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OnMobile Expects Impact Of TRAI Guidelines On Revenues To Be “Moderate”

OnMobile Global warned investors during its earnings conference call last week that the company will be impacted by the TRAI’s new guidelines for enabling mobile value added services – ringtones, ringbacktones, wallpapers, application purchases through telecom networks – but that impact will be “moderate”, and not severe. OnMobile’s India revenues declined marginally during the first quarter of this financial year, which ended June 30th 2013, and since the guidelines have only been implemented in July 2013, the impact will be seen in the results next quarter.

The impact, it said, will be moderated by the fact that OnMobile’s exposure to Data (mobile Internet) and WAP based activations is limited. These, as we had reported earlier (and, indeed, called for), are included in the expanded mandate of the new regulations. There are issues are related to user experience (the number of steps to close a sale has gone up, so there will be drop-off’s), as well as technical challenges related to the enabling of third party confirmations.

OnMobile expects these issues to be sorted out in the next few months, but in a politically correct way, welcomes the regulations because they remove the uncertainty around the 2011 directive.

More interestingly, OnMobile CEO Mouli Raman said on the call that “(Telecom) Operators are consolidating VAS service providers. There is a clear move to consolidate across fewer partners. We believe we are likely to gain because of this. Operators are open to higher revenue shares. More services are likely to be launched because of the improving ecosystem.”

The statement that there will be fewer service providers is unexpected: the move, at least judging by Vodafone India’s yet-to-be-launched-why-the-hell-is-it-taking-this-long open billing and open API initiative, the idea is to perhaps increase the number of service providers, not reduce. The standardization of processes will increase competition, and benefits the consumer, breaking relationship-dependent strangleholds that companies had over the mobile VAS space. 

So is there a change in the telecom operator stance now? We know that Airtel is now more open to discussing better revenue share terms, but is Vodafone pulling back on its open API, open billing initiative?

We’ve written to Vodafone for a comment, and will update if we have more. In the meantime, some slides from OnMobile on how things will work from now on:






TRAI’s New VAS Activation-Deactivation Guidelines Include Mobile Internet
India’s New Activation Process For Telco Billing Via Mobile Internet, SMS, IVR
Onmobile India revenues decline 3.5% quarter on quarter

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© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ