Origins of Onamaalu: The Telugu Alphabet
The Telugu alphabet is called Onamaalu. There is a good reason and a little bit of history for this. Just as Buddhism was widely practised in the ancient Telugu country, Jainism flourished in the Kannade country. The writers of the earliest Kannada literature were Jains. They were the religious leaders and educators of that day. Common folks sent their children to Jain gurus for education. The gurus initiated the Aksharabhyasam of the children with a prayer to the Thirthankaras and Siddhas.
That prayer started with "Siddham Namaha." The close ties with the Kannada country helped spread the Jain traditions in the Telugu country. There is even a school of thought that the Jain and Buddhist literature that existed before Nannaya was destroyed by scholars and kings who embraced Hinduism. Even if the literature was destroyed, the traditions survived and Aksharabhyasam continued to be initiated with the prayer - Siddham Namaha.
In later years, between 10th and 14th centuries, Saivism became wide spread in the Telugu country (Paa So wrote Basava Puranam during this time). Now the religious leaders and teachers were the Saivites and they initiated Aksharabhyasam with a prayer that started with "Onnamassivaaya." But the Jain tradition did not die away.
The initiation prayer generally took the form of "Onnamassivaya Siddham Namaha." Over the years it became O-Na-Ma-See-Vaa-Yaa-See-Dham-Namaha and the alphabet that was learnt with this prayer came to be called "O-na-ma-lu." Source: Mana lipi puttupoorvotharaalu by Thirumala Raamachandra.