Indian Telecom Ecosystem is Killing MVAS Players and Associated Innovations

06:04:00

The competitive environment is driving Indian Telecom ecosystem modules such as Mobile VAS into downwards tailspin. In 2010, Industry pundits used to project MVAS as future revenue driver for Mobile Operator. The Indian regulator identified uneven proposition within MVAS segment offering through Mobile Operator and tried to offer more breathing space to MVAS solution providers to Indian Mobile Operators. Many round of consultation paper and heavy lobbying by Mobile Operators for not to disturbing the ongoing revenue to deployment mechanism. Ecosystem players including content owner, content aggregators, and MVAS developers all stood united with Mobile operator to protect then revenue sharing agreements. Ecosystem players managed to pass through so called hurdle on the revenue sharing to operational part but got trapped on the consumer billing segment.

The so called confirmation mechanism for enabling services, rollback for non active services, mechanism to deactivate service within set stipulated timeline as per the TRAI guideline acted negatively for Industry. The MVAS solution provider argument for maintaining the same revenue share model now started hurting MVAS with the depressed economic environment. MVAS service providers are paying large part of overall revenue to Mobile Operator for using their billing system and left with 30 to 40% of overall revenue. These left over revenue are shared with more than three other ecosystem player and ending MVAS player to have very low to negative RoI.

MVAS service providers in India experienced negative growth in high double digit for the last 2 years and most of them are looking towards other geographies to generate much needed revenue. The current revenue sharing mechanism is impacting MVAS service providers capabilities to invest in research and new innovation. That is the reason, Indian MVAS players are still offering auto running legacy product or replicated product line which is also impacting their competitiveness over International peers.

It’s high time that Indian Mobile Operators must recognize known but un-talked discussion point and offer higher revenue share to their MVAS service provider partner. The higher revenue share percentage allocation to MVAS players are going to help only Mobile Operator as their MVAS service providers would be able to invest and come out with innovative product line which may lead to growth in MVAS revenue. It is expected that MVAS market would continue to fall and collaborative approach from ecosystem player’s end is important to safeguard falling king.

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