IAMAI - AML Mobile VAS Report - Slides - 2011-07

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This document is a “distilled” version of the much larger report that Analysys Mason and IAMAI have prepared. The detailed report is available for purchase on IAMAI’s website – www.iamai.in and is an …

This document is a “distilled” version of the much larger report that Analysys Mason and IAMAI have prepared. The detailed report is available for purchase on IAMAI’s website – www.iamai.in and is an in-depth guide to each of the specific sub-segments within the mobile value added services ecosystem.
This summarised version of the report covers the following areas: The Indian mobile VAS opportunity, policy and market enablers, key trends in the mobile VAS industry in India, key growth areas in services and applications and mobile VAS industry growth forecasts
The key takeaways from this report summary are as follows:
• The Indian non-voice market is at an inflexion point, and the growth opportunity remains significant
• Similar to other mobile-first markets, mobile internet (handset plus dongles / CCDs) will drive growth in non-voice revenues while traditional services stabilize
• However, various market and policy enablers are required in on-deck VAS, off-deck VAS and SMS channels to realize this growth opportunity
• From a market perspective, a self-regulating body for settling issues between market participants can be an effective way to address on-deck challenges
• From a policy perspective, we believe that following a model of market determined revenue share with no special VAS license is the best route
• We recommend establishing an agency under the direction of TRAI to help address off-deck adoption issues and facilitate the allocation and management of a central short code registry system
• It is also recommended that a common standard for local language characters should be mandated on all handsets sold in India to facilitate growth in SMS
• Resolution of above issues also becomes imperative for maintaining market efficiency and balance of power in the evolving VAS value chain
• Among the emerging services, we believe that mobile commerce and utility services will have a significant social impact
• Finally, we believe that mobile internet adoption will result in a proliferation of data enabled services and applications around video, advertising, community, entertainment and enterprise mobility

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  • 1. Evolution of Mobile VAS in IndiaImperatives for Exponential Growth July 2011 | A joint report by IAMAI and Analysys Mason
  • 2. 2FOREWORD Dear Reader, We are delighted to present to you this comprehensive report on the The present version of the report contextualizes the primary question: past, present and future of that enigma which is known as the mobile “What should be done in order for the industry to move ahead?” in the value added services industry in India. In the enclosed pages, we light of “what has been in the past and what can be in the future”. So the have attempted to lay bare before you the story of the genesis and focus essentially is on urging stakeholders to collaborate in charting the evolution of this industry, the roadblocks that it faces, and the path forward for the industry. And, in attempting to do so, we have opportunities that it presents to all stakeholders. More importantly, we suggested “a particular” way that we believe will be acceptable to all have taken much pain to suggest a practical way to put this industry stakeholders. The larger appeal here, obviously, is a call for collective on a virtuous cycle to ensure sustainable progress and to identify the and effective action since this industry cannot flower with an attitude of areas that will truly see tremendous growth. “more of the same” any longer. You will appreciate that such a “first of its kind” report cannot be the With this report we have set our best foot forward with the best interests work of a single group. It is collective effort, and we have benefitted of the industry and users, and we sincerely hope you will appreciate the from detailed conversations with and feedback from more than 50 direction that has been outlined. stakeholder organizations including telecom operators, government agencies, mobile value added services companies, handset OEMs, applications developers and, last but not the least, users. We would like to acknowledge our gratitude to all of them. Thank You. We should also clarify that what you see before you is a “distilled” version of the much larger report that Analysys Mason and IAMAI have been working on for more than six months. The larger and much more detailed report is prepared almost as a step by step guide to each of the specific sub-segments within the mobile value added Dr. Subho Ray services ecosystem. In case you are serious about harnessing the President data and services opportunity that the telecom industry presents Internet and Mobile Association of India today, the larger report can be suggested as “essential reading”. Kunal Bajaj Partner and Director India Analysys Mason
  • 3. 3List of Sponsors Platinum Sponsor Gold Sponsors
  • 4. 4Peer Review / Acknowledgements• Peer Review Steering Committee We would like to thank the peer review steering committee for dedicating their time to this initiative and helping to identify the key issues to focus on. Producing this report would not have been possible without their inputs and feedback  Parag Kar VP, Government Affairs, Qualcomm (India & South Asia)  PG Ponnapa Chief Executive Officer- India/Asia Pac, MPortal  Sanjay K Goyal Founder & CEO, ACL Wireless  Dr. Subho Ray President, IAMAI  Vijay Shekhar Sharma Chairman & MD, One97• Acknowledgements We would like to acknowledge the following people for their extraordinary contributions  Anand Virani Business Development Lead, Services Ecosystem, Qualcomm (India & South Asia)  Chirag Jain Vice President - Marketing & Business Development, Webaroo  Mohit Narain Business Director, ACL Wireless  Rakesh Mahajan Independent Consultant
  • 5. 5Executive Summary [1/5]1. The Indian non-voice market is at an inflexion point, As in other mobile-first markets with no legacy infrastructure for and the growth opportunity remains significant internet access, the growth in non-voice revenues in India will be primarily driven by mobile data access. The mix of devices We believe that access to relatively higher speed data on (handsets, dongles and other connected computing devices) HSPA, EVDO and LTE networks, and a renewed focus of driving this market growth will depend on the economics and carriers on the mobile data opportunity will help drive growth in maturity of the underlying technologies (HSPA, EVDO and the Indian non-voice market in the immediate future. We see LTE). In contrast to growth in the data market, we believe that the foundational elements for such an inflexion point falling in the share of traditional services will begin to stabilize or decline place with improving data access speed, increasing penetration due to multiple demand and supply side constraints. We of smartphones and feature-phones as well as increasing believe that SMS penetration will begin to stabilize unless maturity of the content ecosystem. The opportunity for growth of issues around local language on handsets is resolved, while non-voice revenues in India remains significant, as has been CRBT penetration will stagnate primarily due to the inability of witnessed in multiple other emerging markets, especially after carriers to drop prices significantly combined with the limited the introduction of 3G. However, unlike most other markets, purchasing power of incremental users India will be a mobile-first market with the latent demand for mobile data being fulfilled by internet access through mobile 3. However, various market and policy enablers are handsets, tablets and other forms of CCDs (connected required in on-deck VAS, off-deck VAS and SMS computing devices) channels to realize this growth opportunity2. Similar to other mobile-first markets, mobile internet As in any rapidly growing ecosystem, there exist operational (handset plus dongles / CCDs) will drive growth in issues which limit market efficiency and consumer welfare. For non-voice revenues while traditional services stabilize the on-deck MVAS delivery model, the issues are centered around the absence of a governing body to address operational issues such as
  • 6. 6Executive Summary [2/5] MIS reconciliation and dispute resolution. The issues affecting monitoring MIS reconciliation and similar such operational the off-deck VAS delivery model are structural in nature, with issues is not feasible. In such a market construct, self- the low penetration of financial instruments such as credit & regulation involving all ecosystem participants has been an debit cards resulting in the carrier being the predominant effective means of addressing contractual issues and means of reaching and billing mobile subscribers. In addition, commitments, as can be seen for the advertising market in there are operational issues around interoperability, with D2C India through the establishment of a body such as the ASCI providers required to negotiate bilateral agreements and (Advertising Standards Council of India). We propose that such system integration with individual carriers. Similarly, for the an industry council should have members from the carrier SMS channel, absence of handsets with a common local industry associations such as COAI and AUSPI, mobile VAS language standard limits the penetration of SMS, which in turn provider organizations and other stakeholders as limits the reach of mobile enabled services to the mass market, representatives on a governing board. The members of this including for services like education and health. For the rapid council will include carriers, handset OEMs, technology growth of the mobile VAS ecosystem in India, these issues platform providers as well as MVAS providers. This board can need resolution, either through market mechanisms or by draft guidelines for MIS reconciliation between mobile VAS regulatory intervention providers and carriers to protect the interests of all parties, and can also act as a forum for grievance redressal, and could issue directives for action4. From a market perspective, a self-regulating body for settling issues between market participants can be an effective way to address on-deck challenges 5. From a policy perspective, we believe that following a model of market determined revenue share with no For commercial agreements between carriers, who are licensed special VAS license is the best route entities, and mobile VAS providers, who are non-licensed entities, regulatory intervention for Multiple models for potentially regulating mobile VAS providers, including bringing them under a licensing
  • 7. 7Executive Summary [3/5] framework were evaluated. In the scenario of a licensed mobile commercial terms with individual carriers and then follow that VAS provider, the regulator can potentially regulate revenue with system integration before being able to offer a uniformly shares and other interconnection agreements between the accessible service by consumers across carriers. In addition, in carrier and MVAS providers. However, an evaluation of the a majority of the cases, the carrier has a strong influence in pros and cons of the licensing model suggests that it will result determining the end user pricing of the D2C service to preempt in significant operational and financial overheads on MVASPs, cannibalization of its own offerings. Such a model inherently without the equivalent upside. We also note that even in other limits consumer choice, and also creates a significant barrier to emerging markets that have witnessed growth in non-voice the growth of the D2C ecosystem revenues, there is no precedent of licensing of MVASPs. Additionally, if revenue shares are regulated through setting a We recommend that TRAI should establish a Central Short floor, the incentive for MVASPs to innovate to target higher Code (CSC) agency as a licensed entity to be governed by revenue shares gets significantly impacted. We therefore them. Licensing of the CSC agency will allow it to enter into propose that the MVASPs may be kept outside the licensing agreements with other licensed entities (cellular service framework and revenue shares should remain market providers). The CSC agency will issue the short code to an determined and competitive MVASP (at a predetermined price), and will communicate the same to all UASL licensees. The carriers will then have to process the activation of these short codes in a pre-defined6. We recommend establishing an agency under the timeframe, across all circles. This framework can potentially direction of TRAI to help address off-deck adoption dictate the pricing of off-deck enablers (access, hosting and issues and facilitate the allocation and management billing) using a modular approach to the different components of a central short code registry system involved, allowing VAS providers to choose the access services that they need. The formulation of a “rate card” for the services In the current market structure for short codes and premium provided by the carriers can be done by TRAI under the numbers, a D2C provider needs to negotiate interconnection regime in consultation with carriers
  • 8. 8Executive Summary [4/5] through an acceptable methodology (e.g. on a cost plus basis) service providers such as handset OEMs, new revenue models such as ad-support as well as a shift in the level of control by various participants. With increasing adoption of mobile7. It is also recommended that a common standard for internet, handset OEMs have been exploring opportunities to local language characters should be mandated on all offer D2C services and applications through application stores handsets sold in India to facilitate growth in SMS as well as retail channels (mobile banking). In parallel, faced with increasing competition in the voice market, carriers have Since incremental mobile subscribers are coming from semi been exerting their control over the mobile VAS value chain to urban and rural areas, there is a demand for Indian language reduce operating expenses. Some of these initiatives include support on handsets. Various encoding schemes and other integrating VAS platforms into the core network, and mechanisms are currently in use for sharing local language significantly diluting the role of technology platform providers. content, but there are interoperability issues across devices. This is in turn putting pressure on technology providers to We propose mandating a standard like the one developed by introduce new variants of traditional services such as CRBT, as CeWIT for local language support on device, as well as well as integrate backward to increase their share of the carrier mandating the incorporation of this standard on all handsets spend on VAS. Initiatives to foster growth of the D2C sold in India ecosystem will help maintain market efficiency by introducing further competition and incentivizing innovation8. Resolution of above issues also becomes imperative for maintaining market efficiency and balance of 9. Among the emerging services, we believe that mobile power in the evolving VAS value chain commerce and utility services will have a significant social impact The VAS value chain has become significantly complex over the last few years, with the emergence of new There have been multiple pilots and stakeholder initiatives for driving adoption of utility services which
  • 9. 9Executive Summary [5/5] can provide a scalable, technology enabled solution to existing Video has long been hailed as the potential „killer application‟ issues around access to information, opportunity and on 3G networks, with global 3G carriers offering a portfolio of infrastructure. With the increasing availability of quality data video based services. However, with limited spectrum access and better devices, there is an opportunity for service allocation in India, we believe that data intensive video providers to enhance the quality and deepen the penetration of applications will remain muted. On the other hand, we believe these services in urban as well as rural areas. Among these that penetration of mobile data access in conjunction with rising services, the most valuable will be services providing a sales of smartphones and feature-phones will enable the replacement to infrastructure, such as mobile-health, mobile- growth of a vibrant applications ecosystem. This will also education and mobile-banking. We believe that carriers are well include social networking and community applications, either as positioned to make a substantial social impact by leveraging an extension of their online avatars or customized for a mobile- their retail distribution reach and offering banking, payments first user base. Some of the business applications will allow and domestic remittance services for the urban and rural poor. enterprises to m-enable their field force and harness the The only limiting factor in driving the adoption of utility as well benefits of faster turn-around time and reduced working capital. as financial inclusion services is the multiple stakeholder Finally, data and smartphone adoption will also substantially partnerships required by carriers in developing the market improve users‟ gaming experience and hence adoption, and ecosystem, which necessitates significant effort and time, and also foster new business and monetization models for mobile sometime reduces speed-to-market for some of these services music10. Finally, we believe that mobile internet adoption will result in a proliferation of data enabled services and applications around video, advertising, community, entertainment and enterprise mobility
  • 10. 10Contents The Indian Mobile VAS Opportunity 10 Policy and Market Enablers 16 Key Trends in the Mobile VAS Industry in India 39 Key Growth Areas: Services and Applications 47 Forecasts 110 Annexure: Sponsors‟ Profiles 120 Annexure: Company Profiles 129
  • 11. Global Experience 11 Global experience suggests that share of non voice revenues grows rapidly with introduction of 3G, especially in markets with a high PC & internet base Share of Non-Voice Revenues1 by Carrier, Country (%) 1 Messaging Driven Market 60% • Messaging dominant markets with high base of non-voice revenues • Philippines 45% High Growth post 3G 2 • Markets that have witnessed an 30% average change3 of ~4% per year China: ~4.8%, since 3G 28.2% • Malaysia, Brazil Malaysia: 21.8%, 15% 64.1% Moderate Growth post 3G Brazil: ~16%, 3 45.0% • Markets that have witnessed an S Africa: 8.2%, 0% 8.7% average change3 of ~2.5% per year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 since 3G 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 • S Africa, Indonesia, Thailand & China China 4 Unicom, China Vivo, Brazil Globe, Philippines Smart, Philippines 5 Maxis, Malaysia AIS, Thailand Telkomsel, Indonesia MTN, South Africa Vodacom, South Africa 6 Launch of 3G Services Legend2: Country: PC Penetration, Internet Penetration Note: 1. Non-voice revenues includes revenue from messaging, data usage and other non voice related activities; 2. PC penetration figures are for 2005 and Internet Penetration figures are as of 2006; 3. Average yearly change in share of non voice revenues (within total revenues); 4. China Unicom was considered rather than China Mobile, because the latter launched 3G with TD-SCDMA while the former did so with W-CDMA / HSPA; 5. Smart launched 3G services in Q1‟06; 6. Vodacom launched 3G services in Q4‟04 Source: Analysys Mason, © Wireless Intelligence 2011, Telegeography
  • 12. Global Experience 12 There appears to be a latent demand for connectivity in markets with low PC / internet base, which gets fulfilled by mobile internet Trend of Non-Voice Revenue and Mix (Messaging vs. Data and Others) Market Trend • Markets such as South Africa% of Non Low PC and – Voice 30.4% 33.6% 12.1% 19.4% 28.0% 30.0% 14.2% 23.4% and Indonesia have a low PC / internet baseRevenue internet base and are (South 11% 12% witnessing significant growth Africa, of mobile internet within non 37% Indonesia) 44% voice revenues 56% 35% 62% 52% 76% • Markets such as Brazil which 91% witnessed a late launch of 3G Recent 3G are also witnessing significant launch growth of mobile internet 63% (Brazil) within non voice revenues 53% 56% 38% 44% (~16% growth in share yoy for 37% 24% Vivo) 9% Q1 2009 Q3 2009 Q1 2009 Q2 2010 Q1 2009 Q1 2010 Q1 2009 Q2 2010 • Given the limited PC / internet Maxis Vivo Telekomsel1 Vodacom penetration as well as the late launch of 3G, India might also be expected to Data Messaging Others witness the emergence of mobile data as the dominant channel Note: 1. For Telekomsel – some share of other VAS included within data; Source: Analysys Mason, © Wireless Intelligence 2011, Industry Inputs
  • 13. Mobile VAS Overview 13 Recent trends in structural enablers in the market indicate that the MVAS industry in India is nearing an inflexion point Share of GPRS Enabled Handsets DEVICE The Indian Music Industry CONTENT in Total Handset Sales Revenues by Component (2010) • The device landscape in India • There is a much wider variety has changed significantly with of VAS content and services 65% the entry of local Indian 10% Others available to the Indian user handset OEMs Digital today and carriers have Music become significant 51% • Data enabled devices (both 41% distribution partners GPRS and 3G) now constitute ~70-80% of the installed Physical • App stores with inventories handset base Music into the millions across 49% multiple categories and 2009 2010 genres are being launched by most carriers, handset OEMs and third party stores ACCESS Active Mobile Data (GPRS) DEMAND Data (2.5G) Plan Tariffs (INR)1 • Mobile data is now widely Users in India • The complete ecosystem accessible with carriers across devices, access and 75 launching 3G services across content is resulting in 450 their circles of operations growing demand from consumers for mobile • Low service pricing and the 30 internet services development of innovative 90 business models such as 1 sachet pricing and pay-per- 2008 2010 site are encouraging CY2008 CY2010 Note: 1. Estimated price for entry level plan with penetration of data services unlimited monthly data usage adoption within users Source: Analysys Mason, FICCI Frames 2010, Company Reports
  • 14. Mobile VAS Overview 14 Unlike the wireless voice market, non-voice has been slower to grow in India, as compared to many other emerging markets Share of Non-Voice Revenues1 for Select Carriers in Emerging Markets Mobile VAS in India • Though there have been many rounds of VC / PE investments in mobile VAS 60% Limited companies, only a few companies have Investment achieved scale and gone for public Globe, Philippines offering 50% • End user price for VAS has remained Affordability more or less flat over the past few years, 40% due to low level of competition Maxis, Malaysia Telekomsel, • Carrier marketing is the primary channel 30% Indonesia for creating awareness of VAS offerings China Mobile, China Awareness • Individual participants do not have the 20% resources to market their own Vodacom, South Africa products/offerings Idea, India Airtel, India 10% Vodafone, India • No dispute settlement mechanism available to VAS providers for issues in MIS reconciliation, etc. 0% Transparency Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 • Consumers wary of using mobile VAS as charges for short codes / mobile internet are not well defined Note: 1. Non-voice revenues includes revenue from messaging, data usage and other non voice related activities Source: Analysys Mason, © Wireless Intelligence 2011
  • 15. Mobile VAS Overview 15 With the right policy & market enablers in place, MVAS can reach INR 671 bn, contributing 31% of total wireless telecom revenues in India Mobile VAS Market Potential (INR bn) • Growth will largely be driven by India emerging 2010 – 2015 as a „mobile-first‟ market – with the mobile becoming the primary means of access to the Internet for a large section of the population 31% 31%  Mobile data is expected to account for 54% of total 27% MVAS contribution by 2015, as the single largest contributor 22% 18% • As an INR 671 bn industry, MVAS also has the 16% potential to have multiple second order impact on areas such as entrepreneurship and 671 603 employment 480 368 • However, this growth is currently constrained by 291 multiple policy and market inefficiencies 213 • While various views exist on what the potential 2010 2011 2012 2013 2014 2015 solutions could be, we strive to understand the key constraints in ecosystem development and VAS Revenue (INR bn) thus evaluate and identify the key enablers MVAS Share of Total Revenue required across policy and market mechanisms to achieve this potential Source: Analysys Mason, Industry Inputs
  • 16. 16Contents The Indian Mobile VAS Opportunity 10 Policy and Market Enablers 16 Key Trends in the Mobile VAS Industry in India 39 Key Growth Areas: Services and Applications 47 Forecasts 110 Annexure: Sponsors‟ Profiles 120 Annexure: Company Profiles 129
  • 17. Mobile VAS: Challenges 17 The three primary reasons for the limited growth in VAS are the lack of alternate billing mechanisms, market inefficiency and lack of local language support across devices Key Issues First Order Impact Second Order Impact Challenges for On-Deck VAS1 • Market inefficiencies resulting in Affordability: Price points for VAS perceived scalability constraints for remains flat, due to lack of 1. Carrier control VAS providers competitive offerings 2. MIS reconciliation • Focus of platform providers shifting to international markets to drive higher 3. Dispute redressal revenue from their offerings Ecosystem Evolution: Lack of innovative product and service Challenges for Off-Deck VAS2 • Perceived scalability and profitability offerings, with VAS providers constraints for D2C models, due to focusing on mass market services 1. Lack of alternate payment channels high % of billing share, and lack of alternate billing models 2. No control over end user pricing 3. Skewed revenue shares when • Companies focusing on basic mass Consumer Welfare: Lack of market offerings which can drive using carrier billing consumer interest protection, with no volumes in alignment with carriers clarity on data charges and pricing for SMS/calls to short codes Challenges for SMS adoption • Addressable base of SMS limited, with only 47% penetration Investments for Scalability: Limited 1. Limited understanding of English / Roman characters • Mobile marketing / advertising on investment in this sector due to SMS also constrained perceived risk around carrier control on revenue shares and billing Note: 1. On-Deck VAS: Value added services which are available through the carrier; 2. Off-Deck VAS: Value added services which are available through D2C models Source: Analysys Mason, Industry Inputs
  • 18. Mobile VAS: On-Deck Providers (Challenges) 18 Challenges in the on-deck MVAS space are primarily due to MIS reconciliation irregularities and the absence of a dispute redressal system On-Deck VAS Impact of these issues • Carriers have the dominant Controlled Revenue position when negotiating revenue • Carriers provide marketing support, billing and Shares shares, resulting in a high level of customer service, and therefore command uncertainty for the VAS providers higher revenue shares than in other markets • VAS providers have very little negotiating power because carriers control access to their subscribers. While carriers do reward • Lack of a standard MIS innovative services with a higher revenue MIS reconciliation process results in Reconciliation share, overall revenue shares still remain uncertain payment values and timings skewed • In addition, MIS reconciliation issues and the absence of a dispute redressal system has resulted in VAS providers having little • Lack of a representative body recourse results in no formal addressal of Dispute Redressal disputes which have a negative • Disputes between the VASPs and carriers are impact on the smaller VAS beyond the purview of TRAI and TDSAT and companies taking the cases to court is a lengthy process Source: Analysys Mason, Industry Inputs
  • 19. Mobile VAS: On-Deck Providers (Challenges) 19 Given the high level of market inefficiency and carrier control, there is a significant amount of uncertainty in business models for TPEs On-Deck VAS Dependency of the Revenue of MVAS Provider • As the primary revenue stream of TPEs is on Carrier Revenue dependent on carriers, there is clear linkage between carrier revenue growth and TPE Total Telecom Revenue revenues (and a lagging / leading impact on • Decline in RPM due to stock price) hyper-competition • Demand in terms of MoU • Even in cases of decline of carrier voice also declining revenues (and not VAS revenues), the carriers have been known to heavily reduce revenue shares of VAS partners to protect their own EBITDA margins • Payouts from carriers are often delayed and to Revenue of a MVASP Reduced revenue share meet the timelines for compensating their will further pull down the content partners, platform providers accept • Revenue share revenue of MVASP agreement with carriers • Carriers reducing revenue payments at the carriers‟ terms and conditions • Market impact share to optimise their opex • As VAS providers are not licensed entities, they do not fall in the scope of dispute redressal through TDSAT1  In the absence of dispute redressal, VAS providers need to approach the traditional judiciary system to Revenue of a MVAS Provider resolve issues with carriers & other partners, which is extremely inefficient and costly Note: 1. TDSAT: Telecom Disputes Settlement and Appellate Tribunal Source: Analysys Mason, Company Reports, Industry Inputs
  • 20. Mobile VAS: On-Deck Providers (Challenges) 20 This unpredictability of overall revenue and limited profitability potential has led to platform providers investing in international markets On-Deck VAS Average Revenue Share (Range) for Technology Providers and examples of Acquisitions by • Due to constraints in overall revenues, many Indian Platform Providers in International Markets technology providers are expanding to international markets with better revenue share 100% arrangements and higher end user pricing of services • OnMobile acquired 80% Dilithium Network • OnMobile claims a total base of ~1 bn (2010)1 subscribers, with 300 mn subscribers from international markets, with growing revenues 60% from this segment – 25% of revenues in FY‟10 • IMImobile acquired UK‟s WIN plc for INR were from international markets 1,170 mn (USD 26 mn) (October 2010)2 40% • IMImobile entered Europe with acquisition of • Other companies such as IMI Mobile and content distribution pioneer dx3 (2008)3 Phoneytunes have also expanded their • Mauj mobile, People Group‟s company has acquired UK based Mobango in 20104 international presence significantly, with up to 20% • One97 plans to expand to markets similar to 70% of their revenues coming from these India such as pre-paid minutes dominated markets European markets 0% India USA Europe Note: 1. Dilithium networks is a global provider of mobile video infrastructure solutions, with customers across 120 service providers and carriers in 60 countries; 2. WIN plc is a mobile content and services firm with revenues of approximately INR 2,700 mn (USD60 million); 3. dx3 is a UK based digital content delivery services provider; 4. Mobango is a UK based mobile application and user generated content store Source: Analysys Mason, Industry Inputs
  • 21. Mobile VAS: On-Deck Providers (Challenges) 21 This is also resulting in limited long term innovation and investments, with carriers placing major focus on increasing penetration of basic services On-Deck VAS Subscriber Penetration of VAS Services (2010) • After SMS, CRBT is the only app to achieve 47% significant penetration due to carrier promotion and discovery mechanisms • VAS providers focus on mass market services 20% 17% 15% as they do not have sufficient incentive to experiment with innovative offerings for specific 6% 2% niche consumer segments. Launching a new P2P SMS Games CRBTIVR / Voice Portal SMS A2P Others service can take months • Given the high level of control of carriers and Revenue Contribution of VAS (2010) the small overall market for platform providers, larger international VAS providers largely have 1% stayed away from the Indian market P2P SMS • Buongiorno is one of the few large, global, 38% 34% P2A/A2P SMS standalone, pure play mobile VAS companies CRBT that has extended its operations to India IVR Portals Mobile Data 6% 13% 8% Others Source: Analysys Mason, Industry Inputs
  • 22. Mobile VAS: On-Deck Providers (Challenges) 22 We believe that revenue shares are best left to market forces, given their direct impact on innovation On-Deck VAS Revenue Share Range Estimates by Type of MVAS and their Level of Content / Service Differentiation • There is no precedent of revenue share regulation in global markets 60% • Revenue shares are a commercial discussion between two commercial 50% • Very popular service, albeit stabilizing now entities and should be left to market • Network integrated forces service – harder to 40% switch providers • Allowing the market to determine the • Content is important revenue share will ensure the introduction of new and innovative 30% • Innovative service with high value proposition offerings • Very generic service • Celebrities are • Innovation and ingenuity will be procured by VASP 20% • No clear differentiator rewarded while commoditized between providers services will be compensated accordingly 10% • Setting a floor for revenue shares would unjustifiably raise the cost of 0% commodity content / services News Alerts CRBT Celebrity Talk Source: Analysys Mason, Industry Inputs
  • 23. Mobile VAS: On-Deck Providers (Challenges) 23 Apart from revenue shares, the on-deck VAS market still has challenges with MIS reconciliation, dispute redressal & short code integration On-Deck VAS Uncertain Environment for VAS Providers • The key issues that need to be addressed are MIS reconciliation, short code administration and dispute redressal • The process of MIS reconciliation between Carrier A Carrier B carriers and VAS providers needs to be • IUC framework for interconnection streamlined to ensure timely payment • TDSAT for dispute schedules and method for data reconciliation redressal • Formal representation bodies (COAI, AUSPI) • The process for shortcode administration is • Interconnection also not optimal, and needs to have some • MIS Reconciliation • Interconnection guidelines to simplify the allocation and • MIS Reconciliation • Dispute Redressal integration process • Shortcode • Dispute Redressal • Administration Shortcode Administration • In addition, there is no formal body that the • Billing and VAS Revenue Shares • Billing and VAS providers can approach in case of any Provider Revenue Shares disputes with carriers or between themselves Source: Analysys Mason, Industry Inputs
  • 24. Mobile VAS: Off-Deck Providers (Challenges) 24 On the other hand, challenges in off-deck VAS are primarily due to lack of alternate billing mechanisms and delays in short codes integration Off-Deck VAS Impact on D2C / Off-Deck MVAS Providers: Delays in • Individual carrier controlled and Access to maintained short codes make • These issues have constrained the growth of Premium national rollouts a lengthy and mobile VAS in India Numbers complicated process • As far as technological feasibility is concerned, SMS and WAP/GPRS are the only carrier agnostic services that can be provided • Lack of alternate billing  Even for SMS, short code services face several mechanisms results in a carrier issues from allotment of short code to deployment Carrier Control controlled off-deck MVAS industry of service on Pricing where the VAS providers cannot price their own offerings  For WAP / GPRS, TRAI has made recommendations which do not allow the carrier to block any mobile portal • MVASPs do not have the freedom  IVR shortcodes face similar problems to SMS, to choose from the access and given the importance of voice services in Carrier enablers that they would like to India, are actually a more important mechanism Arbitration on use for their service. Revenue for reaching the masses Revenue Share shares are opaque, even when using only the billing channel Source: Analysys Mason
  • 25. Mobile VAS: Off-Deck Providers (Challenges) 25 The lack of alternate billing / payment channels has resulted in restricted growth of off-deck VAS in India Off-Deck VAS Payment Methods for Purchase of off-deck VAS State of Maturity • The absence of mass 1 Carrier Billing penetration of alternate Simple one button purchase for the Mature payment channels such as Revenue share ~40% consumers credit cards / wallets Carrier IN constricts the ability of the VAS providers to directly 2 Mobile Wallet approach and bill Consumers need Phone Number to provide the consumers 9988998899 details of mobile Nascent Password wallet if not using • The D2C VAS industry has the carrier‟s wallet Mobile wallet details Mobile wallet for purchase of thus remained very small provider‟s VAS server • Most VAS providers go 3 Credit / debit card or net banking through carrier billing to Consumers need increase their reach, and to provide details of payment end up sharing a high share instrument and Niche (~60-70%) of their revenues also go through the bank site for with the carrier for use of Payment Credit/Debit card details + Gateway second level of only the billing channel second level authentication; Processor‟s authentication net banking details server Source: Analysys Mason
  • 26. Mobile VAS: Off-Deck Providers (Challenges) 26 This is in contrast to global markets where the off-deck VAS industry thrives in the absence of billing constraints Off-Deck VAS Mobage Town Case Study Drivers for Japan’s Mobile VAS Market Developer • 90% revenue share to mobile developers Revenue for both on-deck and off-deck content / Share services • Carriers control the device roadmap Device including handset OS and features Capabilities • All handsets are internet enabled • Flat-rate data plans introduced with a Data Plans cap on maximum spend for consumers • Market leader NTT DoCoMo adopted Carrier these developer friendly measures and Initiatives also offered flat rate data plans • Youth specific application in • Global markets such as China, Japan and Total Revenues ~ $ 1 bn Korea, have a robust D2C ecosystem; the Japan with gaming, Active Accounts 22 mn networking, avatar and news market has benefitted from an early opening of • 50% revenues from user carrier walled gardens to offer easy access to Page views / month 17 bn transactions D2C services Source: Analysys Mason, Industry Inputs
  • 27. Mobile VAS: Off-Deck Providers (Challenges) 27 Carrier billing remains an option, but issues of no control over pricing by off-deck providers and skewed revenue shares remain Off-Deck VAS End user Price for Voice and Non-voice ARPU vs. Price of Popular Game in Different Offerings in India (2007 & 2010)1 Countries (INR)2 INR 30 30 INR 30 2500 (2%) 2171.7 2000 (3%) 20 1507.5 1500 15 15 10 10 10 10 10 1000 (17%) 10 722.3 (10%) 500 444.6 (33%) 3 3 3 161.6 119.7 54.0 44.6 42.8 44.6 0 0 Voice Premium Mono Tone Poly Tone Wallpaper CRBT India USA UK China Malaysia (10 mins SMS Download Subscription call)1 2007 2010 ARPU Game Price Note: 1. For a 10 minute call; 2007 rate assumed at INR 1 per minute, 2009 rate at INR 0.5 paisa per second, Cost of per transaction for SMS, monotone, polytone and wallpaper, monthly subscription for CRBT; 2. India (Paid game on Indiatimes), USA, UK, China (Paid game on Apple Apps Store), Malaysia (GamesUnlimited; Maxis games site); Most games in China are cracked and available for free. Number in parenthesis indicates the cost of game as a % of ARPU Source: Analysys Mason, Wireless Intelligence, Industry Inputs
  • 28. Mobile VAS: Off-Deck Providers (Challenges) 28 In addition, MVASPs face issues in the integration of short codes, which inhibits the revenue potential from voice and SMS services Off-Deck VAS • Short code services face multiple issues, right From allotment to deployment, short codes are from the first step of short code allocation to completely dependent on the carrier service deployment and management • Inordinate delays in request processing and allotment of short codes are common within Allocation Deployment the industry • In addition, since short codes are controlled by the carriers, situations arise where some carriers have allotted short codes, while Delay: Request processing Blocking: Selective blocking and short code allocation is of codes that are considered others have not. In such a situation, services often quite delayed „competitive‟ by carriers get delayed and sometimes don‟t get launched ever • Even once allotted and deployed, short code services face issues such as arbitrary pricing Interoperability: VAS and blocking of services that are deemed Arbitrary pricing: Could be provider has to take a separate short code from troublesome especially for „competitive‟ by the carrier small VAS providers each carrier Source: Analysys Mason
  • 29. Mobile VAS: SMS (Challenges) 29 Challenges in SMS adoption include the lack of handsets with a common standard for local language support SMS Penetration Impact on SMS Adoption: • Less than 10% of the installed base of handsets support non- • These issues have constrained the growth of Limited SMS usage in India Roman characters Availability of Handsets with • Limited local language support, • As the number of subscribers from rural areas Local Language Support means a large portion of the is growing at a faster rate than in urban areas, population (~ 90%), is not the demand for SMS in Indian language is addressed likely to continue to grow • Complexity of Indic scripts results in relatively high number of characters per word on an average • Variation in keypad layouts and standards for Indic language • No display guidelines and standards are Absence of support across vendors / devices available Standards Based Solutions for results in loss of content Local Language  3GPP, body for global mobile telephony SMS • This difference creates standards, amended the SMS standards in 2008 incompatibility between to accommodate a request from Turkey to handsets support the full Turkish alphabet Source: Analysys Mason, Centre of Excellence in Wireless Technology (CEWiT) India Reports
  • 30. Mobile VAS: SMS (Challenges) 30 Lack of a local language standard across devices has led to limited SMS penetration to English / Roman characters users SMS Penetration Top Print Newspapers by Circulation in India SMS Penetration, 2010 (Readership, mn) 100% 100% Dainik Jagran, Hindi 55 80% Dainik B haskar, Hindi 34 75% A mar Ujala, Hindi 29 47% Hindustan, Hindi 27 50% Lo kmat, M arathi 21 Daily Thanthi, Tamil 20 25% Dinakaran, Tamil 17 A nanda B azaar P atrika, B engali 16 0% Philippines China India Eenadu, Telugu 14 Rajasthan P atrika, Hindi 14 M alayala M ano rama, M alayalam 13 Times o f India, English 13 • Apart from lower SMS pricing in Philippines and China than P unjab Kesari, Hindi 11 India, the ability to message in local language is the key Daily Sakal, M arathi 11 driver for high SMS penetration P unya Nagari, M arathi 10  The inherent efficiency of the Chinese language (average word- Dinamalar, Tamil 10 length less than 2) overcame the limitations imposed by Unicode Vijay Karnataka, Kannada 9 (UCS-2) in terms of 70- character size limit Gujarat Samachar, Gujarati 9  In Philippines, the local languages are written using the Roman M athrubhumi, M alayalam 9 script which means that the default 7-bit GSM alphabet can be B artaman, B engali 8 used (as in the case of English) 0 10 20 30 40 50 60 • Different handset OEMs use their own proprietary standards for local language text creating interoperability issues Source: Analysys Mason, Industry Inputs
  • 31. Mobile VAS: Recommended Solutions 31 Opinions vary across industry stakeholders on the preferred solutions to address the current issues with the mobile VAS industry 1. Policy Framework without 2. Licensing with Market Determined 3. Licensing with Policy Licensing Revenue Share Determined Revenue Share • A focused licensing regime needs to • No separate VAS license needs to • A broader licensing framework, which Position be in place for VAS, including be issued – but a policy framework leaves revenue shares to be driven by regulation recommending minimum to support VAS providers is required market forces revenue shares • Licensing will ensure that the VAS • Revenue shares should be left to industry gets support on critical issues • Revenue shares remain a critical market forces, as that will help drive such as MIS reconciliation and dispute element in the mobile VAS ecosystem innovation redressal and are currently hampering growth Rationale • Creating licenses will increase the • Revenue share is a commercial and investment in the industry because agreement between entities and cannot of their low levels costs of the MVASPs and innovation will suffer as smaller VAS providers be mandated by the Government • Once revenue shares are regulated, will not be able to bear the attendant • Once off-deck services gain traction, other operational issues such as MIS costs of a license market forces will drive revenue shares would also get addressed without intervention • Formation of a self governed industry forum to formally represent • A VAS licensing framework that will • A VAS license framework that will Potential Solution the VASPs regulate MIS, dispute redressal and regulate revenue shares, and • Formation of a premium number other issues, but will leave revenue recommend measures for policy which will govern the shares to market participants implementation and monitoring operation of short codes Source: Analysys Mason, Industry Inputs
  • 32. Mobile VAS: Recommended Solutions 32 While licensing is potentially an option to address these issues, licensing by itself does not guarantee a solution Licensing will ensure that the VAS industry gets But, licensing may not be best solution for support on critical issues such as MIS these issues as it comes with it‟s own share of reconciliation and dispute redressal additional burdens and responsibilities • Allows companies to voluntarily be indexed and • Licensing will result in high costs, including documented by TRAI, helping more clearly bring out license fee payments and operational delays as the role of third party VASPs Govt. process and approvals would be required • Allow VASPs to come under interconnection • Innovation will be hindered as launching a new regulation and thus access carrier services in a VASP will require first acquiring a license timely fashion with guaranteed QOS, and without • Increased overheads and reporting resulting from the threat of being blocked licensing can inhibit the growth of the MVAS • Address disputes redressal through TDSAT industry • Rate players in the VAS space for their compliance • Regulating revenue share will not be conducive to with best practices and standards set by TRAI and innovation, and is best driven by market forces others. Coupled with information disclosure measures, this would help in improving market functioning and dispute redressal There are other alternatives which can be adopted to help drive growth in the Indian MVAS industry Source: Analysys Mason, Response of Industry Participants to TRAI VAS Consultation Paper – Feb 2011
  • 33. Mobile VAS: Recommended Solutions 33 Hence, a policy framework without licensing is expected to better foster market enablers for the growth of MVAS in India 1. Policy Framework without 2. Licensing with Market Determined 3. Licensing with Policy Licensing Revenue Share Determined Revenue Share • A focused licensing regime needs to • No separate VAS license needs to • A broader licensing framework, which Position be in place for VAS, including be issued – but a policy framework leaves revenue shares to be driven by regulation recommending minimum to support VAS providers is required market forces revenue shares • Licensing will ensure that the VAS • Revenue shares should be left to industry gets support on critical issues • Revenue shares remain a critical market forces, as that will help drive such as MIS reconciliation and dispute element in the mobile VAS ecosystem innovation redressal and are currently hampering growth Rationale • Creating licenses will increase the • Revenue share is a commercial and investment in the industry because agreement between entities and cannot of their low levels costs of the MVASPs and innovation will suffer as smaller VAS providers be mandated by the Government • Once revenue shares are regulated, will not be able to bear the attendant • Once off-deck services gain traction, other operational issues such as MIS costs of a license market forces will drive revenue shares would also get addressed without intervention • Formation of a self governed industry forum to formally represent • A VAS licensing framework that will • A VAS license framework that will Potential Solution the VASPs regulate MIS, dispute redressal and regulate revenue shares, and • Formation of a premium number other issues, but will leave revenue recommend measures for policy which will govern the shares to market participants implementation and monitoring operation of short codes Source: Analysys Mason, Industry Inputs
  • 34. Mobile VAS: On-Deck VAS Providers (Recommended Solutions) 34 The formation of an industry self-governing board that can act as a formal forum for participants in the MVAS ecosystem can be beneficial On-Deck VAS Formation of an Industry Association for Mobile VAS Providers in India COAI / 1. This mobile VAS forum will function in a IAMAI AUSPI self governing manner Formation of an 2. The board can potentially draft MVAS Authority guidelines for MIS reconciliation MVAS Industry between mobile VAS providers and Governing Board carriers to protect the interests of VASPs, especially the smaller providers 3. This will act as a forum for grievance Members From redressal and can issue directives for MVAS Services Stakeholders Across Handset Providers the Value Chain Manufacturers action  Various arbitration mechanisms and models can be developed for grievance Technology redressal Carriers Platform Providers Source: Analysys Mason
  • 35. Mobile VAS: On-Deck VAS Providers (Recommended Solutions) 35 This proposed forum can be drafted along the lines of the ASCI in the advertising industry which has successfully addressed several issues On-Deck VAS Advertising Standards Council of India: Structure and Responsibilities ASCI Consumer Complaints Council Grievance Addressal Council 16 Board of Governor Members 21 Council Members • Advertisers • 9 from within the advertising • Advertising Agencies industry • Media and Allied Professions • 12 from society at large (including • Audio-Visual Producers eminent activists, journalists, • Consumer Researchers lawyers etc.) • Printers and Blockmakers etc. 1. ASCI is a self regulating industry body with a view 1. The Council receives ~150 complaints annually and to achieving fair and acceptable advertising upholds ~50% of these. Through their directives practices in the best interests of the consumers they have achieved a voluntary compliance rate of 2. ASCI has set up a code of conduct which all as high as 80% Indian advertising firms are expected to adhere to. 2. If the advertiser refuses to accept the verdict of the Not being a Government body, there is no specific CCC, then the Council uses its influence with media legal consequence but members follow the owners (esp. members), and advises them of such decisions offending ads Source: Analysys Mason, ASCI website, Industry Inputs
  • 36. Mobile VAS: Off-Deck Providers (Recommended Solutions) 36 A policy framework (without licensing) that will mandate a premium number policy can potentially address the challenges for off-deck billing Off-Deck VAS Proposed Framework for Premium Number Policy • CSC agency to be set up as a licensed agency under TRAI, similar to the MNP agency, and will be governed Central Short Code (CSC) Agency Created & Mandated by TRAI by TRAI • Short codes Short Code Operational allocated and • Licensing of CSC agency will allow it Across Carriers maintained by this central to enter into agreements with other agency licensed entities (cellular service • Pan India access providers) Carrier Carrier …. Carrier across all 1 2 n carriers • TRAI to mandate the „Rate Card‟ • Mandated which includes billing, origination and turnaround time of activation termination charges for carriers whose Host carrier pays User Billed across carriers customer originates service access VASP; Keeps share by carrier to cover request for service interconnection and other costs • IUC agreement between carriers to also include the short code interconnect framework (procedure, VAS Provider economics) • VAS Provider Offers Services to Users • This policy will guarantee pan India Across Carriers access across all carriers Service Flow Revenue Flow Source: Analysys Mason
  • 37. Mobile VAS: Off-Deck Providers (Recommended Solutions) 37 Such a framework will allow D2C providers the flexibility to control the end user pricing of their services Off-Deck VAS Proposed Transaction Model for Premium Number Policy • Such a framework can help save cost and time of integration for MVASPs with multiple carriers Central Short Code (CSC) Agency Created & Mandated by TRAI • Short codes • This also allows the MVASP to decide allocated and the end user pricing of the service, maintained by this central which can bring the benefits of agency competitive market prices to Keeps price as INR a-b-c • Short code will consumers per the rate Carrier Carrier be accessible card for: 1 2 Pan India across • In addition, market driven commercial • Origination / INR b all carriers Termination Host negotiation between MVASP and the Carrier • Mandated charges turnaround time host carrier will ensure availability of (INR b) • Billing – As per of activation multiple competitive options for commercial includes negotiations across carriers MVASPs based on the nature of customer care service as well as scale / expected cost (INR c) End user adoption price VAS (INR a) Provider • The TRAI mandated rate card for A originating carriers will include Carrier 1 Subscriber • Selects a carrier for hosting standard price points for service such based on the best rate Sends SMS to the premium offered for hosting and Originating Flow as billing, based on the cost of code of VAS provider A commercial deal Termination Flow providing such services Source: Analysys Mason
  • 38. Mobile VAS: SMS (Recommended Solution) 38 Standardization of character set and incorporation of local language support on devices can be a potential enabler to drive SMS penetration SMS Penetration Adopt a common standard for local In addition, mandate the incorporation of languages to ensure interoperability and local language text on all handsets sold in efficiency India • Encoding: Indic 7-bit encoding, improves • This enforcement on handset vendors will text payload in a SMS provide better reach and awareness as • Keypad: Simplified Indic keypad design, to devices are replaced over time make user adoption easy • It will help drive the penetration of P2P • Font: Memory efficient font libraries, critical SMS and A2P / P2A services for distribution and field support • Also, it will enable local language advertisements on SMS which can emerge as a key driver for mobile advertising One such standard developed by CEWiT for local language support already has GSMA approval Source: Analysys Mason
  • 39. 39Contents The Indian Mobile VAS Opportunity 10 Policy and Market Enablers 16 Key Trends in the Mobile VAS Industry in India 39 Key Growth Areas: Services and Applications 47 Forecasts 110 Annexure: Sponsors‟ Profiles 120 Annexure: Company Profiles 129
  • 40. Mobile VAS Trends 40 A majority of the growth in MVAS is expected to be driven by mobile internet, with data contributing 54% to mobile VAS revenues by 2015 Share of Mobile VAS Market 2010 – 2015 • While traditionally, data access has remained a small piece of the overall MVAS pie, recent 1% 1% 2% 2% 2% 3% trends suggest that crucial success factors for 11% 9% 7% 6% 5% 13% data access are now falling in place  Data tariffs are at an all-time low, and innovative 33% 33% 38% business models (such as pay per site for select 43% 45% 45% popular destinations) have been introduced by 5% 5% market entrants to drive adoption and usage 5%  Social networking has exploded as a service in 5% 20% 22% 6% 6% 17% India, and carriers and handset OEMs are 17% increasingly promoting SNC applications on their 20% 23% networks / devices 31% 33% 32% 24%  Device functionality is not an impediment any 17% more, with GPRS capability available in handsets 12% in the range of INR 1,600 (USD 35.6) 2010 2011 2012 2013 2014 2015 Mobile Internet (Handset) Dongles / CCD Data Access • This data growth will be dominated by IVR Messaging smartphone and dongle users, but emerging CRBT Others 1 applications / services indicate that data usage can be driven on feature phones as well Note: 1. Others include m-commerce and CMS Source: Analysys Mason, Industry Inputs
  • 41. Mobile VAS Trends: Case Study 41 Feature phones can also help drive data usage through use of innovative services and applications for simplifying adoption Situation Cricket MyHomeScreen Handset Rollout • Cricket Communications is a carrier in the US that follows a cost leadership strategy 1,200 • Customer base is largely in the lower income groups, and from ethnic groups • Discretionary income is scarce and economic climate unfavorable for the 1,000 users to spend on mobile web Messager II (August 27) Complication Cricket Widget Subscribers („000) 800 A200 • Cricket wanted to grow the overall value in the segment, through moving (Sect 22) users to high revenue generating plans that included the mobile web Motorola • They also wanted to meet their goal of add-on services and needed a VE465 600 (September 1) way of making it easier for users to purchase downloads on their devices PCD • Focus on the value segment also limited the type of devices that Cricket TXTM8 could offer to it‟s users Samsung (July 22) 400 My Shot (June 11) mPortal Solution • Widgets provided the perfect solution as they can be easily integrated Cricket into the home screen while allowing users easy access and high level of 200 A300 (November) customization • They can be ported across multiple handset platforms and can include distribution strategies / storefronts that can help drive downloads - Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 • mPortal announced the availability of MyHomeScreen on five handsets in Oct 2009 Source: mPortal, Analysys Mason
  • 42. Mobile VAS Trends 42 CRBT, which was the killer app on 2.5G networks, is expected to stabilize given poor per unit economics, discovery issues & low carrier focus CRBT: Per Unit Economics1 • If subscriber acquisition costs are not factored in, the margins for CRBT subscription revenues for carriers are • Revenue realized per user on quite high subscription is only INR 3 – 8; and as low as INR 2 for song change • However, if the cost of acquisition is factored, in the margins for the carriers are Average Duration of CRBT User much lower 40 days • This is one reason that most carriers have INR 3 - 8 typically maintained CRBT pricing at the same level for the last few years • Also, with the launch of 3G, carriers are • OBD calls cost ~ INR 12-13 User May Drop now focusing more on developing their for each user Off Due to Low Balance mobile internet and data business INR 20-25 • Other acquisition costs accrue upto INR 8-12 • With lower focus on pushing services such • New Song: User May or May as CRBT, we expect the subscriber • ~ INR 5 is the avg. payout Not Renew On penetration to start stabilizing soon at Their Own per download ~17%, and consequently even declining to 15% by 2015 Note: 1. Estimates made on the basis of industry inputs Source: Analysys Mason, Industry Inputs
  • 43. Mobile VAS Trends 43 P2P messaging may peak in terms of penetration over the next year but usage within the target consumer segments will potentially increase Average Text Messages Sent Per User Per Month for the • Countries such as the USA have witnessed significant growth in the usage of text messaging Top Ten Countries (2009) (average of 8 SMS‟s per user per month in 2003) – driven mainly by add-on packages for 609 • Cheaper than voice calls SMS where users get unlimited text messaging • Ecosystem for a range of services on SMS for a flat monthly fee • Other countries such as Japan, which used to be an SMS heavy nation, have moved out of this 408 • Flat rate add-on packs for SMS, with list with the increasing preference of email / IM unlimited messaging over SMS for communication • In contrast, India has an average of ~42 SMSs / 259 215 month at the overall base (with an estimated 196 193 SMS penetration level of ~47%) 158 155 138 113 • With literacy issues and the incremental user base primarily being from rural areas, this penetration is unlikely to grow significantly unless local language standards are mandated Korea Venezuela Philippines USA Ireland Lithuania Portugal Indonesia Malaysia Denmark across devices • P2P SMS is thus likely to grow in a stable manner, with limited growth in the addressable base segment Source: Analysys Mason, Industry Inputs, TRAI Quarterly Performance Report, ictDAT.org
  • 44. Mobile VAS Trends 44 With the launch of 3G, there is significant hype over services such as mobile video, but we expect these services to slowly gain traction only in the medium term due to capacity constraints Calculation for Spectrum Capacity per Cell Site1 • Video (mobile TV subscription on dongles and handsets) will only contribute to about 1% of the mobile data revenues by 2015, 840 primarily due to network capacity issues • Having only 5MHz of 3G spectrum limits the usage of mobile video in the range of 100 to 300 users per cell site per sector 432 420 for different technologies • Given these constraints on capacity and 216 no indication on future allocation of spectrum, we believe that although there 24 12 is a demand for video, mobile video EDGE HSPA HSDPA offerings will gain traction only in the medium term Peak throughout 200 Kbps 3.6 Mbps 7 Mbps per sector1 Max no. of Subs Supported No. of Subs Suported during Busy Hour Note: 1. At 256 Kbps and a contention ratio of 10 Source: Analysys Mason, Global Mobile Suppliers Association (GSA), Industry Inputs
  • 45. Mobile VAS Trends 45 Even though core growth constraints remain the same, the traditional value chain is witnessing significant shifts and undergoing some revenue restructuring • Backward integration across the • Easy integration of VAS products on to the • Carriers offering ad-based services for three segments e.g. TPE moving carrier SDP / network secondary revenue streams into content aggregation • With initiatives like START/STOP, focus is • Partnering with payment companies for • UGC gaining adoption on enabling users to experiment with multiple additional revenue from mobile shopping products and remittance Content Repurposing / ISV4 WAP Carrier Billing Carriers SMS1 MPG2 Voice Online Ad3 Content Content Product/ Developer Aggregators Apps Retail Cash/ CC/ DC Handset OEM Online Carrier UGC Device 3rd Party VASP Integration WAP SMS Voice MPG2 / Ad3 Technology Platform Enablers Managed Services / Network OEM /VAS SI Advertising/Profiling/Relevance Platform Mobile Commerce Platform • Handset OEM is offering • Carriers deploying profiling / • M-commerce solution • Network OEMs are providing VAS under its brand on relevance platform for better provider with one or more technology platform for multiple sales channel: targeting capabilities such as mobile carriers, e.g. Network OEM online, retail and mobile • Ad-networks forming dedicated payment, mobile banking, CRBT platform integration in • D2C players using alternate sales force to sell branded money transfer and mobile carrier network payment channels inventory shopping Note: 1. STK embedded content is included in SMS; 2. Mobile Payment Gateway; 3. Ad based revenues; 4. Independent Software Vendor Source: Analysys Mason, Industry Inputs
  • 46. Mobile VAS Trends: Case Study 46 Additionally, carriers are also increasingly prefering to provide unified services to the users with strong content and technology integration at the backend MTN Challenges Launch in 17 countries in 7 months • Consistent & seamless user Impact on MTN Performance experience • Reduces MTN‟s group headcount • Multiple content inventories significantly • Slow & inefficient roll out in new • Consistent brand representation across all territories territories • Non-existing marketing campaigns • Retailing best practice across all territories • Limited ARPU • Valuable access to consumer insight cross territories • High CAPEX as result of separate systems • Return on Investment IMI Mobile Content Management Solution • Central content hub & local storefronts • Quick & efficient rollout • Ensure optimal customer experience • Boosting ARPU & reduce capex • Marketing & promotion Source: IMI Mobile, Analysys Mason
  • 47. 47Contents The Indian Mobile VAS Opportunity 10 Policy and Market Enablers 16 Key Trends in the Mobile VAS Industry in India 39 Key Growth Areas: Services and Applications 47 Forecasts 110 Annexure: Sponsors‟ Profiles 120 Annexure: Company Profiles 129
  • 48. Themes Introduction 48 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 49. Mobile Commerce 49 Carriers and D2C service providers are experimenting with multiple models / services M-Commerce Service Offering and Business Models in • Linked Value Models: Most existing India: Existing and Emerging m-commerce service providers such as Mobile Mobile mChek, PayMate and ngpay use linked value Mobile Banking Remittance Payments model for their services which is primarily for payments; mChek is embedded in Airtel and Linked E.g. iMobile E.g. Obopay DOCOMO STK E.g. mChek Value (ICICI Bank) (Yes Bank) • Stored Value Models: Regulations only allow usage of stored value for payments at Stored Non-banking Cash out is E.g. Airtel predefined set of merchants; Airtel has Value model not allowed Money recently launched mobile money in India • BC based Models: Mobile based BC model E.g. Nokia E.g. Nokia launched by Eko1 and planned launches by BC E.g. Eko and Based SBI Money and Money and Airtel and Vodafone; mChek is offering UBI UBI remittance & payment service in SriLanka with Dialog Telecom as BC for NDB bank Legend: Status of Service Offerings / Business Models: Existing Emerging NA Note: 1. Eko is a BC for SBI bank and an SBI account is opened for its customers; Regulations mandate that the BC service be carrier agnostic and hence subscribers of any network can open their account; Airtel has partnered with SBI and Vodafone has partnered with ICICI Bank Source: Analysys Mason, Reserve Bank of India
  • 50. Mobile Commerce: Banking 50 Mobile will add relatively higher value for serving the needs of the un- banked segment for banking and remittance Banking Socio Economic and Demographic Segmentation Upper • Businessmen, self employed • Rich farmers and landlords middle class professionals and mid / upper level and High corporate employees • Banked, with access to credit cards, 4% Income1 but limited usage given low • Have multiple bank accounts and debit acceptance in rural areas / credit cards Income Level Middle class • Entry level corporate employees, • Government officials posted in rural and lower salaried govt. employees and retired areas, farmers with bank accounts middle segment / dependents 42% class2 • Access to banking service but may or • Access to banking service but may not have credit cards may not have a credit card • Migrant workers, laborers, drivers and Poor domestic help with no banking • Local farmers and workers with no 54% (Un-banked) services due to a lack of required access to banking services KYC3 documents Low Urban (35%) Rural (65 %) Note: 1. UMC: Upper middle class with annual income above INR 5 lakh ; 2. Middle / lower middle class with an annual income between INR 90K to INR 5 lakh; 3. KYC: Know Your Customer compliance required by Reserve Bank of India which mandates an address proof for opening of bank accounts Source: Analysys Mason
  • 51. Mobile Commerce: Domestic Remittance 51 Mobile enablement can allow shift of cash to cash domestic remittance transactions to formal channels Remittance Market Segmentation for Domestic Remittance in India1 (2009) BC models (Quad 3 & 4) to gain share from Cash-to-Cash Segment (Quad 2) • The prevailing method for unbanked segment to • ~ INR xx bn (no reliable • ~ INR 3,285 bn (USD 73 estimate available) send money to their family in rural areas is Bank / BC Account bn) (bank to bank) • Recently approved through post office or via friends and family • INR 0 bn (BC to BC) • Expected to gain share from INR 1,125 bn (USD • BC based model is likely to provide an additional 25 bn) Sending Party 4 3 channel for rural remittance  Lower transaction cost at 2 – 3% of the • ~ INR 1,125 bn remittance value compared to 5% for post office (USD 25 bn) • ~ INR xx bn (no reliable • Post Office (INR 90 bn /  Lower risk compared to the friends and family estimate available) USD 2 bn) channel which is based on mutual trust Unbanked • Limit of INR 20,000 (USD • Friends & Family (INR 450 444) bn / USD 10 bn) / Cash  BC outlet will be a convenient channel for • Informal3 (INR 585 bn / USD 13 bn) frequent remittance 1 2 Bank / BC Account Unbanked / Cash Receiving Party Note: 1. Values shown are estimated transaction values for 2009; 2. Informal cash remittance channels Source: Analysys Mason, RBI, India Post, Industry Interviews
  • 52. Mobile Commerce: Payments 52 Under the current regulations, there are two different business models for payments using mobile Payments Business Models for Mobile Payments Linked Payment Instrument • No regulatory requirement • This model has a payment instrument Merchants (credit/debit/prepaid card, bank account) App Carrier TP Bank linked to the mobile in the backend Utility Consumer links a payment instrument0-1% 1-18% 1-2% Providers • Already offered in India by providers such as to the application 80-98% mChek, ngPay and Paymate Stored Value Wallet • This model is witnessing pilots in India now, Merchants with carriers such as Airtel launching Airtel Retail Money. Wallet Carrier TP Outlet Utility • Globally, models such as G-Cash and Smart Expected per account model Providers Consumer deposits cash in INR 0.2 / transaction Money have been successfully offering stored his stored value wallet INR 1.0 / account / yr value wallets Source: Analysys Mason
  • 53. Themes Introduction 53 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 54. Mobile Entertainment: Overview 54 Mobile entertainment in India typically consists of three segments: mobile music, mobile games and other content 1 • Mobile music consists of services such as CRBT and music streaming (IVR / WAP), among others Mobile Music • This segment has remained dominated by CRBT so far; but CRBT growth is now expected to stabilize 2 • Mobile gaming has grown in a stable manner over the last couple of years Mobile Entertainment Mobile Games • But given the launch of 3G services, and increasing penetration of smartphones, gaming is likely to emerge as a strong growth segment in the future 3 • Other services in the mobile entertainment stream include products such as wallpapers and themes Mobile Content • These services are expected to remain marginal, as they increasingly compete against free products over the mobile internet Source: Analysys Mason
  • 55. Mobile Entertainment: Music 55 Mobile music contributes ~28% to the overall Indian music industry, and is a dominant segment within mobile entertainment in India Share of Content Categories in Mobile Media Revenues in the Asia Pacific Region • Mobile music accounts is increasingly accounting Mobile Media for a significant share of the overall Indian music Revenues 1,075.5 1,219.5 1,359.0 1,521.0 (INR bn) industry, which is increasingly going digital 10% 3% 13% 18% 23% • In India, mobile music is estimated to be a INR 4% 5% 6% 2.3 – 2.7 bn (USD 50 – 60 mn) business per 21% 25% 29% month in end user revenues, and accounts for a 33% higher portion of the overall mobile VAS revenues • CRBT accounts for about 75% of these revenues, 66% with full song downloads and music-on-demand 71% 74% 78% type of services accounting for the remaining 25% of revenues • However, with the launch of 3G, increasingly 2007 2008 2009 2010 other music monetization models such as Mobile Browsing Mobile Music streaming might gain traction Mobile TV / Video Others Source: Analysys Mason, Industry Inputs
  • 56. Mobile Entertainment: Music 56 The mobile music value chain is witnessing significant shifts, especially in terms of control and innovation Mobile Music Value Chain Evolution: Key Trends Across Segments Content Technology Provider / Carrier Provider Comments Aggregator 1 • Increasing control • Carriers are increasing their control over the CRBT over value chain value chain, limiting the role of VAS players to only the CONTROL • Losing control over • Losing control over components • Increasing control consumer facing interface the value chain to the the value chain to the over subscription and TPE / carrier carrier • Subscription models usage • While these VAS players have an option of providing provide higher D2C services, this model for music is unproven yet control over the user even for established brands INNOVATION 2 • Innovating on deal • High focus area, • Looking at services • Looking for more • VAS players are hence experimenting with innovations structures to especially to improve beyond CRBT to innovative services around network dependent services CRBT such as enhance positioning profiling, provisioning drive growth to adopt reverse RBT of content and discovery • Specific genres of content, such as regional and • Leveraging • Making deals directly devotional, are gaining traction with higher margins due CONTENT 3 • Regional, devotional provisioning • Requiring increasing to lower costs with the content and other long tail capabilities to make choice and variety of content provisioning content providers pay providers / content • Increasing relevance of search and discovery has aggregators resulted in providers experimenting with business for music placement models that enable good product placement • Increasing shift to • These innovative business models in return, can bring DEMAND 4 and comfort with down the cost of the end user, which can potentially • NA • NA • NA WAP / mobile help overcome challenges such as sideloading and internet based piracy search and delivery Source: Analysys Mason, Industry Inputs
  • 57. Mobile Entertainment: Games 57 Gaming as a category behaves differently from other VAS, in terms of revenue growth and penetration drivers Mobile Gaming Revenues in India (INR bn) • While VAS segments such as CRBT and music on demand have a wider appeal, segments such 3.0 as mobile gaming cater to a very niche audience 2.5 2.5 • Adoption of segments such as CRBT have a direct correlation with elements like discovery 2.1 mechanisms and flexible pricing models 2.0 1.8  CRBT adoption grew significantly with the introduction of easy discovery mechanisms 1.5 such as star copy and OBD 1.0  Pricing model flexibility (pay per day plans) also led to greater adoption of CRBT 0.5 • Gaming, on the other hand, serves a niche segment of the base, resulting in stable 0.0 penetration within the addressable base of mobile FY2008 FY2009 FY2010 data users over the years Source: Analysys Mason, Industry Inputs
  • 58. Mobile Entertainment: Games 58 Given the category characteristics, the key growth levers for mobile gaming are active mobile data users and ARPU Customer Segmentation based on Consumer Usage Patterns Key Growth Levers for Mobile Gaming Outliers • The core gaming segment 1 penetration within active data users has remained stable and is likely to stay so • The overall active data user baseGame Spend needs to grow for this base to grow 2 • The casual and amateur gamers base can be grown through providing better user experience and richer game formats for simple addictive games 3 • The ARPU per gamer can be Casual / Amateur Gamers Spend Core Gamers Spend improved through innovations such as flexible pricing models, richer game formats, adver-gaming • Typically opt for micro transactions and • Are more willing to spend on subscriptions „freemium‟ games and upfront payments Casual Gamers Amateur Gamers Core Gamers Source: Analysys Mason, Industry Inputs
  • 59. Mobile Entertainment: Games 59 The enablers required for each of the growth levers are different, but a smooth and rich user experience is important across them Key Growth Levers for Mobile Gaming in India 125 22 1 • High level of congestion in the current 2G / 2.5G 76 3G Data Users 7 (mn) networks have contributed to a frustrating user Core Gaming experience, resulting in limited mobile data users Segment: Growth in 103 2G Data Users Active Data Users1 20 69 (mn) • However, the launch of 3G services will facilitate 0 higher browsing and download speed and an 20 enhanced user experience 2009 2010 2011 100% = 40 mins 100% = 60 mins • As more and more content becomes available on the per day per day 2 phone, and the overall gaming experience is good Casual and Amateur Other because of better devices and networks, this base of Gaming Segment: 83% casual gamers can grow exponentially 94% Internet Richer and Addictive Casual • However, while market forces will take care of these 9% Games Games 8% device and network requirements, it is important to 3% Average US CellPhone iPhone User make content discovery easy for this segment, as this User segment will typically not actively look for games 3 • Pricing model innovation and product enhancement can potentially drive gaming ARPU ARPU: Innovative Pricing Models • Sachet pricing or pay-per-day plans have been very successful in driving ARPUs among serious gamers over INR 3,500 over the course of a game Source: Analysys Mason, Morgan Stanley report on Mobile Internet, Industry Inputs
  • 60. Mobile Entertainment: Miscellaneous 60 Wallpapers, themes and other point solutions under mobile content are expected to remain marginal for data users, as free content is easily available Wallpapers, Themes and Others • Other services in the mobile entertainment stream include mobile content such as wallpapers and themes • These services are expected to remain marginal, as they increasingly compete against free products over the mobile internet • Easy access to the overall mobile internet and thus free content, might cannibalize some carrier revenues from these services for the mobile data enabled segment • But this cannibalization is likely to be limited by newer and less tech savvy users from rural areas who are less familiar with the internet and will continue to use carrier portals for content Source: Analysys Mason, Industry Inputs
  • 61. Mobile Entertainment: Case Study 61 Across entertainment categories, carriers and VAS providers are collaborating to optimize and fine-tune search and discovery Amdocs Solution for Leading Latin American Carrier Downloads (mn) 15 Off-portal profiling & navigation – gives control over the 10 Mobile Internet experience & branding Search engine – capitalize on sponsored links & create stickiness by faster content discovery 5 Targeted advertising platform – increases ad inventory & revenues 0 Feb-10 Jan-11 Direct billing enabler – allows billing for off- portal content (extension of billing platform) Retailing & billing platform – allows selling more Pageviews (mn) premium content 15 Personalized Portal – increases portal usage & stickiness by displaying relevant content 10 Off-portal links – capitalize on sponsored links 5 Recommendations engine – increases content sales & 0 customer experience Jun-10 Jan-11 Unique Page Views Page Views Source: Amdocs, Analysys Mason
  • 62. Mobile Entertainment: Case Study 62 Additionally, new types of entertainment VAS are being pioneered in India keeping in mind the ability to reach the mass market and leveraging popular and exclusive content Offering Registrations for Star Talk (One97 Communications) (mn) • It is an innovative service that allows customers to use their mobile phones to talk with and listen to their favorite celebrities 6.4 6.4 • One97 has partnered with various operators to allow subscribers to dial, connect and interact with their favorite stars 5.3 live • The service allows a select group of callers at a time to 4.2 4.3 connect with the celebrity for a live conversation in a sequential mode 3.4 2.8 2.5 2.6 Business Model Subscription Model (Automated Renewal): • Subscribe to Star Talk for INR 10 0.2 • Celebrity portal, like celebrity interviews, archives, Bollywood gossips, review and preview March September October November December 2011 2011 2011 January February June April May 2011 2010 2011 2011 2010 2010 2010 Event Based Charging: • To talk live to a celebrity, INR10 for the event (auto-renewal) Source: One97 Communications, Analysys Mason
  • 63. Themes Introduction 63 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 64. Utility Services 64 In the broader sense of the term, utility services help enable access to information, opportunities and infrastructure for consumers • Alerts related to crop price, weather updates 1 Access to • Stocks and news alerts Information • Location based services and maps • Push email • Mobile education, tutorials for English in multiple Utility 2 Access to language Services Opportunity • Job listings on mobile • Health support on mobile, including regular health tips Access to 3 Infrastructure • Mobile governance services such as tracking passport application, details of utility payments • Financial inclusions via mobile and mobile ticketing Source: Analysys Mason
  • 65. Utility Services 65 However, the use case / value proposition of the service is dependent on the type of urban / rural deployment Utility Services for Rural and Urban User Segment • Majority of the utility services adopted by rural segments enhance livelihood Lifestyle / Entertainment • Agriculture alerts and health support for cattle LBS increases the productivity of farmers Push Email Entertainment • In urban areas, Services Health majority of utility Primary Value Proposition Support services are point Shopping & solutions such as Payment interview support, Governance learn English, while few services such Education Agriculture as job listings alerts provides livelihood News alerts support Livelihood Job Listings Health support for cattle Financial Inclusion Rural Urban / Semi-urban Primary User Segment Source: Analysys Mason
  • 66. Utility Services: Urban 66 For urban services, a majority of the constraints on access/device will be minimized as online experience shifts to mobile Current State (2G) Expected Evolution (3G and • With the launch of 3G and Better Devices) large-screen device form Mobile Education factors, constraints on access • SMS alerts channel and device capability • Live face to • Tutorial on voice face tutorials addressed for services such on day to day conversational • On the spot as m-education and m-health English in doubt multiple clarification • These capabilities languages significantly enhance the user experience  Education: Research has Current State (2G) Expected Evolution (3G and established that audio-video Mobile Healthcare Better Devices) lectures improve the retention • Enables of concepts by 25% • Consult doctor consultation on call based on  Healthcare: Enables physicians • Regular health high to view high resolution X-Ray tips on SMS resolution X- Ray reports reports on their smart phone shared on mobile screens and instantly send feedback Source: Analysys Mason
  • 67. Utility Services: Urban 67 However, even with 3G, building and maintaining updated content will emerge as a significant differentiator across services such as LBS, 1 listings and m-health (EMR ) Providers Data Partners Job Query Through job Job Opportunity Database agencies and career camps Navigation Comprehensive Consumer Layers of Maps and POI mapping data plotted Location information EMR EMR Database of Patients (Electronic Doctor Consultation Medical Record) • For few services such as listings, maps and mobile health, content is the primary element for it success  For the business of Babajobs, it has to maintain the database of job seekers and agencies. It also requires regular updating to keep it relevant  Mapping and navigation services also require multiple layers of maps and point of interest as additional support Note: 1. EMR stands for Electronic Medical Record Source: Analysys Mason
  • 68. Utility Services: Rural 68 In rural areas, even with better technology, we expect the go-to-market model for utility services will be influenced by factors such as credibility and relationships Livelihood Adoption Drivers Key Enablers IKSL (IFFCO, Airtel and Enhancement Services Star Global Resources) Voice / SMS as Animal Husbandry Ease of Use Access Channel • Provides information on farming techniques, Pesticides weather forecasts, dairy Information Subscription model farming, animal Value for money husbandry, rural health for unlimited usage initiatives and fertilizer availability etc. Weather Updates • Sends 5 voice based Involvement of SMS per day related to Credibility existing farmer body mandi prices Fertilizer Information • No direct charge; revenue through basic telecom Involvement of service usage Crop Market Community Driven villagers / Audience updates aggregation Source: Analysys Mason
  • 69. Themes Introduction 69 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 70. Mobile Community Services 70 Mobile community services can be broadly classified as Social Networking, Instant Messaging and Micro-blogging Classification of Mobile Community Services Key Trends in Different Community Services based on Primary Service Primary • Social Networking Communities are becoming popular Description Key Service Providers ways for sharing multimedia content - photographs, Service videos and even moods or news via status messages • Includes sharing of  Geographic and user specific advertising on social Social multimedia content networking sites has been seen to be common with often Networking along with posting options of group discounts Community status messages to a group of friends  Social networking communities are also introducing the competitive element with online games • Instant Messaging is becoming the preferred option of communication especially over national and • Includes real time international SMS Instant P2P communication Messaging over mobile internet  While apps like the blackberry messenger are exclusive to RIM, there is a growing trend towards integration of different chat clients • Micro-blogging has become a means of providing real • Includes sharing of time information update snippets via text and voice Micro- status messages blogging  The latest trend is in integration of micro-blogging sites only with social networking communities to reach a wider audience Source: Analysys Mason, Industry Inputs
  • 71. Mobile SNC 71 There exist two business models for mobile community services: extension of online to mobile and mobile only model Description Target User Segment • Mobile extension of online communities such as Facebook, Mobile extension of Online Community Orkut, Twitter and Ibibo • Online users typically • These communities are feature rich platforms that allow a wide Services from the metros and range of activities including sharing of text, photos and videos tier 1 cities, who in addition to playing games already have • Broadband connection and a wide screen is required for taking registered with these full advantage of the features available communities through internet • Mobile version is usually an application in a stripped down version in terms of features and allowed activities • These communities have mobile as the primary access Custom built for Mobile (Mobile Only Services) channel and the platforms are highly optimized for mobile usage. Features offered through these communities are • Mobile first users, i.e., customized to work on slower 2G data channels, as well as users with mobile as other bearer channels like SMS or even IVR the first (and only) channel to access • Further, these communities are designed to target specific internet, especially needs of the end users such as allowing users to interact with those in tier 2 / 3 cities and meet outside their friends network Source: Analysys Mason, Industry Inputs
  • 72. Mobile SNC: Mobile only 72 Mobile only SNCs in India are in the audience aggregation phase and targeting mobile first users in tier 2/3 cities Evolution of Social Networking Community MONETIZATION MODEL Increasing ARPU with • Carriers are partnering with online communities increase in consumption to increase data adoption & increase of paid services and better monetization from innovative subscription targeting for ad-based monetization services • The initial success of a social networking ARPU community depends on its ability to aggregate Shift in focus to monetizing the audience usage, while adding users  Users create their own community (adding friends, joining groups, uploading photos/videos) using the SNC service which Focus on most of their friends/family use subscriber acquisition and increasing usage Users • Users in tier 2 and 3 cities, who do not have access to other online SNCs are the key target segment for mobile only SNCs, driven by word of mouth • The mobile only SNCs in India are currently aggregating audience in non-metros with no/little focus on monetization Years Source: Analysys Mason, Industry Inputs
  • 73. Instant Messaging 73 Mobile instant messaging has started gaining traction in India and is expected to follow the same trend as in International markets Adoption of Mobile Instant Messaging in International Markets (% of total Mobile User Base) • Mobile IM is gaining traction as an alternate to traditional SMS based communication, primarily because of additional features  Unlike SMS, mobile IM allows group chat, voice calls 17% at cheaper tariffs (primarily for international calling) and sharing of multimedia content 14%  Such apps are available for free and do not require users to pay anything additional to their subscribed data plan. This becomes helpful in decreasing mobile spend on national and international SMS • This growth is driven by emergence of companies offering mobile only IM, which do not require users to register online  Earlier, mobile IM was dominated by online IM apps 2 such as GoogleTalk and Yahoo! and IM aggregators < 1% such as fring and Nimbuzz, which require prior registration with Google / Yahoo through internet US EU5 Countries1 India  However, applications such as Blackberry Messenger and Whatsapp use user‟s device / mobile number to connect with other users Note 1: Include UK, France, Germany, Italy and Spain; 2. Includes ~2 mn users of leading mobile IM provider Nimbuzz and ~1 mn users of Blackberry Messenger Source: Analysys Mason, Comscore
  • 74. Instant Messaging: Case Study 74 To capitalize on growth in this area, some carriers and OEMs have started to offer their own services for social networking under their own brand • Operator can drive data subscriptions with desirable IP-based offerings (with full Operators IMS/RCS-e interoperability) • Operator can keep its brand • OEM can differentiate with leading-edge OEMs communication tools & extend their brand into lifestyle services • A full-featured, carrier-grade mobile IP-communications platform that offers simultaneous delivery of high-quality, low-latency voice, messaging, audio, and video • Developer can enrich its apps and • Yagatta deployment can be hosted by the Operator/OEM services with a wide range of new or by Qualcomm Developers capabilities; Voice and Text messaging, • First release: YagattaTalk, for all-in-one text, voice, and Group calling, Location features and more image messaging Note: Yagatta services are available for deployment with Operators and OEMs today, ISV/Developer SDK to release soon Source: Qualcomm, Analysys Mason
  • 75. Microblogging 75 Service / app providers are experimenting with voice and SMS bearer channels along with WAP to drive adoption of microblogging on mobile Growth of Microblogging in India from • Twitter, a web based microblogging application, has 2009 to 2010 partnered with local carriers to provide SMS based tweets for users without smart phones 35  Its revenue model is based on promoted tweets which 2009 allows advertisers to serve up ads based on keywords in 2010 Twitter‟s search queries 30 • Bubblemotion, a voice based micoblogging service Number of users in India (mn) 25 provider, is attracting traction by roping in celebrities to record voice messages 20  While it allows listening to messages from fans and family for free, it charges ~INR 9 – 30 (USD 0.2 – 0.7) to 15 subscribe to a celebrity blog • SMSGupShup also offers SMS based service to 10 cater to a larger user base  Evolving from a free group SMS site, its monetization 5 model is based on priority paid messages, premium groups, paid mobile content and advertisements 0 • Moreover, there are a host of new players in the Indian market like yougup, bakbak and dilkholkebol which are gaining popularity Source: Analysys Mason, Industry Inputs
  • 76. Microblogging: Case Study 76 Innovative voice blogging services, with celebrity blog options, are witnessing significant growth in India 12,000,000 3,000,000 Sometimes described as a voice-based 10,000,000 Twitter, the BubbleBlog social messaging 2,500,000 service enables celebrities and everyday 8,000,000 people to share status updates in their own 2,000,000 voice with fans and followers through any 6,000,000 mobile phone 1,500,000 4,000,000 1,000,000 2,000,000 500,000 - 0 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul 2010 2011 Q2 Q3 Q4 Q1 Q2 Key Celeb Amitabh Bachchan Lara Dutta Priyanka Chopra Harbhajan Singh Bipasha Basu Bloggers Sonu Nigam Pooja Gandhi John Abraham Ravi Kishan Yuvraj Singh Started: Emraan Hashmi Neetu Chandra Madhavan Ileana D‟Cruz Shilpa Shetty Unique Users Community Bloggers Now with all the major carriers launching with interoperability, there is an accelerating growth of “community” bloggers (ie, friends following friends – not just celebs) as the “network effect” is now enabled. Source: Bubblemotion, Analysys Mason
  • 77. Themes Introduction 77 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 78. Mobile Video: Global Offerings 78 Video based services have been the primary differentiators for global carriers as they launch their 3G offerings Relative Positioning of Unique 3G Services Launched by Global Carriers1 High Video Conference, 16% Multi Video Calling, 71% Player Mobile Surveillance, Gaming, Adult 23% Mobile TV, 81% Content, Bandwidth Requirement 3% 6% Video Streaming, 68% Mobile Video – Animation, 23% Video Chat, 6% Full Track Video Download, 65% Downloads, 90% Video Video Sharing - Mail, 13% P2P, 45% Mobile Radio, 16% Music Single Player Streaming, Photo Sharing – Maps and Mobile Games, 6% Album, 19% Navigation, 39% 94% Photo Sharing - Mobile P2P, 52% Newspaper, Mobile Email, Mobile 6% 100% Comics, 6% Mobile Blog, 23% Mobile IM, 39% Low SNC, 13% Niche2 Generic3 Category of Services Legend: Service name, % of carriers offering service Note: 1. 3G services of a total of 31 carriers were analyzed: US – AT&T, Verizon, Sprint Nextel; UK – 3, O2, Orange, Vodafone; South Africa – Vodacom, MTN; Malaysia – Maxis, Celcom; Australia – Telstra; Singapore – Singtel; South Korea – SK Telecom; Sri Lanka – Dialog Telekom; Indonesia – Telkomsel; Saudi Arabia – Mobily; Egypt – Vodafone; Qatar – Qtel; UAE – Etisalat; Philippines – Smart Communication; Kuwait – Zain; China – China Unicom; New Zealand – Vodafone; Netherlands – Vodafone; Spain – Orange; Germany – T Mobile; Japan – NTT Docomo; Hong Kong – 3; Switzerland – Orange; Russia – MTS 2. Niche refers to services offered by only few carriers; 3. Generic refers to services offered by majority of carriers Source: Analysys Mason Legend: Service name, % of carriers offering service
  • 79. Mobile Video: Use Case 79 Use case and end user relevance have been the primary demand drivers across global markets 1. HOME 2. COMMUTE 3. WAIT-TIME 4. SECRET Source: Analysys Mason, Janchipchase, Industry Inputs
  • 80. Mobile Video: Service Providers 80 Currently service providers are experimenting with different models of billing, distribution and monetization to address demand Billing Distribution Content Monetization Service Model Model Positioning Model Offering User Base Providers Carrier D2C WAP App Live Recorded Ad. Subs. • 140 live • 4 million         channels 3 subscribers • Pre-recorded by Jan 2011 content • 500,000 users 1 • 18 channels in Dec. 2010         • Live & pre- • 1 mn by Jan recorded content 2011         • Currently trying • MoTV (Mobile TV), Vmotion (Video IVR) to establish a base within         Indian carriers 4 • Video-sharing • 17.3 mn unique website visitors2         Note: 1. Mundu TV is the mobile TV offering by listed company – Geodesic, its solution is currently in beta version; 2. Internet users accessing you tube online as of Feb 2011; 3. WAP support for low end handsets, in which application is not supported; 4. For special events like the Indian Premier League (IPL), youtube has had live streaming feeds Source: Analysys Mason, Company Websites, Industry Inputs
  • 81. Mobile Video: Capacity Constraint 81 We expect that mobile video services will slowly gain traction only in the medium term due to capacity constraints Calculation for Spectrum Capacity per Cell Site1 • Having only 5MHz of 3G spectrum limits the usage of mobile video in the range of 100 to 300 users per cell site per sector 840 for different technologies  High definition video format requires very high transmission speed, which congests the network allowing only 2 users during peak 432 420 hours • Given these constraints on capacity and 216 no indication on future allocation of spectrum, we believe that although there 24 12 is a demand for video, mobile video EDGE HSPA HSDPA offerings will gain traction only in the medium term Peak throughout 200 Kbps 3.6 Mbps 7 Mbps per sector1  More than 200 mobile video users during peak hours will congest the network Max no. of Subs Supported No. of Subs Suported during Busy Hour Note: 1. At 256 Kbps and a contention ratio of 10 Source: Analysys Mason, Dialogic White Paper
  • 82. Mobile Video: Key Decision Parameters 82 Considering the spectrum constraint, service providers have to design their offerings based on four key business model decisions Parameter Options Pros Cons • In case of carrier billing, carriers dominate Carrier billing • Carrier partnership provides larger Billing the revenue share agreement, keeping Model & addressable market, seamless billing and D2C above 50% of the revenue generated by better promotion mobile video • App based video streaming provides better • App based video is not supported by low Distribution WAP based user experience as it allows a user to end feature phones Model & App based customize, categorize and set its • Downloading an app levies data charges preference of mobile TV channels to users • Un edited version of pre-recorded content Live • Live events such as cricket match, fashion is highly adopted on mobile Content & induces better user adoption as it creates a Recorded buzz across the users • 40% of user base view pre-recorded content Monetization Advertising • Industry research reports that a user • Advertising model has regulatory issues Model & Subscription prefers subscription model for mobile VAS and guidelines to follow Source: Analysys Mason, Company Websites, Industry Inputs
  • 83. Mobile Video: Distribution and Content 83 Of these, type of distribution model and content are the two most critical decisions for a mobile video services provider Pros and Cons of a WAP vs. App Distribution Model WAP Distribution App Distribution • Unlike most other VAS categories, carrier Discovery • App design and features allow more alignment is not a crucial success factor for • Limited discovery control for the service control over service and content provider mobile video services discovery for the service provider • Exclusivity of content – whether live or • App versions can vary by device to recorded – can help drive adoption for D2C User Experience • User experience remains completely ensure better integration models, e.g. exclusive rights to IPL (Indian dependent on access speeds and WAP • User experience is enhanced, given Premier League) content can potentially be a experience strong service device integration huge driver for adoption in India • Video may or may not be optimized for • App, residing on the handset, can also the particular device form factor allow some offline play / search / • Also, service providers are currently trying to information features differentiate their offerings in terms of live vs. recorded content, as well as the range of Customization • Usage tracking and profile will be • Allows users to categorize and set their channels being offered dependent on login information at WAP preference of mobile TV / video • A few companies are providing as many as site channels 150 live channels while others are building • Customization will allow a limited range • Allows app to track usage behaviour libraries of pre-recorded content of features and determine usage profiles • However, from an end user consumption Compatibility perspective the adoption of the particular use • Getting users to download the app and case will decide whether mobile TV is a • No compatibility issues with feature compatibility issues on low end feature substitute for live TV watching or will primarily phones phones can be a challenge be a means of watching clips of exclusive content which is not available elsewhere Source: Analysys Mason, Industry Inputs
  • 84. Themes Introduction 84 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 85. App Store: Supply 85 Among the three types of app stores, carrier app stores have the majority share of the revenue • Carriers have a strong hold of value Carrier chain of mobile applications App Store • It provides seamless billing and multiple business model • OEM / OS with its better relationship OEM / OS App Store App Store with developers provide rich portfolio of mobile applications • Third party app store such as by Third Party Getjar has least share of overall App Store revenue of apps market in India Source: Analysys Mason, Industry Inputs
  • 86. App Store: Supply – Carrier App Store 86 Almost all major Indian carriers have launched their own app stores to increase services adoption Carrier No. of Partnerships Description App Store Apps • Currently supported on around 780 mobile • In 2010, most of the 103,000 handsets; initially on 550 handsets carriers in India launched (March 2011) • Download of 2.5 mn apps in the first month • Total download of 40 mn in one year their app stores to mitigate the declining voice ARPU • Around 10,000 downloads within first week 12,000 • The applications are available for up to INR • Carriers are experimenting (March 2011) 20 (USD 0.4), while the games are priced up to INR 150 (USD 3.3) with daily subscription • Apps can be downloaded on 2,300 packages which allow handsets across all major platforms download of as many free 75,000 • Objective is to increase data traffic and (Dec 2010) adoption and sell other services through the apps as one wants or use of free applications (freemium model) choose from lots of 14 Services premium mobile across • Mobstore is supported on over 300 Java, 7 Categories BlackBerry and Windows Mobile phones applications at a nominal (July 2010) price 7 Categories • Access for „Pocket Apps Store‟ is free for Aircel Pocket internet subscribers (March 2011) • One can access PocketApps via SMS also Source: Analysys Mason, Industry Inputs
  • 87. App Store: Supply – OEM / OS App Store & Third Party App store 87 Handset OEMs and third party app stores have launched their app stores in India in partnership with local content providers / carriers OEM / OS No. of Partnerships Description App Store Apps1 • Hungama • In 2009, most of the OEM / • Targets only BlackBerry device users in 18,000 OS vendors launched their • CNBC-TV18 India (Dec 2010) • The India store has both free and paid apps • Geodesic app stores for India • consumers to get recurring Yahoo • Handset embedded Nokia app store; can • YouTube 25,000 be accessed through handset and PC revenue and to strengthen • Airtel (Dec 2010) • The Indian store version currently has free device proposition • Saregama apps only • These vendors partnered • Amar Chitra • The iTunes App Store is embedded in 300,000 iPhones and iPods with India specific content Katha • Hungama (Dec 2010) • Users can purchase applications on a owners such as India subscription as well as transaction basis focussed news channel, • NDTV • The Android App Store is embedded in media companies to 130,000 • Ngpay Andorid OS handsets provided by OEMs introduce mobile (Dec 2010) • ICICI Bank such as Samsung, HTC and Motorola applications relevant for • Cross-platform app store provider Indian consumers • Rcom 75,000 • World‟s largest independent app store with • Saavn (Dec 2010) over 1 billion downloads till 2010 Note: 1. Total available mobile applications for all countries Source: Analysys Mason, Industry Inputs
  • 88. App Store: Critical Success Factors 88 Parameters such as developer community, targeted offering and monetization model will decide the leader in the app store space Current Mapping of App stores and CSF1 • Developer Community: Relationship with • Relationship with developers for developers facilitates better portfolio of Developer better portfolio of applications and applications with India specific content Community healthy economics Critical Success Factors • User Experience and Relevance: Rich user interface, ease of finding and buying a User • Enhance user experience with Experience / proper targeting and categorization particular app enhance the user experience Relevance of mobile applications to ensure user stickiness and scale • Monetization and Billing: With single click Monetization • Seamless billing and innovative billing integration and multiple business / Billing monetization model models such as per day subscription model, app store owners are attempting to address Carrier OEM / OS Third Party mass market users App Stores Favourability of CSF1: High Medium Low Note: 1. CSF stands for Critical Success Factors Source: Analysys Mason, Industry Inputs
  • 89. App Store: Critical Success Factors 89 It appears that a likely model for app stores in India would be carrier app stores in partnership with OEM / OS companies Current Mapping of App stores and CSF1 • For the growth of app stores in India, • Revenue • High rev share share is less • Provides • Provides high partnership of carrier with OEM / OS Developer • Community No developer continuous revenue share vendors is essential forum, except support to to developers Critical Success Factors Airtel developers  Carriers have stronger control on billing and monetization model, while OEM / OS vendors • Better profiling • Profiling based have better relationship with developers User of its on handset subscriber model • Better user  Unlike carrier portal or device app stores, third Experience / interface Relevance • Poor user • Better user party stores do not have direct visibility to interface interface users and need significant promotion • Seamless • Unable to • Unable to • Partnership of carrier with OEM / OS vendor billing implement implement or carrier with third party app store will Monetization • Ability to single click single click implement checkout and checkout and create a strong ecosystem for mobile / Billing subscription subscription subscription application in India model plan plan  Nokia – RCom partnership is an indication that Carrier OEM / OS Third Party industry and ecosystem favours the partnership of carrier and D2C app store App Stores providers Favourability of CSF1: High Medium Low Note: 1. CSF stands for Critical Success Factors Source: Analysys Mason, Industry Inputs
  • 90. Themes Introduction 90 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 91. Network VAS: CRBT 91 CRBT has been a significant driver of VAS revenues in some emerging markets, especially in the Asia Pacific region CRBT CRBT Penetration of User Base in Different • CRBT has historically done well in some Geographies (2009) markets such as Asia, and not so well in others such as Latin America 45% • It satisfies a need for a personalized expression of self, especially valuable in cultures that are typically restrained • CRBT contributed to 13% of total mobile VAS revenues in India, as of 2010, with a 23% penetration of 17% 19% • However, CRBT has now started stabilizing 15% in India, with the lack of penetration in the 12% incremental user base due to discovery and pricing issues 5% • Given poor unit economics, carriers are also increasingly not focusing on CRBT as a key China Asia Pacific India Middle East Europe and Latin Region and Africa America America revenue driver going forward Source: Analysys Mason, Ovum Consulting, Industry Inputs
  • 92. Network VAS: CRBT 92 However, going forward, we expect declining share of CRBT within overall MVAS even though revenues will most likely grow CRBT Market Size Forecasts for CRBT Revenues • Inspite of innovations around CRBT such as (INR bn) and Share of CRBT within VAS adRBT and background music, we expect the CRBT market to mature in India 37 34 34 35 • We expect CRBT to start stabilizing in the 32 near future, with penetration reaching 15% 28 by 2015  Users who see a value for CRBT and can afford current prices are already subscribed to the service  A large share of low end incremental users are 13% unlikely to maintain balances required for spending 11% on discretionary services 9% 7%  The high end corporate / youth segment will likely 6% 5% move on to other data rich services on their mobile phones • With ARPU also declining slightly we expect 2010 2011 2012 2013 2014 2015 revenues from CRBT to reach INR 37 bn by CRBT Revenues (INR bn) Share of CRBT in MVAS 2015, contributing 5% to the overall VAS market Source: Analysys Mason
  • 93. Network VAS: P2P SMS 93 Even though SMS usage in India is low, we expect usage to grow within certain consumer segments such as youths and teenagers P2P SMS SMS Usage and Behaviour Trends in the US & • Even though SMS contributes 45% to the Urban India, 2010 overall MVAS industry today, India lags behind in the total usage / penetration of these service • Considering that the price differential 72% between SMS and voice is not very different Teens using SMS from other countries, we believe that pricing 76% is not the main issue • Other issues such as literacy and local 54% language support might be a bigger problem Teens using SMS in driving penetration / usage daily 38% • Until local language support is available more widely across handset platforms, Average SMS 3,339 driving penetration beyond current levels will sent / received be very difficult per teen per month 2,500 • While we don‟t expect the overall penetration to increase, we believe that usage within India US certain consumer segments (such as youth and teens) is likely to continue to grow, driven by SMS packs Source: Pew Research, Nielsen, Assocham, Analysys Mason
  • 94. Network VAS: Call Management Systems 94 CMS in India is still priced rather high as compared to other developing markets such as Sri Lanka, which impacts adoption Call Management Service Dialog Sri Lanka Vodafone India • Some CMS services such as missed call alerts and voicemail have • Free; Mumbai users pay INR Caller ID • Free witnessed moderate adoption in India 75 as rental Missed Caller Alert • Free • INR 30 / month • Pricing for CMS is high for services that are offered at much lower prices • Monthly rental varying from or for free in other markets • LKR1 3 (INR 1.2) / min for Voicemail INR 21 to 50; airtime charges retrieval. Service is free as usual • However, this is unlikely to change in the near future. Given that voice Multi Party • Free • Free tariffs are already low, and that prices Conference Calling for even highly popular services such Call Hold and as CRBT have remained constant, it • Free • Free Waiting is unlikely that CMS charges will drop • Free; divert charged as Call Divert • Free • In addition to pricing, carriers don‟t another call promote these services in their ATL Call Block • LKR 30 (INR 12.2) / month • INR 99 / month VAS promotions, resulting in lower • LKR 25 cents (INR 0.1) / awareness among consumers SMS Auto Reply • -- message • Overall, we expect CMS to remain a Busy Message • -- • INR 30 / month niche service Note: 1. LKR: Sri Lankan Rupee; Conversion rates as of today Source: Analysys Mason, Industry Inputs
  • 95. Network VAS: Video Solutions 95 Services such as video calling have not been very popular worldwide, and it remains to be seen if such a service will pick up in India Video Solutions Users Admitting to Usage of Different Services on • Video calling on the phone hasn‟t picked up the Cell Phone in the US (Sept, 2010; n=3,001) as a mainstream application in global markets, with even trial remaining limited 74% • While there seems to be a latent demand for such services in the Indian market due to a high proportion of domestic integration, we believe that current networks are not yet tuned for optimal video delivery 39% 34% 30% • For video services, device encoding needs to be in sync with network encoding and current networks are still not in a position to enable smooth video delivery 7% • These issues should be ironed out soon, but will take another six months to a year before Text Internet Email IM Video Calling Messaging Access seamless video on the mobile can become a reality Source: Analysys Mason, Industry Inputs, Pew Internet Research
  • 96. Themes Introduction 96 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 97. Mobile Advertising: Current Status 97 The effectiveness of mobile advertising has been limited due to channel characteristics and lack of subscriber data SMS Based Advertisement Delivery WAP Based Advertisement Delivery Voice Based Advertisement Delivery Calling Ad RBT +919971219978 • Can not use visual for brand • More than 50% of WAP inventory is • Interruption of customer experience promotion advertisements being used for sale of mobile content for the calling party by using pre-call • Not enough space available for and VAS and not by brand advertisers ad inserts or ad-CRBTs appended ad models (with ~50% in India • Reach is very limited for ad spends text inventory bring used for ads) • Device form factor remains a limitation levels equivalent to radio • Consumer engagement levels are – new devices are required for a good • Ad inventory remains limited with no very low – perceived as spam consumer and brand experience established models • Inspite of increasing WAP usage, country level CPMs and CTRs have remained stagnant Source: Analysys Mason, Industry Inputs
  • 98. Mobile Advertising: SMS 98 However, post new regulations the growth in SMS advertising will come from opt-in model and enterprise usage for CRM SMS 1 Highlights of New Guidelines for Commercial Calls / SMSs • New regulations follow an opt-in model for promotional messages; allows advertisers to Regulations send promotional messages to registered • Telemarketers to be allotted „140‟ number series users relevant to categories chosen by them New Number Series for easy identification for Telemarketers • A unique SMS header has also been mandated • Current price level not sustainable with TRAI for commercial SMSs regulations restricting usage of promotional • Telemarketers: Strict penalty of INR 25K – 250K. messages between 9 pm – 9 am (inefficient The penalty is about 250 times the earlier Penalty for maximum stipulated penalty of INR 1K capacity utilization at SMSC) and potential Guideline Violations • Access Service Provider: Strict penalty of INR introduction of termination charges on SMS 100K for first violation, INR 500K for second time and INR 1000K for subsequent violations • However, there will be value addition from Call Timing • No commercial communication, even for profiling information that allows targeted unregistered customers has be permitted Restriction between 9 PM and 9 AM advertising and may see the charges remain flat Limited Bulk SMSs • Service providers not allowed to offer packs over for Unregistered 100 SMSs per day to anyone to avoid use by Telemarketers unregistered telemarketer • Large enterprises will continue to use SMS for CRM messages in addition to ad networks for Options for End • Subscriber has the option to choose the degree Users of call filtering, based on categories of interest promotional messages to opt-in users Source: Analysys Mason, Industry Inputs
  • 99. Mobile Advertising: WAP 99 WAP advertising will see significant growth as mobile internet usage penetration increases WAP 2 Increase in Page Views (per user per month) • Driven by these multiple factors, data usage is expected to grow exponentially resulting in 2- 3x increase in page views ~2x increase 550 - 700 within a year • Current mobile internet usage behavior indicates that users prefer ad supported 350 content (songs.pk, youtube.com) and sites (orkut.com) • This trend is likely to continue in the future, 2010 2011 with even higher page views and data usage Top Mobile Internet Sites by Unique Users • This, combined with better targeting and profiling, can have a positive impact on the Rank Site Rank Site CPMs / CTRs 1 Google.com 6 Zedge.net • In addition, other non-RoI based metrics as 2 Facebook.com 7 Yahoo.com well as innovative lead generation metrics 3 Youtube.com 8 Wikipedia.org (click to call etc.) will also emerge enabling 4 Orkut.com 9 Songs.pk better campaigns for brand awareness / lead 5 Getjar.com 10 Vuclip.com generation purposes Source: Analysys Mason, Industry Inputs
  • 100. Mobile Advertising: Voice 100 Voice based advertising is in a nascent stage with some usage of ad RBTs and pre-call inserts to create consumer awareness Voice 3 Inventory Opportunities Available for Voice Advertisements Pre-call Ringing Call Post-Call • Pre-call insert by calling party • CRBT by called party carrier & • Outbound dialers by calling party • Post-call inserts carrier Reverse CRBT by calling party carrier / telemarketers by calling party carrier carrier • Used extensively by all carriers to • Used primarily by carriers for promote CRBT - Press „Star 9‟ to • Many carriers experimenting service messages and cross/up • Currently not copy song from called party with adRBT selling of SMS packs, data plans being used CRBT and VAS services • Subscribers in few hundred • Currently in experimental stages thousands • Some usage by brands for other carrier messages such themselves for informative • Current CPMs are in the range bill reminders and up/cross services, e.g., messages by of INR 200 – 400, higher than selling of VAS and non-carrier computer saksharta abhiyan other channels due to confirmed brand promotions listening by caller when ad-RBT • Conversion rate of 10% for is being playing carrier services and over 7% for non-carrier products/services Source: Analysys Mason, Industry Inputs
  • 101. Mobile Advertising: Future Growth 101 The overall spend on mobile advertising is expected to reach INR 21 bn by 2015, growing at a CAGR of 60% driven primarily by better targeting Benefits to Entities across the Mobile Advertising Mobile Advertising in India Ecosystem with Changes in Market Dynamics (INR bn) 1 Profiling 2 Measurement 3 3G Service / 21 / Targeting Metrics Device Features 17 Enhanced user Consumers NA Relevant ads experience 12 7 Richer ad formats; 4 Ad Higher CPM; 2 Better reporting Increase in Networks Increase in CTR branded inventory 2010 2011 2012 2013 2014 2015 Interactive ads; Knowledge of RoI; Increased Ads for brand • Mobile advertising is primarily used for lead Advertisers Higher conversion recognition generation than for brand and product promotion spend on mobile (display / banner medium ads) • However, going forward, we expect profiling, measurement metrics & better service/device quality to drive growth for promotional campaigns Legend: Status of Market Dynamics: Emerging Required NA Source: Analysys Mason, Industry Inputs
  • 102. Mobile Advertising: Case Study 102 Service providers have started experimenting with targeted advertising, and realise that they realise in better metrics at lower costs Situation SMS GupShup Solution • FutureBazaar.com launched “Battle‟, a shopping • The SMS GupShup audience was targeted on the basis initiative that lasted 96 hours and had consumers vying of their historically captured profiling data and usage to buy consumer electronics products with genuine and attitude patterns manufacturer‟s warranty • No SMS blast was used – only 1.8 – 2 mn users (pre- • The initiative offered a lowest price guarantee with free screened on the basis of their profiles) were targeted of cost delivery to the customer • Campaign designed exclusively for sales generation, • The focus was on consumer electronics as a leading and not for marketing / lead generation sector of the growing e-commerce market in India • Purchases were made through Future Bazaar‟s online portal or on the phone Revenue generated from converted Sales (INR mn) Insights 6.8 • Equivalent CTRs for confirmed sales: 4 – 5% Objective • Cost of sales ~ 14% was • To achieve maximum sales in 96 hours, for the duration significantly lower than for other channels of the “Battle” shopping initiative • Tier 2 Traffic: 24 / 28 states Sales represented in the purchase tally Source: Bubblemotion, Analysys Mason
  • 103. Themes Introduction 103 Across bearer channels, we have identified nine key themes which will be instrumental in shaping the mobile VAS ecosystem in India Category Current Situation Key Trends Category Themes • UID accepted as KYC will increase share of G2C; carriers • Current scalable models use prepaid cards, and not 1 • Commerce pushing financial inclusion also a key driver (banking, mobile; pilots by carriers, banks, D2C domestic remittances) • Entertainment • Services around music and gaming has seen early • New products such as streaming music, full song download 2 Services adoption among mid ARPU segment and mobile games • Multiple pilots, with few scalable models (e.g. RML, • Utility apps and affordable feature-phones to drive adoption of 3 • Utility Services IKSL), Location based services productivity and livelihood enhancement services Consumer VAS • Emergence of new monetization models based on micro • Carrier promoted SNCs (e.g. AirtelFrenz) aggregating 4 • Community Services transactions, content sales (e.g. Rocketalk) with carrier audience on an ad monetization model marketing support, and increased off-deck usage • Limited services on EDGE with very poor user • Launch of 3G services by 2011 by all major carriers, with a 5 • Mobile Video experience strong video services portfolio (e.g. mobile TV, video calling) • Emergence of affordable android based phones, app store • Device Apps and App • Carrier app stores dominate; D2C app stores facing 6 push by handset OEMs, launch of 3G, utility apps (e.g. Stores issues of billing as credit card penetration is low railway booking) • Among all the network services such as CRBT, CMS, • CRBT has reached a mature level of adoption, while few Network 7 • Network Services Roaming, Recharging, Location Enablement, CRBT network services such as voice mail is limited by cultural and VAS contributes significant share to total MVAS market price points • 3G and better device form factors expected to enhance • SMS / display ads used for lead generation and digital 8 • Mobile Ad / Marketing effectiveness of display advertising and help ecosystem content sale; poor user experience Enterprise growth VAS • Emergence of enterprise mobility providers with vertical • Enterprise messaging solutions (e.g. Valuefirst) , 9 • Enterprise Solutions specific, carrier / software agnostic middleware solutions Sales force management (e.g. Mobien) Source: Analysys Mason
  • 104. Enterprise VAS 104 Enterprise VAS in India can be classified into two major segments: SMS aggregation and enterprise mobility applications • SMS aggregation market refers to the bulk SMS market in India. This includes business transactional SMS such as SMS banking alerts, spam advertising SMS, business promotional Aggregation SMS, consumer opt in services and government and social inclusion services Enterprise VAS • Enterprise mobility applications refers to the range of applications that remove the last mile connectivity issue for Enterprise employees in the field. This can include basic collaboration Mobility applications such as mobile email as well as more integrated applications such as ERP / CRM and SFA Source: Analysys Mason, Industry Inputs
  • 105. Enterprise VAS 105 The SMS aggregation market in India is estimated to be an INR 1.3 bn market with over 3 bn SMSs being sent every month 1. SMS Aggregation SMS Aggregation Market in India Market Trends Revenues (INR bn) and Volumes (bn) Increase in adoption of SMS channel 30 • As cost of customer acquisition is low through mobile, enterprises across verticals are using SMS for business transaction for CRM as well as marketing 24.0 • Besides BFSI and Travel, Retail and FMCG are emerging verticals on SMS channel 20 Emergence of targeted consumer databases • Enterprises have started buying consumer databases 14.4 based on usage and attitude compiled by the SMS aggregators for better targeting. These databases are sold at a premium 10 Availability of richer content on SMS • Enterprises are experimenting with rich SMS based 4.8 offerings embedded with images • With advent of 3G, richer content in the form of video links 1.0 1.3 embedded in SMS will emerge 0.4 0 Emergence of local language support 2006-07 2007-08 2008-09 • With local language capability on SMS channel, enterprises A2P SMS Revenues (INR bn) A2P SMS Volumes (bn) are now customizing messages as per the region to ensure higher consumer engagement Source: Analysys Mason, Industry Inputs
  • 106. Enterprise VAS 106 Based on how SMS aggregators source capacity from carriers, there exist two business models 1. SMS Aggregation 1 Business Model – Variable Pricing Model • In variable pricing model, carriers sell Enterprises SMS Aggregator Carrier SMS on a per SMS basis to the aggregators Sells SMS on a SMS sold to enterprises on a per SMS per SMS basis • Pricing varies on the basis of volumes basis against minimum guarantee of volumes 2 Business Model – Fixed Pricing Model Enterprises SMS Aggregator Carrier • In fixed pricing model, carriers sell bandwidth on the basis of transactions Carrier leases its TPS1 per second (TPS) link to aggregator SMS resellers • Peak time utilization of a TPS link is primarily sell to SMEs / SOHOs approximately 8 to 10 hours / day @ 70% efficiency SMS Reseller Note: 1. TPS – Transactions Per Second Source: Analysys Mason, Industry Inputs
  • 107. Enterprise VAS 107 Enterprise mobile applications market in India is still underpenetrated, being primarily dominated by mobile email (excluding SMS) 2. Enterprise Mobility Current Enterprise Mobility Application Implementation by Enterprises in India1 (2009) Security Concerns • Concerns of data security on these applications is the Messaging 80% primary issue that enterprises face in deployment of enterprise mobility applications E-Mail 52% Lack of awareness SFA 19% • Awareness of the range of mobility applications and the impact they can have on enhancing productivity is CRM currently limited, but growing 21% ERP 16% Investment • Large enterprises might already have legacy core RAN 28% systems in place, and they are often hesitant to make the investments to shift to mobility applications Note: 1. Gartner Report on „Enterprise Wireless‟ User Survey Source: Analysys Mason, Cybermedia Research, Industry Inputs
  • 108. Enterprise VAS 108 The primary growth driver for core business applications such as ERP is the cost savings that can be incurred through reduced turnaround times 2. Enterprise Mobility Impact on Average Turnaround Time Through Enterprise Mobility • The core value proposition for No Enterprise Mobile Application deployment of enterprise mobility Enterprise Server applications with field personnel is on the reduced turnaround time for basic Order processed and invoice Record order with central procurement and invoicing Average generated server Turnaround Field Time of 5-6 • The impact of this reduced turnaround Person 1 days time ion businesses is two fold Collect Client order from invoiced customer • On one hand, it reduces the invoice generating cycle time resulting in Enterprise Mobile Application faster revenue realization per customer Enterprise Server Real time last mile connectivity • Secondly, real time connectivity Processed and invoiced Order recorded instantly allows the field personnel to be more Average productive, without having to spend a Field Turnaround Person 1 Time of 1 day lot of time on admin and other Collect Order Confirmed formalities Client order from Invoice invoiced GENERAT ED customer Source: Analysys Mason, Industry Inputs
  • 109. Enterprise VAS: Case Study 109 Consumer facing solutions such as CRM are emerging as a significant enterprise segment, with apps that can be used to enhance discovery and upsell / cross sell opportunities 2. Enterprise Mobility Situation • A large cable operator in North America offers video, high speed data and phone services • The company recently started quad play through offering wireless data cards. They now also plan to offer mobile voice and data solutions to help retain users and also drive their life time value Challenge • Company faced significant challenges in its overall brand evolution. Primary concern around product was on how to promote the discovery of their services and offerings both to new users as well as the larger cable subscriber base • Additionally, they wanted to be able to make intelligent recommendations and offer personalization to enhance the overall user experience Approach • mPortal with its SPRINGBOARD product suite implemented a discovery solution for smart phones and tablets • The solution is well positioned to help drive retention of users, better service discovery and improve uptake • Additionally, more control over the discovery coupled with insights into consumer usage help plan future services Source: mPortal, Analysys Mason
  • 110. 110Contents The Indian Mobile VAS Opportunity 10 Policy and Market Enablers 16 Key Trends in the Mobile VAS Industry in India 39 Key Growth Areas: Services and Applications 47 Forecasts 110 Annexure: Sponsors‟ Profiles 120 Annexure: Company Profiles 129
  • 111. Forecasts: MVAS Industry 111 Non voice revenues are expected to account for as much as 51% of the incremental industry revenues, and will account for 31% of total wireless revenues in 2015 Mobile VAS Market Potential (INR bn) & Its • Indian MVAS industry is expected to catch up Share of Telecom Revenue (%) with other emerging markets such as Malaysia and China by 2015, in terms of its contribution to 31% 31% total wireless revenue 27% 671 19 • Data access revenues will be the biggest 603 37 22% 14 revenue driver. In addition to data access on 35 handsets, connected computing devices and 18% 480 219 16% 9 dongles will also contribute significantly to 34 202 368 increase in data access revenues 6 34 34 182 28 291 4 148 • CRBT is expected to decline in terms of revenue 213 32 123 2 159 23 contribution due to issues around per unit 28 132 81 19 economics for carriers and end user affordability 96 16 62 201 215 13 48 58 49 88 150 • SMS penetration is expected to stabilize at 25 current levels due to consumer behaviour and 2010 2011 2012 2013 2014 2015 literacy issues unless local language can be Mobile Internet (Handset) Dongles / CCD Data Access introduced. Although, within users of SMS, the IVR Messaging usage will continue to increase driven by CRBT Others1 adoption of SMS based social, utility and Share of MVAS productivity applications Note: 1. Others include m-commerce and CMS Source: Analysys Mason, Industry Inputs
  • 112. Forecasts: MVAS Industry – Handset Data Users 112 Mobile handset data users are expected to reach 468 mn by 2015, contributing to 32% of overall mobile VAS revenues Handset Data Users (mn) • Adoption of mobile handset based data usage will continue to grow, with the reduction in price per MB for HSPA data, increasing penetration of 468 feature-phones and smartphones, as well as availability of content and applications 372 • A user base of 22 mn is expected on 3G handset in 2011, contributing a data ARPU of INR 133 in 314 275 2011 going down to INR 49 in 2015, with access 223 accounting for a major share of the revenues 183 132  The decline in ARPU is driven by a shift in the mix 54 of subscribers on long validity (30 days) vs. shorter 125 validity (1 or 3 day) plans, as well as an overall 22 76 decline in the price per MB for HSPA data driven by 7 142 149 154 129 competition and availability of bundled offerings 103 69 • Of an estimated active base of 1.1 bn 2010 2011 2012 2013 2014 2015 subscribers in 2015, 154 mn subscribers are 2G Data Users (mn) 3G Data Users (mn) expected to access data on 2.5G and 314 mn subscribers on 3G Source: Analysys Mason, Industry Inputs
  • 113. Forecasts: MVAS Industry – Dongles and CCDs Base 113 3G (HSPA and EVDO) dongles and CCD base will grow to 66 mn by 2015, while 21 mn will be connected on 4G Dongles and CCDs base (mn) • EVDO dongles are expected to dominate the mobile broadband access market from PCs, as they provide relatively better capacity and cost 66 per MB than HSPA • However, with an increase in the prepaid base 21 for casual data usage, 3G dongle and CCD 48 ARPU is expected to decline 13  Users prefer using a prepaid connection, as they are active in bouts, and do not want to pay for 28 periods of low or no activity 5 46 • With the introduction of LTE in late 2012 / early 18 35 2013, and issues around indoor coverage at 2.3 12 24 GHz as well as the expected deployment of LTE 7 18 12 in hotspots (rather than full mobile coverage), the 6 initial use case is expected to be CCDs and data 1 2010 2011 2012 2013 2014 2015 dongles 2G 3G 4G • 4G / LTE dongle and CCD base is expected to reach 21 mn by 2015 Source: Analysys Mason, Industry Inputs
  • 114. Forecasts: MVAS Industry – CRBT 114 CRBT contribution to overall revenues will decline from 13% in 2010 to 5% in 2015 due to carrier business case and end user affordability issues CRBT Revenues and its Contribution to MVAS • CRBT has been the traditional killer application but is on its way to losing its sheen as the 37 penetration begins to stabilize 34 35 34  Only about 5% of incremental subscribers are 32 opting for a CRBT subscription at most carriers 28 • The subscription and song change charges for CRBT have remained broadly constant, except for circle level promotions  After accounting for the acquisition cost and content 13% 11% payout, the per unit economics don‟t allow for a 9% significant price drop, especially with high churn 7% 6% rates in incremental customers 5% • Going forward, CRBT penetration is expected to stabilize at 15% of active subscribers by 2015, 2010 2011 2012 2013 2014 2015 while its revenue contributions will decline CRBT Revenues (INR bn) Share of CRBT in MVAS Source: Analysys Mason, Industry Inputs
  • 115. Forecasts: MVAS Industry – Voice / IVR Services 115 The penetration of voice based services will be driven by utility services, and its revenue contribution is expected to increase three fold by 2015 Voice / IVR Revenues and Penetration • Voice based service revenues are expected to grow at a CAGR of 21%, while its users are expected to grow at 27% 25% • Voice services / IVR usage has thus far been 23% dominated by entertainment services, with information and transaction use cases beginning 20% 34 to gain traction in the past couple of years 17% 28  At present, entertainment IVR services is around 16% 15% 60% of total IVR service revenue 23 19 • Voice / IVR is expected to provide a means of 16 information, opportunity and entertainment 13 access to a significant proportion of the 1.1 bn active user base in 2015  The introduction of services such as mobile health and education on a voice based platform will drive some of the demand for IVR 2010 2011 2012 2013 2014 2015 • Additionally, if there is a favourable policy framework for allocation and governance of Voice / IVR Revenues (INR bn) IVR Penetration premium short codes, there is a potential upside from the direct-to-consumer ecosystem Source: Analysys Mason, Industry Inputs
  • 116. Forecasts: MVAS Industry – Messaging 116 SMS penetration is expected to stabilize at 50% of the base by 2015, although usage within this segment is expected to increase Messaging Revenues (INR bn) • Share of SMS in overall mobile VAS revenues is expected to decline from 45% in 2011 to 33% in 2015, as penetration stabilizes. Local language support on handsets could lead to the upside 219 202 • However, the usage of SMS within the 182 penetrated user base is expected to grow with increasing social and community services, 159 supported by the availability of low priced SMS 132 packs  Outgoing SMSs sent per month is expected to 96 increase from 89 per sub in 2010 to 113 per sub in 2015 • With introduction of multiple utility and productivity services on the SMS channel, the value and its usage of A2P SMS will go up substantially • P2A SMS for contests and other such premium 2010 2011 2012 2013 2014 2015 services is relatively price inelastic and are expected to continue to be priced higher even in the future Source: Analysys Mason, Industry Inputs
  • 117. Forecasts: MVAS Industry – Mobile Commerce 117 Mobile commerce revenues will increase from INR 0.2 bn in 2010 to INR 20 bn in 2015, primarily dominated by payments Mobile Commerce Revenues (INR bn) • There have been significant regulatory changes introduced by the RBI in the recent past which have paved the way for carriers to participate in 19.9 and drive the growth of the mobile commerce space, in collaboration with banks and other stakeholders • While some of the business model elements of a 13.4 consumer led BC model are still evolving, government payouts of welfare schemes through such a BC based model remains a compelling 7.9 use case, especially with the introduction and integration of UID numbers  Transaction volumes from such a BC banking 3.7 channel is expected to reach INR 232 bn in 2015 0.2 1.1 • Also, mobile offers an opportunity to shift a share of the informal domestic remittance market to a 2010 2011 2012 2013 2014 2015 mobile enabled channel, driven by the value proposition of reduced costs and increased convenience Source: Analysys Mason, Industry Inputs
  • 118. Forecasts: MVAS Industry – Advertising 118 Mobile advertising revenues will increase from INR 2 bn in 2010 to INR 21.2 bn in 2015, driven by improving user experience with mobile internet Mobile Advertising Revenues (INR bn) • With increasing penetration of mobile internet and improvements in data access and device 21 features, WAP ad inventory is expected to grow substantially 17 • In addition, with industry initiatives around ad effectiveness metrics and carrier profiling of end users, fill rates and CPMs are expected to rise 12 • As the push SMS market has significant user privacy issues as well as policy scrutiny, it will grow only marginally, especially if there is any 7 regulatory intervention on termination charges • However, opt-in SMS advertising models will 4 gain traction from better user profiling, 2 introduction of SMS based utility services as well as enterprise CRM 2010 2011 2012 2013 2014 2015 • Voice based advertising is not expected to grow significantly as it can be taken as consumer intrusion and hence have low fill rates Source: Analysys Mason, Industry Inputs
  • 119. Forecasts: MVAS Industry – Enterprise 119 Enterprise mobility solutions will contribute INR 15 bn in revenues in 2015, while bulk SMS business will grow marginally to INR 5 bn in 2015 Enterprise VAS Revenues(INR bn) • Enterprise mobility solutions market will reach INR 15 bn by 2015, driven by spend on projects to make enterprise IT systems more functional 20 for mobile interactivity 18  Enterprise mobility solutions are now increasingly being deployed by businesses to leverage the 15 power of wireless to have their field force connected 13 to enterprise infrastructure and databases at all 15 11 13 points in time 9 11  Implementation of enterprise mobility solution 9 ensures faster turnaround time to place and fulfil 8 7 orders, reducing working capital and accounts receivables 4 4 5 5 • Bulk SMS is expected to grow marginally 3 3 especially as the market becomes further 2010 2011 2012 2013 2014 2015 commoditized and saturation levels for alerts Enterprise Mobility (INR bn) Total and services are reached Source: Analysys Mason, Industry Inputs
  • 120. 120Contents Annex: Sponsors’ Profiles 120 mPortal Amdocs Bubble Motion IMImobile One97 Communication Qualcomm SMS Gupshup
  • 121. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 121 Sponsors’ Profile: mPortal Summary Founded in 2000, mPortal is a leading enabler of next generation mobile user experiences. The mPortal solution simplifies and optimizes access to data services for users to make personal and relevant choices about mobile applications and content Company Overview Management Team: D. P. Venkatesh, Founder & CEO, P.G. Ponnapa, CEO Emerging Markets Investors: Friedli Corp Finance and Zurich Key Platform Partnerships: Amazon, Apple, Google, HP/Palm, HTML 5, Mediatek, Microsoft, Qualcomm and RIMM Key Clients: AOL, Bloomberg, Disney, ESPN, Time Warner Cable, Comcast, Cox, Cricket, Reliance Infocomm and Verizon Wireless Key Offerings & Business Models Offers SPRINGBOARD Customer Experience Platform which provides two key componenents of the connected devcie experience ecosystem: • SPRINGBOARD Discovery Platform which is a connected devcie software platform that permits the development of a next generation user experience across multiple mobile devices, tablets and smart TVs with a focus on Idle/Home screen presence • SPRINGBOARD Delivery Platform which is a content and application creation, aggregation, analytics, monetization and delivery platform for managing and delivering connected devcie content and applications Business Model is a cloud based globally managed servcies model with revenues generated by licensing software directly to service providers and device players as well as revenue share arrangements based on value or revenues generated by its platform Future Plans Focus on Emerging markets – with a solution aimed at Handsets in the feature phone and smart phone space enhancing Content discovery across device and OS platforms ranging from MTK, BREW, Android, Microsoft, RIMM and others Help carriers in the developed and emerging markets optimize their mobile experience by superior user experience and enhanced home screen Content Discovery across all types of mobile phones, tablets and Smart TVs
  • 122. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 122 Sponsors’ Profile: mPortal
  • 123. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 123 Sponsors’ Profile: Amdocs Summary Founded in 1982, Amdocs is the market leader in customer experience systems innovation. The company combines business and operational support systems, service delivery platforms, proven services, and deep industry expertise to enable service providers and their customers to do more in the connected world. Amdocs is #1 in Worldwide Amdocs‟ offerings help service providers explore new business models, differentiate through personalized OSS and Billing with a 31.2% customer experiences, and streamline operations. A global company with revenue of approximately $3.0 billion Market Share in fiscal 2010, Amdocs has over 19,000 employees and serves customers in more than 60 countries worldwide (January 2009) Company Overview Management Team: Eli Gelman, CEO; Anshoo Gaur, India Head; Shrirang Bapat, Vice President, R & D India Investors: Listed on NYSE (DOX) Amdocs named the #1 Key Partnerships: Alcatel Lucent, Cognizant, CTC, HT, IBM, Tech Mahindra and others Telecom Operations Key Clients: Amdocs‟ customer base includes services companies in more than 60 countries worldwide. Management Systems Some key customers are AT&T, Bell Canada, SingTel Optus, Videocon, Vodafone Germany, Vodafone UK, Vendor Vodafone Greece and others (May 2009) Key Focus Offers OSS/BSS solutions Offers Managed Services such as Customer Management, Revenue Management, Service Delivery and “Amdocs benefits from a Portfolio Management strong managed services business…” Future Plans (February 2009) Plans to amplify the training programs to equip the employees with best of tools and knowledge to perform at highest levels; focus on new projects and launches; refine and expand the base modules and develop customer experience systems; pursue new acquisitions and other initiatives to offer new products and services
  • 124. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 124 Sponsors’ Profile: Bubble Motion Summary Leader in Mobile Social Media with the launch of BubbleBlog – a voice blogging service that has grown rapidly throughout Asia (started in India) Company Overview Management Team : Silicon Valley veterans transplanted to Asia - from former startups Facebook, Yahoo, Oracle, BEA Systems, Skype and Google Investors : Sequoia Capital US, Sequoia Capital India, SingTel, Comcast, Palomar Ventures, Infocomm Investors and NGP Global and India Footprint : Launching with all major operators in India as well as in Indonesia, Japan and the Philippines Key Partnerships : Partnered with 30+ media companies to secure exclusive rights to 500+ celebrities and with 20+ Tier 1 operators to launch BubbleBlog Key Clients : Airtel, Reliance, Vodafone, Tata, Idea Cellular, Telkomsel, Indosat, XL, Globe, Smart, AIS, KDDI, Softbank, Turkcell and others Subscriber Base : Over 10 mn (June 2011) Growth Rate : 382% y-o-y Key Focus Social Media : Focused solely on social media, specifically mobile social microblogging BubbleBlog : Initial service launch, which is a voice blogging service (ie, Twitter with a voice) Future Plans Text/Photo/Video : Initial service was „voice‟ blogging, but already added text as well as deep Facebook/Twitter integration – next up: photo and video Expand Geographies : To rest of Asian countries not yet launched in: Thailand, Malaysia, Vietnam, South Korea, Taiwan, Cambodia and others Smartphone Apps : Launch an iPhone and Android app for BubbleBlog
  • 125. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 125 Company Profile: IMImobile Summary IMImobile is the leading, trusted specialist provider of mobile data delivery technology platforms and managed services globally for top telecom operators, B2C brands and media companies enabling an open mobile market managed services Our industry leading DaVinci Evolved Service Platform™ powers a wide range of services (created, delivered and managed by IMImobile) including: social aggregation, contact management, mobile advertising, mobile marketing, messaging, storefronts, ring back tones and digital music services. Currently, IMImobile has presence across Asia, Europe, Latin America and Middle East. A 650 employee base provides services to 71 operators and blue-chip clients in 59 countries Company Overview Management Team (India): Vishwanath Alluri, Founder, Chairman & CEO; Shyam Bhat, CTO & Founder India Footprint: Hyderabad, New Delhi, Mumbai, Chennai, Kolkata Global Footprints: UK – London, High Wycombe, Westbury; USA – Florida, Columbia, Panama; Dubai Dhaka, Sri Lanka Key Partnerships: National Geographic Channel, SaReGaMa, CRY, Warner Music Group, Universal, and many more Key Clients: MTN, Vodafone, Virgin Mobile, Airtel, MTNL, BSNL, MTNL, Reliance, Aircel, TTST, Maxis, Grameen phone and many more Media, Advertisers & Enterprises: Reuters, Google, Meteor, Sahara, Hindustan Times, Hindu, Yahoo, Cricinfo, Star, Jaya TV and many more Global Membership in Trade Industry Associations: GSMA, WAC (Wholesale Application Community), MEF (Mobile Entertainment Forum) and MMA (Mobile Marketing Association) Key Offerings and Business Models Offers unique combination of cost optimization and revenue generation. Further, IMI mobile is working towards opening operator‟s dormant network assets so that network works as a „smart pipe‟ instead of a „bit pipe‟ Provides a unique combination of content management, operational model, business model and wholly - owned technology which enables a quality and breadth of solution, cost effective software-as-a-service delivery model and high service level availability unmatched in the industry Offers a unique personalized SMS service - mVaayoo™. It is the most cost effective End-to-End Enterprise Mobile Messaging Service with an incomparable, high service level availability Future Plans Plans of creating and driving an open global mobile marketplace for new applications and services, and to help operators realize the network-as-a-service model and make their networks smarter. It also plans to become a specialist provider of technology platforms and managed services globally to 100 leading telecom operators, B2C brands and media companies in the next 2 years and to over 500 customers in 5 years
  • 126. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 126 Company Profile: One97 Communications Summary One97 is a pioneer in mobile internet services for consumers in India. It has the widest and largest deployment of telecom application cloud platform Thriving on innovation, One97 delivers mobile content, advertising and commerce services to millions of mobile consumers Company Overview Headquartered in New Delhi, One97 is more than 1,000 people strong team with regional offices in Mumbai, Chennai, Dhaka, Lagos and Dubai Management Team: Vijay Shekhar Sharma, Chariman & Managing Director Investors: Marquee investors like Intel Capital, SAIF Partners and Silicon Valley Bank Investments: One97 has set up a USD 100 million fund to invest and incubate in mobile ecosystem; Company has invested in Oorja, New Delhi Analytics driven comprehensive customer communications platform; LeapSky Wireless, Singapore – Mobile internet roaming service; Ciqual, Scotland – Mobile Internet analytics platform; TenCube, Singapore – Makers of award winning mobile internet security service WaveSecure (sold to McAfee, USA); PayTM, New Delhi – Mobile commerce platform for consumers and enterprise Key Offerings and Business Models Offers Inapaq branded content services for mobile consumers Offers Oorja Mobile Advertising – pay per click and pay per insert mobile advertising on 2.5G and mobile internet properties Provides a mobile commerce platform, PayTM for mobile recharge offers and deals for consumers Future Plans Leading emerging market player in select segments of mobile internet value chain
  • 127. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 127 Company Profile: Qualcomm Qualcomm India Qualcomm Incorporated, a FORTUNE 500® company is the world leader in next-generation mobile technologies. Today, Qualcomm technologies are powering the convergence of mobile communications and consumer electronics, making wireless devices and services more personal, affordable and accessible to people everywhere. Established in July 1985, Qualcomm is headquartered in San Diego, California and has an employee base of about 17,500 highly skilled professional spread across 139 locations worldwide. Qualcomm believes in giving back to community and encourages employees to achieve work-life balance. Qualcomm is listed on the NASDAQ under the symbol QCOM. Dr. Paul E. Jacobs is the chairman and chief executive officer of Qualcomm. Quick Facts Revenues $10.99 billion (fiscal year 2010) Approximately 17,500 full-time and temporary employees GAAP R&D expenses $2.55 billion for fiscal year 2010 (23% of revenues) Ranked #33 in FORTUNE‟s list of “100 Best Companies to Work For” in 2011 About Qualcomm India Qualcomm established its India operations in 1996 with Qualcomm India Private Limited. Headquartered in Mumbai, it also has a business development location in Delhi. Kanwalinder Singh, president, Qualcomm India and South Asia heads Qualcomm‟s operations in the region. In addition to its offices in Mumbai and Delhi, Qualcomm has R&D presence in Hyderabad and Bangalore, including a handset pre-certification lab in Hyderabad. Qualcomm has expanded its presence with representation of Qualcomm Ventures. Quick Facts Dr. Avneesh Agrawal, President, Qualcomm India & South Asia and senior vice president, Qualcomm, Inc. Office locations: Mumbai, New Delhi, Hyderabad, Bangalore Recognized among India‟s top 25 „Great Places to Work‟ for five consecutive years (2007-2011) and ranked No. 1 in telecom sector in 2008, 2009 and 2010.
  • 128. IAMAI-AML Mobile VAS Report: Sponsors‟ Profiles 128 Company Profile: SMS Gupshup Summary Founded in 2007, SMS Gupshup is India‟s largest and fastest growing group messaging platform processing over 2.5 billion messages per month, with over 45 million users and 3.5 million communities Company Overview Management Team : Beerud Sheth, Co-Founder & CEO; Rakesh Mathur, Co-Founder and Chairman; Vishwanath Ramachandaran, Founding Executive & CTO; Milind Agarwal, Founding Executive & VP Sales; Chirag Jain, Founding Executive Investors : Charles River Ventures, Helion Ventures, Globespan Capital, Private Equity funds and others Key Partnerships : Tata, Aircel, Airtel, Loop, BSNL (India); Sun, Smart, Globe(Philipinnes); Telkomsel, Bakrie (Indonesia); Batelco (Bahrain); Dialog (Srilanka) Key Offerings Offers mobile marketing solutions to acquire new customers, engage and retain existing customers Provides CRM applications (Sales Tracker, Inventory Tracker, Loyalty Program, Rewards & Offers, Content Cards and other Apps) Offers mobile communities for social networking and chat rooms Launched “Reply-All” (many-to-many) SMS capability 350,000 SMS Gupshup Active User Base (Jan 09-Feb11) 50% Future Plans 300,000 45% 40% 250,000 35% 30% Plans to expand its network across new geographies 200,000 150,000 25% 20% 100,000 15% Plans to increase focus on expanding its product portfolio to provide a richer experiences to smartphone 50,000 10% 5% 0 0% users May-09 May-10 Feb-09 Mar-09 Apr-09 Jul-09 Oct-09 Feb-10 Mar-10 Apr-10 Jul-10 Dec-09 Oct-10 Feb-11 Jan-09 Jun-09 Aug-09 Sep-09 Nov-09 Jan-10 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Jan-11 Plans to strengthen the sales and marketing teams in India and international markets last 30-day Active Publishers Active Subscriber %
  • 129. 129Contents Annexure: Company Profiles 129
  • 130. IAMAI-AML Mobile VAS Report: Company Profiles 130 Company Profile: 2Ergo Company Profile: ACL Wireless Summary Summary Launched in the year 1999, 2ergo is an international mobile Launched in 2000, ACL Wireless Limited is a leading Mobile business and marketing solutions company managing end-to-end VAS provider for telecom operators, enterprises and consumers. mobile services ACL engages millions of users across 45+ telcos in 26 countries and services more than 600 enterprises in India Company Overview Management Team: Raj Singh Bhandal, Managing Director India Company Overview Investors: Listed on London Stock Exchange (RGO) Management Team: Sanjay Goyal, Founder & CEO; Vineet Jain, Co- Founder & CTO Key Partnerships: P&G, ABC, Fox News, Aviva, Fidelity, Times of India, Airtel, O2 and Vodafone Key Customers: ACL has a global presence with leading telecom operators such as Zain, Airtel, Vodafone, MTN, Oman Mobile, Claro Key Offerings and Business Models and Glo Mobile Offers end to end mobile business and marketing solutions Key Offerings and Business Models Launched “VoucherNet” for mobile couponing and vouchering Offers mobile communities for SMS chat, voice chat and mobile social Provides Teleco VAS subscription engines and content networking (Frenzo) Enhances retail promotions and integration campaigns across IVR, Provides enterprise messaging for Bulk SMS, short code creation and SMS, WAP and Apps management, voice out - dial and in - dial Developed a mobile site builder for mobile publishing and management Offers mobile content for mobile radio, content services, Voice and solution WAP Portals Developed an award winning Smartphone and Tablet applications Future Plans (Times of India, The Guardian, FOX, ABC, Aviva, Australian Stock Plans to expand the service portfolio and focus on utilitarian services Exchange, Rightmove and others) such as jobs and education for Bottom of Pyramid segment in India Developed sMartsite for mobile optimized website system
  • 131. IAMAI-AML Mobile VAS Report: Company Profiles 131 Company Profile: Affle Company Profile: Apalya Technologies Summary Summary Founded in 2006, Affle is a leading international mobile media Founded in 2006, Apalya is a leader in providing mobile video company headquartered in Singapore, constantly innovating delivery in India. Apalya powers all the Mobile TV offerings in mobile messaging products with over 20 million downloads and 5 India across different operators. Apalya offers its services on million users different mobile phones, tablets, PC across wired and wireless networks. It aggregates premium entertainment content, news and Company Overview all genres of content from leading broadcasters and content Management Team: Anuj Kumar, CEO; Anuj Khanna, Founder & providers from India and Internationally Chairman; Ben Fones, Executive Director Company Overview Investors: Microsoft, Itochu Corp of Japan, D2 Communications (JV between NTT DoCoMo & Dentsu) , Bennett Coleman and Company Management Team: Vamshi Reddy, Founder & Director; Shiva Limited (BCCL) of India and Centurion Private Equity Bayyapunedi, Founder & Director Key Partnerships in India: Airtel, TATA DoCoMo, Reliance, Idea, Investors: Mumbai Angels, IDG Ventures India, Qualcomm and IUVP ESPN STAR, eBuddy, Spice and others Key Partnerships: All leading telcos and content providers Growth Rate: ~75-100% y-o-y Subscriber Base: 5 million (July 2011) Key Offerings and Business Models Growth Rate: Double Digit Growth Offers mobile messaging products SMS2.0 Live and Pinch Key Offerings and Business Models Provides ad serving (Affle Ads) and ad sales representation services Offers over 175 live and on demand channels across multiple genres; catalogue of over 5000 movies Launched Affnet and mobile magazine Offers on-demand content (soaps, talk shows, bollywood, premium Business model is based on mobile advertising and mobile content content, documentary, movies & music videos) transactions Business model is based on subscription; Billing through Telco and D2C Future Plans Future Plans (In Progress) Plans to launch Pinch with carrier integration in India Launched services in Southeast Asia; plans to launch services in South Asia (excluding India), Africa and Middle East
  • 132. IAMAI-AML Mobile VAS Report: Company Profiles 132 Company Profile: Arvato Company Profile: Babajob Summary Summary Launched in 1999, Arvato Mobile provides media entertainment Launched in 2007, Babajob is a web and mobile portal services and digital content-logistics on a global basis for industry dedicated to creating a more efficient informal job market. It has leaders from the telecommunications, media and broadcast doubled its user base and experienced 400% increase in web sector and mobile traffic in the past 12 months Company Overview Company Overview Management Team: Dr.Amadeo Rahmann, CEO; Ralf Priemer, COO; Management Team: Sean Blagsvedt , Founder & CEO; Vir Kashyap, Carsten Mesecke-Von Rheinbaben, CBDO; Michael Krause, CCO; COO Thomas Liebscher, CTO; Ken Golisch, CFO; Dr.Oliver Schwenzer, General Council Key Partnerships: Nokia, Verse, Reliance, Tata, Aircel / TV18 and EKO Key Partnerships: Operators − Vodafone, SonyEricsson, T-Mobile, Deutsche Telekom, TIM, Orange, Medion and Telefónica; Subscriber Base: 595,000 jobs listed and over 180,000 job seekers Content Providers − more than 2500 license contracts including major registered labels from the music, games and video industry Key Offerings and Business Models Key Offerings and Business Models Mobile VAS Services sold via carriers to job seekers Operations of games-portals, music-streaming services, video-libraries, app-stores or e-book-stores across all different platform and devices Business model is based on free job posts to employers. Paid premium Payment-Integration & Clearing (integrated Operator-Billing, CC, services includes assisted search, database access, priority listings Paypal) in-game-billing and SMS blast Web Frontend portal and client development Future Plans Content licensing, aggregation and management including a content Plans to launch their first on the group partner development office in management team with decades of editorial know-how managing music Bihar in Q3 2011 (full-track, RT, RBT), games, videos & movies, apps and e-books Business model is based on Rev-Share to MGs, depending mainly on Plan to expand internationally by the end of 2012 volumes and maturity of market Future Plans Plans to launch mobile browser games, new e-book offerings, in app billing
  • 133. IAMAI-AML Mobile VAS Report: Company Profiles 133 Company Profile: Comviva Company Profile: Eko Summary Summary Founded in 1999, Comviva is the global leader in providing Launched in 2009, Eko is a low-cost payment infrastructure to enable mobile solutions beyond VAS with deployments in over 85 instant small value financial transactions over a mobile phone. Eko countries and 110 operator networks leverages existing retail shops, telecom connectivity and banking infrastructure to extend branchless banking services Comviva‟s extensive portfolio enables mobile operators to Eko works as a “Business Correspondent” to State Bank of India (SBI) transform their VAS business, leading to realization of key goals and ICICI Bank in India to provide mini-savings account and remittance of cost optimization, revenue acceleration and enhanced services to the customers via next-door mom-and-pop stores customer value Company Overview Company Overview Management Team: Abhishek Sinha, Co - Founder & CEO; Abhinav Sinha, Co-Founder Management Team: Manoranjan Mohapatra, CEO; Sangeet Chowfla, Company Footprint: Network of 1000+ retail outlets (grocers, EVP - Global Market Units & Chief Strategy Officer pharmacies, stationers, cybercafés and others) across Delhi-NCR, Key Partnerships: Airtel, France Telecom, Vodafone, Etislaat, Idea Bihar, Jharkhand Cellular, Banglalink, Grameen, Moroc Telecom, MTN, Tigo, IBM, Subscriber Base: 900K+ (Active Users) Ericsson and Nokia Siemens Networks No of Transactions: 2.5 million transactions worth USD 250 million during the period June 2010 - June 2011 Key Offerings and Business Models Key Offerings and Business Models Offers mobile applications Offers no-frills savings account in partnership with SBI and ICICI Bank Offers application delivery platforms for voice, video and text Provides across the counter remittances in partnership with SBI Provides VAS access infrastructure – SMS Platform, USSD, Mobile Provides incentive disbursal to ASHA workers under NRHM, in Internet Gateway partnership with Govt. of Bihar, supported by UNO for project services Piloted across the counter micro insurance program with Bharti-AXA Offers mobile money and recharge Offers across the counter & self talk-time recharge with CyberPlat Customer value and retention solutions Business model is based on the revenues from combination of fees, Provides managed VAS services charges from customer and / or commissions from the partnering organization Business model is based on a variety of Capex and Opex − oriented Future Plans business models including one time license, hosted, Software as a Service and managed VAS models Plans to strengthen current presence and add product lines
  • 134. IAMAI-AML Mobile VAS Report: Company Profiles 134 Company Profile: EnableM Company Profile: Geodesic Summary Summary Launched in 2008, EnableM is a M-education company working Launched in 1999, Geodesic is an innovator in software products focused with operators & OEMs, corporates, publishers & skill development on information, communication and entertainment for mobile phones & PC companies and educational institutions to offer mobile based Geodesic provides products in the space of unified communication, learning frameworks & solutions. It holds 5 patents across work on communication and collaboration, multimedia content delivery across integration of learning pedagogy with wireless connectivity Internet connected devices, financial products and mobile computing. Geodesic solutions are simple, easy to use, and are cost effective on the Company Overview web, desktop and mobile platforms Management Team: Amit Zaveri, CEO; Subrata Dey, COO Company Overview Investors: Artheon Ventures and Pace Ventures Management Team: Pankaj Kumar, Chairman & Co -Founder; Kiran Kulkarni, MD & Co-Founder; Prashant Mulekar, Executive Director & Co-Founder Key Partnerships: Nokia, Qualcomm, Pearson Education, Penguin, Investors: Over 26000 Onmobile, Aircel, Vodafone, BSNL, Tata, Rcom, and Aditya Birla Group Key Partnerships: America Movil, Vodafone, BenQ, HTC, Nokia and Bright Star Subscriber Base: 1 million (Active Users) Subscriber Base: 7.8 million across all products Growth Rate: 100% CAGR Growth Rate: Over 37% y-o-y Key Offerings and Business Models Revenues: FY 2011: Rs. 874 cr (unaudited); FY 2010: Rs. 637 cr; FY 2009: Rs. 653 cr Products : ATEM (authoring platform), AMBI (student learning device), Profit: FY 2011: Rs. 344 cr (unaudited); FY 2010: Rs. 223 cr; FY 2009: Rs. 264 cr Emspeak (language learning tools); Mquest (supplementary content delivery with Text books); Emplay (learning based games) and Emtest Key Offering and Business Models Services : Corporate training for Aggregation / Library Services, Content & Offers products for communication and collaboration such as Mundu Messenger, Mundu SMS, Spokn and CONTINUUM Format Development and Utilities Offers financial products and services such as Fn. Geodesic, Wealth Console, Business model is based on subscription / pay-per-use / licensing Wallet Wap and Spyder Future Plans Provides Content Delivery Platform such as Mundu TV and Mundu Radio Offers electronic computing product called GeoAmida Plans to branch out across emerging markets by 2011 - end or mid - 2012 Future Plans Plans to continue investments in ATEM and make it available for corporate clients as well as individuals Plans to launch Enlyte, an advanced educational tool that assists in learning at all levels
  • 135. IAMAI-AML Mobile VAS Report: Company Profiles 135 Company Profile: Handygo Company Profile: Hungama Mobile Summary Summary Launched in 2000, Handygo is India‟s leading provider of Hungama Mobile is a part of Hungama Digital Media software and system enabling mobile value added services for Entertainment, the largest aggregator, developer, publisher & video, messaging and interactive voice response. With a vision to distributor of Bollywood and South-Asian entertainment content offer unmatched products and services in the wireless telephony in the world. It has licensed worldwide exclusive digital rights to space, it has become an over 250 specialists‟ conglomerate over half a million music & videos Company Overview Hungama powers a majority of all mobile entertainment content Management Team: Praveen Rajpal, CEO in India. It has successfully managed more than 2,000 mobile and digital campaigns for over 300 brands globally. Key Partnerships: Over 11 Telecom Partners and over 30 Content Alliance Partners Hungama Mobile is accessible to over 400 million subscribers across all the networks Key Offerings and Business Models Company Overview Offers its flagship product Behtar Zindagi, an unique IVR based solution, majorly focuses on uplifting the rural section of India Management Team: Neeraj Roy, MD & CEO; Albert Ameida, COO; Siddharth Roy, COO Consumer Business & Allied Services It is the only company that offers content in Arabic language First one to introduce most secure, robust and above all DRM-enabled Key Partnerships: Over 350 content creators & 150 partners globally multi-purpose mobile content delivery platform (MCDP) for MTN Nigeria Key Offerings and Business Models Offers a range of applications and content for Infotainment space The business has built its expertise in the following areas: Mobile through its short code - 55678 Content, Mobile Marketing and Mobile Media and powers these Provides subscription services; community based portals and solutions through its own universal Short Code 54646 to telecoms to improve the usage of subscriber communication tools like SMS and CRBT Service
  • 136. IAMAI-AML Mobile VAS Report: Company Profiles 136 Company Profile: Indiagames Company Profile: Indyarocks Summary Summary Launched in 2000, Indiagames is the leading provider of games Founded in 2007, Indyarocks is a social network that offers across Mobile, PC and Interactive TV. The company is engaged interactive multi-media content to its subscribers across multiple in publishing and developing games across various platforms genres such as entertainment, games, music and videos, as including Online and Mobile. Indiagames products are developed well as user generated content and communities and published across all major technology platforms and are Company Overview distributed through partnerships with mobile operators in over 75 Management Team: Vishnu Manyam, CEO & Co-Founder; countries Kalyan Manyam, Co-Founder Company Overview Investors: Value First Subscriber Base: 6.4 million (Jan 2011); Active Users : 2.5 lakhs per Management Team: Vishal Gondal, CEO; Samir Bangara, COO; month (June 2011) 65% users on mobile Cyril Ferry, EVP- Mobile; Deepak Ail, VP- Mobile Growth Rate: 30% y-o-y Investors: UTV Software Communications, Cisco Systems, Adobe Inc Key Offerings and Business Models and Management First in the social networking space to add SMS as a key feature to Key Partnerships: Disney, THQ Wireless, Sega, Pop Cap, EA and communicate with members Samsung Offers multimedia sharing where members can share their videos, Growth Rate: 40% LTM photos, blogs, movie reviews and favorite games with each other Launched advanced audio video chat rooms available on Indyarocks to Key Offerings and Business Models enhance the entertainment aspect for members and to make new Offers Mobile Games in addition to personalization content on mobile friends Offers social communities with strong focus on making new friends Business model is based on a subscription based PC Games on rather than just keeping in touch with their existing friends demand model; DTH or Satellite TV based Games Channels - Paid and Ad-funded Offers WAP site where members can use Indyarocks just like the way they use it on their computers. Apart from this, there are quick links to Future Plans get entertainment content that is available on Indyarocks Plans to launch various initiatives to drive gaming to the masses in India Future Plans Plans to create mobile VAS content delivery platform Plans to develop Cross platform based games Plan to explore mobile gaming option
  • 137. IAMAI-AML Mobile VAS Report: Company Profiles 137 Company Profile: Informate Company Profile: InMobi Summary Summary Launched 2009, Informate is a leading mobile consumer Founded in 2007, InMobi is the world‟s largest independent intelligence firm with India‟s first On-Device Mobile Metering mobile advertising network serving over 35 billion ad technology at the core of its research. Its research is based on impressions a month across 314 million consumers in 125 real-time actual usage data captured from a widespread panel of countries mobile users in India and US. Its vision is to become the most Company Overview trusted source of mobile intelligence globally Management Team: Naveen Tewari, Co-Founder & CEO; Amit Company Overview Gupta, Co-founder & VP Global Business Development; Abhay Management Team: Kedar Sohoni, President Singhal, Co-Founder & VP Global Ad Sales Investors: Informate is a 100% subsidiary of Cross -Tab Investors: KPCB, Sherpalo Ventures and Mumbai Angels (www.cross-tab.com) Key Partnerships: 10,000 + Publishers and 2,000 + Advertisers Total no. of panelists: India – 3700 (Jun 2011); US – 1300 (Jun 2011) Subscriber Base: 14 million (Active Users) Key Offerings and Business Models Key Offerings and Business Models Syndicated Monthly Reports on Mobile Applications, Mobile Internet, Offers targeted advertising across consumers globally along with best Mobile Entertainment and others in class analytics resulting in high ROI for advertisers Custom Research Services based on Mobile Metering Global sales network offering reach and local knowledge to monetize publisher and developer inventory Mobile Meter Software Licensing (outside India) Offers better developer returns through World Developer Fund (WDF), Future Plans program incentivizing developers for bringing in traffic Plans to introduce sector-wise syndicated reports on Mobile usage in Launched “SmartPay” a global mobile payments solution, enabling India developers and content providers to better monetize their users Plans to expand operations globally to build large mobile panels in Asia Future Plans and Europe Rapid expansion of network across new geographies Constant product innovation resulting in better returns to advertisers as well as publishers and developers
  • 138. IAMAI-AML Mobile VAS Report: Company Profiles 138 Company Profile: Innoz Company Profile: LocationGuru Summary Summary Launched in 2008, Innoz is a leading mobile company providing Launched in 2007, LocationGuru provides turnkey solutions for value added services to telecoms and mobility solutions to location based services to mobile operators, handset OEMs & enterprises in India and across the world enterprises Company Overview With LocationGuru‟s SmartGeo LBS plaftorm & cross platform Management Team: Deepak Ravindran, Co-founder & CEO; mobile applications suite, service providers can quickly deploy and Abhinav Sree, Co-founder & COO; Ashwin Nath, Co-founder & CTO; deliver LBS services for their subscribers Mohammed Hisamuddin, Co-founder & CIO Company Overview Key Partnerships: Bharti Airtel, TATA Docomo, Aircel Ltd and Management Team: Shaheer Ahmed, Founder & CEO; Abhay Videocon Chaudhary, VP-Products Growth Rate: 100% y-o-y Investors: Self funded Key Offerings and Business Models Key Partnerships: Tata Docomo, Aircel, GrameenPhone, Navteq, Motorola, Qualcomm, MapmyIndia and TeleAtlas Offers its flagship product SMSGYAN, a mobile search engine that literally delivers knowledge bits to millions of mobile users in India Key Offerings and Business Models Offers TRANZ, a mobile file sharing application to transfer the videos, Offers SMARTGEO LBS Platform, a unified LBS platform for operators photos and music to phonebook friends Offers consumer LBS apps (POI Finder, Buddy Finder, TBT Navigation, Business model is based on operator revenue share through Family Locator, Location Based Advertising, Dating and others) subscriptions as well as lead generation platform to clients Offers enterprise LBS (workforce tracking, vehicle tracking, smartGeo Future Plans maps APIs for web and mobile) Plans to launch 3G related products as well as voice search application Business model is based on licensing, user subscription & download fee Miki, designed for smartphones including iPhone, Android and Future Plans BlackBerry Plans to launch 3rd Party App Developer Program for LBS app developers to provide them access to mobile locations, maps, geo-spatial content, operator billing & VAS integration
  • 139. IAMAI-AML Mobile VAS Report: Company Profiles 139 Company Profile: Mauj Mobile Company Profile: mCarbon Summary Summary Founded in 1997, Mauj Mobile is a mobile Internet specialist Launched in 2007, mCarbon is the leading telecom solutions focused on providing premium entertainment content on mobile provider having deployed & launched various products with large through GPRS / 3G platforms and owns world‟s largest operator companies and select enterprises. The products based application store “Mobango” delivering 1 million downloads a day on Greenroom platform helps operators and companies launch unique services which either have great utility value, Company Overview entertainment value or even optimize their own infrastructure to Management Team: Anupam Mittal, Founder; Badri Sanjeevi, COO efficiently launch services beyond traditional voice and data Investors: Westbridge Capital , Sequoia Capital and Intel Capital Company Overview Key Offerings and Business Models Management Team: Rajesh Razdan, Co-Founder; Brij Mahendru, Provides premium entertainment content for customer payment through Co-Founder operator billing, distribution through both operator deck and direct to Investors: Canaan Partners consumer Key Partnerships: IBM, Redhat, ENEA, Dialogic, HP and Nuance Offers application distribution Key Clients: Airtel, Vodafone, TATA, Idea and BSNL Business model is based on cost per download (CPD) and other Growth Rate: 200% y-o-y advertising models Key Offerings and Business Models Future Plans Call Manager and the Core Platform Greenroom Build on Mobango offerings to the global application community Launched Channel 99 CDP New / innovative premium products on Mauj Offers iSIM Business model is based on license based, revenue share and D2C Future Plans Plans to launch network based community exchange Plan to focus on contextual info based services, analytics and new markets
  • 140. IAMAI-AML Mobile VAS Report: Company Profiles 140 Company Profile: mDhil Company Profile: Mobien Technologies Summary Summary Launched in 2009, mDhil creates and distributes accurate and Launched in 2005, Mobien Technologies develops revolutionary relevant healthcare information for the Indian consumers, broadly enterprise mobility solutions that help organizations across the focusing on the areas of sexual & reproductive health, lifestyle globe take their business processes to the last mile in their conditions such as diabetes, high blood pressure, stress and business realms others. Their target audience is urban & semi-urban Indians in the Company Overview age group 17-35 years Management Team: Ajit Gokhale, Founder & CEO; Anand Parkhi, Company Overview Co-founder & COO Management Team: Nandu Madhava, CEO Investors: Ventureast Tenet Fund Key Partnerships: Airtel, MSN, Biocon, Onmobile and Indiagames Key Partnerships: RIM, Microsoft, Nokia, Oracle, Motorola, Intel, Tata Docomo, Bada, Vodafone, True, AIS, Intelligroup, KPIT Cummins, Key Offerings and Business Models Syntel, Seal and Perotsystems Website (both desktop and mobile versions), offering articles & video Growth Rate: 172% y-o-y Offers SMS packs on specific healthcare topics (Sexual Health, Key Offerings and Business Models Diabetes and others) Offers iNotify, a unified mobile application platform that enables Content partnerships with pharmaceutical companies thereby enhancing organizations to extend their ERP to the field users. It is capable of consumer value by providing specialized content around care and integrating with multiple ERP platforms management of particular conditions (such as diabetes); Powering the health section of lifestyle portals (such as MSN) Offers mobile applications for vertical specific processes such as Sale Order Management, Warehouse Processes for Inventory, Work Flow Future Plans Processes, Expense Leave Management, Merchandising, Lead Microsites / e-newsletters tailored for specific audience segments Management, Material Requisitions and others Expansion of video content library Future Plans Content in regional languages Plans to launch iNotify 2.0 – RAD tool for enterprise mobile apps Plans to develop iNotify on Demand – Cloud version
  • 141. IAMAI-AML Mobile VAS Report: Company Profiles 141 Company Profile: Mobiquest Company Profile: MosPay Summary Summary Launched in 2005, MobiQuest is a leading Enterprise Mobility Launched in 2007, MosPay provides mobile apps for learning, Company based out of Noida, India education and productivity for B2C and B2B segments. mGurujee is the mobile learning brand of MosPay Company Overview Management Team: Vineet Narang, CEO; Sabina Kamal, COO Company Overview Key Partnerships: Airtel, Tata Tele, Blackberry, Samsung and Nokia Management Team: Shantanu Dash, Founder & CEO Customers: Nokia, Samsung, Aircel, Tata Indicom, Virgin, MapMyIndia, Growth Rate: 12 - 15% y-o-y Spice, Onida, Lava. Beetel, Cellmania/RIM, Ericsson and others Key Offerings and Business Models Key Offerings and Business Models Launched two leading enterprise platforms in the country: m‟apps™ & Offers products catering to learning and productivity m‟loyal™ to cater across various industry segments Offers products like mGurujee‟s mobile learning solutions used for m‟apps™ is a last mile data capture enterprise platform for field force learning courses, test preparations, language learning and others automation on mobile. The platform is an easy to use enterprise mobility ecosystem that is secure, flexible & supported on the common mobile Offers mobile productivity solutions like locate and Backup handsets available in the market Business model is based on subscriptions basis m‟loyal™ is the mobile loyalty platform for retail industry. With an Future Plans integrated new age brand promotions portfolio the platform also enables generating detailed Insights & Analytics to help analyze customer Plans to launch schools, colleges, universities specific apps behavior Plans to focus on corporate specific apps Business model is based on SaaS Future Plans Plans to expand to cover more verticals for last mile automation on the m‟apps platform Plans to launch Mall Loyalty program & Mobile Coupons on the m‟loyal platform
  • 142. IAMAI-AML Mobile VAS Report: Company Profiles 142 Company Profile: Motricity Company Profile: Nazara Technologies Summary Summary Launched in 2001, Motricity empowers mobile operators, brands and Founded in 2001, Nazara provides a range of branded and advertising agencies to maximize the reach and economic potential of original mobile content to the culturally diverse base of mobile the mobile ecosystem through the delivery of relevance-driven users in the country merchandising, marketing and advertising solutions. It provides their entire suite of mobile data service solutions through an integrated, highly Company Overview scalable managed service platform. Motricitys unique combination of technology, expertise and go-to-market approach delivers definitive RoI Management Team: Nitish Mittersain, Founder & CEO for the mobile operators, brands & advertising agency customers Key Partnerships: Exclusive distribution rights of EA mobile in India, Company Overview Sri Lanka and Bangladesh Management Team: Ryan K. Wuerch, CEO & Founder; James Smith, Key Offerings and Business Models President and COO Key Business Highlights Offers wrapped games and subscriptions Since 2005, over USD 2.7 billion in gross revenue has been generated Provides range of WAP based subscription services covering varied by Motricity‟s mobile operator customers through the sale of mobile categories from cricket to devotional to humour content and applications through the mCore Platform & over 8 billion Provides wide range of SMS based services impressions through their mobile advertising network Provides access for enterprise customers to over 300 million mobile Offers voice gaming subscribers through their mobile operator customers across US, Europe and Asia Pacific Future Plans Powers over 50 billion page views through access to the mobile Internet Plans to launch a mobile social gaming destination Key Offerings Plans to launch app store targeted at iPhone and Android markets Motricity Connect is an operator-branded „front door‟ to the Mobile internet Plans to launch a host of IVR services across carriers Motricity Marketplace enables mobile operators to effectively respond to Plans to focus on retail gaming the ever-growing demand for innovative mobile content Motricity Insights is a revolutionary SaaS-based tool that makes enterprise-class predictive analytics, profiling and prospect targeting a viable option for any marketer-combining customer profiling, reporting, predictive modeling, scoring, mapping, targeting & suppression into an automated end-to-end process
  • 143. IAMAI-AML Mobile VAS Report: Company Profiles 143 Company Profile: netCore Company Profile: Nuance Communications Summary Summary Founded in 1998, netCore is a real time digital communications Launched in 2005, Nuance is the leading provider of speech, text and solution provider which provides solutions encompassing all imaging solutions for businesses and consumers around the world technologies- Email, SMS, Voice and the Web Company Overview Company Overview Management Team: Sunny Rao, MD, India & South East Asia Investors: Listed on NASDAQ (NUAN) Management Team: Rajesh Jain, Founder & CEO; Abhijit Saxena, CEO; Girish Nair, COO; Kalpit Jain, CTO; Dr.Atanu Dey, Chief Key Partnerships: Leading mobile operators, VAS players, BFSI Economist companies and Enterprise Solution providers Growth Rate: Achieved 50% y-o-y growth in India Subscriber Base: 2500+ Key Offerings and Business Models Growth Rate: 45% y-o-y Provides Power Value Added Services that are on speech and text-to- Key Offerings and Business Models speech based applications catering to a substantial predictive text input market through the T9 family of solutions, automotive solutions through Provides email infrastructure solutions (anti-spam, mailing and speech and text-to-speech in car navigation systems and personal archiving) navigation devices Offers solutions for customer acquisition through affiliate marketing and Offers enterprise solutions for customer care, financial, travel & tourism, web advertising telecom industries through speech recognition, voice authentication and Provides email marketing solutions text-to-speech solutions and voice identification solutions for security Offers Dragon Dictation to medical, legal and general consumers Offers mobile marketing solutions Business model is based on extensive and robust partner network ; Providers web banner/ ads on India‟s #1 language portal Oneindia.in Direct customer engagement but in select deployments; Deliver on Future Plans various commercial models like software licensing and Software as a Service Plans to launch an integrated suite to manage interaction over web and Future Plans mobile with an additional ability to analyze campaigns Plans to continue their commitment of pioneering text input, speech, mobility, customer care technologies and automated voice care solutions in India that produce the right outcome, at the right cost, for both the customer and the enterprise
  • 144. IAMAI-AML Mobile VAS Report: Company Profiles 144 Company Profile: Olive Telecom Company Profile: Phoneytunes Summary Summary Founded in 2009, headquartered in India, Olive Telecom has Launched in 2000, Phoneytunes provides mobile VAS managed established its presence in the world‟s fastest growing telecom services on data and voice, Turnkey VAS solutions, push mail / IM market as well as 23 other countries which provides wireless and social networking services, applications and On Device portal devices in 2G , 3G, WCDMA arena development backed by content offerings Company Overview Company Overview Management Team: Arun Khanna, Chairman; Avijit Dutt, Management Team: Taron Mohan, CEO; Anupam Sharma, CTO; President- Marketing Rakesh Gulati, VP-Marketing; Hassan Kabeer Key Partnerships: Tata Indicom, MTS, Bakrie, Zain, Virgin, Qualcomm Key Partnerships: Synchronica, Nokia Siemens, Acision, Ericsson and and Haier Qualcomm Growth Rate: Over 20 million devices sold Subscriber Base: 300+ million globally Key Offerings and Business Models Key Offerings and Business Models Offers Mobile Phone devices Offers mobile VAS SDP services – 3G, GPRS, SMS and MMS Provides data download and networking devices Offers App Stores, portals, Mobile TV services Offers Tablets Offers features like MMS, SMS, USSD, Charging and Rating gateways Business model is based on B2B and B2C Provides VAS kiosks Future Plans Provides outsourced development projects Plans to launch 3G ready wireless and convergence devices Business model is based on Revenue share, Licensing and work for hire More variants of the highly appreciated OlivePad Future Plans Plans to launch complete bouquet of 3G, social networking, IM and push mail services
  • 145. IAMAI-AML Mobile VAS Report: Company Profiles 145 Company Profile: RockeTalk Company Profile: Shemaroo Summary Summary Launched in 2009, RockeTalk is an app based social network Founded in 1962, Shemaroo is one of the largest filmed that supports multimedia based P2P interactions besides basic entertainment “Content House”. It is also one of the pioneering SNC features. It provides „mobile first‟ users in T2 and T3 towns companies in New Media sphere their first SNC experience Company Overview Company Overview Management Team: B. H. Maroo, Founder; Raman Maroo, Managing Management Team: Rajiv Kumar, Founder & CEO Director; Atul Maru, Jt. Managing Director; Jai Maroo, Director; Hiren Gada, Director Investors: Mission Ventures, EDF Ventures and iSherpa Capital Key Partnershipships: Leading telcos, Handset OEMs (LG, Micromax, Investors: Privately held LAVA, Karbonn, Zen, Redd, MVL) and content providers (Hungama Key Partnerships: British Telecom (UK), YouTube, Tata Docomo, and Mobile ) all major content Websites and Telecom Operators in India Subscriber Base: 14.7 million (June 2011); Active User : 5.6 million Key Offerings and Business Models (India); 2.2 million (Rest of the world) Growth Rate: 320% y-o-y Offers Content Ownership, Aggregation & Distribution Key Offerings and Business Models Actively involved in leveraging emerging technologies like Broadband, Internet, IPTV, Mobile and DTH SNC updates, including multimedia messaging , life casting and live multimedia communities ,downloading / sharing (videos and wall papers) Provides large content library of films, and non-film audio and video content across multiple categories, genres and across 20+ Indian Offers a simple registration mechanism for users without an e-mail ID languages and its app lets users add friends directly from their phone add book Business model is based on mix of advertising and content downloads Future Plans for VAS (wallpapers and videos) Plan to focus on Broadcast Content and New Media including major Future Plans expansion in 3G, Mobile VAS and Internet distribution Plans to focus on increasing partnerships with Handset OEMs to pre- embed its app Focus on overseas expansion, especially in the South-East Release APIs for developers
  • 146. IAMAI-AML Mobile VAS Report: Company Profiles 146 Company Profile: Spice Global Company Profile: StratosHear Summary Summary Launched Spice Global is a Singapore based multifaceted group Founded in 2007, StratosHear is a leader in mobile media which provides Mobility led solutions across the Ivory coast to offerings with a wide variety of solutions targeted at users ranging Indonesia (i2i) region which include Mobile Devices, Device from entry level handset users to the high end smart phone users Retail, and Mobile VAS Company Overview It is now focused on making its mark on the evolving Mobile Management Team: Vinay Kumar, Founding CEO; Tahseen Jamal, Internet Founder & COO Company Overview Investors: Privately funded through Angel Investors Launch Year: More than 30 years of existence Key Partnerships: Over 250 partners across the ecosystem that Management Team: Dr. Modi, Chairman; Dilip Modi, MD; Kunal includes operators, mobile publishers, media agencies and brands Ahooja, CEO-Devices; Sanjeev Mahajan, CEO-Retail; Saket Agarwal, CEO- Digital; Dr. Abhinav Mathur, CEO-Labs Growth Rate: 900% revenue growth y-o-y Key Partnerships: Mediatek, CKT, K-Touch, Bharti Airtel, Vodafone, Key Offerings and Business Models Idea Cellular, Aircel, Telecom Malaysia, Hungama and PPL Offers Mobi Adz, a fast growing mobile ad network to serve text, banner Key Offerings and Business Models and video ads for mobile Internet users Offers handsets under brand names SPICE, CSL, Nexian and Welcomm Provides an Ad serving platform to deliver ads across multiple channels on mobile platform (audio, text, banner & others) Launched SPICE Hotspots Multi branded digital lifestyle Retail stores Offers an Ad serving platform deployed inside an operator‟s data center Offers SPICE DIGITAL services such as Mobile Radio, VoiceChat, Devotional, Live Streaming, Social Networking, On Device solutions Business model is based on revenue share model with publishers and Business model is based on the revenue share as well as full outright operators sales models Future Plans Future Plans Expansion of global platform and further enrichment of artificial Plans to launch Android led strategy for Devices and Retail; focus on intelligence components Smart Feature Phones; go International with VAS and focus on the Adoption of advance campaign optimization techniques for publisher and devices ecosystem and become a catalyst to create one around our advertiser partners devices
  • 147. IAMAI-AML Mobile VAS Report: Company Profiles 147 Company Profile: Utiba Company Profile: Zenga TV Summary Summary Launched in 2001, Utiba has focused exclusively on the Launched in 2009, Zenga TV provides Mobile TV services with development of the most scalable, flexible and modular mobile capability to operate on low bandwidth and seamless live and financial service platform in the market. The Utiba Platform continues streaming enables mobile phone based transactions including electronic airtime distribution, retail mobile banking, domestic & international Company Overview remittance, government benefit distribution, and utility payments Management Team: Shabir Momin, CEO and Co-Founder; Vikramjit among others Roy, Co-Founder Company Overview Key Partnerships: Colors TV, MTV ( Viacom 18 bouquet exclusive for 5 Management Team: Justin Ho, Co-Founder & CEO; Richard Matotek, years),UTV bouquet, TV Today bouquet, Network 18 bouquet, NDTV Co-Founder & CEO bouquet, E24 bouquet, BBC World, Movies 1200, uncut and uncensored Key Partnerships: Orcale, Alternet Systems contents, self generated news content from 5 states Subscriber Base: over 400 million subscribers worldwide User Base: 6 Million Unique Users; 22 Million user views a month Key Offerings and Business Models Growth Rate: 400% y-o-y Offers U Reach services for electronic top solutions Offers U Hub services for mobile based international remittance Key Offerings and Business Models Provides U Bank services for mobile banking solutions Offers free mobile TV service for live channels Offers U Trust for electronic wallet Offers VOD & Movies at INR 10/10days Offers U choose services for peer to peer talk - time sharing Business model is based on their services to Handset Manufacturers, Offers U Tunes services for Mobile VAS retail their capability to inject Live Audio Video Advertisement in a stream in Offers U loyalty services providing loyalty management system real-time and the On deck and Off deck business with operators as well Offers U View Multi perspective data reporting tool Future Plans Business model is based on mobile operators, banks and payment service providers (PSPs) launch mobile financial services with a lower Plans to launch more channels, VODs and movies, iPhone version initial investment focusing on building out the so called payment Launch of new product in Video space, new version of CrickZenga, new “ecosystem” and acquiring customers version of Facebook app ( developed by Zenga) Future Plans Focus on the developing economies of Asia, Africa, Eastern Europe & Plan to launch the new Site for www.clt20.com and www.iplt20.com LatAm
  • 148. 148 To access the report, please visit: www.iamai.in www.analysysmason.com/india www.slideshare.net/analysysmasonwww.iamai.in www.amalysysmason.com