It''s a great pleasure to present our annual report to you all as we witness a major transformational period in the history of your Company.
Mobile Internet: Driving the transformation
Increase in adoption of smartphones, and mobile internet is changing the way India lives. The adoption of mobile internet in India is growing at a break-neck pace. Number of users accessing internet on mobile grew 71% in last one year touching 320 Mn users (As per study by Internet and Mobile Association of India). The pace is such that the projection of end-2017 has already been surpassed. This is being driven by the investments being made by telcos in depth and breadth of network infrastructure, data pricing becoming affordable, as well as the aspirations of young India to access the new age communication, entertainment, products and services. The technology is undergoing change at a fast pace as well. A couple of years ago we saw 3G smartphones overtaking the 2G smartphone sales. This year, 4G smartphone sales in India has overtaken the 3G smartphone sales.
This is literally transforming our society -bridging the digital divide, empowering rural and urban alike and truly democratising an individual''s access to information, freedom of thought and speech and access to various services not possible before. This brings before businesses a huge opportunity as well as challenges. The needs of the society are changing and businesses who adapt to these changes will be the winners.
Changing business dynamics
The business potential and value is shifting from hardware to applications. Mobile app downloads increased by 129% in 2015, according to a report by Digital Asia. Be it communications, social networking, travel, entertainment, news, ecommerce, India is witnessing the fastest adoption. The new age startups are driving this change. According to the Economic Survey Report 2015-16, India has approx. 19,000 technology enabled startups led by consumer internet and financial services startups. The total investment in Venture Capital backed companies topped USD 12Bn, most of the funding coming in the last couple of years. We have seen huge growth in adoption of shopping apps, taxi hailing apps, social networking and messaging apps in the recent past.
We believe that the next wave of adoption and growth is expected in the areas of financial technology (fintech), big data analytics and Internet of Things (IOT).
The Fintech Opportunity
Over the last few years, the Government of India has been rolling out a technology enabled infrastructure, which will turn out to be path breaking drivers to financial inclusion for citizens of this country. Some of these projects/initiatives are listed below:
1. Aadhaar - Every citizen can now be identified through an aadhaar number, capturing biometric details also. Linking of mobile number and bank account number with Aadhaar number allow for multiple applications like e-KYC and Aadhaar enabled payment. 100cr plus citizens have been enrolled into the Aadhaar database.
2. UPI - Unified Payment Interface being rolled out by National Payments Corporation of India (NPCI) will allow cashless and convenient payments going beyond people having credit and debit cards.
3. Bharat Bill Payment System - Being rolled out by NPCI, BBPS will allow seamless and convenient bill payment of various utilities like electricity, gas, telephone, mobile, insurance, etc
4. Aadhaar Enabled Payment System (AEPS) - This allows various banking transactions like cash deposit, withdrawal, balance enquiry etc just like an ATM but without the need of ATM Cards and makes it possible at micro outlets (bank authorized correspondents) substantially increasing the reach of banking services.
The above initiatives of the Government coupled with many other projects like IMPS (Immediate Payment Service), NACH (National Automated Clearing House), E-KYC (Identification of customer without need of paper documents) enable reach and convenience of financial services beyond what has been imagined earlier. This opens up a multitude of opportunities for new age businesses to participate in enabling financial inclusion for India.
Spice Mobility''s participation in the new age businesses
We are very focused on ensuring that your company moves in line with changing market dynamics and participates in the emerging opportunities. Following are some of the initiatives that your company is taking :
1. Spice Money - Your company plans to roll-out a leading financial services play, leveraging technology to drive financial inclusion. The subsidiary company Spice Digital took initiatives to enter the space of fintech in the previous year. Using a robust technology infrastructure, it has rolled out more than 10,000 touch points where a range of financial services will be enabled. Currently these touch points are enabling people to remit money to bank accounts in a quick, convenient and cost effective manner besides delivering value added services like air and railway tickets, hotel booking, mobile to pups and bill payments. I am pleased to inform that the company has secured necessary permissions and licenses like PPI (Pre-paid Payment Instruments), AEPS (Aadhaar Enabled Payment System), BBPS (Bharat Bill Payment System), E-KYC integration and UPI (United Payment Interface) permission to enable it to leverage the upcoming fintech opportunity.
2. Digital Technologies - Through its subsidiary company Spice Digital, the company is focusing on use of digital technology to deliver value added services, building and running mission critical applications for enterprises and partnering with telcos as their digital transformation partners, to leverage the opportunities that have become addressable with the fast changing ecosystem.
3. New Tech Retail Experience - After consolidation of retail stores, the focus is on transforming the stores to deliver the experience that the discerning customer wants today.
4. One of the subsidiaries of the Company, Spice Online , recently announced a Joint venture with a large Chinese company ‘Beijing Digital Telecom'' for investment in online B2B Ecommerce space.
5. We are aggressively researching the areas of Internet of Things (IOT), which we believe will witness the next wave of adoption, like the mobile phones did 5-7 years ago.
We are also looking at tapping geographies like Middle East, Indonesia and Bangladesh with our digital offerings. Indonesia and Bangladesh are emerging markets with India-like demographics and almost following India in the digital revolution.
Corporate Social Responsibility
As an organization, we believe that giving back to the society is one of our primary responsibilities. Keeping this in mind, at Spice, we have set up the Ek Soch Foundation. The primary objective of Ek Soch is to empower the society by supporting social entrepreneurship. Community based social entrepreneurship, enabled by technology, can create affordable, scalable solutions addressing local challenges. Ek Soch engages with not-for-profits, academics, non-governmental organizations and entrepreneurs to launch effective and scalable models of development. They are empowering the urban and rural youth with the leadership and skill development necessary to manage their own social enterprises and become the change their community needs. Through the implementation of these programs, effective, scalable and relevant solutions will develop from within the communities, bringing about sustainable social change.
I invite you all to join our exciting journey ahead as we build Spice Mobility into a leading digital technologies company. I would like to thank all our customers, employees, partners, and most importantly you, our shareholders for your continued support and trust in our company and in our business and strategic undertakings. I look forward to an exciting and successful year ahead and thank you for your continued patronage.
With Best Wishes,