Nitin Patel, VP Strategic Marketing, Telenity

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On July 7^th, some of the best telecom minds around the world came together to attend VAS India 2006 Conference at the La Meridian Hotel in Delhi, India. This year marked the execution of yet another successful event with information packed agenda and increased attendance.

The keynote theme was "Profiting from Value Added Services (VAS)" presented by Mr. Dilip Singh CEO at Telenity, followed by presentations from key industry executives and guest including Mr. SD Saxena, Director Finance, BSNL; Mr. A.K. Saxena, Member Services, DoT, MC, IT; Mr. Kanwalinder Singh, President Qualcomm, India; Mr. Nitin Patel, VP Marketing, Telenity; Mr. Vishal Gupta Director, Qualcomm; Mr. AK Bhatnagar, Chief Engineer (R&D), Doordarshan, and Ms. Delphine Reffet HP Open Call Business Unit among others.

During the keynote session, Mr. Singh first presented the importance of VAS and reviewed the market performance. He then talked about “How to Profit from VAS” - a concept dear to operators' hearts – and discussed VAS segmentation, service delivery eco-systems, convergence and IP Multimedia Subsystem (IMS).

Below are highlights of Mr. Singh's presentation that may be of interest to our readers.

In India, VAS accounted for 10% of operator's revenues in 2005 and it is expected to reach roughly 20% to 30% of operator revenues in 2009. This translates to roughly $300 Million “money made” in 2005 and a potential of $5 Billion VAS revenues in 2009.

The global mobile subscribers have already crossed the 2 Billion mark and have reached 2.1 Billion subscribers worldwide covering both GSM and CDMA markets. This translates to an approximate 20% annual growth rate most of which primarily comes from countries described in a simple four letter acronym “BRIC” – Brazil, Russia, India and China.

As the global subscriber base is increasing, the challenge for operator still remains and is how to increase their profitability. Even though voice is still a critical part of services revenues, VAS margins are higher and therefore play a key role in remaining profitable. In 2005, global mobile carriers' service revenues topped an amazing $585 Billion. The largest data service revenue generators are the consumer messaging (SMS, MMS, Email, IM) contributed about $43.5 Billion and Infotainment (mobile content) contributed about $26.8 Billion. The global VAS revenues in 2005 averaged 14% of total service revenues.

The first most fundamental service carriers and network operators need to look into is what builds the foundation of all VAS - “Location and Presence”; followed by Messaging, Entertainment and Business Productivity group. Operator ARPUs are under continuous pressure and will remain so with introduction of Equal Number Portability. With VAS, operators benefit tremendously from personalized services, right differentiation and gain margins to remain profitable.

Location and Presence is the first, providing the foundation for all multimodal services. It enables many services such as offer public safety, proximity based community chat, call routing, information and many other personalized value added services. Localized content makes services more personal and country specific. A simple service example would be “locating the nearest pharmacy when in need”. Location is becoming the killer feature of any context aware value added service. However, challenges such as user privacy, security, authentication and accuracy still exist and is being solved in many operators network.

Messaging is the second most important element of VAS infrastructure which has mainly evolved around SMS, MMS, Email and UMS until now. SMS is still the major source of data services revenues to many operators. Next generation Messaging is integrating all in one user experience with Push to Talk, Unified Communications, Video messaging and conferencing services for more personalization and productivity.

Entertainment remains every consumer favorite choice. For instance, content in India is simply described in a three-letter acronym ABC (Astrology, Bollywood and Cricket) and is still “the King” that drives all services. Content in Europe is described as 3G (Girls, Gambling and Games). As content gets richer, value added services get richer offering increased entertainment opportunity for subscribers.

Business Productivity service are key to every enterprise and when marketed to right customers provide huge cost savings, productivity and hence contributes to VAS revenues. For instance, tracking of assets or fleets and monitoring field workforce carrying cell phones enabled with location-based services benefits the enterprise from cost savings and the operators from increased usage of data services, SMS and voice communication.

For all of these services, a flexible VAS Platform is absolutely needed where consumers can benefit from - personalization, new services with right pricing and productivity. Such a platform should be able to bundle services for wireline (Cable or DSL), Fixed wireline subscriber to wireless. One such example is Ring-back tones and SMS that can be used across both fixed and wireless networks. IP Multimedia Subsystem (IMS) supports the standard implementation of real-time time services across any network types. Operators need a service delivery platform (SDP) that serves both IMS and non-IMS deployments consolidating through common services, improving time-to-market, cost and differentiation. Value-Added-Services are on the rise and are now strategic focus to many operators to remain competitive and key to profitability.