wordpress blog stats
Connect with us

Hi, what are you looking for?

OnMobile Q3-FY11: Revenues Up 36.8%; International Driving Growth, India Flat

OnMobile Global has said that a focus from its telecom customers –  from promoting Mobile Value Added Services to focusing on Mobile Number Portability, is likely to have an impact on business for the time being. The company reported a quarterly decline in Net Profit at a consolidated level, and a 86.44% year on year increase, even as total revenue grew significantly both sequentially (by 12.99%) and year on year (by 36.8%). In a note accompanying the results, OnMobile says that its overall Gross Margin and core business gross margins remain stable at around 73%, it’s Operating Profit Margin is flat – marginally up from 11.4% to 11.8%, and Operating Profit Margin on the core business has improved from 23.8% to 25%.

Download: OnMobile Q3-11 details

Standalone Results: Why OnMobile Is Focusing On International

While OnMobile’s revenues appear to be growing quarter on quarter, if you see the chart below, the broad trend is that profitability for the Indian business is in decline. The company usually advises that investors look at their business at an annual basis, not quarter on quarter. So, here’s the performance for the company in the Indian market, on a four-quarters timeline:

While revenue is growing, the net profit tells quite another story: as if OnMobile is running to stay at the same level of profitability, and its investments aren’t really bearing fruit. Also note that OnMobile’s entry into the content business would have led to an increase in topline, as well as increasing content costs (shown in the chart below).

On the conference call, OnMobile CEO Arvind Rao reiterated what Anil Pande, Head of VAS for Reliance Communications, had told us earlier – that growth for telecom operators in India is not coming from VAS, but from data services. This explains OnMobile’s international focus, and in India, the bet that OnMobile has taken on Dilithium, and video serving, which telecom operators will also depend on, for on-deck VAS, alongwith Caller Ringback Tunes, but it also does paint a worrying picture for the Indian market. The larger global trend, though, is moving towards off-deck, and a fragmented market, and there’s little doubt that India will follow.


International Business

Given the turbulent environment in India, OnMobile strategy of focusing increasingly on international business appears to be serving it well:
– As much as 31% of its total revenues for the quarter came from International business. They are now live with 6 countries in Latin America with Telefonica, including Brazil, Argentina and Venezuela, covering 80% of its subscriber base. Remember that last year, the company had said that it intends to complete deployment in the 13 countries, in a worst case scenario, by June 2011. Revenue from Latin America was higher by 80% year on year, and the company says that it is experiencing early adoption rates. Last quarter, the company had launched in Mexico, and registered new offices in Panama, Chile, Nicaragua and Spain.
– During the quarter, it registered new offices in Uruguay, Egypt and China. In China, the company says it won an embedded deal with a major handset OEMs for “video stacks”.
– It launched ‘Music Burst’ an ‘unlimited music download and play’ product on subscription in Indonesia.
– They launched an enhanced version of their ‘My Synchronization Space’ service in one of their European Operators, which included embedding of the application on Android devices. Note that Android has a host synchronization services – Google Sync. Additionally, OnMobile expanded their offerings in the Personal Data Management space for both Android and Apple iOS devices.

Dilithium Update

– Post acquisition of Dilithium assets at the beginning of this quarter, teams have been integrated as a new product unit within OnMobile.
– Restarted the delivery of Dynamic Content Adapter product for one of the top Internet Companies in the North American market.
– Received and delivered their first order of 3G Video Gateway from a leading Telco in North America.
– This acquisition has increased OnMobile’s geographic presence by 21 countries.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

News

Mobile entertainment company OnMobile Global has acquired Appland AB, a Sweden-based mobile distribution and monetisation company for an undisclosed amount. A VCCircle report states...

News

Mobile VAS and ringback tone company OnMobile Global has signed a 3 year ringback tone and reverse ringback tone deal with Bangladesh-based telecom company...

News

Rajiv Pancholy, managing director and CEO of OnMobile Global has resigned from the company. Pancholy will stay on as CEO till February 28 but...

News

Onmobile Global returned to profitability as the company reported a net profit after tax of Rs 1.26 crore for the quarter ended September 30th 2015....

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ