Cellular majors in India having matched each other on prices, technology, and service offerings. Now, how do you differentiate your brand ? The answer lies in providing the unique value added services.
Despite the global mobile phone market recording a slowdown in Q4 2008, the value added services (VAS) industry is on a up- beat mood in India. Thanks to the continuing growth in mobile subscriber base in rural and semi urban areas and the popularity with VAS services among the younger generation.
The rolling out of the third general mobile serives (3G) is all set to take the VAS maket to new heights.
The VAS Industry in India has evolved into a $ 1 billion + industry in 2008 with an estimated annual growth rate of 40 – 50 percent. What makes the industry look ahead is that fact that the mobile service providers are adding up around 10 million new subscribers every month which is expected to take up the mobile subscribers base from the present 350 million to 550 million by 2015.
According to IDC’s Worldwide Mobile Phone Tracker released in February, the worldwide mobile phone market experienced an unusual downturn in the normally robust fourth quarter of 2008. The vendors shipped a total of 289 million units, 12.6 percent lower than the 330.8 million units shipped during Q4, ’07, the study says. For the full year 2008, vendors shipped a total of 1.18 billion units worldwide, 3.5 percent greater than the 1.14 billion units shipped during 2007.
“India is experiencing an interesting phenomena as mobile phone acquisitions are happening in semi urban and rural areas. Unlike in the matured markets, voice applications, caller ring back tone, ring tone services are highly popular even among the basic phone users ,” says Dr Debasis Chatterji, CEO, Netxcell Ltd., a leading VAS provider.
While text messaging is gaining more popularity among the younger generation in urban areas due to falling costs, it’s not so popular with subscribers in semi urban and rural areas as they are not as comfortable in text messaging in English as their urban counterparts.
According to a recent study by LIRNEasia, and information and communication technology policy organization, 27 percent of the total mobile owners at the bottom of the pyramid (BOP), or the poorest socio-economic group, were added last year, whereas the urban areas added only 19 percent.
“Just five years ago, the massive momentum developed by the Indian telecom industry did not include rural areas. But now, the picture is different,” the study said.
It added that phone ownership – both land line and mobile – at the BOP increased a whopping 131 percent between 2006 and 2008.
‘Affordability still remains a key issue for the people at the bottom of the pyramid to buy mobile phones,’ Rohan Samarajiva, chairman and chief executive of LIRNEasia, said.
Mobile ownership is as high as 40 percent at the BOP whereas the fixed phone ownership is at 8 percent.
The study says that India has a large second hand mobile phone market. “Most of the rural customers, on an average, spend $34.82 to buy a second hand phone and approximately $48 for a new phone,” Samarajiva added.
However, a major chunk of the people still utilize only voice services and services like payment through mobile. Other value-added services are still at a negligible level, the study said.