One97 founder Vijay Shekhar Sharma talks about VAS trends and category expansion

Set up as a mobile VAS delivery platform in 2000, One97 has introduced a number of verticals, focussing on m-commerce and mobile marketing. One97 is known for its agility and ability to move with the market. Its subsidiary Paytm became the market leader in a short span of time.

Talking about the latest in mobile VAS, Vijay Shekhar Sharma, founder of One97, said the mobile VAS on feature phones has seen its peak and the market is now moving towards smartphones. Shedding some light on the company's anticipated IPO, Sharma said the company will wait for the market to improve before opting for the IPO.

Sharma said gradually the company has made Paytm its consumer-facing brand with all B2C transactions happening via it. It has added many categories such as utility bills, deals and bus ticketing and is looking to add more digital goods to its kitty in near future. It has also entered the marketing and advertising markets. Recently, One97 launched its mobile advertisement platform AdWorks in beta.

Sharma also shed some light on the One97 Mobility Fund which the company uses for investing in startups.

Here are the edited excerpts:

Paytm has expanded a lot since inception but what more are you looking at? How about gaming or music? We are not looking at foraying into gaming or music. We believe that categories that exist in Google Play or iTunes store like music, movie rentals, gaming, etc are best played by those people only. We don't believe we can add much value in these categories. I do believe categories like bill payments have a huge untapped market.

As for Paytm, it is our consumer brand name from where consumers can buy various digital products. We have become the market leader in all our service offerings, including top-up, DTH and deals. Our value proposition will always be customer experience. We will keep on introducing more digital products on the platform if we see opportunities and gaps.

Are you planning to file the IPO again? As a company, we are lucky that our investors are not under any pressure. IPO should be considered from a viewpoint of raising funds and we are a free cash flow generating company. We generate sincere profitability; in fact it is because of surplus cash flow that we started investing via our fund. So, we don't yet need cash in the visible future. IPO will be planned once the need comes as well as once markets are better. That said the market might improve in one-two years and then we will evaluate our need for money and options in terms of where we want to list, etc.

Are there any more acquisitions in the pipeline? We are very open and we believe that the market is moving from feature phones to smartphones. Any opportunities will be assessed based on technology play. Our acquisition plans happen on the basis of an idea whether we can accelerate the company's growth with the acquisition. We do keep talking to companies; that is how Mobivite happened. But that said, nothing is in the discussion stage right now. One advantage that we have is our fund that allows us to invest in a company that we may not acquire.

You have been in the market since a long time. What are the new trends in VAS that you are witnessing?

We, as a company, have seen the peak of feature phones. People used to buy from feature phones, but now they will buy via smartphones and app stores. Though feature phones are still more in number but that market won't grow now. Smartphones will grow now. The high ARPU user has already moved on to a smartphone; so feature phones services, I assume, will further be reduced in next 18-24 months than what they are now. New trends in VAS might not be known as of now but definitely times of services such as callertunes have passed.

As a company we have seen all trends in VAS; in 2001 and 2004, SMS used to be very popular. After that voice became popular and now mobile Internet is popular and it will continue to dominate.

Are you looking at revising your strategy with the One97 fund? Would you also look at increasing your size of investment? Earlier our strategy used to be to invest in companies or sectors that we are not into. Now we are tweaking that to invest in companies that operate in the same space as we are. The rationale behind this transition is that we are now looking for companies that will help us grow in the mobile space.

As a company, if we don't add any value but only money then it is not a valuable investment for us. We are not looking at financial exits. These are reasons why we have never looked at chipping in an institutional round and won't start now either.