This is a major development for OnMobile Global: the company has renewed its partnership with Telefónica’s Movistar operators in Latin American Spanish speaking countries for four more years. The company will power Ringback Tone services for Movistar across 13 countries, a potential user base of 132 million. The company had first inked a partnership with Telefonica in 2010, a five year deal, with a renewal clause built in (more here).
Why is this deal important? The Vodafone and Latin America deals were critical to OnMobile’s global expansion: where India once dominated the companys revenues, the growth in international revenues and the decline in India since 2010 mean that the global business now accounts for 76% of OnMobile revenues. Following the LatAm deal, Onmobile had also inked a partnership with Telefonica in Spain.
An indication of how important LatAm is to OnMobile is that it now accounts for 20-23% of OnMobile revenues, on par with India, though, in the last quarter, Onmobile reported that its LatAm revenues declined 8.9% year on year to Rs. 44.5 crore. It’s worth noting that Onmobile also launched ringback tone (RBT) services with Brazil’s Oi in January, so it isn’t dependent on Telefonica alone.
Ringback Tones only?
Interestingly, the press release on this renewal appears to focus almost entirely on the ringbacktone business. In the statement, Leandro Musciano, Director of Products and Services, Telefónica Hispanoamérica says:“OnMobile, a key ecosystem player, has been a valued partner of Movistar since 2010. Over these last few years, its RBT products have risen to take up top positions in the contents’ business across many of our markets in Hispanic America; a region that is key to Telefónica’s growth strategy,” .
At the time that the partnership first took shape, in 2009, then CEO Arvind Rao had mentioned other possibilities. From the July 2009 earnings conference call:
We’ve tried to tailor services to the market – for example we have a Soccer Portal, in a continent that is Soccer crazy, just in advance to the World Cup. We’re also dabbling with religion, because it is almost 90-95 percent Roman Catholic, and looking to put in hymns and bible on the cellphone. We haven’t done that in any other market in a substantial manner. We’ll be trialling new things in that market. Another service we’re launching is Mobile Bazaar, under the Movistar brand name, allowing users to trade personal items. Huge potential.
When we launch these things, the idea is to launch it in one market, and then launch in others. One key product is voice search– music, taxi, movies etc. We’re going to launch it in both Spanish and Portugese, and in voice it will be exclusive with us. We have a team in place that is working with the local operators, for planning the deployment.
Of course, a lot has happened since that deal was inked, with Rao eventually leaving, Mouli Raman taking over and then leaving, Onmobile selling Voxmobili, buying Livewire, and the significant layoffs last year.
