Following the announcement of the 1:1 bonus issue, did an interview with OnMobile CEO Arvind Rao.

Key points that Rao made in that interview:
– Latin American project is 90-95% complete
– Spent $50-60 million in one year, and that has had a drag-down effect on margins
– Margins are now starting to creep back to normal levels. Q3 margins not indicative of steady state. International margins are higher.
– Revenues from this project and from other customers will pick up in the next year. First year revenues were in the range of $1-2 million, expecting a 10x increase in the next year.
– This project could be almost half the size of this company.
– With 3G, growth rates could return to normal levels
– Looking at 30-40% growth as a minimum.

He reiterates a point that we made earlier – that the Indian business is dependent on telecom operator marketing, and with operator margins squeezed, VAS suffers. There is hope, because of their timely Dilithium acquisition, and the promise of 3G. It’s becoming increasingly difficult to take a long term call the Indian market; Onmobile realized that rather early, and placed strong international bets with Vodafone and Telefonica. The things that does worry us, though, is that the bet that they took on AdRBT doesn’t seem to have paid off, the content licensing battle in India looks like it is heating up (and margins are getting squeezed). We’re also not quite sure of how VoxMobili’s phone backup product is doing, given Android phones and the threat from free Google Sync.