Quick Look At Official Indian Banking Apps On Android
The main list of banks to track has been sourced from the BANK-NIFTY and it throws up an interesting set of results
Axis Bank Ltd.
No official Android app, supported in NGpay. There is a Java mobile app for it.
Bank of Baroda
Official App: https://market.android.com/details?id=com.fss.bob
Install base: 1,000 – 5,000
Bank of India
No official Android app. There is a Java mobile app for it.
Canara Bank
No official Android app. There is a Java mobile app for it.
HDFC Bank Ltd.
No official Android app, supported in NGpay. There is a Java mobile app for it.
ICICI Bank Ltd.
Official App: https://market.android.com/details?id=com.csam.icici.bank.imobile
Install Base: 100,000 – 500,000
IDBI Bank Ltd.
No official Android app. There is a Java mobile app for it.
IndusInd Bank Ltd.
Official App: https://market.android.com/details?id=com.fss.indus
Install Base: 100 – 500
Kotak Mahindra Bank Ltd.
No official Android app. There is a Java mobile app for it.
Punjab National Bank
No official Android app. There is a Java mobile app for it.
State Bank of India
Official App: https://market.android.com/details?id=com.sgs.sbi.mbanking
Install Base: 50,000 – 100,000
Union Bank of India (FSS)
Official App: https://market.android.com/details?id=com.fss.ubi
Install Base: NA
Other Notables:
Citibank India:
Official App: https://market.android.com/details?id=com.citiuat
Install Base: 10,000 – 50,000
Stanchart India
Official App: https://market.android.com/details?id=air.app.scb.breeze.android.main.in.prod
Install Base: 1000-5000
Notes:
- Interestingly, only five of the twelve banks from the list have official applications on the Android platform.
- Pretty much every bank on that list has a J2ME app for mobile banking, which makes a lot of sense in a country like ours.
- Even the banks with Android apps don’t feature it prominently on their websites.
- Only exception to (3) is ICICI Bank, who are a bit overenthusiastic in promoting iMobile.
- HDFC Bank is a notable absentee in the list, even though they are supported through NGpay.
- The apps mostly have the same feature set. Understandable, as the backend service providers tend to be the same few across banks, which makes feature-based differentiation a hard one to pull off.
- Citibank India and Stanchart India have a reasonable install base.
- nGpay supports both Axis Bank and HDFC, which should be the cheapest route for banks to integrate with an Android or mobile app.
- FSS powers the services of Bank of Baroda and Union Bank of India. Looks like they are using a white-label application.
- SBI’s install numbers are a pleasant surprise. Shows a level of awareness in the market I had, honestly, not expected.
- Quite revealing that both SBI and the FSS-based apps have a minimum requirement of Android 1.5 and up, while most of the others are 2.x.
- These numbers can be quite misleading. It is nearly impossible to track the install base of the J2ME apps. So, usage could be a different matter altogether.
- Install base leader board
- ICICI Bank
- SBI
- NGpay
- Citibank India
- Bank of Baroda
- Stanchart India
- Indusind Bank
BWA at Rs 10 per GB is an invitation to ruin RIL
Medianama recently posted their analysis on the reported plans by Reliance Industries to roll out their BWA-based product at a bundled cost of Rs 10 per GB with their Rs 3500 tablet.
Since this is a topic that has been of some interest to me, I thought it was worth taking a deeper bite into the pricing and other factors of this offering.
As far as per-GB pricing goes, even the cheapest cost, even for fixed lines, is not to be found under Rs 30 per GB. Data on wireless (2G or 3G) is considerably more expensive, other than the sole exception of Airtel’s Rs 99 for 2GB plan on 2G. RIL could tap into RCom’s FLAG and also leverage RCom’s their ‘preferred’ status with YouTube to mitigate a bit of their costs, but that will hardly be enough to start making a dent on the pretty penny already spent in acquiring spectrum through the Infotel acquisition.
The comparison with fixed line broadband or Wimax is not entirely fair when in it comes to BWA. They have different cost structures. Traditionally, fixed line broadband is used by an entire household and is shared over multiple devices. A tablet, on the other hand, will mostly be used by one person. For this to work out, RIL has to sell aggressively to the demographic that currently contributes to Rs 200 ARPU on voice. You can see how the pricing makes sense if you compare it to a mobile phone.
The only problem is that online services in India don’t yet have the utility status that mobile phones enjoy, thus requiring an entire layer of content and services to be added for the users. It won’t work if you just give people cheap bandwidth and a cheap device. It is not that we have not had reasonably priced broadband in India for a while (BSNL’s DSL services now reach a lot of remote places in the country), we just have not had enough India-specific products and services for people to use in those places so far.
Anyway, let us work some more numbers to see how much money RIL can make out of the current plans.
To establish a base (reasonably flawed) benchmark, we will take Airtel’s assertion that their 3GB plan is one of the most popular ones and assume that a user on the new service will use 3 GB per month. For the sake of convenience, we will spread the cost of the tablet over the course of a year. This will mean that for the first year the user will bring in revenues of Rs 291 per month and the cost of data used on the service.
This gives us an ARPU of Rs. 321 for the first year.
Total first year revenue per user = Rs. 3852
Second year revenue per user = Rs. 360
Total revenue for 2-years per user = Rs. 4212
Even on a subscriber base of 100000 users in the first year, this will only bring in revenues under Rs 50 crore in the first two years. Considering that the spectrum alone cost Infotel well over Rs 12,000 crores, the outlook is horrible for the company. At a million users, the company has a shot at a marginally more realistic runway (if you can call two decades that), but I am not sure if those users are there for the taking and we are not yet taking into account the Rs 18,000 crore – Rs 20,000 crore that the company plans to invest in setting up the services.
As a thought exercise, let us bump up baseline usage a bit to 30GB per month. This will bring up the data costs in a month to Rs. 300. Add the device cost of Rs. 219 per month to it and you get an ARPU of Rs. 519 for the first year.
Total first year revenue per user = Rs. 6228.
Second year revenue per user = Rs. 3600
Total revenue for 2-years per user = Rs. 9828
This bumps up total revenue estimates for two years to around Rs 98 crores. On a one million user base it will recover the spectrum costs in a bit over ten-years.
The main takeaway from these numbers is that RIL really needs to get users to use a lot of data or/and get a lot of users from the word go. What stands in their way is that in reaching out to the people who are not already online, they will be dealing with the ceiling of the Rs 200 ARPU on voice segment. They won’t easily move up at all on this curve. Another data point that will be a cause for concern is the ARPU on wire line broadband. These have always been around Rs 600 – Rs 700 level, from information that is not easily available. That more or less keeps the ceiling a bit too low for RIL to succeed with this offering.
There is, though, an alternative way to go about this, which is to not directly charge for the device. Instead, you get a Rs 350 flat rate per month, on a 2-year commitment from the user. It will come bundled with 3GB of usage per month. You can buy more GBs like talktime for phones.
First year ARPU at 3GB data per month = 350 PM
Total first year revenue per user = Rs 4200
Total second year revenue per user = Rs 4200
Total revenue for 2-years per user = 8400
This should get them a much healthier Rs 84 crore in revenue with a better certainty that the users will continue with you.
If you bump up the data usage, the picture gets a lot more healthier.
First year ARPU at 30 GB data per month = 350 + (27*10) = Rs. 620 PM
Total first year revenue per user = Rs. 7440
Total second year revenue per user = Rs. 7440
Total revenue for 2-years per user =Rs. 14,880
In theory, this is the sweetest deal RIL can hope for. Around Rs 150 crore in two years is not a bad number to have in revenue, but it also requires users to consume data at a rate which is comparable to a more than moderate wire line data user at the moment. I also think that Rs. 500 is a major point of resistance for the average household to spend on anything beyond bare necessities on monthly basis.
There are a lot of factors that can change the equation for RIL, but knowing what we know now, it is very unlikely that the offering is a sustainable one in the long term for the company.
Read MoreThe Great Promotional Mailer Overdrive
Contrary to what seems to be popular sentiment on the internet, I actually like advertising as long as it is not overly intrusive, has some form of relevance to things/services I am interested in and is not spammy. As a result I don’t at times unsubscribe from promotional mailers sent to me by various companies and in certain cases I do actually check out most of the offers. Of the many that I subject myself to, I like the efforts of both ICICI Bank and Ebay. So I figured it will be a good idea to track one of these companies for a month to check for volume for and quality. Below is the list of mailers ICICI Bank has sent me through November:
ICICI Bank:
Nov 30: Refer iMobile to 5 friends and get Rs. 500 Nov 30: Just activate iMobile and get a Free Voucher worth Rs. 500 Nov 28: Get 5x reward points for online recharge of Mobile, DTH and Data Card Nov 27: Get 5x reward points for online recharge of Mobile, DTH and Data Card Nov 25: Special Privilege: Rate of Interest now reduced on your ICICI Bank Credit Card Nov 23: Refer iMobile to 5 friends and get Rs. 500 Nov 20: Get a Gift Voucher worth Rs. 500 just for activating iMobile Nov 20: ICICI Bank presents Home Loans at fixed rate of interest for the first 2 years Nov 18: Discovering Malaysia is now 5X more rewarding Nov 16: Prepaid Mobile Recharge at your fingertips! Nov 16: Count on us to cover your medical expenses, with the Family Protect Premier Insurance! Nov 16: Money Manager Nov 14: Rs 100 off on tickets Nov 14: Presenting Culinary Treat - Minimum 15% savings on dining Nov 12: Personal loans Nov 9: Cashback travel vouchers Nov 8: Redeem payback points Nov 6: Activate imobile Nov 2: Get Rs 500 Cashback Travel Voucher by spending on your ICICI Bank Debit Card Nov 2: Get 3 exciting gifts absolutely FREE just for activating Internet Banking!
- 20 mailers in a month are a few too many for my liking.
- They don’t seem to do much of a finely tuned campaign. I am already using imobile, same is the case with internet banking.
- Quite a few repeats.
- The tracking is sub-par
- Copy quality is average
- 23 mailers in all of November, 2011
- A lot of effort is put into the creatives, they are really well done. Copy quality is also good.
- They are pushing deals/offers really hard. Not surprising, since they seem to be flavour of the current boom (or bust).
- The tracking is meticulous on the campaigns. Opens and clicks are tracked, I am assuming so would be
transactionsconversions. - Other than offers/deals, most of the mailers are content initiatives. They categorize existing items on the site.
FirstPost.com: Will It Work?
It won’t.
Before I get into the economics of it, let me first tackle the concept. Going by Raghav Bahal’s introduction:
Today, news is a hyper-active, multi-point phenomenon, with you at its epicentre. You read, write, bounce, redirect, navigate, pick, choose, reject, reinforce, tweet, facebook and firstpost it … Yes, you Firstpost it.
I am not sure what exactly does that mean beyond previous attempts at a forced transformation to a verb like “blishing it”. Ironically, in all the activities mentioned in the quote, “firstpost it” is the odd man out. You don’t need FirstPost.com to do any other activities mentioned in that sentence. The introductory post aside, the concept seems to be built along the lines of early days of The Huffington Post (the current avtaar is a totally different story from what it was like when it was launched).
Huffpo was reportedly set to make a profit in 2009, ‘nearing‘ its first annual profit (no numbers disclosed) by the end of 2010 and was not “rushing to be bought” only months before they were acquired by AOL in March, 2011. The company took $37 million in venture funding pre-AOL and had done $30 million in revenue in 2010. There is no available estimate of how much it costs to keep the operation going, but it is reasonable to expect that the number is non-trivial. It is an interesting model, but not a new one. You can always get traffic on the internet by throwing money at it, but it does not scale (well, other than the exception of Demand Media and they work on a different model altogether).
Let us tackle the numbers. Huffpo does an estimated 23 million uniques (figures from Compete and a guesstimated correction based on an earlier gap between internal and estimated numbers) in a month. On a comparative note, Facebook had an estimated 21 million uniques from India in 2010. As you can see, even with money thrown at it, similar scale will evade a product like FirstPost.com in India. The publication has nine employees on its editorial rolls. Other functions, I would assume, are handled by shared resources with the parent division.
My guesstimate puts the payroll for full-time employees at around Rs 1 crore annually. Distribution costs should be a tiny blip on the general Network18 infrastructure. They are running an out-of-home campaign supporting the product, but I don’t have an estimation on the costs and it could also be a barter or a non-cash deal like how the network sites were running an interstitial yesterday. If you factor in a variety of miscellaneous costs, I would think they would have to do at least Rs 1.5 crore in its first year of operations to reach break even.
Assuming the very unlikely situation of the product being able to sustain about 10 million page views in a month, at an average of four ad impressions per page view and Rs. 200 CPM, we still don’t cross Rs 1 crore in revenue. It is possible to run campaigns based on spots and innovations, but the revenues would be lower too in line with that. Needless to say, even at reasonable scale, they will struggle to make ends meet.
The problem is that scale is impossible in the domain once you stop massive SEM spends and leveraging network traffic. Mind you, I like the product. I have been looking forward to a content product from India that is produced and written well and tackles the topics that I am likely to follow. But, at the same time, I am also aware of the fact that an audience that comprises people like me is very much a niche. If we truly value products like these, we should also be willing to bear at least a part of the costs involved in putting it online.
FirstPost.com by no means is not the first attempt at such a product. The first version of Tehelka.com and the long-dead The Newspaper Today had attempted the same – trying to bring out a web-only well-produced publication. Even though FirstPost.com seems to be spending much less than what it had cost either Tehelka.com or TNT to get going, I am afraid the market dynamics have not changed much since then and it will suffer a fate that is not considerably different from them and unfortunately for FirstPost.com a Huffpo-esque escape into the arms of an AOL is not an option to them.
Disclosure: I have been previously employed by Network18, Tehelka and The India Today Group Online at different times in my career.
Read MoreQuick Note On IPL Live Streaming Revenues
Going by YouTube’s own numbers (as of 9:30 AM, May 12, 2011), the channel seems to have recieved about 5.7 million views so far this month, which is also the month of the IPL. Going with a CPM of Rs. 200 for the pre-rolls, that would have generated about Rs. 11 lakh in revenue so far. The channel has four banner spots when the live match is on. Even if you go with the really unrealistic assumption of Rs. 200 CPM for each of those slots the total revenue would add up to less than Rs. 60 lakh so far. Even if we were to blindly double the numbers (2x everything), the revenue is not going be more than Rs. 2 crore. I’m being extremely cavalier with the numbers here and erring massively on the side of overestimation.
Now, why is this important? Simple reason is that the rights holders need to monetize at the rate of about Rs. 65 crore per year to even break even on what they paid for the rights. There is also streaming of the clips on Indiatimes itself, which should bring in additional revenue and other aspects like mobile should chip in chunks on their own, but I don’t see it all adding up to Rs. 65 crore this year. Granted, the numbers maybe way off from what is actually the case (the slots could also be spot than CPM, making the estimates entirely invalid) and the consortium that got the rights were rushed into selling it at the last moment and they could do a better job next year, but the bottom line is that monetizing this right is going to be tough. Really tough, in fact.
Read MoreWhat Ails Broadband In India
Every year we are presented with a rosy picture of how the internet will explode in India in terms of growth and usage. Even though this scenario has remained unchanged from the times of bubble 1.0, active users in India has never gone over 100 million by even the most liberal of estimates. In the years since 2005 this story changed to hang all its hopes on 3G as the one-stop-solution to all the penetration woes. While the 3G auctions may have made the government's books look a lot nicer, it has done little to further the cause of truly empowering India on the digital front. Meanwhile, with 3G pricing showing little recognition of market realities, the new saviour in town has switched to LTE. I won't hold my breath for that one to work either.
So what really ails broadband in India? I have looked previously at the product aspect of the issue, so I won't go over it again. In this post I will cover policy and pricing instead.
Policy: For a nation that can benefit hugely from a well-connected population, we have policy and governance that does little to foster it. The astronomical rates at which 3G auctions have gone will ensure that telcos have little inclination or incentive to price their 3G offerings at a reasonable rate. Even though there are plans that are as cheap as Rs 99 per month, they have such low usage caps that with any real-world usage, users will wind up paying many times more that amount.
We need to remember that the current environment is one where the bulk of customers are generating less than Rs 300 in ARPU. These are the people who make up the majority of the market and expecting them to pay even Rs 100 on a whim on data is being ridiculous. So you can imagine what a non-starter the severely capped/priced plans are going to be. For the larger market to use digital services liberally, the pricing needs to be much more realistic. Yes, the regular users are using the internet more these days, but we need more non-regular users to be online.
Internet in India has the potential to be transformational beyond belief. We have made positive strides in e-governance and digitizing parts of the government machinery, but the government needs to do more to provide the platform on which a vast majority of our can access information, education and services. The current levels at which the services are priced, they don't ensure either unfettered use or they wind up being unaffordable.
Pricing: There is considerable pressure on margins for telcos from voice. Since voice APRU is not exactly shooting through the roof and VAS having now gone past its glory days the squeeze is truly on in data ARPU. Even in 2009, the ARPU for data on Airtel was $13-$14, which even by today's standards is considerably higher than what most telcos earn on voice. In 2009, you could easily find more than a handful of plans priced under Rs 1000 per month.
By Airtel's own admission its current popular plans are Rs 1299 and Rs 699 per month. By 2009 the company had completed work to make its network 100% ADSL2, which meant that any further increase in infrastructure cost would have been because of the upgrading their network to VDSL2 in select areas. The other cost component, backhaul, does not seem to be a major problem since they were easily allowing 100GB caps on lower end connections earlier, which they are now scaling down to 20GB – 50GB, depending on the plan you are on. Moreover, the network has inbuilt capacity to support IPTV, which requires about 8Mbit of sustained connectivity. So, the story of network capacity being a bottleneck does not hold too much of water.
Looking at the figures, it is easy to understand why the company is going hammer and tongs and after getting more margins out of users. It is easier to get a data user to shell out an extra Rs 500 per month than to get a voice user to do the same. This, though, is an awful thing since it is now leading to a situation where due a lack of transparency and bad pricing usage will go down in the longer term as users are forced to shell out more for less.
Looking at Wimax, which is the only realistic option that can get the internet to areas beyond the big cities, the situation is no better. You will rarely find plans here that cost less than Rs 1000 per month. In economic classes where the spends between all family members combined on voice is less than Rs 1000, how can you expect them to shell out Rs 1000 for data alone, especially when there is a lack of compelling applications to even get them started in the first place?
Conclusion: The big Indian digital story requires us to get most of the population hooked up to the internet. Right now, at even moderate usage levels, that will cost at least Rs 700 per family. This is unrealistic and the root cause of why the proclamations of 'the year of internet' in India has never come true. At this point in time neither the telcos are willing to help the situation alter its course by introducing pricing conclusive to growth and usage nor is the government doing anything to ensure that they have every incentive to do something like that.
Read More