New VAS Services… Where do they come from???

This post is a general understanding of how the new applications and services are launched in the VAS market as of today. Tomorrow is a different ball-game altogether, the ideas would be all around and the niche service offerings would be the play…

Operator Pull

These showcases the customers needs/wants when under analytical light. This is more of a copybook approach which to my understanding is not of great accolades as of today. But this would be quite a potent approach in approaching the non VAS user and also for cross/up selling VAS services.

To my understanding, each Telco has a new products development team focused on conceptualizing new business products, with VAS as no exception. The VAS products focus team is constantly working to analyze the needs and wants of their subscribers.

This team understands the customer preferences from vivid perspectives. They have the best tools available with them for customer profiling and lifecycle management.

Based on the customers profile they can analyze and find out the right content and services focused for the particular set of customers. OR they can up-sell and cross sell services and applications based on the customers lifecycle to promote VAS.

A small example may be of selling data services to a corporate customer since he is more likely to avail the service as compared to general public.

Customer profiling is a vivacious process in itself that involves lot of activities specific to services and applications. If need be, I would be happy to share those details with you.

VAS Provider Push

This is the place where all the innovation comes into the industry. All the other players in the value chain are on their toes to make more money by promoting newer services. This is actually a result of the poor revenue share that they get from the operator (generally 20-40%).

The other players are vouching for more and more mind-space and (pocket space)of the subscriber but the only medium they have is mobile operator to reach the target audience. I would like to segregate this under two heads again:

Firstly, the VASP’s and technology enablers who have the access to a limited profile of the subscriber’s VAS usage trends. They are in a position to analyze the limited data set to get the correct view of the target audience and promote and innovate the kind of services and applications for them

Secondly, the content right owners, providers and aggregators are the people who are second to none in this innovation play-field. They keep devising new and improved ways and mechanisms to deliver their content on mobile handsets of subscribers.

With all this innovation happening and the various players trying to eat into each other’s pie, I wonder what is next when new entrants who have been mushrooming across the nation take their foot-hold in this innovation land.

Jatin Madan
jatinmadan@aol.in

The Value Chain Proceedings…

Now that I have described all the players present in the VAS business arena, I am just trying to put some light on the relationships they share. I would also try to highlight the interdependencies among them and the information flow as I understand it happens.

There is a constant innovation happening in the mobile space with all the players in the value chain trying to reverse or forward integrate. They are able to move up and down the chain but can’t replace the network operator as the customer is still owned by them. This can only happen if the retail strategies by VAS players come out to be successful.

The ongoing major movements that I understand are happening are:

1. The content owners and developers are moving towards the aggregation playfield
2. The aggregators are starting to own the content and develop applications around them
3. The technology enablers and VASP’s are beginning to won and aggregate content as well and are constantly raising the bar for each other.
4. Teclo’s, technology enablers and VASP’s are looking forward to replicate the web experience on mobile thereby the focus of telco’s is moving towards data revenues.
5. Handset Manufacturers are tying knot with the content and application providers providing added value for the subscribers.
6. Telco’s have started to get in direct relationships with content right owners and promoting the uptake.
7. New entities are adding up in the value chain with new ideas to explore the subscriber needs. Mobile advertising, retail and mobile TV are just to name a few here.

All these movements (and many more) are leading to constant innovation in the industry and making it a better place for the subscriber as he is offered so many options. This has also led to many application and services that are offered to customer which he did not feel he needed.

On the application development and offering side, there are a couple of means in which they appear in the market. Either the operator profiles the customer demands or the VAS providers come up with a new idea.

1. Operator Pull (Showcasing customer requirements)
2. VAS provider push (Showcasing Industry Innovation and movements inside the industry)

The operator pull is based on analyzing the customers need and pulling the other player to offer those services whereas the second approach is more focused on offering new services and content and ensuring their uptake by the customer.

I would be discussing them in the next post. Keep visiting…

Jatin Madan
jatinmadan@aol.in

The Composite VAS Business…

This is just another post in the series to introduce the player in the Mobile VAS industry. It does nothing more than trying to explain that the consumer and the enterprise value chain are not mutually exclusive but are just a virtual overlap of the same player having a different role to play.

Basically the role of each individual player gets modified when it comes to the composite value chain or the business model. I’ll take a specific example of VASP who may play the role of a content aggregator for a specific application in the consumer model but act as just a technology facilitator in the enterprise model.

Although the mobile operator seems to play the same role of facilitating the delivery of information or content, it is the minimal role it plays for the enterprise customers.

Here the content generator and developer is the enterprise, but the technology support from the operator is of prime essence or the entire business model pertaining to mobiles from the enterprise perspective is at stake.

An important point that I would like to highlight here is that VASP’s and technology enablers, though had a different role to play in the consumer based model, play a similar role for the enterprise customers.

I would not want to delve into too many details to complicate things further as this post is focused at mapping the two models/value chains together. In my further posts I would try to put across my understanding of how this business model is evolving on a regular basis and what would be the effect of new players OR services/application providers to this value chain.

Jatin Madan
jatinmadan@aol.in

MVAS Business Model

My previous post was more focused towards a basic level understanding of the value chain but this one takes a step closer to reality. It describes the state of affairs as on yesterday. (Since this industry is evolving every hour, as I post this it is already obsolete but I thought it would be nice to showcase the transition)

This value chain is significantly different from what has been expressed in my last post. Innovators find a way to carve out a niche for themselves in the value chain and in turn add value to the services being delivered to the subscribers. The main reasons for evolution of VAS value chain at a rapid growth has been:

1. Develop alternative revenue streams to counter rapidly declining ARPU
2. Shrinking operator margins (To my understanding they would shrink further with further evolution in VAS market)
3. Customer Retention focus to curb increasing churn
4. Entrepreneurs with innovative ideas to serve customers
5. Openness of investors to support new initiatives in the booming telecom market.

I have tried to segregate the value chain in two parts:

1. The Consumer value chain
2. The Enterprise VAS value chain

Consumer Value Chain:

This part of the business is focused on providing value added services to the individual mobile subscribers. My segregation of the major players in the current Value Chain is as mentioned below. Some people may have a different perspective to this:

1. Content Generators – These are the companies that own the copyrights of the content. Examples include the music labels, movie production houses, media houses/TV channels.
2. Content Developers – These are the companies that create customized content as required by the subscriber preferences. Examples include the companies running their own mobile portal on voice, SMS, WAP or USSD.
3. Content Aggregators – These are the companies that aggregate content and make it available to network operators. Examples would include companies that are focused on the content business. They differ from the content developers in the manner that their mainstay is the rights of content and not the mechanism in which it is delivered.
4. VASP – These are the companies that provide Value Added applications to the network operators. They may also act like a content aggregator for the convenience of operator and to create a niche for themselves but focused on providing innovative applications to operators.
5. Technology Enablers – These are the players that provide the services oriented towards providing Vas to subscribers but may or may not be dependent on the content. To clarify things here, an example to with this is “missed call alert services”. This seems to be a fair example for understanding how they differ from VASPs.
6. Mobile Network Operator - They are the famous telcos like Airtel, Vodafone etc that provide the transport and support mechanism to provide content and other services to subscribers. Today in India, they own the customer and bill them for providing services. (I would be taking up the revenue flow in a separate post.)
7. Handset Manufacturers – Mobile handset manufacturers have also started playing an important role. They have their way by activities like embedding links for direct access to portals in their handsets, etc. Things like On-device Portal are where they play an important role in the value chain.

Enterprise Value chain

The enterprise Value chain is comparatively simple in comparison to the industry value chain. I would like to depict it in a more linear manner rather than complicate things further.

My perspective is that it consists of the following entities:

1. Enterprises
2. Enterprise Service Providers
3. Mobile Network Operator
4. Enterprise User

The linear model is depicted in the figure below:

In my next post I will try to map the two together and complicate things further.
And I would also like some help on depiction in beautiful diagrams. Do get in touch if you are interested.

Jatin Madan
jatinmadan@aol.in

“Traditional Value Chain…”

I was taught in my B-School that every industry has a value chain. And absolutely no points for guessing that Mobile VAS has one as well which I wanted to discuss in this post.

This industry started as a value addition to the mobile value chain and has matured itself into a vertical in the telecom arena in itself. People’s perspective of the value chain is simple – a linear line up of entities. But my understanding of the subject is a little more complicated. To my views, the mobile VAS value chain was a linear structure that would mature into 2^nd dimension whereas the VAS providers (VASPs) move towards starting a relationship directly with the mobile subscriber.
The traditional entities in the value chain are:

1. Content Generator – Online Portals, TV channels, Movies, etc.
2. Content Aggregator
3. VASP – Can be deciphered in two ways – VAS Provider or VAS Application Service Providers
4. Mobile Network Operator
5. Subscriber

These players are placed in the value chain as depicted in the figure below: (Apologies for such a raw appearing figure as my focus is on clarity of subject and not to mention that I am not great at photo editing softwares)

 

This is already a 2 Dimensional chain wherein the content generator is directly providing the content to operator and also through aggregator.
Although as of today, since the customer is owned by the operator, he bills the subscriber and provides a revenue share to other parties. But this landscape is moving towards a paradigm shift with newer players making entry into this much sought after and booming arena and adding new dimensions to it.

The new buzzwords are mobile advertising, mobile TV and retail (focused at approaching the customer directly). And the new players into this market are many more. I would discuss more about the Relationship between the various players in the value chain and how the value chain stands as of now.

Jatin Madan

My First Post…

I got my first mobile phone way back in 1998. It was a Siemens huge black device that could easily be used for self defense as well. Carrying it in my pocket was a fuss so I bought a new sling bag in addition to my college bag that was used to carry it.

And then the times started evolving and we moved towards the smaller and sleeker devices. Along-with this came the colour display and multi – functionality phone that could do more than voice and SMS. And today we are trying to port the entire PC suite into the small device for which we are increasing the size again. Looks like a complete circle…

My mobile is the most personal device I have ever owned and life looks incomplete without it. A couple of hours out of battery and I feel I am disconnected from the world. I suddenly tend to remember all the people whom I have not spoken to for a while or forwarded a message to though when my phone is ON, am busy with all the other things in this world.

But that is not only what the mobile is used for today. I use my phone for a plethora of things like listen to radio, download some cool ring-tones and wallpapers, play games for passing some free time, receiving my bank account updates, et al.

Being an active VAS user and a part of the same industry, this blog is focused on the things I understand about the VAS landscape in the country. Some things that have changed the mindset of the mobile savvy generation and some things that are taking our actual lives away from us and pushing us into the dependency of these gadgets.

Jatin Madan