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Onmobile Global (ONMO.BO; Rs112.55; 1M)
Takeaways from Mumbai – OnMobile presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
Pressure in the domestic segment – The slowdown in the domestic segment
looks to be structural with a relatively high CRBT penetration at 20-25% (@ Rs25
ARPU) in context of the poor quality of incremental subscribers. The next leg of
growth will be contingent upon the telcos cutting VAS prices (have remained broadly
stable in the last 2-3 years). However, the company expects to achieve a 10-15%
growth in the medium term. Near term, the domestic segment is likely to be under
pressure as operators have currently shifted their focus towards encouraging 3G
data services, though this should normalize over the next few quarters.
International revenues ramp-up on track – The company has launched services
across all the 13 countries as part of the Telefonica deal (bigger countries were
launched in Dec10-Feb11) and the ramp-up is likely to take 1-1.5 years. The
company disclosed that the Telefonica deal has a fixed revenue share, which is
locked in for the period of the contract. The company doesn’t expect to sign another
large contract like the Telefonica deal in the next 1-2 yrs. Meanwhile it disclosed that
A-PAC and Europe contributed 9% (each) to the total revenues in FY11.
Financials update – The company believes that the EBITDA margins can go back
to 30% over the next 12-15 months (23% in 4QFY11) as the Telefonica revenues
ramp up. Meanwhile the company plans to incur capex of ~Rs800m (similar to
FY11E) for FY12E.
Other updates – 1) Ad-RBT currently has ~700k subscribers; largest worldwide, 2)
reverse RBT too is witnessing healthy growth (launched by DoCoMo) and 3)
Vodafone Romania and Egypt have done well though South Africa ramp-up is
behind schedule due to regulatory issues (not got approval for press * to copy for
RBT).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Onmobile Global (ONMO.BO; Rs112.55; 1M)
Takeaways from Mumbai – OnMobile presented at the Citi India Investor
Conference in Mumbai. Below are the key takeaways.
Pressure in the domestic segment – The slowdown in the domestic segment
looks to be structural with a relatively high CRBT penetration at 20-25% (@ Rs25
ARPU) in context of the poor quality of incremental subscribers. The next leg of
growth will be contingent upon the telcos cutting VAS prices (have remained broadly
stable in the last 2-3 years). However, the company expects to achieve a 10-15%
growth in the medium term. Near term, the domestic segment is likely to be under
pressure as operators have currently shifted their focus towards encouraging 3G
data services, though this should normalize over the next few quarters.
International revenues ramp-up on track – The company has launched services
across all the 13 countries as part of the Telefonica deal (bigger countries were
launched in Dec10-Feb11) and the ramp-up is likely to take 1-1.5 years. The
company disclosed that the Telefonica deal has a fixed revenue share, which is
locked in for the period of the contract. The company doesn’t expect to sign another
large contract like the Telefonica deal in the next 1-2 yrs. Meanwhile it disclosed that
A-PAC and Europe contributed 9% (each) to the total revenues in FY11.
Financials update – The company believes that the EBITDA margins can go back
to 30% over the next 12-15 months (23% in 4QFY11) as the Telefonica revenues
ramp up. Meanwhile the company plans to incur capex of ~Rs800m (similar to
FY11E) for FY12E.
Other updates – 1) Ad-RBT currently has ~700k subscribers; largest worldwide, 2)
reverse RBT too is witnessing healthy growth (launched by DoCoMo) and 3)
Vodafone Romania and Egypt have done well though South Africa ramp-up is
behind schedule due to regulatory issues (not got approval for press * to copy for
RBT).
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