IAMAI India Digital Summit 2008: Operators must build ecosystem for mobile VAS

In the fifth and last session on the first day of the IAMAI India Digital Summit 2008, the panellists discussed how the mobile value added services (MVAS) industry in India has evolved over time and the challenges it was facing.

Session moderator Atanu Mandal, president, ACL Wireless, recapped the evolution of mobile VAS in India. “Originally, mobile VAS was started by telecom operators in 1998, when Essar launched a content service on IVR (interactive voice response) in association with NDTV; in 1999, it launched an SMS based content service. Later on, after 2000, WAP based services emerged and a lot of VAS based companies were born. Initially, VAS companies focused on WAP (mobile Internet) based services, but those services did not work well at that time. The reality is that today, 90 per cent of the mobile revenue comes from SMS and voice based services.”

Mandal then steered the topic to how the VAS industry needs to grow, and the factors which will help it grow further.

Popli added, “There is no point in developing business models for the mobile services which we plan to provide in the future because we will not able to deliver the planned services until problems related to infrastructure are solved.” He also pointed out that telecom operators should become more open and not restrict the services users can avail of on their mobile phones.

Popli also raised the question of how revenue sharing arrangements with operators would work out if a VAS provider wanted to offer customers a free service, supported by advertising. The question remained unanswered.

Milind Pathak co-CEO and country manager, Buongiorno, tried to give a more balanced viewpoint, “How many of us (VAS companies) are willing to invest in call centres and advertising like the telecom operators?” he asked. But he also said that “operators are faltering in building an ecosystem. The operators, handset manufacturers and VAS companies should come together and collectively build an ecosystem which will actually help in changing the current business model.”

According to the Mobile Value Added Services Report jointly prepared by the Internet and Mobile Association of India (IAMAI) and IMRB International, MVAS was expected to reach Rs 4,560 crore by the end of 2007.