This is a time of enormous opportunities

“In spite of formidable challenges facing it,the Indian VAS market has been witnessing definitive and desirable changes. Sanjay Sinha, VP-mobile content, ACL Wireless shares his thoughts about the Indian VAS scene” Heena Jatav & Mukesh Kumar Singh

Where does the Indian VAS market stand today? How is it different from the global trends?
This is the moment of unprecedented challenges for VAS in India. Consumer trust is low, no killer application in sight, the regulatory regime is rigorous, yet this is the moment of enormous opportunities. The old VAS order – with operator delivered, operator promoted and operator charged services – is definitely under stress. Conventional media (SMS/Voice) and the message (Bollywood and cricket in content) are being tested. While it may be too early to say alternative models have emerged, there are some decisive movements. Device centric, app store based, ad supported and D2C models are beginning to emerge. Wireless data (2G, 2.5G and 3G) is growing like never before.
There is also some notable divergence between India and global VAS trends. Historically VAS usage globally is higher in comparison – SMS penetration in India under 50 per cent while it is as high as 80 per cent in countries like Indonesia and China. Voice-based VAS on the other hand has a high penetration in India.

What percentage of operators revenue comes from VAS?
12 to 18 per cent of revenue is currently generated from VAS in India.

How would you measure the success or failure of VAS?
For me, the criteria for success are (a) user uptake, speed and volume (b) user engagement, average usage per customer, and (c) user retention, life-span of user. I firmly believe that financial rewards are a natural outcome of success in these parameters.

What are the challenges facing monetising of VAS content?
The prevailing VAS ecosystem in India has certain built-in inefficiencies. The revenue distribution between players in the existing value chain is heavily skewed in favor of carriers. Lack of transparency in reconciliation and delayed payment cycle further amplify problems. There are other challenges. Reaching the customer is foremost among these. The most prevalent, powerful and cost-effective medium – bulk SMS (OBD and WAP push)- is now under stress on account of regulatory restrictions. Moreover bulk of the high ARPU users are registered under DND (Do Not Disturb) which means you can’t reach them. The advertising medium is too expensive to merit ROI. Average wallet size of mobile subscriber, which some reports claim to under Rs 10, is another big challenge. So even if there are demand and supply, there may not be enough money for transaction.

What is the most popular VAS in India? Will we see the Indian market graduating from Bollywood and cricket related apps?
The most popular VAS service, so far, has been the CRBT (Caller Ring Back Tune). This is the number one service in terms of penetration as well as revenue, for most carriers in India. The good news is that VAS in India is already moving beyond Bollywood and cricket. There have been some significant innovations on VAS front, especially on consumer utility sphere. Mobile learning, jobs, health, search, classified are new VAS buzzwords. There has been some laudable push from carriers in these areas. Then there are mobile advertising and payment, expected to grow exponentially in next 2-5 years.

New Delhi, December 12, 2011 | My Mobile – Face to Face