“EUR 20-22 million this financial year, EUR 65 million next year and EUR 125 million in FY 2012 in this specific vertical” is what Amit Gupta, Director (Finance) at Tanla estimated the projected revenue from the companys mobile payments segment in a conference call about the deal the Hyderabad headquartered BSE listed mobile VAS company has inked with Nokia, primarily for Nokia Maps. Current EBITDA margins are 35%,which the company expects to maintain.

On being asked by MediaNama about when the rollout would begin for the S40 platform, Ovi Store and Music Store and when one can see an impact on revenues, Vesa Kirsi, VP(Sales), Tanla Oy said that the current rollout is for Nokia Maps, but this gives them an opportunity to deploy for other Nokia products and services as well. The impact on the revenue is expected only in the 1st half of next year. The deal with Nokia is non-exclusive.

For Tanla, in the first quarter, the revenues from this sector were around EUR 5 million. At present of the three revenue streams, set up and monthly charge fee equals EUR 200,000 per month, DRM equals EUR 500,000 per month, and bill payment service transactions equal EUR 1 million per month of which 10 percent is the revenue generated.

Tanla expects to start this project with a team of 40, but ramp it up to 100 in the next six months.

Agreement Details

It is a five year agreement which can be extended one year at a time. Tanla has three deliverables to Nokia: their License Manager; On-Device Payment Solutions where they have credit card payments and operator billing in 100 operator networks; and Professional Services across platforms for customization of the solutions for handsets. Tanla will charge an hourly rate for software development.

The License Manager, Tanla claims, is already embedded in over 110 million handsets, and with it, users will be able to try content free of charge before purchasing it.

Platforms & Content Providers

The product has already been rolled out for the S40. So far, the companys business has come primarily from the S60 platform. Tanla claims that by 2012 one-third of their business will come from Nokia even though the market share of symbian phones are set to decrease. Arto Lehtonen,VP (Strategic Planning & New Products) for Tanla Oy illustrated , “We will continue to look at new platforms, so far our business has come from the S60 platform primarily, and now we are extending to other proprietaries of Nokia and at the same time we are looking at providing services to other platforms as well. We have already launched with Windows Mobile and in the next six months we plan to launch with Java, Blackberry and Android versions.’

Top tier application vendors for the S60 – around 20 content providers – have so far used the license manager. Tanla is looking to automate the process, and get around 1000 content providers on board in the next 12 months. Competition is from the payment solutions companies like NetSize and Sybase365, and others on the DRM side, for music. Last year, their product was shipped with around 60 million handsets.

Revenue Model

There will be three revenue streams for Tanla: There will be a fixed set-up amount and monthly fee charged – around EUR 200,000 per month. There will also be a DRM functionality of EUR 500,000 per month. Finally, through payments solution, Tanla will charge 10 percent of the total transaction between the content provider and the end user as service charge. This is across the companys customers. They charge on a per hour basis for the professional services for software development, customisation and support.

Download: Tanla Presentation on  Nokia Deal


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