Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
If you object to 'Discussion' which has nothing to do with Bango but is aimed at promoting other companies or objectives then report it. If you do not then the discussion board becomes devalued. Swift is a complex set of systems for inter bank transfers developed over many years. Ripple is a simple system geared to the enrichment of a few Americans. Bango is not geared to the enrichment of a few Americans nor is it geared to inter bank transfers. Ripple may take off when the US abandons the Dollar as its currency and adopts Ripples XRP in its place.
In less than three months there will be a trading update for the full year results. I expect the figures will be in line with those discussed by Ray and the share price to be double what it is today.
I am not surprised that Rachel is going. The job at Bango is not a big one. I think she has three people reporting to her. She is also working for a company that has unusual problems and does not have the same issues as most larger companies. She needs to broaden her experience. If Bango is taken over she might have to find another position. She has some good skills, particularly communication and I am sure she will have sound procedures in place so there is no need to worry.
Leftos, Every University has its way of doing things and Cambridge encourages students to study Natural Sciences in the first year and then when they know a little more about science to switch. Children coming to Cambridge will perhaps know that they like say Physics but Physics is a broad subject and they might end up studying particle physics or Astro Physics or some other science subject. Ray got a first class degree in Computer Science and had run two companies by the time he was forty. The second, IXI, made him many millions and he does not need to work. I was given a book by Haroun Ahmed on the History of the Computer Dept and not only was Ray mentioned but there was a picture of him in the book.
A question I have is what motivates Ray and a worry is that he will throw in the towel. I think his ambition is to build something really significant for example more significant than Arm. When smart phones were introduced I tried to work out what impact this would have. It seemed to me that the credit card is old technology and the smart phone can replace these and be more secure and cheaper. This I think is the ultimate aim and while there is quite a way to go Bango is making progress.
Leftos, you ask for my opinion on progress. I am very happy !
People are unrealistic about Bango. Its business was always going to be dependent on Smart phones and its creation in 1999 was a bit early as the Smart phones were not very smart and the market for Smart phone Apps did not exist. So the company marked time until fairly recently.
Bango, unlike Boku, is developing a significant market for the sale of physical products and subscriptions as opposed to the simple and high margin digital content. The gross margins on each of these products is very different and so looking at the End User Spend as a measure of progress is unreliable. At the trading update for FY 2017 for the first time Bango did not issue a run rate for End User Spend. The reason being that there were significant purchases of physical goods before Christmas and the annualised EUS would confuse. I suggested to Ray Anderson that he gets rid of the metric EUS as people will take the figures and draw incorrect conclusions. He said he considered EUS to be still a useful measure of progress but he does seem to have stopped issuing EUS run rates.
I pay little notice to EUS and as long as Bango’s gross margin increases by 40% per year for the next few years I shall continue to be happy. Bango has made some very significant investments in Brazil, Korea, India amongst other strategic markets and at some stage the benefits of these will be realised. The introduction of 5G will also be helpful for Bango for the next few years.
Currently the Bango Platform can handle £5 billion transactions They could hit this in the next two to three years and so are working on increasing this to £50 billion.
http://www.proactiveinvestors.co.uk/companies/news/205251/bango-has-ambitious-plans-to-dominate-mobile-billing-payments-205251.html
The company could well become hugely profitable.
Slowburner
I expect Bango's EUS to continue to more than double each year for the next few years. I am not sure what your reference to tortoises means but I am not attaching much intelligence to it.
There are quite a few people making statements such as Boku and Bango are similar companies. This is not the case. Bango is technically strong and aims to market through Merchants. They therefore have few Sales and Marketing staff while Boku has few development staff and many Sales and Marketing. Boku is focussed on sales of digital content which has practically no cost of sales Bango has a wider focus. To take an example Bango has a relationship with Amazon to sell physical goods amongst other things. Boku has no equivalent and their software is not up to dealing with the complexities involved with physical goods. There are many DCB companies involved in the sale of digital content.e.g. Fortumo, Zong etc.
Amazon is interested in some major opportunities such as India and Korea e.g.https://www.nytimes.com/2018/09/04/technology/amazon-hindi-india.html
They are spending a lot of resources on these and will take time for them to materialise but when they do it will be a step change for Bango.
Bango collects information in aggregated form and this is of no interest to the RBI. The RBI is interested in being able to trace where money came from to deter corruption. This is why it is an Amazon issue. Amazon holds the banking licence and is regulated by the RBI.
You no doubt know that one of the reasons that Amazon is taking a special interest in India is because there is a rival operation called Flipkart which is controlled by Walmart. Walmart, a US company, is potentially a major rival to Amazon. https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/walmart-to-take-longer-to-close-flipkart-deal/articleshow/64821066.cms
My understanding, which may not be correct, is Bango's role is the equivalent of providing an electronic cheque book and the subscription to Amazon Prime is the control and payment for a service. The payment for utilities and rebates is different. The RBI data storage requirements is an Amazon issue.
The bill payment rebates represents one of the many examples of Amazon taking a long term view and actions to establish itself in India.
Bango and Boku are very different companies. Bango has a much longer term outlook and is gearing up for the market for goods. Boku has far more sales and marketing staff and are geared to the sale of digital content. This has much higher overall margins as the cost of sales is practically zero. Bango's developers are based in Cambridge Boku's primarily Mumbai. Amazon has its European development centre in Cambridge and has recently built a new building which has space for 400 developers and is a very short cycle ride from Bango. Microsoft also has its European HQ in Cambridge and has also has a large new building. Their old building was sited next to the University's Computer lab which was a given by Microsoft.
Amazon is targeting India and eventually will succeed. Last week they introduced an Amazon branded smart phone for India. They have a banking licence and can operated their Amazon Pay wallet. The plan was to set up a delivery system using drones but Indian regulation has thrown a spanner in the works for this. Amazon plans to provide e-medicine including the delivery of prescription drugs. Bango has been working with Amazon since 2011 and will be a part of the Indian setup. When Amazon and Bango introduced Direct Carrier Billing in Japan Bango boasted in their annual accounts that they were the only company that could do it. DCB for physical goods needs to be more complex than digital content. Bango is doing their sales and marketing through the Amazons, Microsofts and Telfonicas of the world. To give an idea of scale Amazon's sales are about $200 billion per year and expanding.
With Telefonica Bango has offices in Sao Paulo, near Telefonica and has Portuguese speaking deveopers in Cambridge.
Moorhey's position is that Bango is illiquid because so many fund managers have bought so many shares, presumably because they consider it a good share to hold. He seems to prefer to invest in shares which fund managers consider to be a bad investment.
He also would prefer a tipster who covers a wide range of shares so that the tipster cannot possibly understand the companies he is recommending.
My objective is to make a decent return on the stock market and I do not care whether the shares I invest in are thinly traded or not. However if the shares are thinly traded there is the potential for them to carry a higher risk so I make sure I understand the company.
There was a trading update on 20th July. The interim results which will give more detail and probably more information on the outlook is scheduled for 18th September.
I find it strange that people do not discuss the introduction of 5G which is just around the corner. This will have a favourable impact on Bango with greater bandwidth leading to IOT taking off and faster downloads leading to more downloads. This will all help with the EUS more than double each year for several years. In five year's time Bango will be making huge profits.
The sentence I liked from the trading update was: "As in previous years, EUS in the second half of the year is expected to be significantly higher than in the first." Just in case people are too lazy to look at last year's figures they were included in this year's update. Last year total EUS was 271 million. First half 92 million therefore second half 179 million. This year the first half was 220 million. So if this year the second half increases at the same rate we are looking at EUS of 648 million for this financial year.
If Ray did not mean shareholders to do this calculation then he would not have spelled out last year's figures.
ExDirectory I would agree with you that location of the operator would be a better indicator but what I think actually happens and where the EUS is allocated depends as I understand things is determined by the location of the party with whom Bango has a contract. One difficulty is that if the related invoice is raised on a company in the USA for EUS in Indonesia, the sale could be in some circumstances be recorded as a sale in the USA.
Things are not as simple as they seem. Segmental reporting is fine but some companies think it gives too much information. If Bango enters into a contract with Google in Indonesia then the sales are shown as being in the domicile of Google, i.e. the USA. Bango has been active in Indonesia for several years and the scope for increasing sales is nowhere near as great as India.
With regard to use of credit cards one of the issues is penetration. Without credit history you will not get a credit card. Without a credit card you will not have credit history. It is much easier to get a smart phone. Another issue is charges to the merchant which in India has resulted in many merchants refusing to accept credit cards. DCB potentially involves lower charges.
Bango is in many ways different from BOKU. At one stage Bango's technology was significantly superior to that of BOKU and Bango took a strategic decision to align itself and enter into development agreements with companies such as Amazon, Google and Telefonica. Amazon is determined to break into the Indian market but the Indian Government has been putting barriers in the way of Direct Carrier Billing. Amazon therefore applied for and obtained a banking licence. Still barriers were put in their way. They need to produce a compelling offering that will cause the Indian democratic system to remove some of the obstacles. My belief is this is one of the reasons for the takeover of Pillpack in the USA. They are now in talks to buy Medplus in India
https://www.thenewsminute.com/article/amazon-india-plans-foray-pharmacy-talks-buy-medplus-84998.
The population of India is 1.3 billion and rising.
The agreement with Telefonica is aimed at the Latin American market and this is why the office was set up in Sao Paulo in 2013. From the recent update 'Total administrative expenses increased slightly to strengthen sales and marketing in Asia, to accelerate launches by mobile operators in Latin America following success in Chile...'. We can expect more news from the region soon. Brazil's population is almost 30 times that of Chile.