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.

Thoughts?

Alok Mittal

Alok is a first generation entrepreneur, currently CEO and Co-founder of Indifi, a platform for small business lending.

Alok is a board member at TiE Delhi, and a founding member of Indian Angel Network.

Prior to Indifi, Alok ran India venture operations for Canaan Partners in India, with focus on internet, technology and BPO space. Earlier, Alok cofounded JobsAhead.com, a leading job portal which was acquired by Monster.com. Alok is a computer science graduate from IIT Delhi and, postgraduate from UC, Berkeley.

The views expressed on this site are personal views of Alok, and do not constitute an offical opinion of any company or organization.