DCB operators' share needs to be less than 30%, Syntonic recommends
Privacy Policy | 11/09/18 13:00
A few weeks ago, Zenvia announced the sale of its direct carrier billing (DCB) area to US-based Syntonic. The buyer's founder and CEO, Gary Greenbaum, is in Brazil this week and talked to Mobile Time about plans for the country. He was thrilled that he could merge his data platform with DCB to generate new business opportunities for within the apps economy. But it warns that carriers need to move quickly and accept a smaller share than they were accustomed to with the value-added services (VAS) of the past.
Gary Greenbaum, founder and CEO of Syntonic Mobile Time - Syntonic's headquarters are in Seattle, but the company is listed on the Sydney Stock Exchange.Because?
Gary Greenbaum - We needed to grow capital and there was an interest in investing more in mobile in Southeast Asia than elsewhere. So we decided to do the IPO in Australia. We raised money and that gave us credibility to handle large carriers. Brazil has been undergoing a severe economic and political crisis in recent years.Why invest in Brazil now?
I have a long-term vision. I recognize that Brazil is the ninth largest economy in the world and is growing. And it is a mobile first economy. Our focus is precisely on developing countries such as those in Southeast Asia and Sub-Saharan Africa. Now we are entering Latin America. What are your plans for Brazil after the acquisition of the carrier billing area of Zenvia?
With direct carrier billing (DCB) we want to help carriers participate in the apps, mobile commerce and mobile advertising ecosystem. The DCB is the means for mobile operators to participate in a market that is now controlled by over-the-top companies (OTTs). The teles can continue to invest only in voice and text and see their revenue will fall. Or they can take part in this wave of growth in the apps economy. They are in a perfect position in the mobile ecosystem to participate in this $ 2 trillion global marketplace: they have a relationship of trust with the end user; store credits; and have a billing interface for charging without friction.
DCB today moves $ 30 billion worldwide. We want the teles to also participate in the mobile advertising market, which makes $ 200 billion a year and is dominated by Google and Facebook. Our platform enables carriers to offer brands and content providers a means for user acquisition and engagement at a good cost-benefit by adopting, for example, sponsored data. Could you give a practical example of this combination of DCB and mobile advertising?
The gaming market, for example, is quite competitive. Game publishers spend a lot of money to advertise their games and engage users. Imagine if the Pokemon Go offer free download of the data franchise and, say, 30 minutes a day for the person to play for free. After that, with the user won, it would be easier to sell in-app items, and in this case could use DCB. But carriers need to move quickly, otherwise they will be replaced by digital wallets. One of the biggest difficulties for the development of DCB in Brazil has always been to convince operators to reduce their share in revenue share.How to solve this?
In SVA a good part of the content had high margin and the operators could get a big slice. In the new world, that is, in this economy of apps, the margins are smaller, but there is much more demand for mobile content. The carrier has the chance to participate in this growth of premium content with smaller margins or not participating. How much should the margin of the operators in DCB be?
It has to be less than 30%, because that's what Apple and Google charge. Your focus then will be the use of DCB for mobile content, not for the purchase of physical goods or O2O services?
Exact. O2O is not our primary focus. Our priority is the apps market, the sale of virtual goods. There are other DCB players in Brazil, such as Bango and Boku.What sets Syntonic apart?
We have a carrier grade solution that meets the needs of large-scale operators. Verizon Wireless and Smart, for example, are our customers. We join monetization and advertising. We intend to reinvent the DCB. You will not hear the word VAS from me. We are talking about the new economy of apps, we will focus on premium content. Will Syntonic cut off old VAS services that use Zenvia's billing platform today?
We will not cut any campaign or business relationship. Let's invest more, because I believe there is another segment that we want to focus on, which is premium. Many large brands of content come to us saying they do not know how to monetize on cell phones. Our task will be to educate brands and operators on how to participate in this market. It's our role. In which markets do you operate with sponsored data?
In South Africa, sub-Saharan Africa and parts of Southeast Asia. Would you like to share some more information with the readers of Mobile Time?
We are excited to be in Brazil. The most important thing is to transform the mobile ecosystem by allowing operators to participate in the economy of apps.
