Airtel Apps Central recently completed its first 4 months. It has flashed a very impressive set of numbers to emphasize the success of the Apps store format in India. Indeed, there are very interesting set of numbers and facts in 4 month results.
1. The number of apps offered tops 71K, a huge improvement over the 1250 apps it started off with initially.
2. The apps compatibility stands at 780 devices. It started with 550 devices, 4 months back.
3. 75% of the Apps featured are paid, the rest 25% are free.
4. The unique mode of payment, where the post of a paid application gets deducted from the Post paid bill or the Pre paid balance has made acquisition of these apps easier for the consumer.
5. The 71K applications have been categorized under 25 categories
13 million downloads at the rate of 1.2 downloads per second in four months. (That just proves the opportunity for Apps stores in India)
6. More than 32% of the apps downloaded are paid.
7. Tier 2 cities in India made the bigger contributions in terms of downloads (in line with the internet consumption habits of India). The top 5 cities being Surat, Udaipur, Pune, Mangalore and Thiruvananthapuram.
8. The top 5 category of downloads are Social Networking, lifestyle, Books, Entertainment and Games.
Airtel is now working on a downloadable version of App Central so that one won’t need to access it through a web browser but through an icon on the menu. App Central is also aiming to offer local and regional apps for customers across the country.
Two things that will determine the success of the app stores would be
1. Relevance of Apps: As blogged about earlier, Apps would have to dig deeper than Astrology, Bollywood, Cricket and Devotion to establish itself firmly in the minds of consumers. The Mobile phone changed the way a lot of things were done by the Sec C and Sec D class of consumers. The same kind of relevance wil have to be built around these Apps stores
2. Delivery medium: English is the de-facto medium of delivery. This would have to change to Vernacular languages. English by itself has a 10% cut off in population reach. Theres a 90% market that the vernacular languages cover and this is a big opportunity yet again.
The Apps central model will possibly be perfected in India after which Airtel would want to take it to Africa which is the next biggest blossoming telecom market. The parallels and the modus operandi is just so obvious. For a change then, Airtel is making inroads with data traffic in India.Intereting space given that Vodafone and Reliance are already in and Aircel may jump in any given moment now.
The first “desi” Application store, Airtel’s App Central is live. Consistent with Apps Stores world over, App Central is an open platform for developers to create apps for any and all handsets and operating systems. While there is the Apple iTunes, Nokia’s Ovi Store and Blackberry’s App world, Airtel’s Apps Central is unique in its being platform independent irrespective of handset or OS. The App Central is a cross platform offering that will even work on ultra budget handsets that run on the JAVA OS.
There are still quite a few websites third party websites that allow content download for all mobile operating systems but the App Central is far more convenient. The system is designed to recognize the operating system and showcase apps that are appropriate for the same. For a start, the App Central features 1250 applications across 25 categories available for download on more than 550 compatible devices.Applications are available for as low as Rs. 5 and go upwards of Rs. 25. Airtel expects vernacular content to contribute 20-25% of the downloads and vernacular content would be one of its biggest differentiators against the iTune, Ovi and others.
App Central also stores all the applications a user has downloaded in a section called “My Purchases”. This makes it very convenient to change handsets. The user would simply go to the My Purchase section at the bottom of the page and download and install apps. This reduces the time of having to look for them all over again. If apps have been previously paid, there’s no additional charge for downloading it again. Airtel is also working on a downloadable version of App Central to do away with the need to access it through a web browser.
Mobile application creators have been invited by the Airtel to submit their applications at this developer platform and CellMania will be powering the entire back end – right from the applications submitted by the developers to the AppCentral storefront.Developers registering with CellMania’s platform can expect to receive 28 percent of revenue share of the total sales of the application.
Bottomline: Even though Airtel App Central may not be at par with some of the OEM’s stores just yet, it will be, given time. It will also be interesting to see how vernacular mobile content performs. An interesting move by Airtel and we shall be watching the progress of the App central through the days and months to come.
An extension of an earlier post, which has discussed the problem of reducing operating margins for Telecom Operators in India in the of falling ARPUs and high operating expenditures; this post profiles the predicament for Airtel. If Airtel being such an established player in the market is facing a crunch in its operating margins, the performances of other marginal players and new comers could be under serious doubt!
Airtel registered a 17% YOY revenue increase. However, its quarterly sequential revenue growth seems to be tapping out at 1.19%. Thus the revenue growth is slowing down. Net profit is up 26% but that is mainly because of lower financial costs and spends. Operating profit margins are reduced from 30% in last year to 27% this year.
The concern for Airtel is that the growth in number of subscribers is hitting a plateau. With more competitors, the subscriber figures growth may actually dip. The ARPU has decreased 20.6% YOY. With both these numbers going south, it would be difficult for Airtel to keep up its performance in the next few quarters.
Applying the same analogy to other operators and the new comers, one would expect some congruence in the statuses. The overall market situation is same in all cases and thus the performances would not be very different for other operators. It is in this context one needs to evaluate the price discounting options that the new operators are resorting to. It may be a short cut to establishing a quick base but sustainability and profitability are very big questions. Couple that with the high initial spends of getting a toe hold in the market, the break even seems to be distant. Ask Virgin Mobile for validation.
The Indians are going places and they are doing it fast and furious. The case in point is Bharti which has now emerged as a front-runner for equity stake in South African MTN. This would make Bharti-MTN the 4th largest Telecom Operator in the world leap frogging big names such as Verizon, AT&T and the likes. Only the Chinese Telcos would have more subscribers than Bharti MTN. One of the most important reasons for Bharti to emerge as a frontrunner for equity stake in MTN is its leadership position in the Indian Telecom market.
After almost an year, India’s Bharti Airtel and South Africa’s MTN Group are back to the talking table. The duo have restarted merger talks to create $20 billion telecom entity. In fact, at a time when global giants are complaining about a cash crunch and putting ambitious plans on hold, Bharti Airtel has relaunched its audacious merger bid with MTN that could create a $61-billion transnational telecom Goliath with combined revenues of $20 billion and over 200 million subscribers across Africa, Asia and Middle East.
The Bharti-MTN deal, if it goes through, will usher in the next round of the Indian telecom M&A story. At an estimated ticket size of $23 billion, this will be the biggest cross-border deal that India Inc has been involved in, and twice as much as what British telco Vodafone paid to acquire a little over half of Hutchison Telecom International’s Indian operations in early 2007.
The Proposed $23-29 bn deal would be biggest ever M&A transaction involving an Indian company, almost double the previous highest of $13bn paid by Tata Steel for Corus. It would be the third largest deal in the world in 2009 so far, after Pfizer’s $64bn buyout of Wyeth and Merck’s $46bn deal with Schering-Plough Excluding pharma, Bharti-MTN deal would be the largest in world this year so far. Bharti-MTN’s combined subscriber base of 200m would make it the world’s 4th-largest telecom entity, and largest outside China. The top 3 are China Mobile (472m), China Unicom (247m) and China Telecom (237m). If the deal goes through this time, it will make Bharti the largest telecom entity in the world (by number of subscribers) outside China. Add MTN’s 100 million subscribers to Bharti’s 100 million, and the combined figure of 200 million will see Bharti comfortably leapfrog US giants Verizon (122m) and AT&T (108m), among others.
Fund managers with exposure to Bharti feel that with the Indian telecom market showing signs of saturation, the stock-swap deal will be critical for the company’s next phase of expansion. The deal is a good opportunity for Bharti to enter into a lesser-penetrated market like Africa, especially when the company is generating free cash flows.The valuations that have been offered by Bharti may be at a premium to MTN’s share price, but its valuations are cheaper than Bharti’s.
- Subscribers base crosses 400 million
- 15.41 million wireless subscribers added in January 2009
- 5.65 million subscribers in Broadband segment
- Teledensity reaches 34.50% mark!