The Indian Value Added Services (VAS) is expected to log in a turnover of over Rs 20,000 crore by the year 2015 noted telecom experts during the, 4^th International Conference & Exhibition of VAS Asia 2008. The event was organized by Bharat Exhibition Pvt Ltd.

Currently the industry which is pegged around a revenue of US $1.2 billion will see major growth in the music and mobile gaming segments suggests a PricewaterhouseCoopers report. According to PricewaterhouseCoopers for the moment, the Indian VAS industry is being driven by SMS with about 44% of the share, followed by new applications Ringtones & RBTs, GPRS, CLI and other VAS.

OnMobile CEO and co-founder Arvind Rao said: “ringback tones alone have a market of 40 to 50 million users and constituted almost 50 per cent of the VAS market in India and this trend will continue in the near future also.”

According to various telecom experts, as a reality in the near term, the mobile phone will soon double up as a smart card, replacing plastic cards.  Remittances of funds through mobile phones is expected to fulfill the gap in rural banking infrastructure, this would be yet another growth driver for the Indian VAS industry.

In the context of India rolling out 3G services shortly, the analyst report said that “wireless operators see 3G customers more willing than 2G customers to use a variety of multi-media services.”  At present music and games are downloaded on GPRS or 2.5 G platform.  One of the factors that foretell a huge market for VAS in India is the lowering age profile of mobile handset owners and falling costs of handsets with ever-richer features.

While Mr. Rao emphasized the “R-factor”, the expanding of mobile services to rural areas as the future driver of the VAS market, suggested that about 40 % of VAS revenues in this category will come from villages & small towns.

Tata Teleservices president for VAS Pankaj Sethi found the “bottom of the pyramid” customers to expand their use of VAS and drive revenues of operators. 

Entertainment led services and personalization were some other areas that were pushing VAS use, according to Pankaj Sethi.  The other two areas of growth, which the experts suggested, included mobile and social networking.

Pradip Shrivastava, chief marketing officer, Idea Cellular, emphasized international mobile money transfer as a “huge challenge” as it provided quick and efficient service in India with millions of remittances to homes from migrant workers and white collar labour. Annual remittances were now touching the 30 billion dollar mark. 

 “Consumer must be allowed to try out many more services at zero or low cost.  Then only this would expand.  Operators would have to work out new solutions to engage customers,” said Idea Cellular CMO Pradeep Srivastava

Consumer generated content would be yet another driver for VAS in the expanding use of mobile phones, many experts participating in the conference remarked.  Abhay Savargaonkar, senior vice-president for 3G at Bharati Airtel envisaged total revenues from VAS to rise faster than that from voice services in future.  He recalled how Honk Kong was enabling High definition TV to be available on mobiles and machine-to-machine translations over the mobile were becoming a rage in the US.  “In India the missed call has become the biggest innovation.  T-20 is tailor made content for the mobile.”   However, he felt scalability of services would be a big problem in a country of India’s size. “It is required for the industry to come together and have an informed view about the exisiting state of VAS in India. The future lies in the rural India, and we see that besides money transfers, the other two areas would be video and mobile advertisements,” said Vijay Shekhar Sharma, Managing Director, One97.

 “There are very encouraging trends that facilitate the evolution of the India VAS market. From co-marketing initiatives with operators to the focus on youth and visibility, we are very excited to be a part of this development” said Simone Ranucci Brandimarte, CEO/COO Buongiorno

Discussing new business models for meeting these varied needs of what was described as a “booming industry in India”, experts suggested India-specific plans to be innovated.  According to Savargoankar “partnership with all sectors of companies to get as many applications as possible on the mobile” would drive the market. “Close alliances and partnerships are seen as a more practical and flexible approach to bringing together the diverse building blocks for delivering high value VAS” said the report by PwC. The experts also cautioned the service providers and content makers to arrive at proper models for revenue sharing to drive the market further forward.

“The customer focus will clearly be the differentiator and a quality, reliable and consistent delivery is seen as a critical need apart from innovative and exciting offerings” said the PwC report. , the industry analyst firm report said.  “Add value to life through VAS” suggested R K Agarwal, director (planning and new services, BSNL who presided at the experts panel at the conference.

Sourced From: ConnectComm