Mobile VAS In India And Its Future – VAS Players & Telecom Operators Speak Out

WATBlog attended the Mobile VAS Roundtable on crystal ball gazing for the VAS Industry organised by IAMAI and Businessworld and came back with some interesting insights from the panel which had the following panelists.


Krishna Durbha, Head-VAS Business & Marketing Applications Solutions & Content Group, Reliance Communications

Manoj Dawane, CEO, Mauj Mobile

Abhijit Saxena, CEO, Netcore Solutions

Sanjay Swamy, CEO, mChek India Payment Systems

Jagdish Mitra, CEO, CanvasM Technologies

The panel was initiated with a discussion on..

State of telecom networks in India and when will they get better connected?

On this Manoj Dawane of Mauj telecom stated that China’s coverage is 97% and India’s telecom coverage is 60%. Front end is growing very fast as compared to backend i.e. infrastructure. But in the current scenario for customer acquisition telecom companies are sacrificing quality which is where the problem lies.

Handset pricing an impediment?

One of the panelists also noted that handset cost is significant impediment for VAS and Mcommerce. Different makes of handsets make it difficult to build a mass based application.
This point was countered by Abhijit Saxena of Netcore Solutions who felt that pricing wasn’t an impediment. He felt that application providers needed to work around it by providing basic level apps for example email 2 sms by mytoday.

What kind of services will drive the growth of VAS?

One of the panelists stated that For a large no of people cellphone is the first communication tool. Hence voice & sms is going to be the largest used services

Manoj Dawane stated that service providers need to give people services that they want. To state an example he said 50% of the people are of marriageable age which makes a great case for on mobile. He said mobile will be used for entertainment when the person is idle. For example In car consumption would be entertainment oriented content.

On the other hand Abhijit Saxena felt that In the next 3-5 years 20% of the phones would be bought for capabilities beyond voice and sms. Jagdish Mitra of MCanvas felt that Convenience & Convergence will drive mobile VAS usage & platforms like DTH is just the start of convergence.

Reliance Telecom’s Krishna Durbha Defends Revenue Share

Reliance Telecom – Krishna Durba in defence of the operator bashing with regards to the poor revenue share had a very emphatic way of making his point. He said this what you expect..

Please build the network
Please pay 1600 odd crores for the license
Please upgrade the network
Please promote VAS
Please bill the client, make the collections, have a call centre for grieviences with services and then…
And then please pay us 70% share!”

Point he made: Telecom Operators are possibly spending more money promoting VAS than any other VAS player himself!

Why is Operator share different in International markets?
Krishna answred this stating that in international markets the ARPU is high, lifecycle of a user is long due to lock in periods and churn is low. Thereby making it possible for telecom providers to have that kind of revenue share!

On Cost, Access & Success of VAS

Abhikit Saxena stated that at any point if the cost of data/access is great than the content being consumed then that content wont last which is what makes VAS suffer as data charges need to come down.

On the point of VAS success and revenues for operators Jagdish Mitra stated that VAS has succeeded as Airtel makes more money on music on mobile than HMV makes on music as a whole!

On the point of access and cost Manoj Dawane added that The VAS of today would be the service of tomorrow as VAS wont be an addon but will be ‘the service’ that telecom operators provide and will become a commodity.
What the operator needs to consider is would you charge a pizza hut revenue share if he called for a pizza from the landline? Then why charge him for a short code? if the communication tool was more expensive than the pizza would a customer order the pizza?

Post Panel Discussions: On the whole the panel had some interesting comments made. After the panel in my discussion with a few people from the telecom operators side a point was made on TRAI over-regulating the telecom space. Besides for that I spoke to Mr.Krishna Durbha of Reliance communication as well who said that cross platform promotion of reliance services has to happen sooner or later i.e. services like bigadda, zapak and even reliance money could come on to the phone as an addon service.

One Response to “Mobile VAS In India And Its Future – VAS Players & Telecom Operators Speak Out”

  1. April 17, 2011 at 6:29 pm #

    while the role of VAS in customer acquisition and retention may remain questionable,what is not in doubt is the current win win situation for the customers who are enjoying a range of extra services combined with low tariffs. Allowing customers to pay their cellular telephone bills through banks was probably the first VAS. this made life easier for customers and also allowed the operators to use the banks as billl collection centers,sparing them the energy and cost of building their own network.

Leave a Comment

8 − seven =