The FINANCIAL — Mumbai. The Mobile VAS market has a potential to generate over Rs. 55,000 crore, says a recent PwC report titled Value Added Service: The Next Wave.
PwC undertook a detailed and wide scale market research with the objective of understanding the behaviour of Indian mobile subscribers towards VAS and off take of services in future. The research focused on urban India (wherein respondents were spread across different Socio Economic Classes (SEC), age groups, education, backgrounds, working status) and it covers 1050 respondents across 10 cities – Delhi, Mumbai, Hyderabad, Bangalore, Chennai, Bhubaneswar, Kochi, Ahmedabad, Pune and Kolkata.
With BWA and 3G network roll outs, speed that so long has been a deterrent for overall VAS adoption, is now a key enabler that will drive adoption of VAS. It is now time for India to evolve from the well established Mobile Messaging and commoditised voice play to focus on customer segmentation based data play. This report provides insight on the issues that are holding back the growth of Mobile VAS in India and map future consumer preferences. The report also assesses the current state of VAS ecosystem and how it will evolve.
On the potential of VAS, Sivarama Krishnan, Executive Director – Consulting, PwC India said:
“India has very diverse consumer segment based on socio, economic, cultural and linguistic diversity. The diversity, coupled with a young and increasingly affluent population and the fact that India is yet to reach its potential when it comes to broadband penetration are all strong indicators that Mobile VAS has a huge potential. We expect India to set benchmarks on VAS just as it did in the pure voice segment.”
The key findings of the report are as highlighted below:
Communication VAS Services: Video Calls, MMS and Email will be the key drivers for the communication VAS services. The total revenue from communication services is expected to cross Rs. 20,000 crore by 2015. SMS will contribute 72% of this revenue.
Entertainment VAS Services: There is a growing demand for entertainment services which will be adopted by masses. The users are willing to pay most for entertainment services as compared to all other categories of VAS. The total revenues from entertainment services is expected to reach 25,000 crore by 2015
Information based VAS: News updates and medical services over mobile, etc would also see uptake in the next 3-5 years. The total revenue from information services is expected to cross 7,900 crore by 2015.
Transactional VAS Services: Appetite for transactional services is going to remain low. Average awareness of transaction services is 69% with future adoption levels of 39%. Transactional VAS services have the potential to contribute nearly Rs 1,600 crore as revenue by 2015 provided operators and banks successfully respond to challenges of concerns of users around data privacy, usability and language independence of the applications.
87% of the people surveyed are aware of VAS based on regional entertainment, in the form of regional music videos and movies clips; 47% are ready to adopt the services in future and are also willing to spend Rs 50 per month on regional entertainment.
71% survey respondents are aware of the VAS of medical advice from doctor; 49% of the users are willing to adopt the service in future at a price of Rs 73 per month.
Four out of five people are willing to use SMS in future and spend monthly average of Rs 42. In terms of revenues, SMS can contribute nearly Rs. 14,000 crore of revenue by 2015 for the mobile VAS value chain players. The operators, however, would need to focus on the multilingual SMSs and handset manufacturers would need to design keyboards (or applications) which are designed for ease of typing in Indian languages.
Future adoption for medical advice from doctors is higher for SEC B (51%) as compared to SEC A (49%) and SEC C (47%).
Subscription interest for online gaming is almost double for students (57%) compared to 30% for those working full time.
Interestingly, future adoption for making video calls is higher for SEC C (54%) than SEC A (48%) and SEC B (49%).
Even though mCommerce has awareness levels of more than 60% for most of the services, future adoption rates are lower. This points towards the special focus that is required to remove roadblocks to adoption like usability and data security concerns.
On the road ahead for VAS, Sivarama concluded:
“With handset manufacturers entering VAS ecosystem with powerful operating systems and associated Application Stores, we will see shifts in the industry with handset players, VAS vendors and service providers collaborating and competing with each other. The revenue share of VAS players is expected to increase over time.”
Discussion about this post