Growing VAS popularity in India

Growing VAS market

According to Internet and Mobile Association of India (IAMAI), the mobile content market in the country for 2004-05 was worth Rs 558 crore and is expected to reach Rs 1,802 crore by 2007.

Preeti Desai, President, IAMAI says, “The increased interest in and demand for personal expression applications across mobile users is driving the applications and content market. Entertainment and content applications offered by content publishers, aggregators and operators are increasingly central to the revenue and competitive positioning.”

According to Arpita Pal, Principal Consultant, PricewaterhouseCoopers, the content market comprising mobile gaming, ringtones, ringback tones and wallpapers is expected to increase tenfold in the next five years. Pal points out that mobile operators are working towards offering 3G to their subscribers to support content-rich applications.

Though none of the VAS providers is ready to divulge its revenues, there are other indications of their reach and demand: take any reality-based programme on television and you see the use of four-digit numbers for polling.

"We will use this venture capital to create a market for 3G, scale up our infrastructure, and expand into other countries" -Arun Gupta CEO, Mauj

The potential of the Indian content market can be gauged from the recent investment that Mauj Telecom received. The company got $10 million venture capital funding from a consortium led by WestBridge Capital Partners; Intel Capital and Sequoia Capital are the other members of the consortium.

Arun Gupta, the CEO of Mauj, explains how the funds will be utilised. “We plan to use this venture capital to create a market for 3G applications, scale up our infrastructure, and expand into geographies like the US, Britain, Canada and Africa in the areas of mobile music and gaming.”

"Ringtones downloaded from the Internet or with a short code service both need SMS. Thus, it is by far the largest revenue generator" -Rajiv Hiranandani Country Head, Mobile2win

Presently, the Indian mobile market is riding high on rich media content that consists of SMS, music downloads, wallpapers and gaming, with SMS being the biggest revenue generator. Reasons Rajiv Hiranandani, Country Head, Mobile2win, “Anything that you download needs to be initiated by an MO (mobile originator). Ringtones downloaded from the Internet or with a short code service, both need SMS. Thus it is by far the largest revenue generator.”

Music comes next. According to a November 2005 survey by Soundbuzz (a one-stop online and mobile music company) that was based on reports from analysts and other sources, mobile music downloads (including ringback tones) in the Indian market are valued at Rs 400 crore. Approximately Rs 50 crore to Rs 60 crore was paid in royalties to the music industry in the past 18 months.

Gaming is still restricted to a certain age group (between 14 and 24), but it could take off with 3G. According to a Nasscom report, the mobile game-development industry is a $100 million business in India, and is growing at 100 percent year-on-year. By 2010, this industry is expected to be worth $500 million. Indian companies could book an additional $130 million meeting local demand for mobile games by then, up from the current $20 million. Presently, these games are priced between Rs 50 to 150. “In India, there are three price points Rs 50, Rs 99 and Rs 149; these depend on the brand and how exciting or relevant the game is. A generic game would cost Rs 50,” says Hiranandani. Mobile2win created a sort of record with its games on Bollywood themes. Till date its Sholay has been downloaded almost 1,50,000 times on to mobiles (excluding Reliance customers).

Says Rajesh Rao, CEO of Dhruva Interactive, whose games are popular among the gaming fraternity, “People are looking forward to sampling a variety of content on their wireless devices, and the number of VAS consumers is increasing.”

Another reason the mobile gaming market will grow in India is that it satisfies the aspirations of the common man. A niche segment has access to high-end PCs and consoles, but they are expensive for the common man. The mobile revolution has enabled millions of people to access games inexpensively.

Hiranandani opines that the content market has become competitive due to push from operators such as Reliance. “A few months ago Reliance was not charging for the content it was providing. It’s only now that it is charging. This means that now content providers are willing to develop quality content and deploy it across operators to make money.”

Along with the push from operators willing to charge their customers, experts feel that there is growing demand for content from tier II and III cities. Many feel that though the metros are growing in population, the demand for connectivity there has reached saturation point, hence players like BSNL, Airtel and Reliance are looking at tier II cities to push connectivity and content.

This shows that along with Mobile Marketing, there are various possibilities in the Mobile Content and Value Added Services segment, making Advertisers flourish there Products,Services and Brand-name across the globe.

source: expresscomputeronline. com