With most of the operators lowering their 3G tariffs in the country, the uptake of 3G services is finally happening. It should logically lead to the growth of data Value Added Services (VAS) as well.
MVAS can also emerge as a differentiating factor for telcos who have to convince 2G subscribers to move to 3G. However, the key question here is if the VAS industry is geared up to take the challenge? (See IndiaWatch: Vodafone Also Cuts 3G Tariffs, Idea Reduces 3G Tariffs and Airtel Revises 3G Tariffs.)
"The Indian mobile industry stands at INR 1350 billion (US$24.4 billion) and is expected to touch INR 2000 billion ($36 billion) in the next four years, out of which non-voice will contribute INR 400 billion ($7.2 billion)," Himanshu Kapania, Managing Director, Idea Cellular Ltd. said at an event recently. While data revenue is going up for most of the operators, VAS vendors need to come out with innovative and appealing products for the subscribers.
MVAS players hold a mixed opinion on whether it is time to come out with 3G-specific products, or to continue with the focus on 2G voice offerings. (See Aircel Meets the Mobile Data Challenge and Comviva Boasts Mobile Data Milestone.)
"Despite the availability of cheap 3G handsets, the hurdles upfront for a consumer to switch to 3G service are countless. This ranges from the unavailability of a consistent 3G network, even in the metros like Mumbai, to an absence of local content in a diverse country like India. So it is early to say that MVAS will compel a 2G user to subscribe to 3G," says Abhishek Pathak, Regional Head, Mobile Marketing and Advertising, One97.
His views are echoed by others in the industry. "Though there has been a significant upsurge in the video consumption and online gaming, we are still focusing more on voice-related products like live audio streaming of concerts and seminars as majority of the country is still running on 2G. However, as the 3G ecosystem evolves, the scenario is likely to change but as of now, 2G continues to be the prime focus for us," says Albert Almeida, Chief Operating Officer, Hungama Mobile. (See Hungama Launches Uninor Bhaktiras.)
Differing from One97 and Hungama Mobile, the Chinese MVAS player Donjin believes that there lies a great possibility of 3G applications overlapping the 2G ones soon.
"With the availability of cheap 3G tariffs and smartphones, mobile data consumption is witnessing a steep rise among the mobile consumers. With a majority of the population being young in the country, it is sure to increase many-folds at a great pace," says Hariharan Iyer, country head, India and SAARC region, Donjin Communications. (See Donjin to Expand in India.)
No doubt that data consumption is the silver lining to the falling ARPUs of the operators and the reduction in 3G tariffs is a welcome move. It appears there's a lot to be done jointly by operators and MVAS players to win the consumer trust and to push 3G-MVAS services from niche to the general segment. (See Mobile Internet Data Traffic To Grow 58-fold and Vodafone India’s Data Earnings Up By 29%.)
There's no denying the fact that 2G will be around for a long time but it is also time to come out with video and data offerings for the 3G subscribers. MVAS industry will need to come out with unique India-specific products to get an early advantage.
- Rimit Singh, Correspondent, Light Reading India
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