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Penetration of mobile devices with cameras, color screens and other enhancements is increasing in India. Advanced networks and platforms have already been installed and operators have started recognizing that selection and presentation of appealing content will be essential to exploit this opportunity. But uncertainties remain about how best to develop and implement coherent content strategies. As operators gear up to promote VAS, worries about expanding the subscriber base, upgrading networks, and raising funds will become behind-the-scene headaches. The limelight will now be on the new services being offered-and who has successfully managed the transition of mobile phone into a utility tool.

Strategies for Mobile Operators
Although voice revenues dominate for all the mobile operators, they are placing increased emphasis on content and data services as the engines of their future growth. The price war in the mobile industry is all but over and operators will be fighting a new kind of war now. That war is going to be on content. Mobile content helps operators in their positioning, through exclusive services and association with leading brands. However, they are still uncertain about how to develop and manage a clear content strategy. They find themselves overwhelmed with offers for content and services, and are unsure about which deals to strike, what roles to take in content development, and how to present the content to customers effectively. Operators can adopt the following framework to address these issues.

• Adopt a clear content strategy: In general, operators see mobile content as bringing two main benefits: direct source for revenue generation and support for competitive advantage. It is the second that is increasingly driving operator's content partner discussions. Most of the operators are linking their content and data strategy to their customer segmentation and marketing strategies. This provides a clear basis for operators to pro actively seek out the content partners. Operators should also segregate the content based on niche markets.

• Define your role in content delivery: No operator can hope to develop all of its own content and services. Therefore, operators need to develop a range of content-partner relationships. Most of the operators in India believe in publishing the content, and work closely with third-party providers on the development and the presentation of the content. They can invest in marketing and promotion of the content.

Until recently, operator WAP sites and menus were of limited appeal. However, with new devices, greater menu customization and improved GUIs, operator portal are set to become an important distribution channel for content. Operators need to ensure a constant supply of high-quality content to keep customers revisiting their portals. Operators should have both the depth and quality of the content to support each menu category.

• Simplify commercial models: The entire value chain works on revenue sharing basis, wherein the operator focuses on marketing the content, while the content developers focuses on its quality and breadth. The revenue sharing model in India does not include third party billing, instead the end user pays the operator for all the content used. Operators then share the revenues with content providers. Operators need to simplify the process of dealing with content providers. This implies standardized non-negotiable contracts. Operators need to understand the costs of content creation specially high-quality content. This will lead to a willingness to share more of the revenues from content services in order to ensure that there is a viable business model for the content providers.

• Focus on IT integration: The major technical issue that operators face is how to integrate new services and platforms, both in-house and from third parties, with their existing billing and customer support systems. This has received less attention, compared to the investments made in networks and platforms. There exists a need for operators to move away from one-off products or platform-based solutions to designing services within a coherent framework architecture that can adapt to changing needs.

• Align organization and processes with Data Strategy: Mobile operators in India are yet to adapt to a data services world of multiple and diverse products. The best operators have teams with clear responsibilities for the development and management of products and with the relevant skills, for example, media and content management. They also develop consistent roadmaps across the company for content acquisition, marketing, new products and technology platforms, with all units working towards the same clear goals.

• Marketing the existing services: Despite their focus on VAS, mobile operators have not communicated this to subscribers at large. Operators are still preoccupied with airtime rates and subscriber base. The cost of promotions is one of the major problems for operators in selling the content. Hence, sometimes they are seen more as enablers for downloading the content.

The thrust of mobile content marketing activities should be on subscriber education. They may offer the content free of cost for a certain period of time, to make it more popular and friendly. It is important to build awareness through the mass media, but that has to be complemented with more intense campaigns.

• Local language vs English: SMS is and will continue to comprise the bulk of non-voice revenues. Revenues aside, SMS is a potential tool by which GSM operators can reach out to subscribers and tell them what else is possible with the mobile phone. But with the spread of mobile phones into the interiors of the country, language has stood out as an obstacle to the spread of SMS, leaving out 30% of the Indian subscriber base. A few handset vendors like Nokia offer Hindi messaging, but the base of such subscribers is still insignificant to popularize peer-to-peer messaging. Hindi is still the only language on offer, leaving out a large base of Indian subscribers. Surveys by Indian operators have also found that many subscribers do not use SMS-based services because they find the medium tedious and would prefer voice-based services.

• Encourage content providers by paying well: Despite the common refrain, operators have steadfastly refused to acknowledge that content is the king for them. Indian content providers have an abysmal average revenue share of 30% while mature markets allow content providers as much as 87% of the generated revenues. There should be a change in the mindset of the operators: the content is not free and content providers have to be paid for their creativity. In India, the low revenue share with content providers has proven unviable for many small content providers, many of whom have either exited or diversified into allied services. Operators must work out sustainable revenue-sharing models with content providers. Another strategy for operators could be to take up a strategic stake in content companies, to provide financial support and to control the quality of content.

• Finding the right price: While it is all right to position a particular service, it is even more important that the services be affordable, particularly in a price-sensitive country like India. The success of ring tones, logos, downloads, etc has shown that Indian customers are not averse to paying if they perceive value in the content.

Strategies for Content Providers
The mobile content market in India, as in the rest of the world, is highly fragmented with a large number of players from all sectors, including independent start-ups and large traditional media companies. Many of the independent mobile content players are struggling for survival. While, for the traditional media players mobile content represents a tiny portion of their business, and they are uncertain how to maximize their value from mobile services.

Right now, operators dominate the mobile content value chain. Operators should think in terms of a viable business model for the content providers so that content providers shall survive and become able to deliver high-quality content to the operators. With the limited revenue split between so many players, consolidation in the market is inevitable. It has been predicted that only a few regional content providers shall emerge. Most media companies are keen to leverage their strong media brands in the mobile market. For some of these media companies mobile represents a new format and a new revenue opportunity. However, even for the leading media brands, there is a significant cost to distribute and manage mobile content. As a result, the market has seen a recent growth in the role of intermediaries, willing to purchase rights, even assist in content creation and distribute. However, the role of such intermediaries remains uncertain. There is little margin to share across multiple players and several firms have indicated they would prefer to take these activities in-house over time. Several of the content providers have reservations about the mobile content market to date. They are frustrated by the demands of operators, the lack of standardization, and the small returns so far.

The media industry has little doubt that the mobile platform will play a significant role in media distribution, but are some times frustrated by the slow progress of content service so far. However media players must play their role in making this happen. This requires a greater involvement with the operators to develop mutual understanding and encourage development of compelling content and services.

Rahul Jain mobile VAS consultant