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  1. 1. Voice is Kinng?
  2. 2. <ul><li>For millions of years, mankind lived just </li></ul><ul><li>like the animals. Then something </li></ul><ul><li>happened which unleashed the power of </li></ul><ul><li>our imaginations, we learned to talk . </li></ul><ul><li>- Stephen Hawking </li></ul>
  3. 3. State of Current VAS Industry <ul><li>VAS constitutes ~7-10% of of total telecom revenue for Indian operators. </li></ul><ul><li>Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue. </li></ul>
  4. 4. VAS Revenue Split <ul><li>P2P SMS: 35% </li></ul><ul><li>CRBT: 25% </li></ul><ul><li>IVR : 15% </li></ul><ul><li>Downloads: 10% </li></ul><ul><li>SMS Subs: 5% </li></ul><ul><li>P2A (Peer to App) SMS + Misc: 10% </li></ul>
  5. 5. Entities in VAS Value Chain <ul><li>Content/Application Owner - cos. like saregama/mauj/Rajshri who develop coyrighted content </li></ul><ul><li>Aggregator - aggregates content like games/wallpapers/ringtones and distributes it to suit customer needs [players : mauj, hungama mobile, indiatimes mobile etc] </li></ul><ul><li>Software developer - develops applications (like payment/games/middleware etc.) for mobile VAS [players - mchek/July systems/webaroo/affle etc] </li></ul><ul><li>Technology Enabler - provides the platform that plugs into telco networks and acts like a bridge between aggregator and telcos [players include OnMobile, cellnext. mauj etc] </li></ul><ul><li>Operators still dominate the revenue sharing arrangement in VAS . </li></ul><ul><li>Of the amount paid by end users, 60-70% is kept by operator, aggregator gets 20-25% and content app/owner gets 10-15% of the revenue] </li></ul>
  6. 6. Entities in VAS Value Chain..
  7. 7. VAS Portfolio
  8. 8. Perspectives..Numbers <ul><li>Prepaid connection comprise ~85% of total subscriber base </li></ul><ul><li>Almost half of Indians use ULCH (Ultra Low Cost Handsets) </li></ul><ul><li>30% of mobile subscribers in India have opted for caller tune services </li></ul>
  9. 9. More Perspectives/Numbers.. <ul><li>Approx 60% of mobile content downloaded in South India is in local languages </li></ul><ul><li>50% of all prepaid mobile phones have less than Rs. 40 balance at any point of time </li></ul><ul><li>~45% of the target population cannot afford to pay much for VAS products </li></ul>
  10. 10. Challenges <ul><li>Sliding ARPUs </li></ul><ul><ul><li>BoP segment </li></ul></ul><ul><ul><ul><li>Not comfortable with SMS </li></ul></ul></ul><ul><ul><ul><li>English isn’t the most prominent language. </li></ul></ul></ul><ul><ul><ul><li>Multiple dialects </li></ul></ul></ul>
  11. 11. VAS Success Strategy <ul><li>Sachet Pricing [E.g.: 10 Rs. Recharge Coupon.] </li></ul><ul><li>Bundling [E.g: Virgin:MySpace, Spice Mobile: ibibo, Email2SMS; LG: RockeTalk, ] </li></ul>
  12. 12. VAS-tu Shastra.. <ul><li>Reuters Market Light - a short messaging service costing 60 rupees ($1.50) a month. </li></ul><ul><ul><li>100,000 three- month subscriptions </li></ul></ul><ul><li>Nano Ganesh </li></ul><ul><ul><li>Priced between Rs.560 and Rs.1700, about 5,000 farmers are using the application. </li></ul></ul><ul><li>Nokia LifeTools </li></ul><ul><ul><li>Local Information on seeds/crops etc </li></ul></ul><ul><ul><li>Sends subscribers an English word each day, explaining how it’s pronounced and what it means in the user’s native language. </li></ul></ul><ul><ul><li>Each of these packages could cost between Rs 25 and Rs 50 a month </li></ul></ul>
  13. 13. Nascent Market.. <ul><li>Local Search </li></ul><ul><ul><li>Airtel receives 500,000 queries a month. </li></ul></ul><ul><ul><li>BPL’s Mumbai search receives 800 local queries a day </li></ul></ul><ul><li>3G Mirage </li></ul><ul><ul><li>Will accelerate Mobile Internet </li></ul></ul><ul><ul><li>VAS Operators/MVNOs will drive the growth. </li></ul></ul>
  14. 14. Is Voice the Kinng? <ul><li>VAS is currently limited to </li></ul><ul><li>urban area primarily </li></ul><ul><li>driven by entertainment </li></ul><ul><li>content. </li></ul><ul><li>30% of New Mobile Users from Rural India [Q2 2008 Report] </li></ul><ul><li>Mobile handsets costing less than $50 account for 62 per cent of all imported units. </li></ul>
  15. 15. Is Voice the Kingg? <ul><li>SMS, MMS, CRBT, and GPRS would fail </li></ul><ul><li>Regional/Rural IVR seen as a major opportunity  </li></ul><ul><ul><li>But where is the compelling content? </li></ul></ul><ul><ul><li>Competition : SMS? </li></ul></ul>
  16. 16. Voice – VAS Challenges <ul><li>Opportunity: Rural, the untapped market. </li></ul><ul><ul><li>Rural Services : E.g.: Mobile Payments (cashnxt). </li></ul></ul><ul><li>Challenge: Voice Recognition – Not a single engine understands different dialects. </li></ul>
  17. 17. <ul><li>Thank You! </li></ul>
  18. 18. Source <ul><li> </li></ul><ul><li>Emergic </li></ul><ul><li>BDA </li></ul>
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