Having started out with providing plain vanilla services such as SMS and IVR for telecom companies abroad, Indian mobile value-added service companies are graduating to higher-margin services and different geographies.
Onmobile, a Bangalore-based company acquired Livewire Mobile, a US-based company for $17.8 million. With this acquisition, which is its fifth since 2008, the company has plans to be the platform where users in the US can buy music and ring back tones. Livewire Mobile provides these services to Sprint, MetroPCS, and Public Mobile and with this acquisition, Onmobile gets access to them.
According to Mouli Raman, CEO & co-founder, OnMobile Global, Livewire Mobile, with its reputation for providing music services, will help us establishing a presence in the North American markets. Once the presence is established, companies seek better margins, according to industry watchers.
“In an industry where margins are declining, companies need to look at across-the-board offerings - manage, maintain and run a particular entertainment, gaming or utility platform for a telecom company,” said Shiv Putcha, Principal Analyst, Emerging Markets, Ovum.
Changing trend
Also, telcos are seeing a changing trend in the way users are consuming entertainment in the US. According to Sprint’s data, the average number of apps on American consumers’ devices increased 28 per cent in 2012, from 32 apps in 2011 to 41 in 201.
Onmobile is not the only player in town. Last month, Netxcell, another MVAS company, won a contract from Funmobile, a provider of mobile content such as music and gaming in West Africa for MTN, a leading telecom company in the region. “Our partnership will strengthen our footprint in Africa, which is the world’s fastest growing market for VAS/Telecom with almost 17 per cent annual mobile connection growth rate,” said Debasis Chatterji, CEO of Netxcell.
Comviva, one of the early entrants in this segment, which is now a part of Tech Mahindra, in the third quarter of 2013 fiscal contributed $6 million to Tech Mahindra’s revenues. Tech M acquired Comviva in September last year and the VAS company has around 120 million subscribers for its mobile apps, ticketing etc in Africa and other geographies.
venkatesh.ganesh@thehindu.co.in