Mobile Players Focus on MVAS to Increase ARPU

With Mobile Value Added Services (MVAS) touching Rs 7,510 cr in 2008, and expected to touch Rs 9,760 cr in 2009 and Rs 16,520 cr by 2010, mobile players are aggressively rolling out new services to increase the average revenue per user (ARPU).

Talking to ChannelTimes at the Forum Nokia Developer Conference 2009, Deepak Halan, Group Business Director of IMRB International eTech, said, "In the wake of changing industry markets, telecom operators are looking at MVAS as the next wave of growth, and a large chunk of revenues is expected to flow from VAS in the near future. Our report indicates that this market is growing at 70% annually."

While the growing subscriber base has positively impacted industry revenues, operators' margins have shrunk, pulling down ARPU. "As ARPU declines and voice gets commoditized, the challenge is to retain customers, develop alternative revenue streams, and create a basis for differentiation in high-churn markets that is why telecom operators are looking at MVAS as the next wave of growth," said Halan.

Presently, the mobile market has about 12-15 major players, besides a number of new licenses issued to Etisalat, Unitech and Reliance (GSM) is likely to take MVAS to all time high.

"Among MVAS, the most popular service is mobile music download, although voice portals are swiftly taking over," said Halan.  SMS-based infotainment services are largely divided among the big players. A TRAI report indicates that out of the 375 million users, one of every five users have a GPRS-enabled mobile across India, but not many services are available making then passive users, which is a deterrent factor.

However, the new 3G initiative gives a fresh pipe for data and video tracks that could be downloaded without interruptions, and also mobile TV with a lot more services like video on demand will is possible, said Halan.

Srikanth Raju, Director, Head of Product Marketing Forum Nokia said, "MVAS has seen a huge market in India, and now with 3G being rolled out it will further help video download and a lot more development on MVAS."