Mobile telephone has become a large concern in India and given the fact that India is an emerging economic system, there is a batch of possible for this industry to boom in the hereafter. But India is besides a state which is characterized by low buying power for a significant subdivision of the population. This so sets the context for intense monetary value based competition. Mobile Network Operator ( MNO ) houses need to interrupt free from this monetary value driven competition. They are required to offer differentiated merchandises. Differentiated merchandises provide houses the range to increase the client ‘s willingness to pay. Value Added Services ( VAS ) provides the MNOs ‘ the range to distinguish their merchandises. But merely supplying VAS is non sufficient to make and internalise value. This article explains this proposition by analyzing through the construct of Value Net. Further this article brings insight on how and when the benefit of Value created by VAS services could be secured by the MNO houses.
Mobile Network Operator ( MNO ) , Value Added Services ( VAS ) , Value Net, Differentiation
Mobile phones are a recent add-on to human civilisation. Speaking is a really basic and most frequently used communicating medium for human existences. But given the strength of human talking musculuss one can merely pass on with others within a limited distance. But all that started altering with the coming of loud talkers for public speech production and telephones for long distance one to one talk. Telecommunication ushered a new epoch in civilisation and even in the universe of telecommunication, nomadic telephone has been a vivacious revolution. The omnipresent connectivity that nomadic telephones provide has changed human action and behaviour in many ways. One can state with due certainty that it is hard to conceive of life without nomadic telephones as it defines human civilisation in the present twenty-four hours context.
The proviso of nomadic telephone has been a narrative created by the nomadic manus set makers, the telecommunication substructure suppliers and the nomadic web companies. The following subdivision of the article briefly negotiations about MNOs.
2. Mobile Network Operator ( MNO )
A Mobile Network Operator ( MNO, besides popularly called as Cellular Operator ) provides wireless services for the country for which it holds the needed wireless spectrum licence from the authorities. India is divided into 23 service countries – 19 Telecom Circles and 4 Metro Service Areas. ( DOT, 2008 ) As on 30/11/2008 there are about 330 million Cellular phone endorsers in India ( Indiacellular, 2009 ) . There are two dominant engineering platforms used for telecommunication. These are Global System for Mobile communicating ( GSM ) and Code Division Multiple Access ( CDMA ) . There are about 249 million clients ( November 2008 ) for GSM ( COAI, 2008 ) . and about 82 million clients ( October 2008 ) for CDMA in India as on ( AUSPI, 2008 ) . Table 1 lists the assorted MNO houses and their subscriber base.
Table 1: MNO houses and subscriber base ( Indiacellular, 2009 )
Entire Subscribers in 1000000s
Airtel ( GSM )
Reliance ( CDMA + GSM )
Vodafone Essar ( GSM )
BSNL ( GSM )
IDEA ( GSM )
Tata ( CDMA )
Aircel ( GSM )
MTNL ( GSM )
Spice ( GSM )
BPL ( GSM )
HFCL ( CDMA )
Shyam ( CDMA )
Entire ( All India CDMA + GSM )
The Market Share for the MNOs has been shown in figure 1 ( Indiacellular.com, 2009 )
Figure 1: Market portion of MNO ‘s ( Indiacellular.com, 2009 )
MNO ‘s started with supplying voice based services which still continues to be a dominant and a basic service. But in the present twenty-four hours both in the context of developed states and in developing states the gaining possible merely based on voice based services is cut downing. Average gross per user ( ARPU ) is an index of the gaining possible per endorser and all India blended ARPU per month has declined from Rs. 264/- in March 2008 to Rs. 239/- in June 2008 ( TRAI, 2008 ) . The all India blended ARPU was Rs. 404 in September 2004. ( TRAI, 2005 ) . Thus it is apparent that the ARPU figure has been worsening aggressively over the old ages.
Because of the increased competition and regulative policies, which has the purpose for heightening fight, new and enriched services called Value Added Services ( VAS ) has witnessed accelerated growing. Besides MNOs are giving increased attending for VAS. Mobile manus set and substructure suppliers have an of import function in presenting Voice and VAS. The relevant facets sing hardware suppliers would be discussed latter in this article. The following subdivision deliberates upon VAS.
3. Value Added Services ( VAS )
Value Added Services can be defined as any services provided by the MNO apart from the basic service that is. voice. VAS provides extra grosss to an MNO and does n’t cannibalise its basic service ( voice ) , alternatively VAS creates synergism to present new innovate merchandises to stop clients and therefore increasing the value for them ( Kakani and Fernandez,2007 ) . Depending on the public-service corporation of VAS, for the client, it can be classified as ( Brand newsman, 2008 )
VAS for Entertainment
VAS for Information
VAS for M-commerce
Table 2 briefly describes the three mentioned VAS services based upon public-service corporation.
Table 2- VAS services based upon public-service corporation ( Brand newsman, 2008 )
VAS services based upon public-service corporation
VAS for Entertainment
This fundamentally relates to amusement with content based on Bollywood, other common films, devotional vocals, common people vocals, On demand music, local cultural content, Jokes, Shayari ( poesy ) etc. Entertainment is a major driver lending towards the growing of VAS. With the debut of 3G, picture cyclosis and associated services ( like Video conferencing, Video chatting, Online/On demand film streaming etc. ) would be possible. This would assist in bring forthing extra gross for MNOs. Thus one time 3G axial rotations out the market potency of VAS for amusement would be more promising.
CRBT ( Caller Ring Back Tunes, besides known as company tones, dialer tones, etc )
Other Bollywood content
Information related VAS services provide assorted types of information to the client. Information like agricultural trade good ( mandi ) rates, other farm inputs, weather studies, general railroad information, local civil information etc can be provided to the relevant clients. This sort of information can convey radical alteration particularly in the agricultural sector of India ( Thomson Reuters, 2008 ) . With the increased importance of existent clip information specially related to trade good markets, stock markets and other such merchandises with comparatively higher dynamic growing potency for this section. ( Yahoo India, 2008 ) .
Bible Quotation marks
Missed Call Information
Mobile Commerce is another section which has a great potency. This can supply great value to clients as it has the characteristic of distant instant dealing. This has got a valuable public-service corporation. This is because it saves clip as one client can book a railroad ticket through the nomadic and therefore avoid going to the railroad station in the crowded roads of India. Further the client besides avoids the long waiting lines at railroad Stationss, peculiar to India. Such services can besides do its manner in minutess associating to Bankss, measure payment centres, etc. However some of the challenges confronting M-commerce in India is the limited functionality of manus sets, illiteracy of client base, security concerns, psychological opposition to online minutess, etc.
Mobile Payment installations
Mobile Recharge installations
Foreign Remittances through Mobile
Travel ticket booking etc
Depending on the Access Modes, which is realisation of the service bringing method, VAS can be delivered by the following 4 manners ( IMRB, 2008 ) .
VAS through Short Messaging Service ( SMS )
VAS through Voice Platform
VAS through WAP platform
VAS through Unstructured Supplementary Services Data ( USSD )
Table 3 describes the VAS entree manners.
VAS services based upon public-service corporation
VAS through Short Messaging Service ( SMS )
SMS is a really popular medium of accessing VAS. SMS stands for text based messaging. SMS finds multiple uses like, SMS can be used to seek information, to chew the fat, to trip other VAS and besides to end VAS subscriptions. SMS subscription services involve merchandises like Jokes, Astrological anticipations, Ideas for the twenty-four hours, Dictionary services, Religious sermon and quotation marks, chat, etc. Grosss from SMS sum to about 49 % ( IMRB, 2008 ) of the entire VAS grosss.
VAS through Voice Platform ( besides called as Interactive Voice Response – IVR )
Synergistic Voice Response ( IVR ) largely consists of Prerecorded Audio Prompts. The medium of communicating is chiefly voice. This is one of the easiest entree manners, as the job of limited literacy can be overcome. This is because functionalities like the memorisation of short codifications, complex manus set maneuvering ability, etc are non required for the users. The challenge that prevents the growing of IVR is the cost kineticss involved in the voice acknowledgment systems to back up this platform. The assorted services provided by this platform include Ringtones, Ring Bank Tones, Live Radio, Voice Mail, Voice Chat, Voice Conferencing, Interactive confab with astrologer/counselor, etc. Grosss from Voice Platform sum to about 40 % ( IMRB, 2008 ) of the entire VAS grosss.
VAS through WAP platform
Wireless application protocol ( WAP ) can be used to entree VAS if they are activated with General Packet Radio Service ( GPRS ) .Almost all sorts of VAS can be accessed through WAP. This brings huge market potency for WAP. But the challenge in the use of WAP is because of the comparatively lesser figure of GPRS enabled clients in India ( 65 million ) ( IMRB, 2008 ) .Even out of this 65 million merely 15 million GPRS activated endorsers can potentially entree it and further harmonizing to some studies merely 9 million usage WAP ( IMRB, 2008 ) . Grosss from WAP sum to about 8 % ( IMRB, 2008 ) of the entire VAS grosss.
VAS through Unstructured Supplementary Services Data ( USSD )
Unstructured Supplementary Services Data ( USSD ) is similar to SMS but in this there is a existent clip communicating go oning between cellular user and the USSD Server. USSD server responds/execute to the command/request of the user. Grosss from WAP sum to about 3 % ( IMRB, 2008 ) of the entire VAS grosss.
Figure 2, pictorially represents the assorted interest holders consecutive involved in the VAS value creative activity.
Figure 2- VAS Stakeholder Sequence in VAS value creative activity
Table 4 tabulates the Stake holders involved across the VAS value concatenation and depict their maps and parts. It besides provides the lists of the assorted interest holders.
Table-4 Stakeholders maps and Challenges ( Brand Reporter, 2008 )
Functions of Stakeholder
Develops or owns Content. They have copyright of movies, intelligence, seriess, games, sketchs, etc. Content is fundamentally developed for some other media like Film, Television, etc.
Sums content from proprietors of content to accommodate client demands. It includes collection of music, intelligence, film content, wallpaper, games, ringtones, marital content etc. It besides caters to the direction of IVR, quality control & A ; accounting of the aggregative content. It further includes the direction of IPR related issues.
Develops or manages package development, including running quality cheques. It involves development of concern support systems, middleware solutions, security applications, payment applications, games, etc.
Technology Enabler –
They act as a span between MNO ‘s and collectors. They manage and maintain the platform to supply VAS to the consumers of a MNO and manage the integrating of diverse applications, rapprochement of histories and charge. Each VAS may hold a separate platform.
Cellular Operator ( Mobile Network Operator )
Provides the communicating services to make the terminal clients.
End User – Customer-
Owners of the telephone connexion ( may be retail or organisational ) . They receive calls and responds to content, etc
The last subdivision discussed and deliberated upon VAS and the lending Stake holders. The following subdivision would be ab initio discoursing the construct of value cyberspace and later the construct of value cyberspace would be used to better grok the VAS industry competitory kineticss. Kim and Han ( 2009 ) with respect to Mobile Data Services ( MDS ) reported that an person ‘s societal values and public-service corporation of the MDS are more decisive towards VAS acceptance determinations, while the hedonistic value of the MDS has a lesser function to play.
4. Value Net
In concern, houses get the input resources and so transforms them into goods and services to be consumed by clients. While set abouting this procedure the house incurs certain costs. Customers pay a monetary value for basking the benefits of goods and services. The clients should be interested to pay more than the costs incurred for the production and bringing of goods and services. In instances when the willingness to pay for the merchandise is more than the cost incurred so there is creative activity of value. But the mechanisms for creative activity of value are non sufficient for accomplishing sustained value over a period of clip. As explained by Ghemawat & A ; Rivkin ( 2006 ) if a rival develops a product/service similar to another house so none of the houses would be able to stay alone and prolong the value created. This is because the value proposition offered by one house to a client can be offered to the same client by another house at a lower monetary value. Thus singularity is in many ways reflective of value creative activity. This is besides the instance for Mobile Network Operator houses in VAS infinite. Apart from the impression that rivals snatch value from a house, value can be snatched by other houses who can non be classified as rivals. This statement could be better understood if one takes a expression into the construct of Value Net. Nalebuff and Brandenburger ( 1996 ) had talked about a construct of value cyberspace. The construct of value cyberspace efforts to capture the game different participant ‘s drama, to engineer value prisoner for that house at the disbursal of other participants. Value creative activity is really hard as has been advocated by ( Ghemawat et.al.2006 ) . Since value creative activity is hard and is frequently snatched by latecomers and other non rival entities in the industry, the participants who make the initial move effort to invent mechanisms to island the net income at the maximal degree for itself. The construct of value cyberspace can be illustrated by figure 3.
Figure- 3, Value Net as developed by Nalebuff and Brandenburger ( 1996 )
In the construct of value cyberspace there are four sorts of entities. These are Customers, Complementors, Suppliers and Rivals ( including the participant itself ) ( Nalebuff and Brandenburger, 1996 ) . The providers are those who provide the natural stuffs and other inputs which are needfully required for the production and bringing of goods and services. The clients are those who pay for basking the finished/delivered goods or services. The complementors are those entities that provide another set of goods and services which are complementary in nature ( additions to the basic input provided by the providers ) . These additions could mix to the basic merchandise by and large at the finished goods phase, bringing phase or at the ingestion phase. In other words complementors are non necessary for the basic realisation of the fruits of the merchandise during ingestion. Rivals are those houses that produce similar goods and services as produced by the house utilizing a similar concern theoretical account and similar resources. Thus the value created is shared by these four entities. Nalebuff and Brandenburger ( 1996 ) had explained these constructs by the illustration of the gambling industry. They analyzed how Nintendo siphoned value at the disbursal of Customers ( like Toys ‘R ‘ Us, Wal-mart, etc ) , Competitors ( Atari, Commodore for hardware ) , Suppliers ( Ricoh, Sharp for micro french friess and Marvel, Disney for game characters ) and Complementors ( Acclaim, Electronic Arts for soft ware ) . In the subsequent subdivision of the article, the construct of value cyberspace would be used as a templet to analyse the value accumulated in VAS by MNOs.
5.The kineticss of the stakeholders of VAS and Value Net analysis
In the present twenty-four hours nomadic web concern as voice services are acquiring progressively commoditized, VAS brings the much required distinction for MNO ‘s ( Kakani and Fernandez,2007 ) . This provides an increased monetary value premium and therefore boosts the gross or more specifically the ARPU. Thus the fact that there is increased value creative activity through VAS is uncontested but what remains contested is which set of Value Creator ( amongst the set of value Godheads in the value creative activity concatenation ) drives economic benefit for itself the most. Figure 4 illustrates the places of the assorted MNO ‘s, the clients, providers and the complementors in the VAS services.
Value Added Service Providers
Existing VAS Operators
Existing MNO Operators-
New License holders-
S Tel Ltd.
Unitech Wireless Ltd
Existing Handset manufacturers-
Existing telecom infrastructure/ instrument supplier –
Figure -4 Value Net of Nalebuff and Brandenburger ( 1996 ) on VAS
Table-5 illustrates the assorted entities in the value cyberspace, the participants involved and the function of the assorted entities in figure 4.
Table-5, Value Net entities, functions and participants
Name of Major participants
Role of the entity
Persons and group of persons ( as portion of establishments or organisations )
Persons communicate with each other to portion information and besides to acquire emotional satisfaction, They besides get entertained through assorted amusement products/services
Content Aggregator, Software Developer and Technology enabler
They provide the content platform, application and executing of VAS
Handset manufactures – Nokia, Motorola, Samsung, LG
Towers and related substructure – Indus towers.
Contented supplier – Yashraj movies, Rajshri
They provide the substructure necessary for communicating like French telephones, communicating towers, waiters, control consoles, orbiters and other radio equipments.
The content suppliers are providers as they provide the content to the collectors.
CDMA – Reliance, Tata Indicom
GSM- Airtel, Vodafone, BSNL, Idea
They provide the basic telephone service and besides delivers VAS
The following subdivision discusses briefly the function played by each entity in the value cyberspace one by one.
5.a.Customers and client value
Human existences are societal animate beings and communicating between two persons is of basic necessity. The clients of telecom services are therefore chiefly persons. Mobile telephone fundamentally provides the medium for two people to speak in existent clip over a distance larger than ear short. In certain instances a aggregation of persons signifiers a portion of an organisation or an establishment and they engage in intra and inter organisational communicating. Therefore in other words clients of nomadic telecommunication industry are both persons every bit good as corporate ( stand foring organisations & A ; establishments ) . One of the most basic signifiers of communicating is unwritten communicating but over the old ages, particularly in the last century the sort of communicating which human existences engage into has besides changed. Initially, human existences were interested to pass on with marks & A ; gestures made by face, manus and other bodily looks apart from talking. Since the last few centuries written communicating has become a really dominant signifier of communicating. But it is merely in the shutting decennaries of the last century that communications in the signifier of picture taped messages became popular. Customers of nomadic telephone have been influenced by the altering aspects of communicating, like in the present twenty-four hours context Mobile telephone includes communications in the signifier of text messages ( Short message services-SMS ) , Video messages ( MMS ) and Voice mail ( recorded voice messages of companies ) .
Mobile telephony apart from moving as a medium of communicating is besides going a beginning of information. Information revolution has been in the air because of the popularity and spread of cyberspace. Mobile telephone can besides go a medium for transportation of information from one beginning to another. Information could be on the existent clip public presentation of stock markets, local civil & A ; commercial issues, trade goods monetary values, national/international intelligence including the unrecorded mark of cricket lucifers, which is a popular athletics for a considerable subdivision of Indians. The mentioning of the athletics of cricket brings the impression of associating nomadic telephone services to amusement. Mobile telephone services and/or nomadic telephone French telephones have become stand alone amusement device. One can play games, listen to vocals and acquire film reappraisals on their manus sets. While playing a game on the manus set does n’t necessitate any communicating with an external entity but the other mentioned signifiers of amusement do necessitate some sum of communicating with an external entity.
Even in games, communicating has made a bridgehead, as is go oning in online games where in one client while playing the game connects with the external waiter and plays the game existent clip. In some instances bet oning communicating can besides be between some other participants who are remotely located at the clip of playing of the game. This sort of communicating for the intent of gambling additions the portfolio of the subjects of games a client can take from. These sorts of services could besides heighten the quality & A ; degree of the game. In short this sort of merchandises ( integrating of gambling and communicating ) adds value to bet oning merchandises and therefore differentiates itself with standalone bet oning French telephones and consoles.
5. b.Suppliers of telecom Industry
Suppliers provide inputs for the transition of natural stuff into semi finished or finished goods to be later consumed by clients. In the instance of services the construct of provider entails those organisations which provide the necessary ingredients, conduit or substructure for delivering of a service. The substructure provided by a provider could be classified into two types, Soft and Hard. In the instance of nomadic telephone industry the difficult substructure consists of points such as the nomadic French telephones which are the point of contact between the client and the communicating system. In a nutshell the difficult substructure besides includes the towers, orbiters, the radio systems and waiters. The difficult substructure has been depicted schematically in Figure 5.
Figure -5. Conventional Diagram of Telecom difficult substructure
The full show is orchestrated by an array of waiters and other electronic commanding equipments. Soft substructure unlike difficult substructure can non be physically located but they besides fall an of import portion of the set up. The basic application/operating plans meant for the operation of the nomadic phones, towers and the French telephones form portion of the soft substructure.
Complementors are those entities that help a house of another but related industry to make value. Complementors can be differentiated by providers in the sense that Complementors help in creative activity of add-on value but non the basic value. In instance of nomadic telephone industry, the VAS subscribers are Complementors. In other words a nomadic telephone company can populate without Complementors ( though the life would be hard in footings of economic benefits ) but can non populate without providers ( of both difficult and soft substructures ) . In the Indian context the complementors are shown in table 6.
Table -6, List of few Complementors
Name of the house
In the present twenty-four hours context premium VAS offerings like picture conferencing, picture cyclosis, and on-line games are on clasp because of the deficiency of handiness of bandwidth through Mobile. MNO ‘s in India are looking frontward for the 3G spectrum auctions for the debut of premium VAS merchandises. Table 7 describes the assorted VAS stakeholders and their Value Net Functions.
Table-7 Stakeholders maps and Challenges
Role in Value Net
Content Owner – Develops or owns Content.
They incur a significant sum of cost in developing the content. The costs are incurred in footings of battle of ( originative ) work force every bit good as in planing the content. A significant sum of content comes from Bollywood, cricket, etc in India. But they are non able to recognize relative addition. In other words the attempts are non worth the money. In future the content developers have to drive the value in such a manner that it gets its due portion. Typically they have 5-10 % of the portion of value created by the MNO ( IMRB, 2008 ) .
Content Aggregator -Aggregates content from proprietors of content to accommodate client demands
There is increased competition as the figure of participants in content collectors has increased. Therefore there is really high inter house competition. Besides content collectors have no other significant beginning of gross other than to acquire a part from go throughing the aggregative content to the package developer/ engineering enabler. Since content collectors are located at the upstream, the downstream participants have the upper manus and can demand a disproportionate portion of the value created. Because of the positional disadvantage sometimes it could be more executable for a content collector to spread out its boundary and execute the maps of a package developer/technology enabler. Typically they have 10-15 % of the portion of value created by the MNO.
Software Developer -Develops or manages package development, including quality cheques
The challenges for package developers and engineering enablers have been merged because they are similar in nature. Both these stakeholders incur disbursals with respect to do VAS available to the MNO ‘s. But because of intense inter-firm competition and an upstream place with regard to the MNO ‘s they face proportionate value realisation jobs, really similar to that of the content collectors. Each of them gets about 5- 10 % of the portion of value created by the MNO. The engineering enabler besides incurs existent clip operational disbursals because the VAS services runs on their technological installations. As the engineering enabler has to run these substructures they need both measure and quality of VAS to be invariably provided to procure economic systems of graduated table and therefore to stay economically feasible.
Technology Enabler – A span between MNO ‘s and collectors.
Cellular Operator ( Mobile Network Operator ) –
Provides Mobile web
VAS provides an chance to increase ARPU but there are certain challenges in forepart of the MNO ‘s. These include the gait of development for the latest coevals of web used ( 2, 2.5,3 GPRS, etc ) and the at the same time migration direction. Further the handiness of limited bandwidth, the proficient functional characteristics of French telephones, authorities ordinances and limited degree of illiteracy besides act as hindrances. One can state that if the MNO ‘s get concern from VAS all the other upstream participant sections would acquire concern. Thus the challenges in forepart of MNO ‘s are non merely their challenges but it transcends across the full VAS value concatenation.
End User Customer- Owners of the French telephones connexion ( retail and organisational )
The monetary value of VAS is higher than voice and because of this there is trouble for a big subdivision of the Indian population ( 600 million gaining less than $ 2 a twenty-four hours ) to subscribe to VAS merchandises. Further, as VAS services are soon dominated merely by amusement, therefore VAS subscriptions offer limited pick to a endorser. This alienates a significant subdivision of Indian endorsers.
With respect to the value cyberspace concept the function of manus sets is increasing over the old ages. From a clip non so long ago in the distant yesteryear when the primary intent of the French telephones was to do lone voice calls, French telephones have evolved a long manner in its application enrichment. Peoples started utilizing French telephones for messaging, listening to music, playing games, making office applications, shoping cyberspace and such others. With the Blackberry ‘s and Iphone ‘s in the market the construct of French telephone merely for doing a call has been redefined. Furhther now French telephones are used for sending/receiving mails, shoping high informations transfer sites like maps, Global Positioning System ( GPS ) services, picture sites, mobile banking services, instant messaging and such others. Besides the development of assorted applications has enabled a phone to go a multi public-service corporation device. Besides because of enhanced French telephone capablenesss it can be used as a book, as a tool to acquire informed about conditions, as a exposure editor and as a personal organiser. The construct of touch screen French telephones has made pilotages a batch easy for French telephones and checks.
If one attempts to analyse how the French telephones have contributed to the construct of value cyberspace, one demand to understand that its function is bit by bit increasing. Major Mobile Operators ( MO ) are seeking to hold sole tie ups with smart phones manufacturers at least for the initial few old ages. This can besides give a good entry for a smart phone shaper, which when new to the market can sit on the stigmatization of the MO. Since merely the clients of that peculiar MO can purchase the French telephone as it is SIM locked, there is a opportunity that rivals ‘ clients or even new industry clients can take new connexion of the peculiar MO ‘s services. This sole tie up helps the MO to outwit the competition. Besides if there are good applications on the smart phone with sole tie ups, it can drive the ARPU of the MO ( like for illustration blackberry messaging services ) . Writers feel that such MO- Handset locked dedicated services would assist to lasso in clients with high ARPU, high DATA use and will provide to the pick of the clients who are utilizing a phone. With the launch of 3G & A ; 4G services, these clients will further drive the grosss of the MO ‘s. In certain instances the tie up besides laterally drives the perceptual experience of the MO as an pioneer, which increases the trade name value of the MO.
There is besides the GSM & A ; CDMA argument in the Indian context. Unlike most of the developed markets, India is a GSM dominated market. CDMA engineering had a really limited function to play right from the beginning of the nomadic web concern in India. Though there were CDMA participants come ining sharply into the Indian market with really low equipment monetary value because of holding Equal Monthly Instalment ( EMI ) based French telephone pricing on a long term footing ( Bhattacharyya,2011 ) , but over the old ages the GSM participants have been more aggressive, efficient and has been effectual in capturing more than 75 % of the market. With such a large market portion, GSM technologies will drive 3 G & A ; 4 G concern in India as the GSM participants with such large market to fulfill and vie will accomplish both economic systems of graduated table and range and therefore heighten the production and services efficiency and engineering frontiers of the Industry. In the recent old ages ( 2008-2010 ) because of the crisp diminution of the voice rates, MO ‘s are now looking at the succesful launch of 3G for increasing the ARPU ‘s. The launch of 3G with some operators has shown that the major challenge with regard to 3G in India is to drive acceptance for mean Indian clients. There is a batch of handholding that has to be done so that the clients start sing the 3G services and expectedly these clients in the hereafter will be utilizing the 3G services in a sustained footing bring forthing stable and healthy gross untill competition makes a excavation in the long tally. But holding told that the debut of 3G along with smartphones and checks will convey in a batch more value to the clients and the houses is half the image. In India though people look for advanced services on the web or expression for fresh application in the manus set but they are highly witting about the monetary value of the French telephone or the service measure sum ( Bhattacharyya, 2011 ) .
The cleavage for the VAS market can be based upon the following-
The Numberss of proceedingss of use by the client in an annual or monthly footing
The value of ARPU generated by the client in an annual or monthly footing
The Socio economic background of the client
The nature, scope and strength of applications done by the client on the French telephone – service combination.
The VAS market would basically provide to the following client sections
The clients whose Numberss of proceedingss of use is high
The clients who generate high value of ARPU
The clients who come from high Socio economic background
The clients who has diverse nature, broad scope and increased strength of applications on the French telephone – service combination.
In India, clients will be interested to buy an enriched application French telephone or subscribe to a high terminal service when it has high and relevent public-service corporation value and its monetary value ticket is half manner below the monthly return place of the person. Thus both MOs and handset makers have to believe of the public-service corporation value and the monetary value point proposition ; both are of equal involvement for doing inroads in market.
In VAS industry the schemes for the different interest holders have to be different. This comes out really clearly from table 7. Since at present all the VAS participants are concentrating on procuring more value for their house, it looks like a zero amount game. This might non reflect the world as some participants might be making value instead than snaping value. The challenge in such a instance is that there are a set of participants which are the leaders in making the value but so there is a set of dawdlers which imitates the innovators and therefore reduces the differentiating characteristic ( value attention deficit disorder ) of the innovator. The interesting point in this instance is that the value is non created in a additive manner but instead in a networked mode as shown in figure 4. In a additive theoretical account, Supplier provides supplies to manufacturer ( who manufactures finished goods ) . The finished goods reach the distributor/retailer who sells it to the clients. In this additive theoretical account, value add-on takes topographic point serially. If one of the stakeholders involved is removed the value created would be badly impacted because all of them have got experiential importance. In this theoretical account the value to be kept by each ( and all the ) participant ( s ) involved can be easy explored. Thus the struggle between the assorted entities involved for ascription and internalisation of the value created is lesser.
The narrative of VAS is different from the additive theoretical account and this leads to the generation of value capturing struggles. As is apparent from the value cyberspace construct, Content Aggregators ( CA ) , Software Developers ( SD ) and Technology Enablers ( TE ) does n’t hold an experiential function. Merely the Contented suppliers and the MNO ‘s have the experiential function. This has been depicted in figure -6.
Figure – 6, VAS and concern line Scopess
Complementor equals merely dependent
on VAS concern for endurance
VAS Value Business line
Business lines other than VAS
Business lines other than VAS
The Content Developers/Providers ( Cadmium ) and the MNOs ‘ because of this place attempts to take the value from the complementors ( CA, SD and TE ) .Thus Cadmium and the MNOs ‘ exert force per unit area on the complementors. The complementors in bend can non reciprocate. One can state that the complementors have to do VAS so of import that the CAs ‘ and MNOs ‘ discovery operation hard in the absence of VAS. The success of VAS is linked to the endurance of CA, SD and TE. This is because if there is no VAS so CA, SD and TE would non hold any concern to be done and therefore no function in the value cyberspace. This is non the instance for MNOs ‘ and CDs ‘ as for endurance they have other concern lines which can move as a chief stay. VAS therefore provides CDs ‘ and MNOs ‘ an excess and increased beginning of gross.
Therefore one can state that MNOs ‘ and Cadmiums have the upper manus. In between the CDs and MNO ‘s there is a range of collaborative advantage ( win-win ) as a Cadmium who develops content can supply the same, while an MNO can assist do this content make a significant subdivision of the clients. The Cadmium has got the power of supplying a content which will be demanded by a big subdivision of clients, while a MNO gets the power as it can make 1000000s of clients. Thus a Cadmium who has rich contents can dicker for higher premium to let entree for and use of the content. The MNO can dicker for a lower rate ( as a cost ) to the Cadmium because they can command the handiness to the clients. For the Cadmium to hold superior value for itself it needs to hold multiple beginnings of channels for its content to make clients, i.e. the spreading of content to clients of the MNOs ‘ should be one amongst the multiple channels. The presence of multiple channels would assist the Cadmium as it can dicker with the MNOs ‘ for a higher rate as otherwise they would beginning it to other channels that provide a premium rate than provided by the MNOs ‘ . The MNOs ‘ on the other manus should hold multiple types of content ( like Bollywood music, cricket, and intelligence ) every bit good as multiple Cadmiums amongst the same type ( like content entree from different Bollywood production houses ) . This dissymmetry of the beginning would assist switch the bargaining powers towards MNO ‘s side as against the Cadmiums.
The last paragraph talked about the place of the CDs ‘ and MNO ‘s. This subdivision reflects on the instance of the CAs, SDs and TEs, i.e. the complementors. As is apparent the complementors have a weaker bargaining power. If the importance of VAS additions, the importance and dickering power of complementors would travel upward, vis-a-vis the Cadmiums and MNOs. The purpose of complementors would be to jointly work together to increase the importance of VAS. Thus complementors should join forces amongst themselves in this position. But as VAS is bread and butter for the CAs, SDs and TEs there is bound to be an built-in struggle of involvement and competitory tenseness. Hence, distinct from the corporate scheme, the different complementors need to hold single schemes, for absorbing the maximal value.
This subdivision attempts to capture the different strategic waies that CAs, SDs and TEs can follow to vie among themselves. One way that a CA might take is to incorporate forward and do SDs and TEs. Thus the boundary of the CA house would spread out to suit SD and TE. Similarly an SD house can incorporate both forward ( TE ) and backward ( CA ) while a TE house can incorporate backward with SD and CA. The enlargement of the boundary of the house amongst the complementors would assist CA/SD/TE to provide to the full value created. The securing of value would be uncontested amongst complementor equals ( CA/SD/TE ) . The lone major lasting competition for such an incorporate house would be from other incorporate house presenting the full value. In certain instances some disconnected houses would besides add to the competition. This has been shown in figure-7.
Figure – 7, VAS Complementor Peers house boundary enlargement
Content Aggregator spread outing house boundary by conveying in SD and TE ( both downstream integrating ) inside the house.
Software Developer spread outing house boundary by conveying in CA ( upstream integrating ) and TE ( downstream integrating ) inside the house.
Technology Enabler spread outing house boundary by conveying in both CA and SD ( both upstream integrating ) inside the house.
The down side of perpendicular integrating is that the sort of competition required for a CA/SD/TE is different. Second there is batch of uncertainness and freshness in both the nature of content every bit good as technological criterions. Therefore an incorporate house needs to show legerity to account for the assorted alterations. An incorporate house might happen it hard to interpret such legerity into pattern over a longitude of clip.
The following strategic way that complementor equals ( CA/SD/TE ) can take is that separately they have multiple beginnings of the other, therefore increasing the dissymmetry of the purchaser every bit good as the provider. This has been shown in figure 8.
Figure – 8, VAS Complementor Peers addition in Buyer and Supplier Beginnings
Case-1, CA has many purchasers ( SDs )
Case-2, SD has many providers ( CAs ) and many purchasers ( TEs )
Case-3, TE has many Suppliers ( SDs )
Figure-9, VAS-Basic and Advanced merchandises and services
Merchandises and Servicess
VAS Basic Products and Services
VAS Advanced Products and Services ( Very Value Added Services, VVAS )
Video StreamingIn simple words one CA should provide to a big figure of SD houses, any SD house should hold a big figure of provider CA houses and a big figure of purchaser TE houses or a TE house should hold a big figure of supplier SD houses. The increased dissymmetry will cut down the concentration of purchaser or supplier portion and therefore lean the bargaining power towards the house. The 3rd way that the CA houses, SD houses and TE houses can take is to work for concerns other than the VAS services delivered via the MNO conduit. By this manner all the complementor equals would cut down their dependance on VAS delivered through MNO ‘s. The other strategic way which the complementor equals can follow, is to supply Very Value Added Service ( VVAS ) . This has been depicted figure 9.
The VVAS includes merchandises related to populate picture cyclosis, picture conferencing, picture confab, high velocity cyberspace entree, etc. The VVAS would assist to bring forth increased ARPU than the basic VAS like SMS, as basic VAS is acquiring commoditized like basic voice services. In these path the CA, SD and TE should try to supply more and more VVAS instead than basic VAS.
This article started off with depicting the present twenty-four hours scenario of MNOs and VAS. The assorted value subscribers of VAS was besides deliberated upon. The construct of value cyberspace was presented to supply a position lens for better comprehending comprehensively the VAS industry. Further analysis was carried out to understand the kineticss of value creative activity and value accretion in VAS amongst its subscribers. Finally this article laid out the challenges in forepart of assorted VAS subscribers and charted out the likely way they can take. At this occasion it is really hard to order a route map for the journey into future as there is batch of uncertainness crossing across the full VAS value creative activity concatenation and in the environment. But direction bases on the evidences of pattern and shiping on the journey is a necessity instead than contemplating on the route to be taken. Given such a competition it is of import that the assorted VAS stakeholders choose multiple waies instead than the one conclusive way.