Subscriber base:

Population: 1.112 billion

Fixed Subs : 39.41 million (Oct 2007)

Mobile Subs : 217.14 million (Oct 2007)

Internet Subs : 9.22 million (Jun 2007)

Broadband Subs :2.67 million (Sept 2007)

Of the mobile subscribers:

Prepaid connection comprise 85% of total subscriber base (expected to increase to 90%); and over 95% of new additions.

By the end of 2010, the mobile teledensity will be almost 44% with 497 mn subscribers (driven by semi-urban and rural areas)

VAS in India:Past, Present and Future

VAS constitutes 7% of of total telecom revenue for Indian operators.

SMS consituted 55% of VAS revenue in 2006 [P2P/A2P/P2A, A = Application, P=Person), the growth was majorly driven by reality shows like Indian Idol/Kelloggs/KBC etc.

Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue. CAGR of 44% (2007 – 2010), VAS revenues will reach USD 2,744 mn (926mn $

by 2007): This is dependent on several factors like regulatory (e.g. number portability) and non-regulatory factors.

Aircel  21,798,731 5.38%

Bharti Airtel 102,367,881 2.83%

BPL Mobile 2,305,640 2.16%

Bharat Sanchar Nigam Ltd.  49,073,929 1.86%

Idea 47,088,878 3.54%

Mahanagar Telephone Nigam Ltd.   4,297,218 0.86%

Reliance Telecom 12,401,101 0.00%

Spice 0 0%

Vodafone Essar 76,449,598 3.19%

Total GSM Subscribers Pan India

31,57,82,976

o Growth acceleration will begin in 2009, as various challenges are overcome, size of mature user base increases, and telco focus on high end user VAS heightens

Bollywood and Cricket is the killer content - though no significant investment has gone beyond developing local apps or even content/services.

Revenue share between telcos & content providers / aggregators is 70:30, substantially more skewed in favor of telco than in other countries - further aggravated by lack of payment mechanisms.

SMS/IVR/Music downloads/Internet Apps/Search will see an upsurge; limited growth of UGC and mCommerce

Almost half of Indians use ULCH (Ultra Low Cost Handsets)

Entities in VAS Value chain

Content/Application Owner - cos. like saregama/mauj/Rajshri who develop coyrighted content

Aggregator - aggregates content like games/wallpapers/ringtones and distributes it to suit customer needs [players : mauj, hungama mobile, indiatimes mobile etc]

software developer – develops applications (like payment/games/middleware etc.) for mobile VAS [players - mchek/July systems/webaroo/affle etc]

Technology Enabler – provides the platform that plugs into telco networks and acts like a bridge between aggregator and telcos [players include OnMobile, cellnext. mauj etc]

Operators still dominate the revenue sharing arrangement in VAS [Of the amount paid

by end users, 60-70% is kept by operator, aggregator gets 20-25% and content

app/owner gets 10-15% of the revenue]

Challenges:

Lack of content localization

Shortage of spectrum

Slow adoption of GPRS mobiles (only 6.1 mn GPRS users compared to 200 mn overall subs)

Future VAS trends:

Location Based Services Mobile Music update will increase with better bandwidth

Migration to 3G will result in increased ARPU

Local content is on the rise – regional/rural IVR seen as a major opportunity (see our earlier coverage of Ubona)

Mobile commerce doesn not look too promising (India is still a cash and cheque country)

IVR will see large scale adoption, especially in rural areas.

E-Mail will primarily be driven by enterprises

Stocks on mobile will see an uptake

The current state of VAS can be candidly summed in one sentence “Novelty of VAS on

mobile is short-lived and innovation is the key to success which means technology

companies like will have to increase their investments into R&D”

What’s your take?

Download the report here. img credit

tags: vas, telecom

Mobile VAS Numbers for India:

Key Numbers as of March 2008 Total Mobile subcribers – 250mn

Avg. ARPU : Rs. 250/

Prepaid connection comprise 85% of total subscriber base.

VAS constitutes 7% of the total total telecom revenue for Indian operators.

Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue

Almost half of Indians use ULCH (Ultra Low Cost Handsets)

ARPU Split of Rs 250Voice + Rentals 90% Rs 225 Includes Rentals,

Activation Charges, etc.

P2P SMS (primarily)

Also: GPRS Data,

Call Roaming, CLI

5% Rs 12.50

None of this flows through to the VAS Providers

Other VAS 5% Rs 12.50

Rs 4,300 cr / $1 billion annualised revenue

Revenue for 17% of Rs 2 Rs 750 cr cr / $180 million

VASPs the 5% above

annualised revenue

VAS Revenues by Category

Category Penetration Numbers

(million)

Revenue

(Rs /

mo)

ARPU Total

Revenue

(Rs /

mo)

VAS

Revenue

(Rs /

mo)

Annual

VAS

Revenue

Key Players

P2P SMS35% 80 m Rs 30 Rs 11 Rs 250

cr

Rs 3,500

cr

CRBT25% 65 m Rs 25

Rs

5.50Rs 165

cr

Rs 30 cr Rs 350

cr

OnMobile

BhartiTele

Hungama

IVR / Voice Portal 15% 30 m Rs 20

Rs 3Rs 60 cr Rs 10 cr Rs 125

cr

OnMobile

One97

Cellebrum

Downloads (Ringtones, Wallpapers, Games)

10% 25 m Rs 10Re 1

Rs 25 cr Rs 6 cr Rs 75 crHungama

SMS Subs.5% 15 m Rs 20

Re 1Rs 30 cr Rs 6 cr Rs 75 cr

One97

P2A SMS15% 30 m Rs 6

Re 1Rs 30 cr Rs 6 cr Rs 75 cr

IndiaTimes

Misc Re 1Rs 50 cr Rs 5 cr Rs 50 cr

TOTAL (ex-P2P SMS)

250 m Rs

12.50

Rs 360

cr

Rs 63 cr Rs 750

cr

Does this mean that VAS market is ~200mn industry only (though the expected CAGR

is ~44% )?

Entities in VAS Value chain

Content/Application Owner – cos. like saregama/mauj/Rajshri who develop coyrighted content

Aggregator – aggregates content like games/wallpapers/ringtones and distributes it to suit customer needs [players : mauj, hungama mobile, indiatimes mobile etc]

software developer – develops applications (like payment/games/middleware etc.) for mobil

e VAS [players - mchek/July systems/webaroo/affle etc]

Technology Enabler – provides the platform that plugs into telco networks and

acts like a bridge between aggregator and telcos [players include OnMobile,

cellnext. mauj etc]Operators still dominate the revenue sharing arrangement in VAS

[Of the amount paid by end users, 60-70% is kept by operator, aggregator gets 20-

25% and content app/owner gets 10-15% of the revenue]

nvention of cellular technologies and its evolution is the biggest boon to mankind.

Telecommunication industry is growing at a rapid rate. There are 3.3 billion mobile

subscribers worldwide, out of which ~ 375 million  mobile subscribers are Indian. Over

350 billion text messages are exchanged across the world every month.

Ever since cellular world came into existence, there has been continuous innovation

around cellular services. Today, mobile phones have moved beyond their primary role

of voice communications and have graduated to become an essential entertaining

device for mobile users.     We are in an era where users purchase mobile phones not

just to be in touch with people, but use it to express their thoughts, for social

networking, to show their interests, send photos, download images, play games, read

news, surf on the Internet, listen to music, chat instantly with friends & families and

even check their bank balances. Thanks to new and  innovative services been offered

by Mobile VAS providers on continuous basis.

What is Mobile VAS?

Mobile value-added services (m-VAS) is the ability for cellular operators and service

providers to charge a premium price for the services (beyond voice conversation) they

offer to their subscribers (mobile users). Some of the services include: SMS (text

messages), MMS (multimedia messages) , USSD (interactive menu based

services) ,CRBT (caller ring back tone), video streaming , mobile advertisements,

participation in polls and contests, location based services, mCommerce (financial

transactions), Instant messaging, Infotainment services (news, weather reports, songs,

recipes ), content downloads (wallpapers, screen savers, games, ring tones), down

loadable mobile applications.

These are just a few of them which one can imagine at immediate contemplation. List is

inexhaustible based on handset compatibilities and customer demands.

Mobile VAS statistics based on demographic and geographic

Early 2009, survey was conducted for mobile users based on various demographics

(gender, age, education, income ). Mobile users are spread across all parts of India.

Take a  look at the summary (statistical reports) of the survey results of two popular

services in Mobile VAS: Internet usage and SMS (Voting for TV contests).

Mobile Vas in India - Statistics and Trends

Almost 63 million urban Indians accessed Internet using their phone in February, 2009.

Checking emails and searching  information using search engines are the two most popular reason cited by almost 3 in 4 urban Indians.

16 million urban Indians access Internet on their phone almost on a daily basis.

Another report discussed here is ‘SMS voting for TV contests’. Voting in reality TV

shows is the most popular contest type urban Indians participate in by sending SMS to

preserved short code. 45 million urban Indians mentioned voting in reality TV

shows, the most popular SMS contest/vote type followed by voting in news polls

(31.64 million).

mobile vas in India - gaming works

Based on many other surveys conducted on various topics, it is noticed that Mobile VAS

including services such as music, playing games, surfing Internet for reading news,

sports, stocks are more popular amongst men, where as women prefer using their

mobile phones for checking emails, downloading ringtones,wallpapers, browsing

Internet through search engines for food services. It is the younger group .i.e. between

20-25 age group of mobile users who like downloading games and ringtones most.

Regular surveys and market research provide service providers, insight about the

group of mobile users to target before launching any campaign.

Prediction of mobile VAS in India

Mobile interconnected industries are every day coming up with fresh and ground –

breaking mobile technologies. Mobile VAS accounts to 10-12% of the total telecom

revenues. Over 375 million mobile subscribers in India, out of which 8-10% of the total

mobile subscribers are expected to be GPRS (General Packet Radio Services)

subscribers as well.

At present CRBT download and SMS (A2P) mobile VAS seems most popular amongst

mobile users. With the launch of 3G services (faster data speed) in India, games

download, video streaming, mCommerce, mobile blogs and mobile chat is expected to

grow in future. As per TRAI predictions, mobile VAS revenue growth contributing to

telecommunication industry is expected to grow to 30% in next 5-7 years, which is way

beyond the current contribution of 10-12%. Many experts are predicting mobile VAS in

India to be 1 billion USD market by 2010. Let us wait to watch, what is there for Mobile

VAS service providers in 2010.

-

Statistics and frequency of playing games

Let us take a look at some real statistics on mobile games. Based on data gathered in

April 2009 for Feb/March mobile game users it is found that approx 30 million urban

Indians use their mobile phones to play games on a daily basis (12.5%). The Indian

gaming industry though at its cusp, is showing huge potential in sheer market size.

Looking at data in the February- March 2009 time frame there were a total of 105

million Indian consumers playing games on their mobile phone, of this 30 million

consumers played games on their cell phone almost daily.

Mobile Gaming report: “frequency of playing games”

(Two month ended March 2009, Urban Indian Mobile Phone Users)

Frequency of playing games Unique Users (Millions)

Played 1 to 3 times in last month 46.0220

At least once a week 28.5380

Almost daily 30.4700

[Feb/March 2009 statistics on mobile gaming]

Nokia continues its dominance in Indian mobile space accounting for 65% of power

user’s handset followed by Sony Ericsson a distant second (10.6%).

Source of game(s)

There are several mobile game providers in India today. Some data was gathered,

considering the most popular games providers. It is observed , 8.92 million Urban

Indian purchased game(s) for their phone in February/March 2009 .

As seen in graph , it can be noticed, service provider is the most popular source for

purchasing game(s) with 3.59 million urban Indians citing purchasing one from them

followed by Rediff (1.87 million), Hungama.com (1.51 million) and zapak.com (1.40

million). Among service providers Bharti Airtel is the most cited source accounting for

almost 40% of purchasers.

VAS Revenue For CDMA Operators in India (Sep 07)

 

According to the Telecom Authority of India   (TRAI), “Value added services are enhanced services, in the nature of non-core services, which add value to the basic teleservices and bearer services, the core services being standard voice calls, voice/non-voice messages, fax transmission and data transmission”.

Currently in India

At the Mobile VAS Summit held at New Delhi on 24th September 2009, Ravi

Vishvesvaraya Prasad from Telecom Industry Consultants stated that the mobile VAS

market in India is worth US$2000 million. He expected it to double by 2011 with an

annual growth rate of 70%. He added that mobile VAS currently contributed 9-12%

of an operator’s revenue, which is expected to reach 18-22% by 2010. Reliance’s

VAS is leading the pack, followed by Airtel and Vodafone.

The hot seats for VAS in India are multimedia, info-entertainment and mobile

commerce. Entertainment services include ringtones, caller tunes, music, videos,

animation clips, gaming, chatting, contests and voting, email, matrimony, match

scores, and astrological predictions. Information services comprise news alerts,

traffic alerts, bank alerts, job search, location based services and different alerts for

events, fares and prices. Mobile commerce is the most risky and high-tech service

offered by cellular operators. It includes mobile banking, involving bill payments and

bank transactions via a mobile phone.

All these services are witnessing continuous growth and increases in revenue. 40%

of VAS in India is person to person SMS. The stats presented at the Mobile VAS

Summit by telecom industry consultants, illustrated that in India, mobile users

mainly use VAS for music/call back tunes, person to person SMS, person to

application SMS, and games.

Factors driving the growth of VAS in India

The Indian VAS industry is growing at a rapid rate for various reasons. For one thing,

the Indian economy is currently booming and has a high GDP rate. Another

important factor is the availability of mobile phones and data plans at much cheaper

rates. In India, VAS services are mostly provided in monthly plans. Two or more VAS

services are often packaged together in a single set, which appeals to a lot of

subscribers. Moreover, Indians love to participate in SMS contests of reality bites,

SMS contests and other digital services. At present, VAS revenues are mostly from

SMS services, but when 3G services finally get out of their red tape, an increase in

the general usage of VAS is anticipated.

VAS’s future in India

The Indian telecom industry is growing at an unprecedented rate, with the second

largest mobile subscriber base in the world after China. The fastest growing market

is also improving its services in addition to providing standard calling

services. TRAI predicted a bright future for VAS services in India, paving the way for

a revolution in the telecom industry.

The Indian urban landscape of potential mobile subscribers has pretty much reached

saturation, but rural India is still relatively untouched in terms of using VAS,

constituting only 15% of the country’s entire VAS consumption. Cellular operators

have already made efforts to enhance their mobile subscriptions in rural India but

there are a lot of factors to consider such as the availability of content in local

languages, affordability of handsets, and availability of economically viable

prepaid/postpaid plans.

Faster Internet connectivity may become the most desirable VAS in coming years.

India still lacks the infrastructure for the development of a faster mobile Internet

network. The intervention of private players in providing the 2G/3G network will

definitely boost the usage of the Internet and related VAS services, which are

currently limited to browsing. A reliable service will largely determine the acceptance

of 3G services in India.

There are numerous VAS players, mostly smaller content providers, who provide

their services to cellular operators. The future is expected to see an amalgamation of

content providers in the VAS industry and the emergence of a few strong large

players. This coordination will provide a fertile ground for the growth of VAS and

allow content providers and developers to turn a better profit, in addition to

providing a greater revenue share for telecom operators.

Manufacturers will bring in a new range of feature rich, yet reasonably priced cell

phone models. They will be embedded with Java, GPS, GPRS and 3G technologies to

support high-end VAS services. These low priced phones will also feature tiny

software packages for supporting music and video related VAS. The shanzhai are

poised as strong contenders in this market.

Mobile commerce is also one of the fastest emerging VAS in India. I recently received

the ‘Tap and Pay service’ from Vodafone and Citibank to use my mobile phone as a

Citibank credit card. Mobile commerce has the most potential to become a popular

VAS in India. However, it’s also the most problematic, with security concerns that

need to be overcome.

In conclusion

Value Added Services hold a different significance for different people. For me it can

be voting for my favorite contestant in Big Boss (the Indian version of Big Brother);

for a student, VAS may involve setting the latest Bollywood number as their call back

tune; for other people, it’s being able to check the bank balance and pay the

electricity bill. With the advent of faster Internet, we’ll soon be able to enjoy live

streaming of music videos, television broadcast on mobiles, video calls, and video

conferencing. The VAS industry is India has a lot of scope for growth, with plenty of

opportunity for developers and mobile phone manufacturers, including the shanzhai.

From offering BSS solutions as well as range of MVAS solutions including mobile messaging solutions, Comverse is betting big on the Indian market. Mr. Pushpendra Mankard, Sr.VP, Comverse shares his thoughts in an interaction with TelecomTiger.

Q1) VAS has been in existence in India for almost 4-5 years. Yet we witness consistent fall in ARPU. It implies that revenues from MVAS are not able to compensate the fall in

revenues from conventional voice services. Do you see the situation improving in near future?

Ans: Mobile ARPU is falling in majority of the Asia Pacific markets; the situation is not unique to India. Elsewhere, operators are facing the same business challenge of a rapid decline of ARPU. This can be due to a number of factors, for example, voice is becoming commoditized, reduction in tariffs, the shift in strategy focus of acquiring lower-spending prepaid consumers in a bid to increase market share.

In fact, the Indian telecom industry is one of the fastest growing in the world and India is projected to become second largest telecom market globally by 2010. This has helped the VAS Industry in India to come out of its infancy. Even the global economic slowdown has done – little to affect its growth, this demonstrates the resiliency of the Indian VASmarket.

The Indian mobile VAS market has grown by around 60% year on year and is estimated to touch INR 251 billion in FY 2009-10. This trend is expected to increase in future, as VAS services grows exponentially, giving operators a new revenue source. With the onset of 3G and India’s 400 million mobile phone users, we believe that mobile internet and data will be the first major opportunity for 3G operators to grow ARPU. It will thus make mobile internet a significant growth engine for the operators.

Q2) Indian consumers in totality have not shown much interest to VAS apart from few services such as CRBT, content, ringtones and music. What is the main bottleneck for this?

Ans: Indian consumers are in a phase of transformation from using basic telephonyservices to high end value added services.

In India, we see music and film companies, cartoon artists, game makers and musicians all aggressively entering the mobile content market for ring tones, gaming, mobile imagery and streaming audio and video. Service providers in India have positioned mobile services as game changers in attracting and retaining subscribers. The popularity of these entertainment type of VAS is still likely to continue and driven by the youth segment. Other value added services  may however take a little while to encompass the Indianmarket. Fuelled by the rollout of 3G networks, mobile advertising will be one VAS to watch for.

Q3) Currently it is observed that VAS enablers like you either work together with handset manufacturers or directly with operators when the situation demands all the  parties to jointly work together to bring about a comprehensive end-to-end delivery of services.

Ans: An example of this sort of partnership is the launch of Comverse visual voicemail on Blackberry smartphones earlier this year. The Comverse Visual Voicemail solution delivers all messages to a BlackBerry’s inbox, complete with each voicemail’s date, time and length, as well as each caller’s phone number and identity if available. Listening to messages and returning phone calls are as simple as clicking on the message.

While the user can take pleasure in a true visual voicemail experience to save money and time, service providers can benefit from a boost in customer satisfaction, as well as enjoy increases in voicemail usage and penetration in key consumer and business segments.

We have also worked with a Hong Kong operator to launch Hong Kong’s first visual voicemail service. The service is available on the iPhone 3G.Not only does the service enhances the users’ experience, but it also generated additional revenues for the operator.

Q4) Do you see the Indian MVAS sector picking up post entry of 3G services? Trends from BSNL and MTNL negate this belief.

Ans: Though 3G enrollments by MTNL & BSNL have not shown very high results in India todate, however, with the private players stepping in, we can expect a rise in the use of far more VAS than what it is now.

It is no secret now that the future growth in Indiantelecom services is to come from the Rural parts of the country. And only those mobile service providers willbe able to sustain growth who have devised the right strategies to tap this market.  Capgemini, the global consultancy firm is precisely focusing on this concern of service providers to offer its expertise in the telecomfield. 

Mr. Reji Cherian, Vice President, Capgemini shares more thought on the company’s vision for the Indian market in an interaction with TelecomTiger.

Excerpts:

Q1) What is your take on the potential of rural telephony in India?

Ans: Rural India accounts for over 70% of the population, 56% income, 64% of expenditure and 33% of savings. We are already seeing the segment growing based on data from March 2009 Urban teledensity stood at 88.6% and Rural teledensity at 14.8 and the subscriber base itself crossing the 136 million mark. With low Rural penetration levels, there is huge scope for operators in this segment. Estimates peg the segment to have a market share of 32%  by 2015 in the overall mobile subscriber base.

Q2) A section of the industry feels that it will be VAS more than wire which willbring rural folks on board for mobile services. Do you agree with this theory?

Ans:  There are reasons to believe on account of the early indicators that mobile voice usage is inelastic beyond a point, prices have declined rapidly, VAS will become the key driver of ensuring growth and expanding reach of mobile services. The need of the hour is to help reach information to the Rural Indian consumer, there are instances to showcase that VAS can also help to bring the rural flocks onto the mobile services fold. Reuters Market Light and Nokia Tools serve up as examples for this. Operators will have to build services that help rural consumers overcome challenges of getting to essential information eg: soil and water related, information on Government schemes, plants to crop according to season.

Q3) Talks of mobile broadband in the rural space are doing the rounds. But from a service provider perspective the fix is whether to go for 3G or WiMAX to push mobile broadband. What will be your suggestion to such service provider?

Ans: Asia and Africa have shown promising trends on WiMAX implementations. We feel that for new entrants and Greenfield players WiMAX offers a more compelling proposition For incumbent GSM operators, the 3G/HSDPA/HSPA and moving onto LTE route offers a

natural upgrade path, moreover mobile operators would also like to safeguard existing investments and hope to drive increased data usage given saturation in voice.

Q4) How can Capgemini assist service provider in the value chain for delivery of services in the rural areas?

Ans: We could certainly assist in the strategy formulation for expanding to rural areas. Analyzing best practices from emerging markets and successful operators elsewhere, helping operators understand key differences between Urban and Rural markets. We have experienced professionals who bring their global expertise on board. Operators can leverage from our strategy formulation competency which spans over various business areas such as Content Delivery Device.

Q5) Is there a radical change in approach required to streamline the processes for rural areas ? (as compared to urban areas)

Ans: Rural areas typically spend a higher percentage of their household income on communication services, indicating the importance of mobile services in their day to day life. Consumer services, which constitute telecom services, had a CAGR of 10.3% over FY 03-07 in rural India compared to 9.4% in urban India

The difference lies in answering questions like how to encourage the rural population to adopt mobile services by giving them a sound value proposition. Mobile services in rural areas are still considered as a household service while in urban areas it is considered to be a personalized and individual service.

Thanks to the rapid growth of mobile subscribers, India's mobile multimedia platform value-added services market is flourishing. See how Airtel is managing this uniquely segmented market.

India's mobile market is defined by increasing ubiquity as subscribers reach the 250 million mark, with

net additions of nearly eight million subscriptions per month. It is also a very diverse market -- where

the bottom of pyramid (BOP) consumers co-exist with the sophisticated consumers commanding 10

times the mobile spend.

This market is slowly transforming from a voice-only market to a multi-platform value-added services

(VAS) market. And until recently, the VAS market has been primarily SMS-based, with Bollywood and

cricket being the largest content drivers.

 

While the market size of VAS is now about US$1billion, it constitutes only about seven percent of the

country's total mobile revenue. To maxmise the potential of this market, marketers need to gear up to

overcome the following four challenges of marketing to the BPO consumer:

Consumer challenge

Marketers should shift their focus from acquisition to education. Brands must realise that this group of

consumers needs to be educated about mobile VAS, in areas such as the technology, tariff structures,

premium SMS, interactive voice response (IVR) and data usage.

Device challenge

In order for VAS to be adopted by more people, devices that support the use of VAS should be

offered at lower price points. However, at this juncture, low cost handsets enabled with GPRS or

general radio packet system are still not widely available in this market.

Content challenge

Brands need to be more innovative in coming up content. The two most popular subjects have been

Bollywood and cricket. Marketers should think beyond these topics. One other subject they could tap

into is spirituality, which is an equally big market. Marketers must also be able to offer content in its

local languages, rather than just English, if they want to reach out to the masses.

Operator challenge

The fourth challenge arises from the delay in setting spectrum policies. This has resulted in congested

mobile networks, leaving no bandwidth for data-efficient applications. 

< of price market daily track to technology mobile use starting are Kerala in Fishermen instance, for

innovations; hi-tech receptive very be shown also has consumer BOP the band, this constraint a is

While changing. BPO However, >>

On the other hand, India's telco providers are also strategising on how they can address the county's

top-end consumers. We take a look at how Airtel, Indian's largest global system for mobile phones

(GSM) player, segments the top-end market in terms of VAS usage.

Faced with diminishing marginal returns on voice revenues, Airtel was forced to abandon its one-size-

fits-all demographic segmentation. It came up with a strategy where it reclassified users into different

segments based on attitudes, VAS adoption traits and average revenue per person (ARPU).

Airtel focused its attention on two segments in particular. The first group was known as "funsters" --

consumers aged between 18-35 years old, who share a common trait -- a high adoption of VAS. Airtel

believes that with some targeted marketing, spending from this group can increase quite significantly.

The telco has exclusive tie-ups with application providers like Google and has identified music-on-

demand as a key value proposition.

The other segment of focus is the "achievers", who are the top five percent of mobile users. While this

segment isn't a high adopter of VAS, it contributes to revenues nearly 10 times that of Airtel's ARPU,

currently at US$10.

To enhance customer experience for this segment, Airtel has separate priority relationship managers.

It also partnered with HTC and Blackberry to offer high-end handsets catering specifically to this

segment.

Brands entering India must understand that ubiquity in diversity is an inherent dynamic of the market.

Marketers must always be ready to unlearn and re-imagine their mobile strategies to succeed in India!

Manish Sinha is planning director, digital & new media of BatesAsia. Read full bio.

Vodafone Essar adds highest no of new GSMsubscribers in OctTT Correspondent |  New Delhi |  11 Nov 2009

Indian GSM operators collectively added 10.32 million new subscribers in the month of October taking the subscriber base for such services to 355.25 million.

Vodafone Essar emerged as the operator with the highest number of new subscribers added. The company added 2.98 million subscribers taking its total base to 85.82 million. Airtel followed with additions of 2.7 million and subscriber base of 113.21 million at the end of October.

Aircel which has recently expanded into new circles recorded the highest growth rate in subscriber additions at 7.84% by adding 2 millionsubscribers. The company had added 1.3 million subscribers in September. Its total stands at 27.74 million.

BSNL however could not match its private counterparts and could add only 0.6 millionsubscribers in the month. Idea looks set to overtake BSNL in market share as it added

1.9 million new subscribers. Idea’s subscriber base is 53.35 million as compared to BSNL’s 53.96 million.

Circle-wise, Rajasthan grew fastest at a rate of 4.34 % followed by Bihar and UP (E) at 4.14%.

“Our international reach will be our main differentiator formobile financial services,” says Roamware

Mr. Abraham Punnoose VP- Marketing & Business Development, Roamware

 

  TT Correspondent |  New Delhi | 25/09/2009

Having built a market leader position for itself in the roaming solutions provider space with a market share of 60%, Roamware is set to leap frog into a completely new domain, the mobile banking services with the acquisition of Ireland-based Macalla, which specializes in providing mobile financial solutions. But Roamware does not considers the decision to be a kind of foray in any way. It says that it is more about leveraging from the combined synergies of the two companies.

Company’s VP- Marketing & Business Development, Mr. Abraham Punnoosereveals more on the company’s business plans for mobile financial services in an interaction with TelecomTiger.

 On the decision to foray into mobile banking services:

Let us go back to the year 1992-93. Mobile services were evolving across the globe. Roaming services and solution providers for the same were present in the market. But the main concern facing the industry was real-time seamless migration to a roaming network which was missing till Roamware came with its solution. I say this to emphasis that application development is a major competency of Roamware.

Secondly there are over 4.2 billion mobile connections in the world but only about a billion banks accounts. So the scope for offering mobile banking even to the unbanked is tremendous.

Thirdly over the years Roamware has built a client base comprising of more than 382 operators spread over 140 countries across the globe. 

Additionally we also aim to leverage from our association with the Grameen Group.

On why Macalla:

Like I said earlier, Roamware’s reach within the global operator community is huge. Macalla on the other hand has a good base within the banking and financial services sector. The combined synergy can be turned into an unmatched competitive advantage. 

Moreover Macalla is already operating in key markets of Europe particularly Western Europe, Middle East and Africa.

On marketing under Roamware brand name:

We do understand that Roamware is known in the market for its roaming solutions. But the decision to operate Macalla under Roamware brand name is to leverage from the strong brand equity enjoyed by Roamware.

Also if we analyse the past, Xerox started off as a photo copying machine manufacturer. But over the years it has diversified into different product segments but yet operates under the same brand name.

On India opportunity:

Again in India there are over 430 million mobile subscribers as compared to over 100 million bank accounts.   There is significant market to converge these as well as target the untapped. India witnesses over $ 50 billion foreign remittance from abroad which currently are mainly through the official channels or through the grey channels.  

While we acknowledge that there is already a strong presence of some domestic players in the Indian market, we still feel that there is a huge opportunity for us even in such a scenario. It is because we can offer to incorporate the existing systems into the international ecosystem. This has been lacking till now.

On challenge from international players:

Yes Nokia is also set to enter in a big way in the mobile banking services domain. But its positioning is more towards providing an interface in the handset for such services. The application part is missing. It does not has international reach within the operator community as compared to Roamware.

On immediate targets:

We have not set ourselves a target in terms of revenues. But in terms of market penetration, we expect 20 % of our clients to adopt the solution over a period of 12 to 24 months.

“Already serving more than 657 mn ad displays monthly in India over mobile web”: Admob

Mahesh Narayanan Country Manager, Admob India

 

  TT Correspondent |  Mumbai | 29/09/2009

Mobile Advertising in India is currently known to be dominated by players endorsing the medium through the SMS channel. But apprehensions have always persisted over this mode since there is a strong possibility that repeated endorsements might cross the lines ofDo Not Disturb norms and then such players may be left in the lark. The SMS channels are also known to clog inboxes of the subscribers. The increased uptake of mobile data services and end-user preference to access WAP over mobile has given breed to a new form of advertising which is known as mobile web-based advertising. Admob is one such player which claims to be a global leader in this space and is now eying the India opportunity.

“In early 2000’s the challenge in India was to evangelize & get advertisers to explore the potential of the online medium. The USP offered then was accountability and engaging the audience. The addressable market for this segment is roughly around 80 million in India. Compare this to the mobile medium which has an addressable market of more than 430 million subscribers & a rapidly growing number of which are connecting to the internet via their mobile device. And apart from accountability, advertising over mobile web also offers an enhanced one-to-one engagement with the audience,” says Mahesh Narayanan, Country Manager, Admob India while speaking to. TelecomTiger.

US-based Admob, provides a platform for advertisers keen on leveraging the mobile webmedium for advertising. Apart from dealing with advertisers directly, Admob’s other objectives include getting advertising agencies as well as publishers on board to its platform to increase its reach. While globally, Admob serves 8 billion ad displays every month, the India figure stands at more than 657 million. India is now the second highest market for the firm in terms of traffic contributed. Other markets served by Admob include SEA (South East Asia consisting of Singapore Indonesia, Malaysia, Philippines), Australia, Japan & EMEA (Europe Middle East & Africa).

Mahesh who has earlier worked with firms such as Rediff.com, Bidorbuyindia.com, Mediaturf, Times Now & Google says is will be a logical transition to open up to themobile web medium for those advertisers who have leveraged from exploring the digital medium.

On Consumer Trends for mobile web in India:

Mahesh reveals that the potential of mobile web-based advertising depends a lot on increased uptake of mobile data services which in turn is dependent on the affordability of the services. “Recently Aircel introduced affordable data plans for subscribers which resulted in significant surge in subscribers opting for the services. Interestingly our observation reveals that with the increased uptake of data services, the mobile web usage by Aircel subscribers exponentially increased more than 10x times as compared to trends just a few months ago.”

Over 28 % of Admob’s traffic in India comes from mobile users with smartphone handsets. Additionally Nokia is seen dominating the traffic generated for mobile webusage.

Mahesh says if more affordable handsets supporting mobile web access are introduced in the Indian market the uptake will certainly increase manifold. 

On advertisers already hooked on to mobile web advertising:

Surprisingly even mobile service providers are making use of the medium in India. Mahesh says Reliance Mobile used the Admob advertising platform to target subscribers from rival networks during its GSM launch. Handset Manufacturers like Nokia, Sony Ericsson, LG are also using this medium to promote their handset launches.

Sector-wise, BFSI and Travel sectors are increasingly integrating the mobile medium with the overall marketing activities. The travel sector is in fact using mobile web to reach out to international tourists interested in visiting India. “With Admob’s reach within the US market where mobile web usage is very high particularly on iPhone, travel agencies in India can effectively target tourists and market their packages for India.” 

Auto sector is also seen making use of the medium.

On publishers:

According to Mahesh, it is in publisher interest to make the most of their content and have a dedicated focus for the mobile subscribers as well as it allows them to earn additional revenues. “We have witnessed month-on-month growth of 30% for mobile web traffic on our platform in the last three months in India which is not only due to increased use ofmobile web but also because more and more publishers are joining our network.”

On competition:

Mahesh sounds unfazed by competition in the field as he feels that Admob’s technology driven and early mover advantage will help it to stand ahead of the competition.

On market in India for mobile web advertising:

As with other new services and business models associated with the mobile medium where it is practically difficult to quantify the market in terms of revenues, Mahesh says that it may happen that rural subscribers have their first time access to digital medium over the mobile medium. In such a scenario even the rural subscribers can be counted as the addressable market.”Globally Gartner predicts the mobile web advertising industry to touch $ 10-15 Billion in revenues by 2011. The Indian mobile web market is estimated at $5-10Million in 2009 with significant growth expected in 2010” concludes Mahesh.

http://www.inkfast.ma/pages/en/services.php- VAS company in Morrocco

Kirusa Software Pvt. Ltd.,Bangalore Voice SMS company

http://www.vs366.com/about_us/english/league/index.php -chinese VAS company

A to Z of Telecom VAS: Including and Beyond ABCD- The Indian PerspectivePosted: 06 Dec 2009 08:46 PM PST

We have often heard the letters ABCD in the domain of telecom and telecom VAS. Their nomenclature also varies based on the different contexts.  This paper tries to enumerate the different contexts as well as goes beyond ABCD and tries to give an holistic view of the VAS domain from an Indian perspective with a simple order of clubbing almost all the salient intrinsic from A to Z.

Well by this time you must have figured out that the ABCD we are talking about here doesn’t mean American Born Confused Desis for sure.

Cellular penetration in India has reached almost saturation level in the metros and urban areas of the country, and there is little room for further growth in these areas. Logically the countryside is where the next phase of growth is coming from and will continue for a long time. These are small towns, villages, and rural areas with a sizeable portion of the population falling under the Bottom of the Pyramid, or low income marginal income population. This is called the ABCD market -the Ayah, Bai, Carpenter, Driver market. They are the ones who are spearing the next phase of growth in the mobile space and naturally VAS should be customized and personalized according to their profiles to achieve mass scale adoption.

Let us now explore the letters A to Z in an alphabetical manner to unearth the various catalysts of the evolving VAS scenario in India:

A: Astrology, AdRBT, AppStores

AstrologyWith a market size of more than Rs 40,000 crores, the attraction of prediction is too tempting for operators as well as consumers. The fascination about future coupled with various other factors like match making, etc makes Astrology an integral component of the VAS offerings of many operators. Sub-applications like Horoscopes, Tarot numerology, palmistry, gemstones, soulmates, etc are all offered under the domain of Astrology.

AdRBTFreebies are always welcome in the Indian market. The future of Ring Back Tone (RBT) is Ad-RBT (Advertisement RBT). This will create different business model by linking together enterprises with operators and enable penetration of RBT to the lowest level of the pyramid. People will get paid for listening to RBT and hosting RBT on their phones

as companies will discover new and innovative methods of product/brand promotion and touch points.

AppStoresFuture VAS applications will be Innovated, Incubated & Implemented out ofStores on the lines of App Stores. These will facilitate an ecosystem towards creating an end to end VAS value chain. Various innovative and need based applications would be developed in a short span of time from such labs.

B: Bollywood, Browsing, Blogging

BollywoodIndians are crazy about Bollywood and are ready to devour content in any means-right from wallpapers, ringtones, games to celebrity gossips and trivia, etc.

BrowsingMobiles have already replaced computers as the preferred mode of browsing and have a far better reach than the costly PCs. While mobility during browsing attracts the urban people, in the rural areas they offer an economic alternative to the costly computers.

BloggingWith the emergence of micro-blogging sites like Twitter, Indians are happily and constantly blogging on the move. Life has become like twenty-twenty version of the cricket and blogging is also no longer unscathed by it. This makes blogging via mobile phones a way of life rather than a style for the new and modern breed of Indians.

C: Cricket, Content, Comminity

CricketWe Indians eat live and sleep cricket. We worship cricketers as demi-Gods. Anything related to cricket, count us in. With the emergence of the shorter version of cricket T20 and IPL, revenues from cricket related VAS is a perennial source of income- as operators and franchisees not only make moolah during matches but also after and before the series leveraging merchandise sales, wallpapers, team anthems, etc.

ContentContent is King. The future model of content on mobile will evolve just like content on the web, which is mostly free. This will further warm up the battle for quality content. Applications without compelling and dynamic content will have a limited shelf life while those with engaging content will have a larger appeal.

CommunityWe always like to bond together in different communities and sub communities where according to our specific interests. VAS will also evolve to address the needs of particular communities based on their areas of relevance. For instance, followers of Baba Ram Dev would be enticed by a VAS application devoted to Yoga or Baba Ram Dev and can use the same to stay in touch with the latest happenings related to this front.

D: Devotion, Dating

DevotionIndians are God-fearing religious people and we seek blessings in order to be successful in life. Spirituality is a way of our life. Various applications like slokas, muhurats, festivals, tithis are all examples of Devotional VAS.

DatingWith a sizeable chunk of the population in the age group of 15 to 30 years, coupled with the fact that youngsters are early adopters of mobile services, Mobile Dating will take center stage in the days to come. This may be clubbed together with Matrimonial on mobile phones as many people will be using mobile phones as the first source of information for finding their perfect match.

E: Education, Enterprise

EducationExam results, Vocabulary for competitive exams, and Lessons via Mobiles will not only be embraced by rural India, but also urban students who are always on the move. Many operators have also come out with special packages on different modules and subjects like History, geography, etc. This will enhance the interest of the student community in the so-called insipid subjects and lease a fresh life in the delivery of knowledge.

EnterpriseSeamless connectivity and containing costs while enhancing productivity will drive adoption of various VAS applications among enterprises, specially Micro Small Medium Enterprises. Enterprises may also adopt an MVNO model and come forward for connecting with their stakeholders directly, thus creating a whole gamut of enterprise enabled VAS instead of the traditional Enterprise VAS. Just think about a mobile phone which whose different keypads are configured to address different enterprise needs of a consumer. For eg, when you press 1, you get all the services of a bank like ICICI, when you press 2, you can avail the services of an insurance company like LIC, when you press 3, you get the services of a HUL and so on. This can create a whole new disruptive ecosystem that can change the way enterprises offer VAS today.

F: Fun

FunPeople like to have Fun-on-the Go while waiting in queues, travelling, etc and what better means than the ubiquitous mobile phone with some compelling applications. Operators will gradually come to respect the impatience of youngsters and many such applications will be developed to remove the boredom of people, especially the impatience of youngsters.

G: Gaming, Gambling

GamingThis is an evergreen field in the domain of VAS. Multiplayer, community based, location based games would be the future driver in this category.

GamblingGambling-both legal and illegal are already being played out on the mobile phones. Many tourism destination derive a lot of revenues from gambling This will only increase

in the days to come. Various online lotteries can be easily provided on the mobile phones and this will increase frequency of purchase as it will enhance transparency and reduce time and effort to know the outcome.

H: Health, Handsets

HealthTelemedicine has got a shot in the arm, thanks to Mobile Based Health Advisory System. Wellness tips, Fast Aid tricks, BMI tracking, personal monitoring, etc are some of the possible services. Coupled with embedded capabilities, it’s a huge field waiting to be fully exploited.

HandsetsCapability of handsets is a major constraint in the delivery and access of VAS applications. Supporting voice and vernacular VAS is a real challenge, especially for the low-end handsets of the developing world. Operators have to take in cognizance the capability of handsets of the targeted market while developing any VAS application.

I: Infotainment

InfotainmentThere is a huge market to be tapped seeking infotainment on the mobile device itself. Information coupled with an entertainment quotient held great value in the domain of VAS. This is especially true in the emerging rural markets where there is an intrinsic propensity to correlate information with entertainment needs.

J:Jokes

JokesThis would not be a wrong assumption that 1 out of every 3 messages that we send to each other are Jokes. This is the single largest category of VAS in vogue today, even ahead of CRBTs by volumes, if not by revenues.

K: Knowledge

KnowledgeMan’s quest for knowledge is never ending. Via Mobile search engines- voice and text, a large community of consumers will explore the encyclopedia of knowledge available in the public domain.

L: Location Based Services, LIMI

Location Based ServicesLocation Based VAS such as nearest point of interest along with presence and context will be a niche application that will find acceptance among specific user groups. These will be available at a premium as compared to other VAS. Examples include buddy finder, child tracker.

LIMI (Low Income Marginal Income)Both the rural and urban populations lying at the bottom of the pyramid will propel the

next phase of mobile revolution. Volume and Margin will be competing against each other and new VAS business models will gradually evolve to address this sector.

M:Music, M-Commerce

MusicThis is one area where rural India is ahead of its urban counterpart. Music on Mobile is the most popular VAS in rural India, even surpassing CRBTs.

M-CommerceThis will revolutionize the financial sector especially the microfinance sector which will get a boost from better affordability and reach in rural areas. Banking and insurance will also now reach every household in the village. Booking Movies, places at restaurant, hotels, cars, spas, etc will get a fillip with the advent of m-commerce.

N: Networking, News

NetworkingNetworking with friends and family is on the rise and according to a recent study not only youngsters, but even middle-aged people are taking to it via mobiles in a huge way. Social networking sites like Orkut, Facebook, Myspace are seeing an ever increasing mobile population logging into their websites.

NewsNews across various categories ranging from sports to entertainment to current affairs are being accessed by people on the go. It’s the age of T20 and people want news relevant to them in sachets instead of an overload of information.

O: Ovi-like Stores

Ovi-like StoresOvi-like Stores are the one stop shop for future VAS applications. It is a single gateway to a host of applications based upon the requirements of a particular geography, consumer segment, etc. These stores will be open to developers and content providers to come up with compelling applications backed by rich content.

P: Profile, Packaging, Pricing

ProfileSame size doesn’t fit all-age, region, religion, gender matter. VAS should be customized and relevant for the individual based upon his/her demographics. Also the same individual’s needs are different at different time periods and situations. All these factors must be taken into account while coming out with VAS applications.

PackagingWith proper packaging a simple application can be a killer, while without proper packaging, even the best of applications can be flop

PricingNew target segments demand new business models and new business models in turn

necessitate new pricing models. Sachet-based pricing is the way to go, especially in rural areas.

Q: Quiz

QuizQuizzing on mobile can be a very popular application not only among the youngsters but can also serve as a tool for interactive learning in rural areas.

R: Ringtones, Religion, Radio, Rural

RingtonesMost popular VAS across the globe other than SMS-will evolve more with time.

ReligionTimings of various festivals, chants, slokas, etc all are popular religion based VAS across India

RadioRadio on Mobile will be the next big thing after FM on Mobile. Radio will also get a new lease of life via this new delivery medium.

RuralThe rural market is the one that is driving cellular penetration now and obviously VAS relevant to them will push up the ARPU

S: Search, Satchet

SearchSearch on mobile has the potential to be greater than that on the PCs as both audio and textual search can be provisioned.

SatchetDifferent markets call for different pricing models. For the rural market, sachet based pricing is the way to go. Already many operators are testing with Rs1/day schemes on various offerings. This is based on the presumption that everybody does not require the same service everyday.

T: TV on Mobile, Ticketing

TV on MobileThe single most application which will benefit the maximum from the advent of 3G is TV on Mobile. Various programs, clips, audio-visuals would be tailored according to this platform. TV in many Indian household is a shared object and at times there are quarrels in the house with the remote. TV on mobile will exploit this and garner a sizeable media market.

TicketingTicketing on Mobile will save time and money for both rural and urban consumers. Various enterprises are coming forward with ticketing on mobiles. From Train, Car, Bus and Air tickets to movies, etc can be booked directly from your mobile phone.

U: Utilities, UGC

UtilitiesUtility Payments from mobile will enable the middle class people to avoid the hassles of Govt. bureaucrats and long queues.

UGCUser Generated Content will drive the services on mobile to a more personal and customizable level. Content will move towards a free regime.

V: Vernacular, Voice

VernacularWith a lot of applications for the mass market, applications catering to the rural market, Vernacular interaction and delivery process enabled by transliteration engine on the mobile will be a common thing.

VoiceVoice based VAS is the way to go. This enables more interactivity, engagement and is the most easy and popular means for any service. Voice based IVR is one such example. Voice based system does not advocate any structural learning for the end user to utilize it..

W: Wallpaper, Widgets

WallpaperWallpapers on mobile phones are one of the early VAS applications which gained prominence before the era of CRBT and will always be in demand. Wallpapers are available under multiple categories from movies to sports to animals,etc.

WidgetsMobile widgets are highly useful web-based apps offering videos, photos, news, games, live sports scores, social networking, and LBS

X: VAS.X

VAS.XThe ‘X’ here stands for Gen “X” ie next generation VAS.2/VAS.3….etc.  SMS 2.0 is one such example . It enables interactive hyper-linking of advertisements etc. In essence, any VAS service which evolves to the next level can be termed as VAS.X. This assumes prime significance as most of the VAS services today are undergoing continuous improvements and are evolving to their next level at a break-neck speed.

Y: Youth-based Applications

Youth based AppsYouth is the largest consumer of VAS and is also the largest demographic market by number in India. They are the early adopters of such services. No doubt, more than 50% of VAS is built around them.

Z: ZooZoo

ZooZooZooZoo is synonymous with Promotion & Packaging. In order to be successful in the VAS industry, don’t do different things, but do things differently. This means while without the right kind of promotion/packaging even the best of applications may not fly, while with proper promotion/packaging even an ordinary application can be a hit.

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Guest article contributed & CO-authored by  Anup Chakraborty & Amit Mehta of Tata Consultancy Services

Anup Chakraborty is currently working with TCS as Assistant Systems Analyst in the domain of Mobile Value Added Services. He is working with a team of go-getters in enabling an end to end VAS ecosystem within TCS leveraging in-house innovations from various centers of excellence.

Amit Mehta, is currently heading the sales and marketing of the VAS, SDP and Mobility group in TCS, where he was one of the founders members, which evolved, created business case and successfully launched the same

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Promotional activities

 Increasing net revenues and ARPU by enhancing usage by way of regular recharges & more Talktime availability. Increasing MOU by increasing the penetration of tariff products.  To run various up selling promos for recharges. Drive Promotion and Incentive schemes for Sales team thereby creating revenue enhancement opportunities at the point of sale. Analyzing Plan wise usage & revenue pattern. Monitoring of existing products and scheme and the customer response on the scheme. Work in coordination with the Branding Team for local promotion of products.  Customer loyalty and churn reduction. Development & Management of Product and services. Data warehousing Reports & MIS To assist vertical head in planning & leading all products, promotional and branding initiatives for the Prepaid segment at the circle Develop and maintain a model for competitor information particularly tariff related

 Managing Branding Activities - Below the Line (POPs, etc) & Above the Line (Hoardings, Print Ads, TVC’s, etc)

Product Promotions through new schemes and sales oriented workshops Increasing Brand Equity through co-branding activities and tie-ups with significantly important organisations Public Relations & Media Management for ensuring that Brand Image and Brand Value is effectively maintained Market & Competition Analysis to develop new strategies for Brand Awareness  Social related activities and events for promoting the brand through associations with worthwhile causes  Management of Vendors and other organisations for operational activities 

VAS & Products – North-East & Assam Supervision of daily promotional activities for VAS & Products in NE & Assam Circle Pre-launch Activities for VAS & Products like Testing, Training & Service Initiation Coordination & Interaction with Customer Care & Sales for Training and Problem Resolution with relation to VAS & Products  Coordination with Brand Team for effective promotion & communication of newly launched & available VAS & Products Coordination with Content Providers for effective Content Delivery & Complaint Resolution for VAS; Coordination with Sales for effective Product Launch  Circle-Specific VAS & Product Consumer promotions during major events, festivals, etc

Promotion including Media Planning, Product & Media Launch, Branding- New Business Development

Buongiorno Hong Kong Limited (India) was established in January 2006. The company functions through key verticals - B2B, B2C and Marketing Services. 

Buongiorno works with more than 100 telecom companies, including Vodafone, Orange, TIM, Telefonica and T-mobile in Europe, Sprint, Verizon and AT&T in the US, Quatar and Kuwait's Wataniya in the Middle East and Africa, and India's Airtel and Tata Docomo. 

Buongiorno was technology partner for the diet-sms recently introduced by Tata Docomo. Stefano Diemmi, Deputy COO, Buongiorno, in an interaction with Prasoon Srivastava of CIOL shared some of the company's experiences in the value-added services segment and his vision on upcoming business trends in the same segment. Excerpts:

From where did the concept of diet-sms evolve?

Diet-sms started as the first-ever innovative, mobile-to-mobile SMS offering in India. This new offer from Tata Docomo charges consumers 1 paisa only per character, with no charge for the spaces between words.

True to its name, diet-sms is set to revolutionize the SMS platform with its innovative pricing and value proposition. This offering was aimed at bringing down the communication cost on short text messages for Tata Docomo customers.

The concept behind this offering was to extend the per second billing system introduced by Tata Docomo and introduce an innovative mechanism of charging text messages which is beneficial both for the consumers and the telco. This application has been specially designed to cater to the needs of a new dynamic entrant in the telecom sector, setting new industry benchmarks.

Buongiorno is the technology partner of Tata Docomo and responsible for managing the diet-sms application and billing, which has been implemented by using the B!3A VAS SMS Gateway and Technology platform. The diet-sms application is extremely easy to use and will prove economical to a large chunk of SMS-users.

Buongiorno has evolved its SMS offerings in the past 3-4 years of operation, moving significantly up the value chain with its VAS, SMS, P2A and A2P Gateway. This gateway, built on the propriety B!3A platform,

allows operators to configure unique billing or consumption models and is the core behind the 'diet-sms' offering.

What was the market response to the concept of diet-sms in India as well as in other geographies? 

The concept of diet-sms has received good response all across India. Consumers have appreciated this innovative approach of SMS pricing.

Based on your global experience, can you share with us the most well adapted B2C VAS offering that has given an operator reasonable RoI?

In general, the most successful B2C VAS offered by any operator worldwide is based on subscription services. So it includes all those services that provide a continuous update of information, content and data, to the end-user. 

The success of these services is based on a long-term engagement of the customer, continuous education on VAS service usage as well as discounted availability of multiple-purchase content compared to standard single-purchase.

Other services, especially in highly developed markets like Japan, are based on mobile social networking and customer interaction on "virtual-places", which help chat, communicate, blog, connect and play with other customers. These services ensure a high-level stickiness of a customer to the service and high-usage, allowing the operator and service provider a long term revenues generation in multiple forms (via direct sell, e-commerce, advertising, etc.)

Recently SMS interconnect charges had become an issue in the industry. What are your views on this?

SMS Interconnect is an issue mostly for the service of SMS push-capacity delivery or SMS promotional messages.

There is no specific impact of SMS interconnect charges on VAS services, which are directly distributed by mobile operators in their own network so there is no cross-operator involvement.

According to you what are the various kinds of business models in VAS offering we may get to see in the next couple of years?

In the coming years, India - following a global evolution of carriers worldwide - will see a huge increase in VAS services related to mobile gaming, social networking and skill-based promotion/contest. This will provide newer ways of interacting with consumers, who will be more accustomed to VAS/Data services and look forward to innovative activities to engage on the mobile platform.

Especially, social networking dedicated for the mobile phone would emerge as a new trend to support communication, moving from simple value-added services to a real parallel mode of interaction between consumers just as voice and SMS are the norm currently.

Also, the continuous high penetration of smart-phones is opening a new opportunity for VAS services based on mobile applications (e.g. iPhone, Android, Blackberry applications), which would progressively substitute the current form of customer interaction with premium content being available on the mobile phone.

Which are the areas where you see lots of scope for improvement and business proposition?

There is a great scope of improvement in terms of accessibility of services and applications, providing easier interfaces and methodology to connect to services. It is also important to educate consumers to discover, engage in and improve the usage of the services itself. 

CRM and one-to-one customer interaction based on historical profile would become more and more crucial to support the progressive growth of the market and introduction of new services.

Please elaborate on the way Boungiorno can fill these gaps and business growth that the company expects from these opportunities?

Buongiorno expects to leverage the opportunities available, based on its international expertise and understanding. In the near future we will propose innovative services especially in the areas of social networking, gaming and SMS subscription services - based on optimized marketing technique of one-to-one promotion and gratification of consumers.

Buongiorno will continue to leverage on its existing assets and optimize capabilities in SMS/GPRS content service provision; however, it will also start focusing on being ahead on the innovation curve to create new long-term revenue opportunities and continue leadership in the VAS market in the forthcoming years.

Telecom operator Bharti Airtel is piloting a location based service in Delhi and Mumbai, called Buddy Finder. The service allows allows a subscriber to monitor the location of an individual who has agreed to share his/her location with the subscriber. This is quite similar to a service from Telenity that had come up for discussion at a Mobile Monday in Delhi a few months ago. The cost of the service is Rs. 10 for 10 days, and can be activated using the *321*88# code. We learned of the service from a subscriber in Mumbai, and tried it out in Delhi. Our take:

The Challenge

The challenge for this service, is in replacing the phone call. If a subscriber has to take the initiative of requesting inputs on a buddys location, then what stops him from just placing a call and asking the same question, getting the same details. I don’t think the cost of the call will be a major factor in the urban areas for this service.

What We Liked

The concept is simple and very useful, and satisfied an important need: it operates on a ‘Master-Slave’ relationship paradigm, where it is highly likely that one individual will agree to share his/her location with another: for example, Husband-Wife (either way), Car Owner-Driver, Employer-Employee, Girlfriend-Boyfriend, Parent-Child, etc. A parent would want to know where his/her child is.

The other key thing is that it addresses the privacy issue by incorporating consent: only a person whom I allow access to my location will get it. An SMS is sent to users, asking them to respond to a request for location sharing. The people I was stalking following they had to respond with yes to be added to my buddy list.

What We Didn’t Like

– Only USSD based? I think consumers are far more comfortable with using SMS for querying than USSD, and having to go through a bunch of menus each time before placing a request is tedious.

– Airtel to Airtel only: Airtel subscribers can only track other (consenting) Airtel subscribers; it’s unlikely that Airtel would have access (probably via triangulation) to subscribers of other telcom operators. That limits the potential of the service. It’s unlikely that location sharing information will be shared among telecom operators, unless mandated by the government.

– Nicknames: strangely, I couldn’t choose ‘Nikhil Pahwa’ as my identifiable name on the service. Had to settle for a shorter ‘Nix’.

– Accuracy: The location isn’t accurate: it’s close, but not exact. I doubt that triangulation can adequately replace GPS: there have been occasions when, lost in the dense and crowded Chandni Chowk area in Delhi, a friend and I have logged on to Google Maps and used Latitude to locate each other. It’s accuracy (using GPS) is astounding; just for the record, for those who have launched Buddy Finder, I’m currently about 1 km away from “Ashok Pillar, Kamla Nehru Ridge, Civil Lines, Delhi”.

Suggestions:

Allow subscribers to set up alerts for specific users, perhaps at a specific time of the day. Alerts are non-intrusive, and don’t depend on users querying the system. That’s a value-add that trumps having to call. Also enable SMS  based querying, which will allow users to query for location, instead of making multiple calls to query ‘Where have you reached now?’ Would asking for an alert every 10 minutes until a particular time, or over a period of time be too complicated?

The Problem Of Distribution

40-45 million have caller ring back tones and it generates 40 rupees per subscriber for operators. The

biggest challenge for mobile application providers is reach and distribution. This distribution is in the

hands of the telecom operators.

Telecom operators never entertained mobile application players a decade ago and many skeletons of

mobile app players are hanging outside the door of telecom operators.

How to sell to operators?

As a mobile app player you need to make sure that the telecom operator sees the value that your

application provides. The app that did it for Onmobile was a voice based cricket app which was liked by

the folks at Hutch and they helped us roll it out. We never got paid for the application but did a revenue

share that also in a few circles.

Learnings from Onmobile experience

What we learnt from this is that as a mobile application player its important to just get your app live on

any network as once you get one success story then the world will be at your feet.

App Store – A boon for developers

The app stores that we see are an Industry altering event. Any developer sitting in any nook and corner

of the world can now get a ready distribution channel.

Advice on kinds of apps to develop

Me too apps dont work. So dont try to replicate what has been done in the west. Also dont get caught up

in software coding and not give time to UI. UI and UE i.e. user interface and user experience are the two

most important aspects of a mobile application

Business Model

We at Onmobile are not big fans of the ad funded model and believe that if the user doesn’t pay for the

app then it probably isn’t worth it in the first place.

We also believe that one shouldn’t compromise on software management skills and companies to work

towards bringing in developers that have deep domain knowledge and can build robust apps.

As a CEO you need to keep your team invested and hence one should be generous with ESOPs.

What is Onmobile doing to help developers?

Onmobile has launched an app developer network wherein we provide our reach through operators and

voice based platform to app developers to build their apps upon.

We have also launched an incubation fund and we shall be looking at funding companies that are in the mobile applications space and we shall get VC’s to fund them as well if required. One such deal we did was with Verse which recently got funding from Matrix Partners.

“3G is Overhyped While Revenue Share In Mobile VAS Is Fair To Content Providers” - Arvind Rao, OnMobile

When: July 09, 2009

By watblog

 

On 3G -

The biggest beneficiary of 3G will be mobile internet access.

1. Operators in India are trying to load more calls per spectrum and hence spectrum is clogged

2. First use of 3G will be for voice.

3. Second use of 3G would be for data both for data cards or internet on mobile.

On post 3G auction -

1. It will take 2-3 years for a full 3G rollout even after auction for large players and for last mile

3G connectivity in India.

2. 3G handsets are expensive and hence adoption of 3G would be low

3. Even if handsets have video calling facility it doesn’t work unless both the users have a video

calling-enabled handsets. So for actual usage there is still a lot of time before 3G can make

an impact.

4. Hence, I don’t see substantial revenues through 3G materialize for 5 years substantial.

Substantial means even 5-10% of total VAS revenues.

Mr. Rao described the 3G saga in minimum words - “Its all hyped!”. He also questioned the 3G hype

by asking - “How many users would have 3G handsets? And how many people would actually use its

features?”

On MNP (Mobile Number Portability) and its impact on VAS (Value Added Services) -

1. Number of users does not affect OnMobile as we are across all operators

2. For a smaller VAS company it may help

3. MNP will make us lose profiling and we cant target users based on their consumption

4. MNP may have a smaller effect rather than a major shift

5. Exclusive / Viral Content will not drive operators to give higher share to content providers

even after MNP is implemented. (This contradicts our take on how  MNP will revolutionize

Mobile VAS Space)

6. Even MNP would not have a great impact on the revenue share.

On Revenue share -

I don’t see it changing at all. Operators spend a lot of money on infrastructure and promoting the

music. All content VAS providers should learn to respect what operators are spending. We are ok with

the way revenue share is structured currently.

(Please Note: Current revenue share is 80:20 in favor of the operators and Ajit

Balakrishnan of Rediff had stated that this needs to change to 50:50 for growth of mobile

content.)

On are operators doing enough to grow Mobile VAS?

The core reason why VAS is a 7,000 crore industry because the operators have whole heartedly

supported it. So my answer is Yes operators are doing a great job.

On Middemen -

I think that there are too many middlemen in VAS for instance -

Content

Content aggregators

Technology

Distribution, etc etc

What this space requires is innovation and what you don’t need is too many people in the same space

offering identical services thereby undercutting margins.