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Indian Mobile VAS Market To Reach Rs 55,000 Crore By 2015.Really?

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The Indian Telecom growth story seems to be accelerating without brakes. But then, with 791 mobile subscribers there is no reason to doubt the growing telecom market in India. The interesting thing in the Indian telecom market is that the traditional revenue sources for the operators- voice & SMS are at rockbottom. The subscriber churn as a result of Mobile Number Portability has also added to the worries of the operators. So it is obvious that the operators are betting on VAS as the next big opportunity to sustain and succeed in the market.

The mobile VAS market in India has really taken off in the last few years. The launch of pocket-friendly Android based smartphones is helping the cause of VAS services and the launch of 3G is now expected to give the Indian Mobile VAS market a huge boost. How big a boost you ask? If PWC is to believed, the mobile VAS market in India has the potential to generate Rs 55,000 crore by 2015. These estimates have been published in PWC’s report titled Value Added Service: The Next Wave which assesses the VAS ecosystem in urban India.

Here are some of interesting data points from the report:

  • Communication VAS services comprising of SMS, Video Calls, MMS and Email is expected to cross Rs 20,000 crores by 2015 with a majority contribution by SMS
  • Information VAS services comprising news and alert based services is expected to cross Rs 7,900 crore by 2015
  • Entertainment VAS services comprising of Caller Tunes among other things is expected to be the most profitable VAS segment and is expected to reach Rs 25,000 crores by 2015
  • Regional Entertainment based VAS services are expected to be in big demand and VAS providers would need to focus on localization and multi-lingual capabilities
  • Online gaming on mobiles is expected to be a favorite among students
  • Medical advice from Doctors over mobile has good awareness and a significant number of users are expected to adopt this service. I personally found this interesting since I have not heard of any operator or VAS provider offering similar services
  • The only negative looking aspect is the fact that even though mCommerce has high awareness levels, the adoption rates are expected to remain low. I am not really surprised though. Given the sad state of e-commerce in India, I wonder if Indian consumers are ready to adopt mCommerce

All in all, the report showcases a rather rosy picture of the mobile VAS market. However, I wonder if the forecasts are on the higher side. A previous report by IMAI pegged the MVAS market at an estimated Rs 11,680 crore in 2010. If those numbers are to be compared with PWC estimates, it means that the mobile VAS market in India is expected to almost double in revenue each year till 2015. Even with all the positives in the Indian Telecom market, this seems difficult. For what it is worth, the report from PWC is betting on the launch of wireless broadband and 3G to drive the mobile VAS market but going by the initial reactions to these services, the operators still have a lot to improve in terms of infrastructure and pricing to increase adoption.

Having said that, I would love to see the Mobile VAS market flourish and reaching the estimates that have been forecasted. India has been instrumental in setting the benchmarks in traditional telecom services and repeating the same in VAS would be the icing on the cake.

What are your thoughts on the Mobile VAS forecasts by PWC. Do you think the mobile VAS market has the potential to grow and attain revenues reaching few thousand crores?

  1. Anita says

    Nice article about VAS ….however i want to know is there any specific evolution about M-Bnaking kind of thing

    1. Ankit Agarwal says

      Anita, just use the seach box on the website for Mobile Banking. We have had quite a few articles published on the same. The current report by PWC does not share many details but does say that mobile banking VAS may not grow as fast as other features

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