More VAS adoption by telcos could improve Arpus: Study

Global technology major IBM has said the domestic telecom operators can arrest their revenue depletion due to the steeply falling Arpus, (average revenue per user) by adopting an aggressive VAS (value-added services) strategy.

Though the 743-million strong domestic mobile market has been growing exponentially, this growth is accompanied by steep decline in the Arpu and increasing churn, says an IBM Global Business Services report titled ''Be smart, drive VAS''.
But the study soon notes that enhancing data and allied revenue from VAS is an imperative step to address the imminent revenue loss due to this market trend and outlines the key strategies service providers need to adopt in their pursuit of the VAS market by offering more user-friendly content as well as charging them more. The current average Arpu stands at a low Rs 141 per customer.
The study further notes that over time competition has substantially increased, leading to a negative impact on the voice Arpus, which now constitutes as much as 80% of the overall revenue basket of the operators. The problem gets more confounded as the new subscribers are not adding up Arpus, says the report.
"The current projection based on the current the rate of subscriber growth, a revenue opportunity of Rs 21,000 could crore arise if Arpu could be kept constant versus its actual decline until 2014. Therefore, if the declining Arpu trends are not addressed the industry stands to lose significant revenue in the market."
The domestic mobile market that has been the world''s fastest market for years now, is also known for the lowest Arpu or average revenue per user, which today stands at a low Rs 141, bringing red mark to the balance sheet of almost all the operators.