Bharti Airtel gears up to boost MVAS revenues

In a scenario where telco ARPUs have been squeezed down to rock bottom and most users prefer to go prepaid, MVAS could be the way out. Airtel certainly seems to think so writes Subhankar Kundu

Mobile value-added services (MVAS) have led to the emergence of a fresh business ecosystem giving rise to supporting industries such as content development and aggregation. The evolution of the MVAS market has come in parallel with the changes and advances that have taken place in the telecom industry. A well demarcated value chain of MVAS seem to have evolved.

MVAS is now considered as a major tool for additional revenue, service differentiation and customer retention. One of the majors, Bharti Airtel, has been looking to MVAS to provide its next wave of growth.

According to industry estimates, Mobile VAS in India would account for 18% of the total revenues generated by operators from mobile services by end 2010. For Bharti Airtel, VAS accounted for 11.8% of its total revenues as on March 31, 2010. SMS revenues had risen from 4.1% in the previous fiscal to 6%. Non-voice revenues, which are considered to be the core MVAS category, had increased from 9.5% to 11.8%.

Applications & services

Bharti Airtel recently entered the VAS zone more aggressively with various services including location-based services, mobile TV, App store and many other innovative applications.

Airtel claimed that it had always been in VAS but that its campaigns were periodical. On the other hand, its competitor, Vodafone, had focused heavily on VAS offerings as was visible during the last two seasons of the Indian Premier League (IPL).

Launching an app store

The company also launched India’s first Mobile Applications Store—Airtel App Central through which customers can access applications for business, games, books, social networking etc. starting as low as Rs. 5. The cost is added to the customer’s mobile bill or deducted from available talk-time in the case of a prepaid connection.

Initially, the Airtel App Central had over 1,250 apps across 550+ devices categorized under 25 customer categories including both free and paid applications. Within four months of its launch, it clocked 13 million downloads at the rate of 1.2 downloads per second. Today the store offers 71,000 plus apps across 780 devices. It includes some India-specific devotional apps such as Ayyappa the God to Bhakti ki Shakti where you can express devotion to Maa Durga to Qibla which allows you to calculate the direction from anywhere on the globe to anywhere. Old local favorites such as Book Cricket and Gilli Danda staged a comeback in a mobile avatar along with other games and apps around popular festivals such as Holi and Diwali. There is an SMS directory application which claims to save users from the trouble of remembering formats and those difficult to remember numbers that are required to query popular services for information such as your flight details, railway booking etc.

Who’s downloading what

Airtel mobile customers in smaller cities like Mangalore, Thiruvananthapuram, Surat, Pune and Udaipur with basic phones priced at less than Rs. 5,000 have taken the lead. Social networking and utility apps ranked highest on the popularity charts. Other popular categories included books, entertainment and games.

The downloads from Airtel App Central have indicated that the Indian mobile applications model will be different from the global one. Occupying an average of not more than 2% of available space on the customer’s handset per app, downloads from Airtel App Central are being led by feature phones and not smartphones. While 25% of the apps are free to download, the top five are subscription-based. Airtel recently launched its own movie library, Airtel Talkies, and followed it up with another product with pre-release audio promos of films, starting with My Name Is Khan. “Then came The Japanese Wife and the initiative has been extremely successful,” commented Shireesh Mukund Joshi, Director of Marketing and Communications at Airtel.

Music sales seem to be one of the most popular categories with songs available from Rs. 1 onwards. Joshi claimed that revenue generated from selling music through the Airtel mobile network was larger than that of HMV and Sa Re Ga Ma combined. Joshi added, ”We sold 220 million pieces of music last year. The Airtel radio, which works like a jukebox, is our strongest product in the market.”

Venkatesh V., CEO, Mobile Services, Karnataka Circle, Bharti Airtel, said, “Today, a mobile phone is not used solely for communication; it is a cost-effective option that is available for entertainment, for news and for any other information that one may require. This shift in consumer behavior, where subscribers expect more than just connectivity, has ensured that service providers are actively announcing various value-added services that will help retain customers.”

Partners galore

Among the major application vendors partnering with Airtel are On Mobile (for almost all products), Spice Digital for Music, Symbiotic, Nazara Tech for games & WAP, Indiagames for games, One 97 and World Phone for voice-related services, Telenity for location-based services and Apalya Technologies for Mobile TV.

Like other operators, Airtel also went with Apalya Technologies, for content aggregation, provisioning and distribution regarding Mobile Video Delivery.

The service provider recently launched a Buddy Finder Service, a handset-agnostic LBS offering. Telenity’s People Finder Service is currently being deployed at other operators as well. Airtel’s Buddy Finder Service works on four bearers namely SMS, USSD, IVR and WAP. However, USSD is the most popular bearer as it’s simple and easy to use. Dial *321*88# from any mobile handset and you are on the service. Telenity has made USSD compatible with location.

The most recent launch came from Delhi-based One 97. The service named ‘Talk-to-me’ will now enable Airtel subscribers across India to connect and interact with their favorite Bollywood and regional superstars—a select group of callers can connect with the celebrity at a time for a live conversation in sequential mode. Every caller will be prompted in advance and given equal time to interact with their favorite star through the IVR. The celebrity will have an option of managing the call by extending the time or moving on to the next customer.

Venkatesh added, “Talk to Me—a live voice chat option with some of Karnataka’s favorite superstars, season-specific services like the World Cup Match Alerts, consumer connect initiatives such as Live Radio or unlimited mobile Internet all guarantee greater consumer connect and a long lasting relationship. Additionally, the rollout of 3G services will be favorable for VAS products and we are bound to see greater traction.”

Subhankar.Kundu@expressindia.com