I have submitted a proposal to speak at GSMA Mobile Asia Congress later this year. Let’s see if I get selected! Here is the abstract that I wrote with a couple of my colleagues.
Monetising the Mobile Millions as Value Shifts Away from Voice: The Coming Age of VAS Operators
World over, VAS services are synonymous with the ‘subscriber pays’ paradigm. The list of services is also limited- Ringtones, Wallpapers, Games, CRBT, SMS Subscriptions, Pull services, GPRS Data, on-demand Music & (bandwidth permitting) on-demand video. Innovation is stymied as the control still rests with the Telcos & revenue shares are not attractive in many countries including India.
Netcore has succeeded in creating a unique new model of VAS through its award-winning product portfolio ‘MyToday’ (GSMA Mobile Innovation Global awards 2008, Runner-up, ‘True Mobile Startup’ Category). It has created a phenomenally successful direct-to-consumer service, MyToday SMS dailies, building up a subscriber base of over 3.5 million users in less than 2 years. This new ‘digital mass media’ service is currently ad-supported & free to user, demonstrating for the first time that VAS services need not always be paid for by subscribers. Businesses can contribute to generating revenue as well. This new model needs to evolve to a broader definition of VAS wherein a Right of Way is created to a subscriber & businesses pay for that right of way. We believe that subscriptions will be key driver in this ‘VAS 2.0’ paradigm.
In emerging markets like India, mobile growth continues to explode because of new users who are coming in from the bottom of pyramid. They have limited ability to spend and 45% of mobile users have low cost handsets. Given some of the other unique qualities of India’s mobile users -80% or more prepaid subscribers, speaking numerous languages, mainly youth, heavy rural spread, with little or no exposure to the Internet – the possibilities for new innovative VAS services are limitless.
These services will drive the emergence of a different class of companies from the VAS 1.0 companies we see now. The positioning of VAS 2.0 companies will shift from being at the Telco’s back-end to directly facing the end consumer. We propose to name this new entity – ‘A VAS Operator’ – one who will manage their own consumer relationships & generate multiple monetisation streams. These can be significantly larger than the current industry revenues and can include advertising, invertising, mCommerce & subscriber-paid services with alternate billing options. MyToday permission-based marketing platform already supports multiple monetisation models including a) Subscriber pays – for premium & PULL services, b) Advertiser pays – for SMS ads, WAP ads & lead generation, c) Merchants pay – for transactions & Enterprises pay- for mobile business solutions.
Netcore’s success with the disruptive MyToday SMS Dailies service only underlines the fact that many more innovative ideas for new VAS services can come from non-Telcos & smaller players provided the right environment can be created. In the presentation we will share key learnings from our experience which have helped us flesh out what the ‘right environment’ and the VAS Operator concept could be.
Our experience with running MyToday SMS Dailies has also provided us with valuable insights into the support required from regulatory authorities on redefining & supporting VAS 2.0 which we will also share in the presentation. For VAS 2.0 to flourish, Telcos need to play a different role, that of enabling smaller players. This role needs to be defined & regulated since it is in direct conflict with their more prominent role as VAS provider. The emergence of VAS Operators can be complemented and enhanced by a shift in the Telco’s mindset from a one-sided business model towards becoming a platform facilitating the interactions between VAS Operators & users. Telcos will of course benefit from data charges, billing relationship & more network usage.
While MVNO is a proven & well-known concept, VAS operator is a new & original concept that Netcore is seeking to establish. We will share many ideas in this regard which can also be implemented elsewhere in the world.
