Ta­ble 2

Voice&Data - - VAS -

ed­u­ca­tion, and mo­bile ap­pli­ca­tions. This will give the op­er­a­tors an op­por­tu­nity to en­hance ARPU and in­crease cus­tomer stick­i­ness. At present, in In­dia con­tri­bu­tion of VAS to over­all rev­enue is 10% com­pared to the fig­ures of about 30% in de­vel­oped mar­kets. So, there is an im­mense op­por­tu­nity for growth in VAS adop­tion and rev­enues.

But are the In­dian op­er­a­tors ready to make use of this op­por­tu­nity?

VAS Sce­nario in In­dian mar­ket

A re­port from Deloitte on MVAS, es­ti­mates the size of the In­dian VAS mar­ket at 158 bn and pre­dicts it to grow to 671 bn by 2015. In ad­di­tion, con­tri­bu­tion from VAS to over­all rev­enue is es­ti­mated to grow from the ex­ist­ing 10% to more than 30% in 2015. In the next 5 years, VAS ARPU is also ex­pected to grow by 48%.

Push­ing VAS Us­age

The key to un­lock the po­ten­tial op­por­tu­ni­ties pre­sented by VAS lies in har­ness­ing the power of sub­scriber data. This ap­plies equally to both VAS providers and the op­er­a­tors.

To­day, VAS providers and tele­com op­er­a­tors use ba­sic sys­tems to an­a­lyze VAS sub­scriber be­hav­ior. The em­pha­sis of anal­y­sis is on the over­all be­hav­ior. The scope of such sys­tems is limited to ad hoc re­ports and anal­y­sis. To­day, an­other char­ac­ter­is­tic of the op­er­a­tor ap­proach is the use of el­e­men­tary pro­fil­ing and un­tar­geted cam­paigns to push VAS us­age.

To un­leash the full po­ten­tial of VAS, op­er­a­tors and VAS providers need to walk the ex­tra mile—adopt­ing an­a­lyt­ics and

The key to un­lock the op­por­tu­ni­ties pre­sented by VAS lies in har­ness­ing the power of sub­scriber data

em­ploy­ing un­con­ven­tional data sources to study sub­scriber be­hav­ior. It’s nec­es­sary that VAS and mo­bile op­er­a­tors have a well-de­fined an­a­lyt­ics roadmap to ex­ploit its ben­e­fits.

An­a­lyt­ics can help VAS providers and op­er­a­tors in im­prov­ing the ac­qui­si­tion, en­hanc­ing the us­age, and im­prov­ing the re­ten­tion of VAS sub­scribers. By us­ing seg­men­ta­tion and pro­fil­ing, the VAS be­hav­ior of sub­scribers can be un­der­stood bet­ter. Ac­cord­ingly, fo­cused cam­paigns to up-sell/cross-sell ser­vices would be pos­si­ble. Cur­rently, op­er­a­tors are ex­plor­ing the use of mi­cro-seg­men­ta­tion to pro­file the sub­scribers at very small group sizes to be able to map the sub­scriber groups bet­ter. This along with fo­cused cam­paigns would achieve the be­low out­comes: In­crease in VAS adop­tion Im­proved prof­itabil­ity of VAS ser­vices Bet­ter re­turns on Vas-fo­cused mar­ket­ing cam­paigns

Apart from the con­ven­tional us­age of an­a­lyt­ics men­tioned, there are other ar­eas where it can be used in­no­va­tively to en­hance VAS pen­e­tra­tion and prof­itabil­ity.

New VAS An­a­lyt­ics Frame­works

VAS Value Ma­trix: It helps to study the sub­scriber move­ment across VAS cat­e­gories. Based on IAMAI’S re­port on MVAS, we pro­pose this an­a­lyt­i­cal frame­work that helps to cap­ture the shift of val­ues (per­ceived and prac­ti­cal) in ur­ban and ru­ral con­sumers for var­i­ous VAS ser­vices. As de­picted, VAS cat­e­gories are mea­sured based on their prac­ti­cal value—real value to sub­scribers and per­ceived value—value cus­tomers per­ceive of the cat­e­gory.

VAS Share to Over­all Rev­enues in Coun­tries

South Korea Ja­pan Ger­many USA China In­dia

Mo­bile Pen­e­tra­tion (%) 106.5 97.88 135 96 67 71.5

In the above fig­ure, ini­tially ur­ban cus­tomers at­tached a high per­ceived value to mu­sic that has less prac­ti­cal value. Also so­cial me­dia apps, mo­bile in­ter­net had less prac­ti­cal value and per­ceived value. But to­day, so­cial me­dia apps and mo­bile in­ter­net have high per­ceived value and prac­ti­cal value. This might be due to the launch of 3G, pen­e­tra­tion of smart­phones, and the ex­plo­sion of apps. Ru­ral sce­nario presents a dif­fer­ent picture, ear­lier mo­bile in­ter­net and so­cial me­dia were con­sid­ered to be low in prac­ti­cal value have shifted to high per­ceived value now. These shifts in­di­cate the change in sub­scriber be­hav­ior and pref­er­ence us­ing which VAS ser­vice providers can come out with more rel­e­vant of­fer­ings.

Cat­e­gory Man­age­ment

Mar­ket bas­ket anal­y­sis is a con­cept in re­tail, where ev­ery cus­tomers pur­chase is cat­e­go­rized into groups like gro­cery, health­care, cos­met­ics, etc. Sim­i­larly, a tele­com op­er­a­tor/vas ser­vice provider can group ser­vices sub­scribed by a cus­tomer into groups like ed­u­ca­tion, mu­sic, news, sports, etc. Mar­keters can study the per­for­mance of each cat­e­gory and try to study the re­la­tion be­tween cat­e­gories and come out with of­fers.

VAS Us­age Pro­file— Scat­ter Graph

An­other im­por­tant frame­work be­ing pro­posed here is the VAS pro­file ma­trix. VAS pro­file ma­trix is the per­cep­tual map­ping of sub­scribers and sub­scriber groups across pop­u­lar VAS cat­e­gories. This ma­trix helps op­er­a­tors to iden­tify dif­fer­ent cus­tomer seg­ments and also

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