OnMobile to invest US$150mn by year-end, eyes 50% of VAS market share

Friday, January 14, 2011

Indian mobile value-added service (VAS) provider OnMobile Global expects to have invested US$150mn in its fledgling Latin American operations by the end of 2011, as the company seeks to latch on to demand for mobile data, company VP David Fondots told BNamericas.

OnMobile spent US$75mn in 2010 and will spend a similar amount this year, going mainly toward licensing fees and hardware deployments for networks.

The company is banking much of its opportunity on a six-year, exclusive revenue share agreement to manage Telefonica (NYSE: TEF) branded applications in Latin America.

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The agreement will allow OnMobile to have a strong presence in most of Latin America in about two years, Fondots said.

"One good customer in one fell swoop gives us a great jump on the region," he said, adding that the company is also eyeing agreements with other operators.

The work with Telefonica will include providing ringback tone platforms and a sports portal. Other products will include media backup and anti-theft platforms, a mobile address book and Music 360, which allows users to play music and video from a broad range of formats.

The executive said that in Latin America, OnMobile is aiming to have a 50% market share of the mobile value-added services market for service providers within three years.

Latin America is ripe for investment in VAS, as most countries are reaching close to 100% penetration, but mobile data adoption is still low, at around 10%, he said, adding that Telefonica is "a great partner" as the company is very focused on convergence of its platforms and defining a single strategy.

OnMobile has grown through acquisitions of companies to expand its product line, including mobile software company ITFinity, French data products company Voxmobili, French speech recognition company Telisma and 3G video technology company Dilithium Networks.

The company is seeing revenue growth of 20% per year and saw global revenues of some US$200mn last year.