In its first investment in India, Inventus Capital Partners, an early stage technology-focused venture capital fund, and Ojas Venture Partners invested $2 million (about Rs9.7 crore) last month in TELiBrahma Convergent Communications Pvt. Ltd, a Bangalore-based mobile solutions company. The companies invested $1 million each.
“The mobile market in India offers exciting investment opportunities. In TELiBrahma, we saw a set of tenacious entrepreneurs addressing a large and fast growing market opportunity,” says Kanwal Rekhi, co-founder, Inventus.
Start-ups in this sector have had their share of failures. MKhoj had to abandon its SMS-based service where users could browse for the best deals in their locality. CEO Tewari says it was extremely difficult to scale up business as they were giving out information on discounts that form only about 10-15% of the organized retail market.
Mobile2Win co-founder Rajiv Hiranandani says keeping spam out will be a challenge; only then would the real advantage of the medium be extended to customers. Also, revenue sharing between the telecom operator, mobile advertising company and platform provider needs to be more transparent. Currently, telecom operators take away the biggest chunk of revenue generated, which is at least 70%, says Hiranandani.
Attempts are on to see what can be done to ensure that customers don’t lose privacy. “You intrude (on) someone’s privacy when you send spam messages. However, permission-based advertisements will find takers as they cater to a client’s profile,” says Tewari.
So, the future for mobile advertising will lie in sending out advertisements that customers have requested. “Mobile users see push advertising as an intrusion and companies cannot sustain the medium with that response,” says TELiBrahma CEO Narasimha Suresh.
The company has introduced an advertising solution based on Bluetooth technology in Bangalore’s shopping hub — Commercial Street, Forum Mall and Total Mall. “This is a pure permission-based mobile advertising offer; the consumers get the best of the deals and the retailers get to use a robust and cost-effective advertising medium,” says Suresh.
Bluetooth advertising solutions allow mobile phone users to interact with an advertising panel or kiosk to receive advertising content associated with a place or product on mobile phones in the vicinity of the display.
However, while getting customers to agree to receiving ads on their handsets may work for a big percentage of users, there will still be a niche group that will not welcome such ads, says Suresh.
Also, as customers generally prefer not to read randomly sent text, they need to be given incentives such as lower tariff for value-added services or coupons that can be exchanged for call charges.