Mobile payment processor Bango's flurry of deals warms market
With Google fathering ‘web 2.0’ and the ubiquitous mobile phone becoming ever more intelligent, it seems that it is a matter of moments before the mobile internet marketplace becomes a familiar, perhaps smaller reality.
However, as with all marketplaces, ease of payment is a must. It is in this basket that Bango (BGO.L), a Cambridge-based company, has put all its eggs. As 3G finally looks set to become more than a useless novelty, payment for the rich content it promises will surely be next on the agenda.
Yet judging by the gyrations in Bango's share price since it listed on AIM in June last year, the stock market has been undecided or hesitant about its prospects. Maybe that has changed in the past month. Its share price has surged 36% as the company signed several deals.
Bango has developed a direct-to-consumer infrastructure platform that operates alongside mobile operators' portals and enables content providers to sell and deliver products directly to mobile phone users on all networks using the mobile Internet.
This bypasses the need for a customer to send Premium SMS (introduced in 2002) which is both cumbersome and often costly.
Bango's technology allows consumers to browse and buy on their phone bill, by credit/debit card, by PayPal or X-Pay and enables content discovery and identification so content providers can customize the user experience and payment.
The ease of purchase has other commercial benefits. "The traditional way of purchasing content is to text the name and code of the content to a short-code. Users receive back a WAP Push link which when clicked on, takes them to a page where they download the content," explains Sarah Keefe, Bango's VP Marketing Communications (pictured).
"There is, however, no opportunity for the user to quickly and easily purchase another item. When 'browse and buy' is compared to single purchase SMS-based downloads, we find that the number of repeat purchases increases from 18% to 46%."
Bango's software packages or platforms can be downloaded from its website and range in price from £849 to £109 a month. It also gets a percentage of payments collected using billing providers. Transaction revenues have so far been mostly generated by sales of ringtones, wallpapers, games and video clips.
Since its June '05 listing, Bango has been on the journalists'-clichéd rollercoaster run. It listed at 134p, climbed over the next six weeks to a high of 230p. Then it played snakes and ladders for eight months, before sinking to a low of 160p a month ago. Since then, on the back of a string of good news deals, it has climbed to 217.5p, which values the six-year-old company at £57m.
Those deals, all in the past month, have included:
mBlox
It signed a global collaboration to deliver integrated content billing with mBlox, the world’s largest mobile transaction network. By integrating mBlox billing system with Bango’s browse and buy technology, mobile users pay for content via a portal even though the underlying billing mechanism is Premium SMS.
Essentially, Bango does the front end of the transaction and mBlox handles the back office though its network that provides the delivery and billing capabilities. mBlox’s network of commercial relationships, its clearing and settlement services and its content delivery connections enabled it to process over 1 billion transactions worth $400m in 2005.
Mobile shopfronts
It entered a partnership with July Systems, a retail innovator that creates 'mobile shops', to improve the way content providers sell entertainment items such as games, wallpapers and ringtones from the mobile Internet.
“This solution lays the groundwork for a mass consumer market because it makes it easier for content providers to enter and play in the mobile internet space with innovative storefronts,” said Bango CEO Ray Anderson.
New Customers
Hearst Publications, one of the world’s largest publishers of monthly magazines, launched mobile sites for Cosmopolitan, CosmoGIRL! and Seventeen and signed up with Bango to enable selling content to consumers on any US network.
Discovery’s new UK mobile portal, which will enable mobile users to access content on its ten UK channels, signed up for the Bango platform.
These join a stable of some other well known brands including News Corporation newspapers, Channel 4, Manchester United Football Club, Ann Summers and EMI Music.
Full year results in May
Whether Bango's share price remains locked into a snakes and ladder pattern might be determined by its next set of financial results. Its fiscal year has just ended so we won't know how well it has being doing until it releases them on 18th May.
In the six months to end 6 months to end September 2005 revenue grew 158% to £3.22m, compared to the previous corresponding period, gross profit grew at the same rate to £0.95m, while pre-tax losses narrowed to £0.43m from £0.55m. Its own broker is forecasting Bango will move into the black in the current financial year.
6th April 2006
