Telecom market overview: Indian market has seen an

exponential growth in mobile subscription in recent years

Growth is fastest at the bottom of
the pyramid

Rapid
increase in
>600m subscribers
rural
subscription
Teledensity
47.88
Decreasing ARPU & MOU: Despite Growth, Tariff
war b/w operators has lead to decrease in ARPU

ARPU is on a
down trend due
to decreasing
call rates.
India has the
lowest call
tariffs globally.

MOU/sub is on
a down trend
adding to
lowering of
ARPU.
 Revenue from VAS: Industry gets 11%(avg) of its revenue
from vas out of which sms comprises more than 50%

Of the 5% contribution of “other non-voice

MVAS” more than 50% is through CRBT
(Caller ringtone)

Source: Quarterly Investor relation reports of players

Mvas players have realized the potential and the need of
focusing on vas in order to tackle Decreasing ARPU

Airtel’s
increasing
revenue from
MVAS

Source: Quarterly Investor relation reports of players

Some more facts: low penetration of internet, of which
85% is from urban market. Total active GPRS subscription
is also from urban users

Only 130m of 602m Only 53 million

subscriber use GPRS active Internet
Handsets users

Only 2m
Active
This leaves a huge scope for Voice and SMS
based MVAS applications

Market
for Voice
& SMS
This leaves a huge scope for Voice and SMS
based MVAS applications

The reach of Mobile has

also made it a new
medium to reach the
audience.
Mobile phone has got
the scope to serve as a
medium for direct
marketing and hence a
driver to Mobile
Market
advertising
for Voice
& SMS
The accessibility of Internet on mobile has more
potential than accessing internet on PC, showing
huge prospect of WAP applications in Future

Internet
on PC v/s
on Mobile
Low English speaking population: Most of the
content available on internet and vas is in the language
that majority doesn’t understands
More than 60% of the Indian
English population is not English literate.
speakers No Indian Language is among
the top 10 languages on internet.
There is a Mismatch in number of
speakers and the language
consumed on Web

Other 1600
dialect
speakers
The potential of Internet on Mobile and other value
added services can be better utilized if the content is
localized.
 Traditional media like Print and Television
English have recognized the potential of vernacularism
speakers and they have been able to generate mass
appeal, this is evident from the growing number
of TV channels (more than 400) in local
languages

Other 1600
dialect
speakers
 Current efforts in promotion: heavy emphasis is
on promoting Entertainment vas, till now all the
companies have banked on Entertainment for
generating revenue through VAS.
Current scenario Scenario expected in Future

High
High

entertainment
M-Commerce

Promotional efforts
Promotional efforts

entertainment

Information vas
Information vas

M-Commerce
Low High Low High
Revenue From VAS Revenue From VAS
Challenges faces by MVAS in India: The above
facts poses various challenges to the vas
industry which can be segregated as follows

Consumer challenge Operator challenge

• subscriber from lower end of
pyramid faces problems such as
Ease of use, user interface and
familiarity
• less aware on VAS services
• lack of vernacular content
•Low susceptibility and low loyalty
towards entertainment vas Value
added
service
Device Challenge
• Low Penetration of compatible
handset
• High cost of Feature rich handsets
• Generating awareness among
user
•Delay I n3G has limited the Vas
take-off
• Preloaded applications have yet
not taken off
Revenue challenge
• the revenue share between
operators and operator/ aggregator
is substantially skewed in favor of
Operators
Recommendation: The focus of the Mvas entities
should be oriented Broadly towards Content,
Technology , and the access Medium of the user

Content
• Providing relevant content to the
and understanding the needs of the
consumer is the key to growth of
mvas in India

Technology/ Access
Medium/ Access device
• More than 400m users in India
use only sms and voice based
mobile phone and hence SMS
based applications should be
developed in accordance to the
available technology and the
popular access medium
 Advertisement on Mobile
The reach of the fourth
screen(mobile Phone)
provides immense
opportunity to the
advertisers to reach the
masses.
Mobile Ads has a potential of
being more effective than
any other media since
mobile in its ways is a
channel of Direct marketing.
According to a report by
Telcordia (a pre-paid mobile
platform from US), the next
change in the Indian
telecom Business model
could be the revenue to the
operators through
advertisements, it proposes
a free airtime usage to the
consumer for receiving ads
on their Mobile phone
 Mobile Web Content (Localized content)
The Rapid penetration of mobile in rural and
tier-3 cities of area has invoked the need for
content that caters to the local need.

Language barrier is another reason for which it

is required to have content in local language.
In rural areas where the literacy rate is low
IVR will be a quick solution to providing
regional content in local languages all across
India.

Mobile serves as a cheaper device to access internet as compared to PC and hence it has the
potential to become the primary internet access mode. M-vas companies should look into the
development of web content since the WAP version of local web content is very low in India
Voice & SMS based application: More innovative
application should be developed to cater to the
majority of population

Example: Automated Local Directory

Bus Route: 9
90 services (location based content)
Currently@:
Punjabi Bagh
Destination:
Shivaji stadu
im
Next stop: Pa
tel
nagar in 10 m You are at Karol
in
Bagh, what
information do you
need
1.Restaurant
2.Coffee shops.
3.hospitals

Example: Public Transport on

Phone (location based content)
 Shift of Focus: Focus of orientation should shift from
entertainment to Infortainment vas
Collect the content/info from the expert and market it to the needy segment seeker

 IVR has been seen as a quick solution

for the vernacular issue, yet only, the
application that fulfill the needs of the
localities would take off.
 Indian Agriculture Research Institute of
India (PUSA) runs a program of Krishi
Sewa that provides relevant education
to the farmers to help them with their
crops.
 MVAS entities should leverage the
reach of Mobile phones and join hand
with IARI to provide that information
through mobile.
 The pricing of IVR call has to be
brought down to encourage low
income groups to use services
Thank you