'Growth of VAS is bound to be phenomenal'

What are the current trends in the value-added services market globally
and in India?

Value added services (VAS) have matured globally and form a considerable
proportion of the revenues. In India, although in terms of revenue it might not
be that big but the thrust area is the same. People are focusing on mobile
entertainment, m-commerce, location-based services and the fourth area that is
also picking up is efficiency-based services, which is linked to the
enterprises.

-Ajay Vaishnavi, COO, Cellnext

How do you think value-added services are going to fare in India and what
services will gain prominence?

VAS in India will follow a global trend. Although right now it just forms around
14% of the operator's revenue but it is bound to grow two-three times than
that. Currently, the operators are busy in collecting the numbers and once they
are through, the focus will entirely turn to VAS. Growth of value added services
in India is bound to be phenomenal. Presently, the major driver is
person-to-person (P2P) messaging but overall, the ratio of P2P as a percentage
of VAS is coming down gradually. Mobile entertainment is picking up in a big way
along with the efficiency services. The third aspect is location based services
and m-commerce although they have not picked up in India yet but are bound to
become big in future.

What are the issues and challenges that players in the VAS market have to
face?

The VAS industry is still very small and we still don't have a proper process
or common benchmark. The revenue share is a major issue, although it has matured
but it is very less as compared to the global standards. The reason is that the
operators charge low revenue from the end user leading to lower revenue share
for us. Moreover, there is so much of competition in the developers industry and
this is driving down the revenue share. There is no common effort to make the
industry grow but as the market becomes mature there will be more transparency.
Another challenge at the customer level is to educate the customer that there
are things beyond entertainment. It is a challenge to show the customer value
beyond mobile entertainment.

Which of the sales modules are most popular for selling value added
services? And which delivery channels will pick up?

The most popular is through the operator portal because the end user accesses
that only. But for the enterprises services, we have various channels, and
operator is just a partner. On the other hand, to sell value added services to
the end user, there is no alternative, other than the operator portal, so the
operator has a fair control. Today, the most popular delivery channel is SMS,
but WAP and GPRS are also going to pick up. SMS has its limitation in just 160
characters and is cumbersome whereas if you use GPRS, it's a complete online
experience and can be made user friendly, once people have compatible handsets
and operators provide GPRS connection free, it can pick up. MMS is an area,
which has not been explored properly, and it could be a profitable channel if
used properly. In India for the rural areas, voice can be a successful delivery
model

How will 3G affect the VAS market in India?

3G will enhance the application. It will help us create more applications and
help us add more features to the existing application, making the experience
much richer. But there are a number of challenges that we have to go through
before 3G becomes a reality in India and value added services can leverage on
it.

Sonia Sharma