India mobile based services can be a $10 bn industry

The mobile value added services (MVAS) business in India is in need of a paradigm shift and generation of regional content aimed at rural masses would make it a $10 billion industry by 2015, say industry insiders and sector specialists.

Currently, the MVAS market is around $5 billion, according to a study by the Internet and Mobile Association of India (IMAI) and research firm IMRB.

“The focus has to be on rural products. Services like weather forecasts, farming techniques and m-banking will rule the roost,” Udit Shankar, chief executive officer, TeleDNA, told IANS.

Despite the launch of high-speed 3G services and low-cost handsets, the business has not seen a major expansion due to expensive Internet services and lack of proper knowledge among the distributors as well as the customers about the services and their benefits.

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[caption id=“attachment_371406” align=“alignleft” width=“380”]  Operators should markets services to more rural consumers: AFP[/caption]

“These customers need not only cheap devices but value for their money. Thus low cost devices, equipped with local content and proper guidance, would lead to the growth of MVAS,” Shankar added.

Sensing such an opportunity, state-owned Bharat Sanchar Nigam Limited (BSNL) is expanding to rural areas.

“Through services like m-banking and m-commerce MVAS in rural areas is likely to witness massive acceptance and this will further improve the revenues of operators as well,” said BSNL Chairman and Managing Director R. K. Upadhyay.

BSNL will launch a video-on-demand service in a month’s time.

Other operators such as Bharti Airtel and Vodafone have started their mobile banking services.

According to VAS solutions provider Comviva, content in regional languages will drive user demand.

“Smaller towns and villages now require content associated with health and education in a big way; providing them these requirements in their language will give a fillip to the operators and users alike,” Milind Pathak, vice president, Asia marketing unit, Coviva, told IANS.

Regional language speakers are the large majority compared to only seven percent English-speaking population.

Analysts belive that wider availability of smartphones of lower price points would boost the earnings from mobile VAS.

Out of the 50 million new devices sold in the first quarter of this year, smartphones constituted only 2.7 million. While the mobile subscribers base has touched almost 930 million, the total smartphone base in the country is around 27 million.

According to research firm Gartner, rural areas offers a huge bowl of opportunity to service providers.

“The rural areas give a lot of opportunity to the operators but having operations in these areas is equally difficult. However, a player can still reap the benefits if it plans right,” Neha Gupta, senior analyst, Gartner, told IANS.

“Services such as weather forecasts for fishermen and mandi rates for the farmers are already being used in some places. New contents based on video services will now rule the market,” she added.

Rajan Mathews of the Cellular Operators Association of India (COAI), the GSM operators’ lobby, however, has a slightly different take on this. He said MVAS will be driven on a segmented basis. While certain services will be a hit in rural areas, others will be taken up by elite customers.

“Services offered by the government such as m-education, m-entertainment and m-commerce would clearly have a high resonance in rural areas, while other such location-based services like navigation, finding shopping spots and travelling will be a hit among the city dwellers,” said Mathews.

IANS