OnMobile Global looking at 2 overseas acquisitions

Q: At that point, put in your growth on the revenue side, the fact that ARPUs are under pressure for telecom operators and your pricing essentially depends on what they charge, do maximum amount of revenues come in from there?

A: When you say their ARPUs are declining, that’s on their core business which is person to person voice calls and person to person SMS. We are in a different service line which is value-added services which is typically priced at a premium price and we are seeing tremendous usage. For eg. Today, person to person calls are at Rs 1 per minute, whereas the value-added voice portals that we are launching are all at Rs 6 a minute. Also, what we are seeing is that the demand is relatively inelastic and there is huge appetite for these services. So they are making a lot of money to support the decline on their core business ARPU.

Q: What about inorganic growth, there is talk about you scouting for an acquisition in either Europe or the US. Any details you can share with us and how many acquisitions are you looking at?

A: In the past we have done two acquisitions in the last two years; we bought one company in Mumbai and we just finished buying a French company which is a fabulous company, it’s done extremely well for us. We are looking at another couple of acquisitions, probably two acquisitions in the next 12-18 months. They will be international acquisitions.

We have some criteria for acquisitions, we are very selective, we do it very carefully and conservatively, but they will largely be companies which have very good product IP that’s the key thing. We have to have some technology that is unique, that can be deployed around the world, not necessarily in their home market. That’s one type of companies we are looking at.

The categories of companies are people with a regional footprint, who are very strongly entranced in markets which are difficult to access. For eg. if one looks at Eastern Europe or Latin America or the China region, these are markets that are typically difficult to Indian companies to access without a local partner or a local company with a strong footprint. If we can get them at an attractive price, and they have good products, we will be happy to look at them.