Mobile services provider Comviva, after conquering the African continent, has plans to go solo in India and succeed without parent Bharti's help
In 2010, in N’Djamena, capital of the restive Chad region in Africa, one of the clients of mobile services provider Comviva saw his network disappear after a bomb attack. No other service provider existed—they had either run off on their own or had been forced to by the local militia. Comviva had two engineers stationed in the city who used back alleys to avoid gunfire raging on the main roads. The client’s service was restored.
Operating in some of the world’s most dangerous regions without loss of life has made Comviva race ahead of its peers in Africa. This ability, gained from years of experience and from carefully cultivating relationships with unpredictable rulers, has positioned the company ahead of other service providers in the continent. This, combined with its cutting edge technology, has fuelled its growth across Africa, Latin America, and South Asia.
What makes Comviva CEO Manoranjan Mohapatra most proud is that the company has been able to maintain the record of being in the most restive regions, cracked markets that others shied away from, and yet made sure that employees working there were safe. “We are not going to grow by taking risks on their lives. We grow because we know how to work there.” This is what its competition has found difficult to replicate.
The company, which is part of the Bharti group, now derives just 30 percent of its revenue from its parent. Its products are mainly in the mVAS (mobile value added services) space. Some of its other customers who make up for the majority of the revenue are Bharti’s competitors, like Vodafone.
The going was not easy initially, particularly in Kenya where M-Pesa, a mobile-phone based money transfer service from Vodafone, ruled. Comviva’s product was technologically superior, as it could fit to suit multiple operator requirements. Before Vodafone launched M-Pesa, it acquired Safaricom, the state-owned national telecom network. Vodafone immediately had 80 percent of the Kenyan market when it launched M-Pesa. In a country where daylight robbery is common, the ability to pay through mobiles was hugely successful.
However, Vodafone found it tough to capture markets in other countries as it was difficult to tune the product (M-Pesa) to other operators’ needs. Comviva’s model, on the other hand, is an open-source model, more adaptable to other operators’ needs, says Mohapatra. As a result, the company was able to quickly have 34 deployments in the continent.
To win in Africa, you need to offer mobile money, apart from the package of caller tunes and usual mVAS services. If you can have your own product which becomes a bestseller, you earn margins of 40-50 percent on that product in an industry where the average is 25 percent. That is what Comviva did when it launched Mobiquity, to pay for services on the mobile phone. Take the example of Aminali Murungi, a fruitseller in Dar-es-Salaam in Tanzania, who had to give her money to hooded robbers to save her life. Now, she uses Mobiquity to not just pay her bills, but also to make purchases and transfer money from one bank account to another. Her brother, who studies at the other end of the city, can then make his transactions.
“Other technologies similar to Mobiquity allow you to make payments, but this is the only platform where you can do the entire netbanking on your own. This has generated wide acceptability,” says Angel Dobardziev, practice leader, emerging markets, Ovum Consulting, who tracks the global mVAS sector.
Mobiquity makes the mobile phone a convenient financial transaction medium. It enables users to create their own mobile bank account and then use the phone to transact payments just like they do from a normal bank. Transactions are easier to perform for people who are illiterate and un-banked. For banks, operators and financial institutions, this opens up a big market for a wide range of services. Around 38 service providers in 20 countries, including Vodafone, France Telecom and others have deployed Mobiquity.
Negotiating with other telecom operators was not just about making business sense—it was also about knowing which tribes their heads belonged to and to adhere to their quirks. The same held true for potential customers. “You really need to be aware of what works with whom. Half the Western firms shut shop as they could never unravel the people there,” says Mohapatra.
Today, Mobiquity makes up for 35 percent of Comviva’s revenue. The rest is made up by managed VAS services and traditional offerings like mobile music, voice applications, video applications, gaming, messaging, call completion and self care. For all services, it was critically important to have a thorough knowledge of local cultures and customs. Comviva now has 250 million end users in the Ivory Coast, Guatemala and Tanzania.
“When we talk with telecom operators in the region, the offerings made are thought out very carefully. We appeal to people from all backgrounds,” says Mohapatra. A major telecom operator had released a game in which one fought a bunch of hoodlums to save a treasure. But the clothes worn by the hoodlums looked suspiciously similar to the traditional costumes of a tribe, to which most of the ruling party members belonged. Such gaffes in another country would be seen as stupidity. In Africa, they are life-threatening, both for the business which might be asked to move out, and for the people who work for that company.
In India, Comviva’s foray into mobile payments has been slow as the government was not comfortable with the idea. The Reserve Bank of India regulations impose a cap on the use of mobile accounts. In 2011, it was hiked to Rs. 50,000 from one tenth of that earlier. Comviva is currently the number two mVAS player in India, behind OnMobile.
(This story appears in the 03 February, 2012 issue of Forbes India. To visit our Archives, click here.)