Link to Admission Document - InternetQ

evenues of nearly US$24.0 billion worldwide and are projected to grow to US$47.2 billion by2013 (Portio Research as at 2009).●●Mobile messaging continues to expand, offering mobile marketers the opportunity for ever greaterengagement. In January 2010, the world’s messaging traffic averaged 12 billion SMS text messagesper day, at a global average price of US$0.025 per SMS. This industry generates US$1 million ofrevenue every 4.5 minutes. SMS traffic keeps growing annually as does SMS use in emergingmarkets. While 79 per cent. of all SMS text messaging revenue relates to person-to-personinteraction, a growing portion of revenue is derived from the use of ‘premium SMS’ services, suchas paying for digital content, engaging in contests and other games and interacting with brands.Mobile network operators traditionally limited the ability of their mobile subscribers to accessthird-party services, but more recently they have been enabling the provision of third partycontent, applications and data services in an effort to retain their subscription base and boostmobile data revenue growth.1.8 Strategy and ProspectsThe Group is operating in an expanding market. Mobile devices are increasingly being used formarketing campaigns because they are effective at reaching the advertisers’ target audience directly andin a manner in which the responses of the end-user can be measured.Mobile network operators, who are the Group’s principal customers, are keen to encourage and usethese services because marketing campaigns are often designed to be interactive with the mobilesubscriber. Through the subsequent engagement, mobile network operators can drive the ARPU higher.The Group is seeking to become a leading provider of mobile marketing solutions, including theprovision of digital content. The principal elements of its strategy are as follows:● Acquire new clients in the markets in which the Group already operates inThe Group intends to make use of its existing relationships with principal mobile network operatorsin the markets in which it currently operates in order to broaden its customer base. The Directorsbelieve that the development of these markets will cause the brands, mobile network operators andmedia companies to use mobile marketing as an integral part of their marketing strategy. With a trackrecord of successful campaigns, the Group’s ideas can be adopted by new customers, who will need tobe educated about the advantages of mobile marketing, the breadth and distinctiveness of the Group’ssolutions and ideas and its ability to satisfy their marketing requirements. Accordingly, the Directorsbelieve that the Group can grow its business presence in each of the markets in which it alreadyoperates.● Penetrate new emerging marketsThe Directors have identified a number of markets which satisfy the Group’s principal businessdevelopment criteria. These include Russia and certain of the CIS countries, South East Asia, theMiddle East and Africa. The Directors are preparing to increase the Group’s efforts to penetrate thesemarkets by building and strengthening relationships with key mobile network operators in their chosenarea of operation.● Continue to invest in the technology platformThe Directors believe it is key to continue to invest and enhance the functionality of the Group’s mobilemarketing platform, by developing new technology solutions that will further strengthen and broadenthe platform’s capabilities and its user applications. A significant part of that investment will be focusedon improving the Akazoo hub, both in terms of user interface as well as content provision andmanagement.● Pursue strategic acquisitionsThe Group intends to continue its geographic expansion into new markets. Consequently, the Directorswill evaluate and pursue acquisitions in those markets in which they feel the Group can gain acompetitive advantage and in a faster and more cost effective manner. In addition, the Directors mayevaluate acquisition propositions which will enhance the technological capabilities of the Group or giveit access to important new client relationships.25