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Five Disruptions in India’s Mobile Industry: 5 – VAS Competition

November 3rd, 2009 · 3 Comments

With walled gardens and high retained shares, operators in India have kept the Value Added Services (VAS) revenues largely to themselves. VAS in India (excluding P2P SMS) has grown to over a billion dollars in revenue. Only about 20% of that flows through to the VAS companies.

Operators have faced little or no competition here from off-deck services because of the ability of VAS companies to do their own billing. What if that where to change? What if companies could create an independent payment collection capability combined with an open publishing platform?

Such an entity (what I call a Digital Services Operator) would be able to inject competition into the VAS space. More importantly, it could also drive innovation and the creation of new services — and truly make the mobile a magic lamp in the hands of consumers.

Last Word

So, the Indian mobile space will continue to be exciting — the coming disruptions will open up the field to innovation across the board. Operators will need to think smart on how to retain their existing subscribers and acquire new ones, while VAS companies will reap benefits from higher network speeds and more open access to the mobile subscribers. 2010 promises to be an exciting year!

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3 responses so far ↓

  • 1 kasi // Nov 3, 2009 at 11:36 am

    Dear Rajesh,

    Mobile will see a very very slow growth in terms of value
    added services from third party (apart from operators and
    thier conglomarates). Most probably a lag of 5-10 years. Because the data owner wants to control the industry and working in a closed system.

    He who owns the data, owns
    the industry and he knows about it !!! :-) …. and he
    thinks he is smart and converting the magic-lamp into to a candle.

    Kasi

  • 2 Raju // Nov 4, 2009 at 12:47 pm

    Will agree completely with your view.

    Independent payment collection capability from a mobile subscriber will create huge opportunities to many VAS companies. This will surely drive innovation, and helps to create more services for mobile user.

    If not completely operator independent model,
    atleast , Telecos must come out with a payment gateways ( Similar to online payment gateways) with transaction charges.

    For example, Telecos charge X%( generally between 4 to 10%) as their transaction charges for processing the transaction.

    This will help offdeck players to create innovative services for mobile users.And ofcourse, operators can even earn for every transaction carried via their network/subscriber.

    This will boost m-commerce and micro payments in india. We could see greater possibilities for wealth creation and distribution by this initiative.

  • 3 Mathew Varghese // Apr 23, 2010 at 12:41 pm

    Hi Rajesh,
    Thanks for sharing your valuable insights and wonderful information.
    I am looking for some data on
    1. The total number of VAS IVR ports deployed in India.
    2. Average IVR port price (hardware only)
    3. Average Services price

    Appreciate if you could give me some approximate numbers or point me to some link.

    Thanks,

    Matt

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