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Expect-Soon-VAS-Explosion
ST Team
Wednesday, October 1, 2008
It was chilling cold outside. But it could not deter the enthusiasm of mobile phone technology experts and learning aspirants who attended Momo Monsoon, held at IIM Bangalore on 30th August, conducted by Mobile Monday Bangalore, the city chapter of the Finland based Mobile Monday, a global community of mobile industry professionals, which promotes mobile industry by fostering cooperation and networking among interest groups and industry.

This edition of Momo Monsoon aimed to promote discussion on issues, ideas, challenges, and opportunities in the Mobile VAS ecosystem, the event threw light on several issues related to mobile value added services (VAS) and its opportunities.

In the inaugural keynote, Prof. Dr. Sridhar Varadarajan, Professor in Information Management at the Management Development Institute, said that though the mobile calling minutes in the country was increasing, average revenue per user (ARPU) is on a decline, thanks to a fierce competition among the players to offer customers the lowest possible call charges. But VAS could be a solution for this.
Last month, 9.2 million new subscribers were added to the mobile subscriber base in India. Though growth numbers are exciting, mobile VAS is still in an infancy stage due to the low adoption rate and lack of a promotion-conducive ecosystem. There is a wide gap between the urban and rural sectors in mobile adoption. Out of the total of 320 million urban population of India 240 million people are mobile phone users and the urban teledensity is 85 percent. Almost 80 million of them have access to cable TV DTH and Internet, while 70 percent of India is rural and still remains underconnected.

Considering the low PC penetration and still lower Internet and broadband penetration, the mobile has the potential to emerge as the content and communication platform for rural India, which has a population of around 850 million with 63 million mobile users, where current teledensity is about 8.5 percent.

VAS: A New Hope?

VAS players could also look at disadvantaged segment of life. In India there are 116.11 million visually impaired people, while 280 million people have varying levels of hearing loss disability. These people are affected by severe loss of connectivity, mobility, and community contacts. Mobile firms can offer the technology platform or services pertaining to them, Varadarajan says.

VAS also acts as enablers that boost the plummeting ARPU of operators, says Kiran Anandam Pillai, Head, Consumer Products, OnMobile. Apart from sending SMSes, which have become a major source of income for TV channels, people now widely use their handsets to play games, download ring tones, read news alerts, access the Internet, listen to music, access information from banks, check exam results, book tickets for movies, trains, and flights, participate in contests, and view one touch ads, he adds.

Further, local language content adds to the prospects of VAS' growth in rural India. For example, a farmer would be interested to know the 'mandi' price in his own area, rather than quotes from remote cities. Also, he can get answers for his farm related queries via SMS from experts from an institute, which provides such services. The challenge for an operator is to aggregate content that is as locally relevant as possible.

It is clear that there is a huge scope for innovation in VAS. Location based services, car pooling, GPS, TV serial updates, SMS for public services, mobile dating, remotely controlled applications, voice morphing services targeting children, and mobile-search are some of the really hot prospects under VAS. The major factors that increase the potential of VAS are the advent of new networks, high bandwidth availability, transition from circuit-switched to packet networks, and upgrades in handset standards and technologies that support new formats (3G, SIP).

According to Prakash Sayini from Forum Nokia, the one good thing that happened in India is the mobile penetration and innovations in the data space. Now mobiles have lots of converged devices like maps and multimedia. Since one can now access Internet via mobile phones, it creates a lot of opportunities to innovate.
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