Mobile VAS industry could be worth Rs 4,560 crore by end of 2007: IAMAI-IMRB Report

Mobile VAS industry could be worth Rs 4,560 crore by end of 2007: IAMAI-IMRB Report

Author | exchange4media News Service | Wednesday, Jan 03,2007 8:54 AM

Mobile VAS industry could be worth Rs 4,560 crore by end of 2007: IAMAI-IMRB Report

The mobile value added services (Mobile VAS or MVAS) industry could be worth nearly $1 billion or Rs 4,560 crore by the end of 2007, from its current size of Rs 2,850 crore. This was revealed in the ‘Mobile Value Added Services Report’ jointly prepared by the Internet and Mobile Association of India (IAMAI) and IMRB International.

A break up of the total market size of Rs 2,850 crore reveals that P2P (person to person) SMS continues to dominate the industry with Rs 1,140 crore, followed by ring tones, including caller ring back tones (CRBT) at Rs 1,026 crore. P2A (person to application) and A2P (application to person) stands at Rs 428 crore, games and data stand at Rs 171 crore, and others (MMS, etc.) at Rs 86 crore.

The P2P SMS revenue is accrued completely to the telecom operators while the remaining MVAS revenues are distributed among content owners, developers and telecom operators on a revenue sharing basis. The MVAS industry in India (excluding telcos’ share) is currently 24 per cent of Rs 2,850 crore and is estimated at Rs 684 crore.

Dr Subho Ray, President, IAMAI, said, “This is the first attempt at a market estimate for the industry and we are hopeful that the government and the industry will now give the attention due to the MVAS industry.”

He further said, “For the market to grow and come out with innovative solutions, three issues must be set right at the outset: a) revenue sharing and schedule of payments, which is currently heavily in favour of telecom operators; b) stable and long term enabling policies by the government; and c) intra-industry issues such as intellectual property rights, etc. Without these, the industry will not be able to sustain the growth.”

According to the report, in future, VAS would see a lot of structural changes in India with the consolidation and emergence of cutting edge services. Mobile operators will lose prominence in the value chain as the market for content aggregators will consolidate and with their better bargaining power, this will ensure a revenue shift from operators to aggregators in the value chain.

With increasing mobile penetration into the heartland of India, significant VAS revenues will be driven by regional content from B & C class towns.

Internet on mobile will become a more feasible option as players in the Internet content space especially configure their sites for access through mobiles, this would be further strengthened by the new trend of a mobile domain being set up. Thus, GPRS usage would pick up significantly.

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