Marketing Management Project

ePGP-03

Market Survey and Strategies

For
Providing value added services
At low cost, In Indian context

Submitted to
Dr. Atanu Adhikari, IIMK

Prepared by:
Sharon Selvaraj (Roll No : ePGP-03-167)
Nitin Jaiswal (Roll No : ePGP-03-139)
Nitesh Kumar (Roll No : ePGP-03-138)
Alok Sinha (Roll No : ePGP-03-095)
Sreeramana Gadhamsetty (Roll No : eMEP-10-064)
Yeshaswini GR (Roll No : ePGP-03-193)
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Table of Contents
EXECUTIVE SUMMARY................................................................................................4
MARKET AND PRODUCT OVERVIEW.............................................................................5
India's Mobile Market.................................................................................................................5
Mobile VAS Services..................................................................................................................6
MVAS Value Chain.....................................................................................................................7
MVAS Content Aggregator – Categories & Offering....................................................................7
MVAS Content Aggregator – Key Competitors............................................................................9
SITUATION ANALYSIS...............................................................................................10
MARKETING OBJECTIVES...........................................................................................11
MARKETING STRATEGIES..........................................................................................12
MARKET SEGMENTATION.........................................................................................................................12
MARKET TARGETING:............................................................................................................................14
POSITIONING:.....................................................................................................................................14
MARKETING ACTION PROGRAMS...............................................................................17
PRODUCT: .......................................................................................................................................17
ACCESSIBILITY OF SERVICES:....................................................................................................................18
PRICING...........................................................................................................................................18
BREAK EVEN ANALYSIS:........................................................................................................................20
PROMOTION:.....................................................................................................................................21
IMPLEMENTATION....................................................................................................21
FINANCIAL PROJECTIONS..........................................................................................22
MONITORING AND CONTROL.....................................................................................26
MARKETING ORGANIZATION......................................................................................27
CONTINGENCY PLANNING.........................................................................................27
ANNEXURE...............................................................................................................27
SOURCES OF INFORMATION......................................................................................................................27
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Executive Summary
In the last decade the Indian telecom industry has changed dramatically – some of its idiosyncrasies
like
- usage of ultra low cost handsets by 50% of Indians
- 85% of customer are prepaid customers
- declining ARPU and increased competition among operators
- rural India is still mostly untapped
sets it apart from any other telecom industry in the world.

This marketing project originally started with an aim of providing social networking features at low cost,
however soon realized after doing a market survey that providing social networking VAS is not going
to be profitable and sustainable in long term and social networking is particularly not palatable to rural
population.

We have diverse set of users –urban vs rural, sophisticated vs basic- the need is to identify niche
offerings that satisfy these diverse tastes by identifying innovative, user-centric, localized content
through specific delivery mechanism. This is where mobile value added services (MVAS) come into
play.

The MVAS market is fragmented, high infrastructure setup cost being one of the reasons, there is no
leadership in the market and there is a definite entry opportunity in the market. We plan to enter the
MVAS market by providing six distinct and interesting offerings, catering to different niches of the
market and yet keep the prices low. This being a network based market and winner takes them all, it’s
important hence that we make a speedy entry with a good footprint with an aim to gain as much
market share and as early as possible.
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Market and Product Overview

India's Mobile Market
India has the second largest subscriber base in the world with about 638 million wireless
subscribers. 92% of the subscriber base in India is on Pre‐paid connection, with the remaining
8% on post‐paid subscriptions. Almost half of Indians use ULCH (Ultra Low Cost Handsets).
Approx 60% of mobile content downloaded in South India is in local languages. 50% of all
prepaid mobile phones have less than Rs. 40 balance at any point of time.

As per TRAI 2010 reports,

• Total telephone subscription: 638 M

• Total tele-density in India: 54.10 %
• Wireless (Mobile) subscription: 601 M
• Wireless subscription growth for the past 2 years: 20%
• Proportion of rural to urban subscribers is 31:69

Pic. Distribution of Telecom subscriber in India; source TRAI.

While the urban top-tier markets are near saturation with the number of subscribers, the growth
has mainly been triggered by subscription in rural areas. The inequality suggests a large
untapped market to reach the users at the bottom-of-the pyramid.
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Pic. Declining APRU, source- TRAI data.

India is a low ARPU (Average Revenue per User) country and the share of data is small though
the MoU (Minutes of Usage) has been increasing. Hence, Mobile service providers/operators
need to look at alternate streams of revenue. With cell phone operators and mobile phone
manufacturers seeing an immense growth potential in the rural sector, they are now devising
new ways and trying to grab a larger share of the rural pie.

Mobile VAS Services

Mobile Value Added Services (MVAS) are those services that are not part of the basic voice
offer and are availed separately by the end user. They are used as a tool for differentiation and
allow mobile operators to develop another stream of revenue.

iPhone caused a paradigm shift by unleashing the VAS market. Even though VAS market
existed before, Apple made it disruptive by partially open sourcing the iTunes App Store and
allowing collaborations from independent third party developers. In spite of using a 30-70%
revenue sharing in the favor of developers, it helps Apple rake in close to $75 million in
revenues every month. This is the kind of revenue that can come in from MVAS. As per
Gartner's prediction, “Through 2012, over 70 percent of IT-dominated social media initiatives will
fail. Only those that focus on a customer need will survive”.

For a firm to be successful in the Mobile VAS Services market, the following factors play a key
role:

1. Relevant content
2. Technology support for delivering VAS
3. Access-support from handset
Hence, we need to use Focused differentiation strategy with Market-development strategy
for rural markets.
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MVAS Value Chain

A typical value chain in the MVAS industry includes content creators, aggregators, Telecom
operators, technology companies, and mobile handset manufacturers. A brief overview of the
same and a few examples are depicted below:

MVAS in India is still in the nascent stages and multiple players overlap in each of the areas in
Value chain. Operators still dominate the revenue sharing arrangement in MVAS retaining 60-
70% of revenue. This is one of the reasons why there is a dearth of innovative mobile content.
However, as per TRAI, this is likely to change in the future wherein operators get only 30%
approximately and the rest 70% will be shared by Content providers and aggregators.

MVAS Content Aggregator – Categories & Offering

Content aggregators either aggregate content from different sources or even develop mobile
specific content like mobile games. They have the responsibility of coordinating with technology
enablers/mobile operators on one hand and content providers on the other.
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Content Aggregators typically focus on value propositions in the following categories based on
the customer needs:

• Entertainment
• Information
• M-commerce
• Social VAS
• Enterprise VAS

Content provided by the content aggregators can be accessed using SMS, Voice (IVR), GPRS,
USSD, MMS.

Pic. VAS through different means; source -TRAI data

However considering cost to end consumer, cost to provider, availability in handsets, ease of
usage (limited by literacy and language factor), consumer awareness and growth potential, SMS
(Short Message Service) and USSD(Unstructured Supplementary Service Data) access
modes are more suitable for the rural market in the current situation as per TRAI report.

A market research was conducted with 15 rural users using low cost handsets to identify their
content needs. The research was done using descriptive research process (see annex for
questionnaire). The data collection was done using survey. The sample was based on
'Convenience sampling’. The following features are identified to be incorporated in the 'content
aggregator' offering that will be accessible via SMS and USSD.

Entertainment Information Commerce Social VAS Enterprise VAS

Bollywood, News – Aajtak, Mobile banking Facebook Local Best Deal
Cricket related Ndtv,cnn- Ticketing Twitter – Local
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entertainment, ibm,times Mail – advertising

jokes, astrology Gmail,Yahoo
Chat –
Gmail,yahoo
Dating
Blog
Job related –
Naukri.com,Mon
ster.com,Babajo
b.com

MVAS Content Aggregator – Key Competitors

Indiatimes

Indiatimes is both a content provider and a content aggregator. Indiatimes provides the following
services as a content aggregator:

• Downloads - Ringtones, Wallpapers, Games, Picture Messages

• Daily Updates – News (from indiatimes), Astro, Youth Tips
• Regular Updates – Cricket (from indiatimes), News/Stocks (from indiatimes), Astro
• Leisure - Chikka, Dating, Masala Chat, Contests, Movies
• Jokes - Chat
• Info - Travel Guide, Handset Info
• Voice based social networking – Hi Buddy

Hungama Mobile

Hungama Mobile, a division of Virtual Marketing India Pvt Ltd (VMIL) was launched in 2001 and
in this short span of time is now the largest aggregator, developer and publisher of Bollywood
and South Asian mobile and digital entertainment content in the world.
Hungama Mobile runs a comprehensive network across 50+ carriers in over 30 countries and is
the worldwide exclusive rights holders to over 70% of all Bollywood content for mobile and
online publishing.
The range of services provided by Hungama Mobile includes:
• Mobile TV
• Ring Tones – Mono, Poly, True Tones and Ring Back Tones
• Full track downloads – First company in India to launch the service with Hutch
• Video download and streaming services
• Games – Based on movies, developed in Java, Symbian & Flash
• Themes & Interactive Applications
• Graphics – Wallpapers, Animated Screensavers, Operator Logos etc
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Situation Analysis
This section analyzes the market in which the company operates and its competitive position.
The SWOT Analysis for the Mobile VAS Content Aggregator offering is given below. Based on
the analysis, it can be concluded that the weaknesses and threats can be mitigated by the
opportunities and strengths with a well planned marketing effort to build awareness of the
offering and localization of content.

Strengths Weaknesses

• Differentiated offering with focus on • New player in the market

India's rural consumer's mobile needs • No brand equity
• Focused specifically on content • Need to spend more on advertisement
aggregation and hence not tied to a • Require VC funding
single content provider • Need huge volume of sales to break-
• Based on open standards even
• Technically innovative solution
• Content localization
• Simple and easy to use from low cost
mobile phones
• Competitive pricing focused on volume
Opportunities Threats

Supply side: Supply perspective:

• Lack of transparency in revenue
• Increased marketing efforts by sharing arrangements, billing system
Operators across the players in value chain
• Increase in user base • Limited availability of local content
• Increased need for mobile marketing • Do‐Not‐Disturb Registry and spectrum
• Technology improvements – 3G and requirements related to mobile
others marketing
• More investments in telecom industry • Forward integration by content
providers
• Backward integration by technology
Demand side: enablers

• Increased need for Entertainment, m- Demand side:

Commerce and local Content
• Limited awareness of services
• High cost of content
• Security concerns for mobile banking
• English isn’t the most prominent
language.
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• Bundling of VAS by Operators[E.g:

Virgin:MySpace, Spice Mobile: ibibo,
Email2SMS; LG: RockeTalk, ]
• PC‐to‐phone calls where ISPs can
offer cheaper
• STD calls and even free local calls
• Availability of low cost smartphones

Marketing Objectives
The goal is to see that the MVAS content aggregation offering becomes the product of choice
for low cost mobile users. The decision to use the offering is likely to be exercised by:

4. Users who have not yet installed any MVAS offering and realize they have a need for
one

5. Users who have installed MVAS offering that caters to a single need i.e Entertainment,
but are looking for additional functionality i.e social networking

6. Users who are looking for communication in local language

The goal is to reach a 10% selection rate in 4 years:

Year 2010 2011 2012 2013 2014

Projected Wireless
Subscriptions – Millions 638 850 1050 1159 1300
Projected Wireless
Subscriptions (Low cost
handsets) – Millions 319 425 525 579.5 650
Planned Selection Rate 1.00% 2.00% 5.00% 10.00%
Planned VAS Users – Millions 4.25 10.5 28.98 65

If we achieve this, we will be able to break-even in 3 years.

In order to reach the usage goals, the following marketing objectives must be achieved:

• Achieving brand awareness across all parts of India

• Raising awareness of the relevance of MVAS offering in the day to day life

• Performing market research to identify the key features that need to be a part of MVAS
offering for rural needs

• Continuous R&D and development

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Marketing Strategies

This is a network based business and network based businesses have the following
peculiarities-

1. First mover gets the advantage

2. And winner gets them all

Pic. Typical S-curve of a network

based business.

Hence its utmost important for us that we realize the situation and segment, target and position
ourselves in market so that we get a bigger share of the pie at the earliest, the benefits of which
we will reap in time to come.

Market segmentation
As Segment marketing offers key benefits over mass marketing, a combination of Demographic,
Geographic and Behavioral segmentation provides better mix for generating revenue.

Market
Segment Recommendation Support

Geographic
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100 million subscribers expected out of 250
million people expected to go mobile. Rural
mobile penetration is highest in Punjab (20.69
Rural and percent), followed by Himachal Pradesh
semi-urban Highly (17.09 per cent), Kerala (10.63 per cent) and
areas recommended Haryana (10.20 per cent).

Existing Delhites were at top as well with maximum

City Subscribers base usage of social networking on Mobile. Mumbai
& Chennai come second with 5% usage each.
Region
Region specific content to be generated.
Demographics

Social Networking(Face book, Twitter, popular

web-mails, chat, messenger, dating and blog
sites are most popular among age group
between 18-45.Jokes are popular amongst
people between 18 to 44 years of age.

Age All age group

Males are generally more active users of

SMS VAS services compared to their
counterparts. While males are more interested
in getting sports updates (63%) females are
Both Male and interested in spiritual (52.1%) and astrology
Gender Female (50.3%)quotes

This segment is price sensitive and so want a

convenient and relatively price optimal
Income Lower package to promote VAS

7. People who want to advertise their

All kinds’ business product / or any promotion. Agriculture
people/banks/trader necessary for the farmer’s
Occupation s and also farmers. livelihood e.g. mandi rates, weather

Psychographic

Sport-Oriented, out- Only in Urban and semi-urban people have

Lifestyle door Oriented this lifestyle.

Culture-Oriented

Behavioral
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Occasions Regular

Readiness
stage Interested

Market Targeting:
Pros:

• Content Aggregators has high demand with high volume of subscribers increasing along
with increase in their income, there is need for providers catering to different kinds of
VAS services.
• High demand for local language content in Rural areas
• High demand for entertainment-related VAS, also going forward there is a need to focus
on information VAS and transactional VAS (M-commerce), ensuring even growth among
all consumer segments.
• Facilitate of content accessible through simple access modes like SMS and USSD,
which are cheaper compared.
• Wider portfolios and integration along the value chain could improve MVAS revenues of
content aggregators/providers.

Cons:

• Content Aggregators need to invest to get provide local regional content

• The Revenue share is less compared to Operators.
• There is also need for Content Aggregators to do some marketing, again demands for
huge investment.
• Need to collaborate with Technology provider for better
• Too many contenders for a small pie, There are numerous small content players
grappling for business in the various MVAS segments, e.g., sports alerts,
ringtones/music, etc.

Positioning:
Competitive frame of reference:

Points of Difference (PoD):

• Social Networking: we will have interfaces with Facebook, Twitter, popular web-mails,
chat, messenger, dating and blog sites.
• Shopping: we will enter into partnership with some of the ecommerce providers on
revenue sharing basis. We would get a share of the businesses we will bring into them.
• Job Opportunities: We will have interfaces with Naukari.com, Monster.com and some of
the job sites like babajob.com which caters to job opportunities for drivers and house
maids segment etc.
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• News: We will aggregate news from all the popular news sites for example Aajtak etc.
• Local Best Deal: This is for the local advertiser to reach to a particular geographical
segment. We will also provide bulk sms facility for advertisement also.
• Entertainment: This will give the total experience: From Bollywood to Cricket ; from
online Games to Astrology . This will provide multimedia micro-sites, most-sought-after
downloads, jokes, latest stories and rare pictures.

Points of Parity (Pops):

• Category: SMS, USSD

• Competitive: Price, content

Pod:

Pop Brand Interface with face book, twitter etc.

Ecommerce
Regular SMS Interface with all job sites like
Naukri, monster.

Aggregate news from AajTak, etc.

Local best deal in particular geographic
location.
Complete entertainment

Customer

Competitors Competitor’s Pod

(Hungama Mobile, Indiatimes) Picture messages;

Bollywood
Wallpapers
Ringtones/games
Music, commerce
Information
Online shopping,
Banking

Positioning
Pros Cons
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In terms of market share, 92% of the
subscriber base in India is on pre‐paid
connection, with the remaining 8% on post‐
paid subscriptions. This has also given rise to
opportunities for generating increased
revenue, through exploring potential Value
Added Services (MVAS)
Differentiate from other content aggregators
by giving the POD, along with content specific
to region, and also local content.
Access devices play an important role in the
usage of different MVAS categories.
As per analysis Huge subscriptions, over
100Million expected from Rural India.
All the age groups are interested in VAS in
Urban India. Over 150 Million subscribers
expected in next year Youth segment
comprises 30% of the total handsets
The Revenue generated is high in VAS.
The consumers are not fully aware of the
services offered
Selling more to the existing customers is
relatively easier
Has to come up with attractive
subscription packs of news, alerts etc and
more exclusive services tailored to pre‐paid
subscribers, as they can easily switch to other
operators giving better package
A huge investment is required, when it is
difficult to give VAS with very low price which
becomes barrier for price sensitive
consumers
Feature rich handsets with affordable price for
price sensitive consumers is another challenge
with is not is in hands of Content aggregators.
Need for developing local language content,
and they are highly price sensitive.
Need to cater to all types of SMS services in
Information, Entertainment, commerce
VAS..etc where huge effort is needed in
collecting the data , thereby need of
collaboration with different content owners in
all the areas .
The share of content aggregators is low. Only
10-15% is their share.
The stakeholders/content aggregators need to
ensure that the consumers are educated about
the value of the services in the MVAS market
Need to maintain the competitive edge.
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Marketing Action Programs

Product:
The below diagram is schematic of the product being offered- the central block is where we plan
to operate.

Pic. Our Product offering: localized web content at cheaper prices

The possibilities are limitless for the offerings that can be provided to masses at low cost- any
content which is available on the web can be provided to the end customer at very little extra
cost to us given the content is accessible through the web-services and is free(on web).
To cater to be low cost segment we are going to support USSD and SMS protocols- they work
out to be cheapest for telecom operators. All the operators support these two protocols so we
are not locking into a particular service provider.
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To start with and to gauze the market response we plan to launch the following services-
1. Social Networking: we will have interfaces with Facebook, Twitter, popular web-mails,
chat, messenger, dating and blog sites.
2. Shopping: we will enter into partnership with some of the ecommerce providers on
revenue sharing basis. We would get a share of the businesses we will bring into them.
3. Job Opportunities: We will have interfaces with Naukari.com, Monster.com and some of
the job sites like babajob.com which caters to job opportunities for drivers and house
maids segment etc.
4. News: We will aggregate news from all the popular news sites for example Aajtak etc.
5. Local Best Deal: This is for the local advertiser to reach to a particular geographical
segment. We will also provide bulk sms facility for advertisement also.
6. Entertainment: This will give the total experience: From Bollywood to Cricket ; from
online Games to Astrology . This will provide multimedia microsites, most-sought-after
downloads, jokes, latest stories and rare pictures.

Accessibility of services:
All the cell phones, even some of the wired phones support these protocols - this makes our
product offering operator and handset agnostic. All the cell phone users – high end or low cost-
can access our services at a very nominal price.

To access our services end user will have to type one of the following-
a. SMS service1 to XXXX
b. * Service1XXXX#

Where, service1 is the code of the services offered; option a. is for SMS and option b. is for
USSD.
XXXX is the shortcode- this will get after applying to TRAI.

We will support pull mode in which the cell phone is initiating the interaction as well as push
mode in which the content will be pushed to cell phones. Generally the pull mode is one time
interaction of the customer with us where as in the push mode the customers are subscriber to
our services.

Pricing
Pricing is a function of demand of the product, our cost and what price competitors are offering.

Demand

There are close to 300M mobile users in India, majority of them, especially younger crowd, uses
SMS more than calling. Even professionals use it for myriad of reasons, including checking
bank balances, mobile bills, and status of train/flight etc.
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Recent TRAI data shows that Indians are using SMS as an extension of their lives more and
more every year, an average Indian sends 29 SMS per month.

• SMS VAS is the highest revenue earning Value Added Service with almost 5%
revenue earned by service providers
• 1 in 5 urban Indians have used a SMS based VAS service either as a one-off or on
subscription basis.
• SMS is an effective marketing tool, showing conversion rates a lot higher than other
conventional mediums i.e. TV/Radio etc. 1 in 3 Urban Indian has acted in some
manner over the SMS i.e. forwarding to others or enquiring about it.
• SMS, an advertising medium, has an interaction rate of around 5%
• 25% users have participated in some sort of SMS contest

Most popular VAS in India

Taking a conservative figure of 30 lakhs customer subscription, which is just the 1% of the
whole mobile user base, even then, the number if pretty big, there is a huge demand.

Also 95% of this user base is cost sensitive.

Cost:

The major portion of the cost is fixed cost; the variable cost is negligible for a given capacity of
user base. The fixed cost consist of the following-

1. Hardware cost and AMC

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2. Third party software cost and AMC
3. One time own software creation cost for the solution
4. Employee salaries: maintenance staff
5. Cost for shortcode that needs to be given to TRAI
6. Cost of building (rent/lease) and miscellaneous(energy charges, network usage charges,
advertisement) etc

Cost of # 1 : 10 lakhs for Intel with failover and AMC

Cost of # 2: 10 lakhs for Linux AMC and Oracle with AMC

Cost of # 3: 10 lakhs for code development, testing and go live

Cost of # 4: 2 Production support engineers( 25K per month/per engineer)= 6 lakhs

1 Marketing Person = 4 lakh

1 Accountant cum Manager = 5 lakh

Total : 15 lakh

Cost of #5, #6: 5 lakh

Grand Total of fixed cost: 50 lakh(approx).

Break Even Analysis:

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For break even we need to have 25M customer interaction with our services- since we don’t
have any variable cost- anything that we sell after this is going to be raw profit.

Competitor’s Price

The standard SMS rate in India is Rs 1 per sms, USSD is virtually free till now- its primarily used
in India for getting the balance of the amount (recharge coupon). The market norm till now- is
that almost 75% of Rs 1 goes to the telecom operator (the service provider)- we can expect to
get 20 paisa of this 1 Rs.

Promotion:
We will reply on three types of advertisements:
1. Advertisement though the social networking sites
2. SMS advertisement
3. News paper advertisement

The total budget should not exceed 4 lakhs, its included in cost above. Since we are offering the
product for the mobile devices- the emphasis of the promotion will also target the mobile
devices- through SMS. We will spend 75% of promotional budget in SMS advertisement. We
also plan to organize some promotional events – lucky draw of some of the early users of our
system and we will provide them with brand new cell phones.
We plan to engage in some charity event geared towards the under privileged class which may
get us some media coverage in return.

Implementation
The following activities need to be completed to successfully implement our plan-

1. Get the shortcode from TRAI- this would entail applying to TRAI citing our marketing
plan as to what all services we are going to provide, expect to get the code in a month’s
time.
2. Lease/Rent out the real estate for our operations- we would be requiring a 1000 sqft
area and getting this would not be a problem.
3. Hire key resources- we would need 2 engineers, 1 full time manager and one marketing
person.
4. Identify a software/hardware vendor- to get us the hardware and develop software
solution, expecting this would require around 3 months of time for the software to be
ready and fully functional.
5. Enter into revenue sharing agreement with telecom operators- we will be starting on this
right away- given what we are offering- would not be too difficult to get operator partner
with us. We may have to give a bigger cut in the beginning.
6. Organize promotional events.
One of the founders will be closely associated with each step of the project and keep a close
eye on the every activity that needs to be executed. He will work directly with the marketing
person and the manager.

Overall we can go live in 4 to 6 months of timeframe and start getting revenues only after that.
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Financial Projections
Indian Population spread

Total Indian population as per the 2010 is 1191000000. This population is divided in terms of
age group and geographic location is as given in below figure:

INDIA Population Spread

Percentage Absolute
Population of India 1,191,000,000
0-14 years 31.10% 370401000
15-64 years 63.60% 757476000
65-over 5.30% 63123000
Rural Population 72.20% 859902000
Urban Popultation 27.80% 331098000

Internet Users Distribution

We will differentiate the population in terms of Rural and Urban population.

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• Rural Population
We are assuming that the current penetration of internet use in the rural population is too
low to be considered substantial for our analysis. Let us assume that the current user of
internet in the rural population is zero

• Urban Population
1. Assumption is that 80% of the urban residents have used at least one time
the internet and are familiar to the inter use.
2. Distribution of the internet users based on the choice for using internet is as
given below:
Urban Market Segment Percentage Users

Assume 80% of Urban population uses Internet 80% 264878400

68% of the Internet users use social networking site 68% 180117312
68% of the Internet users download Music/Video/Photos 68% 180117312
60% uses for the Education 60% 158927040
48% uses for purchasing the tickets online 48% 127141632
40% uses for online news 40% 105951360
30% uses for the online gaming 30% 79463520
30% uses for the online trading 30% 79463520
25% uses the Mobile VAS 25% 66219600
42% uses for information search 42% 111248928
22% uses for the payment of utility services 22% 58273248
18% uses for online shopping 18% 47678112
42% uses for the online jobsites/matrimonial sites 42% 111248928
36% uses for blogs/forums/reviews 36% 95356224
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Number of VAS users forecast

• Rural Population : We are assuming by better support and marketing we are

assuming :
1. 30% of rural population can be pulled for using VAS for social networking
2. 20% of rural population can be pulled for using VAS for online shoping
3. 20% of rural population can be pulled for using VAS for news
4. 60% of rural population can be pulled for using VAS for Music/Video/Photos
Based on the above added data we expect following new customers from the rural area
:

Percentag
Rural Market Segment e Users

Number of rural population not using the net services 859902000

30% of rural population can be pulled for using VAS for social
networking 30% 257970600
20% of rural population can be pulled for using VAS for online
shopping 20% 171980400
20% of rural population can be pulled for using VAS for news 20% 171980400
60% of rural population can be pulled for using VAS for
Music/Video/Photos 60% 515941200
So total new customers added from the rural area per use of
the VAS different activity 1117872600

• Urban Population : By providing a better support, we assume that

1. Out of the above internet users 50% of each category of internet users
could be converted to mobile VAS users and 20% out of them will be loyal to
our services.
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2. 50% of the existing VAS users will be made loyal to our services.
So number of new VAS customers added are :

Urban Market Segment Percentage Users

68% of the Internet users use social networking site 50% 18011731.2
68% of the Internet users download Music/Video/Photos 50% 18011731.2
60% uses for the Education 50% 15892704
48% uses for purchaisng the tickets online 50% 12714163.2
40% uses for online news 50% 10595136
30% uses for the online gaming 50% 7946352
30% uses for the online trading 50% 7946352
25% uses the Mobile VAS 50% 33109800
42% uses for information search 50% 11124892.8
22% uses for the payment of utility services 50% 5827324.8
18% uses for online shoping 50% 4767811.2
42% uses for the online jobsites/matrimonial sites 50% 11124892.8
36% uses for blogs/forums/reviews 50% 9535622.4

So total new customers added from the Urban Population

per use of the VAS different activity 166608513.6

Final Conclusion

• Total number of new customers added per VAS usage = 1117872600 +

166608513 = 1284481113. This is the above number is 0.0107% of the total
population.

• We also assume that the average revenue per use of the VAS service is 20
paisa. So the expected revenue in the first year = 1284481113 * 0.20 Rs. =
256896222.6 Rs.

• As per the expectation the Indian population is expected to grow at the rate
of 1.548%. We also assume that the percentage of VAS users will grow at the rate of
20%. Based on these assumptions, the expected number of revenue for next five
years is as follows :

Year 2010 2011 2012 2013 2014 2015

Population 1,191,000,000 1209436680 1228158760 1247170657 1266476859 1286081921
Percentage
of VAS
users 0.01078490 0.012941875 0.01553025 0.0186363 0.02236356 0.026836272
VAS users 1284481114 1565237857 1907361287 2324264688 2832293167 3451364478
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ePGP-03
Expected
revenue
(Rs.) 256896222.7 313047571.5 381472257.5 464852937.6 566458633.3 690272895.6

Monitoring and Control

We are assuming that approximately it will take six months to make the implementations
operational. During this six month we will be parallel working on the advertising and marketing
of the VAS services.

After the six months we are expecting to launch the fully functional VAS facilities. As per the
calculated projections from the financial projections we are expected to get 1284481113 VAS
facilities usage for the first year of launch. This means if we divide these equally across the
twelve months period, we should get approximately 1284481113/12 = 107040093 VAS usage
for every month. Below graph shows the expected number of the monthly usage:

We should monitor these numbers carefully on monthly basis and see if the numbers are as per
the expected number. If the numbers are not as per the expected numbers, we should take one
of the following actions:

• Check if the required number from the rural and urban areas is as per the expected
numbers.
• Do a customer survey in the rural and urban areas separately to find out the reason
or need of the customers.
• Take corrective actions to support the need of the customers.
• Promote the product in the respective section of the target segment.
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• Engage the mobile operators and service providers to release a concessional plan
for short period to attract more customers.
• Add on more VAS facilities, as per the customer need and requirement.

Marketing Organization
One of the founders will head the marketing organization and oversee and guide the marketing
manager.

Contingency planning
In the event of competitors’ offering or we not getting enough customers in time, we have
sufficient cash cushion to keep us going for another 3 years. Even with sufficient cushion at
present we will have tight controls consisting of a lean organization and efficient use of funds.

Annexure

Sources of Information
Primary
Questionnaire used for arriving at different types of services offered:
1. Do you use a mobile phone?
2. What do you use mobile phone mainly for?
3. Do you use sms for communication with friends/family?
4. Do you surf internet on the phone?
5. Do you use social networking site to keep in touch with friends/family?
6. Do you have online friends?
7. Which activity do you want to prefer among netsurfing, SMS and Social
networking?
8. Do you know English speaking?
9. Do you know English writing and reading?
10. Do you prefer the activity in your mother tongue language?
11. Are you ready to pay extra money for the local language support?
12. Do you want to go active on social networking site?
13. What are the main reasons for not using the social networking site?
14. What services you want in your mobile phone which can help you/your work?
15. If the cost is reduced and made easy to use do you want to use the same?
Secondary

◦ Freely available analyst reports on the mobile market segment

◦ Market analysis and comparison of the social networking features in low cost
mobile handsets and the current limitation
◦ Data on how mobile based social networking has evolved in advanced mobile
markets
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◦ Available reports of the current Mobile handset and service providers

Some of the referenced material is mentioned below-

http://www.trai.gov.in/
http://www.trai.gov.in/annualreport/AnnualReport_09_10English.pdf
http://www.trai.gov.in/WriteReadData/trai/upload/StudyPapers/16/studypaperword21jan.
pdf
http://www.trai.gov.in/WriteReadData/trai/upload/StudyPapers/17/ASSOCHAMMVAS_S
TUDY_%20paperfinal.pdf
http://www.slideshare.net/andre4e/sms-trends-august-2008-presentation
www.iamai.in/Upload/Research/mobile.pdf