|
Mobile phones today have moved beyond their fundamental role of communications and have graduated to become an extension of the user’s personality. We are witnessing an era when users buy mobile phones not just to be in touch, but to express themselves, their attitude, feelings & interests. Customers continuously want more from their phone. They use their cellular phones to play games, read news headlines, surf the Internet, keep a tab on the weather, and listen to music, make others listen to their music, or check their bank balance. Thus, there exists a vast world beyond voice that needs to be explored and tapped and the entire cellular industry is heading towards it to provide innovative options to their customers. Spoilt by choice, the mobile phone subscribers are beginning to choose their operators on the basis of the value added services they offer. The increased importance of VAS has also made content developers burn the midnight oil to come up with better and newer concepts and services.
Mobile value-added services (VAS) are services that offer differentiation and the ability for mobile operators to charge a premium price and add new revenue streams. Mobile VAS include non-voice advanced messaging services such as SMS, MMS, MIM, and UM and wireless data services based on wireless data bearer technologies such as WLAN, GPRS, 1xRTT, WAP with VAS applications including mobile gaming. Mobile VAS also includes voice-based services such as PTT and WDA. Value-added services (VAS) are unlike core services. They have unique characteristics and they relate to other services in a completely different way. They also provide benefits that core services cannot. There are two types of VAS. The first service type are those value-added services that stand alone from an operational perspective. These types of services need not be coupled with other services. Many non-voice services fall into this category. They are often provided as an optional service along with voice services, but they could be offered and used by themselves without the voice service. For example, SMS could be offered and used as a service without voice calling. The second, and arguably more numerous and important type of VAS, are those services that do not stand-alone. Instead, this category adds value to existing services. While it seems implicit in the definition of value-added, this is an important principle that makes value-added services stand apart from other services.
|
As average revenue per user decrease from voice drops, and voice becomes commoditized, Telcos are increasingly looking at data as an additional revenue stream. The end users have also embraced VAS and it contributes between 5-10% of the revenues of different Telcos. Thus Mobile VAS has become an important element in the growth of mobile telephony in our markets.
Pre-paid has been a good platform on which the market had grown very fast, as it creates a volume based platform for tariff reduction. Operators have had a strong focus on the pre-paid segment as the cost of customer acquisition is very low compared to the post-paid segment. Another reason for the strong focus on customer acquisition has been to up the network valuations, which are largely assessed based on the number of users on it. However the flip side is that, customer retention has become very difficult. Loyalties in the prepaid segment are low due to the low switching costs and it is not uncommon for user to routinely change their numbers and service providers. Pre-paid subscribers are also low usage subscribers who contribute only 25-30% ARPU’s as compared to the post-paid segment.
Mobility operators face two clear challenges:
- To address customer retention in the high churn pre-paid market
- To develop alternative revenue streams as voice has become commoditized and has ceased to be a differentiator
Valuetech with its partners offers VAS in three main categories –
- Entertainment VAS - Entertainment VAS is designed for mass appeal and extensive usage. These provide entertainment for leisure time usage. An example of these kind of services are Jokes, Ringtones & games. These services are currently very popular and are driving the revenues for the mobile VAS market.
- Info VAS - These are the services which provide useful information to the end user. The user interest comes in from the personal component of the content. E.g. Information on movie tickets, news, banking account etc. These also include productivity services like missed call information which brings back lost business opportunity for the operators. They also include user request for information on other product categories like real-estate, education etc.
- mCommerce VAS (Transactional services) - mCommerce VAS allow the use to conduct a transaction using the mobile phone. These services are in a very nascent phase and are not really available to most users. An example of these kind of service are buying railway tickets or paying bills through the mobile phone.
|
