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OnMobile Buyback Starts This Week; CEO Arvind Rao On TRAI VAS Guidelines, Mobile Marketing & More

Following OnMobile Global‘s announcement of a proposed buyback a couple of weeks ago, we posed some questions emailed to us by our readers to its CEO Arvind Rao yesterday:

MediaNama: What would be the expected start date of the buyback?
Arvind Rao: So, it would be sometime this week

MediaNama:Will the parent company OnMobile Systems Inc continue selling shares during the buyback?
Arvind Rao: No, the promoters and key people are not allowed to sell in the buyback.

MediaNama:Any update on the change of ownership from Argo to a more stronger investor. There have been rumors about companies like TCS and Tech Mahindra…

Arvind Rao: I have no comment, I don’t know anything about these things

MediaNama:Any update on the TRAI directive regarding subscriptions?
Arvind Rao: The industry, both individual companies have given their responses to TRAI, and let us see what TRAI finally end up with. Our basic point of view is that what TRAI is trying to do is correct, in terms of the consumers, but the method in which it is being done is a bit draconian. There are alternate ways to do it which would be the more preferred routes to follow. In particular, we have given TRAI detailed recommendations on what other telecom operators are doing in other parts of the world. We believe that those business guidelines are better to follow, rather than what I call over regulation of the industry.

MediaNama:What is the status of implementation of those guidelines by various operators?
Arvind Rao: They are in various stages of implementation. It depends on the operator end.

MediaNama:What about BSNL and Vodafone?
Arvind Rao: I don’t know, at the specific level of the account.

MediaNama:Because they would impact your subscriptions…
Arvind Rao: They would impact everybody’s, not just mine.

MediaNama: Any chances of VAS companies taking this matter to court in case TRAI doesn’t change the guidelines?
Arvind Rao: I don’t know. I cannot speak for other VAS companies, but we have never thought of this.

MediaNama: On the buyback – in November 2010, you had pledged your shares and increased your stake at the same time as a selling round by Onmobile Systems, when price was (adjusted for bonus) Rs 125. This time you have been dormant, even though the price languishes at Rs 60 or thereabouts. Are you planning to pledge your shares?
Arvind Rao: No.

MediaNama: There is an update on moneycontrol.com that shares of Riff mobile and Oskar Habitat have been pledged
Arvind Rao: These are all promoter group companies…

MediaNama: Can you update on the progress and the EBITDA contribution on topline and bottomline of Africa, including the tie-up Airtel (Africa), Vodafone Egypt and Spain (new deployment)?
Arvind Rao: I don’t want to do that specifically. We don’t talk about specific customers or give out specific customers. Overall, international revenue growth is very strong. India depends on TRAI etc, but even then the data services side is picking up extremely well.

MediaNama: What percentage of your current RBT subscriptions take place through SMS?
Arvind Rao: I don’t have that number.

MediaNama: Any update on your plans to enter mobile marketing? There was a partnership with Madison Marketing…this is specifically with respect to the $200 million that Inmobi has just raised
Arvind Rao: We are working on the business plan and initial projects have been rolled out. There is not much overlap between what they (Inmobi) are doing and what we do. They are focused on advertising, I’m more focused on marketing. The two are quite different.

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