Although VAS adds to the revenue stream of telecom operators, it has not yet achieved mass adoption for most product offerings. And 3G too may not be able to make the situation any better, says Saket Agarwal, CEO, Spice Digital.
4Ps B&M: While the telecom sector has been virtually untouched by the ‘R’ word, how has it played out for a VAS company like Spice Digital?
SA: Although operators have continued to add subscribers but these subscribers are different from the ones acquired earlier in terms of their disposable incomes and usage pattern due to which revenues have been under tremendous pressure. As a VAS company, we help the operators to grow their overall revenue pie, but we are still a cost constraint to them. Additionally, there are many other external factors that have impacted our business. For instance, TRAI’s policy, which makes taking consent from subscribers before activating any service imperative.
4Ps B&M: Given the current situation where average revenue per user (ARPU) are falling, how is Spice Digital helping operators improve its ARPU?
SA: As a VAS company, we offer various kinds of services to our subscribers. However, we’ve realised that there is a skew in the consumer profile and consumers that are under served by mass media are far more willing to brace entertainment-based VAS. For instance, there are places in the country where we still do not have FM and people in these areas are more likely to subscribe to Mobile radio to listen to the latest Bollywood songs. So, we see a huge pent up demand in these set of users and the consumption levels for them are too on the higher side.
4Ps B&M: Are your products catering to the mass market?
SA: See, if we talk about mass adoption, then for any service to be termed as a blockbuster product, it should be subscribed by more than 5% of the total subscriber base. However, there are only two products that fit that bill – our flagship product mobile radio and the popular VAS Caller Ring Back Tone (CRBT). The other services are niche services which can be classified broadly as devotional services, mandi rate services or eduacational services where we offer services from the lowest common denominator. So, Angrezi Seekho is another flagship niche product that we have launched. To cater to a vast audience, most of our services are offered on the voice platform as it’s assumed that all those who have phone know how to make a call and are therefore well versed with the voice and can speak. So we have content that goes in multi language to suit the needs of a greater set of audience.
4Ps B&M: How will 3G change the rules of the game for Spice Digital?
SA: According to me, 3G will be another niche. Let’s look at it this way. There has been quite a while since GPRS was first introduced, but till date only 30% of the handsets in the market are GPRS-enabled leave alone customer having subscribed to it or not. It’s noteworthy that a typical GPRS handset starts at a price point of Rs.4,000 and this price barrier will be double for 3G. Although BSNL & MTNL have been offering 3G services for a while but there haven’t been much takers for the same. The point here is not about getting into technology but about affordability and I believe that 3G will initially receive a lukewarm response.
Surbhi Chawla
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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4Ps B&M: While the telecom sector has been virtually untouched by the ‘R’ word, how has it played out for a VAS company like Spice Digital?
SA: Although operators have continued to add subscribers but these subscribers are different from the ones acquired earlier in terms of their disposable incomes and usage pattern due to which revenues have been under tremendous pressure. As a VAS company, we help the operators to grow their overall revenue pie, but we are still a cost constraint to them. Additionally, there are many other external factors that have impacted our business. For instance, TRAI’s policy, which makes taking consent from subscribers before activating any service imperative.
4Ps B&M: Given the current situation where average revenue per user (ARPU) are falling, how is Spice Digital helping operators improve its ARPU?
SA: As a VAS company, we offer various kinds of services to our subscribers. However, we’ve realised that there is a skew in the consumer profile and consumers that are under served by mass media are far more willing to brace entertainment-based VAS. For instance, there are places in the country where we still do not have FM and people in these areas are more likely to subscribe to Mobile radio to listen to the latest Bollywood songs. So, we see a huge pent up demand in these set of users and the consumption levels for them are too on the higher side.
4Ps B&M: Are your products catering to the mass market?
SA: See, if we talk about mass adoption, then for any service to be termed as a blockbuster product, it should be subscribed by more than 5% of the total subscriber base. However, there are only two products that fit that bill – our flagship product mobile radio and the popular VAS Caller Ring Back Tone (CRBT). The other services are niche services which can be classified broadly as devotional services, mandi rate services or eduacational services where we offer services from the lowest common denominator. So, Angrezi Seekho is another flagship niche product that we have launched. To cater to a vast audience, most of our services are offered on the voice platform as it’s assumed that all those who have phone know how to make a call and are therefore well versed with the voice and can speak. So we have content that goes in multi language to suit the needs of a greater set of audience.
4Ps B&M: How will 3G change the rules of the game for Spice Digital?
SA: According to me, 3G will be another niche. Let’s look at it this way. There has been quite a while since GPRS was first introduced, but till date only 30% of the handsets in the market are GPRS-enabled leave alone customer having subscribed to it or not. It’s noteworthy that a typical GPRS handset starts at a price point of Rs.4,000 and this price barrier will be double for 3G. Although BSNL & MTNL have been offering 3G services for a while but there haven’t been much takers for the same. The point here is not about getting into technology but about affordability and I believe that 3G will initially receive a lukewarm response.
Surbhi Chawla
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
TSI exposes b school ranking scamsters Mahesh Peri of Career 360 and Premchand Palety of C fore. - For Complete Sting Operation Video Click Here
Pioneer Exposes the fraud called Mahesh Sharma and Mahesh Peri of Career 360 and Barbel Schwertfeger of mba-channel.com
IIPM: An intriguing story of growth and envy
Prof Arindam Chaudhuri of IIPM on MF HUSAIN
IIPM Related Links
Detail of all IIPM branches
IIPM - Admission Procedure
IIPM, GURGAON
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