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Sep09: OnMobile Standalone Profit Down 19%; Cautious; Operator Deployments

On a standalone basis, OnMobile Global has reported Total Revenue of Rs. 834 million, up 5.1% year on year increase, even as the companys profits declined 33.66%, on account of increased expenses: total expenditure rose 33.66% year on year. Employee costs were up 17.09%, and following OnMobile’s content deal with SIMCA last year, content costs rose to Rs. 199.9 million. Sequentially, however, content costs have reduced. OnMobile has said that during the quarter, they mutually terminated business with one of the Indian telecom operators, which was going through some internal restructuring.


Details: Standalone: Balance SheetResults| Consolidated: Balance SheetResults | Investments Disclosure | Q2 09-10 Highlights

Now in its commentsfollowing the results, the company has suggested that the VAS revenue growth for telecom operators in India has dipped, and that there was a significant correction in the quarter ending June 30th 2009. Based on the data from the results, we’ve compared changes in OnMobile’s India revenues (i.e. Standalone) with the VAS revenues (excluding P2P SMS) for the telecom operators:


OnMobile has revised the estimated useful life of Telefony Cards, grouped under computer and electronic equipment, from 3 years to 5 years. This has resulted in net profits during the quarter being higher by 50.63 million.

Content Costs (Standalone)


After the surge in content costs following the SIMCA deal last year, content costs for OnMobile Global have begun to plateau.

Consolidated Results

On a consolidated basis, OnMobile reported total revenues of Rs. 1086.3 million, up from Rs. 974.6 million during the corresponding quarter last year. With expenditure of Rs. 1033.4 million, up from 799.7 million from Sep08, OnMobile reported a profit of Rs. 98.7 million down from Rs. 183.5 million in Sep08.

OnMobile KPIs


Telefonica Deal

OnMobile has made an initial commitment of EUR 37 million for starting its operations in Latin America. The company says that “Kick- off in the first 3 Telefonica Operators has happened on schedule through the execution of our Parallel Deployment process. Deployments to start in Q3 and Q4.”

Details of the Telefonica deal: OnMobile Says Telefonica 5 Year Contract Begins Q1 2010; 23 Services; Music Driven

Ver Se

OnMobile had sold 5.08% of its equity holding in Ver se Innovation Pvt Ltd for Rs. 30 million, following which Ver se became an associate of OnMobile, and is no longer a subsidiary.

Key Moves

Two of OnMobile’s key employees, Sandeep Ganguly, Head of Private Operators, India and Pratapa Bernard, Head Data Product Unit, India resigned during the quarter. According to MediaNama’s sources, Bernard plans to start up; when we’d contacted OnMobile CEO Arvind Rao a few weeks ago regarding this development, he had declined to comment on the rumored resignations. Ganguly had said that our report on his resignation, if published, would have been a ‘blooper’…guess it wouldn’t have. Bernard had also declined to confirm or deny his resignation.

Key Deployments

— OnMobile has launched CRBT in South Africa, as per its global agreement with Vodfafone. The company says that the deployment has exceeded targets and has the number 1 penetration in the country in 5 months of deployment, overtaking competitors who were live with the same service for a longer time period.
— The company launched RBT services in a leading Operator in UAE and seamlessly replaced an RBT competitor with increased penetration in the first quarter of deployment.
— The company has signed an LOI for deploying its Music and Voice Portal services in an existing CDMA Operator launching GSM services in India. This is likely to be Tata DoCoMo.

— Signed an LOI for SMS services with a new entrant in the Indian market.
— The company migrated the two former Spice circles (Karnataka and Punjab) onto OnMobile platform on schedule.


— Launched new tuned versions of four south Indian languages, and a balanced (client-server) based Speech Recognition product for the iphone with the first deployment targeted for Q4 09-10.
— Released the OnMobile Family Calendar add-on to the Network Address Book and launched the first Connected Community for a leading mobile Operator in Germany.

— Launched the OnMobile Churn Management product in one of the leading operators in India for RBT. This has reduced churn on RBT by 10%. The company has used this result to sign up “a leading operator in Indonesia” for churn reduction on their core service.
— Launched OnMobile Phone Backup 2.0 which expands the coverage of this service across a wider set of handsets. Phone Backup 2.0 includes iphone and Android versions which have been deployed this quarter across different operators in Europe.

— The OnMobile AdRBT product has reached the next stage in deployment results from the first circles at a leading operator indicate an encouraging 7% conversion rate.
Universal Messaging Platform was launched with 7 deployments this quarter; the platform combines all forms of messaging into one, easing deployments and management.
— The OnMobile MMP2500 Voice Platform was enhanced with Multi-Party conferencing; the first product partners will launch services using this facility in Q4 09-10.
Antakshari, OnMobile’s first service on OnMobile Developer Network, has reached 200,000 users in 2 months.

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