In recently held GSM 3G World Series Telecom summit in Mumbai where India and worlds leading telecom and IT giants participated few interesting business trends in telecom sector have been revealed in which one of the newest and fastest growing business model was of “mobile Value Added services Industry”.
The market potential of mobile data services can be understood by the fact that- one sixty million people armed with handsets want to be entertained when they are travelling, waiting or simply living. And they are willing to pay for it. Over half dozen aggregators (mobile content or mobile solutions companies) to offer a host of data services from contests and ringtones to weather forecasts, games, banking and astrology services, among dozens of things on the mobile phone.
The mobile Value Added Services (VAS) Industry was at 2,850 crore at the end of 2006 and is estimated to grow at 60 percent to touch Rs.4,560 crores at the end of 2007. The data market in India is expected to be of 40000 crore by the end of 2008.
The sears in the industry predict that in future the perceived value of entertainment related value added services would reduce and consumers would demand more of utility based VAS. Some of the examples of utility based VAS are alerts related to farmers on mandi prices, alerts to customers on insurance premium etc.
“ValueFirst, which is a leading provider of such utility based VAS services, has been experiencing growth in multiples of three for the last two years. The business model of ValueFirst is quite unique compared to other players in the industry as we focus on enterprise-grade utility services of value to the enterprises and their customers”, said Mr. Vijay Shukla, Country Head, ValueFirst (vfirst.com).
Mobile VAS in India can be categorized into the following broad categories like Person to Person SMS, Ringtones inclusive of monotunes, polytunes, truetunes and also includes CRBT (Caller ring back tones) person to Application SMS inclusive of messages sent by end users for contests & for seeking other information like news & updates; Application to Person SMS inclusive of service push by enterprise service providers like ValueFirst. “Providing mobile value added services to enterprises is a difficult terrain and only few companies have been successful in serving enterprises”, said Mr. Boby Srinivasan of Roamware.
The growth of VAS in India has been helped both by macro level environmental factors and specific market initiatives to develop this category. Increasing comfort levels with basic mobility services, Personalization of the digital world and digital devices, Reduction in call rates & CPP initiation, focus on movies & music and growing use of SMS contests are the factors working as a catalyst for growth of VAS.
“Though with growth of mobile density there is huge scope of growth in vas market but still this segment is facing lot of challenges like Piracy of Content, lack of Infrastructure, preference for low feature handsets, high cost to the end user, absence of utility services and its current focus on mostly youth and entertainment. Since End users want control and interactivity therefore the applications to look out for in future will be user generated content and mCommerce. Other then this regional content is giving a significant boost to the content market especially in the entertainment category. It is getting popular both in voice and non- voice services. With increasing mobility penetration into the heartland of India, significant VAS revenues will be driven” added Mr. Shukla.