The Indian Mobile VAS (MVAS) industry

India has a total of 0.85 billion mobile subscriptions as of the end of July 2011, according to the Telecom Regulatory Authority of India (TRAI). As voice services are getting commoditized, mobile service providers are increasingly turning to non-voice services to increase their revenues.

This has resulted in the Indian mobile value added services (MVAS) market witnessing phenomenal growth since 2005 and has by far outpaced other markets around the world. This sector has thus emerged as the most vibrant and transforming division of the overall Indian telecom industry.

MVAS is expected to contribute 31% of wireless revenue by 2015 according to a report by the Internet and Mobile Association of India (IAMAI) and Analysys Mason. Currently, entertainment VAS is the leader with the usage of different ring tones and caller ring back tones is an all-India phenomena with both prepaid and post-paid users and across all types of demographics. However, a change is developing in the usage of VAS with the urban Indian user beginning to see value from information VAS such as updates available on sports, bank accounts and the like. Emerging MVAS services for the urban user includes social networking and gaming. Rural Indian mobile users however are still enamoured by the entertainment VAS. The growing mobile internet usage in India at around 46 million currently, will further fuel growth of mobile applications usage. “As customers get comfortable accessing the mobile Internet through their smartphones and tablet devices, the MVAS industry is likely to grow significantly and 3G would give it that boost,”said Badri Sanjeevi, COO, Mauj Mobile.

There are a number of companies in India that provide MVAS services and the large players like OnMobile, Comviva and IMIMobile earn their revenue from both export and Indian markets. Indian MVAS players are also looking at fresh revenue models and areas to enter and, at the same time, they are consolidating and increasing their depth in the existing market. OnMobile, one of the early players in the MVAS segment, has gone beyond mobile and launched services around music radio in the Asia-Pacific region. In Europe, the company had launched a speech recognition engine with Orange for a retail company. It had 49 million RBT users every month, 35 million phone backup downloads and 10 million on-device portal downloads.

There have also been some acquisitions by Indian MVAS companies in the last few years. OnMobile acquired European speech recognition company Telisma in 2008. In August 2010, Mauj acquired UK-based Mobango, an independent online store for mobile apps and user generated content. IMImobile, an Indian provider of value-added services (VAS) solutions to mobile telephone operators, has just acquired Skinkers, a UK-based digital agency in a move that is expected to be beneficial to both companies as the services of the other organisation can now be provided to their existing clients.

The Indian MVAS companies have leapfrogged their software services counterparts in understanding their markets, learning to make acquisitions to fuel growth in new and existing markets and they demonstrate a sophistication that is an eye-opener for other sectors as well. Are there learning’s to be taken from this industry on how to quickly jump on a happening technology trend?