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OnMobile Ties Up With Telefonica In Latin America; To Invest $50M; Market Data

onmobile-telefonicaOnMobile Global, a BSE listed Mobile Value Added Services company, has inked a deal with Telefonica Internacional for exclusive and non-exclusive market rights for the Latin American market, as well as Telefonica company S.A.U. Spain. The Latin American deal gives OnMobile access to group carriers in 13 countries.

OnMobile has said that the company will invest over $50 million in the market, and deploy their portfolio of VAS services, including Ring Back Tones, Music Radio, a Soccer Portal, Voice Search and others. A timeframe for the investment has not been mentioned, nor has the company outlined. Onmobile CEO Arvind Rao had told MediaNama last week, the challenge is not in sales and business development, but in execution. OnMobile has another key deal with Vodafone Global, and is in the process of launching VAS services with Vodafone operators.

Telisma Advantage?

One thing that we think could have worked in the companys favor, is the fact that they have Brazilan Portugese capability for voice portal services, courtesy their key acquisition of Telisma last year. Brazil is Telefonica’s largest market in Latin America, and accounts for almost 37% of Telefonica’s Latin American mobile user base. Telisma’s TeliSpeech is a speech recognition software which integrates with voice specific menus and voice search.

OnMobile had acquired Telisma for over EUR 12 million. The company has mentioned before in earnings conference calls, their acquisition of Telisma was to essentially develop new language capabilities, which will help them gain market entry and acquire new clients. Telefonica appears to be one such case.

Telefonica in Latin America

Telefonica is the third largest telecom operator in the world, with a significant presence in Europe and Latin America. It’s one of the largest telecom operators in Latin America, with a wireless subscriber base of 124.65 million subscribers, as of March 31st 2009.

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Latin America has a wireless market penetration of 83 percent (as of March 2009). Telefonica Latinoamerica witnessed significant growth in the Jan-March quarter in Brazil, Mexico, Peru, Argentina, Chile and Venezuela, with churn at 2.6 percent.


Telefonica Data Revenues (March 2009)

Note: all percentage figures mentioned below are year on year

Interestingly, for the Jan-March 2009 quarter, data services (VAS or non-Voice) accounted for 17.2 percent of the groups mobile service revenues in Latin America.

Brazil (Vivo): Data revenues account for 11% of Vivo’s service revenues, and during the quarter ending March 31st 2009, the carrier saw 30% growth in wireless data services, due to spread of GSM, increase in SMS and content services.

Argentina (T. MÓVILES): Argentina had a wireless penetration of 112% at the end of March 2009. Growth in wireless data helped the carrier register a 14.7% in ARPU in the first quarter, with data revenues accounting for 27.7% of service revenues, up 36.1% year-on-year. Connectivity and non-SMS data businesses performing especially well. In Q1 the Company began to market its wireless broadband services more actively

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Chile (T. MÓVILES): At the end of March 2009 the estimated wireless penetration in Chile was more than 98%. For Telefonica MovilesARPU declind in the quarter by 7.5%, but wireless data revenues 43.1% in the first quarter in local currency, accounting for 11.4% of the service revenues.

Columbia (T. MÓVILES): Colombia had a wireless market penetration of 92% at the end of March 2009. ARPU declined in the quarter by 18.9%. Data revenues grew 39% accounting for 7.6% of wireless service revenues.

Mexico: Mexico has a wireless market penetration of 72%, and in Q1, ARPU fell 9.7% year-on year. Data revenues grew 40.9% in Q1.

Peru (T. MÓVILES): At the end of March 2009 the estimated wireless penetration in Peru was more than 62%. For Telefonica Moviles, ARPU declined in the quarter by 18.1%. Data revenues grew 11.3% accounting for 12.1% of wireless service revenues.

Note: information on data access not available for Central America, Ecuador and Venezuela.

Disclosure: Telefonica group company Telefónica Investigación y Desarrollo was a research client for MediaNama

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– OnMobile CEO Arvind Rao Cautious On VAS; Launches With Vodafone In Romania, South Africa

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



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