The Indian VAS industry were termed as driver of growth in 2010-11 with a projection by major analyst firm put the figure above $ 10 Bn. On a contrary VAS industry is reeling under immense pressure to survive with the evolution of OTT players and tough regulatory norms. In recent few quarters result from leading Mobile Operators, it is evident that VAS revenue is on constant declining mode and Mobile operators are also trying to shift their focus from legacy VAS services to data centric services. On evaluating multiple VAS service companies, it is very clear that Innovation is missing barring few startups’s to offer compelling value proposition to Mobile Operators and in turn to Indian mobile consumer. Many small VAS companies with one or two product and back by angle funding jumped into VAS bandwagon to make it big but unfortunately bitten dust due to very tough ecosystem leg time to gain business from big player. The companies also faced huge revenue share surrender in favor of Mobile Operators to gain access of their million of subscriber’s. It all raises one single and simple query – Why VAS failed to take off in India?
The lack of subscriber pulse reading took most of VAS provider off track and trapped them into downward spiral. If one successful competitor launched product follows with similar product by other VAS provider. It justifies the philosophy of developing product post market acceptance. The trending is continued in the IVR, SMS and Contents.
The sudden regulatory move with MVAS regulation followed by double consent gateway took VAS providers by surprise and forced them to initiate implementation to mitigate slippage in the market place. With invent of 3G network deployment and subsequently VAS provider focus points to streaming and especially media content. The move also flooded market with many choices and led to price point deflation to gain business traction. A new industry popped up as subsidiary of VAS segment where exclusive distribution of cross boarder product promotion is gaining ground. The exclusive right management based portfolio enhancement by VAS provider to save on research $ to maintain their profitability as bulk of the revenue is kept by operator by allowing them to do operator billing. In my point of view, VAS provider must gear up their innovations in order to survive otherwise the bad economy going towards worst economy may impact their viability.
