Time for Real VAS?

Update: Sep 16th 2011 – More detailed article here.

With impending blockage of SMS spam from 27th September, and requirement of reconfirmation of subscription at every renewal, there is a potential for large scale shift in Mobile VAS. The two “facilities” mentioned above have led to a business model for VAS driven by push and dubious billing. The owner of customer databases land up being the king – service innovation is only as valuable as the marketing push one can provide behind it, in competition to every other service.

If indeed the above mechanisms are implemented well, VAS has the potential to become a pull business rather than a push business. It might mean that innovations that create and meet real consumer demand acquire premium, and distribution channels have to align to those innovations rather than the other way round.

While this may mean short term compromise in revenue, ultimately this might create an innovation driven VAS ecosystem. Perhaps good news for entrepreneurs who have been clamoring for a more level playing field – if they can meet the innovation challenge.


6 Responses to “Time for Real VAS?”

  1. Sundar says:

    Yes, “transactional SMS” in TRAI’s lingo is a good step in enhancing the value of pull-based services. There’s a caveat there, but, let me come to that later.

    There are many things at play here:
    1. A lot of marketing spam has been taken out of the system.
    2. The overall number of SMS also come down drastically because of the 100 SMS/person limit.
    1&2 together means deflation of the SMS currency. That is, people can afford to pay more attention to each SMS from now.
    3. Pull services have been allowed.
    4. Unrelated to the TRAI regulation, SMS, voice, IVR gateways are becoming self-service cloud services. [Our wakeup alarm call service for rail passengers, Pyka, has benefitted from this commoditisation/cloudisation: http://www.ideophone.in/blog/pyka-cloud-telephony/ ]
    5. For most transactions that happen online or offline or on mobile, SMS has become the de facto “last mile” equivalent.

    All this means that, a new crop of entrepreneurs can build services (shameless plug: http://blogs.wsj.com/indiarealtime/2011/08/03/text-messages-tell-indian-travelers-where-to-get-off/ ) over SMS (keeping in mind that the medium will change in the longer term).

    The caveat now. The TRAI regulations are a bit ambiguous and arbitrary about what constitutes a transactional SMS. So, gateways like SMSGupShup are actually treating query-response messages also as promotional. I hope that TRAI allows service-level opt-in.
    The problem is evident in http://www.medianama.com/2011/09/223-how-trai%E2%80%99s-sms-guidelines-are-killing-my-startup-dayson-pais-textme/ and my comment there: http://is.gd/LddgJf

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