Mobile Monday:

1
Mobile Monday

• Mobile VAS and Indian Market

2
Indian Telecom Large Growing
Penetration/Subscriber Base

• Telecom Sector
• 140 million phones with Teledensity of 12.75
  (Mar. 2006)
• 90 million mobile phones including WLL-M
  (Teledensity - 8.25)
• 50 million fixed phones (Teledensity - 4.5)
• Out of 32 million phones added during last year,
  about 31 million are mobile phones
• More than 4 million subscribers added per month
  (growing at 35 p.a.)
• Others
• No. of TVs- 100 million
• No. of Cable TV Connections- 62 million
• Internet Connections- 7.5 million (30 million
  users _at_ 4 users per connection)
• No. of PCs- 16 million
• Broadband subscribers 9.15 lakh
• Mobile devices will be the biggest mass market
  reach platform!

3
What is M-VAS?

• Services provided on mobile devices (beyond peer
  to peer communication) are making mobile phones
  as an integral part of life. Increasingly playing
  a role of
• an entertainer
• an informer
• a secretary
• a guide
• a companion
• a retailer
• a platform for promotion/advertisement

4
Typical M-VAS

• Entertainment
• Ring-tones
• Color ring back tones
• Wall-paper
• Mobile games
• TV related services (e.g., voting)
• Music download
• Video download
• Horoscope
• Jokes
• Dating
• Adult services
• Mobile TV

• Information
• Mobile marketing/advertisement
• Weather/News services
• Directory services (Yellow pages)
• Customer care
• Exam results
• Financial info (stock quotes)
• Internet / Mobile email

• Commerce
• Mobile banking
• Ticket booking
• M-wallet / Micro payment
• Shopping

5
Market Share
Source SSKI Report
6
Current M-VAS Status

• Content is the major share of M-VAS revenue
  share (60)
• Most of the services are provided over
  SMS/Voice/WAP
• Most of the services are controlled by the
  operators walled-garden approach
• Operators make the lion share (60-70)
• Services are less appealing slow long user
  response time lack rich intuitive UI
• Service configuration is painful or limited for
  most users

7
What sells, where and when

• Contents
• Ring-tones (Bollywood, Regional, Devotional)
• Games Cricket, Racing, Bollywood (male targeted
  content)
• Delhi, Rajasthan, Karnataka, Andhra Pradesh,
  Punjab and Maharastra are amongst the top circles
  M-VAS
• Access/Download spikes at lunch time 1 - 3 pm,
  traveling back home 5 - 7 pm and after dinner 9
  -12 am

8
RWorld An elaborate M-VAS platform
Source Reliance Infocomm Documents
9
M-VAS Trend

• M-VAS will move beyond SMS/Voice Growth in
  M-Commerce, Mobile TV Internet based services
  (GPRS/USSD based)
• Operators need to open their walled garden to
  allow 3rd party to host services (On I-mode
  platform 2000 walled garden services 50000
  open garden services)
• Operators need to change/adapt their revenue
  sharing and business models to encourage newer
  and better content and service provisioning
  more open mind set with regard to content
  services ownership
• M-VAS will become a significant platform for
  advertisements which will drive down VAS prices
  and broaden adoption base
• Services will target specific market segment /
  verticals Youth/Women/Traders/Adult (location /
  context based)
• Compelling and locally relevant content /
  services highly adapted to mobile terminals and
  display/viewing capabilities
• More payment options e.g., subscriptions /
  pay-per-view / sachets / free-trails/preview
• More savvy MVNOs to drive the adoption, branding

10
Will Indian M-VAS market explode?

• Falling ARPU Rs. 1299 (1999) to Rs. 374 (2005)
  will push operators to accelerate M-VAS growth
• Customer willing to pay premium for value-add
  services (anywhere between Rs. 3-30)
• Mobile devices are set to become the platform of
  mass market communication bridging the digital
  divide between rural / urban India creating
  more uniform demographic reach
• Lower prices due to advertisement/service
  sponsorship
• M-VAS revenue for Indian operator is between
  7-10 of their total revenue (Europe 10-20,
  South Korea/Japan 20-25)

11
M-VAS Accelerators / Inhibitors

• Accelerators
• Availability of cheap color / data capable phones
• Easy of use (less of clicks intuitive)
• Personalization
• Cheap GPRS
• Segment specific services
• Regional language support
• Advertisements / Sponsorships

• Inhibitors
• Poor discovery mechanism
• Limited of attractive services
• Small display screen
• Low recall of Keyword / Codes
• Plethora of non-standard handsets / platform
• M-commerce limited by credit card penetration /
  prepaid balance / regulation Slow learning curve
• Difficult service configuration procedure

12
Growth and Pricing Chicken or Egg issue

• Will there be mass adoption when prices drop?
• ROI vs. seeding time for non entertainment app is
  high
• Till there are enough subscribers, does it make
  sense to invest in innovative services network
  (3G) and subscribers will not ask for it if there
  isnt enough on offer (both quality quantity)
• Is creation and growth of killer M-VAS dependent
  on device/network capabilities? Can such be
  created for existing?

13

• Thank You!