Value Added Services aka services other than voice services are a huge market potential for all mobile operators.
This time we got lucky to get a chance to have a Q-A session with Sukesh Jain, Head, VAS & Content, Bharti Airtel - India's largest mobile operator.
He discussed the focus of Airtel on VAS, its pricing, 3G VAS, m-Commerce and other related stuffs and gave his thoughtful comments.
TT: Earlier we consider non-voice services are value added services. Currently, is it true that SMS and data services are the key contributors of VAS revenues? Also why do you think that other services under VAS are not popular or contribute a larger chuck to Airtel's VAS revenues?
Sukesh Jain: Yes, all non-voice services are tracked separately as ‘non-Voice revenues’. SMS and Data are surely some of the biggest categories in non-voice revenues.
However, contrary to popular opinion, there are multiple other services which are significant contributors to our VAS revenue. For instance, Hello Tunes, the ring back tone service, is one of the mainstay services of the VAS business. Other important revenue sources for the VAS business include services around Faith, Cricket & Sports, WAP downloads, Movies & Celebrities, etc.
Going forward, Airtel sees several new growth genres like Education, location based services and Health.
TT: Do you think that VAS prices are high and hence people consider offering like CRBT, CelebrityTalk, etc as luxury and hence poor adoption. Do you think that with a price rationalization will help massify VAS?
Sukesh Jain: I think that VAS prices are quite rational, else we would not have seen a healthy penetration of first generation VAS like Hello Tunes. Celebrity Talks also have seen upwards of a million subscribers - which is quite healthy given that the service has been introduced in recent times.
I think that given the diversity of a country like India, the larger issue for telecom operators is not price but discovery! How can consumers find the services that give them the content of their choice?
However, as we evolve and customers start looking beyond voice, I think that our ‘pricing + product + content’ strategy will help us to massify VAS in the country.
TT: Are utility services like weather alerts, agricultural alerts, etc popular in villages and e-education services in urban areas? Is there a clear preference for services in urban and rural areas?
Sukesh Jain: Entertainment and Music related services have led the adoption of VAS across segments and geographies - urban and rural included. We are seeing a healthy offtake of Cricket and Faith across segments.
Niche services like Agricultural Alerts, Education, Health, etc have see strong adoption and there is a clear trend visible for such utility services.
TT: m-VAS or m-Commerce has huge opportunity in India. What is Bharti Airtel doing to make these popular?
Sukesh Jain: Like mentioned earlier, the larger issue in the mass adoption of VAS is discovery of content. I think that will continue to pose a challenge for us and the industry. We have been doing lot of customer education on the offline and online platforms. Airtel has been regularly using mVAS and mCommerce in its marketing campaigns, helping in stronger awareness of such products and services.
TT: Is the limited spectrum for 3G also a major constraint for video based VAS?
Sukesh Jain: In India, it is early days for Video based VAS on mobile. However, customer response to such services has been a positive one. While it has made good early in-roads, there is a lot of scope for expanding the portfolio and will certainly not be limited by any spectrum issues. I think adoption of such services will accelerate as 3G adoption leapfrogs across India.