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How Geodesic Ltd Makes Money; Mundu TV ARPU, Anti-Piracy Plans

geodesicGeodesic, the digital messaging and content solutions company, shared details on its operations and sources of revenue during its Q1FY12 investor conference call:

– Key revenue source – Enterprise CRM: Many people have, in the past, asked us to find out about Geodesic’s primary source of revenue. In its earnings call, Geodesic said that its Unified Communication and collaboration platform which incorporates CRM, and covers four mediums – e-mail, instant messaging, SMS and voice. This business contributed around 42 percent of its revenues. This is an enterprise product, and they get clients through system aggregators (which service Fortune 500 companies) on a license fee model, and also through direct sales, with a per-month and usage fee. Geodesic MD Kiran Kulkarni said on the call that the platform offers a communication cost reduction by 40%.

– Telcos, Handset & Retail: Over 37 Telecom Operators and 11 Handset Vendors together contribute about 23% of Geodesic’s revenues. The Handset Vendors pre-bundle its applications- Mundu IM, Mundu TV, Mundu Radio and others.

How does it make money from this? Geodesic says that it charges a small fee to the Handset Vendor as a pre-bundling fee allowing its customers to use the app for a period of 120 days, post that the consumer has a choice of either using the product or simply stop using the product. The conversion is considered retail sales – which contributes just 8% of Geodesic’s revenues.

Geodesic added two Telecom Operators and three Handset Vendors, including a tablet maker, during the 1st Quarter. Micromax in India has started bundling Mundu TV with all their Android phones starting Bling 2. Some notes on this segment:

  • Mundu TV: The average revenue for user is about Rs. 70 at this point of time, and the company has clocked close to 4.5 million downloads in about six-and-a-half months. According to Geodesic, Mundu TV has been the Number 1 app on the OviStore and on Apple’s iTunes App Store under the Entertainment category.
  • Conversion on Mundu TV: Geodesic informs  that it witnessed a conversion of 4% out of that 4.5 million and the average price roughly comes out to be in the range of Rs. 60 to Rs. 70, because the package cost initially is Rs. 49 for five channels and Rs. 99 for ten channels. It has also signed up with almost 30 channels and has got some music content;  education content; some sports content;in addition to all live news channels.
  • Plans to launch prepaid subscription cards: The company feels that a lot of people are not very comfortable pulling out credit cards and punching  numbers. To address this issue, it plans to come up with prepaid cards that will be distributed through mobile stores as well as through stores like Croma. The company might consider mobile commerce and e-payments.

– Electronic Computing Segment: This segment, which includes its GeoAmida business targeting governments for electronic verification and accounting of government services (public distribution system etc) and financial inclusion initiatives. According to the company, almost 15% of its revenues came from Geo Amida during the last fiscal (FY11) and almost a similar number during the present quarter.

It has been deployed in the Mahatma Gandhi Rural Employment Guarantee Act (NREGA scheme), in law enforcement, financial intrusion and microfinance. State Bank of Hyderabad and Yes Bank are using it for customer transactions under banking correspondent roles. Geo Amida is completely UID compliant, Aadhar compliant, which means it can be used in related applications. The company says it has maintained a growth rate of 50%. Geodesic estimates that the government will need over 2-2.5 million devices.

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Plans: Geodesic is looking at mobile commerce and e-payments, to “bolster GeoAmida revenues”.

– Financial Solutions: Along with web solutions and consultancy, Financial solutions contributes around 10.4% of the companys revenues. Geodesic says that its financial solutions suite has powered four of the top websites which do online trading. Geodesic has a Portfolio Management System and  Life Tuner, a financial planning product, among others. The company mentioned that moneycontrol.com, Edelweiss , Axis Bank and LGC Securities are amongst the users of its  financial solutions.

Other notes:

– Anti-Piracy Solutions: Geodesic has also used its Content Management Analytics product to do online anti-piracy for films, although it feels that revenues are not substantial enough for it to talk about at this point of time, but they are significantly growing. The company has so far done 40 films, including Akarshan and Chiller Party.

– Education Device: The company is working on an education device, which it intends to launch within this fiscal. More on that here.

– Chandamama: The company launched Chandamama, a popular children’s magazine on iPad in July and
regional Chandamama editions in nine languages in September, and claims to have received more than 5000 downloads in one to one-and-a-half month of Chandamama on the iPad. The company plans to launch it on the Android platform by November. It also plans to launch various other new products coming out on the e-media space in Chandamama in next 12 months.

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– Accounting questions: the Geodesic management had to face some persistent questions regarding changing their auditor, the management of their financials and differences between audited and unaudited results, the declaration of dividend, from Nishit Shah from IDFC. Read the exchange in the concall transcript here, starting Page 16.

Geodesic To Launch Education Device
Geodesic Reports Rs 83.86 Cr Profit For Q1-FY12; Micromax-Mundu TV, Spokn, GeoAmida

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