Indian VAS could touch $33 bn in 3-4 years

Indian VAS could touch $33 bn in 3-4 years
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First Published: Mon, Jul 09 2007. 03 05 PM IST

Kuldeep Goyal, director, planning & new services, BSNL Ltd, lighting the inaugural lamp at the VAS India 2007 International Conference & Exhibition
Kuldeep Goyal, director, planning & new services, BSNL Ltd, lighting the inaugural lamp at the VAS India 2007 International Conference & Exhibition
Updated: Mon, Jul 09 2007. 03 05 PM IST
New Delhi: If you were asked to recall a few occasions on which you’ve been asked to switch off your mobile phone, there’s every chance you’d rattle of the names of a few seminars, presentations, or even cinema halls where such a request was made.
But if you can’t get a fix on the number of times you’ve been asked to switch on your cell, it is probably because there haven’t been any, have there? Well, that’s precisely what the host asked participants to do at VAS India 2007 International Conference & Exhibition, the conference on mobile value added services that saw the convergence of representatives of the telecom industry in India and abroad.
Kuldeep Goyal, director, planning & new services, BSNL Ltd, lighting the inaugural lamp at the VAS India 2007 International Conference & Exhibition
And with pretty good reason. The urban mobile market is growing at a faster pace in India than in any other place on this planet. The numbers provide the evidence: there were 157 million users Indian cities in 2006-07, up as much as 73% over the previous fiscal. Which means one in every two urban dwellers now owns a handset.
It was against this backdrop that participants at the conference deliberated on avenues to boost the average revenue per user (ARPU) and, in the process, augment the top lines of mobile phone service providers.
Only, it was focused on a service that currently is nowhere near its full potential, but has the kind of power to rev up toplines like no other product probably has. They call it mobile value added services, or VAS. The term refers to a spectrum of services such as gaming, mobile imagery, wireless application protocol (WAP), wall papers, streaming audio and video and more.
According to Assocham estimates, VAS accounts for barely 10-12% of the operators’ revenue at present. But it is poised to grow over 65% to touch Rs8, 200 crore by the end of this fiscal, from Rs4, 950 crore a year ago. The conference was much, much more bullish. A press statement it released says the industry can top $33 billion, or as much as Rs1,33,700 crore in the next three to four years’ time.
VAS India 2007 was an opener to a number of possibilities that have yet to be explored in the country. One such is what they call GMS, or geographical messaging services, which is currently available in the US. Speaking to this correspondent, Rajesh Sawhney, president, Reliance Entertainment, said: ”Once this new innovation is in place in India, it will edge out SMS, as it allows one to send the same message simultaneously to several cell phone users at a particular venue, without even knowing their cell numbers. Just imagine the value it could provide to advertisers trying to reach a large audience at one go.”
To drive home the point, Sawhney said the Indian mobile advertising industry is still in its nascent stage with revenues of just $20 million (Rs80 crore), compared to $10 billion in the US.
Sawhney describes VAS, as the next frontier in the mobile services business. He believes advent of Web 2.0, myspace and youtube has breathed new life into telecom. He foresaw 3G already moving into 4G and what was described as triple play (games, videos and music) on mobile phonies now becoming a multiple play.
Sawhney’s sentiments were echoed at the conference by Dilip Singh, CEO, Telenity, a US based provider of nextgen converged services platforms and applications for communications networks. He believes the industry is in the process of changing the way we communicate at present. ”Soon the mobile phone will not just carry you voice, but will also carry your location video, allowing you to see, on your handset, the person at the other end of the line,” he said.
He added: ”The VAS industry is heading towards a situation where the ringtones on your cell will change automatically each time you travel from one city to another. We are already heading towards shrinking a personal computer — something that will be capable of multitasking and will fit in our pockets.”
But the conference wasn’t just talking to the urban subscriber. Earlier, while inaugurating VAS India 2007, Kuldeep Goyal, director, planning and new services, BSNL Ltd, highlighted the need for VAS players to develop applications in localized languages such as Bhojpuri and Haryanvi and advised them to explore this potential even in fixed-line phones, by offering VAS.
Assocham president Venugopal N Dhoot, in his address, said: ”Various downloads such as ringtones, bill-related information, contest, exam results and messages received from public services such as banks, railways and airlines earn revenues for the industry and would add to the growing revenues from VAS”.
Sashidharan, MD, Bharat Exhibitions, the organizer VAS India 2007, said, ”Considering the fact that call rates in India are the cheapest in the world and the margins are very low, the only hope for operators resides in VAS services.”
Most experts and service providers at the event emphasized the need for educating people about the benefits of these services. ”It is important for the industry to show what these applications look like instead of just talking about them,” said Rakesh Godhwani, manager, mobile content and applications, Qualcomm India. ”Many are still discovering what the mobile can do for them”, he pointed out. According to him, service providers should try and understand what customers want instead of offering them what off-the-shelf products.
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First Published: Mon, Jul 09 2007. 03 05 PM IST