Hello Data

Indian operators are struggling for substantial increase in non-voice

revenues. VAS revenue for Bharti Airtel, the largest wireless operator in India,

was 9% of its total revenue during the last fiscal. The story with CDMA

operators, which are known for driving data revenues globally, is also not

encouraging in India.

Indian VAS revenue contribution will take at least three to four years to

match the global mobile operators' non-voice services revenue that was 15% of

their total income in 2008. According to Informa Telecoms, revenues comprising

data services of global telcos reached $188.7 bn in 2008, registering 24%

increase. Indian mobile VAS revenue is estimated at around Rs 6,000 crore.

Baburajan K

Indian telcos are moving to the rural belt where they face dwindling ARPU.

Data will be the main option to sustain their revenue growth here. For this, the

VAS ecosystem should be strengthened. Consumers should start getting content

beyond Bollywood and cricket. Operators must focus on enterprises besides retail

customers. Handhelds should be targeted at enterprises which are on the move.

And, enterprises should start deploying at faster pace.

3G launch by BSNL and MTNL is yet to excite subscribers. This is primarily

because of poor reach and week content. A research by O2 says, the use of social

networking and business applications is driving the usage of converged devices

such as iPhones and BlackBerry by small businesses in the UK. O2 sale figures

indicate that seven out of ten small businesses are buying smartphones as

replacement of their existing handsets. During the recent London tube strike, O2

reported 10% increase in data traffic as customers remotely accessed data, even

when they were unable to reach the office. Seamless access of phone services

anywhere in India will be a critical component for Indian enterprises to opt for

smartphones.

Most of the Indian mobile VAS revenue comes from SMS. Majority of the $188.7

bn of non-voice revenues, globally, are also SMS-based. But there is a shift

happening globally. For instance, $75.1bn (40%) of this revenue was from non-SMS

services in 2008. New advanced technologies such as HSPA and the demand for

data-optimized handhelds such as Apple's iPhone are accelerating the level of

non-SMS spend. With an expected increase in the usage of mobile broadband, when

India realizes the dream of 3G and WiMax following the spectrum auction, data

revenue will shoot up. But this will depend on the efficiency of the ecosystem.

India should not lag behind developed nations. A fifth of $192.8 bn revenues

generated by North American operators came from non-voice services. In the case

of African telcos 5% of $71.1 bn came from VAS. Indian operators should woo

enterprises to boost VAS revenue.

baburajank@cybermedia.co.in