Changing face of Mobile VAS

We have had several discussions on Mobile VAS on venturewoods earlier. Many of us have noticed the transition away from operator-led services – for reasons to do with operators (revenue shares, non payment of dues), service operators (excessive push, billing frauds), as well as regulators (ad-hoc regulations). Last friday, Canaan did an event around emerging mobile services in Bangalore. The panelists included people trying to build mobile subscription, payment as well as advertising services. Interestingly, the operator-led world was conspicuous by its absence.

Is there still a future of operator-led services? I would think so. Operator channels still remain the channels of mass distribution of mobile services. They also remain the most convenient payment mechanisms. The trick perhaps is for operators to recognize these strengths, and focus on them. Other elements, such as branding, consumer experience management, and service delivery are best left to a distributed ecosystem of providers.

Within our portfolio and outside, we are beginning to see operator-led service providers morphing their services to take more ownership of end-consumer experience. Be it in consumer directed analytics, delivery of services, or better integration of operator-led services with other touch-points like the internet. On their part, operators would be well served to re-establish consumer confidence by clearly outlining their commitments to consumers – the “bill of rights” of a mobile consumer in India.

2 Responses to “Changing face of Mobile VAS”

  1. Alok Mittal says:

    Abinash – good points. I don’t think I am envisaging a reversal. The reality is that in India, [95%] of VAS revenue is still operator based. so what operators need is not a reversal, but a way to stay relevant.

    The startup sentiment today has swung in the direction where there is an argument being made that operators will become passive entities in the VAS business. I am not sure that is the case – I think there are businesses to be built by helping operators evolve. And that is going to happen only if operators want to.

    4% for payment through the operator – ain’t happening (anywhere in the world). 30% across operators in next 24 months – I would be a happy camper.

  2. Abinash Tripathy says:

    @Alok – thanks for the post and teeing up a discussion on this topic. Where is the data to support this? worldwide, there has been a steady decline in operator led services as customers are using services from the apple and google walled gardens. The 150K+ companies publishing apps are not building anything for the operator walled garden.

    In markets like India where people don’t have credit cards, I agree that the operator has a billing relationship with the customers which positions them strongly to be able to monetize. But, I feel that if customers buy smartphones and download apps from the apple or goolgle walled garden, then the operator will only make a small cut out of the payment transaction (~4%) for providing carrier billing while the google ecosystem will make 96% of the revenue.

    I am curious to understand how you are spotting this trend.

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