Another Quarter of increasing content and royalty costs for BSE listed mobile Value Added Services company OnMobile Global, as the company reported, on a standalone basis, an 8.2% increase in cost of content quarter on quarter, and a 166.4% increase year on year.
The company also suggests that the TRAI directive on subscription services has resulted in a revenue decline of 10% in some operators. They are, as CEO Arvind Rao had indicated earlier to MediaNama, working on a revised directive.
Details:Investor Conference Call | Dial in Numbers 3rd Aug 9am | Q1 09-10 Highlights | Published Results Consolidated | Published Results Standalone | Standalone Balance Sheet | Consolidated Balance Sheet | Investments Disclosure
On a standalone basis, Net Profit declined 1.86% year on year and 22.6 percent quarter on quarter to Rs. 142.3 million, though Net Sales were up 36.16% year on year, and down 6.8% quarter on quarter at Rs. 879.1 million. OnMobile has suggested in the past that their results be compared on an annualized basis, since the sales cycle tends to be long, and costs lop-sided. The company now says that Q1 is historically the lowest in terms of revenue and profitability, delivering around 17 to 22% of full year revenues and profit after taxes.
OnMobile also suggests that one operator client is going through an internal re-structuring which has impacted revenues for the quarter, while another experienced delays in rolling out their new network, which resulted in deferral of revenues. The company also had to incur third party expenses in this quarter ahead of the Telefonica deal.
On a consolidated basis, the company reported net sales of Rs. 986.5 million for the quarter, total revenues of Rs. 1072.4 million, and a total expenditure of 961.5 million. Net Profit was at Rs. 86.7 million. Note that consolidated results are not comparable year on year, since the company incorporated Telisma results July 2008 onwards.
The decline in net sales both on a standalone and a consolidated basis is a little surprising, given that the subscriber reach, unique users and Active RBT users have all increased quarter on quarter: the number of calls handled remained static, and that is a little surprising.
This performance sheds some light on what CEO Arvind Rao had told MediaNama a few weeks, suggesting that one shouldn’t expect the same rate of growth in India, and also puts into context the importance of two key international deals that the company has struck: with Vodafone and Telefonica. Some key developments
Telefonica Deal: OnMobile has made an initial commitment of EUR 37 Million to start its operations in the Latin American region. (Related: Telefonica Deal Conference Call / Telefonica in Latin America)
New Operator Launches: The company went live with RBT in Europe, following last quarters Vodafone deal, and has also opened an office in Romania. OnMobile also launched Voice Portal and RBT services with a new GSM operator in India.
Android: Two large handset manufacturers have selected OnMobile’s Phone Back-up solution for Android phones. The company claims that their Social Address Book has supassed the 250K download mark in the Google Android Market, and has been lainched in all the subsidiaries of a leading Operator in Europe.
MRadio & Life Tools: crossed the 1Million subscriber mark in the SAARC region. The company also partnered with Nokia to launch Life Tools.
— OnMobile Says Telefonica 5 Year Contract Begins Q1 2010; 23 Services; Music Driven
— OnMobile Ties Up With Telefonica In Latin America; To Invest $50M; Market Data
— OnMobile CEO Arvind Rao Cautious On VAS; Launches With Vodafone In Romania, South Africa
— Q309 Call: Why OnMobile Did The SIMCA Deal; Ad-RBT National Rollout Plan