Indian portals call cellular users for profits

Indian portal players have found a new lease of life from a totally unexpected space—not your traditional Internet subscribers, but India’s booming cellular base. Thanks to this trend, the Internet subscriber base is becoming a subset of the mobile space. Srikanth R P has the details on how every Indian portal worth its name is wooing India’s fast-growing cellular population

In a crowded Mumbai commuter train where space is at a premium, two lanky collegians are busy looking up ringtones through an ad in an evening newspaper. While the commuter rush on the train—‘packed tighter than sardines’ would be an understatement—allows almost no form of individuality, this sociological reality does not stop these collegians from downloading ringtones to their mobile phones to give them the individuality they seek among India’s booming cellular population, where almost everybody (at least in the cities) seems to sport a cellular phone. In another corner of the same train, a middle aged man is busy checking cricket scores through the SMS feature available on his cellphone. Unfortunately, the Indian team is yet again snatching defeat from the jaws of victory. All this while, in the ladies compartment, a Bengali lady is busy wishing her relatives ‘Shubho Bijoya’ by sending out picture messages of the Goddess Durga on the eve of Durga Puja.

What do ringtones, festivals and cricket scores have to do with the resurrection of Indian portals? Plenty, if you look at the number of downloads happening across portals and the number of ringtones each portal has made available on its site. India’s leading portals, Rediff and Yahoo India both have more than 5,000 ringtones available on their sites. Ditto for picture messages. Personalisation is the key here and most users don’t mind paying a tiny amount for personalising their mobile phones with a unique picture message or ringtone. Though no portal is willing to provide a number, onlysaying that thousands of downloads are happening through their portals every day, the fact is that this is a big market opportunity no Indian portal wants to miss.

Big opportunity

With close to one million new users signing up every month, the Indian cellular population continues to ring a new high. Says Debasis Ghosh, head, Corporate Communications at Rediff.com, “The profile of the Indian mobile user is changing rapidly. It is moving from business users to individuals, from the older generation to the younger generation and from bigger cities to smaller cities. It is getting more mass-oriented and is overlapping the Internet user profile. So, in essence, we have two profiles that fit our target audience and we can fine-tune our services to offer more services by using the same platform. One more interesting trend we have observed is that the Internet base is fast becoming a subset of the cellular base as the cellular base is growing at a scorching pace.” For the record, IDC estimates the Indian Internet base at close to 15.5 million while the cellular base has already crossed 18 million.

Rediff’s strategy in the mobile space has been extremely successful and the portal’s financial figures for the first quarter this fiscal make that amply clear. ‘Fee based services,’ which include subscription services like matchmaking, e-commerce and e-mail, besides the mobile space, contributed 48 percent of the total Indian online revenues. This is significant when you consider that Rediff launched services in the mobile space only in January this year.

Another biggie in the Indian portal scenario, Yahoo India, which incidentally was the first Indian portal to launch services in the mobile space, has seen growth surging over 100 percent year-on-year. What’s significant is that the company expects this scorching rate of growth to continue at the same pace for the next couple of years.

Says Yahoo India country manager Neville Taraporewala, “India has emerged as the second largest market for Yahoo in terms of mobile services after China. With our dominant presence in the Internet space, we feel we are uniquely positioned to exploit both the mobile space and the online medium—both of which are huge business opportunities. For example, we have close to 30 million registered users from India who use our communication platforms like Yahoo Mail, Yahoo Messenger and Yahoo Chat.” Yahoo India’s strength in the Internet space has rubbed off in terms of sales in the mobile space too as the Yahoo Messenger service on mobile phones has turned out to be highly popular. This is in addition to the revenues Yahoo India gets from contests, providing cricket scores, picture messages, jokes and logos.

Indian users who have traditionally opposed paying for services such as e-mail are more than happy to pay for checking the same e-mail on their mobile phones. As Ghosh of Rediff says, “The issue is of convenience. And as with any product, if you can deliver products and services suited and tailored to an individual’s interests, they are more likely to buy the product.”

Another example of convenience is Sify’s case of providing stock tips on mobile phones—a service that has taken off exponentially. Explains V V Kannan, president, Interactive Services, Sify, “On trading days, we send out tips for subscribers to buy and sell stocks, suggesting long-term and short-term buys. We have received a lot of repeat subscribers for this service, which indicates the potential this service has.”

Almost all the major Indian portals have tied up with most of the cellular providers in India and have revenue sharing agreements in place. Cellular players are also benefiting from this trend, as more and more of their revenues accrue from value-added services (VAS). For instance, the contribution of VAS to the total revenues of cellular providers is around 12-15 percent today, up from a figure of around 2 percent just two years ago.

Innovations

India has emerged as the second largest market for Yahoo in terms of mobile services after China, says neville taraporewala

But, as the market starts getting crowded, Indian portals are innovating to keep a step ahead of the competition. For instance, Rediff has just launched a mobile search service for ringtones. Just like Google, a subscriber can search for and download specific ringtone by sending a simple SMS. If you wanted the signature tune of James Bond movies on your mobile, you would have just have to key in Search Bond and send it to a pre-defined four digit code, say 7333. The user automatically receives the code for the ringtone. Ghosh says that this move has opened up tremendous opportunities for Rediff as users are more likely to download more ringtones as they end up discovering more and more ringtones. Additionally, this move has eliminated the need for the user to go back to the Internet and search for ringtones, a significant point when you consider the poor PC penetration ratio in India.

Yahoo India too has an innovative service that allows users to create picture messages in nine different Indian languages. All the user has to do is key in the code for the language of choice, along with a message phonetically typed in English, and send it to a pre-defined code. A picture message is generated in the script of the desired language.

Using proven strengths

Indian portals are also betting big on opportunities in the outsourcing of mobile content. For instance, most television channels do not have the required expertise or infrastructure to handle contests that require answers to be sent by SMS messages. Take Zee TV’s popular television programme, Antakshari. The entire mobile content for the contest is handled and managed by Rediff. Zee also gains as it gets access to the alliances that Rediff has with different cellular service providers across the length and breadth of the country.

Customised SMS services are emerging as one of the biggest growth areas for Indian portals. A recent example is the ongoing SMS contest for Kinetic Nova. Yahoo India claims that over 75,000 unique users have participated in this contest in a month’s time, generating over 1.2 million messages.

Future holds more rings

As India’s PC penetration ratio continues to be a subject of debate, Indian portals have nevertheless moved on to an equally large revenue base and have diversified their sources of revenues. And unlike other markets where communication is driven through PCs, India is a different market as most communication is expected to happen through mobile devices—a fact exploited by portals like Yahoo India and Rediff.

Kannan of Sify sums it up perfectly when he says, “The world over, all the thriving portals and dot-coms have reinvented themselves in the last two years. The pure-play advertising model is not working even in mature markets like the USA. The way forward would definitely be to seek more revenue opportunities from subscription and value-added services.” Whichever way you look at it, ringtones and other mobile based services are certainly ringing in cash for Indian portal players as they ride on the booming cellular boom.