Rural VAS: a new opportunity for telcos

Gartner say that revenue from data services will significantly contribute to the overall growth of mobile services in India, with a CAGR of 16.8 percent from 2009 to 2013. Currently, the VAS market has been contributing at over 10-15 per cent of the total revenue of mobile telecom service providers. The total market revenue of mobile value added services (VAS) at $1.6 billion as on March 2009 and expected to grow 30 to 40 per cent per year.

Mobile market penetration is projected to increase from 38.7 percent in 2009 to 63. 5 percent in 2013. Gartner says this growth is primarily attributed to the operators increasing their focus on the rural market, local consumer durable and electronic companies entering the domestic mobile handset segment, and lower handset prices.

To cash on the rural VAS market a few of the telecom players has already take the initiative for rural VAS. Airtel, the market leader, is already testing its rural VAS in Maharastra and Uttar Pradesh.

Similarly, Thomson Reuters has been updating over one lakh farmers in the country with the latest market trends, weather forecast, and crop information via its SMS-based service. The subscription can be bought for a period of three, six or 12 months at a price of Rs 60 per month. The content is available in local languages such as Marathi and Punjabi. Thomson Reuters now plans to extend this mobile service to nine more states.

However, the pricing of the VAS would the key to success in the price conscious people of India.

The 3G roll-out will also give a boost to the VAS. However, industry experts believe that consumers being educated on VAS would lead to the real big growth in the mobile industry. Astrology, Bollywood and cricket have long been the growth drivers of MVAS, however, some believe this dominance is softening and new entrants like devotional, fashion and regional content are catching up fast.

akhileshs@cybermedia.co.in