Russian Mobile Content News
Newsletter, April 17 - May 31, 2007

MegaFon-Moscow got TV broadcasting licence
The Federal Communication Supervision Agency (RosSvyazNadzor) has provided a licence to a Moscow subsidiary of the MegaFon cellular carrier (MegaFon-Moscow) for TV broadcasting. "Mobile TV is an effective and a very perspective service. Its potential will be revealed when Russia implements 3G networks. MegaFon was the first mobile operator introduced that technology to Russian users. Now with a licence received we are intending to bring mobile TV broadcasting on a new quality level," said Vasily Kuzichev, MegaFon-Moscow's business director. Currently MegaFon subscribers in Moscow can watch 11 TV channels on their handsets:
1. Vesti24 (Russian news channel)
2. SPAS
3. TNT (Russian entertainment channel)
4. Travel TV
5. Rambler TeleNetwork (Russian business channel)
6. RBC TV (Russian business channel)
7. World Made Channel
8. Fashion TV
9. World Music Channel
10. Muz-TV (Russian music channel)
11. Style.

MTS published Top-10 mobile content partners in 1Q07
The rating is based on MTS revenues from mobile value added services (VAS) including mobile content:
1. Inform-Mobil
2. INFON (Mobikon, Rustar Holding)
3. Neva-Line
4. Avant Mobile
5. Shamrock Games (NextMedia Holding)
6. i-Free
7. Solvo International
8. 1st City Reffereal Service
9. Teleport/Nikita Mobile
10. Forte IT.

Zvon Studio will distribute GameMaker's games in Russia
On April 24 a Thai company GameMaker announced a distribution agreement with a Russian company Zvon Studio. According to the deal Zvon Studio will resell GameMaker's games based on Adobe Flashlite 2.1. The first four games (Casino - Blackjack, Casino - Video Poker, Casino - Hold'Em Poker, Casino - Ride the Tide) are ready to be sold in the Russian Market.

A1 is changing strategy
A Moscow based A1: First Alternative Content Provider is changing directions of its strategic development. The company will focus on mobile marketing, mobile community services, interactive TV services and WAP projects. "A place of mobile marketing is defined. Large advertisement agencies are paying more and more attention to mobile promo. Soon a similar situation will surround mobile communities. Marketing trends say about a growing demand in direct communications with consumers," said Kirill Safonov, A1 CEO. A few months ago some A1 key managers left the company. Seems A1 could not compete in still the most revenue driven segments like phone customization and content aggregation. And it's turning to the most promising niches.

INFON enriched its product portfolio with Flash Lite
INFON, a St. Petersburg based content provider and one of the leaders in the Russian VAS market, is starting to distribute Flash Lite based content in Russia and the CIS countries. Currently the company offers Flash card games and Flash screen savers with clock.

Tele2 launched a new WAP portal in Russia
A Swedish cellular operator Tele2 released a new version of its WAP portal designed in a "mafia" style traditional for Tele2 advertisement campaign in Russia. The portal was developed by Tele2 and i-Free. Users of WAP.TELE2.RU could become citizens of the Mafia City and participate in a Mafia game. The portal allows users to develop blogs and photo galleries, comment other users' blogs, dating, communicate in chats and forums. The portal goal is to unite users in interactive net community.

MegaFon published Top-20 content partners in 1Q07
A third largest Russian cellular operator MegaFon has published a list of its Top-20 mobile content partners for 1Q07:
1. INFON
2. Neva-Line
3. i-Free
4. Telemarket/Nikita Mobile
5. Shamrock Games (NextMedia Holding)
6. Inkor
7. Forte-IT
8. Avant-Mobile
9. Solvo International
10. SMS Media Solutions/SoyuzTelecom
11. Mobilnye Otvety
12. PlayPhone
13. WAP Tak (Irikom)
13. Svyaznoi Zagruzka
14. A1: First Alternative Content Provider
15. Plastic Media
16. Delphi
17. Inform-Mobil
18. RealMedia
20. SPN Gigital Media.

Fabrika Mobilnogo Kontenta offers Kitmaker games
A Moscow based mobile content developer and publisher Fabrika Mobilnogo Kontenta has signed a distribution agreement with a Spanish mobile games and applications developer Kitmaker.

VimpelCom launched mobile instant messaging
The second largest Russian mobile carrier VimpelCom (Beeline brand) has launched an instant message service Svoi (own) for Beeline subscribers. Followap Inc. has provided its own software solution for the service. MegaFon also launched an IM service, Push-to-Talk. The service is available to MegaFon subscribers only. Interesting that VimpelCom has had a similar PTT service but it's offered to VimpelCom corporate clients only.

Mobile city guide launched in St. Petersburg
A news agency Rosbalt and a content provider TeleClick have launched a joint project Mobile Guide. The service is focusing on St. Petersburg visitors and tourists. It offers voice excursions over the city based on geographical position of a user. Currently the service is available to MegaFon subscribers only, but the project developers planning to add other regional operators soon. The IVR service navigation is by mobile phone keyboard and by voice menu. The Mobile Guide is available both in Russian and English 24 hours a day. The service costs 30 rubles ($1.2) per minute. TeleClick, a St. Petersburg based company, operates in Russia and the CIS countries specializing in interactive service for regional media and corporate clients.

Inform-Mobil entered Armenia
Inform-Mobil, a mobile content and service provider headquartered in Moscow, has entered the Armenian VAS market. The company has signed a contract with ArmenTel cellular carrier. Armenia is the ninth country for Inform-Mobil. The company has entered Belarus in June 2003, Ukraine in August 2003, Kyrgyzstan in March 2005, Uzbekistan in April 2005, Tajikistan in December 2005 and Georgia in April 2006. A Kazakhstan subsidiary of Inform-Mobil was launched in November 2006.

Jamango mobile community in India, Singapore and Bulgaria
i-Free is poised to go global with its Jamango mobile community service as part of its international business development strategy. The first Russian mobile community service to venture outside the former USSR, Jamango has been launched in India, Singapore and Bulgaria simultaneously. Started in Russia in 2004, Jamango has recruited over 3 million users in Russia, Ukraine and Kazakhstan. Jamango offers access to mobile services and entertainment such as blogs, chats, forums, interest groups, personal WAP pages, photo galleries, interactive games, etc. Jamango comes in several technologically different incarnations (SMS, WAP, Web and Java), users can communicate freely irrespective of the access point they choose.

MTS tends to reduce a number of content partners
MTS changes settlements with mobile content suppliers. Content providers (CP) could lose 10% of revenues. MTS is the largest Russian mobile carrier (76.7 mln users in Russia and the CIS; 2006 revenue - $6.38 bln, net profit - $1.25 bln). Russian content providers received a letter signed by Pavel Roitberg (director, products and services development department, MTS) stating that from June 1 2007 MTS is changing settlements on short service number revenue split. Currently if a CP sells infotainment services to MTS users on 287,000-717,000 rubles ($11,000-27,577) a month, it receives 56% of the revenues. In a new scheme a CP with 300,000- 1.5 mln rub ($11,538-57,692) monthly revenue will get 51%, with 3-6 mln rub ($115,385-230,769) - 55%. "Revenues of CPs have grown, and we suppose that target barriers on revenue sharing should be also raised," said Roitberg. VimpelCom gives 70% of revenues to CPs. According to Elena Kokhanovskaya, MTS PR director, CP settlements were started to be optimized in 2006 when CPs with below $10,000 monthly revenues were pushed to work over aggregators. A new revenue split offering will help to build a class of aggregators to deal with small content providers.

Content providers have given an ultimatum to MTS
Ten leading Russian content providers have warned Leonid Melamed, MTS president, they could stop dealing with the operator if the operator would insist on a new scheme of revenue sharing. According to a new MTS scheme, CPs with 15-22 mln rub ($576,923-846,154) monthly revenues would receive 60% instead of the current 65-68%. Melamed has replied that MTS, probably, would not change the scheme of calculations.

INFON & PeterStar offer SMS payment for Wi-Fi & dial-up
INFON has signed an agreement with a large St. Petersburg telco PeterStar to offer SMS payment service for PeterStar's Wi-Fi & dial-up Internet access. PeterStar is the strongest Wi-Fi provider in the city (about 20 Wi-Fi zones in hotels, business centers, cafes and restaurants). The first SMS payment service for Internet access in Russia was launched by PeterStar and i-Free in March 2005.

i-Free promotes O!Karto brand potato chips
i-Free handles an interactive marketing stunt titled O!Karto.A Summer of Serious Fun, aimed to promote the market launch of O!Karto potato chips produced by Orion International Euro. To participate, consumers have to buy a package of O!Karto chips and SMS the code found on the package to 4131. With the reply, the sender will receive proof of code registration and a WAP link to download free brand content of choice: a color picture, music or video. 10,000 prizes are at stake, including Sony PSP playstations, sunglasses with .mp3 player, and Dictaphone key chains. The 30 top winners are in for the super prize: a week long trip to Malta for two. To qualify for the super prize, the participant needs to SMS at least three codes to 4131, then register at www.okarto.ru and post an exiting episode from their life, illustrated by photograph.

INFON suffered from mobile virus
Kaspersky Lab (a Russian leading anti-virus company) has found a new smartphone virus. The virus was spending money of unaware users on INFON services. Trojan-SMS.SymbOS.Viver program run on Symbian OS smartphones was sending premium rate SMS on INFON's service number 1055 (177 rubles, almost $7). Offered as a utility program at one Web site the virus has been downloaded over 200 times within one day. "According to our data, the virus has sent up to 400 SMS within three days," commented Kirill Shramko, INFON's CEO. "INFON is ready to reimburse all the money to suffered users. Besides, we will continue our investigation on the case and all the information will be provided to law machinery."

Mamba.ru online dating service profitability is 47%
Mamba.ru is an online dating service founded in 2002. A Moscow based investment company Finam owns 100% of Mamba.ru. According to Finam's financial report Mamba.ru has earned $7.3 mln in 2006, net profit - $3.4 mln, EBIDTA - 47%. Mamba.ru has 7,000 partner sites including Mail.ru, Rambler, km.ru. Its database consists of 9 mln user profiles, 4 mln active users. Key revenues come from SMS services allowing users to lift up their profiles. Mamba.ru receives 3 mln SMS a month, gaining 60% of the revenues (40% goes to cellular operators).

Sberbank launched mobile banking
Sberbank is the largest Russian bank, the state has a control stake. In May 2007 Sberbank has launched its own mobile banking service allowing VISA and MasterCard holderd to make financial transactions between card by mobile phones (the cards must be issues by Sberbank). Russian cellular carriers are interested in promoting mobile banking. Though they acknowledge that below 2% of mobile subscribers are currently using that service.

HeroCraft, i-Free, Samsung Fun Club run product placement
HeroCraft (a game developer), i-Free (a content provider) and Samsung Fun Club run a product placement campaign in a mobile Java game. If a user of a special version of "Rise of Antares: Indigo Mission" game encounters a special artefact, her/his phone sends an SMS, and the user can win a gift from Samsung (.mp3 player produced by Samsung).

Music publishers refused MegaFon to use their music in RBT
MegaFon has 31.44 mln mobile subscribers, revenue in 2006 - $3.7 bln, net profit - $812.8 mln, owned by TeliaSonera (35.6%), TelecomInvest (31.3%), Alfa Group (25.1%) and IPOC (8%). According to Denis Nochevnov, MegaFon's head of new technologies and projects, several large music publishers, including Universal and Sony BMG, has stopped selling their content to the carrier. Rights owners are not happy with a payment scheme MegaFon persuades selling a Ring Back Tone service (Pri:)Call brand). The service users pay to MegaFon 30 rubles ($1.15) for every downloaded music piece. MegaFon shares that revenue with rights owners. Every next month MegaFon bills the users another 30 rubles ($1.15) as a monthly service charge, but does not share that money with rights owners. MTS, another member of the "Big Three" Russian cellular operators, has a different revenue split for its RBT service Gudok. MTS charges 25.5-64.5 rubles ($0.98-2.48) monthly for RBT but shares the money with rights owners every month. Thus MTS has an access to exclusive catalogues of majors. VimpelCom is planning to launch RBT, but, according to company's PR manager Ekaterina Osadchaya, a payment scheme is not worked out. Neither MTS, MegaFon nor rights owners disclose a RBT revenue split proportion. Some analysts say rights owners receive 30-40%. Alexander Blinov, EMI/Gala Records CEO, said when his company found out about MegaFon's position to music owner they had not signed a contract with the operator at all. "We are ready to work with MegaFon, but then the operator should pay us a share of the monthly service charges it bills anyway." According to Blinov, some large Russian labels like Pervoe Muzykalnoe Izdatelstvo and Real Records has also stopped selling music content to MegaFon. "We have temporally hold up selling melodies for RBT to all content providers," specified Andrey Luzhnikov, Real Records' CEO. The company is going to reconsider all the contracts.

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IV Mobile VAS Conference, November 15-16, St. Petersburg
Event focus: converging media. Event details: www.vasforum.ru
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MobileMonday Monte-Carlo, June 4
You are going to MEM and Global Messaging'2007 in Monaco?
Don't miss a special MobileMonday Monte-Carlo networking event.
Date: Monday, the 4th of June 2007.
Time: 18.30-20.30.
Place: Restaurant-Bar "Tender to", 1 Quai Albert 1er, Monte-Carlo.
Admission: FREE, but online registration is required.
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