neomobilelogoRome-based mobile VAS firm Neomobile SpA, which recently raised an undisclosed amount of capital from UK-based BlueGem L.P. (which now owns 45% in the company), is now using the funds to expand in India and eying acquisitions to achieve scale. Neomobile already has a presence in India through its acquisition of Spanish firm Arena Mobile last year with its last round of funding.

Arena has been in India since 2006, and has launched services such as Speedflirt (a dating community) on Airtel, beauty alerts and film gossip with USSD subscription packs, and live broadcast SMS alerts from Filmfare Awards in 2007. Its revenues are over $1 million, Ranjan Reddy, Vice President- Global Sales at Neomobile India told Medianama. Neomobile India’s clients include Nokia Interactive and Diageo for mobile marketing. It has also undertaken campaigns for media buying with Group M. These contribute to 15% of India P&L.

Acquisition In Mind

ceo1The company will acquire a domestic firm “not before 2011”. Neomobile’s CEO Gianluca D’Augustino told Medianama, “Our typical approach is: we enter a market, we start, we make some mistakes, we correct and improve, once we understand the market, we settle down and then we make an acquisition. An acquisition partner is the only way to grow in this industry.” The company believes in outsourcing technology and will focus on content packaging, so its target acquisition will be a technology-strong VAS firm.

Neomobile is expanding to Delhi and Bangalore and undergoing consolidation – it currently has an 80-90 people strong creative team in three locations – Rome, Barcelona and at a content factory in Bangladesh, and will restructure to have local teams.

Speedflirt To Be Relaunched

Arena’s match making service Speedflirt has fallen off the radar two years since its launch and will be relaunched in January with new features. “It’s not going well, usage has plateaued. The 3 month average of active users was around 80,000 and we are currently working with Airtel to add features, value and modify pricing to attract users,” said Reddy.

Launch Strategy: New Models & Price Points

In the first quarter of 2010, Neomobile plans to launch a few services – on WAP and voice – to test the market and will focus on both mobile marketing and direct to consumer (D2C) services.

On what strategy they would employ to compete with the plethora of VAS companies, Reddy said, “We understand that there are 400 VAS companies and 13 operators, but not many are true blue D2C companies. Boungiorno is one, but has predominantly been B2C with a D2C line. Tanla and Zed have not started yet. Other companies who are in the B2B space and are monetising extra inventory out there, but are few D2C firms globally, so there’s not that much of clutter.”

“From content point of view, that’s something we have to be quick to react to. So Bollywood, astrology, cricket – the ABC – will continue but there has to be a market for other things, innovative models, different price points. ” This is in the form of mix-n-match content: currently most WAP offerings have specific bundles per category: game packs or Bollywood, or all wallpapers/ all animations and is usually a Rs.99 plan. Neomobile is working with operators to offer a Rs.10 subscription package depending upon the amount of content. It will also offer Filmfare and Femina content (a mix of images, animation, articles) on a single price point or as an all u can eat model.speedflirt

Augustino said that mobile operators need to be open to new concepts and models and not be defensive or conservative or speculative as can sometimes happen.

Neomobile will also take charge of promoting VAS, traditionally the role of the operator, and spend on operator deck or off-deck VAS by advertising on networks like AdMob. This will mean an increase in media expenses for Neomobile and a reduction in revenue share for the operators; Reddy would not put a number to this redution, however. He also said that Neomobile would style VAS offerings according to operators: “For RCOM, we need to keep the regional content category in mind. And Idea Cellular’s market share comes from B and C class towns, so we will target voice services for its subscribers.”

Voice Portal, Voice Blog

Agreeing that WAP in India is still a small market, with some 9 million people (worst case scenario) actively using GPRS, Reddy said the company will still choose to start with WAP and follow up with voice as the company has had experience with the former. Neomobile is also planning a voice portal and will acquire regional content for it. It has also partnered with an Indian movie production house for a Voice Blog of celebrities.

Mobile App Store

Neomobile’s mobile applications store may not arrive in India for a while. Reddy explained, “In Italy, we launched it with a EUR 5 fee and users could consume unlimited applications. We have to figure out whether the same business model makes sense, whether the market is ready, whether we have the tools to enable for low end handsets etc. It needs to be customised, adapted to Indian requirements, with the low end handsets and business model as well.”

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