0
Mobile VAS Summit
         23-24th Sept 2009, New Delhi




VAS: Redefining Mobile Phone Services
               in India
...
Who Are We?
About IMRB International

  • We are a part of Kantar Group, the insight &
    consulting division of WPP Group Plc.,

  •...
Some VAS Studies Successfully Completed by us..…



                                                                      ...
…for a Number of Clients…
Mobile VAS: A Global Perspective
ARPU & Share of Data: Cross Country Analysis




                                         •   India and brazil
           ...
Comparison of Most Popular Mobile Phone Activities in
GCC and Europe
         Percentages indicate penetration i.e. propor...
The Indian VAS Mobile Market
Rising Mobile Subscriber base but… Decreasing ARPU


   • We have crossed 450 million wireless subscriber mark now
     an...
Rising Mobile Subscriber base but… Decreasing ARPU
Defining the Scope of VAS
Defining the Scope of VAS…




    “Mobile Value Added Services are those
       services that are not part of the basic
 ...
We see VAS standing on 4 pillars


                                                                                  Acces...
Revenue distribution in VAS market


                                                                                     ...
Media & Telecom: Towards Win-Win

  •   Markets such as China, Japan and Europe have an organized business
      model whe...
Importance of VAS
VAS : Growing Market Size (Million USD)

                                                                3442




        ...
Other Reasons for increasing importance of VAS


   • Decrease in ARPU despite increase in MOU:
     With declining ARPU, ...
Drivers and barriers to growth of VAS
in India
Key drivers for growth of VAS



  Supply side drivers
  Marketing Efforts by Operators

  Price Decline of VAS services  ...
Challenges to growth of Mobile VAS

                                  VAS Challenges
                                  VAS...
VAS - Access Modes
Comparative evaluation of Mobile VAS access modes

      Parameter             SMS               Voice            GPRS    ...
Comparative evaluation of Mobile VAS access modes


      Parameter           SMS              Voice            GPRS      ...
Share of VAS Revenue by Access Modes


                                USSD
                    GPRS
                     ...
VAS Categories
Need based categorization of Mobile VAS


                         VAS categories
                         VAS categories
...
Comparative Analysis of various categories of VAS

                 Entertainment VAS            Information VAS          ...
Rural VAS market
The Great Rural India opportunity

                                                                 Subscription
         ...
Future of VAS
Innovative Uses of VAS

  • AdRBT (Ad Ring Backtone) wherein each time a person calls
    he/she hears an ad jingle instea...
Future of VAS
  •   Till now the emphasis has mostly been on Voice & SMS based VAS

  •   With the advent of 3G in India t...
Thank You!
    Deepak Halan
  deepak.halan@imrbint.com




    IMRB International
      8, Balaji Estate,
Guru Ravidass Ma...
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IMRB Represented at The Mobile VAS SUMMIT 2009

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  1. 1. Mobile VAS Summit 23-24th Sept 2009, New Delhi VAS: Redefining Mobile Phone Services in India Deepak Halan IMRB International
  2. 2. Who Are We?
  3. 3. About IMRB International • We are a part of Kantar Group, the insight & consulting division of WPP Group Plc., • 37 years of expertise with 28 offices in 11 countries • Within IMRB, we have several sector specialist groups – Retail – Automobile – eTech (Telecom, Internet, etc) …………………….
  4. 4. Some VAS Studies Successfully Completed by us..… Mobile Banking Mapping of mobile banking technologies Mobile VAS report with IAMAI- 2007 edition and 2008 edition A supply side report on Mobile VAS in India Mobile Advertising Concept test of various options of Mobile Advertising among end consumers Mobile VAS Usage behavior of Mobile VAS among end consumers Mobile Remittance Concept test of remittance through mobile- both Domestic and International
  5. 5. …for a Number of Clients…
  6. 6. Mobile VAS: A Global Perspective
  7. 7. ARPU & Share of Data: Cross Country Analysis • India and brazil are low ARPU countries and share of data is small • In most countries share of data increases with ARPU
  8. 8. Comparison of Most Popular Mobile Phone Activities in GCC and Europe Percentages indicate penetration i.e. proportion of respondents who use the service at least once per month GCC Europe 1. Voice (99%) 1. SMS (90%) 2. SMS (98%) 2. Voice (84%) 3. Take photos (87%) 3. Take photos (59%) 4. Record videos (78%) 4. Collect voicemail (36%) 5. Listen to music (77%) 5. MMS (35%) 6. Play games (59%) 6. Play games (31%) 7. MMS (56%) 7. Listen to music* (23%) 8. Ring-tone download (55%) 8. Listen to streamed music (14%) 9. Music download (51%) 9. Mobile web browsing (14%) 10. Phone balance transfer (50%) 10. Email (12%) Source: Yankee Group and AMRB, 2008 *Downloaded or side-loaded • It is evident that proportion of data service users is higher in Europe vis-à-vis GCC. • Voice calling and SMS dominate in both regions, though the order is reversed. As we look down the top-ten list we see broad similarities. e.g., music, games and multimedia services like MMS feature strongly on both
  9. 9. The Indian VAS Mobile Market
  10. 10. Rising Mobile Subscriber base but… Decreasing ARPU • We have crossed 450 million wireless subscriber mark now and have the second largest subscriber base in the world • Over 100 mn new subscribers added in 08. • The growth of mobile market can be clearly attributed to the favorable and improved regulatory structure, declining handset prices and innovative pre paid tariff structure. • With increasing competition and need for increasing the subscriber base in rural markets, the call rates and hence the ARPU are declining.
  11. 11. Rising Mobile Subscriber base but… Decreasing ARPU
  12. 12. Defining the Scope of VAS
  13. 13. Defining the Scope of VAS… “Mobile Value Added Services are those services that are not part of the basic voice offer and are availed separately by the end user. They are used as a tool for differentiation and allow mobile operators to develop another stream of revenue”
  14. 14. We see VAS standing on 4 pillars Access Technology Devices Technology platform such as The use of VAS is largely SMS, GPRS, IVR & USSD are dependent on the features available Infrastructure used to deliver VAS services to in the mobile handset. the consumer Content Growth of VAS market is dependent on relevant content available to the consumers. USSD=Unstructured Supplementary Service Data
  15. 15. Revenue distribution in VAS market Content owner - gets 5 - 10% revenue Content Aggregator gets 10 - 15% of the revenue Technology enabler gets 10 - 20% of the - revenue Mobile operator keeps 60 - 80% of - the revenue End user pays for content/service/voting
  16. 16. Media & Telecom: Towards Win-Win • Markets such as China, Japan and Europe have an organized business model where the telecom operator keeps 20-30% of the revenue • In these countries the VAS market is much more evolved than India and the content market is not over-supplied and fragmented – so carriage does not rule over content. • Low revenue packages for VAS providers stunts innovation and quality control of content. • The operators could help VAS providers by providing them venture capital, promoting their services and providing intellectual property safeguard. • An ideal revenue sharing arrangement - operators charge for access to their pipes and a fee for billing and collection and pass the rest to VAS providers and content owners.
  17. 17. Importance of VAS
  18. 18. VAS : Growing Market Size (Million USD) 3442 2033 1565 1204 950 Dec 2007 Jun 2008 Dec 2008 Jun 2009E Jun 2010E • The VAS market is expected to grow steadily at a rate of almost 70% for the next one year. • VAS currently contributes around 10% to the operator’s revenue. It is expected to increase to 12% by June 2010.
  19. 19. Other Reasons for increasing importance of VAS • Decrease in ARPU despite increase in MOU: With declining ARPU, the challenge is to develop alternative revenue streams and retain customers by creating a basis for differentiation. • Greater need for differentiation among the service providers – Greater competition – Saturation in Metros and Urban cities – Number Portability expected shortly in India. • 3G VAS: With added utility to mobile phone through 3G, both subscriber base and ARPU are expected to observe phenomenal increase in the coming years
  20. 20. Drivers and barriers to growth of VAS in India
  21. 21. Key drivers for growth of VAS Supply side drivers Marketing Efforts by Operators Price Decline of VAS services Demand side drivers New Technology Adoption by Operators Low priced feature rich handsets Impact of 3G Need for Entertainment & mCommerce & Transaction based Services Need for Local Content
  22. 22. Challenges to growth of Mobile VAS VAS Challenges VAS Challenges Supply Perspective Supply Perspective Demand Perspective Demand Perspective Lack of transparency in Limited awareness of Revenue sharing VAS arrangements & in billing system High cost of content Limited availability of Exit barriers for VAS local content consumers are high
  23. 23. VAS - Access Modes
  24. 24. Comparative evaluation of Mobile VAS access modes Parameter SMS Voice GPRS USSD Costly as user Cost to end Cheaper than is required to Cheaper than Costly consumer voice invest at each SMS stage IVR Need to infrastructure invest in Infrastructure in costly technology Infrastructure Cost to provider place especially infrastructure. in place speech E.g. from recognition 2.5G to 3G Low penetration Handset Handset Handset Reach of GPRS agnostic agnostic agnostic enabled handsets
  25. 25. Comparative evaluation of Mobile VAS access modes Parameter SMS Voice GPRS USSD - Limited by - More literacy and Convenient language factor than SMS Steep learning Ease of usage Easiest to use curve - Difficult to remember short code and keywords With Enjoys low expansion to The biggest cost and rural and Depends on contributor and convenience Potential likely to remain semi- rural uptake of 3G of usage areas, has services so in near future huge potential
  26. 26. Share of VAS Revenue by Access Modes USSD GPRS 3% 8% SMS Voice 49% 40% • SMS contributes around 49% to the overall VAS revenues. This consists of P2P, A2P and P2A services.
  27. 27. VAS Categories
  28. 28. Need based categorization of Mobile VAS VAS categories VAS categories Entertainment Entertainment Information Information mCommerce mCommerce User interest Allow the user to conduct a Designed for comes in from transaction using the mobile mass appeal and relevance of the phone. extensive usage. content Currently in a nascent E.g. News stage in India E.g. Jokes, alerts, travel Bollywood information, E.g. payment platform from ringtones, ticket Paymate etc. games, etc. information, etc.
  29. 29. Comparative Analysis of various categories of VAS Entertainment VAS Information VAS mCommerce Identifying the best access mode to provide Marketing it since needs mCommerce differ across different To drive the usage of segments Handset penetration Challenges content/services other and usage of the key than music e.g. games. Credibility of the source access mode (GPRS) of since there are alternate mCommerce is low in channels available India Security concerns Has potential to emerge Expected to remain the Is going to be key to Future as a key VAS component VAS driver for the next address the needs of rural status once security concerns few years market are addressed
  30. 30. Rural VAS market
  31. 31. The Great Rural India opportunity Subscription Population Contribution Contribution 30% 70% Urban India 30% 70% Rural India • Telecom operators are seeing an immense growth potential in the rural sector both in terms of new connections & VAS. • As per market expectations, it is believed that of the next 250 million expected to go mobile; at least 100 million will come from rural areas.
  32. 32. Future of VAS
  33. 33. Innovative Uses of VAS • AdRBT (Ad Ring Backtone) wherein each time a person calls he/she hears an ad jingle instead of a ring tone. • Healthcare chains tying up with operators to alert patients via SMSs about their appointment date with a particular doctor or when their next dose of medicine is due. • GlucoPhone: A Cellphone for Diabetics that measures blood sugar levels, records and sends results to self and others and even manages meal plans • Speech recognition applications • LBS Apps: SMS sent by a tourist enables the taxi to locate him • Data: Traffic policeman can retrieve entire data about an offender by simply sending an SMS
  34. 34. Future of VAS • Till now the emphasis has mostly been on Voice & SMS based VAS • With the advent of 3G in India the VAS market is likely to grow to a larger extent in the near future both in terms of usage as well as new application development. • Some new VAS likely to boom in the coming years are : – mCommerce (including travel, shopping, movie tickets etc.) & Mobile marketing (like Ads on mobile, including product videos) – Location Based Services – Multimedia Broadcast Services :Mobile TV – Video calls/ conferencing – VOD (Video on Demand) or Live streaming video content • Some of these applications are available on the existing 2 or 2.5G network as well, but few suppliers and slow access speed has resulted in low usage • Mobile VAS in India has a long way to go
  35. 35. Thank You! Deepak Halan deepak.halan@imrbint.com IMRB International 8, Balaji Estate, Guru Ravidass Marg, Kalkaji, New Delhi – 110019 +91 11 42697800 (O) +91 11 42697906 (D) http://www.imrbint.com
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