Mobile VAS: The Music of Money

19 05 2009

Which is India’s largest music company? Clue : It’s not Saregama India or T-Series. Answer :- It is Music Bharti , the mobile value-added-services wing of Bharti Airtel. Rediff  reports:

Music Bharti has become the largest music company in India, overtaking Saregama India Ltd  in terms of revenue,” Bharti Airtel’s Deputy CEO Sanjay Kapoor said.

While Kapoor did not disclose the exact revenue earned by Music Bharti, which provides music services like hello tunes, call-back tunes and music on demand, Saregama had a annual revenue of about Rs 150 crore (Rs 1.5 billion) in the fiscal ended March 31, 2008.

A closer look into the advertising messages of major mobile services companies indicate the focus on value-added services. Aircel TVC has MS Dhoni advocating the use of Mobile phone for locating a hotel, making air bookings, cricket information and downloading music. Vodafone through its new TVCs which are being aired frequently during IPL matches is using the newly created characters Zoozoos using the various VAS provided by Vodafone. The latest Airtel TVC also has Madhavan and Vidya Balan on vacation in a tent, subscribing to the astro service, again a VAS.

With India having reached a mobile penetration of over 30% and urban centres reaching saturation level penetrations, all mobile companies, new and old are looking at VAS to differentiate as well as to enhance their ARPUs from the existing customers.

In a related news item in Deccan Chronicle, the size and growth rate of mobile VAS market in India are reported as :

“Mobile VAS industry is expected to generate sales of Rs 11,000 crore. It will achieve a compound annual growth rate (CAGR) of 44 per cent in the next few years. As of today, 60 per cent of the content of mobile VAS comes from the audio downloads.

In his blog, Rajesh Jain, an Internet entrepreneur , who has business interests in providing content and services to cell phone service providers, while giving a detailed breakdown of the market size for various services, makes a key point

” What is touted as a $1+ billion industry (what subscribers pay) is in reality only a $200 million industry from the VAS providers point of view, thanks to the skewed revenue shares between the operators and the VAS players.”

When 3G services are rolled out al over India the market for Mobile VAS would expand and  go beyond the frivolous to more useful services, for which customers would be willing to pay.

– G. Mohan

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