On a Strong Foot

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The much hyped introduction of mobile number portability services in some of the global markets did not fetch significant returns for both operators and customers. But India is bracing for an MNP plunge.

After lots of discussions and apprehensions, MNP is finally set to hit the Indian market by the end of 2009. Once operators become replaceable and number portability becomes a reality, two things would come under focus-service quality and value added services provided by operators. While on one hand, operators are really excited about this model, on the other, VAS players believe that MNP will have some positive impact on the VAS ecosystem. This would make the entire system very interesting and competitive wherein performance would be the key player.

MNP would place VAS providers as strong players in the ecosystem, with added responsibilities of introducing more number of innovations, give world-class quality, and value for money. It is also believed that MNP would affect the revenue sharing pattern between operators and VAS players, because operators would be ready to pay high prices for exclusive content in order to attract more and more customers to their brand.

Impact on VAS Ecosystem
The introduction of mobile number portability in India has the potential to change the dynamics of the telecom industry by compelling mobile operators to enhance their services and offerings. Customers, who are not satisfied with their current offerings or services, will switch for lucrative offers and innovative services by competing operators.

Commenting on the same Milind Pathak, co-CEO & country manager, Buongiorno says, “MNP would definitely have an impact on VAS, which may become one of the factors for choosing an operator by any customer. For example, if a particular operator is known for its strength in music VAS. Music lovers would prefer that operator over another.”

“Still for some time, basic services by operators like voice call, customer services and network quality will rule as a parameter in opting for a particular operator's services by masses,” he further adds.

It is a big challenge for VAS players to attract customers to a particular brand just because of exclusivity of content. Commenting on the challenges Debasis Chatterji, CEO, NetXcell says, “There will be positive impact of MNP on VAS. More and more telecom players would want to have exclusivity over the content that they offer to their customers, thereby differentiating their offerings to the end customers. However, it will be interesting to see how telecom players would want to position their brand with the kind of offerings.”

Experience from markets around the world shows that MNP in itself does not have a major impact on a mobile user's decision to switch from one provider to another.

In the long-term, operators offering the best services, in terms of -the variety of services, ease of use, competitive propositions with the criteria varying from user to user-will gain market share.

Talking about MNP and VAS, Sangeet Chowfla, CTO, Comviva says, “The attractiveness of an operator's value added services is that any service beyond a simple voice call will differentiate the operator in the market and play a role in attracting users to the network. A proposition that is exclusive and popular will attract customers, and with MNP they will have the added advantage of not having to change their number.”

“Equally important, ease of use is a critical differentiator in attracting usage of mobile VAS,” he adds.

But on the other side, some players believe that MNP is not going to impact VAS space in a big way. Amit Sinha, GM, One97 Communications says, “MNP is good for consumers. A lot of service providers who do not provide really 'value adding' services to the consumers will take a hit. But I think VAS will not be impacted much by MNP on an overall basis. However, smaller providers, who are deployed with one or two service providers, might get adversely affected.”


“More and more telecom players would want to have exclusivity over the content that they offer to their customers” Debasis Chatterji, CEO, NetXcell	“MNP would definitely have an impact on VAS” Milind Pathak, co-CEO & country manager, Buongiorno	“Operators will be able to differentiate their brand via their portal offerings” Sangeet Chowfla, CTO, Comviva

MNP and Revenue Sharing
Though the Indian VAS market is touching new heights, the biggest anomaly in the system is that while the number of companies and demand for such services is increasing, the revenue model-shared between VAS companies and operators-still leaves a lot to be desired. VAS providers feel that the ratio of revenue share is heavily skewed in favor of telcos, which is not in case of other geographies. But with entry of new models like 3G, MNP, and mobile TV, and with service providers shifting focus from subscriber base expansion to VAS, VAS providers are expecting some positive changes in the revenue sharing pattern.

Especially, MNP is creating a lot of hope and excitement among VAS companies, because they feel that this model will have some positively impact on the poor revenue sharing pattern between operators and VAS providers. Operators would be ready to pay a premium to content players for exclusivity of their content and even VAS application providers will have an exclusive contract with them. For example, content players of new and premium movies would have operators vying for exclusivity.

“We see revenue sharing being affected with the implementation of MNP. In any exclusive content partnership with operators, we will see revenue share deals more favorable for VAS providers. Also innovation and premium content would fetch improved revenue share from operators,” says Pathak of Buongiorno.

Interesting applications and content from various sources may be provided via an operator's on-deck portal, others may be off-deck via the Internet. The mobile Internet will grow in India as there is a wealth of content and variety of interesting applications available for users via this route. Mobile operators provide a means of accessing the Internet and can deploy solutions to enhance the user experience. The ease with which mobile user can enjoy the Internet over his or her mobile phone, and the speed and richness of that experience can prove a differentiating factor for operators.

“Though mobile Internet usage in India will no doubt grow, there is still room for on-deck operators' portal. Operators will be able to differentiate their brand via their portal offerings, therefore, they are keen to secure compelling content or applications that have the potential to gain mass traction,” says Chowfla of Comviva.

But Amit Sinha of One97 Communications has a different opinion. He believes that “content services are replicable and operators across the board will use them. So, there will be no significant impact on the revenue sharing pattern. There might be certain unique services and the complete IP will owned by a single provider which can tilt the balance in favor of service providers.”

Future Calling
The implementation of MNP is still under progress, but VAS players believe that VAS solution should need to be MNP ready. Speaking about the plans Chowfla says, “Our solutions are already MNP ready and have been deployed in markets where MNP has been in place for some time. Comviva has invested greatly in ensuring its applications are available via a variety of channels such as voice, SMS, USSD, and web.”

Apart from VAS, NetXcell believes that billing, tariff, etc, could compel the overall market compete for price. On the other side, One97Communications is not planning specific services for MNP model, but the company's strategy will stick to creating and developing more innovative products and services with best possible user experience across platforms.

However, VAS players have a mixed opinion regarding mobile number portability. While on one hand, some players strongly believe that MNP would actually work as a catalyst for boosting VAS ecosystem and increase their revenue share, on the other hand, some players are expecting that MNP may have a smaller effect rather than a major one, and that exclusive content will not force operators to give higher share to content providers even after MNP is implemented.

All said and done, the pros and cons of MNP will come to the fore after the implementation. While the customer is waiting for yet another path breaking service, it is yet to be seen how the VAS segment paradigm would be changed in the aftermath of the implementation of MNP.

Arpita Prem
arpitap@cybermedia.co.in

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