How was the year 2006 for service providers like you, in terms of content and VAS?
Harish Gandhi: Mobile content consumption has progressed rapidly over the last three years in the Indian market. Players in the value chain, from copyright owners to content aggregators to content marketers, are beginning to settle into their respective roles. There is a greater understanding of consumers' content needs. Mobile content has grown by 200% over the last two years, and is expected to grow significantly this year too. As more and more phones that enter the market are multimedia enabled and can access the Internet, the propensity and ease of access to mobile content will continue to grow.

In 2006, Airtel introduced a host of innovative value added services (VAS). After Hello Tunes and Easy Music outlets, the latest was 'Song Catcher'. Airtel partnered with Microsoft to launch the Windows Mobile 5.0 for customers to access corporate email via direct push technology. In November 2006, Airtel tied-up with Google, which will power search on Airtel Live.

Airtel also joined hands with Disney to launch India's first 'Disney Mobile Theatre'.

Mahesh Prasad: It has been a fantastic year for the entire mobile industry. India's subscriber growth is surpassing China's. In mobile content and VAS segments, the year has been a spectacular one for Reliance and the mobile industry on the whole. We were able to create and launch new services, and in calendar year 2006 we did about 2,500 content services on Reliance Mobile World. Interesting things were done on voice portal content services as well. There were also quite a few new unique services that were launched. In the transactional space we had services such as speed post tracking, gas booking etc. M-blog was another new service which achieved great success.

Pradeep Shrivastava: The year 2006 was a good year with growth nearly doubling in terms of content and VAS in absolute terms. More and more innovative services were launched. Music, entertainment and sports were the areas where we saw a lot of action. Transactional services also gained considerable popularity.

How much do content and VAS add to an operator's revenue? How do you see this share growing in the future in comparison to voice?
Harish Gandhi: The mobile market in India is at a fairly early stage of development, nevertheless, very attractive. A mobile user in India is still at an experimental phase regarding adapting to VAS, but we can see that changing in the near future. Currently, the revenue from VAS is about 10-11% of the total mobile revenue share.

Mahesh Prasad: We have not made revenues on content as a separate thing, but today more than 10 mn subscribers' use just R-World. In addition to that, we have voice portal and SMS content services too. So if we look at the total gamut of services, nearly 70-75% of subscribers are using these in any month. India is still a growing market for mobile VAS. But interest from consumers is tremendous and we are seeing a lot of innovation in the mobile content and application space. But if you benchmark it with mature markets such as Japan and Korea-where around 25% of the revenue comes from the non-voice services-it is less in India.

Pradeep Shrivastava: Typically VAS contributes between 8-12% of gross revenues. This share is likely to grow between 15-18% over a two-year period.

How do you see the content market growing in the coming days? Which will be the killer apps?
Harish Gandhi: Indian consumers are very discerning. They want high quality products with a high value for money quotient. Keeping this and the rapidly evolving technological landscape in mind, we will continue to launch products that provide exciting new ways for the consumers to entertain, engage and inform themselves. With falling handset prices and advanced attractive features thrown in, the Indian consumer is beginning to use the phone for more than merely making calls and sending text messages. Also watch out for community-based services like messaging (IM, voice messaging), which are set to grow this year.

Mahesh Prasad: The industry is going through the growth phase and we have come way forward from just using SMS. We have a number of services such as ring-tones, caller tunes, etc and the consumer is also comfortable with these services. Entertainment-music, movies and cricket or anything related to these areas-will bring in those customers who have never used VAS. Customers are also willing to use mobile for utility services such as electricity bill payment and airline tickets, which are complicated mobile transactions. Anything to do with spirituality is also a big segment. We, as operators, need to develop services for everyone and have a broad array of services for every segment of the mobile user.

Pradeep Shrivastava: While film related content will continue to grow, user generated content is likely to begin making a contribution this year. User generated content will gather momentum, hence community creation focused on enabling user groups to share content could be a killer application.

What kind of revenue sharing models do you see emerging between content providers and operators?
Harish Gandhi: There are multiple players in the content value chain, and the number of players depends on the deal structures for the content pieces. The attempt is to ensure as equitable a distribution as possible, so that each party's effort and investment to deliver the content is rewarded in the same proportion.

Mahesh Prasad: The issue of the lion's share going to the operators has been raised time and again, but what they haven't shared is that there is a tremendous amount of effort that goes in on both sides. No content is made exclusively for the mobile, except for games, and it needs to be adapted for the new medium. The revenue share model varies from application to application, from the sophistication of the application and the perceived value that it brings to the content provider and the operator. It can be anywhere from 15-35%.