3. Operators will focus on VAS and Data Services in the Red Market: Voice, SMS and quality of network can no longer be used for differentiation – they are now hygiene. The Red Market subscribers got a phone in the first decade of India’s wireless rollout between 1995-2005. They have been using Voice and P2P SMS for between 3 and 13 years. They now want to do much more with their phone – and their time is now coming. 3G will be a big enabler for richer services, and can actually drive higher ARPUs (Average Revenue Per User). We will also see the emergence of Data MVNOs – or mobile computing operators.
4. The Coming Era of VAS Operators: Today, 90% of operators revenues comes from Voice and Rentals. Of the balance 10%, about half comes from Person-to-Person (P2P) SMS. So, VAS accounts for only about 5% of revenue. Operators have primarily focused on voice. I see a new breed of companies emerging who will create direct-to-consumer services and focus exclusively on VAS – think of them as VAS Operators. They will have multiple revenue streams – not just from subscribers, but also from advertisers and businesses. They will be the Genies that make the mobile as magic lamps in the hands of consumers.