MediaNama: Digital Media in India

It looks like the Indian Army has launched a Facebook page that goes by the name ‘ADGPI – Indian Army‘, thereby expanding its social media presence after launching its Twitter account few months back.

The page seems to have been launched earlier this week, on May 15, 2013 and seems to be currently updated on a daily basis. It currently provides information like the welfare schemes available for soldiers, photos from the ongoing training programs like Yudh Abhyas 2013 and Army-related news like the Border Personnel Meeting with the Chinese Army among others.

On Its Approach To Social Media

While the page is still relatively new, what’s particularly interesting is the way the Indian Army is approaching social media in general. Remember that unlike other departments, the Indian Army is typically more reserved in providing public information, more so in real-time, due to the high security risks these information might pose, and the user’s knowledge on Indian Army initiatives is majorly limited to what they read and see on various media platforms. Hence, social media platforms can be used by the army to spread more awareness and possibly motivate more youngsters to join them. However, maintaining a balance between engaging the audience with more information while avoiding any leaks of classified information is crucial.

Its also essential to adapt to each social media platform and use them effectively. For instance, Twitter allows only 140 characters in each tweet and it works more like a river of real-time information, while Facebook allows one to elaborate more on each topics and offers a conversation-based approach. Its quite interesting to see that Indian Army adapting to both the platforms. It uses its Twitter account to post short news bits like any specific terrorist arrests and select photos from its training programs, while at the same time, it directs users to Facebook in case the information is more elaborate. We believe the organization will therefore probably use Facebook as a medium to elaborate on a few Army related initiatives and probably feature photos from various training camps from across the country.

Supreme Court Directs State Govts To Comply With Sec 66A Guidelines

Vikas SN — Fri, 17 May 2013 08:05:07 +0000

The Indian Supreme Court has directed all state governments to implement the Indian government guidelines which requires the approval of a senior police official before arresting any person for posting defamatory content on social networking platforms like Facebook and Twitter, reports The Times Of India.

The Indian Government had issued these guidelines in November 2012, which mandated the approval from an officer of DCP (Deputy Commissioner of Police) level in the rural areas and of IG (Inspector General) level in the metros before registering complaints under Section 66 (A) of the IT Act. The government had informed that this decision was taken to prevent the misuse of Sec 66A, after several incidents of the misuse of the act was reported in the country in the preceding months.

This judgement follows a PIL (Public Interest Litigation) filed by a Delhi student, Shreya Singhal, challenging the Section 66A of the IT Act in November 2012. Singhal had filed this plea after the arrests of two girls from Palghar, Maharashtra for posting an update on Facebook and liking that status update in November 2012. In her plea, Singhal had noted that Sec 66A was vague and therefore may lead to unprovoked abuse, which will violate the right of speech and equality provided by the Constitution of India.

Following up on this, Baijayant Jay Panda, A Lok Sabha MP from Kendrapara, Odisha (BJD), had filed a Private Member’s Bill in the Lok Sabha seeking the amendment of Section 66A of the IT Act.

Prior to this, P.Rajeeve, a Rajya Sabha MP from Kerala, and a member of the Communist Part of India (Marxist) had moved a motion in the Rajya Sabha for scrapping of the Rules in the Information Technology (Intermediary Guidelines) Rules 2011, which made intermediaries responsible for content posted by individuals on the Internet, but the motion was defeated in the Upper house.

A private members resolution moved in the Parliament by MP P. Rajeeve, to withdraw the draconian Section 66A of the IT Act, was also withdrawn in February 2013, following assurances from the Telecom Minister Kapil Sibal that the resolution will be taken up after the Supreme Court of India rules on it.

Our Coverage on Section 66A Of the IT Act:

- MouthShut Challenges IT Rules In The Supreme Court Of India
- Resolution Challenging Section 66A In Parliament Withdrawn
- Sec 66A: Police Books Boy For Using Girl’s Photo, Anonymous Hacks BSNL Servers
- Live: Discussion In Rajya Sabha On IT Act Section 66A
- Sibal Defends IT Act Section 66A In Parliament: Notes
- Chennai City Police Arrests Two Over Harassment On Twitter
- MPJay Panda Moves Motion In Lok Sabha Seeking Amendment Of Section 66A
- Indian Govt Issues Guidelines To Prevent Misuse Of Sec 66A; PIL In Supreme Court
- Breaking Down Section 66A Of The IT Act
- Challenges Mount Against The IT Act
- Questions That Report Of Arrests For Facebook Comment Raise About Indian Law

Industry Moves: Zapak, Akamai Technologies, Siti Cable And Tata Teleservices

Brindaalakshmi K — Fri, 17 May 2013 07:03:32 +0000

Reliance Entertainment Digital’s Zapak has appointed Shard Sharma as National Sales Head for all businesses under Zapak with effect from April 2013. Shard will be responsible for managing their teams in Mumbai and Delhi and will be reporting to Chaitanya Prabhu who heads Zapak’s gaming business in India across carriers, OEMs and advertisers.

Shard has 13 years of experience in sales. Prior to joining Zapak, Shard worked at Sify as Regional Manager – North, East and West for 3 years between 2010-2013. He has also worked as Senior Manager at Rediff, Account Group Head at Web18, Manager at Webdunia, among others.

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Akamai Technologies has appointed Sidharth Malik as Vice-President and Managing Director for Akamai India reports Business Line. The report states that Malik will be based out of Bangalore and will report to Sanjay Singh, Senior Vice-President and General Manager of Asia Pacific and Japan (APJ).

Prior to joining Akamai Technologies, Malik worked as Senior Director of the Developer Platform Business at Microsoft India, Managing Director, South Asia for Telelogic AB, Country Manager with IBM Rational India, Area Vice-President at Salesforce.com and Sales Manager at Tata Elxsi India.

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Siti Cable Network has appointed V D Wadhwa as its Chief Executive Officer (CEO) and will report to Subhash Chandra, chairman, Siti Cable, reports Afaqs.com.

The report says that Wadhwa will be responsible for growing the organisation through digitization and will be based out of Noida. Prior to joining Siti Cable, V D Wadhwa has worked with Timex Group India Limited for 14 years in various roles including Managing Director & CEO, Senior VP – Business Development and VP – Sales & Marketing, India & SAARC,

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Deepak Gulati, Executive President of Tata Teleservices has quit the company reports Business Line. The reason for his exit is not known. However, their sources say that the exit could be attributed to the company’s recent performances in the market. It is not clear who will be taking over from Gulati.

Prior to his stint with Tata DoCoMo, Gulati has also worked with Bharti Airtel for eight years as their regional CEO and was responsible for the launch of the company’s operations in three of its five regions across the country.

April 2013: India Added Over 3.50 Million GSM Connections

MediaNama — Fri, 17 May 2013 06:17:46 +0000

The Cellular Operators Association of India (which includes most of India’s GSM telecom operators), has reported an addition of 3.50 million GSM connections in April 2013, closing in at 664.4 million subscribers, a 0.53% increase from 660.9 million subscribers in the previous month.

Note that the COAI has not included subscriber numbers for S Tel and Etisalat DB.

GSM operator and circle-wise data (excluding Reliance and Tata):

- Vodafone added 1.42 million connections in April, taking its connection base to 153.77 million.
- Idea Cellular added 1.28 million connections in April, taking its connection base to 122.89 million.
- Bharti Airtel added 0.60 million connections in April, taking its connection base to 188.79 million.

Download: GSM Data from COAI (.xls file)

- Among metro circles, Chennai added 54,442 GSM connections, with Mumbai adding 47,816 GSM connections.

Note that no information has been provided about the active users, which we’ll probably get once the telecom regulator TRAI releases data for the entire industry.

MeritNation In FY13: Rs 9.82Cr Operating Revenues; Rs 21.43Cr Operating EBITDA Loss

Apurva Chaudhary — Fri, 17 May 2013 05:12:24 +0000

Applect Learning Systems, which runs the e-learning site MeritNation has reported revenues of Rs 9.82 crore and EBITDA loss of Rs 21.43 crore for financial year ended March 31, 2013 (FY13). Revenues for the company grew 141.27 %, by around Rs 5.75 crore from Rs 4.07 crore in FY12. EBIDTA loss too increased 293.93%, by Rs 15.9 crore from Rs 5.44 crore loss it had reported in FY12. Info Edge (Naukri) now owns a majority 54% stake in MeritNation, having invested about Rs 61.5 crore on the company in four rounds of funding.

In February 2013, Info Edge had invested Rs 30 crore in Applect Learning Systems. Prior to that, Info Edge had invested Rs 31.5 crore in MeritNation across three different rounds, including a Rs 20 crore round in September 2011, Rs 5 crore round in May 2010 and Rs 6.5 crore round in July 2008.

MeritNation is an e-learning site which targets school students (Class 1-12) across various educational boards like CBSE and ICSE among others, in India. The company currently claims to have around 3 million users across 9 countries.

In April 2013, MeritNation launched complete study material from class 6 to 10 for Maharashtra board. Prior to it, the company had also completely redesigned its website making it easier for users to navigate quickly and connect with friends.

Download: Structuring Of Investments In eCommerce Businesses In India – A MediaNama and Arkay & Arkay

Nimbuzz To Acquire Unified Licence To Offer VoIP Service In India

Apurva Chaudhary — Fri, 17 May 2013 05:01:14 +0000

It looks like the mobile instant messaging and VoIP company Nimbuzz is planning to offer Internet telephony services along with its existing IM service in India, reports Business Line.The report states that Nimbuzz is planning to apply for a new unified license for Rs 15 crore, once the Government announces the guidelines for it.

Nimbuzz currently offers telephony services through a Skype-like platform called NimbuzzOut, which allows users to make calls to mobile phones and landlines globally. The service is however not available in India since the Indian government prohibits the company from offering such a service in the current telecom regime.

The current telecom regime allows voice services between PC (personal computer) to PC or IP based devices to PC within and outside India. It also allows PC to a public switched telephone network (PSTN) abroad, but voice services between a PC and a PSTN in India is prohibited. Under the new telecom policy that was launched last year, a new unified licence was introduced which allows companies to offer voice telephony (VoIP) services by paying an entry fee of Rs 15 crore.

That being said, we hope that VoIP licensing shouldn’t be a ruse to create a separate license for PC to PC IP communication and force VoIP companies like Skype and others to buy a license, when the communication involves just data. These applications are just providing the medium for communication and are not the channel themselves.

It’s also worth noting that at the World Conference on International Telecommunications (WCIT) 2012, Internet service providers had pointed out that services like WhatsApp, and Skype have been eating into the operator’s margin and they should be charged. India’s largest telco Airtel has been particularly vocal about this issue, having continuously raised it over the past year. Earlier this year, Vodafone India had also joined the battle between telecom operators and Internet companies, by seeking a need for a regulation which would make it mandatory for Internet companies like Google to pay connectivity charges to telecom companies. We believe this may hamper the entire ecosystem, where ultimately the user will have to pay greater fees to use these services.

Why IndiaProperty Was Demerged From Consim Info

Brindaalakshmi K — Fri, 17 May 2013 03:45:17 +0000

Online real estate portal, IndiaProperty was recently demerged as a separate entity from its parent company, Consim Info, which operates BharatMatrimony, CommunityMatrimony, EliteMatrimony, among others. IndiaProperty claims to have over 4,50,000 listings and around 3 million users, and competes with 99Acres (Info Edge), MagicBricks (The Times of India Group*) and Makaan.com (from People Interactive/Shaadi.com). Ganesh Vasudevan, CEO of IndiaProperty, spoke with MediaNama about reasons for the demerger, post demerger plans, funding, partnerships, challenges, competition, among other things:

Why The Demerger

Medianama: Why you decide to make IndiaProperty, a separate business entity? How do you see IndiaProperty evolving as a company after this separation?

Vasudevan: We feel that the online real estate industry has great business opportunity since the business is moving from print classified ads to online. This shift has already happened in the jobs and matrimonial industries. Our demerger gives us the opportunity to give dedicated focus to the real estate business. If we were a part of Consim, there may be competing interest in terms of resource allocations etc. Demeger also gives us the capability to get funding, dedicated resources etc. Besides, the real estate industry is also mature. However, it requires investment to make use of the opportunity and grow, so through the demerger we will also be to attract investment to drive the growth

Medianama: Why did you decide to separate now and not 3 years ago?

Vasudevan: 3 years ago, the real estate market had not shifted online to a great extend and also the attractiveness of this space has gone up now. Also, at the time, Consim was focused on matrimony business. Now that the matrimonial business is established, we saw the opportunity in growing our real estate business. We re-focused in 2011. In the last two years, we have increased our topline 3 times, and become leaders in West and South, alongwith becoming the place to buy new property. We have also brought about several innovations: we have the only assisted search service where consumer pays us to shortlist properties that match their requirements. We also have an augmented reality app through which you can point in the direction that you want to look for properties and it lists available properties in that direction. We have reached 50,000 users on this app so far. We also launched a virtual property fair through the brand called grahapravesh, a forum where customers can ask any question related to real estate. Apart from we also provide legal assistance, verification, among others.

The Relationship between Consim Info & India Property

Medianama: Is IndiaProperty’s separation from Consim for real or just a separation on paper?

Vasudevan: It is a real separation. We don’t have any shared resources. For now, the board is the same. Once the new investors come in, the board will also change. However, the rest of the team, right from the CEO, the resources are different.

Medianama: Was the demerger done as a pre-IPO exercise for Consim Info?

Vasudevan: The demerger has more to do with Indiaproperty than Consim’s IPO. Demerger helps us get investment to expand business and better talent as well. These are clear signals of our intent to grow and expand. Besides both these businesses are in different stages of development. The matrimonial business has matured whereas IndiaProperty needs capital to grow. Demerger gives us the freedom to do it.

Medianama: What were the challenges that you faced with scaling when you were a part of Consim Info? How do you plan to overcome them now?

Vasudevan: Challenges were clearly resource allocation and management focus. For the last 12 – 13 months, we have been working quite independently even though the court order has taken time. Essentially, the customers we are handling are also very different. Matrimonial business is primarily B2C while IndiaProperty mostly handles B2B. The skill sets required are also very different. So the demerger has really helped us.

Medianama: What is Consim’s stake in IndiaProperty?

Vasudevan: Earlier investors in matrimony have invested in Series A in The stake structure is similar to Consim, however our series A investors will get additional shares in the company. I wouldn’t want to reveal Consim’s stake or investors stake in the company.

Funding

Medianama: What do you plan to do with the latest round of fund raised?

Vasudevan: The demerger only happened in March although the company has been functioning independently since last year. We were planning to invest this fund in technology and marketing especially in tier ii towns where real estate is picking up. Very soon, we will be looking at series B to further invest in the technology and marketing of our company.

Monetisation & Partnerships

Medianama: How do you monetise your website?

Vasudevan: Monetisation is mainly through paid ads by people in the real estate ecosystem. We also work on customised marketing solutions for new launches, transaction services, assisted searches, among others.

Medianama: What kind of partnerships do you have with property owners, real estate agents and real estate developers?

Vasudevan: We have over 2000 builders who advertise with us. We have partnerships with category A builders to help market their properties and also 75,000 agents who use our services. Agents list their properties and pay listing fee. In addition, rental packages are also sold to agents because they usually work on both property sale and rental. We offer listing and branding products for both these services giving them flexibility to choose what they want to project.

Competition & Marketing

Medianama: How has competition affected your business? How do you plan to position yourself as a separate entity with edge over competition?

Vasudevan: We have successfully built our company around the new properties space. We have the maximum number of new properties listed in the top 10 cities in the country. Online spends is still a small part of the real estate industries spends on advertising. We believe it will increase over time.

We are building our franchise in terms of listing packages as well. Marketing is required to build the brand in the north and east. That’s the reason why we are actively seeking investments. Our assisted property has found interest with NRIs so we are looking to market the service to NRIs in the middle east, U.S and other countries.

Medianama: How do you plan to compete with Magicbricks and 99Acres which have a headstart?

Vasudevan: I think we have started off on a good note with focus on new properties. In five years, the supply will be still short of the projected property requirements. So we are focusing on reaching out to agents to build an ecosystem in the south. The marketing will also help us compete well. Our USP is to help customers in the search process, not making them do a self search.

We are looking at more trade shows and Above The Line marketing. We have done Below The Line marketing well so we are looking at mass media this time. We are leveraging the NRI strings we have by virtue of BharatMatrimony. We have done a trade show in the US which had good response. Most of our strategy is going to be focused on getting new individuals to use our services.

Medianama: What are the challenges in online real estate or property segment?

Vasudevan: The primary challenge is to get validated information especially from agents because agents don’t share lots of information while users don’t want to use agents. While we have validation mechanism at the backend, 80-85% is validated, the rest is what the builder wants to communicate. The challenge is to collect this information and balance the needs of the builders and the end users. We trying to push for 100% validated information. Real estate is by and large a touch and feel decision and for most Indians, it is a ‘once in a lifetime’ decision which is requires lots of offline interactions as well. We cant do it entirely through online. The industry needs a hybrid model which we have adopted quite successfully. It becomes more difficult with second hand properties where like mentioned before agents don’t give all the details.

Tata Sons To Offload 2.72% Stake In Tata Teleservices Maharashtra

Vikas SN — Thu, 16 May 2013 12:13:37 +0000

Tata Teleservices Maharashtra Ltd (TTML) promoter Tata Sons has submitted a notice of offer to the Bombay Stock Exchange (BSE) to sell 51.62 million equity shares (51,623,679 shares) of value Rs 10 each, which accounts for 2.72% stake in TTML, through separate window provided by BSE and NSE for this purpose.

The company has appointed Tata Securities as the broker for this sale and has informed that the sale will start at 9.15 AM on May 17, 2013 and will close on the same day at 3.30 PM. The allocation will be made on a price-priority basis i.e. bidders with the highest price will be allotted shares at multiple clearing prices in accordance with SEBI OFS (Offer For Sale) guidelines.

TTML informed (pdf) that SEBI has permitted to undertake two successive offers within a time gap of three days and has also relaxed the mandated 12 week cool off period for promoters after any divestment through the OFS route. SEBI has also relaxed the maximum allocation limit of 25% of the offer size to a single investor, i.e. a single investor can be allotted more than 25% of the shares put up for sale.

SEBI Public Holding Regulations: This sale was mandated due to an amendment to SEBI’s Securities Contracts (Regulation) Act in June 2010, which requires all public listed companies to maintain a minimum 25% stake in public holding. Back then, the government had said that existing listed companies which has less than 25% stake in public holding, will have to reach the minimum 25% threshold through an annual addition of not less than 5% to public holding.

As of March 31, 2013, Tata Teleservices promoter group held 77.2% stake (pdf) in TTML. The promoter group currently comprises of Tata Teleservices Limited which owns 37.65% stake, Tata Sons which owns 20.72% stake, NTT Docomo which owns 12.12% stake and Tata Power which owns 7.24% stake. The remaining 22.8% stake is in public holding.

TTML Revenues: Earlier this week, TTML had posted a total loss of Rs 115.23 crore for the quarter ending March 31, 2012, a significant improvement from Rs 197.2 crore loss in the previous quarter and Rs 123.4 crore loss in Q4-FY12. The company had reported total revenues of Rs 702 crore, registering a 5.5% growth from Rs 665 crore in the previous quarter and a 6% growth from Rs 662 crore in Q4-FY12.

VAS and Data Revenues accounted for 37% of Tata Teleservices Maharashtra Ltd (TTML)’s total wireless revenues, a marginal growth from 33% in the corresponding quarter last year.

PolicyBazaar Co-Founder & COO Avaneesh Nirjar Hasn’t Quit; On Extended Leave

Nikhil Pahwa — Thu, 16 May 2013 12:07:43 +0000

Contrary to the rumors we’ve heard from industry sources, Avaneesh Nirjar, COO and one of the co-founders of online insurance firm PolicyBazaar.com, hasn’t left the company, but is on an extended break, owing to ill health, both Yashish Dahiya (CEO) and Nirjar told MediaNama. MediaNama had heard from sources that Nirjar, who had started PolicyBazaar.com along with Yasheesh Dahiya (CEO) and Alok Bansal (CFO) five years ago, had left the venture, and there had been a farewell for him. “Avaneesh continues to be a shareholder and is still an employee at the company, but no longer involved with day to day operations. In the last year, we’ve built a Business Unit structure, and each unit is being managed by a BU head, Dahiya said. No one will be replacing him, since there were overlaps with the COO role.

Nirjar told MediaNama that the BU teams are running independently, but “I’m there to support them when they need me, and as a shareholder, I want to work towards the success of that business. If there is a need for me to go back in full time, I will go back in. There have been health issues, and there is philanthropic work that I want to do.” The PolicyBazaar website lists Nirjar as its co-founder, and says that he “was responsible for running business operations and executing business strategy ensuring operational excellence”.

Prior to founding PolicyBazaar, Nirjar was Director (Operations) at FirstEuropa Services, an online Insurance aggregation company operating in nine countries, for a period of two years. Founded five years ago, PolicyBazaar had raised Rs 40 crore in its second round (Rs 30 crore from Intel Capital and Rs 10 crore from Info Edge), and Rs 20 crore from Info Edge in its first round of funding.

PolicyBazaar has undergone some significant changes in recent times: the company switched to a call center based model after the web aggregation business became uneconomical, owing to changes in regulations from India’s insurance regulator IRDA.

Onmobile CEO Mouli Raman: No Plans To Go Direct To Consumer; Piloting Brand Supported mRadio

Nikhil Pahwa — Thu, 16 May 2013 10:29:58 +0000

OnMobile Global reported revenues of Rs 725.4 Crore for the financial year ended 31st March 2013. The company focused largely on its growing International business (Which now accounts for 61% of its total business on its earnings conference call, we thought we’d get a sense of what is going on in Mobile VAS in the Indian market, and OnMobile’s approach to it from its CEO Mouli Raman, in a brief Q&A (on the concall):

MediaNama: On the last conference call, you had mentioned that the TRAI is planning to relax the VAS regulation and allow routing of payments through telco gateways. Is there any update, because there is no official statement from the TRAI on this?

Raman: On the deactivation side, the operators have already implemented what the TRAI had asked. On the activation side, there has been no formal directive, but many initiatives the operators have taken on the ground. There are delays because they (Ed: TRAI, we assume) have other things they are looking at right now.

MediaNama: So, what is the state of your Ringback Tone business in India?
Raman: Overall, we’ve been proactive in implementing these initiatives, and we’ve seen stability in revenues.

MediaNama: Is it growing or still declining?
Raman: We have a decline, but that has stabilized.

MediaNama: So what then is the state of VAS? Telecom operators appear to be shifting focus towards data services.
Raman: Today, the normalcy is returning. It hasn’t returned fully, but from here on, we expect consumers to start experimenting with the services much more. Operators are looking at how to increase the pie beyond operator branded services. They’re looking to engage the off deck model but they don’t do the promotion. We’re starting to see the signs of that. The third thing is that we are engaging beyond operators through government and social sector.

We are also seeing opportunities for taking some of our existing services and going to market. For example, we are running a trial with a large company for mobile radio, (in a way) which until has not been done by an operator. Our approach is free of cost to the consumer, and they will be marketing their products as their services, through non-operator means.

The fifth thing is that on data, our existing services, we’re making them all data. We’ve launched music downloads with one of the large operators.

MediaNama: Are you ruling out launching your own independent products or also placing bets on OTT (Over the Top)? The world over, operators appear to be focusing more on OTT.
Raman: We’re looking at two things – while there is a good shift to the OTT players, we are seeing very good traction for operator branded data services, particularly in emerging markets. The second thing is that we do not have a plan to go directly to consumers.

We are looking at how it is possible for us to market services beyond operators. Tying up with a handset manufactures and embedding clients, and we’re looking at alternative ways of marketing. It is unlikely that we will have a brand of our own, but it will be a co-branded services. We dont have a plan to launch our own brands.

More in our OnMobile FY13 results coverage:
- Analysis of OnMobile FY13 results. Lots of charts.
- Onmobile’s earnings conference call

OnMobile FY13 Concall: Music Downloads, Unbilled Revenues, Investor Warns Against Any Large Acquisition

Nikhil Pahwa — Thu, 16 May 2013 08:21:09 +0000

With Net Cash at Rs 151.8 crore, investors are trying to push OnMobile Global to buy back shares, but the company said that it doesn’t have any such plans yet. Speaking on the conference call, Tony Haight, the Chairman of OnMobile’s board, said that “We’ve had requests for a buyback and the board has discussed this. Given the investment needs – both organic and inorganic – the company needs capital.” Reacting to this statement, one investor spoke up on the concall against again plans for a large inorganic expansion, saying that investors would be vary of a large inorganic move, given that the Telefonica deal is still being amortized. “If at all any inorganic deal is done, the quantum of the inorganic deal should be laid out to the investors. We would be averse to any large layout. It should be cautious and small.”

The responses from the Onmobile management:

Tony Haight: Until we have good clarity on the decisions we make on what kind of growth we fund and when, we are going to reserve the decision on distribution of any cash for purposes of a buyback. We’re not opposed to a buyback, but we want to know what decisions are best for the company.

Mouli Raman (Onmobile CEO): we will not make any investments as large as Telefonica, but we want to keep our options open. We would like to defer the buyback.

More in our OnMobile FY13 results coverage:
- Analysis of OnMobile FY13 results. Lots of charts.
- Quick Q&A with Onmobile MD & CEO Mouli Raman

Other notes from the conference call:

Looking Ahead

- We see 2013-14 as a year in which we will have 100% deployment across all our geographies, and very good cost efficiencies. We are trying to reach a net margin of 8-9%. If we are able to target 8% return on a growing revenue base, that itself would translate into a very good improvement on our return on capital. We are trying to prune down our incremental working capital requirements.

- We will be able to show good improvement on the revenue side

Unbilled Revenue Piles Up

We should be able to get Rs 70-80 crore of cash released in unbilled revenued in the next 3-4 months. We’ve had a higher built up in unbilled revenue. Rs 40-50 crore should be available in June-July.

India business

India was contributing 55%, we had a challenging year due to financial and regulatory pressures. Revenues dropped 19% year on year. Contribution of India reduced to 39%.

International Expansion

- LatAm: Extensive adoption of RBT, and we continue to be bullish on RBT. We’re seeing traction in RBT other operators based on successes in LatAm. LatAm contributes 23% to revenues, as compared with 11% the previous year. You’ll see healthy growth in Latin America this year as well. In India, there was a huge spurt in the first couple of years, but in LatAm there was a steady growth. The quality of the customers that we’re acquiring, and the marketing practices in LatAm are much more conservative. The growth is much more steady.

- Africa: revenue growth of 100% in Africa. LAunched a football service, and are in the process of launching more services in existing customers. We’ve seen moderate growth. Bangladesh is positive. One of the largest operators will becoming online in Bangladesh in the next few weeks. Africa RBT: from a regulatory standpoint is much stricter than in India, but the adoption is much faster. We attribute that to the fact that there were not too many alternatives.

- Customer wins in Spain, Turkey and Italy and will be going live this year.

- North America has seen moderate growth.

- Mexico: new operator, with about 15 million users

For the coming year, we expect international revenues to be 70%, and Indian to be 30%.

RBT

Seeing growth in RBT (Ringback Tones), and we’re seeing opportunities beyond music. RBT will continue to be a key player for us. Consumer adoption for RBT in the International market continues to rise. We continue to see a robust growth in the international market.

Data Services

We’ve extended managed services offering to manage data services. We have three customers and are making a push for this. Data continues to grow at a rapid pace for all our customers.

New customers

We’re expanding customer base to cover new customers like handset manufactuers

VAS

“We are focused on creating services around education and health because a majority of customers will still not be on data over the next two years.”

On Declining Content costs

The declining content costs are purely a function of the negotiation with our partners. Some operators have started dealing with content providers directly, and therefore the content costs have gone down.

On Music download and streaming

We’re seeing a lot of opportunity in music download, and we’ve worn 4 customers and we are making a push to make this big. Right now, the focus for us is for powering operator branded music services. In North America and Europe, operators are able to bundle along with their core service. We are focusing on operator branded portals, (not compete with Google etc).

Corporate Governance & A Challenging Year

- The issues of corporate governance are a thing of the past, and we have taken steps to ensure that such incidents do not recur in future. We will add independent directors.
- Last year was challenging. We have stabilized the company.
- We’ve focused on improving efficiency, Given the stabilizing trend in India, the robust growth in international markets

Working Capital & Employee Costs

- Some challenges in pruning our working capital. We’ve not been able to get a concessional certificate from the IT department
- Last year, employee cost was 40% of revenue. In the next year, we’re looking to improve this by 10%
- Looking at selective recruitments in the geographies where we are looking to expand to, and we are looking to expand to a few geographies. Outlay for salaries etc will be between Rs 66 and 75 crore in the coming year.

Dividend

- The board has recommended a dividend of 15%, despite the domestic biz facing challenges.

The Lowdown: Developer Initiatives Announced At Google I/O 2013

Vikas SN — Thu, 16 May 2013 08:18:37 +0000

Besides new consumer services, Google announced several new developer initiatives at Google I/O 2013, its ongoing annual developer conference at Moscone Center, San Francisco. Here is a quick lowdown on all the announcements:

Google Play Services: Google introduced several new APIs for Android developers as part of a new Google Play Services update. For the uninitiated, Google Play Services allows app developers to make use of various Google services like Google Maps and Google+ among others within their apps. Among the new APIs announced include new version of Google Maps Android API, improved Google Cloud Messaging APIs and Google+ Sign In APIs.

Google announced three new location APIs - Fused Location Provider which uses a new low power location finding mode that apparently uses less than one percent of battery per hour, Geofencing which allows developers to define virtual boundaries for a real-world geographic area and setup location-based trigger actions and Activity recognition which allows developers to use the device’s accelerometer data and machine learning to detect user activities like walking, driving and biking among others.

Google also rolled out an improved cross platform Google+ single sign on mechanism, which works similar to the Facebook and Twitter single sign on mechanisms but also prompts users to automatically download and install the Android app on their tablet and phone through Play Store. The company has introduced API tools to allow developers make cross-client authentication and authorization, particularly between Android and web apps.

Google Cloud Messaging: It introduced new features for Google Cloud Messaging like support for persistent connections from your servers, upstream messaging to send data from app to servers and the ability to sync notifications across devices i.e. if the user dismisses a notification on their Android phone, it gets dismissed on tablets and vice versa. Google claimed that 60% of the top Android apps are using Google Cloud Messaging in their apps and the company is sending around 200,000 messages every second and 17 billion messages a day. However, do note that these probably include duplicate notifications sent to an user across various Android devices.

Google Play Game Services: Google announced a new service called Google Play Game Services, which will offer social features to game developers like Cloud Save which will allow users to save player progression, game state and game progress sync across devices along with Achievements and Leaderboard features integrated with Google+ circles. These features will be available for game titles across Android, iOS and the Web.

Android devices will get an additional feature of turn-based and real-time multiplayer service with Google+ integration. Google informed that these new features have been rolled to all Android devices running on Android 2.2 and later, through an update to the Play Services app. Some of the initial game titles offering these features include World of Goo, Super Stickman Golf 2, Beach Buggy Blitz, Kingdom Rush, Eternity Warriors 2, and Osmos.

Google Play Developer Console: Google introduced five new features to Google Play developer console. These include an App translation service, which allows developers to purchase professional translations directly in the dev console, Referral tracking which lets developers see which ads have worked for them and which haven’t, Revenue Graphs which shows developers total app revenue in the last day, week and month with country-specific filters and Beta Testing & Staged Rollouts which allows developers to distribute their apps for alpha and beta testing or do staged rollouts by rolling it out to a specific percentage of the app userbase. The access is controlled by Google+ and user feedback will not be public.

It also offers app optimization tips for tablet app developers and plans to offer Google Analytics Integration later in the summer.

New Developer Tools: Google unveiled a new dedicated IDE (Integrated Developer Environment) called Android Studio for app developers who build Android apps. The IDE is currently available as an early access preview on the Android Developer website and is compatible with Windows, Mac OS X and Linux. Some of the prominent features include code editing, ability to build international versions of their respective apps. Google Cloud Messaging integration is also expected soon. (Video Demo)

Google Wallet Instant Buy: Google Wallet also debuted a new Instant Buy Android API, which allows third party developers to integrate payment features into their apps to offer physical goods and services. The company claims to offer a faster checkout experience to Android users through this API, by sending the user’s billing or shipping information directly to the developer with the user’s permission. It also claims to have signed up partners like AirBnB, Booking.com, Expedia, Fancy, Priceline, Rue La La and Uber among others and is currently allowing US Android developers to sign up for the API. (Video Demo)

Google Compute Engine: Google has now extended its infrastructure as a service, Google Compute Engine to all developers. Google Compute Engine was launched by Google in limited preview in Google I/O 2012 and allows developers to run linux virtual machines (VMs) on the same infrastructure that supports Google. Google has now introduced new features like Sub-hour billing, Shared-core instances and Advanced Routing.

It has also launched Cloud Datastore, which is a fully managed and schemaless solution for storing non-relational data. Google claimed that over 3 million applications and over 300,000 unique developers are currently using Google’s Cloud Platform.

OnMobile India Revenues Decline 19.6% In FY13 To Rs 284.5 Cr; Total Revenues Rs 725.4 Cr

Nikhil Pahwa — Thu, 16 May 2013 07:55:10 +0000

India revenues for OnMobile Global declined 19.6% to Rs 284.5 crore for the fiscal year ended 31st March 2013 (FY13), down from Rs 353.8 crore the previous fiscal year (FY12). The decline was steeper than the annual decline in the last quarter of the year: down 21 percent in Q4-FY13, to Rs 66.7 crore, as compared with Rs 84.5 crore in Q4-FY12. OnMobile, however, said that the company witnessed stability in the India business during the quarter, which means that the decline has reduced or stabilized. India accounted only for 39% of Onmobile’s revenues in the FY13, down from 55% a year ago. The growth in the international business (64.5% up in Latin America, 9.8% up in emerging markets, 8.1% up in emerging markets) to around 61% of total revenues. Onmobile expects the split between India and International revenues to be 30:70 in FY14.

Onmobile also won an operator contract in Mexico. Africa reported increase in revenue by 39.8% for the quarter, and 105.3% for the full year. In Spain, the company went live with an operator, powering operator branded content services. During the year, revenues from Europe increased 48.4%, while they grew 39.7% in Q4-FY13, in comparison with Q4-FY12.

More in our OnMobile FY13 results coverage:
- Onmobile’s earnings conference call
- Quick Q&A with Onmobile MD & CEO Mouli Raman

Overall Financial Results

OnMobile Global has reported consolidated profits of Rs 47.18 crore for FY13, down 43.2 % from the Rs 83.09 crore reported in FY12. Revenues, however, increased 13.7% to Rs 725 crore from Rs 638.01 crore reported the previous fiscal year. It’s important to note here that the difference in profitability is due to a difference in other income: Onmobile had reported other income of Rs 67.64 crore in FY12, and this declined to Rs 22.04 crore in FY13: During FY13, Onmobile sold its stake in Ver Se Innovation (Rs 5.5 crore) and Kabuza Marketing (Rs 18 lakhs) for a profit of Rs 4.74 crore. The previous year, sale in Ver Se had netted the company Rs 46.64 crore. “Normalized for Ver Se sale in Q3 FY2013 and FY2012 and forex loss, Net Profit increased by 12.0%, in line with Revenue growth,” the company has said.

Net Cash was Rs 151.8 crore as on Mar 31, 2013 compared to Rs 161.2 crore as at March 31, 2012. Investors are trying to push Onmobile to buy back more shares.

The company declared a dividend of 15%, which will lead to an outlay of Rs 20.03 crore, including dividend distribution tax.

For the fourth quarter (Q4-FY13), the company reported profits of Rs 10.8 crore, substantially (125.47%) higher than the Rs 4.79 crore it has reported for the same period last fiscal year (Q4-FY12). Revenue increased 3.69% to Rs 184 crore from Rs 177.55 crore.

However, note that OnMobile prefers comparisons to be on a four quarter basis, because earnings can be lumpy due to longer sales cycles.

Products

Once again, there’s no update on products and their deployment from the company, but the dependancy on RBT is surprisingly increasing, and in comparison with the previous fiscal, on a percentage basis, both ‘Voice & Text Services’ and ‘Data and others’ contributed less to revenues.

We did some calculations (below) on the basis of the consolidated revenues (without Other Income) and the percentage figures provided above, and for Onmobile, it appears that RBT revenue has increased 34.58% year on year, and surprisingly, the revenue from ‘Data and Others’ has declined 19.46%. So, it appears that the growth in International RBT revenues are more than compensating for the decline in India.

Strange.

Content Costs

Content costs continued to decline and at Rs 11.8 crore for the quarter, were at their lowest in almost four years (they were Rs 7.59 in Q1-FY09), as telecom operators did direct deals with content providers, instead of going through Onmobile.

The Lowdown: What Google Announced At Google I/O 2013

Vikas SN — Thu, 16 May 2013 07:24:07 +0000

Google previewed a new version of Google Maps, unveiled Galaxy S4 with Stock Android and announced several new services at Google I/O 2013, its ongoing annual developer conference at Moscone Center, San Francisco.

You can read about the various developer initiatives announced in Google I/O here. A quick lowdown on all the new services Google announced in I/O 2013 below:

Device Activations: Google has clocked 900M Android device activations to date, up from 400M device activations in 2012 and 100M device activations in 2011.

Google Play Store: Google Play Store has seen 48 billion app installs to date, of which 2.5 billion app installs were in the last month alone. Google informed that in the last four months, it has paid out more money to third party developers from Google Play, than in all of last year. The revenue per user is 2.5 times of what it was an year ago globally. There were however no specific numbers disclosed on this.

Google also introduced a new tablet specific section to the Play Store (about time!) and extended the recent Play Store revamp to the web store. It also plans to roll out a similar revamp for Google Play Books, Movies, Magazines and the Music section. Note that Magazines and Music section is currently not available in India.

Google Play for Education: Google announced a dedicated Android app store called Google Play For Education which will only feature educational apps for grades K-12 . Teachers can sort these apps by grade level or subject matter, pick out an app and instantly install on all the kids’ tablets. In a similar fashion, teachers can also push books and YouTube educational videos to tablets. The service is currently being tested in various schools and it is expected to launch in the fall, with app submissions kicking off in the summer. As an aside, Google also informed that over 1,000 schools in the United States are currently running Chromebooks.

Google Play Music: Google launched a new monthly all-access music subscription service which lets users listen to songs on their devices. Some of the features of this service include music recommendations, ability to create a radio station from any song or artist and ability to browse music through 22 different genres. It will be initially available in the United States and is priced at $9.99 per month with 30-day free trial. The company plans to roll out this service to additional countries in the forthcoming future.

Google released a new version of its Play Music Android app, bringing in a new user interface, a new Listen Now feature and few functionality tweaks like swipe to remove a song from playlist or queue or swipe to switch songs on the now playing screen or now playing bar.

It also released a new version of its Play Books iOS and Android app, adding the ability for user to upload their own PDFs and EPUB files through its website or import them from their Google Drive storage. Users can currently keep up to 1,000 EPUB or PDF files in Google Play Books for free and the file size of each book should be under 50MB.

Google Hangouts: Google unveiled an unified cross platform messaging system called Hangouts, which will available on the Chrome Web Store and through native mobile apps on Android and iOS. It will also be a part of Gmail and Google+.

The service allows users to send text, emoji, photos and videos to their friends and family. It features both one-on-one and group chat and offers a free group video chat for up to 10 people, thereby positioning it as viable Skype alternative. Google Informed that this Hangouts service will replace its existing Google Talk, Google+ messenger and the original Google+ Hangout video chat service.

It will be interesting to see how this service fares against existing services like WhatsApp, Facebook Messenger and Skype among others. Although, the service does have an edge with Gmail integration and will possible attract Google Talk users. (Video Demo).

Google Maps: Google informed that it now offers mapping information for more than 200 countries. This includes a mixture of a Google mapped countries, user mapped countries through Google Mapmaker, and third party data. Interestingly, it looks like the whole of India was mapped through Google Mapmaker. Google also claims to offer streetview information in 50 countries globally.

Google Maps currently has more than a billion monthly users and over one million websites are currently using Google Maps in their sites. Google Maps API usage has seen over 30% growth year-over-year and Google apparently get more maps usage on these sites than on its own products.

Google previewed the next major version of Google Maps for Android and iOS and a tablet version of Google Maps. Google informed that this updated version will feature a new suggestion engine to help users find relevant places nearby and after searching for their preferred place, users can swipe through various results at the bottom of the screen, to browse through them. It also features a new integrated Zagat review experience and Google Offers experience.

Google Maps claims to have more than one million transit stops globally and Google Maps for Android has already provided 50 billion kilometers of turn by turn directions until now. Google has now added live coverage of incidents globally along with real-time incident alerts and dynamic re-routing. The new apps are expected to be available this summer.

Google also unveiled a new revamped version of desktop Google Maps, which features a new maps interface, live 3D imagery, a new search experience with all the results labeled directly on the map, instead of markers in the existing version and Google+ integration, allowing users to show only the results which their friends have reviewed.

It also features a new directions interface, a new public transit schedule viewer and integrated flight search reviews. Google also claimed that that the new Maps version will be heavily personalized for each user and will allow users to capture a photo sphere (Google’s version of 360 degree panoramas) on their Android device and add it to Google Maps. Google Earth has also been integrated to Google Maps (Video Demo)

Google+: Google+ now has 190 million monthly active users in the Google+ stream and 390 million upgraded accounts which are active across Google properties and are using Google+ features like +1 ing apps in Google Play and making video calls in Gmail among others.

Google announced 41 new features across three main areas – Google+ Stream, Google+ Photos and Google+ Hangouts. Some of the prominent new features include a new cards-based multi-column interface, which shows up from one to three columns depending on the device screen size and orientation. It also offers a new Related hashtags feature, wherein Google analyzes the contents of a specific post and adds a related hashtag. Users can then click on them to see related items from Google search and social sources.

Interestingly, Vic Gundotra, Google’s senior vice president of Social, said that more than half of all the sharing on Google+ is done in private circles. We believe this was said in response to several reports of Google+ being a ghost town (lack of any activity).

Google+ Photos: Google has rolled out new features like Auto Highlight, Auto-enhance and Auto-awesome. Auto Highlight scans through the user’s photos to detect blurry and duplicate images to decide the best pictures which can be showcased on the user’s album, while Auto-enhance offers photo enhancing features like noise reduction, structure and contrast among others.

Auto-awesome automatically combines pictures together to create an animated Gif and currently offers five modes – Mix, HDR, Smile, Motion, and Panorama. Smile Mode scans through multiple pictures to detect people smiling in a photogragh to develop a new photo where all people are smiling while Panorama feature creates panoramic photos from pictures taken side by side. (Video Demo)

Earlier this week, Google had also unified its storage options, offering users 15GB storage space across Drive, Gmail, and Google+ Photos.

Google Search: Google’s Knowledge graph has 570 million entities to date. Google has now added support for Polish, Turkish, Simplified Chinese, and Traditional Chinese to the knowledge graph service and it now shows graphs and trend lines on Google Search. Google said that users can also now search for “my upcoming flight” and “restaurant reservation” to get personal results.

Google has introduced Conversational Voice Search and hot wording to Chrome, allowing users to just speak to the computer to get answers. For instance, users can ”Okay Google, how far is Delhi from here?” and Google will respond with the answer along with directions. This will be along with the existing Knowledge graph service.

Google has also added new Google Now cards for reminders, public transit commute time cards, and music, TV, movies, books, video game recommendations.

Samsung Galaxy S4 With Nexus User Experience: Google announced a new variant of Samsung Galaxy S4 with Stock Android 4.2.2 and Nexus User experience. The phone will be available on the US Google Play Store for $649 contract-free from June 26, 2013 and will offer LTE support on AT&T and T-Mobile. Its not clear if the company plans to extend the device to other markets including India, however its worth noting that Galaxy S4 has not been subsidized by Google like previous Nexus devices.

Google Wallet: Google Wallet will feature Gmail Integration, allowing users to quickly and securely send money to their friends and family through email. Similar to attaching files to an email, one can attach money to an email and send to their friends and family. The service is free if the user is sending money from their Google Wallet balance or if the user’s bank account is linked to Google Wallet else Google charges a flat 2.9% fee per transaction to send money using the user’s linked credit or debit card on Google Wallet. The service is expected to be rolled over the coming months to all U.S. Gmail users over 18 years old. However, it will be limited to desktop version of Gmail. (Video Demo)

Google Chrome: Google Chrome now has 750M monthly active users, up from 450M monthly active users in I/O 2012. Google attributed the new growth to Chrome on mobile phones and tablets, however it didn’t disclose any usage breakdown between the desktop and the mobile version.

The company previewed the next-generation video codec VP9 for faster video-streaming performance and said that YouTube will add VP9 support later this year. It also previewed a new data compression proxy feature for Chrome on Mobile, which shows users how much data they are saving and a new requestAutocomplete API which makes checkout much faster on mobile through Google Wallet.

YouTube: While Google didn’t disclose any YouTube related information in the keynote, YouTube has now expanded its live streaming service to more YouTube channels, allowing any YouTube channel with more than 1,000 subscribers to apply for the feature.

Google TV: Google informed that it will be rolling out Android 4.2.2 ‘Jelly Bean’ update to Google TV in the following weeks. Google TV will also receive the latest version of Chrome during the day, following which Google will be rolling out Chrome updates every six weeks. Google has also added hardware-based content protection to Chrome for Google TV, enabling developers to offer high definition premium TV content within their web apps.