What is growing, surviving and robust is the enterprise messaging business, says CEO, ACL Mobile Sanjay Krishna Goyal

Set up 15 years ago to focus on thriving VAS business that time and an emerging high potential enterprise messaging business, ACL Mobile has come a long way. Like its competitors who could not sustain the VAS bubble of 2009, It has gradually consolidated to become an enterprise messaging firm. Today, ACL Mobile claims to serve about 15 – 20 % of the 10 billion SMSs and messages that are sent every month from banks, e-commerce firms, government corporations, schools, hospitals to consumers mobile phone in India.

In an interview with Mohd Ujaley, Sanjay Krishna Goyal, Founder & CEO, ACL Mobile says, “The VAS business as like others did not prosper so much, whereas the enterprise messaging business has continued to grow and in the last 5 years it has grown by 300%. We are growing at about 35% per year and the industry is growing at about 25–30%. Many additional things came in the middle but now what is growing, surviving and robust is the messaging business.”

How ACL Mobile is currently placed in the market?

ACL Mobile is a 15 years old company. In all these 15 years, we have evolved ourselves as a messaging focused company. We have consolidated ourselves as a messaging business. Of course, many additional things came in the middle but now what is growing, surviving and robust is the messaging business.

ACL Mobile serves about 15 – 20 % of the total market of all SMSs and messages that go from an enterprise or a business on to a consumer mobile phone. ACL has about 15% of the market share in India. We pioneered the space in 2003 and were the first company in India to send the first message to a consumer mobile phone.

Today, there are about 10 billion messages that are sent every month, from banks, online businesses, retail, e-commerce; you name it, including schools hospitals etc. There is no industry today or no business in India which is a consumer facing business that does not use our messaging services. 80% of the total messages that are sent are utility messages which includes balance information, sending OTP, tracking child or knowing when to take medicines and almost 10- 20% is advertising and promotional messages.

There was a quiet period for most of the companies working in your domain. Was there a specific reason behind that silence?

The VAS industry was predominantly coming with services like ring back tone and were basically operator services being offered to consumers, which could be news alert or ring back tone and other content driven services, so it was content and applications for consumers. That industry went through a very big hype till about 2009 and then of course some of the reality started hitting in, on-mobile went public with about 3000 to 4000 crore, and after that they fell to 300 crore.

Although it was a relevant and a meaningful industry and added a lot of value but it did not live up to the hype or expectations that was created out of it. For Example, today’s Flipkart valuation is around 12 billion, after three or 5 years if that changes into 1 billion there would be a problem. Similarly, the VAS industry went through the exact same problem. There were limited growth areas, companies that were there in that space have not grown or gone beyond a certain point.

ACL at that time had two businesses, one was our VAS business and the other was the enterprise messaging business. The VAS business as like others did not prosper so much, whereas the enterprise messaging business has continued to grow and in the last 5 years it has grown by 300%. We are growing at about 35% per year and the industry is growing at about 25 -30%.

The second point that I would like to highlight is the impact that the messaging industry has in the lives of a normal citizens. We service almost 400 million Indian consumers every month. In totality about 700 to 800 million people get some form of this communication from a business in India, that is the kind of width this sector has in India and every segment of the industry whether it is school, hospital, logistics, and you name it, have started using it in a very useful and an effective way.

What is the reason for this growth now?

The reasons for growth are many. First and foremost, it is the simplest, widest and the most universal way to communicate with somebody on a mobile phone. The universal appeal and simplicity of technology across the devices, across networks and all across the world is one of the major reasons.

There are two to three aspects that are specifically driving the growth of this industry. First is banking – which forms the largest sender of these messages. Today, more and more people are coming under the banking umbrella. Therefore as more and more people are opening their bank accounts, doing credit card/debit card transactions or doing online transactions, all of these are facilitating the growth of this sector.

Secondly, it is the growth of mobile internet. When somebody uses internet, he/she will download an application, now if you want to download an application you get an SMS for authentication, if you do a transaction in any e-commerce portal, one transaction ends up giving you three to four SMSs which is a support for completing the transaction. Today, Internet is driving the growth of SMS. If you go to Practo, you get an SMS for dentist’s appointment.

There is a misconception or a perception that internet is killing the growth of SMS, which is actually for Peer to Peer SMSs. People say Whatsapp is killing messaging but in reality it is affecting the peer-peer SMS and not the enterprise messages.

Even, in enterprise messaging, there is growing introduction of miss call or call directly with an IVR features. Are you also venturing into that segment?

Yes, actually it is a part of our offering. When you say messaging, we call it SMS and Voice Message. For example, if you are unable to deliver an OTP through SMS, we send a Voice OTP. We have a full portfolio of voice based services.

These days, we are noticing political parties are also using messages to reach out to the public. How that segment is playing out?

As I said, anybody and everybody, who has a consumer base is using messaging services and political parties are using it heavily. 10 billion a month is not a small figure.

What are the verticals that are fetching more money to the sector?

First would be banking and second would be online. It is difficult to say which one is bigger but I would say both online and banking are contributing to about 20% each.

What about the government’s corporations and political parties, are they also significantly adding to the kitty?

Yes, the third will definitely be government, which is becoming very large. LIC and all government projects are build out. So, according to me, government, political parties, online and banking qualify as the largest. Having said that every industry is using it, from a small club to a school, to a hospital, hotels, retails, it hard for me to imagine who doesn’t use mobile messaging services these days.

Apart from the enterprise messaging, are you planning to foray into any other sector?

We are always looking at innovating in the mobile space and one of the innovations we did was in the payment service, PayChamp, for which we actually got the award from Financial Express. Paychamp today solves a very big problem. If I am an online content provider, how do I charge my customer, not everybody has a mobile wallet which is largely being used for recharges or for paying electricity bills. So one of the gaps in the market is the payment of digital goods and services and the best way to charge for it is through your mobile phone. So PayChamp is integrated with all the telecom operators and any content provider can plug in to our platform and be able to charge its consumers, varying from Rs 1 to Rs 500. So it is very suitable for micro billing, typically for digital content and services.

The change that is coming globally especially in most part of Europe and even middle east is that, in those areas the regulators are not just allowing payments for digital goods and services but also for the physical goods and services. We foresee, the change coming to India in the next 1 to 3 years. Now imaging, you don’t need a wallet, you already have a wallet built in your cell phone. You go there, no authentication required, everything is automated, and you press one button, and payment is done.

Who are your major clients in India?

Our biggest clients are in enterprise messaging. Out of the 50 banks in India, 40 banks are our customers. Almost every private bank is our customer. Our largest customer is HDFC Bank. 100% of their messages goes through ACL Mobile platform. PayChamp is a new initiative, we have about 100 merchants who are trying this out. Quikr is our largest customer. Others include some of the education players, video content players etc.

What opportunity are you looking now beyond enterprise messaging?

As an Angel Investor, I invest in some of the startups. But from ACL point of view, our goal right now is to focus on the payment and the messaging business, which is growing not just in India but also globally.

The global market now for A2P messaging is $40 billion. Even in Europe today, it is growing at about 5-10% per year and we look to tap that market. We already have a global messaging service where we serve customers who are present globally through this platform. Our next step is to create physical presence of the company in these market so that we can acquire local customers. We are going to create sales offices in Middle East, South East Asia and Africa.

Currently, we are growing at about 30 – 35% per year and the revenue is about 150 crore. We are a profitable business. We look to achieve about 175 crore revenue in 2017.