads, you’re told you’ve got 100,000, and you get paid for 30,000, one year after its done.”

Popli rubbished claims of India being a competitive market, saying that while in the US, there are only 3 mobile operators, the revenue shares are much higher, despite their being at least three times as many mobile operators in India. A rather shocking revelation - “If you have ever dealt with mobile operator, you will know that after your meeting ends with one operator, every mobile operator knows what you’re talking about.” I don’t know about you, but the word CARTEL comes to mind. No wonder some VAS players are pushing for standardization and transparency in this space.

So is the solution in going off-deck and allowing advertising to pay for the content? Says Popli: “In telecom, operators have actively discouraged free content. If you put your content up for free - the amount of money I make off advertising on a per-click basis, is equal to the money I make the revenue share I get out of a Rs. 3 SMS. It is actually encouraging me to destroy existing business models. So if a big media company suddenly decides that it’s easier to give the content away for free, because it is easier to collect Rs. 1 lakh from an advertiser than revenue share from an operator, the whole game starts changing.” I think that argument is valid only if you have a fill rate of 100 percent for advertising.

The other issue here is - while a big media company with its marketing muscle has this option, smaller content owners do not. Hence, the opportunity for a large content aggregator, to do what a big media company is doing.

The Mobile Monday held in Mumbai a couple of days ago, was rather charged up; Veer Bothra and Aditya Mishra were kind enough to allow me to participate virtually, via mobile from Delhi. Am impressed that Veer’s phones battery lasted for over the two hours that I was on the line.

UTV Owned Techtree Gets Overhauled; Tech2 Needs To Rethink Ads; SEM-Sales Margin Game?

Well, this was on the cards: Techtree has become the first of the IT Nation properties to be overhauled, post the acquisition by UTV. And it’s not surprising either - TechTree has a tech and gadgets show UTVs business channel UTVi, and it was never a good idea to send viewers to a stone-age site. While the content in the new site appears to be the same, its positioning is significantly different. Take a look at the older version (here) and the revamped site.

The interactive elements - Forums, Ask Techtree, E-Classifieds, Comments and Contests are separated from other categories on top; the opinions segment has also been given a prominent position on the right, and its good to see that they’ve retained the recent comments section from the front page…. Their Price Search has also come out of beta. Apart from that, there are no new sections of note, but the content discovery and usability has been improved.

Tech2 And Ads

TechTree competes head-on with Web18s Tech2.com, both on the web at TV. I just checked out Tech2, and I think it’s obscene what they’ve done with the site, with permanent Nokia E-Series background. Just because it’s possible to put a product as the site background doesn’t mean you do it - I wonder if the editors have any say in this. Then again, if they’re just getting in traffic using Search Engine Marketing, and selling ad space to advertisers based on those numbers, reader loyalty doesn’t really matter.

UTV had completed the acquisition of a 76 percent stake in IT Nation for Rs. 15 crores earlier this year. They’d announced plans to invest Rs. 120 crores in the digital space over the next two years.

Disclosure: I own an inconsequential number of shares of Network18

TV Roundup: NDTV-Hindu JV, STAR-Balaji Split

So it’s Official: BSE listed Balaji Telefilms has informed the exchange that their agreements with STAR for a Joint Venture for regional TV channels is being terminated. Also, Balaji promoters will be buying back STARs stake in Balaji Telefilms for Rs. 190 per share. STAR had acquired 25.99% equity interest in Balaji Telefilms in August 2004. Importantly for Balaji, their contract with STAR is being modified to allow them to work with other broadcasters during prime time.
Related Story: Murdoch India Trip: FDI Limit; DJ Index, $100 Million In TV; AsiaNet, Balaji, Sakaal

Meanwhile, NDTV Ltd and the Hindu Group are forming a joint venture which will launch a Chennai focused TV Channel, reports Indiantelevision.com . NDTV will hold 51 percent stake in the channel, while the Hindu will hold a 49 percent stake. The channel will be a part of NDTVs city-focused bouquet of channels, and will be called MetroNation Chennai.

Reliance Launches BIG TV DTH; What About IPTV?

It’s over 3 years since we first heard Reliance ADA Groups DTH venture, and finally, they’ve launched BIG TV. Interestingly, the company - Reliance BIG TV Ltd - is a wholly owned subsidiary of Reliance Commnications…takes me back to that interview that Kamla Bhatt did with Rajesh Sawhney, President of Reliance Entertainment a year and a half ago, where he outlined the ADA Groups strategy of having a presence across the value chain - as content creator, licensor and distributor. Can listen to it here.

So BIG TV DTH will be the distribution arm, and there are 20 BIG TV channels planned as well. BIG TV is being priced at Rs. 1490 + recharge coupons, and offers over 200 TV channels in the MPEG4 format. Note that Airtel is also using MPEG4 for their DTH service. BIG TV claims that the retail channel for BIG TV will cover 1 lakh outlets in 6500 towns, but this part of the release easily takes the cake:

“An army capable of installing over 15,000 daily connections with specially trained installers would ensure fulfillment of every customer order within 48-72 hours.”

Reliance also has also had an IPTV service in the works…when will that be launched?

Related:
– Is Airtel Getting Its IPTV & DTH Act Together?
– Is Videocon Looking To Acquire Loss Making IPTV And VoIP Co IOL Netcom?

BIGAdda Goes Mobile; WAP Site Blocked By Airtel?

BIGAdda, the social networking site from the Reliance ADA Group has gone mobile with the launch of SMS and WAP services, and a Mobile Application. I just tried to access the WAP site - http://wap.bigadda.com via my Airtel Live connection, and received the following message -

“Gateway received an invalid response from the upstream gateway”

This is yet another indication of the issues that GPRS users face - mobile operator networks in India are not neutral,and access to sites is controlled; this issue was raised by Microsoft last month, during discussion on VAS. Note that the site might work with Airtels other GPRS plan - Mobile Office - but it is access via Airtel Live! that really matters; it’s automatically enabled for GPRS enabled handsets, is pay-per-use, and is likely to have substantially more users than Mobile Office, which costs Rs. 499 per month. Note that I haven’t been able to use Fring since I switched from Mobile Office either.

BIGAdda concurrently offers three mobile based services - SMS, WAP and a Mobile App; I tried the online flash demo, since mobile access wasn’t possible -

Register Via Mobile: This will allow BIGAdda to add mobile-only users, and should be the norm for mobile services. Note that BIGAdda is also encouraging users to SMS the BIGAdda WAP link to other users to get them on board as well. So if you get SMS invite spam (like the email invite spam we’re already getting), you know whom to blame.
SMS Alerts: Well, they’re supposedly free, but read the fine print, and BIGAdda is controlling costs by allowing only 2 Alerts per day. They’re using the short code 55454
Phone Backup: Well, isn’t Phone Backup what OnMobile bought VoxMobili for? If I remember correctly, OnMobile’s phonebackup service is priced at Rs. 40 per month…BIGAdda is also offering a phone backup service, but they don’t appear to be pushing this service much. It will given them access to substantial user data and connections.
Mobile Text, Photo & Audio Scribbles: BIG Adda is allowing users to scribble (scrap/public message) audio, text and photos via the mobile.

It was evident that would go mobile once they launched a MoBlog for their celebrity blogger - Bollywood actor Amitabh Bachchan.

Impact Of TRAIs Internet Telephony Recommendations; Sify To Benefit

We don’t think these recommendations will have any impact in the short term; they need to receive the mandate of the Indian government before it becomes a policy. Even then, the Department of Telecom may make changes, like they did in case of the recent 3G policy. The impact, if these guidelines were to be accepted in their present form:

On ISPs: The guidelines allow ISPs like Sify, YouTelecom and other ISPs to offer telephony via the Internet, maybe even convert CyberCafes into PCOs (Public Call Office)- ironic, since earlier, it was the other way around. However, the issue remains that VoIP connections will have to follow a numbering scheme.

On Skype and similar services: If you have to use the Internet to call a mobile phone using Skype, Skype will have to be registered in India, you (each user) will have to be issued a VoIP number, and you’ll have to pay tax. The numbering scheme is in itself is fairly restrictive, and it defeats the TRAIs goal of helping increase broadband penetration.

But numbering was also necessary, since specific VoIP numbers will help take care of the governments security concerns. Service providers will have to install Lawful Interception (LI) equipment And it protects the telecom operators interests - free-for-all VoIP usage would disrupt their Voice business.

On National Long Distance Cos: An increase in business for those with National and International Long Distance licenses (NLD and ILD) - including Cable&Wireless (JV with TTK Group), AT&T, British Telecom and Verizon (JV with Videocon). Why? Because ISPs will have to tie up with NLD players for calls and pay a carriage fees on a per minute basis (see Pg 45, section 3.11.23 of Recommendations). Carriage fees is likely to be between Rs. 0.30 - Rs. 0.65 per minute, as per the Interconnect usage charges. Note that NLD operators pay a percentage of their annual gross revenue as license fee to the government. This will now include Internet Telephony revenue as well.

On Calling Cards Business: Is likely to benefit most, now that they can connect to landline and mobile networks within India via the NLD service providers and ISPs. Using VoIP, they can offer cheaper international calls.

On The Common Man: Unless the ISPs are able to scale up and improve the quality of service, don’t expect STD and ISD rates to go down (despite the headlines). This is going to take a while, though we hope we’re wrong about this.

Advantage Sify: Sify has both an ISP license, and an NLD/ILD license via its subsidiary Sify Communications Ltd; hence the carriage fees (mentioned earlier) remains within the company, and they can offer both calling cards and VoIP services via Sify Broadband. However, it’s important to remember that Sify’s access business has been on the decline, and providing good quality of service isn’t exactly their forte’; see this. I’ve had a terrible experience with them as well.

Overall, the guidelines don’t appear to be as revolutionary as they initially appeared to be, but it’s a small step in the right direction. Free and unrestricted telephony, without a numbering scheme, is the order of the day. That may well emerge once there is better bandwidth via 3G, but note that Telecom Operators are blocking mobile VoIP services like Fring*.

Download the recommendations here. Also, do let us know what you think of the impact on the guidelines.

Also read: Regulator Recommends Unrestricted Internet Telephony In India; Separate Numbers For VoIP

*- If on Airtel, try connecting to Fring using Airtel Live! instead of Mobile Office. I switched last month, and have been unable to use Fring.

Picsquare Receives Undisclosed Investment From Bhola Digital Lab

Bangalore based photo printing portal Picsquare has announced an investment from offline player Bhola Digital Lab. This is ironic, particularly since online photo printing services compete with traditional photo printing services; Picsquare has been using Bhola’s printing services, and apparently worked with DTDC for delivery. For Bhola Digital Lab, this is a strategic investment, giving them an online presense, and a means for customer acquisition. The quantum of the investment, or the stake acquired have not been mentioned. Picsquare had raised $75,000 from MChek CEO Sanjay Swami, Snapfish founder Shripati Acharya and Vijay Iyer, VP (Marketing) of Portal Systems.

No inputs in the company release about how PicSquare has been performing, though, just a mention of over 1.5 lakh users. That’s around 50,000 more than the number claimed by another photosharing upstart - MeraSnap, whose userbase was aquired earlier this year by HP owned Snapfish. We’ve contacted Picsquare for more info.

Other companies in this space include Printo (funding from Sequoia Capital and Seed Fund), iTasveer (has a deal with Windows Vista), KPCB and Sherpalo funded ZoomIn, Canvera (funding from Footprint Ventures, Mumbai Angels and DFJ) and others like eYaadein and PhotoMasti.

Regulator Recommends Unrestricted Internet Telephony In India; Separate Numbers For VoIP

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Asides

• I'm a Jerry Seinfeld fan, and certainly not a Microsoft fan - particularly since they launched the memory hogging Vista, which HP forced me to take with the new laptop. So even though MS signed up Seinfeld (see this) for their ad campaign, I don't think even he can make them popular...what do you think? #
• For those who’ve been following the developments around ACK Media (Amar Chitra Katha) and Geodesic (Chandamama), I chanced upon a (cultural) study on another Indian comic book franchise - Raj Comics. Do check out “Raj Comics for the Hard Headed” by Amitabh Kumar (site, pdf), at the Sarai Media Lab. #
• So, I'm not going to read too much into the connection between Zoom TVs celebrity content, and this product. Couldn't help but notice the trademark...so who's trademarked Zoom in India? #
• mMyself, which claims to be India's first "Just-For-Women" Private Portal. The front page just looks like an aggregation of banners. Very poor usability.[via Manuscrypts] P.s.: Just in case you don't know what the million dollar homepage is about - read this. #
• Raju Narisetti, the Editor of Mint, has started blogging at A Romantic Realist. By the looks of it, he's not yet figured out how to link using HTML, but his first post, which went live on the 15th of August, on "Love and Hate in Airtel Land" talks about spectrum crunch and quality of service issues. Seven good posts in four days, and at least one every day - that's a great start. :) #