Detailed Narrative
ONMO+ Launch and Initial Performance
OnMobile successfully launched its ONMO+ service on June 26, 2026, in the last four days of Q1 FY27. The launch demonstrated high product quality, with no activation issues reported and strong user satisfaction. Key metrics include 70 minutes of usage per subscriber, 75% of users playing more than five games, and 45% playing more than ten games. The service's retention (D7 vs D30) is 2.7 times the industry average, indicating strong stickiness. The user demographic is primarily 25-34 years old, with 82% under 35, and users typically access the service on 2-3 devices, with 44% of sessions on desktops and 31% on TV.
Core Business Profitability Focus
The company is prioritizing profitability in its core carrier businesses (mobile entertainment and communication, and mobile gaming) to fund ONMO+ expansion. The mobile entertainment and communication segment aims for 25% profitability, up from 20%. In mobile gaming, the focus is on optimizing marketing spend, with a target EBITDA range of 10-25% for the current year. This strategy involved restructuring and discontinuing partnerships with operators that did not yield sufficient profitability, impacting revenue but improving overall margin efficiency.
Retail Expansion and Market Opportunity
ONMO+ has garnered significant interest from major retail groups in India and Spain, recognizing it as a new product category. The company plans for in-store presence by the Diwali festive season (October) in India and by October/November/December in Spain. This retail strategy is crucial for mass adoption, as it allows for direct customer engagement and support, which is vital for a new product like ONMO+. Management believes this approach will help recoup investments within four years and achieve cash positivity in 2-3 years.
ONMO+ Expansion through Operator Partnerships
Beyond direct-to-consumer (D2C) and retail, OnMobile is in active discussions with 20 operators or broadband providers globally for Smart Consoles, with 10 already in commercial discussions. The company is actively sending out commercial proposals, aiming to close these deals. The strategy for operators involves a minimum CapEx model, with plans starting around $50K per month, which can scale up depending on bundling and market aggressiveness. This approach allows for faster deployment compared to traditional carrier services.
Capital Allocation and Funding Strategy
The company raised INR 65 crores through a debenture issue at 13.8% interest to fund ONMO+ and settle short-term credit facilities, supplementing its existing cash position of INR 135.5 crores. Management emphasized the importance of maintaining strong liquidity and diverse funding sources to support aggressive ONMO+ expansion. While current budgets cover India and Spain, more aggressive global expansion would necessitate additional fundraising, potentially through a QIP of $5-10 million or more, alongside leasing and lender support.
Chingari Divestment and DeOSphere Update
The divestment of Chingari has been delayed by 12-18 months due to Chingari's internal restructuring, though the valuation as of March 31, 2026, remains intact. OnMobile expects to reassess the valuation by the end of the current year. Regarding DeOSphere, management expects to settle the amount due for services rendered within the next two quarters, indicating a resolution to this outstanding matter.