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Denis Waitley was quite right when he said, "Imagination plus innovation equals realization." This has become the motto for telecom stalwarts who are relentlessly exploring possibilities in the remotest areas of India to realize their drive and desire of providing value added services.

If imagination is said to be the key in transcending barriers the barriers of region and social class, then innovation emerges as the clear winner, which ensures an equitable development for the telecom industry.

As fishermen in Kerala use communication technology to find the price of their catch, the farmers of Bihar use their mobiles to find the mandi prices. Such things demonstrate the empowerment of the Indian masses through VAS.

India is experiencing the most profound telecommunication trans-formation with several services being rolled out almost everyday. The telecom sector has witnessed a growth spurt from villages and small towns. The total telecom subscriber base for India grew from 70.83 mn in the first quarter of 2008 to 90.98 mn in the second quarter. Rural India contributed a 71% rise in this sector, while the remaining 29% growth came from urban India. This seg-ment is currently growing by 8-10% every month.

Last year saw the entire industry discussing and debating the opportunities and challenges of rural VAS. With the creative and resilient entrepreneurs gearing up to tap the entire country, VAS in uncovered areas being popularized. This year's telecom budget also saw a massive allocation of funds by the government for the 'aam aadmi'.

According to a report by PricewaterhouseCoopers (PWC), mobile VAS in India is expected to reach 18% by 2010, which accounts for 10% of the operator's revenue. Mobile VAS players are now looking to boost their revenue, as they resolve to move on from just ring tones and caller tunes. Mobile VAS in India still stands at 8%, as compared to 45-50% in Southeast Asian countries.

Of the next 250 mn mobile subscribers in the country, approximately 100 mn will be from rural areas, which will drive the uptake of rural VAS. By 2012, 60% or close to 400 mn of India's projected 650 mn total mobile subscriber base will be rural subscribers.

On a Higher Note
As the subscriber base of the country is expected to reach 500 mn by the end of 2010, rural India is where the next wave of growth lies. As urban markets become increasingly saturated, and as mobile telecommunications transcend technologies, standards, operators, and operational zones, the largely untapped rural markets can no longer be ignored. Indeed, the proportion of new mobile subscribers from rural areas indicates the importance of this market segment for sustaining mobile growth in India.

Rural India or base of the pyramid' (BoP) is the driver for this mobile revolution with 100 mn users today, and by 2012, it is expected to add over 60% of total telecom subscriber base, according to a recent report.

Jagdish Mitra, CEO, CanvasM says, "The rural market needs to adapt VAS and utilize the services that positively impact their lives and BOP segments by enhancing their livelihoods and enriching their lives. These needs can be fulfilled by implementing new methods and tools."

Agrees Vijay Shekhar Sharma, managing director, One97 Communications, "Rural India has the potential to propel the growth of the whole telecom sector, provided we are able to bridge the rural-urban divide."

Nonetheless, as the different stakeholders from the industry agree that rural India is the next place, the industry also comes to the next level of implementing the solutions that were being discussed from a long time.

VAS Innovation
Apart from regular services being provided, innovations in the VAS space are being witnessed in these potential services: healthcare, banking solution, employment, and education.

One of the prime areas for innovation in the rural market is in providing healthcare and health information via mobiles. VAS delivers practical advice to people on an immediate basis, plus references and suggestions for further medication/hospital centers.

The other innovation is with providing banking solutions to carry out transactions-such as allowing a trusted third-party to make payments, or carrying funds from one village to another-through mobile VAS.

Innovative products for the rural user need to be examined critically on the following parameters:

• The cost of providing such products should not be such that it causes mobile services to be economically out of reach for rural consumer
• Products/services also need to adhere to the regulatory measures so that they do not act as hindrances towards practical implementation
• Products/services involving cross-industry collaborations must be such that they bring economic benefits to all the participating stakeholders for the offering to be sustainable

Sunzay Passari, executive vice president, telecom and VAS, Aegis Tech says, "The BoP has completely different needs and aspirations. So VAS for this segment has to be more tailor-made and specific to their needs,"

Deepak Halan, group business director, tech group and e-governance practice, IMRB International says, "The type of VAS that will work has to revolve around their lives which could be education (admission process, courses of choice, fee structure, career counseling etc), job opportunities, farm inputs/practices, market access for produce and governance records (land records or application)."

Using mobile phones to teach English to the rural youth is becoming popular by the day. Since aspirations of rural youth are increasing, they look at English as a means of transforming from agriculture to services in the new economy. A number of operators have invested in this application. The rural sector is transforming rapidly. Who could have imagined that one day rural BPOs could also be set up?

Atul Chaturvedi, COO, Idea Cellular says, "Industry circles peg the size of the regional VAS market at Rs 850 crore, which is expected to double in the next two years. The regional content market would, typically, mean VAS solutions that are in local Indian languages."

He also feels that sachet pricing is one of the most innovative methods to allure the urban users. Given the fact that the price of the handset taken by a rural customer ranges between Rs 1,600-2,200 (including the second hand handset) the ARPUs are expected at around Rs 95 per month. Thus, sachet charging is a very viable solution.