MVAS A Value-Add To Your Career

[Broad-Man]

Plunging indices. Huge quarterly losses. Massive job cuts. Since October last year, there’s been barely any good news in the business dailies. One exception stands out: telecom companies in India have steadily kept on adding mobile subscribers. In February 2009, India added another 13.44 million mobile subscribers to its existing 362.30 million, making the telecom growth story continue despite the overall economic slowdown.

The case for Mobile VAS
However, even as the number of subscribers has gone up, with increased competition and expansion in non-urban areas, call rates have declined. Hence the average revenue per user (ARPU) has gone down, squeezing the margins of telecom companies. Operators are thus looking to increase revenues by offering mobile value-added services (MVAS) to existing customers. Says Girish Trivedi, deputy director, information, communication and technology practice, Frost & Sullivan, South Asia and Middle East, "Service providers are going to focus on an application-led ecosystem to get a bigger wallet share of the customer. Creating, selling and bundling applications based on usability and user experience will be the key growth area."

Definition. MVAS is any service provided by your mobile phone operator, over and above core voice calls and is charged for separately. ‘The MVAS In India’, a report by the Internet and Mobile Association of India (IAMAI) and the eTechnology Group at IMRB, a market research firm, identifies three distinct areas in MVAS. The first is entertainmentVAS, which includes jokes, games and movie clips. The second major component is infoVAS, which covers news and weather updates, while the third category is mCommerceVAS (mobile banking and payment).

[Broad-Man]

The scope.
Increased competition and saturation in urban areas mean that operators have to focus on MVAS for differentiation of their services. Subho Roy, president, IAMAI, adds that the decision by the Telecom Regulatory Authority of India (Trai) to allow MVAS players to start operating without a licence will spur growth. Technologies like 3G will also give rise to a new set of MVAS applications based on rich multimedia services. On the ‘pull side’, customers are expecting more from their handheld devices than basic telephony. According to Deloitte India, a management services firm, MVAS, which currently accounts for 10 per cent of the operator’s revenue in India, will reach 18 per cent by 2010.

The industry is thus poised to grow fast. Future of MVAS in India, a report by BDA Research, an advisory firm, forecasts a compounded annual growth rate (CAGR) of 44 per cent from 2007 to 2010.

Recession dynamics
However, the current economic environment could impact the telecom sector and growth of MVAS. Says Jagdish Mitra, CEO, Canvas M (an MVAS company which is a joint-venture between Motorola Inc. and Tech Mahindra): "There could be a delay in the roll-out of greenfield operators, as foreign investment could be at stake and venture capitalists could be conservative in their approach towards investments in MVAS firms. Also, deployment of 3G would be delayed, affecting the growth prospects of the MVAS industry."

Philip Jose, manager, KPMG, an advisory firm, agrees: "I see a lower growth of around 30 per cent, as the MVAS industry might not be able to maintain its present rate of growth over the next few years."

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Job creation.
That said, operators will have more and more MVAS requirements and one can expect to see a huge requirement of professionals in this space.

Currently, there are over 100 MVAS companies in India and the number is growing steadily. Says Vijay K. Bhalla, guide and mentor, Telecom India Daily, an online telecom industry newsletter: "While Indian MVAS companies can position themselves in the global market, the global companies can also make India a support hub for their operations and add to jobs generated in India."

Nitish Mittersain, CEO, Nazara Technologies, a mobile entertainment company, expects the industry to grow to at least 10 times (from the current 15,000-20,000 MVAS professionals) in the next 3-5 years. Even if we take a conservative growth of five times, we find a requirement of about 75,000 to 100,000 professionals in the next few years.