Sirji, Whats Behind the Idea?

It is definitely an advertisement that makes you sit up and say What an Idea
sirji!. Idea Cellular has taken to the environmental cause through its latest
ad campaign Use Mobile, Save Paper promoting a paperless world and preventing
deforestation. So, we have a middle aged man reading the newspaper online, a
waiter at a hotel typing the menu in his mobile and a passenger showing a soft
copy of his boarding pass. Thats not all, Idea is trying to show us how a
paperless world would be. So, the ad shows university students attending their
graduation ceremony, holding mobile phones displaying their certificates. A
group of musicians replacing their standard song book with a mobile phone having
the musical notes; a clerk at the court typing out the judgment on a mobile
rather than on a typewriter.

While the advertisement shows a great deal of foresight and brings out what
could be, a person following the telecom space and especially the value added
services (VAS) segment might just find it a little too far-fetched, especially
certain aspects such as downloading boarding passes onto the mobile. This is
simply because the VAS ecosystem is still evolving, GPRS connectivity is still
expensive, 3G is still in nascent stages of adoption, etc.

Also, the nature of partnerships required to achieve this kind of integration
of services on the mobile is missing. Only recently has m-banking taken off in
the true sense; still a small segment of people use the MVAS for mobile top-ups,
booking movie tickets or even receiving news updates. So, while the Idea
campaign does depict a Utopian paperless world, it does raise the question of
how feasible it all really is, considering the existing infrastructure
loopholes.

Speaking about the campaign, Pradeep Shrivastava, chief marketing officer,
Idea Cellular says, "Environment as a subject touches all, but gets attention
only at strategic forums. The common man gets to contribute little towards the
cause, due to lack of direction and ideas. Hence, Idea Cellular has taken up the
responsibility of educating the 500 mn mobile phone users in the country. If
they start using the mobile phone more judiciously, together we can make a
significant contribution of saving paper, and therefore, the green cover
necessary for the health of the planet."

One cant negate the fact that the campaign does bring out a social message
for the masses, but at the same time seeks to boost Idea Cellulars own new VAS
services. Well not just Idea, all VAS players have a reason to smile as this ad
campaign might just work towards promoting the uptake of VAS services among a
larger set of the population. A couple of years back, mobile operators only
focused on expanding their networks and improving their subscriber base. Today,
to supplement stagnant voice revenues, cellular operators are turning to VAS to
boost revenue in both data and value-added voice services.

In India, SMS, ringtone, caller ring back tone (CRBT) and games constitute
the bulk of VAS. VAS delivery has been mainly based upon SMS, IVR, GPRS and WAP
platforms. Of these, SMS is the most widely used platform and the customer is
billed accordingly. When it comes to IVR, very few operators or VAS players have
a payment gateway. GPRS connectivity still has its loopholes and price factors
as hindrances while WAP is still not instrument agnostic. Nevertheless, VAS is
where all telecom operators see growth, and hence, are increasingly partnering
with VAS players.

According to Nitish Mittersain, chief executive officer, Nazara Technologies,
the Indian VAS segment is expected to log in a turnover of over Rs 200 bn by the
year 2015. Currently, the VAS market is valued at Rs 65 bn ($1.35 bn) and
constitutes about 9-10% of the total revenues for telecom operators in India.
With 3G services ironing its way in, the VAS industry is expected to increase
its share manifold, with some industry estimates pegging the figure at Rs 200 bn
by 2015. The prime movers in the VAS industry will be Bollywood and cricket, but
we see mythology content and astrology fast catching up. SMS, IVR, music
downloads, Internet apps, searchwhich have a huge market potential in the
Indian market will also see an upsurge, says Nitish.

Explaining the dynamics of the VAS market, Ambarish Verma, CEO of NOVONOUS
says, VAS services will become a major revenue source for telecom operators in
India who are facing challenges like decreasing ARPU despite increase in
consumer base. Regulations with copyright, operators revenue shares, and
infrastructure bandwidth are the major roadblocks in the VAS segment.

However, slow data transfer and speeds problem will be alleviated, once more
number of telecom operators start offering 3G services at economical rates.
Also, mobile handset manufacturers will also have to work with VAS players and
telcos, and iron out any existing compatibility issues to promote mass adoption.
Although mobile operators are currently focusing on expanding their networks and
improving their subscriber base, but once operators achieve saturation point and
witness further dip in ARPUs, they will pay more attention on mobile value added
services (mVAS). Market dynamics will eventually sort out the disparity in
revenue sharing.

Eventually, a larger ecosystem consisting of mobile operators, service
providers, payment gateway companies, regulatory bodies, etc, all need to come
close together to achieve the level of network integration and change in user
behavior required to realize the environmental cause that Idea has started
promoting.

Priya Kekre

priyak@cybermedia.co.in