Midas looks at an exciting mobile payment company with 11m customers and warns on the flotation of Ocado, the rival to Waitrose’s delivery service that also delivers Waitrose goods.
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The numbers add up for mobile group Bango
The japanese word for number is ‘bango’ and ten years ago entrepreneur Ray Anderson thought it was the perfect name for a pioneering British technology company.
Anderson founded Bango because he was convinced it was only a matter of time before the internet could be accessed by via mobile phones and he was sure this would lead to a wealth of opportunities for sharpwitted operators who knew their way around the world of IT.
A decade on, Anderson’s prescience is paying off. Bango offers mobile phone users an easy way to pay for games, music and other content quickly and securely so they can start playing, using or listening to the latest must-have item within seconds of deciding they want it.
To the unenlightened, this service may sound rather unnecessary. But to a growing number of mobile phone owners, particularly those under 25, making a call is pretty much the most banal way their handset can be used. Millions of people not only text, email and organise their life on their mobile, they also buy goods and download films, news clips, weather forecasts, cinema listings, bank statements and thousands of songs and games.
Some of these are free, but many are not. Until recently, the most widely used way to pay via a mobile was by texting your details to the content provider – the company supplying the music, game or whatever. But this service uses premium texts that are expensive and give users no real idea where their text is going, what precisely they are paying for or what the cost is.
Bango’s system is different. It works with mobile phone operators such as T-Mobile, Virgin and AT&T in America and with organisations such as CNN, the Cartoon Network, Sky, leading video games firms and even companies such as Interflora.
When mobile phone users want to pay for a new game, a Bango page pops up on screen offering the chance to do so by card or by adding the cost to the phone bill. If they choose the phone bill – which most do – they are redirected to the game. The technology knows what phone number is being used so the cost is simply added to the next bill.
The process is quick and extremely safe because no payment details are exchanged on screen. This is helping the company to grow fast. Last year, 11m customers worldwide used its services and in the 12 months to March 31 revenues rose 48% to £26.1m and the group delivered a maiden profit of £10,000 against a loss of £478,000 the previous year. In the year to next March, turnover is forecast almost to double to £51m and profits of £2m are expected.
About one billion mobile phones worldwide are already able to connect to the internet and the number of products and services sold over them is rising rapidly. Researchers expect that by 2012, mobiles will generate about £40bn of internet sales, against £13bn in 2007.
Bango is at the heart of this growth and it recently reached an agreement to provide payment services for any applications on a BlackBerry. The company also provides a service analysing who is buying what and how they are buying it so firms have a greater understanding of how to market their products.
Midas verdict: Since the dotcom bubble burst, IT companies have carried a large health warning. But Anderson has built several successful technology firms already, Bango has cash in the bank and it seems to be in the right place at the right time. With the shares at 97p, the adventurous should have a punt.
Traded on: Aim Ticker
BGO Contact: 01223 472777
http://www.bango.com
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