Cell Operators Battle to Add Value

Warfare is dead. Long live fare wars. With basic airtime prices taking the downward plunge, cellular operators are betting their future on value added services (VAS), which are expected to surge to 40 per cent of their revenue realisation within a year.

"The basic coverage is of course key. But, with plain vanilla services taking a backseat due to a downward pressure on pricing discovering and making the first move of fulfilling a customer need in terms of a VAS is very important," says Tushar Maheshwari, GM Marketing, Bharti Mobile, which operates in Andhra Pradesh, Delhi and Madhya Pradesh.

Agrees Subbaraman Iyer, VP Marketing, Sales, Customer Service at Tata Cellular. "Various technological innovations have given scope for offering a wide gamut of services that are poised to convert a cellular phone from a productivity tool to a personal accessory. With growing information requirements, cellular service providers need to offer as many VAS as possible," he says.

"Not only is VAS revenue generating, but it also helps build value thus ensuring subscribers' loyalty. Moreover, VAS is also considered a key differentiator," he adds.

Currently, VAS contributes to just about 1 to 1.4 percent of Bharti Mobile's (Airtel) and Tata Cellular's revenues. But, both companies expect it to peak to 40 to 50 per cent of their revenues within a year.

And studies world over only reaffirm their faith in VAS. According to a study by UK-based analyst and consulting companies Ovum and ARC Group, by 2004, roughly 600 million users world over will be sending an average of 25 text messages each over the short messaging services (SMS) per day, as against the 50 million users sending an average of one message a day each in 2000.

In India alone, the subscriber base is expected to touch 50 million by 2005 from the existing 3 million, according to the Cellular Operators Association of India.

Thanks to this great revenue potential, the cellular operators in Cyberabad are vying to outdo each other in providing more and more infotainment services as value adds.

The latest VAS offering is Bharti Mobile, or Airtel's, upcoming tie-up with ICICI Bank for its existing mobile banking service. Currently its mobile banking facility is available with IDBI bank in addition to GTB and HDFC. Airtel is also tying up with NetXcel and Air2Web for its 500 and 700 series information services, says Maheshwari.

Tata Cellular too is also reportedly in talks with ICICI Bank for the i-banking facility, sources say. As of now, its i-banking facility is available with HDFC and GTB.

Airtel will soon be offering customised set of VAS by segmenting the customers. This package of services will be a mix of some new and old services. Recently, Airtel had also offered online payment of cellular bills and a host of other VAS over its Website.

Currently, about 60 to 70 per cent of Airtel's subscriber base uses VAS. Approximately 3.5 to 4 million messages a month are being sent over Airtel. Of the SMS usage, 92-93 per cent is people to people services, while 7-8 percent is people-application services.

At Tata Cellular, approximately 50 per cent of the base is availing at least one VAS/SMS service a day. Approximately 1.4 million SMS text messages were sent in February alone. And in the insta-messaging services category such as stocks, news, and astrology, 80,000 request messages every month are sent by our subscribers.

Currently, besides M-Banking, AirTel offers Email services, and information services such as news, stocks (live quotes, list of top 10 companies to invest, currency, new issue of shares).

Airtel also offers general information such as horoscope, jokes, weather forecast, Gati consignment status, and entertainment information as prime time tv listings, local information on hotels, restaurants, pubs, renting of cars, hospitals and chemists, flights and trains, movies theatres, and ATMs.

The dial-a-services includes rent a car, car helpline, hotel reservations, train reservation, call a travel agent, call ambulance, order food, handset batteries, sweets, burgers, household maintenance, flowers, pizza, and courier services.

Tata Cellular recently launched two insta-messaging services: i-Mutual Funds in collaboration with Karvy Consultants, wherein subscribers can know the Net asset values of various mutual funds, and i-Games, wherein Subscribers can play games on their mobile phones.

Currently, Tata Cellular offers e-mail services, and information services such as news, stocks, horoscopes, movies, restaurants, car rentals, and flight information, besides call management services.