Hottest Technologies
Since technology forms an essential delivery support system for all businesses, the year saw some major technological additions in the VAS bouquet: Hungama Mobile focused on technology to build in-house development capabilities and forge strategic alliances; Buongiorno introduced ad serving and m-commerce platforms; and Bay Talkitec added 3G-based video application platform that will allow users to automatically utilize 3G applications.

Whereas OnNobile, India's largest VAS and data solutions provider for mobile, landlines and media service providers has added some phenomenal products and success stories in his kitty. Some of the latest product launches are-Phone Backup, M Search, and One Touch RBT.

The new product Phone Backup has been launched with Bharti Airtel and BSNL in India, Indosat in Indonesia, and Maxis in Malaysia. It allows subscribers to effortlessly take a back up of all types of personal information including files, messages, photos, videos, music, contacts, and tasks stored on their mobile.

With M-Search, users simply request for the content that they desire. The request can either be via voice or text. M-Search identifies the users request and immediately renders the requested content.

With the one touch RBT solution, when a mobile subscriber likes someone's ring back tone (RBT) and wants to set the same as their RBT, they can do so by just pressing the '*' Key. Another successful product, the On-Device portal delivers portal content on mobile phones through a client application.

Key Challenges
Like any other burgeoning industry, the mobile VAS space has its share of challenges that will iron out with better infrastructure, advanced technologies, more conducive regulations, and well designed structure. India is a challenging market to service, considering the diversity in language and culture across, low literacy ratio combined with fewer people comfortable with English.

In spite of increased demand and lots of new innovations, the Indian VAS industry is facing a lot of roadblocks, the tussle over the entry of 3G technology being one of them. Lack of content localization is also hampering VAS penetration, especially in rural areas. Preferences for basic handsets that do not support MMS is a deterrent as well.

Considering the present spectrum infrastructure constraints in India, operators are facing bandwidth crunch, which limits services offerings. For eg, to offer IPTV and other voice-based applications, a much higher bandwidth is required. There are numerous challenges in India concerning 3G rollout, and VAS players are preparing to tackle it.

Also, customer loyalty is a challenge as the market mature. With the number of first time mobile user shrinking and the likelihood of them being low ARPU subscribers, VAS players constantly need to reinvent themselves and connect with the existing higher value subscribers. High infrastructure cost, diversity of the spoken language and culture across the country, accents based on regions, dialects, cultural issues, noisy environment, and side speech are some of the major challenges.

Besides, as the VAS industry is scaling up, the biggest challenge revolves around building world-class competency and people practices, processes, delivery system and timely execution. Finding a place in the next generation VAS market will be difficult if the above factors are not taken care of.

The Roadmap
Almost all mobile VAS players are ready with their roadmap for the next fiscal. Bharti Telesoft will continue to enhance its current portfolio and develop innovative offerings in the m-entertainment, m-commerce, VAS and business support system space, to expand its geographical reach and extend its current market penetration. Bharti Telesoft is also focusing on aligning technologies to address business issues. Bay Talkitec plans to tap the 3G VAS market potential in the Apac region as well as the US. They are setting up their own office in Singapore and Malaysia. They are also in the process of setting up a new facility in Chennai and doubling their headcount from hundred at present.

Learning from existing VAS ecosystem in global markets, Canvas M will develop its business propositions for the local markets. They are in the process of enhancing their capabilities in managing consortium of content and technology VAS partners for various clients. They are planning to enter into the partnership with content, application and technology players to facilitate the building of business models that share business risk and helps in technology transformation.

Hungama Mobile will focus on consolidating its position in the mobile VAS space, drive the consumer business space through interesting online, mobile and retail initiatives, and complete the setting up of its international distribution network started a year back.

For Buongiorno, the focus will be on technology/content-based aggregation for operators and media partners, enhance offerings via CXRM services on WAP, and introduce social networking and UGC-centric services. They are also planning to drive marketing services for loyalty programs, brand solution, mobile ad sales, and mobile ad serving technology platform for mobile operators.

Future Ahead
Solution providers are looking ahead to the introduction of 3G to aid services like videoconferencing and video streaming. With the advent of 3G, value added services play a larger role in terms of differentiation.

Mobile is the only connected computer that most people will ever have. As a result, a lot of services offered today to PC and Internet users will be available to mobile users due to some unique advantages of mobile such as mobility, reachability, ability to bill the users, and location.

The year ahead will witness mobile VAS service providers consolidating their position, with operators taking long-term positions across either a technology bearer or content genre. Ad serving-commerce and social networking on mobile is likely to see innovation in the coming future.

On the technology front, some of the service like Mobilemarketing, mCommerce, location-based services, utility services, and services for bottom-of-the-pyramid users are going to further drive the growth of the VAS space. The convergence the telecom, media, and the technology space is resulting in making mobile an essential channel alongside print, radio, and TV. This convergence is opening up many challenging opportunities in the VAS space.

With a majority of the 6-mn odd mobile connections added per month coming from the smaller and rural markets in the last 12 months, a steep growth in the consumption of regional and devotional content will be the highlight for next year. This will be further driven by innovation in branding and marketing through ad funded mobile entertainment content.

However, operators will need to shift focus from customer acquisition to VAS promotion. Once there is increased awareness, advance VAS adoption will also take place.

Arpita Prem
arpitap@cybermedia.co.in