Mobile players focus on MVAS to increase ARPU

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

Talking to CXOtoday 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 indicated that this market is growing at 70% annually.”

While the growing subscriber base has positively impacted industry revenues, operator 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 licences issued to Etisalat, Unitech and Reliance (GSM) that is likely to take MVAS to all time high.

Among MVAS, the most popular service was downloaded mobile music, although voice portals were swiftly taking over, said Halan. SMS-based infotainment services are largely divided among the big players. A TRAI reports indicates that out of the 375 million users, one out 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 give 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, will further help video downloaded and a lot more development on MVAS.”