SMS: A JV with the TV

The latest statistics say that the number of cellphone users in India has reached 7.6 million and new subscribers are also being added at a blistering pace. This trend is likely to continue, with a target user base of the middle class alone being 100-million strong. However, it is also estimated that they won’t come into the cellular fold because of dramatically declining airtime rates alone, but because they perceive cellphones as essential to their lives.

Now let’s flip the coin and look at it from the cellular service providers’ point of view—airtime rates have crashed to the lowest in world, per user revenues are drastically down, even usage has declined after the novelty has worn off. Airtime rates have crashed by more then 75 percent in the last three years, while roaming rates have come down by almost 85 percent in the last three months. As per COAI, accumulated losses of the cellular industry, as on 31 March, 2002, are around Rs 7,000 crore. Average revenues per user are plummeting so fast that statistics compiled are out of date before they can be posted. So numbers, i.e. the increase in subscriber base alone is not going to get rid of the hangover after such a party!

There is one silver lining to that dark cloud however. The runaway popularity of the short message services (SMS) has brought some joy to the cellular operators. SMS has caught everyone’s fancy, especially the lightning-fingered young and the young at heart. It has turned out to be a good revenue generator for the cellular operators. The revenue share from SMS, currently pegged at 5 percent of total revenues, is expected to grow up to 10 percent by 2003. This unobtrusive method of instant communication is also great for expressing one’s creativity and sense of humor and is proving to be a major source of entertainment value for millions.

A Money Spinner IDEA

Star TV has joined hands with Cellnext Solutions, and brought many of its shows on the tiny screen of the cellphone. Cellnext is taking care of the implementation, operation and upkeep part.

SMS TV works for all three in the gully. Cellular operators get an opportunity to provide their subscribers with a value-added service for their share of the shekels. Broadcasters get another medium to engage their viewers and persuade them to stay on the scene without the remote control power trip of a rapid zap (particularly during the advertisements).

And for the solution provider, in this instance, Cellnext, it’s a money-spinning idea ably executed.

For the end-user, it’s a cool opportunity to participate in shows like Kaun Banega Crorepati (KBC) in real time and make their opinion heard.

And to keep them devoted, the broadcaster, in this case Star TV has dropped in some prize money for the SMS interactor on a first-off-the-mark basis during the airing of KBC.

Cellnext is also doing a lot of the traditional TV guide work in tandem with providing the interactivity now with a wide range of services in association with Star TV for cellphone users. These include TV schedules, dedicated song requests, movie options, contests, voting and opinion polls.

Then there’s the fun stuff for youngsters, techies and enthusiasts by way of ring tones, logos, birthday wishes to celebrities, music messaging, cricket, horoscope and so on.

Taking a cue from the European operators, the next move could well be into SMS TV. What otherwise is there to do for an encore? For instance, in Spain, a simple crossword quiz of 30 seconds generated 6,000 SMS answers per day with a peak of 43,000 on a special anniversary edition. The German television show, ‘Jede Sekunde Zählt’ (Every Second Counts) invited users to send SMS messages to influence which contestant would win a competition. This call to action generated 1.2 million SMS messages within half an hour.

SMS TV works by providing a return path for the viewers to interact in real time during shows that lend to such interaction. This helps the broadcaster too because it adds on a new revenue stream. The henchmen that the broadcaster will have to share the loot with in the gully are, of course, the cellular operator and the service provider—a nice three-way revenue-sharing arrangement that puts a smile on the faces of all concerned.

And SMS TV surely gives more teeth to the concept of value-addition in a cellular service industry that’s feeling the pressure on its bottomline.

Manisha Sharma, Cellnext Solutions