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.

Continuous Downfall In MVAS Complaint And Billing Without Subscriber Consent – Far From Reality

The Indian Telecom Sector is experiencing regulations compliance deadline followed by regulation amendments. Telecom Regulatory Authority of India (TRAI) swing into action from 2010 to achieve higher protection and flexibility for subscriber. The intention was to create competitive environment through MNP, MVAS regulation and in-turn enforce better customer interaction management by wireless service provider. The broader vision was to enable subscriber choose their services or product or applications or even wireless operator.

During consultation processes with TRAI, most of the MVAS companies supported wireless operators to maintain the same mechanism running at that point of time instead of proposing new mechanism in order to protect their own interest too. The MVAS companies fall in the same cubical of wireless due to the fear factor of wireless service provider’s backlash in case of other way than network providers. The successful compliance by wireless service providers immediately opened new challenges for MVAS companies. MVAS companies started showing vulnerability in converting their service offering into paid service in MVAS regulatory environment of user initiated service request compared to network initiated service ennoblement.

Even after MVAS regulatory enforcement by TRAI, huge number of subscriber’s complaint to regulator regarding clear flaunting of processes by many MVAS players triggered another amendment. The regulatory amendment enforcing consent gateway implementation as must have clause for both Off Net and On Net players in order to continue their services. It opened the can of worms around malpractices in MVAS domain.

Recently, TRAI released report indicating fall in subscriber complaint post enforcement of consent gateway regulatory amendments. Regulatory bodies tried to take credit of subscriber pain point removal. The total number of MVAS complaint experienced dramatic fall from 259476 in June to 95510 in August 2013 whereas the MVAS billing without consent from subscriber in the said month also came down from 104996 to 9338. TRAI tried to claim that their initiatives improved overall QoS of MVAS as well as Billing without consent vs. Complaint ratio came down from 40.46% in June 2013 to 9.77% in August 2013.

It raises many queries such as initiatives to develop awareness within subscriber community by regulatory bodies, MVAS Service Providers and other ecosystem players. All TRAI claim is based on the number given by the service providers which service providers receive on their customer service Toll Free numbers. It is also interesting to note that many subscribers who try to launch their complaint on service providers customer care fails to receive the complaint ticket number.

Also how many Indian subscribers know their right about new activation, renewal, billing rollback, complaint and many more. The above number clearly indicates that less than 0.04% of the covered subscriber base of 700 million by TRAI is only facing issues around MVAS which is hard to digest. In a scenario, TRAI as well as wireless service provider initiate nationwide drive through print and TVC, the number would increase multi fold.

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.