With mobile operators looking for newer ways to manage traffic and increase revenues, the mobile telephony space opens up a lot of opportunities for companies like Cellnext, which acts as a content aggregator, application provider and delivery platform in this space. Shipra arora reports

While the temptations are many, Atanu Mandal says Cellnext will not deviate from its current focus of catering to the wireless communications industry and the wireless IT needs of the enterprise market

Cellnext might be the youngest and smallest arm of the $1 billion Escorts Group, but it is definitely one of the most forward looking. Riding on the surging mobile telephony wave, the company might well turn out to be the opportunity window for the industrial group in the emerging technologies market—in just one-and-half years of operation, the company has already forged alliances with almost all the mobile service providers in the country, barring MTNL and BSNL. A Rs 4 crore company now, Cellnext expects to double its turnover within the next year. The company has technology development infrastructure in Bangalore and Delhi, and sales and support offices in Britain and Europe.

In the Indian IT industry which is ruled by big fish, the strength of Cellnext lies in its exclusive focus on mobile technologies. According to Nasscom, such niche positioning is the way to go for smaller players. While the temptations are many, Cellnext CEO Atanu Mandal maintains that the company will not deviate from its current focus of catering to the wireless communications industry and the wireless IT needs of the enterprise market. “Mobile telephony is an upcoming and fast growing market, and we will be leveraging our strength in this segment to carve a place for Cellnext in the IT industry,” says Mandal. The company’s competence is spread across GSM data technologies like SMS, WAP, SS7, GPRS, 3G and IVR.

However, Mandal says that being a niche player alone cannot help, and a company needs to constantly move up the value chain. Cellnext is in the process of doing just that. Starting out as an Application Service Provider (ASP), the company has recently taken on the product mantle.

Operations
Cellnext’s operations are spread across the two areas of application and content for enterprise and wireless telecom operators. The applications segment comprises ASP, turnkey or products and the project business. On the other hand, the content business is driven on the ASP model. It has adopted a clear-cut two-pronged strategy whereby in the domestic market ASP is the growth driver, while applications (products and projects) are the driving factor as far as the international market is concerned.

With the ASP business (both content and applications) doubling every quarter, the company has already achieved the inflection point from where growth is now likely to take off in a big way. “If our ASP business continues to grow at the current rate, it will become a stable model for us over the next few years,” says Mandal. In comparison, the products business is the high-revenue, high-margin segment for Cellnext.

The ASP business of the company is supported by its data centre hosted in Delhi. The server farm comprises 20 servers and 5 Mbps of Internet bandwidth for connecting to mobile operators with some point-to-point link. The bandwidth is further scalable as per requirements.

Content
Content services have emerged as the driving force behind Cellnext’s ASP business. Says Mandal, “This is because it enables the mobile community to exploit the benefits of wireless Internet without large up-front expenditure, complex installations or significant changes in corporate networks.” Presently, content accounts for more than one-third of the company’s total revenues. Mandal says that Cellnext basically acts as a content aggregator, application provider and delivery platform, and helps in service creation as it mediates between content providers and service providers. While service providers are the mobile operators, content providers comprise enterprises, mobile operators, and mass media operators like Star TV.

Cellnext has already tied up with almost all mobile operators in the country as a service provider for delivering content services. For sourcing content, the company has forged alliances with various content partners. It is the content delivery partner for Star TV, Railway Information Systems, Timex, Amway, ICICI Prudential, Nokia and Escorts Heart. The SMS service implemented for Star TV covers a large number of shows on air, including the new avatar of Kaun Banega Crorepati.

From the mobile operators’ perspective, this is a means of generating high traffic. “These are challenging times for mobile operators as access traffic cannot be pushed beyond a point and they are now looking at new ways for driving traffic and revenues. They are increasingly looking at providing content services and not just access,” explains Mandal.

However, in India, content revenues today stand at hardly 1-2 percent as compared to Japan, where almost 40-50 percent of total revenues comes from content revenues. With content services gaining greater importance in the telcos’ scheme of things, there is going to be a surge in this market, thereby opening up opportunities for companies like Cellnext. The success factor is fairly discernible as the company is already generating five million hits per month.

Cellnext functions as an ASP for enterprises to meet their mobile messaging needs. It provides mobile messaging services in both its forms: (a) Notification messaging, and (b) Responsive messaging. The company currently powers content across the following technologies: thin client—server technology like Interactive Voice Response (IVR), SMS, WAP, GPRS, multimedia messaging service (MMS) and 3G, and thick client-server technology like J2ME. According to Mandal, though the company is ready and proficient across all these technologies, considering the dynamics of the Indian market, SMS forms the bulk of its content services with almost 85 percent of its content services revenues coming from it. This is followed by IVR and WAP.

Going forward, while SMS will remain the dominant medium, the company will be introducing MMS, GPRS and J2ME traffic to expand its content business. Cellnext will be setting up its MMS centre by December this year, and is hopeful of launching its service in the next 2-3 months as most of the service providers’ networks (MMS rides on GPRS network) are expected to be ready by then for MMS. (Till now, only BPL Mobile has launched its MMS service in early October 2002). MMS, believes Mandal, will gross good revenues as it will be a major option for advertisers, greeting card companies and anyone with multimedia content to deliver. The company is in talks with various operators as well as content providers for this service.

Hand-in-hand with MMS will be GPRS traffic, and the company will be building its applications and delivery capabilities on this front as well. Then there’s J2ME, which will give Cellnext an entry into the WLL market. J2ME, a new handset technology, puts intelligence into the handset itself (like menus and certain services). Cellnext has done its first project for one of the WLL operators; the launch of its operations will be the launch of Cellnext’s J2ME services as well.

Since it is a handset technology, the company is also working closely with handset providers like Nokia and some CDMA players. According to Mandal, some popular J2ME applications can be gaming, multimedia and corporate e-mail. Apart from ASP opportunities, the two technologies, MMS and J2ME, are also likely to drive growth for the company on the project side as well.

Turnkey/products business
In May 2002, Cellnext made its foray into the products business with the launch of its ME Series, cServ Series and pBiz Series of product lines. The company is unfazed by India’s dismal track record on the packaged product front. Mandal is quite optimistic about Cellnext’s product offerings on account of the different business requirements they are targeting. “Time- to-market is very important in the mobile operator segment, considering the fast moving dynamics of their business. A readymade package business has good potential in this segment,” says Mandal.

Further, the company will be leveraging its ASP business in the domestic market as a good showcase of its capabilities. At present, turnkey projects amount for almost two-thirds of Cellnext’s applications business.

The high point of Cellnext’s product offerings is the use of the SS7 application platform. SS7 targets the operator’s content which is there on the systems, billing, subscribers and area-related content. This content can be appropriately exploited to deliver more services.

• Cellnext messaging engine (ME Series): Cellnext messaging engine captures data from the existing SS7 signalling network and delivers average revenue per user (ARPU) enhancing value-added services by using the operator’s existing set-up like short messaging services centre (SMSC) and the Web. The solution captures both Notification and Responsive messaging needs.
• Cellnext content aggregation & delivery platform (cServ Series): Targeted at mobile operators, this middleware platform integrates numerous ARPU enhancing applications with the operator’s SMSC and IVR. This series combines
  gateway capabilities with content aggregation, thus offering an integrated platform to operators.
• Enterprise application Integration Platform (pBiz Series): This series is a range of ‘middleware frameworks’ enabling access to enterprise applications and content over shared and personal devices. The pBiz series of products helps enterprises extract maximum benefits from existing enterprise applications by spreading their access to mobile users, and also offers a common interface to multiple disintegrated enterprise applications.

Services/Projects
As part of its service offerings, Cellnext places wireless experts at client premises for specific assignments. The company offers its services in the areas of consultancy and professional services, turnkey projects, and dedicated software labs. Having entered the projects domain last year, the company is currently working on various projects requiring Wireless IT skills with expertise in different aspects of GSM and pervasive computing technologies.

ASP
The ASP portfolio in the applications segment includes off-the-shelf applications and custom integration. All the applications are developed and hosted in the company’s data centre.

While the fast-changing technology scenario is not a worry for Cellnext and its 90-person software development centre, the hitch for the company lies in the readiness of operators and handset providers in the Indian market. “There are a lot of players involved in the value chain who also need to be prepared for us to be able to launch more innovative technology solutions,” explains Mandal. Nevertheless, considering the fast pace at which the Indian telecom industry—especially mobile—is moving, the bottleneck is likely to be non-existent soon.