As per market estimates, the value added services (VAS) market in India is currently worth Rs 180 billion. Going forward, this space is expected to grow to Rs 320 billion by 2015. Looking to tap the opportunities such growth entails, companies like Handygo Technologies have chalked out ambitious expansion plans in India.
In an interview with tele.net.in, Praveen Rajpal, chief executive officer, Handygo Technologies discuses the opportunities and challenges offered by the VAS market in India. He talks about company’s future plans and its recent mobile commerce offering, RockASAP.com.
Excerpts…
How big is the VAS market in India?
The industry estimates show that the Indian cellular market for the 2011 financial year is estimated to be around Rs 1022.3 billion and the market is growing at the rate of 16.6 per cent. Of this total amount, VAS or non-voice revenue for mobile operators contribute around 13 per cent ie Rs 130.26 billion. By these estimates the Indian VAS market is expected to reach 320 billion by financial year 2015.
According to a report by the Internet and Mobile Association of India (IAMAI), the mobile VAS market in India would be worth Rs 671 billion by 2015 contributing to 31 per cent per cent of the overall wireless revenues. This growth will be driven mainly by mobile data (both on handsets and dongles/connected computing devices), contributing 54 per cent of the overall mobile VAS market by 2015. Non-voice revenues are expected to grow to contribute 51 per cent to overall incremental wireless revenues in 2015.
What are the key drivers for the growth of VAS market in India?
The Indian VAS market is bound to grow as operators have already invested around Rs 1,000 billion in 3G and the broadband wireless auction. The operators are looking for killer applications that will help them recover their auction money.
What is the company’s latest initiative in VAS space?
The company has recently launched a website called RockASAP.com, India’s first mobile commerce application empowers users to search and buy products in various categories, including lifestyle, gadgets, books, music and clothing.
Handygo has also introduced ‘Digital books on Mobile’ feature on RockASAP.com. The ‘E-Book’ search engine empowers the users to search for their favorite books, authors and products from the wide collection of digital books available at RockASAP.com. We have tied-up with more than 40 publishers as well as various national and international authors in various categories for its ‘E-Books’ section to bring in the best reading experience to its users. They can download more than 500 books, priced 40 per cent to 50 per cent less than the paperback editions. As of now, RockASAP.com has top 23 Indian book publishers and 27 magazine publishers and 12 international book publishers and 7 magazine publishers listed on the platform. Every publisher has approximately 5000 titles active on RockASAP.com platform.
What are Handygo’s future plans?
For the financial year 2012, Handygo will have five to six million subscribers for its rural application - Behtar Zindagi. There has been a growth of 300 per cent in the subscriber base of Behtar Zindagi in comparison to the last year. This year, Behtar Zindagi is targeting an increase of 500 per cent in its subscriber base. The company plans to invest Rs 1.2 billion for the IVR based service Behtar Zindagi user connect campaign to be rolled out in six states.
For the next financial year, Handygo is targeting a subscriber base of more than 15 million.
What are the challenges before the company?
VAS industry in India has not done well because of its complete dependency on operators. The VAS players need to delink partially from the operator and start focusing on non-operator business in a big way - be it government, enterprise, and machine to machine applications. The VAS players suffer from lack of infrastructure and content localisation. Other challenges include slow pace and low penetration of 3G services. Also, a higher percentage of consumer segment is from the prepaid segment, where more than 50 per cent subscribers’ prepaid balance is less than Rs 10. Herein, segmentation needs to be done to identify customers who do not have money to pay for VAS and wherein, brands will be paying for their advertising inserts.
Despite these challenges, VAS will continue to grow in India owing to increase in awareness of VAS, increased mobile subscriber base, introduction of 3G services and increased focus on m-Commerce.
What are the technology trends that the company expects in India?
Vulnerability in the ecosystem has ensured constant innovation. Following are the trends that the industry will witness in India -
Deeper penetration: Many users started using internet with smartphones getting affordable and social networking sites like Facebook becoming popular. With new users logging in daily, in a few years a housewife from Jalandhar would send grocery orders via email from her wireless device and payments would be made via online payment gateways.
Entertainment: With 3G and advanced wireless devices, TV channels will compete with exclusive streaming services which would offer entertainment at competitive prices.
Publications: Applications will change the way users read newspapers and magazines. Interactive advertisements and auto updated personalised content will be delivered to users. Instant feedback and gratification will become the industry standard.
Voice Over internet Protocol: Faster, stable data connections and applications will ensure communication is seamless and cost effective irrespective of distance between the caller and the person being called.
More data on Cloud: Our bank statements, bills have already found their way to email. The next revolution will happen with medical reports and other financial data getting stored on the cloud.