Chikka targets Europe

i.t. matters
Wednesday March 15, 2006 MANILA, PHILIPPINES

Chikka targets Europe

BY MARICEL E. ESTAVILLO, Reporter

Philippine-based mobile messaging solutions provider Chikka Asia, Inc. has begun exploring the European market, zeroing in on Italy, Spain and the United Kingdom.

"We are targeting a large part of Europe, but we will slightly emphasize those three markets," Ronald Benzon, business development director, told BusinessWorld in an interview.

Europe, particularly Italy and the United Kingdom, are already hosts to some large Filipino communities, mostly nurses and domestic helpers.

The company’s flagship product called "Chikka Txt Messenger" -- which allows personal computer users to send text messages to mobile phone users -- is seen as a cheaper alternative for overseas Filipino workers (OFWs) to communicate with their relatives and friends in the Philippines.

"The OFW community is a market for us, but it is not our only market. Our solution can be used by all. In fact, it is easier for us to enter Europe amid competition because we are offering them a unique solution," Mr. Benzon said.

To penetrate Europe, Chikka will partner with regional telecommunication providers such as Vodafone and Telefonica, including smaller operators in each target country.

"We are currently in talks with a possible partner, although we have not picked one yet," Chikka chief operating officer Chito Bustamante said in a separate interview, referring particularly to the company’s venture in Italy.

Mr. Benzon did not disclose the firm’s revenue sharing model for Europe.

In a number of countries, the revenue sharing scheme between the content provider like Chikka and its telecomunication partner is 50%-50% on total revenues.

In countries such as Japan and China, the revenue sharing model is 90%-10% and 80%-20% respectively, in favor of the content or the solution provider.

Here in the Philippines, telecommunication providers get the most share in revenues, reaching 80% in some cases.

Mr. Benzon said the European venture is just part of a bigger effort for the company to expand its presence abroad.

Chikka has set aside some P57 million in capital to fund international expansion.

"For any company, to expand abroad is just logical. To grow, a company should either expand its product base or expand its market," he said.

This April, Chikka is hoping to sign partnership deals with three to five telecommunication providers in Latin America.

During the recently concluded 3GSM World Congress in Barcelona, Spain, Mr. Benzon said they received a "few hundred" proposals with a target of signing up with at least a dozen telecom partners.

"We have some 30 telecom partners already. And we hope to double the number by end of this year," he said.

Chikka already offers mobile products and services in Guam, Singapore, Hong Kong, Indonesia, Malaysia, Thailand, the US, China and Japan.