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Music for Telefonica May Boost Onmobile’s Growth

Sept. 21 (Bloomberg) -- Onmobile Global Ltd., an Indian supplier of ringtones for mobile-phone service providers, expects its partnership with Europe’s second-biggest phone company to help accelerate sales growth in the next two years.

Onmobile, based in Bangalore, is investing $75 million to provide services including a radio application to Telefonica SA’s clients in Latin America, said Chief Financial Officer Rajesh Moorti.

“Bulk of the cash flow will be this year,” Moorti said in a phone interview from Mumbai. “The first full year where you will see the impact on the revenue will be on the fiscal year beginning April 2011.”

Sales growth at Onmobile may accelerate after rising at its slowest pace since at least 2005 as the company taps into growth in Brazil, the world’s fasting growing major economy after China, and other Latin American nations. Onmobile is offering radio, voice search and text message services to Telefonica’s 143 million customers in the region.

Onmobile’s shares, which have declined 10 percent this year, dropped 2.2 percent to 352 rupees at 11:18 a.m. in Mumbai.

Revenue may grow by 29 percent to 6.9 billion rupees ($151 million) in the fiscal year ending March 31, 2013, because of steady domestic revenue and “upsides from the Telefonica deal,” according to Bhavesh Gandhi at India Infoline Ltd., who rates the stock a “buy.”

The company’s sales rose 11.8 percent to 4.5 billion rupees in the year ended March 31.

Onmobile has 33 percent market share in India’s value-added service market, Gandhi said in a report dated Sept. 9.

To contact the reporter on this story: Jay Shankar in Bangalore at jshankar1@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell in Mumbai at sfoxwell@bloomberg.net

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