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Ladies and gentlemen, good day, and welcome to Q1 FY '24 Earnings Conference Call of Tanla Platforms Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ritu Mehta from Tanla Platforms Limited. Thank you, and over to you, ma'am.
Hello, and a warm welcome to our Q1 earnings call. Joining with us today are Uday Reddy, Founder, Chairman and CEO; Deepak Goyal, Executive Director and Chief Business Officer; and Aravind Viswanathan, CFO. Uday will share his perspectives on business imperative and strategic progress made by us. After opening remarks, we'll be happy to engage with the participants and address their questions.
Before I hand it over to Uday, let me draw your attention to the fact that today's discussion may feature statements that are forward-looking in nature. All statements other than statements of historical fact could be deemed forward-looking in nature. Such statements are inheritently subject to risk and uncertainties, some of which cannot be predicted or quantified. A detailed disclosure in this regard is mentioned in the results presentation that is uploaded on our website. Audio recording and transcript will be available on the website soon. Now I hand it over to Uday.
Thanks, Ritu. Good afternoon, everyone. Thank you for -- thank you for joining this call. I would like to make 6 points before we get into the Q&A. First point is we have given a very detailed investor presentation and shareholder report which proactively addressed a lot of potential investor questions. It is our intent to be the best-in-class on governance, and we are constantly improving our disclosures to provide more insights on our business to investors. From Q1 onwards, we have started reporting EBIT for both digital platforms and enterprise communications business to help investors track these businesses separately.
The second point, please, is our financial performance. We have delivered exceptional results in a seasonally weak quarter. I have always [indiscernible] about importance of financial discipline. We run our business at 20% EBITDA, with a 76% conversion of gross margin into EBITDA while generating strong cash flows of almost of INR 90 crores.
The PowerPoint is on investments. We have invested close to INR 15 crores on our new platforms in the current quarter. And we have made a big bet on the enterprise business with INR 375 crores acquisition of ValueFirst from Twilio.
Our fourth point is on our innovation, Wisely ATP, our patented anti-phishing platform, is our landmark innovation. We completed proof-of-concepts [ with leading ] banks on Wisely ATP. And the Q2 will be the quarter focused on accelerating our GTM and our commercial holders.
The third point is on enterprise [ amines ] business. We are now in the phase of price expansion in this business, and we have visibility of price increase in some parts of our domestic business over the course of Q2.
Finally, we completed the acquisition of ValueFirst India business in July, and we will complete the acquisition of International business by end of Q2. We are very excited by the synergies. And we are on the track to move this business to double-digit EBITDA in a couple of quarters.
In summary, we are firing on all cylinders. And I'm sure it's quite evident from the presentation and the note, which is distributed to all of you. And now I get to hand it over to -- I'm very happy to take questions from you now.
Thank you. [Operator Instructions] The first question is from the line of [ Meet Raj ] from Equirus Capital Private Limited.
Yes, thanks for the opportunity. And congrats on a very good set of numbers. So first question is in terms of the new contract with the world's largest e-commerce company, so just wanted to understand what is the nature of business that we are -- that we have signed the contract for. And what is the revenue potential for FY '24 from that contract?
Yes. So Meet, I'll ask Deepak to give you a context on the kind of business we will do on the customer that you mentioned.
Sure, sure.
Yes, Deepak here. So we have signed a contract to serve them for all their terminations into India, all their messaging termination into India. So it has MLD, which is a domestic type of messages. It has ILD messages as well. So it has both. So it's a mix of both, and we signed for both the messages. So it's a comprehensive contract, but we signed us up. And as far as the size of contract is concerned, that is something which we will not be able to share at this point.
Okay. Okay. Okay. And second, in terms of -- yes. Second is in terms of the proof of concept that we have done with 3 of the largest banks. So in the letter to shareholders, you just mentioned that in Q2 beginning, the commercials will be closed. So just wanted to understand what is the revenue potential from those banks, basically?
Deepak?
Yes. So we have signed a proof of -- I mean we have completed POC with the 3 banks. And as Uday mentioned, in this quarter, Q2, we should be able to sign all 3 banks commercially.
In terms of the numbers, I think we would be able to share post Q2. Let us first get the commercial time.
Okay. So apart from these 3 banks, how is the pipeline looking for that product with respect to...
The pipeline is very solid. Pipeline is very solid. We -- initially, we ourselves only started with 3 banks. Because we just wanted to see whether things are working fine or not. And now we have already -- in Q1, we have met a lot of many other customers, and we have a great interest coming in from those customers as well. So in Q2, the target is not just to sign these 3 customers, but to sign many more. And we are in advanced stages with them as well.
And I forgot to add 1 thing about our -- the e-commerce customers, the global e-commerce customers, that we are the only 1 with whom they have -- they will be having now direct connect. All this while they were working with international providers, and those international providers in turn would connect with the domestic providers in India. Now this is the first time they got connected with directly -- the direct provider. So it's this volume, and we are very hopeful that we would be able to ramp up their -- most of their volumes maybe in the next 2 to 3 months' time.
So in that e-commerce company, what would be our peak market share once we go at full throttle? Both in [ India ] and...
[indiscernible]. See, we always try to go beyond 60%, 70%. So this is what we would give a target for.
Okay. Okay. Okay. And last question is in terms of the pricing. So we have some visibility of price reset in Q2. So just wanted to understand what would be the quantum percentage, if you can share some color? And how will it play out.
So let me start on that and then maybe I'll ask Deepak to add on it. So this is a little dynamic thing. So in order to quantify, I think for all of your questions, that's going to be our answer, that most of the quantification of these will be clear by end of Q2, right? And therefore, we will probably be able to address these from a financial standpoint at the end of Q2. But I think there is a larger message in terms of how the market is playing out. So from a price perspective. So maybe I'll ask Deepak to give color on that. Because that's quite exciting. And as we go through this process, we will discover in terms of the impact, and that we will communicate as part of our Q2 results.
Okay. Okay. Sure.
The next question is from the line of Balaji Subramanian from IIFL.
Congrats on a great set of numbers and appreciate the extra disclosure. So I just have 1 question. It's more of how the industry is headed in the medium to long term. If we look at the kind of deals that have happened in the last 1, 1.5 months in the sector, I think probably, what we are seeing is CPaaS players either selling themselves to larger enterprise players or telcos so that CPaaS becomes 1 of the many offerings which these companies offer alongside other offerings like cloud, security, et cetera.
So keeping that in mind, how do you think Tanla is kind of going to compete with these players who will be probably looking at bundling and there could be some cross-utilization, et cetera, as far as offerings are concerned? So that would be my only question.
Before Uday answers this, Uday, I just want to say...
[indiscernible] Yes.
Completely fair. So hi, Balaji. So you really see Tanla acquired Karix a few years back, now they acquired ValueFirst, Gamooga. And if you see, Tanla already providing bundle of services, right? So it is not just -- if you really look at it, Tanla launched Wisely ATP, which is absolutely different product. It's not CPaaS product. It's a security product. It's an anti-phishing product, okay? Which gives us a very huge credibility, has been handled with all our large BFSI customers and so many other customers. So it gives us a huge -- I mean, I would say, edge over others. Right? So this is -- so we are already doing that. Over to you, Uday.
Okay. So Balaji, Deepak has covered most of the points. The way we see [indiscernible], the enterprises are not just looking for bandwidth or voice or any of the telco services. What they're looking at and there is competition there. That's number one, right?
Number two, as Deepak mentioned, like they are looking at products which are going to protect their users. That is our customer to customer. That's number one. Number 2 is they also would like to work with someone like Tanla who is going to help them comply. Okay? We are the one who have helped all the enterprise in India to comply with the CCP 2018 June regulation. That's number one, right? And the PDP is around the [ car ] okay? And we are very, very conscious about the fact, right, and the bill.
So we -- so we are all things we're investing in a lot of our products and platforms and services to cater to the enterprise. So we don't have any competition. If you look at our book of offerings, we don't have absolutely no competition in India. Probably, it looks like we don't have -- do not have any competition outside India also. What the telcos are buying the assets, I think they have a plain vanilla connect, and we are not there to compete with them.
That is quite helpful. All the best.
Thank you. The next question is from the line of [ Deepak Sukhani ] from [ Reds ] Capital.
Congrats, Uday and team, on great set of numbers and excellent presentation, disclosures and the Q&A materials. I have 3 quick questions. First is I can see CapEx of almost INR 100 crores in the last 6 months. Can you kindly elaborate what are these for?
Sure. Let me take that, Deepak. I think 2, 3 big things, right? One is, obviously, we have accelerated our platform investments, right? With Wisely ATP and some of the other platforms that we've been building. So that is 1 big ticket for the CapEx.
The second is in terms of the innovation center that we had done, right? So between these are the 2 big tickets that has kind of increase. I think you will see a normalization because the innovation center CapEx is largely done. Right? But the platform investments will continue to happen because that's the bread and butter of our business. So we will continue to see some amount of CapEx as far as that is concerned.
So does this include any new platforms which you are working on? Or just the existing ones which are under offering?
This is under development, a lot of them, right? So we've talked about Wisely ATP as an example. So some of them will get commercial. But in some sense, and Uday keeps talking about it, we are on a perpetual motion of innovation, right? So we can't rest on existing. So we keep building and coming out with new platforms. So I think this is something that will continue for the quarters to come.
Got it. My second question is about the largest e-com contract. Usually, these are bidded to low-cost bids, I may be wrong. So my question is, did we get this contract based on better pricing or better tech offering?
[indiscernible], Deepak. As I mentioned earlier, this tech giant was looking for direct providers in India. And obviously, we are their first choice. And we were in -- and this is how we have been selected or softer thorough discussions over the period of the year.
Great. That's amazing. My last question is with Wisely ATP. Will it primarily be only for BFSI sector? Or do you think any other sector could potentially use that?
These are -- any brands whose names is getting misused would be our potential customer. Let's say, for example, you get -- you might be getting messages from Adani Electricity or Tata Power and all of that, that your electricity is -- commission get disconnected, right? So -- and there's all scam messages. So even those are affected by all the phishing messages.
Then there are job frauds. Jobs have been offered using Amazon's name or Flipkart's name or [indiscernible] name. So there are -- so it's a very -- if you really [indiscernible], the TAM is really big. But our initial focus was the BFSI. That's why I mentioned BFSI, but it will move to a lot of other verticals aside.
Thank you. We'll move on to the next question. That is from the line of Amit Mishra, an individual investor.
Hi. Am I audible?
Yes, sir. Please [indiscernible].
Good day, everyone. Thank you for giving me opportunity to ask questions. Firstly, congratulations are in -- should be given to the whole team. Very, very good performance in Q1. And also the client additions, which are very good. So 80-odd clients, we have added. And let's say it's better, it's about disclosures, it's unparalled in the industry. I have not seen such disclosures from any company. So thanks a lot. We are setting example in [ CG ] for the rest of the market, I would say.
So I have 2 questions. So first 1 is on the partnership with Kore.ai. So we did a partnership with them in June 2022. And according to what we discussed earlier, they deal with pretty large accounts. So I wanted to know, they have longer lead time. I think Deepak mentioned earlier, 6 to 8 months. So I want to understand where we are in that partnership. Have you done any -- onboarded any client. or we are doing PoCs with them? Or there is no progress? So can you please give some color on that? [indiscernible]?
Deepak?
Yes, sure. So Amit, yes. So as far as our core relationship is concerned, yes, as I mentioned earlier, the lead time is pretty large. And we have, in fact, won a couple of customers already. But it will -- it takes time to onboard them. So currently, they are on the onboarding stage. But as any new relationships -- because they are based out of U.S., they were handling American customers and then now in India. So any new relationship takes its own time and goes through ups and downs. So we are into that phase.
We are -- so I mean we have a solid pipeline for that. we have met many customers. And right now, we are just going through the phase of understanding better about their requirements and how we can -- how we can serve them. So it is taking some time, but it is on track.
Right. So which geography we have this 1 customer with Kore.ai?
India, sir. We actually closed 1 of the good banks in [indiscernible].
Okay. Okay. So other geographies, nothing so far, but we are still making context or setting...
We have 1 very -- 1 customer, very way advanced in Indonesia.
Indonesia. Well, great.
Yes. Yes.
So for the second question, actually, it relates to Enterprise business. This is -- I've been noticing we have these Q1 and Q2. And I've noticed in the past, we have a solid jump. So this is how, I think industry is organized, from Q1 to Q2, there is a solid jump. So we used to have -- like in '19, we had 24%; '20, we had 28%; '21, we had 34% from Q1 to Q2. Of course, last year was a little bit distorted because of -- we lost a customer, a big customer. .
But is it fair to say that this is sort of a thumb rule of like Q1 to Q2, we can assume like 20%-plus sort of jump? Because I understand that it's a festival season in India. The campaigns, their preparation and everything starts in Q2. Is it fair to assume on an average?
I mean partly, Q2 is not a festival quarter.
Yes, I know. I know. But the revenue profile, will you start preparing for that, probably? I don't know. But the revenue jump is the biggest in Q2. So I just wanted to get some sort of -- it's kind of a business, how business is set up in CPaaS industry. It's specific to Tanla. And what would be the fair percentage to assume you...
It will be tough to give any specific number right now, Amit, okay? But I just want to tell you that in Q1, we have some uptick because of IPL also. Right? We have...
Can you put a number on IPL jump? Is it possible?
That number, I leave it on Aravind, but I'm just giving you a little high level -- this thing, right? Yes, Aravind, please.
So I'll tell you just before that, right, just to give you a little bit of a context. Q2 has historically been high because in the couple of years that you mentioned, we had our ILD price increase in July, right? And that has really skewed the market in many ways because those price increases were high. We had certain amount of ILD price increase benefit in Q1 this year. So that's something that 1 needs to normalize when you look at historic data, right? So that's 1 point.
It is difficult to see IPL is more a season in terms of where multiple customers do incremental spend, right? So you don't really call out. We just know that there were more volumes in some form, right, that we've seen in -- due to IPL. The domestic business historically picks up in Q2 vis-a-vis Q1, right? But I think there are multiple factors now with other pieces of business becoming large, right, that it's not only 1 dimension. So it is difficult to kind of quantify, and I don't want to kind of the corner into a guidance for Q2. But when you're looking at historic data, it's important to note that there are multiple other factors beyond that also needs to be accounted for.
No, no. Guidance was not the intention to get, but I noticed like 3 years in a row, like '19, '20, '21, we had 24%, 28%, 34% uptake in -- from Q1 to Q2. But that's okay, that we can leave it at that.
Just -- if I can squeeze 1 more question. For the combined entity for Tanla and ValueFirst, eventually, where would be our total employees trend? What is the comfortable level you see, where we will end up?
[indiscernible] [ Commitment ] to comment. Sorry, I didn't -- go ahead. Go ahead.
No, no. I thought, let me give the facts, right? And then we can improve, right? So if you look at overall at the announced ValueFirst, about around slightly more than 450 employees, and Tanla has been at around -- its consolidated Tanla is around slightly over 600, right? So that -- so the combined entity would have a head count between 1,000 and 1,100, right? That's how we start as a base, right? Uday, I'll leave it to you in terms of [indiscernible].
I guess -- I want to say the same thing. Thank you.
Sure.
Thank you. [Operator Instructions] The next question is from the line of [ Ramdrava ] from XLR Limited.
So I have a couple of questions. The first question is related to the Tanla entity. Tanla ATP, what would be the total addressable market for this ATP in the future to come? I mean, not immediately in the next few quarters. Probably if you can say a couple of years. In terms of revenue, what will be our total addressable market and the product, right, the product segment of Tanla ATP? That's the first question.
I'm sorry?
[indiscernible]
I could not hear your...
[indiscernible]
Yes, what would be the total addressable market for the next couple of years or if not more, the total addressable market under protect book because there's [indiscernible].
As Deepak mentioned, like we are about to close commercials with very large banks in this quarter. And we are pitching to other brands as we speak. So I think we will continue or a period of time over the course of a couple of quarters. So what's a TAM, like and so on and so forth. It's too early to comment.
Because see, I saw 1 of the slides in your presentation and the product. You mentioned that 0.3 billion will be by 2023 or 2027 with the total addressable market under this product categories, Tanla ATP network. So I just want to understand on what basis -- whether that entire 0.3 billion will be the total addressable market for us.
Yes. So Uday, maybe let me...
Go ahead, Aravind.
Yes. So I think what we have done there, right, if wrong to look at it as just an ATP market, we talked about our platform addresses all the buying centers, right, across Inge, communicate, protect and experience, right? So you know that -- and we have compartmentalized our existing platforms under this product. So what we have access the market, we are talking about project itself, it's an overall protect market, some of which gets addressed by our existing platforms, that we'll keep innovating and building in new platforms, right?
So the way -- the good way to look at it is that Wisely ATP would be a subset of the number that we have mentioned there in terms of dollar million, $300 million or so in India. And which will kind of [indiscernible]. But it is not to say that it's only ATP, it will have -- it covers the entire spectrum of customer spend there. So you could say that -- when you look at Wisely as a platform or platform and if you look at products as an area from a buying center standpoint that [Audio gap] that has this kind of potential, and ATP is 1 of the products. So that's not a reflection of time of ATP per se, but it's a larger -- larger discussion in terms of how to look at our business.
Okay. Got it. And I have another question because I -- maybe this question will look this way to very negatively subject. So I want to understand, who would be the potential customers for Tanla? Is it the telcos or even the enterprises? Why I'm asking this question is, normally, the rosters, when they send phishing SMS, they choose 1 of the enterprises as a target and they send the SMS to the users and they try to send the money through various ways and means, right? So is it the telcos who filter using the Tanla ATP? And if it happens to be the enterprises, how are they going to use? So for example, let me take as example, HDFC Bank. So HDFC Bank by themselves, they don't send any phishing messages, right? But how potential customers for us, further HDFC customers for the antics? I hope I put the question properly.
Yes, Ram, the -- so it's a good question. So the way it works is the ATP platform has been deployed with the telcos. Okay? So we need to have a -- so we need to have a deployment with the telcos to start. That's the number 1 point, right?
And 2 is -- but -- but the bank is the one who has to protect their users, okay? So in this example, bank has to pay the money to us, and then we keep our revenue share and pay the remaining amount to the telcos. So the bank is a standard, and ourselves and telcos are the harness. That's how it works. Unless until the telco decided to charge the mobile user directly, okay? In India, what we decided is to charge direct enterprises, not to the users because of the low ARPU in India. If the ARPU is very high in certain markets like mainly Saudi and so on and so forth, probably we can look at charging the users. But in which case, we don't really approach all the enterprises that -- whichever the user wants to safeguard himself from the scammers, they can always subscribe to our subscription. That's what we're looking at as we speak.
It means to say that the HDFC Bank will pay for these services, which are the services that are being sent to HDFC customers, right?
Yes, yes, yes. Yes. So yes, so we want to charge per user per month.
Okay. Okay. And -- so I also saw in 1 of the slides that now the try urge -- not the slides, I saw the news that try urged the other telcos to come up with the kind of solution similar to our ATP. So any update pertaining to other telcos, steady progress on that?
Yes, we are in touch with all telcos. And as we speak, we are running the PoC with 1 of the largest telcos in India. We already deployed with the VL and lies, but we are not -- we are doing the PoC with 1 of the largest telcos in India. And of course, we are talking to all telcos.
Okay. Okay. And I have 1 suggestion. I mean, I'm writing -- I wrote a few questions to the investor relations, but hardly with any response. So probably, we can just look into some investor relations to get a proper response for the questions, what we ask.
Sure, Ram. Thank you for that feedback. Let me look at it and personally respond on that.
Thank you very much.
The next question is from the line of Mohit Motwani from Novama.
Congratulations on great set of numbers. I got disconnected in between. So I don't know if this has already been answered. First question on the ILD price hike you have already mentioned. Can you give some color, maybe not quantify, but some color on the growth in this quarter? Or how much was it of it was driven by the volume growth and how much of it was price-driven? Not numbers, but maybe some sense on that?
Roughly, I would say that 50% of our growth, right, has come through price increase, but there have been a lot of organic growth across all dimensions of the business also beyond the price increase.
You mentioned 50%, right? Correctly?
Slightly more than 50%. Slightly more than 50%, yes.
Sure. That's helpful. One more question. So there were some articles which suggested that -- what has increased the pricing of the messages. So has it impacted any volumes at your end? Have you seen any pressure on volumes from the customers?
Yes. I would say -- so volumes, we have seen some pressure on the volumes. But since the price has gone up, so overall -- but revenue remain intact. But what we are seeing is when the prices go up, like the customer takes some time, because the -- in WhatsApp, a huge amount of messaging happening on promotional side and customers who are rethinking about their marketing strategy. But we feel that at 2 or 3 months' time, those volumes would be back because WhatsApp was actually able to give them a great ROI.
The next question is from the line of Amit Chandra from HDFC Securities.
So you mentioned that around 50% to 60% of the growth in this quarter for the enterprise businesses, ILD price hike linked. So in terms of the volume, if you can share some light, how has been the volume growth, especially from the angle of transaction and promotional messages? Because if I'm not wrong, promotion was under pressure, and we are seeing some pickup in the promotional messages. So how has that speed been in terms of transaction and promotion? Because transactional machine has been growing, but promotional has started growing maybe this quarter.
[indiscernible]
[indiscernible]
No. So I was just saying that we did see volume growth in the quarter in the domestic business, right? But I will ask Deepak to give color is what I was saying. Deepak, over.
Amit, your question is around energy business, right?
Yes, energy.
Yes, yes. So see, Amit, traditionally, the Q1 is generally weak on promotional side because customers are still working on their budget. They exhausted all the budgets by March. And new buyers are getting tensioned and stuff like that. And things go a little slower and you rightly said that transitions are on the high side and the promotions are not so high. So that is there.
But what we -- what -- what has happened for us is, one, as I mentioned earlier, because of IPL, because we have certain customers, there are certain -- those fantasy gaming companies and a lot of other customers who do campaigns around IPL. So we got some support from there. And we also won -- we have been winning a lot of new customers in the last 6 or 8 months' time. And we have seen that some new business is also getting added. So that's the support came from there as well.
Okay. Now also, have you seen any kind of a shift of volume from say, the traditional SMS to the WhatsApp side, especially on the promotional messaging side? And also, we have seen a consolidation in the industry, that hasn't happening. So -- and we have gained market share also. So is that changed our equation with telcos in terms of our sourcing costs with them? So is that -- that we have higher market share and we can ask for better pricing in terms of sourcing costs?
Okay. I'll give you your second question on the first year, definitely, when you have a better leverage, the volumes are higher. Obviously, you get some price advantage. There's no cost staying, maybe it happens. And as far as your -- the first question is concerned, that the volumes are shifting from SMS to WhatsApp. I would say WhatsApp has created -- has added more to the -- our overall numbers. So let's take for example, I'll just tell you, there is a BFSI sector. The BFSI did just do not do any promotion on WhatsApp. Okay? They've mostly used it for transactions and for user-generated messages and stuff like that. There are e-commerce companies, and there are certain segments which actually rely more on WhatsApp, and they do it on WhatsApp.
Then there is a segment which find WhatsApp very expensive. So what they do is they would still WhatsApp. So I just want to tell you, then enterprise is sending messages, price is very high on WhatsApp. But if user is asking -- user is initiating a conversation with WhatsApp, the price is very low. So what customers do, they would send an SMS campaign, right, which is much cheaper, which will have a WhatsApp link. So if SMS wants to -- if a user wants to initiate a conversation, okay, you can just click on the link and conversation gets initiated over WhatsApp. So the overall, it becomes cheaper. So here, you get volumes on SMS as well as well as on WhatsApp. So it's like that this mix of all of that, right? But yes, definitely, ROI on WhatsApp is definitely good to start out about it.
Okay. And sir, my second question would be on the Wisely ATP. So as you said that the ATP product is being deployed at the telco level. So is it part of a telco will only have a single product for anti-phishing or there can be multiple product installed by a single telco?
Yes, [indiscernible]
[indiscernible]
Yes, sorry. So they go with 1 table, not with too many.
Okay. And can they have their own -- because you're not -- it is not like a crew block, which is being built via the -- which is being built by the aggregator, but it is -- the telco will build the bank or the entity for the ATP services. So is it that the telco can have their own platform? And also in terms of the -- in terms of revenue share, how that will be split. So is it in the final stages? Or is it still under consideration in terms of the revenue share number with telco and [indiscernible]?
If you are asking like me, if the telcos can outsource in terms of development and all of it, yes, absolutely, yes, it they can take back this -- but we don't see any competition as of today. In future, I don't know. So that's number one.
Number two, like we are able to close the commercials with the telcos. So probably, we should be able to come out it with the explanation in the Q2.
The next question is from the line of Tejas Shah from Laser Securities.
Normally, shall we do acquisitions, which we have seen the last acquisition, it was basically via stock. This time, I think you have opted for cash. So have we not thought about the stock sharing Tanla shares and doing the acquisitions?
So are you referring to ValueFirst acquisition?
Yes.
No. So that's the history, right? So we have paid out a full cash.
Normally, Tanla historically, where in you do acquisition via so where we issued stock to the acquiring company. And then the locking before 12 months, 18 months or whatever, and then the business goes on. So any particular reason why we are looking for -- why we look for cash this time?
A couple of things. One is like when we acquired Karix, it's partly cash, partly stock, okay? It's not 100% stock, right? I think if I remember correctly, 55%, 45% towards cash, right? And so is Gamooga, it's not completely stock like partly -- partly stock, I mean shares, right? So when it comes to then those days, we never had such a -- I mean, we never had so much of cash to pay to acquire these companies. But our option is always to acquire with cash, but not -- we don't want to dilute, that's our whole intent. But the situation now is different from the pay we left a couple of years ago.
Okay. Second question is on the [ Vodafone. ] Now the telco normally problems, we hear it outside. So how quicker we get the payments from Vodafone? So is it between 30 days, 60 days, or it is much more?
Or voice is not is taking...
Uday, I can answer this question. I heard that, right? So from our perspective, the important point to note is that we are a customer than Vodafone being our customer, right? So we have to pay them for the services, right? So from that sense, I don't think we have a financial exposure because for all of the things, the amount that we spend there we are a much multiple larger customer. Vodafone than is to us. So that's really not something which is very relevant from our perspective.
The next question is from the line of Anil Nahata, an individual Investor.
Uday, it's very good to see the progress that we have come over in 1 year from the challenging times. My first question is on the line of international business. With the ValueFirst acquisition, now we are having 2 more geographies besides the UAE business. So what is the kind of directional sense that we are pushing for in the next 2 years for our international business?
Yes. So as it is like we are operating out of Middle East for the last couple of years, and we are growing up revenues quite quickly, like -- that's number one, right? But with the acquisition of ValueFirst, now we have access to 2 more large markets, which is Saudi and Indonesia.
So we have our plans, and the 2 largest markets are very close to us in the template we can offer our platforms. And we also can offer our enterprise communication APS in this market. So definitely, yes, we have a larger plan for our international plan. That's what if we want me to -- I mean what you want to hear from me, right? So we have a very serious plan to expand ourselves into interaction market. Okay.
So Uday, if I can -- though I know you're a bit averse to giving quantification, but if I can look at, like, say, for example, today, less than 10% of our revenues will be from the international markets. Can we look at a situation where we are looking at 20%, 30% of the revenues coming from the international market over the next 2, 3 years?
You yourself said I'm quite averse to giving any forward-looking statements. So let's leave it like that.
Okay. Fair enough. The second question that I had was in terms of the NLD price, you mentioned that there's a 3-year cycles by which the prices sort of change in the market. And in the shareholders' letter, you also mentioned that. Can you just give some more color on to that? Is it that something that you are looking at in terms of telcos increasing the price of the SMS? Or is it just a better improvement in the marketplace?
Absolutely. The telcos are the 1 who has the control on the price increase. And they have already sent out the price increase to all of us. And it is affected from first of August. And so we also have kind of sent out mails to our enterprises, our customers. But this impact is mainly on certain NLD volumes. It does not impact on PSU volumes, which is mainly non-PSU and nongovernment volume. So yes, it is effective from first of August.
So Uday, if it is not basically it means that is dealt scrubbing charges that they're trying to increase. Is that it?
Sorry, scrubbing charges? Sorry, come again?
Are they trying to increase those scrubbing charges? I mean, okay, can you quantify what is the increase in the certain segment? What goes up from where to where?
So I cannot really qualify and quantify statement. But having said that, all I'm saying is I'm here to confirm that the prices are all set to go up from first of August. That's the first point. But it is going to affect only non-PSU, nongovernment traffic. That's what telcos have sent the mail to all the aggregators and enterprises directly. And wherever we have the business it enterprise, we also sent out mails to enterprises.
Fair enough, that -- so if I can just insist what is the order of magnitude of this price increase? Is it like 10%, 20%, 30%, just in other ballpark idea?
It's too early to comment because we don't know. We are not -- the enterprises are the ones who are going to consummate the services. So we have to see how this enterprise are consumed look at this price. They keep looking at ROI because these SMS are being used not necessarily for OTP and transactions but also for promotional life. So we have to see how the market is going to react to -- react to the price increase.
Okay. Maybe then in the next couple of quarters, you will be able to give us a better idea. Is that correct?
In Q2, we should be able to that in itself, we should be able to give you a clear clarity, yes. Yes.
So that will be very nice. Another if I can just ask a last question on the Wisely I mean, I'm very pleased to see this kind of innovation coming from Tanla and you have been sparing some of these things. If I look at Wisely, this is probably a follow-up question to Rama as well. So basically, each of the telcos will be deploying with some partners or maybe they will develop it themselves. So Tanla already has signed up with VI, if I understand right, you are in discussion with 1 of the larger telcos. But in the hypothetical situation, let's say, 1 or the other telcos, go with somebody else. Then how does this marketing work? I mean, HDFC Bank is the customer, HDFC Bank is going to be charged. So Tanla and BI will be approaching HDFC Bank as 1 may be supposed geo goes with somebody else do will also be approaching HDFC Bank. How this thing is actually going to work? It's a bit confusing. So if you can just help understand that better, it will be very nice.
Yes. Again, I must say that it's a good question. I'll tell you -- let me step back, let me explain how we like. So this SMS -- I mean you get the SMS on both on A2P application to PSM, which is a commercial communication on your phone as well as peer-to-peer SMS, which is a person-to-person communication by the platform is going to be deployed for both P2P and ATP messages, right? So that's number one, right? And this platform is deployed with the telcos, as I told you earlier, like.
The third point is like when I go to HDFC, okay, assuming that I have a deployed 2 telcos, okay? All I have to tell them is what is my coverage in terms of 2P and what is the coverage in terms of P2P. For example -- and what is -- and then I have to protect DFUs. Okay? So it is a telco and enterprise coverage and water P2P and B2B -- just also a combination of a bit of both, the telcos, enterprises and 2-pad PPP. It's a big -- it's not a competitive sector, but it sounds a little complicated, but we cut this formal ally. So effectively, like we are here protect the banks use okay, right? If I go and commit to the bank saying that I'm going to protect all your telco users, okay? And then I say that I'm going to cover 70% of my male traffic. So that's how they could pay as a commercial side. It all depends the coverage.
Understood. So that's a good one. So basically, you are projecting your coverage of the A2P message and of the P2P message and doing a deal with the telco on that basis?
Yes. The use -- the coverage of users and the volume in terms of both AP and B2B.
Understood. And the 1 question finally. I mean, to the presentation was very nice, but this time, I did not find any mention of the 2 collar messaging. I mean I saw a huge amount of volumes in the IPL season on through quarter and my phone was virtually having business chat from 2 pillar on a daily basis. So can you give some clarity on what happened on True Color, I mean I was hoping it might have exited 1 billion messages a month or something like that?
I think we have covered in the presentation, but probably might not have called out a crew collar as a channel like, but...
I think it comes under does come into -- it comes under OTT. So what we've done is we've kind of consolidated across, right? So we -- so you're right. So we've not -- we've called out volumes at an overall level, and as we've not broken down at what is the component of the individual one. But you're right, we see a good uptick in bile OTT in Q1 vis-a-vis Q4. And that is what kind of -- if you've seen our overall platform gross margin, which accelerated to 30% plus, in the current quarter, a lot of it is driven by what we've done on the OTT channel.
Okay. Thank you very much, Harbin. And Udaan Like, all the best to you. This is extremely good progress from last year's Q1. I hope we can accelerate this progress further. Thank you.
Ladies and gentlemen, that is the last question. I now hand the conference over to the management for their closing comments. Thank you, everyone. That was the last question for today. In case we could not take your questions, please -- due to time constraint, please feel free to reach out. Good evening. Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Tanla Platforms Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.