Ronnie05's Blog

VAS: Increasing penetration and revenue

Posted in Revenues and Monetization, Value added services and applications by Manas Ganguly on March 19, 2009

Covering a Linked in Discussion, on Increasing penetration and revenue of VAS services in India.
http://www.linkedin.com/answers/product-management/positioning/PRM_PST/437353-22685324?browseIdx=57&sik=1237453659425&goback=.ach_PRM.abq_6_1237453659425_n_o_PRM
How to Increase penetrations and Revenue for various VAS services?
Given the present scenario, getting a bigger wallet share for VAS services from the consumer seems to be the biggest hurdle? How can the consumer be incited to use various new VAS services that come up? Is tariff discounting or offering Free Try n Buy the only way to let the consumer have a feel of the service?? 

Hi Anoop 

Your Q seems to have generated a healthy round of discussion and here is my take adding to the muddle 

I come from a Marketing related view guided by two basic tenets 

1. Supply and Demand 

Music, H/Bollywood, Games, Ringtones, Singtones, Cricket is what most of the VAS revenue is based up on (Currently). There is a healthy demand for this but supply is manifold leading to commoditization. Hence the need for innovation in VAS! (Think Medicine, Think Train Ticketing/ Think Fitness/ keep thinking..) 

2. The Age old Construct of the 4Ps. 
We have a Product/Service and currently we are trying to push mass usage through Tariff discounting (Pricing Strategy). A few Opinions beforehand have already mentioned Retail Push (Place) and Cross Selling/Up selling and Consumer Education(Promotions). Even more, we have spoken about Profile and Behavioural based Targetting (a very high order mechanism) 

My take on the VAS markets in India : 

1. We need more stakeholders in the ecosystem. Currently it is only the VAS provider and the Operator. Hence the scope in VAS development and deployment remains limited. 

2. The Indian Consumer is averse to Credit Card and Mobile Payments. I am not surprised about VAS ARPU of Rs.25 (as cited by Rahul). 

3. We are limited in content.Games + Music + Entertainment form 36% of VAS applications in US. The next 36% is Books, Utilities, Education, Lifestyle, Productivity, Travel, Fitness, Sports etc. Social Networking as VAS content has also been less exploited. 

Point 1,2,3 (More Stakeholders, Wider content, Paying Mechanisms) lead me to the end of my argument, which i will elucidate with an example: 

How about partnering with VLCC for beauty tips, reserving apointments, reminders etc etc? 
How about partnering with Apollo hospitals to provide a range of services on a VAS platform? 
Tie ups with Local Gyms to disburse mobile services to its members? 
Taxi services and Train/Flight Booking via VAS…. 
The possibilities are endless if you take the unconventional route to VAS and application monetization.The business model would be a win win win design for the consumer – Telco + VAS – Solution provider. 

Would consumers pay? They already do… and a minor addition in terms of taking services mobile will not hurt them if they are hung up on VLCC, Apollo and the likes… 

End points: 
1. Dont invent new needs and delivery mediums, instead tap the consumer needs at the right places and occasions 
2. There is a fundamental need to move away from Telco VAS provider (Duopoly mindset) to a tag along/second fiddle mindset with the solution provider. 

Hope this is somewhat leading to the right direction.

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