“Third Party Billing Will Soon Come Into Mobile Content Business”

Mobile2win is a leading mobile content and solutions company in India. Its owners include VC firms Siemens Mobile Acceleration, Softbank China Venture Capital and Contests2win India. The company was set up in September 2003. It has operations in India and China and employs 90 people currently. ContentSutra speaks to Rajiv Hiranandani, the Country Head, India, on all issues concerning mobile content. Excerpts:

What is the state of mobile content industry in India?
The mobile content market is still evolving. Right now, it’s Rs 400 crore (or in the range of Rs 350-600 crore). The market is evolving in terms of operators streamlining the revenue shares etc. They are abandoning the walled garden approach. Airtel is allowing third party billing. A couple of others are allowing it too.

The market seems to be fragmented with hundreds of players in the business?
Right now the entire industry is in a flux. Ultimately five to eight players will be there who will be closer to operators.

What are the key issues now affecting the mobile content industry?
Mobile rights management, like digital rights management, is a key issue. There is a parallel in terms of IPR/ rights management. Then there are leakages in content revenues. That’s very similar to what is happening in the film distribution business where only 60 per cent of the revenues go to the content owner. So there are revenue leakages in the mobile content business too. It’s all a distribution game. If you have good content plus last-mile access, then you are a winner.

Have you thought of off-portal sales?
Off-portal is driven by media. All media companies like The Times of India group, Hindustan Times, Dainik Bhaskar, and radio channels are pushing mobile content. Off portal is going to be the next big thing. It will be basically driven by media companies. Then there will be third party billing. Operator will just provide the pipe and there will be a situation where they get around 3-4 per cent of the revenues.

Are you looking at a B2C model in mobile content distribution?
We are not looking at a B2C model. We are not a media company. A B2C model requires hundreds of crores of investment. We are a mobile content aggregator, enabler of wireless solutions to media companies and wireless content to telecom service providers. We have 250 of our own mobile games. So we deploy our own content, and aggregate content. We provide mobile games to some 58 operators worldwide. We own a lot of bollywood games like Lakshya, Sholay etc. It’s not easy to get inroads into international operators. We tie up with international aggregators for this.
Essentially, we are in two businesses. We provide the wireless interactivity for media companies. We do the backend and wireless solutions for them. Then we are also providing content solutions for the telecom service providers.

Will you ever look at entering B2C?
To enter B2C, we have to move into an inflection point. That is some 35-40 million GPRS connections. But we have only 10-15 million GPRS connections now. So our model currently is B2B.

What is the status of third party billing? Who all have rolled out?
There will be third party billing in the next seven to eight months. Reliance and Hutch would also be introducing the third party billing. For instance, we can tie up with micro transaction companies like Paypal. In fact, only two weeks ago I had asked my team to come up with a proposal for a payment partner. We are very clear about it having a third party biller.

I have heard about cash flow problems in mobile content business. Mobile operators don’t pay on time and such things.
Cash flows are not easy. Telcos take three to five months to send in money. To run a company like this, you need constant cash flow. However, we are cash positive and we are a profitable company. It’s not that operators are willingly delaying payments. There are infrastructure issues that need to be sorted on a war footing.

What are the new trends in mobile content?
It has gone beyond gaming, ringtones, and so on. Now a lot of lifestyle applications are being rolled out. Art of Living, Mobile Karaoke, Yoga etc are some of the examples. Now we are exploring Kamasutra on mobile. Illustrators and developers are ideating on it. Within two to three months time, you can see Kamasutra being rolled out. Now we are rolling out Karaoke in regional languages – Hindi, Gujarati, Bengali and so on. We have already had 60,000 downloads of mobile karaoke in four months.
We are upbeat on -