VAS : A Way of Life?

VoicenData Bureau
New Update

Fuelled by operators' expansion and government support, telecom growth is now

taking off in semi-urban and rural areas. In the near future, a majority of new

subscribers are expected from here. Mobile phones operators and manufacturers

see an enormous growth potential in the rural sector, and are now formulating

new ways to grab a larger share of the rural pie.


From launching low cost handsets to bringing down the tariffs and organizing

campaigns to advertise their plans, telecom players are now accelerating the

already cut-throat competition in the hinterland.

Next Wave

It is believed that the next wave of mobile growth will come from the bottom

of the pyramid. For a majority of the population in the rural segment, the

mobile phone is the first communication device. Going hand-to-hand with telecom

operators, MVAS providers are also ready to explore rural India. Rural should

not always be interpreted as poor and therefore some categories of MVAS might

apply directly to them.

The increasing rural penetration of telecom players is believed to help in

increasing the ARPU of VAS players as well. But VAS players have a different

opinion. They believe that rural expansion might not necessarily help in

increasing ARPU in the near-term, especially since rural services will take some

time to evolve, and in general, the rural consumers have low ARPU from an

overall telecom spend perspective.


According to Vijay Shekhar Sharma, MD, One97 Communications, "Rural expansion

will help increase the overall revenue-base based on the already deployed

infrastructure. In the long term, the operator's ARPU for this segment will

expand due to increased VAS take off."

Content is King

Rural VAS is turning out to be a huge opportunity as operators expand in

this area. But innovative and relevant content catering to the needs of the

rural masses would be the key to success for VAS providers. Basically, rural

segments have two sets of needs: needs similar to the urban market, for example

infotainment content, updates on various utilities; and second, needs unique to

rural areas, like rural-focused content, commerce transactions, updates on local

activities, etc. And to expand successfully in rural India, VAS players should

develop applications addressing both these needs.


Talking about applications for the rural segment, Sangeet Chowfla, CSO,

Bharti Telesoft says, "We have a host of offerings that enrich the lives and

enhance the livelihood of the rural segments. Some address the underlying needs

to enable greater uptake of mobile services, such as our PreTUPS prepaid


He adds, "We are working on a range of solutions in three core areas:

content-together with the content providers we aim to provide relevant

infotainment services to the rural segments such as economic data,

agriculture-related information, as well as mobile music and entertainment

services; commerce-by enabling mobile banking, remittance and payment services

via a trusted financial institution to ensure access to financial services for

the many rural dwellers currently relying on informal, and often unreliable and

expensive methods; and community-via IVR services that are available in local

languages and messaging services that are intuitive.

On the other side, One97 Communication has developed and deployed the VAS

platform for the Airtel IFFCO Kisan Sanchar Project to connect farmers by

launching their 'Dakia service'. This is a unique case of user-generated content

and collaboration application tailored to suit the needs of the rural



"We provide a platform where people of a region having relevant information

can share it with other members of the group," says Sharma of One97


M-commerce has considerable potential in rural India. As stated by TRAI in

its consultation paper, mobile-payment will be a great benefit, particularly in

rural and remote areas where there is easy accessibility of mobile phone

services, but banks are not easily accessible. The RBI has also taken some

initiatives in this direction.

Kirusa, a leading vendor of voice SMS and developer of MVAS, is also

enhancing its service portfolio to fulfill the demands and requirements of the

rural masses. The company is providing voice SMS services on fixed lines as

well. "People in rural India go to PCOs and sometimes the person they are trying

to contact is not reachable. So they can use voice SMS by just dialing the code

and communicate to the person easily without waiting for hours," says Inderpal

Mumick, CEO, Kirusa.


Kirusa is also providing IVR services in local language. This makes IVR

services simple and can be used by any person in the rural market. Mumick adds,

"The command to use voice SMS is very simple and can be easily explained to

people in rural India on the way to use. Those who are unable to read can learn

it from IVR."

MVAS is going to address two main needs of rural consumers-connectivity and

entertainment. Connectivity will provide information VAS. Mobile also has the

potential to evolve as a key entertainment mode considering the lack of other

entertainment options in rural areas. So, by leveraging these two aspects, MVAS

can be a success in rural areas.

Mauj Mobile has aggressive plans of penetrating into rural areas of India

with a holistic range of offerings suited for specific territories. It has a

large repertoire of devotional content, which has been very well received in

rural areas. It has already successfully leveraged key partnerships in the

southern markets for providing film contents. Mauj has also created Marathi and

Bhojpuri content for rural subscribers.


Demands of the Segment

According to Sharma of One97, "The focus of rural expansion has to be

services which enable the rural population to have access to infotainment

content, and updates on local utilities in local languages. The content has to

be delivered in a medium which is easily reachable and usable. The primary focus

is on voice applications for now. "

Going rural also means covering geographies where there are few entertainment

and information outlets other than television. This has given a fillip to MVAS.

Apart from having access to entertainment, rural consumers are also willing to

spend a little more on mobile phones, primarily because it is a device that

empowers them.

Expressing his view on the demands of this segment and focus areas for rural

expansion, Chowfla of Bharti Telesoft says, Developing affordable product lines

is the key to reducing cash barriers for entry and to expand the mobile market.

Performance ratio needs to be tailored to the distinct consumption profile of

people at the base of the pyramid."


Explaining the demands of potential and present rural subscribers, Manoj

Dawane, CEO of Mauj Mobile, says, "Rural markets are a different audience. The

content served to them needs to be customized to suit their requirements and

preferences. Localized regional content and utility-based info services have

great potentials in this market."

What Lies Ahead

According to a Gartner report, the total cellular service revenue in India

will grow at a CAGR of 18% from 2008-2012. The mobile subscriber base will

increase to over 737 mn connections by 2012. The cellular market penetration is

projected to increase from 19.8% in 2007 to 60.7% in 2012, due to the rapidly

proliferating rural market, low tariffs rates in the Indian market, increasing

focus on the rural market and lower handset prices.

Success in the rural market is dependent on the interplay of a multitude of

complex factors. On one hand, government policies will probably play the most

critical role in growth of MVAS in rural India. This will affect penetration

drivers such as the level of competition in the sector, tariff and non-tariff

barriers for ICT products, and use of Universal Service Obligations Funds for

the development of rural telephony.

Low literacy level of those living in rural areas will be another limitation.

Therefore, voice in regional languages would be a better option for

communication and will facilitate vernacular services in the rural areas.

Marketing the content in the rural market is going to be all the more

challenging. This would require right packaging and pricing of MVAS.

It is without doubt that innovative services by VAS players will make the

lives of farmers and rural inhabitants easy. But how can we overlook numerous

instances where there are mobiles but no electricity to charge them? There is a

long way to go before rural VAS becomes a way of life in the hinterland.

Arpita Prem