Mobile VAS to increase

According to the recent figures the mobile value added services market is expected to have a compound an annual growth rate of almost 50 per cent. The reports claim that MVAS market is growing, there might be a few challenges including the revenues sharing model.

According to a report by Boston Analystics, a knowledge process outsourcing firm the revenues from MVAS (excluding person-to-person SMS) are expected to be around $348.8 million (around Rs 1,395 crore) by 2009.

The revenue sharing arrangement for non-enterprise MVAS is typically 60-70 per cent in favour of the operators, 15-25 per cent for content aggregators, and 10-15 per cent for content creators. Further, royalties paid out to the copyright owner account for 10-15 per cent of the total revenues.

In the non-enterprise MVAS, even in the case of enterprise solution services, the operators retain 70 per cent of the revenues, while the remaining accrues to the service providers. The revenue sharing arrangements in India are significantly different from those in evolved mobile markets such as China, where the share of the operator ranges between 20 and 30 per cent, while the aggregators and the content owners get a majority of the pie.

The report suggests that despite considerable growth in the mobile subscriber base, low feature handsets continue to remain the order of the day. The purchase decision for handsets continues to be driven by basic utility for voice.

According to the India Mobile Handset Usage Satisfaction Study 2006, an integrated digital camera, FM radio, and speaker phone features remain the most likely upgrade drivers.

One of the features, which are growing in the market include the tri band, Bluetooth, infrared port and others. The report predicts that the share of operators is expected to decline from 60 per cent to 30 per cent by 2010, with other players across the value chain accounting for almost 70 per cent, compared with 40 per cent at present. The report notes that regional content, mobile Internet and location-based services will be accessed in future.

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