Indian Telecom Sector Non-Focus Towards Consumer Awareness- May Hurt Business Prospects

Indian Telecom sector is facing tough time for the last 3 years and is expected to experience reduced level of tough business environment. Telecom service providers blamed regulatory un-certainty for tough business environment and lack of product adoption by Mobile Subscribers but that is partially correct. Telecom Regulatory Authority of India (TRAI) and Department of Telecommunication (DoT) India must be appreciated for coming out with mobile subscriber centric and supportive regulation such as Mobile Number Portability (MNP), Mobile Value Added Services (MVAS) and its amendment, Roaming and many more.

Indian regulator were forced to take such a drastic move as mentioned above post multiple and continuous reporting from media and mobile subscribers of unwarranted activation of services, billing and lack of customer support. Regulators moves were focused to bring in competitiveness among Mobile Service Providers and thus to bring back focus on service or network Quality of Service in order to retain or acquire new mobile subscriber. The current Telecom environment and its competitiveness are closely knitted with services or products which are influenced by enforced regulatory to the maximum level.

It raises a simple query that

• How many Mobile Subscribers are aware about their rights?
• How many of Mobile Subscribers are aware about the process of activate or deactivate any VAS services?
• How many Mobile Subscribers are aware about the process to escalate Unsolicitated commercial communications violating their privacy?
• How many Mobile Subscribers are aware about process to escalate billing related concerns to their service providers as well as to regulators?

Based on survey (1500 Mobile Subscribers), the results were shocking as less than 1% were aware of process and generic answer were that we try to get it resolve through customer care and being charged for the same.

Somehow, Somewhere Mobile Service Providers are still missing the link of getting connected directly with Mobile users. Mobile Service Providers analyzed any product or service or application adoptions based on the said offerings activation factor but they must realize that it is difficult to analyze a particular product success when multiple products are hosted and mobile users are not aware.

In most of the new product launch, 6 are going for broadcast messaging to all active MVAS user base or print media such as newspapers or TV advertisement. Mobile Service Providers at an average spend around 5% of their total revenue in ad spend but at the same time they failed to create an awareness among mobile subscribers which focuses on mobile subscriber rights. Different Mobile Service Providers are offering multiple toll free numbers as well as message formats to retrieve automated information for mobile subscribers. Most of the Mobile subscribers don’t remember those toll free numbers or finds it hard to replicate the message format to retrieve information but are forced to rely on Customer Care.

Isn’t it true that, there is “NO” print media or TV communications from Mobile Service Providers creating awareness about mobile subscribers daily Telecom related problem such as product performance, activation /deactivation request, and billing issue. Mobile Service Providers argue that they are running customer care (CC) and also advertise their customer care number through multiple medium. It raises another query around consumer awareness through print media, campaign management and TV advertisement for above mentioned issue. How many times, any mobile subscribers have seen any print media awareness program regarding MVAS, MNP, Roaming and Billing?

The Subscriber feels helpless post continuous attempt to launch simple complaint. It triggered negative response from subscriber to subscribe or renew new mobile value added services such as music, ringtone, Infotainment post double consent enforcement under MVAS regulation amendment. Under double consent regime, service providers must take mobile subscriber consent before charging subscriber for any services or products. The recent drastic fall in MVAS activation and exponential rise in MVAS deactivation is nothing but early warning system. The telecom ecosystem players must realize that it’s not regulation but lack of offered value attached with offered value added service or lack of awareness about offered services or products.

Indian Mobile Service Providers do not have an alternative but to improve on consumer awareness program without fearing that awareness is going to create an environment where mobile subscribers will be deactivating already running services or product but instead of that it will attract many new mobile subscribers to adopt existing or new services.

The further delay in adopting proactive approach towards Mobile subscriber awareness program by Mobile Service Provider will have cascading impact on Telecom ecosystem players. They would be rest assured that in any circumstance their concerns would be resolved on the fly and that is going to trigger higher adoption of new or existing services or products.

In my point of view, the current state of Indian Telecom Sector offer highest level of opportunities for innovative proposition to bring back rapid eroding value added subscriber base.

New Wireless Service Providers License By Indian Government Triggered MVAS Downturn

Once the darling of Indian wireless segment, the MVAS service providers are now facing identity crisis. Late 90’s and early 2000’s, the immense underlined potential around Mobile Value Added Service (MVAS) caught many eyebrows and subsequently few innovative minds turned Entrepreneur dived into MVAS bandwagon to make the most of it. The unprecedented Operator driven and controlled mobile subscriber growth offered MVAS service providers to collaborate with Indian wireless service providers based on wireless service providers favored financial agreements.

The On Net deployment environment governed by wireless operator offer MVAS providers an opportunity to focus on product more than servicing. MVAS service providers such as Onmobile Global, Hungama, Comviva, Hungama and many more achieved impressive YoY growth. Observing quick success through bundled or replicated product line on basic SMS and IVR based mechanism attracted many small companies to try their luck in MVAS segment. The auto recurring revenue stream with double digit growth assured MVAS providers regarding Technology and Consumer trend but missed to read continuous indication of Indian government and regulators to cash on to growing wireless subscriber base.

MVAS ecosystem players as well as Industry analysts came out with very aggressive forecast and equity market that also rewarded listed MVAS service provider’s equity investors. The induction of new wireless service providers brought cheers within MVAS service providers but changed the ecosystem of MVAS segment the most. The tariff war initiated by Regional and Challengers with Incumbent Indian Wireless Service Providers impacted MVAS providers the most. The freebies such as free voice minutes, SMS, Music service offered by new entrant created buzz with Subscribers and Incumbent experienced more than 7-8% churn rate as both rural and urban subscribers opted for low tariff based services by regional and challengers.

The sudden tariff assault on Incumbent forced them to restructure their service assurance and delivery and thus pressurized MVAS service providers to surrender more revenue, resizing VAS service portfolio as well as servers, removal of VAS services with low user uptake. Incumbent changed their strategy and in order to keep the cost lower; initiated Off Net service ennoblement for their subscribers to counter regional and challenger service offerings.

The Off Net service ennoblement by Incumbent acted as “MVAS FDI for many innovative MVAS companies spread across different geographies to tap into vast Indian subscriber base”. The move also impacted dearly to Indian Wireless Subscriber Provider but that will be part of another article.

The above move quickly changed the MVAS dynamics with feature and technological superior unified messaging, unified communications, rich communications etc. The incumbent MVAS tried to match new entrant product line but met with another onslaught in the form of MVAS regulation. It is highlighted through many articles for the last many years that fall in MVAS revenue is primarily driven by MVAS regulation but the reality is mentioned above. The “government and regulators move to bring in additional wireless service providers without setting ecosystem centric guidelines”. The knockout punch came out on cancellation of 2G license by honorable Supreme Court of India. It sent the ripple factor on MVAS players with higher cost than revenue and in-turn initiated unprecedented recession in Telecom sector. The MVAS regulation and its amendment should not be blamed for the downfall of Indian MVAS ecosystems instead MVAS players must take the onus due to lack of strategic and tactical moves with dynamically changing industry dynamics.

MVAS Activation Hits Lowest Level – What about User Initiated MVAS Deactivation

The concern of MVAS service providers in recent month is falling MVAS adoption by subscribers due to regulatory enforcement of Consent Gateway. In TRAI released report, the MVAS activation fell from 69 million in June 2013 to 27.65 million in August 2013 end. It represent 40% fall in MVAS activation and service providers are blaming squarely on Consent Gateway regulatory enforcement.

TRAI released report does not indicate any deactivation initiated by subscriber by calling service providers customer care number or network agnostic TollFree number of 155223 for MVAS activation/deactivation

Indian print media on multiple occasions highlighted the unwarranted MVAS billing challenges faced by users especially rural based. It is also interesting to know that most of the common subscribers are not aware of deactivation TollFree number and faces many hurdles in getting their MVAS centric concerns registered with their serving wireless service providers.

TRAI should also release user initiated MVAS deactivation request to highlight the un-highlighted concerns of subscribers. The drastic fall in monthly MVAS activation is nothing but validation that everything is not fine with MVAS service delivery and Billing. TRAI should also come out with another amendment on MVAS in which the ecosystem players must allocate part of total generated MVAS towards the awareness of mobility subscriber.

It is widely expected that TRAI tentative next move may act as trigger for the consolidation in Indian MVAS ecosystem as well as differentiator for many mobile operators.

Mobile Value Added Service without Consent Activation Complaint Far From Reality - Indian Environment

Mobile Value Added Services are making all rounds of talk post MVAS regulation enforcement in India. Indian wireless operators and value added service developers strongly opposed MVAS regulation during consultation with TRAI. Even GSM body COAI opposed it vigorously but failed to stop consumer friendly regulation. TRAI released report claimed as loud success to reduce the number of complaint around mobile value added service is far from real picture. As per TRAI report, in June 2013, the total number of VAS complaint received stood at 259476 whereas the complaint alleging mobile value added service activation was only 104996. Post MVAS regulation amendment enforcement from 1^st July2013, TRAI claiming that due to amendment the number of total MVAS and alleged activation complaint went down to 95510 and 9338 respectively in August 2013. By demonstrating huge drop of 60% and 90% in total and alleged activation complaint is none other than self acknowledgement of successful enforcement of regulation. Based on reports, India total MVAS user base is around 150 mn and if only 0.1% of the total VAS users are only facing issues then it’s hard to accept. The reality is different, majority of user’s donot even know the reach out number to launch complaint and even though user’s achieve success in launching complaint, they do not know the final outcome of the same. One of my know is charged heavily for various MVAS services without requesting for the charged MVAS and he tried to launch an complaint through different ways for the last many day. It is also interesting to share that after repeated attempt he spent more money than what he was charged and am not talking about the mental agony and time cost during his attempt. The reality is that the released numbers may reach to unhandled level if wireless operator creates awareness around it. I have seen many advertisements by wireless service providers promoting their new launches but failed to see any awareness advertisements which clearly help their end consumer’s.

Mobile Value Added Service without Consent Activation Complaint Far From Reality - Indian Environment

Mobile Value Added Services are making all rounds of talk post MVAS regulation enforcement in India. Indian wireless operators and value added service developers strongly opposed MVAS regulation during consultation with TRAI. Even GSM body COAI opposed it vigorously but failed to stop consumer friendly regulation. TRAI released report claimed as loud success to reduce the number of complaint around mobile value added service is far from real picture. As per TRAI report, in June 2013, the total number of VAS complaint received stood at 259476 whereas the complaint alleging mobile value added service activation was only 104996. Post MVAS regulation amendment enforcement from 1^st July2013, TRAI claiming that due to amendment the number of total MVAS and alleged activation complaint went down to 95510 and 9338 respectively in August 2013. By demonstrating huge drop of 60% and 90% in total and alleged activation complaint is none other than self acknowledgement of successful enforcement of regulation. Based on reports, India total MVAS user base is around 150 mn and if only 0.1% of the total VAS users are only facing issues then it’s hard to accept. The reality is different, majority of user’s donot even know the reach out number to launch complaint and even though user’s achieve success in launching complaint, they do not know the final outcome of the same. One of my know is charged heavily for various MVAS services without requesting for the charged MVAS and he tried to launch an complaint through different ways for the last many day. It is also interesting to share that after repeated attempt he spent more money than what he was charged and am not talking about the mental agony and time cost during his attempt. The reality is that the released numbers may reach to unhandled level if wireless operator creates awareness around it. I have seen many advertisements by wireless service providers promoting their new launches but failed to see any awareness advertisements which clearly help their end consumer’s.

Indian Wireless Mobile Subscriber Growth Facing Stagnation

The growth story of Indian wireless subscriber base is experiencing near to zero percent growth. Post achieving 900million plus subscriber base during low tariff regime, the subscriber addition growth muted down. For the last one year, more than 60 million subscribers surrendered their wireless mobility connection for one or another reason. The slews of regulatory enforcement such as MNP, Roaming, and MVAS also helped subscribers are maintain single connection compared to multiple connection. As per TRAI released report for the month of July 2013, the wireless subscriber base increased from 873.36 Mn to 874.88 Mn MoM and achieved less than quarter of percentage point growth. On analyzing last 12 month subscriber growth, it is evident that few months of growth and de-growth is neutralizing the net subscriber growth. Moving forward, it is expected that Indian wireless subscriber base would settle around 850 million post connection cleanup process of BSNL and other wireless service providers as they are still reporting high non VLR active subscriber base.