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Adding value beyond calls

Mobile-based value added services are gaining ground fast as India’s surging subscriber base responds. Saurabh Turakhia tells more.

india Updated: Sep 11, 2007 23:01 IST

It is clear, at least in India, that the mobile success story has been far bigger and faster than the internet’s. As per Telecom Regulatory Authority of India’s data, by the end of July 2007, India had a total of 192.98 million wireless subscribers under the GSM, CDMA and WLL services. The internet subscriber base stood at 9.2 million as on March 31, 2007.

A January 2007 report by Soundbuzz, a mobile music retailer, along with Pricewaterhouse Coopers and IFPI, states that revenues from physical sale of music in India will halve from Rs 1,000 crore in 2005 to Rs 500 crore in 2009/10. Interestingly, digital music online and mobile revenues are set to increase. These statistics, when viewed along with the tremendous mobile boom, show great opportunities in music on the mobile. New initiatives by content and mobile service providers point to the possibility.

In music, Saregama has recently introduced mobitune cards for ringtones, with three ringtones allowed per card. In addition, a pilot project across Bangalore, Chennai and Hyderabad is testing out music downloads at 25 Nokia outlets. Gavin D’abreo, chief marketing officer, Saregama, says, “We have tied up with Nokia for digital kiosks at their stores where consumers can download songs through a connecting USB, at Rs 12 per song.”

• Mobile VAS in India will grow to Rs 4,560 crore in 2007, from Rs 2,850 crore in 2006.

A December 2006 IAMAI and IMRB report

• Digital music sales to increase eight times to Rs 3,601 crore in 2009-10, from Rs 450 crore in 2005.

A January 2007 report by Soundbuzz, Pricewaterhouse Coopers and IFPI

•"Music is the second largest VAS service, after SMS. Non-voice revenue as a percentage of mobile revenues are 9.9 per cent ending June 2007."

Bharti Airtel

• Saregama’s pilot project with Nokia saw 8,000 music downloads against 4,000 handsets sold at 25 Nokia outlets, at kickoff at 3 cities.

--Saregama India

The other part of the mobile value added services (VAS) revolution lies in internet access. A significant section of mobile users, youth more than others, has shown keen interest in web-based mobile services. An opportunity that is bound to see a lot of action in the near future. In fact, Airtel is just about to launch its Google search service on Airtel Live, in a tie-up with Google. This is significant because Google is today synonymous with online search, and highly popular, especially with youth.

Other VAS are also getting popular. According to a December 2006 report by IAMAI and IMRB, the Mobile VAS in India stood at Rs 2,850 crore at the end of 2006 and, it is estimated, will grow at 60 per cent to touch Rs 4,560 crore by the end of 2007. While peer-to-peer (P2P) SMS contributed the most at 40 per cent, ring tone downloads also contributed significantly at 35 per cent by end-2006. The telecom operators get close to 60 per cent of the total revenues from VAS (other than P2P SMS for which entire revenue goes to the operator) while the content creator and aggregator get the rest.

Enthused by the response to VAS and viewing it as a big opportunity into the future, Airtel is adding on Google search now, which it views as a significant initiative. This WAP-based service can be accessed on a GPRS enabled phone. Strongly targeted at youth, the Google search service will be positioned as the simplest way to search for anything. It will be supported by a new advertising campaign, to be released shortly.

Saket Agarwal, COO, Cellebrum, a six-year-old mobile content aggregating firm, says, “With the rise in GPRS handsets sales, polyphonic and true tones are raking in more revenues. GPRS services revenue brings close to 10 per cent of the total VAS revenues for a telecom operator.” He talks of projects like providing background music that would run through a conversation “If a guy wants to propose to his girlfriend without saying anything, a romantic song’s tune can play in the background. If an employee wants to give an impression to his boss that he is caught in traffic, a corresponding background theme can be chosen.”

He also talks of future projects that include a social networking initiative for mobile users and one on invited advertisements those which will play before a conversation between two mobile subscribers.

Connection, information, entertainment… the small mobile handset is sure looking at becoming a big device.

First Published: Sep 11, 2007 22:51 IST