The Indian VAS ecosystem
witnessed turbulent time for the last 5 years post MVAS regulations. Indian
regulatory body came out with MVAS regulation to protect Indian mobility user
and imposed number of authentication and authorization process in order to kill
unwarranted billing to end consumer.
The double consent mechanism
implementation knocked down Mobile Operator VAS business and Mobile Operator
witnessed de-growth in the segment. The entry of OTT players especially the
messaging players killed flourishing SMS business which include P2P, A2P and
P2A. The sudden move by regulatory body knocked out many VAS players from the
market whereas some other segment like Music, gaming etc witnessed tough time
retaining the consumer and generating revenue out of them. The revenue share
model between Mobile Service Provider's and Content Provider's also made the
business sustainability more difficult.
While the transition was
happening during MVAS regulation implementation; India started witnessing
adoption of Smartphone in Early 2012. It offered huge window of opportunity for
the VAS player to acquire user through indirect channel. Many companies from
content, music, gaming turned towards Smartphone players to acquire new user.
Smartphone player's captured the opportunities with both hands and started
selling their inventories in return of space asked by the VAS providers. Some
of the Smartphone players even integrated FOTA solution from leading FOTA
service providers in order to ensure that they can mint money through existing
consumer base. The unprecedented growth in the startup segment in early 2013
made Smartphone player the darling of all.
The limited space in the device
and limited leading Smartphone players made the situation worse when Smartphone
player started asking for hefty price point to integrate any VAS services or
applications without any commitment of user adoption, retention, usages etc.
Many startup companies poured in
many million $ in order to get the userbase without any solid business case to
retrieve the invested money and disappeared after some time.
In 4G era VAS it will be very
interesting to see how the VAS ecosystem pans out between Mobile Service
Providers and Smartphone Players. Smartphone players are coming out with higher
RAM and ROM which can sustain heavy load and may offer good consumer experience
provided consumer gets better network coverage.
At the same time, Many Mobile
service provider started developing their own VAS ecosystem and went to market
to acquire users like the other applications. The only differentiation what
Mobile Service Provider implemented is the monetization part. Mobile Service
provider now acts as VAS aggregators which can be delivered through the
applications to consumer based on the consumer wish coupled with monetization
mechanism. In my point of view, it will help Mobile Service Providers to offer
both value add to end consumer as they can offer multiple option compared to
Smartphone players.
The Mobile Service Providers are
struggling with high cost of service and it is expected that they will be
offering virtualized VAS ecosystem to end consumer and Reliance Jio and Bharti
Airtel successfully demonstrated that through their number of applications
which they can sell while selling the SIM to end consumer.
On a contrary, Smartphone players
also started focusing on developing their own VAS ecosystem instead of relying
on others for small amount. Smartphone players also trying to develop recurring
revenue model based VAS platform and some of the are even successful doing so.
Unfortunately, the low DAU, MAU,
Revenue per user are pushing Applications providers to take another route of
user acquisition model as Smartphone players dont know who will be buying the
product, what are their liking and in that scenario, selling a device the
preloaded applications will definitely yield bad result.
I think that Mobile Service
Provider's will again take the centre stage and am confident that they will
witness the revival of their VAS business in coming Quarters
