/vnd/media/agency_attachments/bGjnvN2ncYDdhj74yP9p.png)
/vnd/media/media_files/2025/08/26/728x90-banner-with-offer-2025-08-26-23-24-15.jpg)
The growth in India's telecom industry has been inspiring and fascinating with the total number of customers across operators crossing over 900 mn in March 2012, with a strong tele density of 162 in urban areas and a monthly addition of almost 6 mn customers in rural India. Yet there is no denying that stiff competition, declining revenues and an exceedingly demanding customers are posing a challenge for most operators today.
Knowing the Customers
The biggest shift and an undoubted game changer will be the operators' know-how of their customers, ie, what they need, what can be sold, what to prioritize, and how to offer the right set of services to the right customer. This puzzle will change even as you attempt to solve and therein lays the challenge.
India, with its diverse needs, languages, and levels of engagement needs a finely segmented portfolio of offerings that are easy to decipher and engaging enough to ensure customer loyalty. In terms of revenue, the operator still has the lion's share. However it is becoming increasingly difficult to control the various services and customer experience. Whilst VAS (value added services) is being looked upon as a key competitive differentiator to engage the customer, the lack of focus on a synchronized model for VAS and the inability to analyze data generated from VAS usage in a holistic manner are now beginning to hurt.
The beauty of the Indian market is its diverse needs, compelling enough to adhere to a profitable business model around VAS. As if the diverse landscape and need for innovative yet localized content were not enough, what adds to the complexity are over-the-top players that have set up successful models around how content gets consumed via web. This leaves the operator merely as a bandwidth provider. Therefore an operator needs to have a bouquet of services ranging from the very simple song, sports, gaming option to more sophisticated services like money transfer and video content.
The existing VAS models are a mishmash, often a reaction to a sudden customer need or competitive pressure. Operators are managing multiple vendors, contracts, SLAs, and product roadmaps. Hence there is an underlying requirement for a uniform experience and SLAs across their entire service portfolio to its end customers.
Never before has the task been so well cut out. The time has come to manage the VAS landscape more systematically and capitalize on the power that analytics can provide. This model should take into account the ever-changing needs of customers. While most models in the market have explored managing operational aspects, none have provided the operator with a service model that ensures revenue enhancement (through enriched customer experience/insight), reduced time-to-market (measurement on business KPIs rather than technical KPIs), and reduction in operating expenses (through cloud) as combination. These 3 critical parameters will ensure a much better deal for operators.
Even though VAS accounts for a mere 10—12% of an operators revenue today and there are about 20 mn*3G customers showing a low penetration rate of 4%, this is bound to increase. The VAS market is expected to grow to `35 bn by 2014. Most developed nations have also shown a tendency to take 3—5 years for VAS revenues to reach 15 % post the introduction of 3G.
However growth will need to be backed by a strong business model where the operators develop a broader portfolio of VAS offerings and are able to finely slice and dice customer usage patterns, customer behavior, and social media interactions. The era of mass media and impersonal transactions is over. Companies are relying on powerful technologies such as predictive analytics to interact directly with customers and ensure a 2-way communication.
What Should VAS Models Include?
VAS models, too, must now seriously include analytics as a tool to personalize offerings. It would help to ensure the right positioning, messaging, and increased customer engagement. Analytics will also be the key to answer questions around innovation and competitive differentiation. Real-time analytics can be used as a differentiator for personalized products, better customer service, and reduced revenue leakage. Operators will also need to explore possibilities allowing them to use the real-time customer context and user profiles they have access to and build a model for monetization of APIs.
Revenue enhancement will also need backing by adequate measures to optimize operational costs. Repeated investments in VAS application infrastructure will naturally impact an operators capital and operating expenses. The ability to utilize cloud as a means of building agility in the organization can never be over emphasized. An emerging IT delivery model, cloud-as-a-service can significantly reduce IT costs and complexities while improving workload optimization and service delivery.
A managed VAS environment will therefore necessarily be more about innovation, customer centricity, and optimization. This will be achieved through a combination of powerful technologies such as analytics from both the customer and network perspective as well as cloud infrastructure backed by a strong service management capability.
With every operator betting big on VAS to drive their revenues, the journey of building a favorable customer experience and a scalable ecosystem must also begin now. VAS analytics through cloud will only start things on the right note.
Avinash Joshi
The author is director, communication
sector, IBM India and South Asia
vadmail@cybermedia.co.in