Mobile Value Added Services

Mobile services have always been alluring to the customers. In the beginning, when there was only voice, customer use to fancy mobility the voice as esteemed service. Although the prices were high and coverage was limited, it was a new experience for everybody.

Through the years, with the advent of new and innovation services in the market and equally innovative Tariff plans with day-to-day new schemes the mobile industry has been mutually benefiting to the customer as well as the operators. Also, the new mobile experiences coupled with new expectations from customers, business personnel and enterprise units, has given an opportunity for the content providers, equipment vendors and solution providers to come up with efficient and optimized mobility and VAS solutions.

Today, although voice services are still the prime concern of the customers, the market is clearly moving towards more value added services and richer customer experience. Each service provider has come up with a bundle of offerings accompanied with rich value added services and that too with falling prices. This has encouraged the whole industry to move towards a new era of mobility whereby consumers are ready to accept the new offerings at affordable prices, service providers are keen to improve their network and services, solution provider are ready with innovative VAS solutions and multimedia content. The onus also lies on the equipment vendors to come up with new architectural solutions to enable cheaper and richer mobile services.

Mobility and Virtualization are two trends that are changing the way people can access information while on the move. People are learning that mobile phones can be used for more than just making phone calls. Already now, mobile phone users can access a variety of useful value added services (VAS) for data. The future of telecommunication also promises diversified usage of mobile phones.

The telecom operators realize that like other operators in the world their voice revenues are getting reduced and that they will have to focus on non-voice revenues. The value added services are focusing the handset increasingly as an entertainer, an informer, a secretary, a guide, a companion, as an integral part of consumer life. Most operators have experimented with Value Added Services by launching aggressive components in specific services.

For example, the ring tone features have targeted the youth and the urban population. It became an instant hit amongst youth and the urban population. This was followed by cricket updates, motion pictures and film star information, news, astrology updates etc. Despite having to pay a premium on this content, the Indian subscribers are paying for perceived value. Service providers are already targeting for 35-40% of the revenue to come from data services and this can be done because the challenge posed by Value Added services does not call for huge investment.

The Mobile Value Added Services (Mobile VAS or MVAS) sector could be worth a billion dollars, around Rs 4,500 crore, by 2007-end.

This would be a increase of 58 per cent from its current size of Rs 2,850 crore, according to a report jointly prepared by the Internet And Mobile Association of India and IMRB International. A break up of the total market size reveals that P2P (person to person) SMS or text messaging, continues to dominate the industry with Rs 1,140 crore, followed by ringtones including caller ring back tones at Rs 1,026 crore, Person to Application and Application to Person at Rs 428 crore, games and data at Rs 171 crore and others

The P2P SMS revenue is accrued completely to the telecom operators. The remaining MVAS revenues are distributed among content owners, developers and the telecom operators on a revenue sharing basis. In the case of MVAS (except P2P SMS) the revenue sharing arrangement is heavily in favour of telecom operators. This model is significantly different from more developed markets such as China where typically the operators are entitled to 20-30 per cent only.

In the case of enterprise solution services the revenue share arrangement between operator and short code owner is typically 70 per cent and 30 per cent respectively.
The Indian users have gone way ahead in showing interest to the new technology and advanced services offered by the operators unlike many European countries. Today it’s not only the access technology, but also the applications provided on the same that are important. Customers don’t want to know what technology they are using, they are more concerned about what services are being offered and at what price.

POSTED BY : SUMAN MONDAL