Revenue Model – Money Flow Addendum…
Posted by jatinmadan on January 7, 2008
This post is more like an addendum to my previous post on the revenue shared between the entities. Every player in the value chain wants to make the most moolah but currently it is the mobile operator that gets the largest part of the pie. Today the mobile operator loosely retains around 60-80% or the revenues flowing from the subscribers. This is not a definitive figure as the revenue share varies from service to service.
This remaining spread gets shared amongst the remaining players as on today. But things are in for a change as suggested by industry experts in numerous reports available across web. People have suggested that this ratio would be reversed in the coming 12-24 months.
The likely reasons I see for the same happening are:
- Mobile advertising providing additional source of revenue for the operator
- Increasing pressure from the other players finding ways and means to own the subscriber (Yes, I am hinting at growing focus towards retail).
- Customers getting attracted to newer applications, which would be offered at a premium share rate to the operator.
I believe in the same but with a little skepticism of the operators in India still retaining about 40% of the subscriber paid amount in totality. The reasons are simple and straight forward:
- The conservative attitude of the operators when it comes to paying out money.
- The growing number of smaller players in the industry who would still be dependent on the operator.
- Operators’ focusing on customer acquisition in B and C circles would involve a lot of impact on their bottom-line. Thus they may still want to make up for it more from VAS where they can.
I may not be an expert but have an opinion that may count. This is just what I am trying to express here. I would follow it up with the changing paradigm of the industry revenue model. I just like to call it – “The Moolah Movement”.
Jatin Madan
jatinmadan@aol.in
