IMPACT OF VALUE ADDED SERVICES ON THE SELECTION OF MOBILE SERVICE PROVIDER IN INDIA
#1

PRESENTED BY:
PIYUSH AGRAWAL

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IMPACT OF VALUE ADDED SERVICES ON THE SELECTION OF MOBILE SERVICE PROVIDER IN INDIA
INTRODUCTION

Mobile Value Added Services (MVAS) To Grow 70% YOY To Rs.16,520 Crore Market By 2010 – IAMAI & IMRB Report
Current Mobile VAS industry is estimated at Rs. 5780 crore
To Grow 70% YOY to Rs. 9760 crores by end June 2009 & Rs.16520
crores by end June 2010.
Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue.
MVAS currently contributes around 9 % to the operator’s revenue.
It is expected to increase to 10.4 % in the next 1 year and 12% by June 2010.
Key growth driver of MVAS would be the consumers’ desire of getting
more from their mobile phone and also decreasing Average Revenues Per User (ARPU)
Along with Entertainment VAS utility based services like location information, mobile commerce (M-Commerce) for mobile transactions and Local content rich services would show enormous growth.
India has 400 million mobile users with an ARPU of about Rs 200. Of this, the non-voice ARPU is about 10% (Rs 20), comprising P2P SMS (Rs 10), CRBT (Rs 4) and other VAS (Rs 6). The other VAS (which are non-network services) amount to about Rs 3,000 crore [400 million x Rs 6 per month x 12 months].This market for data services will probably grow to 2-3x in the next 3 years. The market itself is growing 25% per annum, and also the spend on data is increasing.
So, in about 3-4 years, this will be a $2 billion market (Rs 10,000 crore). The bulk of this spend will come from the top 10-20% of subscribers (about 100 million), each of whom can on average spend Rs 75-100 a month on various data services. By then, voice will have become a commodity being offered at about Rs 200 for unlimited talk time, so that even as the overall phone bill will stay the same or even fall, the contribution of data services will rise.
There is an opportunity to create companies which operate like a Data MVNO (Mobile Virtual Network Operator) or a Mobile Computing Operator in the country - focusing on high ARPU consumers and enterprises. The goal for this company would be to target the top 100 million consumers with operator-agnostic data services.
VAS Revenue Split
P2P SMS: 35%
CRBT: 25%
IVR : 15%
Downloads: 10%
SMS Subs: 5%
P2A (Peer to App) SMS + Misc: 10%
Entities in VAS Value Chain
Content/Application Owner - cos. like saregama/mauj/Rajshri who develop coyrighted content
Aggregator - aggregates content like games/wallpapers/ringtones and distributes it to suit customer needs [players : mauj, hungama mobile, indiatimes mobile etc]
Software developer - develops applications (like payment/games/middleware etc.) for mobile VAS [players - mchek/July systems/webaroo/affle etc]
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]
Operators still dominate the revenue sharing arrangement in VAS .
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]
Entities in VAS Value Chain..
Research Objective
To study the impact of VAS on the selection of mobile service provider
To study the difference in the behavior of prepaid and postpaid customers towards VAS
Research Methodology
 Primary Data: - Questionnaires
 Secondary Data: - Internet & Magazines
 Sample Size:- 123 respondents
 Sampling Type:- Convenience Sampling
 Data Interpretation and Compilation Tools:- SPSS & Microsoft Office
 Data collection procedure :- Questionnaire & Field work
Findings
The analysis of the questionnaire shows that majority of the people are willing to pay in the range of Rs 2-5 /min so we can say most of the people find them costly
As per the above diagram we can analyze that 41% of customers are satisfied with the current VAS but still there is a lot of scope for improvement as the other customers need to be converted into satisfied customers.
From the above drawn figure we can analyze that in terms of customer satisfaction Idea is leading the market due to its cost effective plans and innovative marketing strategies Vodafone is a close second due to its good and effective service and different types of VAS.
Prepaid connection comprise ~85% of total subscriber base
Almost half of Indians use ULCH (Ultra Low Cost Handsets)
30% of mobile subscribers in India have opted for caller tune services
75% of the target population feels that vas are too costly
Recommendations
VAS should be more cheaper and convenient as in today vas in mostly used by postpaid users but 80% mobile users have pre paid connections so if they start using them it will be beneficial for service providers
There is a lack of awareness about 3G service so the providers should try to educate them regarding this
41% of customers are satisfied with the current VAS but still there is a lot of scope for improvement as the other customers needs to be converted into satisfied customers.
As airtel and reliance have a very high amount of dissatisfied customers so they should try to make them happy to save them from big losses
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http://studentbank.in/report-value-added...-empirical
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