Ronnie05's Blog

Mobile Apps: Status check in Emerging countries

Posted in Value added services and applications by Manas Ganguly on August 13, 2010

Reproducing a report about Mobile Applications and its impact in Emerging Markets (Afro-Asian markets)

Emerging markets will drive the growth of global mobile value-added-service (VAS) revenues from $200bn in 2009 to $340bn in 2014. With China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey, Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and the Ukraine expected to account for 36 per cent of such revenues at the end of the forecast period.These numbers were released by Informa Telecoms & Media, which has been monitoring the high growth potential for VAS in emerging markets as high market saturation limits growth prospects in developed countries.

In fact, operators and service providers in emerging markets have been more innovative and proactive in developing and deploying mobile VAS than their counterparts in the developed world, especially in the areas of mobile payments, P2P funds transfer and agricultural information services. The reason being that these services are having a big impact on the day-to-day lives of the local population and are contributing to the social and economic development of the population in these markets, Informa said, citing services such as M-Pesa from Safaricom in Kenya, the Rural Information Service from China Mobile, the Please Call Me service from MTN in South Africa, and the CellBazaar service from GrameenPhone in Bangladesh.

“Compared to the developed world, there are very different economic, social, demographic and cultural challenges in the emerging markets. In many countries, 3G services are still not available, or are limited to mobile subscribers in larger cities. Therefore operators have to depend on 2G services such as SMS, USSD (Unstructured Supplementary Service Data) and IVR (Interactive Voice Response) systems, to be able to drive mass market adoption of their mobile value-added-services, and to successfully reach subscribers in smaller towns and rural areas,” said Shailendra Pandey, senior analyst at Informa.

Pandey adds that mobile social networking is beginning to see strong growth in emerging markets but most of the services are instant messaging chat applications. One of the most successful service examples is China Mobile’s IM service called Fetion, which has over 100 million registered users. The addressable market for the Fetion service is large as it can work using IVR, GPRS and SMS access modes. Also, mobile app stores have so far not received the same attention from the operators in emerging markets as they have in the US and Western Europe, although some large operators like China Mobile have already launched – or are considering launching – their own app stores. Earlier this year, China Mobile collaborated with Nokia to launch a joint mobile app store MM-Ovi and it has been reported that over four million mobile apps had been downloaded from this app store by March 2010.

Indian Telecom Story (Part XXVII): The Future is Mobile Internet.Is India Ready?

Posted in Industry updates, Internet and Search, Value added services and applications by Manas Ganguly on March 4, 2010

The Mobile Revolution is dead, Long live the Internet revolution!

At the very outset, I need to correct myself: The Mobile Revolution is not dead by any means. India is just 525 million subscribers young and the estimate is 1 billion by 2014. However, the age of hyper competition has seen the net revenue realizations drop like a stone through the last few months. White Box Manufacturers from China have swamped the device arena and have redefined the principles “lower cost of acquisition” and “feature rich devices”. Micromax, a non entity till an year back has done close to a million devices in the January, 2010 calendar month. You still have to add Spice, Karbonn and others to the list. On a cumulative basis white box manufacturers a.k.a local players are clocking close to 1.5-2 million handsets in a month. That’s some number. However, the point I try making here is that India with its 525 million subscribers is suddenly not as attractive a telecom market for the next 500 million waiting to happen. ARPUs and realizations have reduced considerably for the incumbents and it is difficult to fathom how the new entrants want to make sustainable profits. Fortunately for Indian Telecom, 3G looks like a near future possibility and while most of the spectrum will still be used by voice services, there is some hope for data and VAS models.

The Google Bus which was an initiative by Google to introduce the Internet to the masses.

Internet and delivery: The Telecom Operator perspective.
The next big thing for Indian Telecom is likely to be Internet and Internet based VAS services. To put it in numbers, the number of Mobile subscribers in India is 525 million and the number of internet users is 47 million. The opportunity thus would be leveraging the existing 47 million users and the big opportunity is growing the 47 million onwards. Coupled with applications like Mobile ticketing, Mandi Rates, Weather services, Banking and payments, internet would change the way people think and work radically. The idea is not the top of the line innovative “bells and whistles” apps but apps which reflect daily chores and activities that people undertake. (Remember the “What an Idea Sirjee” ads?). Content aggregators, developers, Telecom Operators, handset manufacturers and the eco-system needs to bring solutions which help people fulfill their daily requirements in a better manner.

The interesting thought here is that Internet delivery may not be the way it is currently done.
• The Computer will definitely be replaced by the handheld
• Regionalization and Vernacularization of content will be the key to adoption

Device capability and building the eco-system: The Handset manufacturer’s perspective
So for handset makers in India, its time to abandon the cost game and play the value game. Nokia is already learning the ropes with its Life Tools and is trying to create an eco-system in the current for service demands of the future. However, a lot others are not quite there both in terms of intent and capability. The game will see a shift from “Call and SMS” handsets to “Call, SMS and more” handsets.

The capability building will include two things:
• Device capability: Evolve from “Talk and SMS” Device strategy to data capable handsets. Most of the handsets in the mid range are not even Java enabled and have inadequate RAMs. This may be OK for cost reduction in short term but the devices would be severely short in terms of generating a demand tomorrow.
• Building an Eco-System: Device manufacturers need to integrate their products with a development eco-system. It would mean giving away a lot of their channel power to the aggregator or developer but it is necessary to get into the shared mode of delivery rather than “do it all myself”.

The mobile internet revolution is waiting to happen. However the delivery and the content needs to be thought through.

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.
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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