Net sales in the quarter ended December 2009 at OnMobile Global have registered just a marginal increase to Rs. 896.3 million, and net profits have declined 36.3 percent year on year to Rs. 130 million. Total expenditure rose 16.4% to Rs. 758.5 million in the quarter with costs of content fees and royalty growing 58.3 percent to Rs. 218.9 million year on year. Employee costs are up 3.4 percent sequentially.
OnMobile had noted in the previous quarter that VAS revenue growth for telcos in India were sliding and in the December 2009 quarter, the company said this trend continues despite good addition of mobile connections in the country. Mostly, the directives issued by Telecom Regulatory Authority of India on VAS in April has impacted acquisitions and usage. A comparison of changes in OnMobile’s India revenues (i.e. Standalone) with the VAS revenues (excluding P2P SMS) for the telecom operators:
Post the revision of the useful life of its Telefony Cards to 5 years, profit before tax has risen by Rs. 27 million in the quarter, compared to the Rs. 50.63 million rise recorded in the September 2009 quarter.
Content Costs (Standalone)
After plateuing in the previous quarter, content costs have again picked up pace.
On a consolidated basis, OnMobile reported total revenues of Rs. 1154.7 million, marginally lower than the Rs. 1157.2 million from the corresponding quarter last year. With expenditure of Rs. 1037.1 million, up from 866.6 million from December 2008, OnMobile reported a net profit of Rs. 126.2 million, down from Rs. 276.4 million in December 2008.
OnMobile’s VAS deployments in Latin Americas through its EUR 37 million investment in Spanish firm Telefonica were to begin in this quarter, the company has said that its business agreements have been formalised and they will be deployed in 13 countries.
More on the Telefonica deal here: OnMobile Says Telefonica 5 Year Contract Begins Q1 2010; 23 Services; Music Driven
Released the first version of OnMobile Social RBT with:
- RBT provisioning aided by intelligence on the social calling pattern of the user.
- And UGC RBT with the ability for the user to record their RBT from an established Social Network
Launched the next version of the OnMobile Corporate RBT product
Launched a spoken English mobile learning program called “Learn English” on BSNL with EnableM.
Extended the functionality of the OnMobile Phone Backup 2.0 by adding a mapping
capability and extending the clients to include iphone, Android, web and WAP.
Rolled out Atlantis – a new Content Management system
Added an Intelligent OBD application onto its Universal Messaging Platform.
Signed up three additional partners for the OnMobile Developer Network including VoiceTap.
Launched the OnMobile Teliphone product, to automate search of local information via voice recognition on Iphone.
Extended the OnMobile Search and Discovery product by increasing conversion of services selected by the user using free-form input on the SMS channel
On January 11, 2010, OnMobile received another legal notice from Deputy Commissioner of Commercial Taxes for KST, KVAT and CST amounting to Rs. 112.4 million for the period from April 2008 to March 2009. The company has deposited 50% of the total claim amount.
In an earlier case, the company received a notice for Rs.339.2 million for the period from April 2002 to March 2008. The case was dismissed by the Honorable High Court of Karnataka and the company filed an appeal at the VAT Appellate Authority on March 31, 2009, depositing 50% of the total claim amount.