MVAS Regulatory– Technology and Business Impact on VAS companies


The government regulator initiative to govern VAS vendor and mobile service provider to protect end consumer needs further re-calibrations. Post consultation paper release in FY10-11 and subsequent responses from ecosystem stakeholders highlights showstopper as well as hidden opportunity around proposed MVAS. This article highlights Technological and Business continuity challenges posed towards VAS developer, Owner’s, and aggregators.

Before going into details of impact, MVAS regulation makes it mandatory for the VAS service provider’s to take authorization from end user to activate requested VAS service. Post authorization, Service Provider would be able to bill end user. The process must be repeated at the end of VAS service expiry.

The government regulatory wanted to address end user concerns of repeated billing or lengthy process of deactivating unwarranted VAS services but in-turn forced VAS ecosystem players to realign their VAS design, development and delivery mechanism

The technological and financial impact on the VAS providers would be the followings:

Technological Impact

  1. All VAS provider would be enforced to change the service delivery mechanism both on the service and business logic level to support the regulation on Service Creation,Execution, Activation, QoS, Provisioning and Assurance
  2. Enhanced two way Security, Business Intelligence, Reporting and Billing upgrades
  3. All VAS provider would be enforced an automated customer care portal integrated with mobile operator website in order to seamless adhere regulation
  4. VAS provider would be required to integrate minimum feature set of Service Delivery Platform and integrated CDN
  5. All VAS provider must offer certified product or service w.r.t standardization for seamless integration with Mobile Operator Network
  6. All VAS services or product must be certified across devices in order to get the security clearance from mobile operator
  7. All VAS provider must have dynamic feature set with a capability of segregated and aggregated mechanism to enable and disable business and service logic based on the product offering
Financial Impact

  1. Due to the high capex and opex cost by Mobile operator, there is a high probability that mobile operator would renegotiate the price point with VAS provider
  2. High Capex in implementation required regulatory compliance feature set
  3. High Capex in certification process
  4. High Capex to upgrade VAS service or product attached  technological platform
  5. Lower customer adoption and subsequent low VAS revenue due to stringent mechanism.
  6. Low ARPU per customer across Apps, SMS, Data- music, video centric service
  7. High Capex to offer committed QoS
  8. Low RoI and High TC
In the midst of high competition, margin pressure and added hidden threats of MVAS regulation may take Indian Mobile Operator into VAS tariff war which till now was not affected with the same.

In conclusion, MVAS regulation might bring cheer for end user but High TCA, TCO, UAC and cumbersome processes would translate into Low - VAS Revenue, ARPU, Margin, RoI. It also possesses great opportunity for the innovative VAS companies to tap untapped VAS userbase.

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