Noida-based mobile VAS (value added services) provider mCarbon Tech Innovation Pvt Ltd is one of the leading players with services mainly focused in the usage and revenue (U&R) space. This means that it provides services (or products) to telcos that directly help them increase both talk time and data usage of their users. The firm sees newer opportunities with 4G and national mobile number portability (MNP). Techcircle.in spoke to mCarbon co-founder Rajesh Razdan to know more about where the company has reached and how it plans to grow further hereon. Here are the edited excerpts:
What are mCarbon's different business buckets? Which are the biggest drivers?
We provide an over-the-top (OTT) call management app for telecom service providers to offer call filtering, setting profiles, visual voicemail, SMS screening, push notifications and other phonebook utilities to their subscribers. We also provide call manager (for call scheduling), call/SMS filter, SMS analyser (analytics on SMS) and Channel 99 (managed WAP magazine); besides USSD gateway (unstructured supplementary services data, a protocol used to communicate with the service provider's computers) on the cloud to ensure fast and easy rollout of interactive services for telecom operators.
However, one of the biggest drivers of our business is micro loans or balance advance which telcos provide end users who are out of balance for data and voice needs. We provide about 4 million micro loans every day. Another big (similar) vertical for us is transfer of balance between two users of the same network.
VAS was a big talking point before apps took over. Many of your peers have pivoted their business accordingly. Take for instance One97. How have things changed for you? How have you adapted?
We haven't pivoted from being B2B to B2C. There is a latent demand for somebody to service telcos as their challenges are insurmountable. We continue to build our story on B2B model. There are no immediate plans of completely pivoting to B2C, though we are exploring it.
However, we have pivoted in the sense that earlier we were a pure VAS player with services like virtual call room and audio and video content delivery platform, among others and now we are more of a usage and revenue (U&R) enhancement company with services in customer lifetime value management space which is valued at Rs 50,000 crore globally. We are working very closely with the marketing and product team of telcos and most of the innovation comes from us. We are largely providing services in the prepaid space as this constitutes 90 per cent of Indian user base.
To date, you provide varied services like OTT, network app store and USSD. Are these services provided separately to the telcos? Are they integrated in some way?
We have developed Greenroom, a 'network applications store' that enables operators to launch multiple products at reduced time and costs. Every new service that we add to their bouquet is deployed through Greenroom. This also allows us to be very agile with our services.
VAS has become a commoditised business. What is your USP? What's the plan to build it further?
We are not an erstwhile player. We were never into content like shayari or horoscope on SMS or caller ring back tone services. We are in U&R, customer management space in which how users spend, leakages in network etc are the grey areas we are addressing. We also provide services like call scheduling and call blocking which are very nifty applications.
We are now coming out with intelligent notifier which means that we will make balance reduction information (which comes in the form of USSD after a call or SMS) more contextual by also giving information on the kind of packages that are relevant to your usage, helping save money. For instance, if a Mumbai user is calling Delhi frequently, we could give information on a Rs70 package which gives 700 minutes and 200 SMS. This is like a lead management tool for telcos because traditionally such packages are embedded on a random message which gets lost. It is deep consumer insight clubbed with intelligent campaign.
You've recently forayed into neighbouring geographies. How do you plan to expand further? Are these expansions through strategic tie-ups?
We have very recently forayed into Bangladesh and are trying to get into some other prepaid economies of Asia Pacific, including Nepal, Indonesia, Vietnam, Cambodia, Thailand and Malaysia. We've also found some Eastern European countries that have a significant number of prepaid users.
In most of the newer geographies, we have active sales force, besides partners and agents. We also have surrogate sales partners. For instance, we reach out to some clients through hardware partners like IBM, HP, Oracle, Dell etc.
In certain geographies, we will also be open to small time acquisitions for market entry. These players could be traditional VAS like aggregators that already have clients that we are eyeing.
What are the different revenue streams?
Earlier it was a one-time licence-based model and then telcos would pay maintenance. However, we later tweaked the model to annuity based revenue with long-term contracts of at least three years. This ensures that we grow as their user base and revenue expand.
We will end the year with about Rs 80 crore in revenue and are growing at 60 per cent annually.
Are you looking at new revenue channels to build on the existing properties?
About 90 per cent of the revenue of telcos is deployed in the U&R space which keeps us on the tip of the iceberg. So I see both vertical and horizontal revenue expansion stream as the pain points are large and size of the industry is big.
We are also very opportunistic. When DND was made a compliance by TRAI, we were the largest suppliers of DND solutions. Also, once 4G and national MNP is allowed, the adjoining challenges will also force us to innovate, opening newer opportunities.
All leading telcos including Tata, Idea, Reliance, Airtel, Vodafone, Videocon, MTS etc are our clients. We touch 500 million end users. Besides, we also have 50-60 enterprises (including banks) which send SMS notifications through our technology platform.
You last raised funding in 2011 from existing backer Canaan. Is all of that deployed? Are you planning to raise the next round from new investors?
We are surplus in cash. So we are not in the market to raise money. We have enough to fund our overseas expansion through internal accruals.
Canaan is kind of shutting down Indian operations. What will happen to your investment? Do they continue to sit on your board? Is there plan for another VC firm to buy their stake?
At present, Alok Mittal is on our board. I don't know if they are planning to make a secondary sale.
(Edited by Joby Puthuparampil Johnson)