Introduction:
India is all set to become the second largest Telecommunication market in world with lowest ARPU in world. Since 2000’s onwards it’s growing at a CAGR of 30+% with penetration at 47+%, having a subscriber base of 560+ million with wireless segment contributing 92% having an urban penetration of 80+% and rural penetration close to 20%. The industry is concerned about falling ARPU which in 2006 was Rs. 345 and has fallen to as low as Rs. 160 thanks to constantly declining tariffs. The potential for growth lies in rural under tapped market which again is low ARPU base and increases concern. All are eying VAS as the rescuer and trying their tricks & cards to increase revenue share of this segment to as high as 40% from 14% at present, in couple of years.
VAS Market Scenario:
Initially voice revenues occupied 95% of the revenue pie with VAS contributing not more than 5% of revenue and of which SMS contributed more than 90%. Because of the potential and reasons mentioned above more than 150+ companies have mushroomed since 2K’s to offer their services across the value chain. Among them, some, such as “On Mobile” have met with tremendous success on the basis of constant innovation. During early days their EBIDA margin was more than 80% and has come down to as low as 15%.Margin will improve significantly once 3G is available since it will enable high margin content to be made available rather than the present largely SMS driven VAS. VAS revenues have been growing in India with a CAGR of 60%. Analyst expects it to grow at a CAGR of 20% in coming 5 years. Revenues in 2009 were Rs. 1,00,000 M and are expected to double in the next two years with a CAGR of 70% and contributing around 20% of total revenues. VAS has a penetration of 25% (without P2P SMS) which is expected to grow to 45% till 2013 with3G availability as 3G enabled handsets are expected to be of 60% of total handsets used.
VAS Offerings:
Operator as the only major Sales module is hampering its growth. Delivery channels such as SMS, WAP; GPRS have their share of benefits and problems and one delivery channel has to pick up for better opportunity tapping. For a successful VAS offering three attributes are essential:
a) accessibility of service (Technology Platform)
b) Bundling of Services (Packaging and Offering)
c) Content Quality.
A perfect combination of above three results in a killer VAS application. Besides the three factors, the differentiating factor is the way we promote and brand our services and the way we manage the VAS lifecycle – e.g. CRBT innovations like Press * to copy, Ganna bolo Hello Tune pao have kept CRBT segment growing and healthy.
A-Z offerings of VAS can be summarized as
A (Astrology, AdRBT, AppStores)
B (Bollywood, Browsing, Blogging)
C( Cricket, Content, Community)
D (Devotion, Dating)
E (Education, Enterprise)
F(Fun)
G(Gaming, Gambling)
H(Health, handset)
I(Infotainment)
J(Jokes)
K(Knowledge)
L(Location Based Services,LIMI (low income marginal income))
M(Music, mCommerce)
N(Networking, News)
O(ovi-like stores)
P(profile, Packaging, pricing)
Q(Quiz)
R(ringtones, Religion, Radio, Rural)
S(Search, Sachet)
T(TV on mobile, Ticketing)
U(Utilities, UGC)
V(vernacular, Voice)
W(Wallpaper, Widgets)
X(x-gen applications)
Y(youth based applications)
Z(ZooZoo(promotion & packaging)).
Do Post your feedback and Comments.
Thanks
