Emergic: Rajesh Jain’s Blog

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India’s Mobile VAS Industry

August 10th, 2008 · 7 Comments

I have tried to put together some numbers to give a better perspective of India’s MVAS industry. Would love to get feedback on the numbers. These have been assembled from multiple sources, and are not completely accurate but they give an idea of the revenue streams. The key point: what is touted as a $1+ billion industry (what subscribers pay) is in reality only a $200 million industry from the VAS providers point of view, thanks to the skewed revenue shares between the operators and the VAS players.

Key Numbers as of March 2008

Mobile Subscribers

250 million

Avg. ARPU

Rs 250 / $6

Industry Revenue

$ 1.5 billion per month

Annual Revenue

$ 20 billion

Market Cap

$ 120 billion

VAS Providers Revenue

$ 0.18 billion

VASPs Market Cap

$ 1.5 billion

 
ARPU Split of Rs 250

Voice + Rentals

90%

Rs 225

Includes Rentals, Activation Charges, etc.

P2P SMS (primarily)

Also: GPRS Data, Call Roaming, CLI

5%

Rs 12.50

None of this flows through to the VAS Providers

Other VAS

5%

Rs 12.50

Rs 4,300 cr / $1 billion annualised revenue

Revenue for VASPs

17% of the 5% above

Rs 2

Rs 750 cr cr / $180 million annualised revenue

VAS Revenues by Category

 

Category

Penetration

Numbers (million)

Revenue (Rs / mo)

ARPU

Total Revenue (Rs / mo)

VAS Revenue (Rs / mo)

Annual VAS Revenue

Key Players

P2P SMS

35%

80 m

Rs 30

Rs 11

Rs 250 cr

Rs 3,500 cr

CRBT

25%

65 m

Rs 25

Rs 5.50

Rs 165 cr

Rs 30 cr

Rs 350 cr

OnMobile

BhartiTele

Hungama

IVR / Voice Portal

15%

30 m

Rs 20

Rs 3

Rs 60 cr

Rs 10 cr

Rs 125 cr

OnMobile

One97

Cellebrum

Downloads (Ringtones, Wallpapers, Games)

10%

25 m

Rs 10

Re 1

Rs 25 cr

Rs 6 cr

Rs 75 cr

Hungama

SMS Subs.

5%

15 m

Rs 20

Re 1

Rs 30 cr

Rs 6 cr

Rs 75 cr

One97

P2A SMS

15%

30 m

Rs 6

Re 1

Rs 30 cr

Rs 6 cr

Rs 75 cr

IndiaTimes

Misc

Re 1

Rs 50 cr

Rs 5 cr

Rs 50 cr

TOTAL (ex-P2P SMS)

250 m

Rs 12.50

Rs 360 cr

Rs 63 cr

Rs 750 cr


Points to note:

  • P2P SMS Penetration is about 35-40%, while VAS Penetration is at best 25-30% of all users
  • SMS in all its forms (P2P, P2A, Subscriptions, A2P) is the biggest revenue generator after voice
  • Music (as part of a broader Entertainment category) is the bedrock of the VAS Industry accounting for over 50% of non-Voice/SMS revenues (CRBT, Ringtones)
  • Voice Portals are the other big revenue generator, as they are the gateway to a wide variety of content

Tags: Uncategorized

7 responses so far ↓

  • 1 Mobiles in India: Value added services at Broadband Blog // Aug 10, 2008 at 8:48 am

    […] the crap that gets dished out in the media. All in all, it is not the billion dollar industry but a more sedate estimated $200 million dollars. The number of subscribers may be “booming” but the real revenues are not. The mobile […]

  • 2 Girish // Aug 11, 2008 at 10:03 am

    What were the triggers which led to the change of rev share in developed markets? How and when will it change in India - 3G and entry of new players, better content, speed, etc., MVNOs, or consolidation in the content aggregation space (better negotiation) or exclusive deals for content with committed volumes? I am only referring to Downloads & Misc.

  • 3 KP // Aug 11, 2008 at 10:52 am

    Rajesh is bang on… and I always wondered how this industry didnt look deeper…

    I just want to add another point - I did read on some blog that majority of Indians will access the internet on the mobile phone (which will give rise to another new set of valuation and revenue stream projections) - the truth here is that if you classfiy the majority of ringtone and wallpaper downloads as intenet access (which is again a phenomenon in RURBAN* markets; UP, Bihar etc) I fail to understand how can we ever say these consumers are accessing internet in the real sense.

    RURBAN* - rural(ly) urban :)

  • 4 Rohin // Aug 11, 2008 at 3:25 pm

    Rajesh - what sources/assumptions are you using to arrive at this data? It would help to know.

  • 5 raj // Nov 4, 2008 at 6:10 pm

    Great man……….very informative it actually brings lot of things in a single sheet.
    Great work .. keep it up

  • 6 muthukrishnan.m // Nov 5, 2008 at 4:57 am

    hai

  • 7 Nidhi Shah // Nov 18, 2008 at 1:26 am

    Hi Rajesh

    U have veey well shown the table of VAS Revenues by Category.

    I just had a few doubts regarding the same.

    1)CRBT revenue is 25 RS in table, But on an avg the cost of CRBT is 45 RS.
    2)What does the item “SMS Subs.” mean?

    Besides that what is the source for this penetartion numbers for CRBT, SMS etc

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