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How ‘Exclusive’ VAS Will Save Indian Mobile Operators!

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The way Indian mobile operators have grown in the last few years both in terms of operators as well as subscriber base, there were doubts whether this growth will ever stop. Well, even if the growth has not stopped there are definite signs of slowing down as evident from the latest mobile subscriber data for August

Not only that, Indian mobile operators are hard pressed for margins. Operational pressures have made them freeze new hiring / lay-off employees even as the pure subscriber growth remains positive. This does suggest that Indian Mobile operators are wading through rough waters and if the way things are going, not many will manage to swim through.

If I had to come up with a single reason which plagues the Indian mobile operators, it would have to be Differentiation. In plain speak, there is no freaking way customers can say ‘Oh! X operator is different or Y operator offers me what no one else does". What am I saying? Operators are differentiating all right, you say. Lets do a quick round-up

Network:

Well, all I have to say in this regard is "Check Twitter for the answer!". The specifics may vary with location / operator but overall I don’t think there is one operator which can promise the best network availability at all times (despite what some advertise)

Pricing:

Where do I start on this? The pricing wars did create this competition among operators to come up with the cheapest and most attractive pricing but almost everyone came to a level playing field. For now, most operators are back to raising their prices

There might be more micro-level differentiators (customer service anyone) but if the operators cant differentiate on product / service (network) and pricing, there seems to be something really wrong.

Access To Exclusive and Amazing VAS Is The Differentiation Mobile Operators Need

Captain Obvious answer, isn’t it. True because there are umpteen reports and articles highlighting how big an opportunity VAS is and how it can help mobile operators make higher margins etc.

But, I have never had a ‘AHA’ moment with VAS which could make me a believer. Not until now that is when I actually participated in a VAS offering.

tutor on mobile

To cut the long story short, there is a service that Tata Docomo has launched known as ‘Tutor On Mobile’ which is basically a conference platform developed by a company Voicetap. What Voicetap’s platform and eventually TOM offers is an interactive platform where people can listen to experts talk on various topics (education, jobs, health etc.) and also ask any questions that they have in real-time.

I singed up to be an expert on one of these TOM sessions and that’s where I got a sense of the differentiation that VAS can offer to mobile operators. DoCoMo’s TOM is only a single example but the idea here is that a product / service like this offers direct benefits to subscribers and they can get real value out of it.

Imagine being able to connect with an expert on say ‘Investment Strategies’ and ask questions directly right from the phone. This is the kind of stuff that not only makes me pay a premium to my mobile operators but also makes me talk about it (Purple Cow if you will). It could be TOM or any other VAS offering that actually delivers immense value.

When an operator has access to ‘Exclusive’ powerful VAS offering, they have that differentiation to position themselves in the market if they market it right!

The focus here is however on ‘Exclusive‘ because if all operators have access to similar VAS content, the playing field gets leveled again. The challenge for them is to work with VAS providers to develop exclusive content for their network alone. VAS providers on their part need to scale and cant be restricted with one operator so they have to introduce enough tweaks to launch different VAS content for different operators.

The idea here is that if mobile operators are able to secure access to amazing VAS content that is useful for subscribers, not only can they use it to set themselves apart from their competition also get free word-of-the mouth publicity (from subscribers). Add to that the fact that it enables the operators to charge a premium helping their overall margins as well.

Do you think exclusive VAS is the differentiation mobile operators badly need as they struggle with their operations and positioning?

[Disclaimer: Tata Docomo is a regular advertiser on this blog]

  1. Kiran K. Karthikeyan says

    Ankit Agarwal There are private utility companies all over the world, and there is serious money to be made providing utility services. While all this competition has forced the various players to keep searching for differentiators, and also move quickly with technology upgradations, there will come a time when the playing field becomes level. Companies which are in the business of providing mobile operator services now trying to innovate on non-core VAS is not a good thing by any stretch. Mind you, it is the revenues they gain from their core services they are putting into innovating on VAS, which they should be putting into improving service quality. Leave innovating on VAS to other companies, and take a cut from that to supplement revenues. This can lead to a much better ecosystem as a whole, better for the operators and their consumers.

  2. Kiran K. Karthikeyan says

    Ankit Agarwal There are private utility companies all over the world, and there is serious money to be made providing utility services. While all this competition has forced the various players to keep searching for differentiators, and also move quickly with technology upgradations, there will come a time when the playing field becomes level. Companies which are in the business of providing mobile operator services now trying to innovate on non-core VAS is not a good thing by any stretch. Mind you, it is the revenues they gain from their core services they are putting into innovating on VAS, which they should be putting into improving service quality. Leave innovating on VAS to other companies, and take a cut from that to supplement revenues. This can lead to a much better ecosystem as a whole, better for the operators and their consumers.

  3. Ankit Louis Agarwal says

    Kiran, while i agree to you saying mobile is a utility service here is why they differ from water, power etc. While water, power etc. are provided by govt. bodies there is little or no competition there. With the mobile operators, the majority are privately owned and they need to have differentiation. Also, even if they improve the network quality they might be able to add subscribers but the current ARPUs are making operations difficult and as such they need premium VAS to not only maintain/add subscribers but also to increase ARPU

    PS: Not arguing the case for better quality, thats an absolute must. But i doubt if you can say X operator is better than Y in the existing marketplace

  4. Ankit Louis Agarwal says

    Kiran, while i agree to you saying mobile is a utility service here is why they differ from water, power etc. While water, power etc. are provided by govt. bodies there is little or no competition there. With the mobile operators, the majority are privately owned and they need to have differentiation. Also, even if they improve the network quality they might be able to add subscribers but the current ARPUs are making operations difficult and as such they need premium VAS to not only maintain/add subscribers but also to increase ARPU

    PS: Not arguing the case for better quality, thats an absolute must. But i doubt if you can say X operator is better than Y in the existing marketplace

  5. Ankit Louis Agarwal says

    Kiran, while i agree to you saying mobile is a utility service here is why they differ from water, power etc. While water, power etc. are provided by govt. bodies there is little or no competition there. With the mobile operators, the majority are privately owned and they need to have differentiation. Also, even if they improve the network quality they might be able to add subscribers but the current ARPUs are making operations difficult and as such they need premium VAS to not only maintain/add subscribers but also to increase ARPU

    PS: Not arguing the case for better quality, thats an absolute must. But i doubt if you can say X operator is better than Y in the existing marketplace

  6. Ankit Agarwal says

    Kiran, while i agree to you saying mobile is a utility service here is why they differ from water, power etc. While water, power etc. are provided by govt. bodies there is little or no competition there. With the mobile operators, the majority are privately owned and they need to have differentiation. Also, even if they improve the network quality they might be able to add subscribers but the current ARPUs are making operations difficult and as such they need premium VAS to not only maintain/add subscribers but also to increase ARPU

    PS: Not arguing the case for better quality, thats an absolute must. But i doubt if you can say X operator is better than Y in the existing marketplace

  7. Dr. Arpan Kar says

    The telecom market is indeed facing a crisis with the high rotational churn and ever dipping Arpu. Probably VAS remains the onl service differentiator and the last face saving grace

    1. Ankit Agarwal says

      I tend to agree with you. Rotational churn is a big concern largely because the network availability is pathetic across operators. As for ARPU, price wars are to blame. VAS and to be more specific exclusive content (text, voice, media) could play a vital role in turning things around for mobile operators

  8. Kiran K. Karthikeyan says

    No, it is not VAS or anything else that will help them survive or rather from being treated like a utility service, and that is what they are. Why do you think of mobile operator services differently than water, power etc. The only thing that can make me switch utilities (if I had a choice) is the quality of service. So instead of figuring out new VAS, they should just create a differentiation in terms of their quality of service, nothing else. There are far too many players in India selling pretty much the same thing.

  9. Kiran K. Karthikeyan says

    No, it is not VAS or anything else that will help them survive or rather from being treated like a utility service, and that is what they are. Why do you think of mobile operator services differently than water, power etc. The only thing that can make me switch utilities (if I had a choice) is the quality of service. So instead of figuring out new VAS, they should just create a differentiation in terms of their quality of service, nothing else. There are far too many players in India selling pretty much the same thing.

  10. Kiran K. Karthikeyan says

    No, it is not VAS or anything else that will help them survive or rather from being treated like a utility service, and that is what they are. Why do you think of mobile operator services differently than water, power etc. The only thing that can make me switch utilities (if I had a choice) is the quality of service. So instead of figuring out new VAS, they should just create a differentiation in terms of their quality of service, nothing else. There are far too many players in India selling pretty much the same thing.

    1. Ankit Agarwal says

      Kiran, while i agree to you saying mobile is a utility service here is why they differ from water, power etc. While water, power etc. are provided by govt. bodies there is little or no competition there. With the mobile operators, the majority are privately owned and they need to have differentiation. Also, even if they improve the network quality they might be able to add subscribers but the current ARPUs are making operations difficult and as such they need premium VAS to not only maintain/add subscribers but also to increase ARPU

      PS: Not arguing the case for better quality, thats an absolute must. But i doubt if you can say X operator is better than Y in the existing marketplace

    2. Kiran K. Karthikeyan says

      Ankit Agarwal There are private utility companies all over the world, and there is serious money to be made providing utility services. While all this competition has forced the various players to keep searching for differentiators, and also move quickly with technology upgradations, there will come a time when the playing field becomes level. Companies which are in the business of providing mobile operator services now trying to innovate on non-core VAS is not a good thing by any stretch. Mind you, it is the revenues they gain from their core services they are putting into innovating on VAS, which they should be putting into improving service quality. Leave innovating on VAS to other companies, and take a cut from that to supplement revenues. This can lead to a much better ecosystem as a whole, better for the operators and their consumers.

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