For OnMobile, falling revenues prompt change in business model, branding strategy

Struggling Value Added Service (VAS) provider OnMobile Global has made changes to its business model and has unveiled its new brand identity, in line with its change in strategy.

Called ONMO, this new branding is an effort by the Bengaluru-based company to reach out to B2C consumers instead of corporates, which used to bring in revenues in the past.

“OnMobile, will engage with consumers directly, offering a suite of apps and services to its customers globally,” said Rajiv Pancholy, MD and CEO of OnMobile Global. He, however, added that its B2C business will continue to bring in revenues.

Incubated within Infosys in 2000, OnMobile – which provides Caller Ring Back Tones (CRBT) and other kinds of services used by mobile phone users – has had a rough ride since its blockbuster IPO in 2008.

A part of this rough ride has to do with changing user behaviour. Users have been looking at alternatives instead of keying in an SMS to set a song as their caller tune, which has resulted in reduced revenues for telcos globally. This, in turn, has had a ripple effect on companies like OnMobile whose margins have fallen to ‘low teens’.

The company has been working towards this change for over two years now. As a part of this new strategy, OnMobile will launch apps that will enable consumers to express themselves, discover, and create new audio. Pancholy pointed out that using ONMO apps, a user can choose, create, communicate and discover songs.

“We made significant investments in technology, product development, processes and people to get ready to serve consumers directly,” said Pancholy, who was brought in as CEO in May 2014 after Promoter-CEO and Managing Director of OnMobile Global, Chandramouli Janakiraman, as well as his family members, were de-classified as promoters of the company.

The board clarified that action was taken on his request. Janakiraman and his family hold 4.11 per cent in the company. Interestingly, the board in December 2013, de-classified Arvind Rao, who was the other promoter of the company.

Pancholy did not specify the investments that has gone into developing these apps. The company has been resorting to monetise some of its assets. Recently, OnMobile SA, a wholly owned subsidiary of OnMobile Global Limited, has entered into an agreement with Voicebox Technologies France S.A.S., for the divestment of certain speech technology assets for €650,000.

In the June-ended quarter, OnMobile clocked revenues of ₹86.7 crore, a 2.36 per cent sequential growth and net profits of ₹12.57 crore, a 153-per-cent increase in the same period.

Till date, the company claims to have touched 1.5 billion mobile users globally, through its VAS products like Ring Back Tones.