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Truecaller’s True Colors

September 28, 2022 – Truecaller (TRUEB:SS) is a Swedish adware & spyware app which feeds an inferior caller-identification service aimed at detecting spam. The EU’s General Data Protection Regulation (GDPR), and similar legislation across the globe, threatens Truecaller’s business, which we believe is on the brink of redundancy.

It now resorts to skirting regulations and/or avoiding taxes through uncreative loopholes which we believe will be inevitably cut-off.

  • When the taxman comes knocking, Truecaller is a loud and proud Swedish company. Truecaller bills almost exclusively from Sweden from advertising customers/agents despite substantially all operations being in India.
  • When regulators come knocking, Truecaller is an Indian company ostensibly to avoid privacy regulations such as GDPR. Despite this GDPR specialists consulted by Viceroy confirmed that they are in breach of these regulations and are subject to GDPR regardless of their claimed domiciliation and users and non-users location.
  • Several geographies including the EEA, Nigeria, Brazil and South Africa have prevented Truecaller from collecting user address books from apps installed through the Google and Apple app stores. Truecaller must now rely on more expensive preinstalled copies of the app to increase their footprint.
  • Truecaller took a one-time revenue bump from Q4 2020 to Q4 2021 by pushing ads to every user on every call driving a 3-4x increase in user impressions. Impressions per user per day are now flat/decreasing q/q.
  • Truecaller faces competition from OEMs, OTT solutions like WhatsApp and governments, with TRAI announcing their intention to create a Truecaller-like app backed by government issued identity documents.
  • The company and app also have a long and storied history of security and user data breaches, some of which were conducted from within the app. There are also hundreds of “cracked” premium versions of the app online which communicate with Truecaller’s servers without issue and come with lifetime paid membership.
  • Truecaller’s Indian auditor was also Wirecard’s local auditor. They were banned from auditing financial institutions, a rare occurrence.

Viceroy Research is short Truecaller.

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