Arun Tanksali: Head - Mobile Lifestyle Business Unit, Comviva

The Indian Value Added Services (VAS) market is going through a transformational phase. With 3G coming in and data services gaining traction, the market is set for a new high. At the same time, it is engrossed in challenges ranging from regulatory issues, lack of innovation and poor business models.

To discuss the needs, issues and challenges faced by the VAS market today, Light Reading India caught up with Arun Tanksali, Head - Mobile Lifestyle Business Unit and the leading mobile VAS player, Comviva Technologies Ltd. The company has a strong presence in the African market and is all set to tap the India market.

Here are the excerpts:

On killer applications
It is a very interesting area. Before I go into it, I would agree that VAS is going through a transformational phase. One is from the regulation point of view, and second is the way the industry functions. It is critical to recognize that the industry needs to bring in some kind of sanity in this space.

Presently, the industry works on the basic premise of how to acquire new subscribers in VAS. This depends upon the ability of service providers to acquire new customers, and on the kind of VAS services they provide. I think this will change. The need for application and the capability to deliver value will drive the VAS market in future. This will force the VAS providers to innovate a lot more than they do now.

On challenges in the VAS
I would say that regulation will force a certain amount of innovation in the coming future. It is happening but in a limited fashion. We hope it will accelerate but will take a few more months. The increasing use of vernacular languages in content is certainly going to make a key difference. Though it is taking longer than we expected, we believe that it will eventually happen.

You are right that growth is now stagnant and has reached a plateau in India. New innovations are not happening in the country, yet almost all the applications today are to do with data.

In the last three-four years, data-oriented applications haven't made the kind of impact the industry was expecting. There are several reasons for that. Existing data plans fail to make any substantial impact. Unlimited data plans is still not an established model. More and more users are going back to the tried-and-tested model of CRBT and other basic stuff. And there were barely any applications beyond that.

The second challenge is that the number of layers in the industry has stagnated. Smaller companies need to innovate at a regular basis. That hasnt happened at the pace it should have. It [VAS] has not evolved as a matured industry and hasn't had the kind of impact I was hoping.

3G as a growth driver
Today, there are very few 3G-specific applications in the market. Almost none, I would say. I am talking specifically about the Indian market. We have few applications which we believe are good candidates for adoption. Some are in the 3G-video space and some are in the data-oriented space. However, I am disappointed that peer-to-peer calling has not happened here, and mobile TV is yet to take off.

I think that major consumption sources of video today are web sources like YouTube and similar others. The success of other applications depends largely on how sophisticated the user's phone is. You need to have devices through which the user can access content conveniently.

For success of such products, you have to provide familiar models to users. These should be instant models that allow quick access to browse content of the new-age services.

Also, major data-oriented consumption is from mid-range phones. These have brought in a lot of simplification in the video experience. It is far easier to discover content now. Sourcing and managing the video on the back end is also easy and people can access same kinds of videos. You need a favorable ecosystem and a hugely simplified paradigm to create that kind of impact and demand.

On Comviva's future plans
Traditionally, our strength has been Africa, Middle East, India and the neighboring region. We have some new product launches like Aggregated Voice & Video Applications Network (AVAN) and WebAxn platform planned for India in the coming quarter. AVAN will allow operators to work with third-party developers to provide customers the access to a wide variety of applications more quickly and at lesser cost and risk. WebAxn will enable operators to open up web development and rapidly introduce a range of services. AVAN and WebAxn have already been launched globally.

However, we won't launch this platform in India first because we see higher receptivity in the smaller market overseas. If we have a new product, sometimes it is easier to take the success route in the overseas market. Also, because of the sheer market size of India, it becomes really difficult. So with any new product, the chances of success are much lower in India compared to some of the other markets we operate in.

Also, while it would be just the 15th or 50th new service in some other country, in India it will be the 150th service by an operator, so chances of success are very low. If you are the 150-th app provider, the chances of making it to the top 10 get lower. Good thing is that in many of these markets, particularly in Africa and parts of South-East Asia, the demography is pretty similar and learning is great. We can apply the learning in India or vice-versa.

We have been in Africa for more than eight years now. That is why our global revenues are much higher than India revenues. In the last couple of years, we have started getting into the Latin American market as well. We are seeing a good uptake of our services there. We are already present in more than ten countries today.

For many of our other products around data and core network, we are seeing a lot more traffic. This is opening up new opportunities in data management, more abroad than in India today.

On cloud as an opportunity
Not all our products are capable of running on cloud but we have three or four products in the cloud portfolio. We have done multiple deployments on the cloud-based model.

-Jatinder Singh, Principal Correspondent, Light Reading India