Monday, January 31, 2011

India’s First Mobile Wallet Service brought to you by AIRTEL

Airtel has launched India’s first mobile wallet service by a telecom operator.
Aimed at offering customers with an efficient alternative to cash transactions, airtel money will provide airtel customers across the country with a convenient and secure way of making payments through the ubiquitous mobile platform.
In 2010, bharti airtel was granted the license to use the Semi Closed Wallet by the Reserve Bank of India (read: Airtel Gets RBI’s Nod for Mobile Payment Service [First Step to Mobile Currency]).
Currently available in Gurgaon only, Airtel has already established partnerships with several merchants (including coffee shops, restaurants etc) to accept payments via airtel money – which will gradually be scaled up to over 3,000 merchants across the city. Airtel money will subsequently be launched in Delhi NCR and several other key cities in India.

Where can you use airtel money?

  • Load cash: Load cash on your airtel mobile by visiting your nearest airtel retail outlet [Minimum is Rs. 10, Maximum is Rs. 5,000 and monthly limit stands at Rs. 50, 000].
  • Pay bills & recharge: You will be able to use this cash in your mobile for making bill payments (electricity, gas, financial services, etc.) and recharge – Limits same as above.
  • Shop & make payments: Instead of cash, pay over-the-counter merchants such as your nearest kirana store, chemist, etc using your mobile phone. You can even sit at home and pay for services like booking movie tickets online
Airtel had recently announced a JV with State Bank of India to provide banking and financial services to millions of unbanked Indians using the mobile platform. With this launch of airtel money – airtel now offers a complete suite of financial products on mobile devices for the banked as well as unbanked population of the country.

How To use airtel money

  • Register by filling in the application form and submitting KYC documents (2 photocopies of proof-of-identity, 1 copy of proof-of-address and a passport size photograph).
  • After the above, your existing airtel SIM will be upgraded to the new 64K airtel SIM with airtel money
  • Activate your airtel money account by choosing your MPIN.
  • Load cash into your airtel money account by visiting your nearest airtel retailer
  • You are now ready to send commands through the airtel money application on your phone and transact anytime, anywhere!


Airtel will charge a month subscription fee of Rs. 5/month and charges Rs. 5/payment.
Essentially, this is not a semi closed wallet service (as allowed by RBI) that enables you to add money, but not withdraw (instead, make payments/buy goods and services).
Question to ponder: Wondering what happens to mChek usage after this? Also, why is Airtel trying to do everything on its own (i.e. be the ngpay + mChek) and not build an ecosystem?

36.8% Growth in Q3 for OnMobile

OnMobile Global has said that a focus from its telecom customers –  from promoting Mobile Value Added Services to focusing on Mobile Number Portability, is likely to have an impact on business for the time being. The company reported a quarterly decline in Net Profit at a consolidated level, and a 86.44% year on year increase, even as total revenue grew significantly both sequentially (by 12.99%) and year on year (by 36.8%). In a note accompanying the results, OnMobile says that its overall Gross Margin and core business gross margins remain stable at around 73%, it’s Operating Profit Margin is flat – marginally up from 11.4% to 11.8%, and Operating Profit Margin on the core business has improved from 23.8% to 25%.

Download: OnMobile Q3-11 details
Standalone Results: Why OnMobile Is Focusing On International

While OnMobile’s revenues appear to be growing quarter on quarter, if you see the chart below, the broad trend is that profitability for the Indian business is in decline. The company usually advises that investors look at their business at an annual basis, not quarter on quarter. So, here’s the performance for the company in the Indian market, on a four-quarters timeline:

While revenue is growing, the net profit tells quite another story: as if OnMobile is running to stay at the same level of profitability, and its investments aren’t really bearing fruit. Also note that OnMobile’s entry into the content business would have led to an increase in topline, as well as increasing content costs (shown in the chart below).
On the conference call, OnMobile CEO Arvind Rao reiterated what Anil Pande, Head of VAS for Reliance Communications, had told us earlier – that growth for telecom operators in India is not coming from VAS, but from data services. This explains OnMobile’s international focus, and in India, the bet that OnMobile has taken on Dilithium, and video serving, which telecom operators will also depend on, for on-deck VAS, alongwith Caller Ringback Tunes, but it also does paint a worrying picture for the Indian market. The larger global trend, though, is moving towards off-deck, and a fragmented market, and there’s little doubt that India will follow.

International Business
Given the turbulent environment in India, OnMobile strategy of focusing increasingly on international business appears to be serving it well:
- As much as 31% of its total revenues for the quarter came from International business. They are now live with 6 countries in Latin America with Telefonica, including Brazil, Argentina and Venezuela, covering 80% of its subscriber base. Remember that last year, the company had said that it intends to complete deployment in the 13 countries, in a worst case scenario, by June 2011. Revenue from Latin America was higher by 80% year on year, and the company says that it is experiencing early adoption rates. Last quarter, the company had launched in Mexico, and registered new offices in Panama, Chile, Nicaragua and Spain.
- During the quarter, it registered new offices in Uruguay, Egypt and China. In China, the company says it won an embedded deal with a major handset OEMs for “video stacks”.
- It launched ‘Music Burst’ an ‘unlimited music download and play’ product on subscription in Indonesia.
- They launched an enhanced version of their ‘My Synchronization Space’ service in one of their European Operators, which included embedding of the application on Android devices. Note that Android has a host synchronization services – Google Sync. Additionally, OnMobile expanded their offerings in the Personal Data Management space for both Android and Apple iOS devices.
Dilithium Update
- Post acquisition of Dilithium assets at the beginning of this quarter, teams have been integrated as a new product unit within OnMobile.
- Restarted the delivery of Dynamic Content Adapter product for one of the top Internet Companies in the North American market.
- Received and delivered their first order of 3G Video Gateway from a leading Telco in North America.
- This acquisition has increased OnMobile’s geographic presence by 21 countries.

Facebook to offer location-based discounts to users

Grab Your Discount Coupon

Facebook users will now be able to get discounts and special deals in shops, cafes and restaurants thanks to a new mobile phone feature.

Launched in the US last November, Facebook is expected to announce today the roll out of ‘Places Deals’ in the UK and Europe, a new service which rewards users for visits to different locations by logging their whereabouts on the site via their mobile phones.
According to source close to Facebook: “Places Deals is launching today in Europe. There are lots of retail and food partners on board, and the service is set to be really popular as increasing amount of people use the site via their mobile.”
The move is part of a growing trend which will see consumers increasingly use their mobile phones instead of credit cards. Last week it emerged that Apple’s forthcoming iPad and iPhone are expected to include a mobile payments feature that the firm hopes will replace cash and cards for millions of users.
Last year Facebook launched its Places service, which allows users to share their location with their friends by ‘checking in’ to bars, restaurants and shops via the social network’s mobile phone application.
However, until now, UK users have not been able to use the service to find out which good deals or offers available near them. Now with the ‘Deals’ service, Facebook users will be able see what offers are nearest to them at any time and share those deals with their friends.
Facebook is hosting a large event in London today, at which it is expected announce the launch of the ‘deals’ service across Europe.
When the discount service launched in the US, a developer writing on the company’s blog said: “You'll see a few different types of Deals: individual deals for a discount, free merchandise or other reward; friend deals where you and your friends claim an offer together; loyalty deals for being a frequent visitor to a place; and charity deals where businesses pledge to donate to a cause when you check in.”
It is not yet known which retailers and restaurants are on the board for the UK launch. When Places Deals launched in the US, some of the initial partners included Macys, Gap and Starbucks.
Facebook was unavailable for comment.
Ian Maude, head of Internet at Enders Analysis, said: “This move is a no brainer for Facebook. Places Deals is a combination of Foursquare meets Groupon (the popular daily discount site). It is the company’s first major move into mobile, discounts and location based advertising. I think this has the potential to be a smash hit for them.” source