When Geodesic Information Systems’ application for the iPhone was reviewed by technology magazines as one of the best among several global mobile value added service (MVAS) application providers, it was indicative of the fact that Indian companies had a new area of competence to showcase to the world.
Atul Chitnis, Senior Vice-President (Product Technology and Strategy), Geodesic, had told eWorld then that developing such an application and competing globally would put the spotlight on Geodesic’s capabilities in this area. Today, Geodesic and many other MVAS application developers recognise the overseas markets as potential revenue generators.
Reliance Mobile World is in the process of tying up with a Singapore-based mobile operator to make available its mobile applications to customers in Singapore and Thailand. According to a spokesperson, the applications can be accessed on any CDMA/GSM mobile connection. Reliance’s home-grown range includes ring tones, caller tunes, games, cricket-based applications, movies and music, news and finance.
A key reason why developers are looking at other markets is the current revenue sharing agreement they have with telecom operators. MVAS application developers share 0-30 per cent of total revenues generated by the use of VAS. The rest is taken by the telecom operator. This not only makes it difficult for developers to sustain their business but also de-motivates them from working on new solutions, say developers. Besides, they feel the Indian mobile subscriber is not aware of how to access and download new, more high-end applications .
“Despite much write-up in the media about the mobile subscriber growth story, the emergence of mobile commerce and advertising, the fact remains that VAS revenues are still largely driven by ring tones and short messaging service (SMS),” says a highly placed official with a leading telecom operator. This is where international markets find favour with MVAS developers.
“Internationally, operators recognise the value of content and are willing to pay for it because their subscriber base has more or less stabilised. However, in India, we find that mobile operators are spending all their money on acquiring new customers and not retaining and enhancing the experience for existing subscribers,” says Salil Bhargava, Chief Executive Officer,
Jump Games, a company that makes gaming applications for the mobile and online space.
Jump Games offers licensed content such as Fido Dido and Virgin comics on the mobile and also has its own intellectual property in the form of applications involving racing, puzzles and board games. It has deployed Sudoku and various board games in Australia on the mobile operator Telstar’s network. In Scandinavia, it has developed multi player arcade games, says Bhargava.
The company is currently involved in developing 3D mobile games and multiplayer wireless games for next-generation handsets that will utilise technologies such as location-based services and Bluetooth.
Bhargava says that in overseas markets, value added services contribute about 23 per cent to the average revenue per user (ARPU), while in India it is less than 8 per cent. Little wonder the Indian gaming market is estimated at about Rs 80 crore, while the global market is valued at $6 billion (about Rs 24,000 crore) with the US, Japan and Korea taking up major portions of this pie.
Stricter testing norms
Revenue sharing with operators abroad is greater — between 30-50 per cent. “But operators there are more strict when it comes to aspects such as testing,” says Arvind Rao, Chief Executive Officer and Co-Founder, On-Mobile. A technical testing usually has to be followed by a comprehensive market testing because operators insist on highly localised services. “This results in more time to deploy a solution overseas (four-six months) than in India (one-two months),” he says. On-Mobile works with operators such as NTT DoCoMo and has deployed most of its Indian applications there such as ring tones and caller back tones. Additionally, it has developed and launched 3G applications such as video streaming and location-based services. These applications cost more than the regular VAS.
“Testing takes more time in the US, but it is worth it,” says R. Vidyanand, Business Head, India, Mobio Networks, a US-based MVAS provider that recently entered India. He recollects his experience with an Indian blackberry application that he downloaded but is still unable to run or use. “I pay Rs 25 a week as subscription fee without using it (application). And the only way to unsubscribe the application is to log on to it and run it,” he says, emphasising why testing and localisation of applications is important.
Mobio had developed some cricket-based applications for the Cricket World Cup in April this year. Though response to the same was satisfactory, Vidyanand feels telecom operators need to give developers more space to experiment with applications and perhaps fund some of the application development work. He is confident that revenue sharing between operators and MVAS developers in India would improve in future. “New entrants to the telecom industry will have to rely heavily on VAS to stand out amidst the clutter from existing operators. Given this, they will have to open terms and conditions for application providers, including revenue sharing,” he says.
Mauj Telecom, part of People Infocomm group, has been testing overseas waters by introducing standalone applications. The company developed a co-branded game for MTV’s Ad Sales and Sponsorship division Viacom Brand Solutions International. As part of the MTV European Music Awards ’07 hosted in Munich, Mauj created a music-cum-sports influenced game.
The company created a co-branded Sony Ericsson and MTV game where a rock star is the hero who partakes in various sports events. A normal 100 m sprint event was shown as a red carpet run; instead of a long jump on a track, the character dived into a crowd of fans from the stage and instead of throwing a javelin he threw a microphone into the audience. Mauj would like to continue this model of working on a case-to-case basis because a “mobile application provider’s business is different from an information technology (IT) services business”, says Manoj Dawane, Chief Executive Officer, People Infocomm. “The content prepared by the mobile application provider needs to be locally relevant, while the IT business works mostly around specificationsof a particular project. IT does not necessarily focus on the end recipient of content, unlike mobile VAS providers,” he says.
Rao of On-Mobile adds that the unique selling proposition for IT companies is cost reduction whereas for MVAS providers it is creating new revenues for clients. “We are a product company. If our revenues double we need to increase head count by 5-10 per cent, unlike IT companies who may have to proportionally double headcount”.
archana@thehindu.co.in
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