Israel start-up Celltick Software Technologies, which provides interactive broadcasts for wireless operators, has signed a $30 million contract with Russian wireless operator VimpelCom (NYSE: VIP). Under the contract, Celltick will provide VimpelCom with its Chameleon service, based on Celltick’s LiveScreen technology. Chamelon broadcasts real-time video directly to cellular telephone screens.
Celltick said that VimpelCom had 28 million subscribers, and that the new service, launched this week, would reach two million subscribers, and ten million users by the end of the year. A software licensing agreement of this type is expected to produce a profit of over 50% for Celltick, i.e. at least $15 million. Celltick has already received $10 million from VimpelCom.
The service will be deployed across all the network’s 88 regions from Kaliningrad in the west to Khabarovsk in the Far East. The service targets all types of audiences, and is able to broadcast both to the entire subscriber base and to specific segments and specific locations.
VimpelCom expects Chameleon to boost its data revenue while increasing subscribers’ loyalty and enhancing its brand perception. A trial of the service in the summer of 2004 achieved dramatic results. 2,000 users received broadcasts for a few weeks; 40% of them clicked on to access value added services, each adding an average of 15% to their monthly spending.
VimpelCom operates under the Bee Line GSM brand in Russia and K-mobile and EXCESS brands in Kazakhstan. VimpelCom’s network covers approximately 94% of Russia's population (136 million people), including the Moscow Region and the City of St. Petersburg, as well as the entire territory of Kazakhstan. VimpelCom was the first Russian company to list on the New York Stock Exchange.
Published by Globes [online] - www.globes.co.il - on April 20, 2005