IAMAI Session V: Perspectives for the Future of Mobile in India

Tomihisa Kamada, The Executive Vice President and Chief Technology Officer of Access Co. Ltd, Japan delivered the keynote address while Atanu Mandal, President of ACL Wireless, Viren Popli, Head of Mobile Entertainment for Star India, and Milind Pathak, Co – CEO & Country Manager, Buongiorno (Hong Kong) Ltd. Shared their insights on Mobile VAS in India.

Here is a compilation of what we at WATBlog think is the most relevant analysis with respect to this topic.

There are essentially 3 phases that a mobile market can go through:

Phase 1: Voice and SMS

Phase 2: Ringtones, wallpapers, information, entertainment

Phase 3: Rich Media, Open Internet, Convergence

Today the Internet is PC Centric. In the Future Internet access from mobiles will overtake the PC.

In Japan, the number of mobile internet users is already more than PC users. One will see that 3 years down the line in India as well primarily because of the volume of mobile penetration.

Mobile in the future will not only be mobile ‘phones’. Mobile will extend to cameras, dvd players, books maybe – a ubiquitous Internet.

The Internet on mobile has also evolved quite a bit. 1^st there was cHTML, 256 colour, Java & SSL, IRDA, Flash, HTML with email, full browser support with Adobe PDF support and now mobile TV is accessible.

One has also simultaneously seen a convergence between TV and Mobile – where the mobile is becoming increasingly powerful and the PC is becoming increasingly mobile. Mobile technology providers have also innovated greatly with things like zoomable fonts where users can optimize fonts on the mobile phones for reading etc and thus make the browsing experience on mobile phones equally good as that on PC’s.

Another thing that one finds becoming popular in the Mobile Internet market is mobile widgets. One has already seen that on the PC’s with Apple’s OS. Now we will see widgets for mobiles as well. This makes the touch and feel experience better and users can have a more ‘graphic experience’. This will also lead to users bookmarking favourites as widgets.

One also sees mobiles becoming advanced communication devices with high end cameras, voice recorders etc. Thus mobiles automatically need to be tapped as avenues that can crowd the space of user generated content.

Mobile optimizers are also developing transcoding softwares and servers where Internet ‘.com’ websites can automatically get converted to surf on a mobile platform. This will do the mobile VAS market a World of Good primarily because browsing times and website loading times will fall dramatically. Also, websites will not find it too expensive to migrate to the mobile platform thus making it a thriving eco system.

Yahoo Launches R&D Lab in India

Yahoo will be opening up an R&D lab in India soon. The lab to be opened at Bangalore will be a centre for excellence for the next generation of web, search and advertising technologies. The focus will be deliver memorable experience to the users. Yahoo said Yahoo-Labs-Bangalore will be responsible for making the Internet simpler and easier for advertisers and users.

After rebuffing the offer from Microsoft, Yahoo seems to be focusing more on creation of assets to align with its business. Setting up an R&D lab in makes sense. And its not just the cost factor. A majority of Microsoft’s products are developed here in India, its second biggest development centre after Redmond, United States. The engineering talent in India is capable of producing the cutting edge technology products in a world class manner

ICICI Bank Admits A Hit Of $264 Million From US Subprime Crisis

Maybe it’s time to brood for ICICI Bank CEO KV Kamath (right). The bank has become India’s first financial institution to admit that the US subprime crisis (see Wikipedia entry) has cost it dear. The credit crunch in the US has resulted in losses of about Rs 1,050 crore ($264 million) in 2007-08 for India’s second largest bank, after the state-run State Bank of India. The information interestingly did not come from the bank directly, but was revealed by P K Bansal, the minister of finance in the Union Ministry, who was asked a question in the upper house, Rajya Sabha.
ICICI Bank has large overseas operations especially in the US and UK, and is likely to have had a larger exposure to overseas assets than any other Indian bank. According to an article in Mint, ICICI Bank has about $2.2 billion worth credit derivatives exposure, while SBI has only about $1.1 billion. The bank, however, said it had neither invested directly in the USD market nor taken an exposure in the US subprime loan market.

Deutsche Bank Real Estate Arm RREEF Invests $70 Million In Golden Gate

Deutsche Bank real estate investment arm RREEF has kicked off investments in India. The firm has invested $70 million for an undisclosed stake in Bangalore-based real estate firm Golden Gate Properties Ltd. The company is engaged primarily in residential projects, and is building 20,000 homes with a total built-up area of 23 million sq.ft, in cities like Bangalore and Hyderabad. It also plans to build mixed use developments and special economic zones, says a Reuters report.
Former ICICI Venture real estate investment head Kishore Gotety is the country head of RREEF in India. The property fund management company is jointly owned by Deutsche Bank and DB RREEF Trust, and globally manages over $73 billion worth of assets.

Millennium Spire To Invest $1 Billion In Indian Real Estate

Here is a new entrant into the Indian real estate sector. Global real estate fund Millennium Spire said it would invest $1 billion across the country. Ashish Balla, a portfolio manager of the fund, said they plan to accelerate investments in south India with Coimbatore as a key focus geography, reports PTI (Via Mint).
He said the company was not investing in land, but would fund infrastructure development projects on partnership basis. With regard to Coimbatore, Balla said that one-fourth of the investment fund would be earmarked for the district for projects like an inner city mixed used project of landmark value and knowledge based industrial township.
“The Fund has a target internal rate of return in excess of 25 per cent over its 5 year lifespan,” reads the company’s website. The website further adds that Millennium Spire has a secondary focus on opportunistic commercial and retail development. Ashish Balla and Abhijeet Balla look after the company’s operations in India. Abhijeet has 17 years of operational experience, primarily in the areas of building turnkey businesses in new markets, process re-engineering and sales and distribution management. Ashish is an urban planner and development professional who has worked in the United States, Italy, SE Asia and India.

The Hidden Dynamics of Print-Online Competition in Classified Advertising Markets

By matching supply and demand in the corresponding markets for goods and services, publishers of classified advertisements serve as information brokers increasing transparency and driving market clearance.

These days specific online services for each category of classified advertisements promise a far more efficient matching mechanism at a lower price and compete with the incumbent print players. With reference from different sources such as IAMAI report and other research company an empirical analysis of classified advertisements in the categories of recruitment, real estate and automotive, based on data from India result to tremendous growth in internet classified business.

The substitution dynamics hidden by fluctuating overall market developments are derived from a simultaneous fit of the market dependence of advertising space in newspapers and a time-dependent substitution term. The results show that approximately half of the classified print advertisements have already migrated to online players. However, this substitution seems to have reached at least a temporary saturation.

Apparently, the so-called Riepl's 'law', formulated at the beginning of the twentieth century, still holds true today. This 'law' states that once a specific technical medium has established itself in social practices it will exhibit a strong resistance to change. Job Portals such as Naukri.com and monster.com does not seem to have threat from print media as presumed earlier. Timesjobs.com having a strong backup of print media could not shake the online market. Online players have their own kingdom to rule, shaadi.com, bharatmatrimony.com, jeevansaathi.com and timesmatri.com(simplymarry.com) have their own story. Shaadi and Bharatmatrimony fighting hard to win the market but again here the print media don't make much of difference to uplift simplymarry.com in online matrimonial classified business.

Realestate portal just started in India and picked up the market soon has players such as 99acres.com, realacres.com, indiaproperty.com and magicbricks.com. magicbricks.com has supporting print classifieds sections Times of India respectively but again the online market did not move down due to the print media presence.

VC's looking for new internet trends in indian dotcom

"Venture capitalists have become much more cautious in the last six to seven months in the wake of a high rate of failure in the dotcom business both in India and abroad," Amul Gogna, executive director of the Investment Information and Credit Rating Agency (ICRA), told India Abroad News Service.
In the changed scenario, VCs are now looking at new areas such travel, jobs, matrimony and real estate portals he added. The emergence of venture capital funding in the country has helped in the evolution of Internet-based ventures.

Risk capital investment in the domestic information technology (IT) sector increased from $20 million in 1996 to $320 million in 2006 and most of the venture funding has been in the areas of Web site and portal creation.Analysts say dotcom companies, mainly in the business-to-consumer (B2C) segment, which were cash-starved, were spending more money than required or had no revenue model, have started wilting under pressure.

"Most of the venture capitalists in India were looking at valuation game and nobody took a close look at the revenue model of the dotcom companies. Indian Dotcom Company has shot up with real estate portals after the bust of online travel portals such as yatra.com, cleartrip.com and makemytrip.com. Although investments will continue to flow in for the right companies, real estate portals have new dimensions in this hot market of real estate.Top 4 real estate portals to name are 99acres.com, magicbricks.com, realacres.com and indiaproperty.com. The real estate band wagon has just begun and internet players such as naukri and times group has taken internet classified business seriously.
Company Background for the above mentioned real estate portals are as follows.

1) 99acres.com - Info Edge (India) Ltd. (Naukri Group)
2) MagicBricks.com - Times group
3) RealAcres.com - Horizon InfoVentures(p) Ltd
4) IndiaProperty.com - Bharatmatrimony group

Although online real estate portals was half a decade back but that did not survived. The trend of Internet business is changing and the mass is digging the information from the cloud of Internet.According to ICRA's India Internet Business Report, there are around 50,000 dotcoms that are of Indian origin or are India oriented.

In view of the high initial promotional expenditure, which is Rs. 100 million to 150 million on an average, it is assumed that the average turnover of a dotcom venture would be in the range of Rs. 100 million-120 million, says the report. When this figure is reconciled with Rs. 253 billion, which is the expected aggregate, worth of e-commerce activities in India in 2007, the inevitable conclusion is that only five to 10 percent of the existing Internet ventures would eventually survive, it added.