Mobile VAS Numbers for India…

Hello Readers!

Recently I came across a beautiful article on statistics on actual revenues generated in India by Value Added Services. I thought, it will be good if I share the same with you. These numbers are really mind boggling considering the over hyped VAS industry.

• Total Mobile subcribers – 250mn
• ARPU : Rs. 250/
• Prepaid connection comprise 85% of total subscriber base.
• VAS constitutes 7% of the total total telecom revenue for Indian operators.
• Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue
• Almost half of Indians use ULCH (Ultra Low Cost Handsets)

ARPU Split of Rs 250

Voice + Rentals	90%	Rs 225	Includes Rentals, Activation Charges, etc.
P2P SMS (primarily) Also: GPRS Data, Call Roaming, CLI	5%	Rs 12.50	None of this flows through to the VAS Providers
Other VAS	5%	Rs 12.50	Rs 4,300 cr / $1 billion annualised revenue
Revenue for VASPs	17% of the 5% above	Rs 2	Rs 750 cr cr / $180 million annualised revenue

VAS Revenues by Category

Category	Penetration	Numbers (million)	Revenue (Rs / mo)	ARPU	Total Revenue (Rs / mo)	VAS Revenue (Rs / mo)	Annual VAS Revenue	Key Players
P2P SMS	35%	80 m	Rs 30	Rs 11	Rs 250 cr	Rs 3,500 cr
CRBT	25%	65 m	Rs 25	Rs 5.50	Rs 165 cr	Rs 30 cr	Rs 350 cr	OnMobile BhartiTele Hungama
IVR / Voice Portal	15%	30 m	Rs 20	Rs 3	Rs 60 cr	Rs 10 cr	Rs 125 cr	OnMobile One97 Cellebrum
Downloads (Ringtones, Wallpapers, Games)	10%	25 m	Rs 10	Re 1	Rs 25 cr	Rs 6 cr	Rs 75 cr	Hungama
SMS Subs.	5%	15 m	Rs 20	Re 1	Rs 30 cr	Rs 6 cr	Rs 75 cr	One97
P2A SMS	15%	30 m	Rs 6	Re 1	Rs 30 cr	Rs 6 cr	Rs 75 cr	IndiaTimes
Misc				Re 1	Rs 50 cr	Rs 5 cr	Rs 50 cr
TOTAL (ex-P2P SMS)		250 m		Rs 12.50	Rs 360 cr	Rs 63 cr	Rs 750 cr

Does this mean that VAS market is ~200mn industry only (though the expected CAGR is ~44% )?Entities in

VAS Value chain

• Content/Application Owner – cos. like saregama/mauj/Rajshri who develop coyrighted content
• Aggregator – aggregates content like games/wallpapers/ringtones and distributes it to suit customer needs [players : mauj, hungama mobile, indiatimes mobile etc]
• Software developer – develops applications (like payment/games/middleware etc.) for mobile VAS [players - mchek/July systems/webaroo/affle etc]
• Technology Enabler – provides the platform that plugs into telco networks and acts like a bridge between aggregator and telcos [players include OnMobile, cellnext. mauj etc]
• Operators still dominate the revenue sharing arrangement in VAS [Of the amount paid by end users, 60-70% is kept by operator, aggregator gets 20-25% and content app/ owner gets 10-15% of the revenue]

Points to note:

• P2P SMS Penetration is about 35-40%, while VAS Penetration is at best 25-30% of all users.
• SMS in all its forms (P2P, P2A, Subscriptions, A2P) is the biggest revenue generator after voice.
• Music (as part of a broader Entertainment category) is the bedrock of the VAS Industry accounting for over 50% of non-Voice/SMS revenues (CRBT, Ringtones).
• Voice Portals are the other big revenue generator, as they are the gateway to a wide variety of content.

Via Emergic (with permission from Rajesh)