Acision sees huge potential for VAS solutions in the Indian market as operators desperately look for new revenue generators, and voice revenues consistently hit new lows. Udit Shanker, VP-South Asia, Acision in an interaction with TelecomTiger

Q.1) Voice revenues for Indian telcos are dwindling at an alarming rate. Under such a scenario the operators are keen to generate more revenues from VAS. But even here the uptake for VAS in India has not happened beyond few of the popular services and applications. How do the operators overcome this challenge? 

Ans: Besides attracting, acquiring and retaining customers, operators today need to acquire a steady source of revenues by introducing high–end value-added services (VAS) to balance the downward trend in ARPUs. Market statistics that support this are:

•           ARPU in the Indian market fell by 27 per cent from last year due to an increase in prepaid subscribers. (It is common trend in the industry that prepaid ARPU is generally lower than post-paid ARPU). Revenues from non–voice or data services grew by 33 per cent year-on-year. This figure includes SMS, Internet browsing and multimedia (IDC, 2009)

•           VAS in India accounts for 10 per cent of operator revenues, and is expected to reach 18 per cent, and generate revenues of US$ 2.74 billion by 2010. (Stanford University and consulting firm BDA, 2009)

Operators can augment revenue streams by offering more compelling VAS applications such as ringback tones, SMS personalization, visual voicemail, mobile email, mobile Internet, instant messaging and billing for SMS per character than per message. For example, operators can also offer messaging bundles to increase usage of SMS, the most popular and most frequently used VAS service in the market today. VAS such as SMS and MMS provide operators with an opportunity to generate revenue that can counter the decline in voice revenues and substantially boost ARPUs. Acision is at the heart of enabling the core VAS services in four domains; messaging, mobile marketing, mobile broadband and charging:

Q.2) What are the VAS services which you believe will see a positive traction in the immediate future?

Ans: We believe that mobile broadband is next high growth VAS that will see positive traction in the future. The increasing range of feature-packed smart phones with mobile Internet capabilities, access to high-speed 3G networks, and plug and play laptop dongles will play a key role in boosting mobile broadband traffic and usage.

Q 3) Another concern for the telcos is that there are a significant number of inactive subscribers, which has increased with introduction of lifetime validity vouchers. Can VAS help operators tide over this issue?

Ans: The Indian mobile connection market continues to be dominated by prepaid subscribers, with industry analyst Gartner predicting the growth of the Indian prepaid subscriber base to reach over 92% of the total connection base by 2012.

Prepaid subscribers are the hardest segment for an operator to retain, as the churn rate amongst this group is very high. The reason for the high churn rate is due to prepaid subscribers being cost conscious, and tend to search and adopt the best deals in the market. Typically, prepaid subscribers do not stay with one operator for more than 6 months. Attracting and retaining prepaid subscribers is a challenge faced by many operators.

One highly effective tactic to retain prepaid subscribers and foster loyalty is to provide incentives to the users when they top up. For example, if a user balance is running low at INR50, they can top up to INR200 and receive 20 free SMS messages or 20 minutes of free voice calls.

For a prepaid user who has been loyal to the operator and is reaching the 3-month mark or 6-month mark, the operator can offer incentives for the user to the stay with the operator. Incentives such as 50 bonus voice minutes at their next top up, or free use of ringback tones for 3 months at their next top-up. Operators can also offer bigger rewards like free handset vouchers for prepaid subscribers who have constantly topped-up for a period of 12 months.

As prepaid services mature in the Indian market, it is imperative that operators consider replicating post-paid like bundles for the prepaid segment, such as increased SMS bundles, MMS bundles, voice bundles and even mobile broadband data caps.

Q 4) Players such as Bharti Airtel have been working on developing an in-house VAS platform capable of supporting all VAS applications and services. Do you feel threatened by such a move in futu