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BANGALORE, INDIA: A couple of years back, mobile operators only focussed on expanding their networks and improving their subscriber base. Today, to supplement stagnant voice revenues, cellular operators are turning to VAS to boost revenue in both data and value-added voice services.

The VAS market, currently valued at Rs 65 billion ($1.35 billion), constitutes about nine to 10 per cent of the total revenues for telecom operators in India and is expected to be 40 per cent of total revenues of operators in the next three-five years.

Dr. Vinod Vasudevan, Group CEO, Flytxt, discusses the industry trends and some of his plans for 2010 in an interview with CIOL Excerpts:

Q: Do you seen new services gathering steam in 2010?

Growth of value added services in India is bound to be phenomenal. Presently, the major driver is person-to-person (P2P) messaging but overall, the ratio of P2P as a percentage of VAS revenue is coming down gradually.

India is a country with lot of passion for musical and sports.  Mobile entertainment will pick up in a big way. Location based services and m-commerce are also expected to grow in popularity over the next few years.

Q: How do you see the VAS market grow in the aftermath of 3G/WiMax?

The introduction of 3G services is a tremendous leap for the VAS industry. With 3G services ironing its way in, the VAS industry is expected to increase its share manifold, with some industry estimates pegging the figure at Rs. 200 billion by 2015.

3G is expected to enhance customer experience. It will be possible to deliver rich media content and services with a 'wow' experience. Data services should see a surge in adoption and usage. Video streaming will open up a lot of possibilities for innovative VAS.

It will really be interesting to watch the WiMax proliferation. It could really change a lot of rules of mobile /VAS game.

Q: How can VAS reach beyond info-entertainment and serve in increasing usage and ARPU?

Mobile entertainment has evolved in many ways. Initially, the only form of mobile entertainment was ring tones and wallpapers. With an increase in the usage of advanced mobile handsets, we are seeing an increase in the adoption of music and gaming services among the subscribers.

Besides music and games, infotainment (contests, jokes, astronomy and news), cricket and social networking are other services that are catching up with the customers.

However, success of mobile entertainment services depends on how mobile operators and other service providers will promote these services among subscribers. Efforts should be made to make subscribers who have shown affinity towards ring tones and wall papers aware of these new entertainment services.

Q: What are the future plans in VAS arena?

Today, many FMCG companies have even started reaching out to their customers through VAS as a medium.

Video Streaming/Mobile Advertising/Cell Broadcasting are some of the latest offerings. These products have proved to be successful in the market within India and abroad. Once the 3G is launched in the market, we will see a lot more products and services being offered.

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