Prepared by: Arun Koshy Thomas

Summary Report of Panel Discussion of mPower: Voice of VAS 3rd February,2012

Panel Members:

Subhash R. Ghosh, Director, Lemontree Consulting Sanjay Diwan, MD, Consulting Inc. Probir Roy, Director, PayMate Bikas Jha, Sr. Director - Sales & Marketing, Real Networks Dev Vig, Associate Director, mPortal Shrish Lal, Sales Head ROM and Goa, MVAS, Tata Docomo

Prepared by: Arun Koshy Thomas

Panel Discussion Report

A panel discussion on mPower: Voice of VAS was organized by the Placements Team11 on Friday, 3rd February 2012. The panel was attended by six members who are the stalwarts of MVAS industry. The speakers were Subhash R. Ghosh, Director, Lemontree Consulting, Sanjay Diwan, MD, Consulting Inc., Probir Roy, Director, PayMate, Bikas Jha, Sr. Director - Sales & Marketing, Real Networks, Dev Vig, Associate Director, mPortal, Shrish Lal, Sales Head ROM and Goa, MVAS, Tata Docomo. The session started by welcoming the panel and the audience on behalf of the institute.

The discussion opened with an introduction from Mr Sanjay Diwan acknowledging that the next wave of growth is from mobile applications. It was followed by the individual sessions by other dignitaries where the speakers discussed various aspects of mobile value added services and their implications for the changing role of the telecom industry. The panellists in their presentations emphasized a number of important issues, including the challenges, opportunities and future of VAS. It was followed by question and answer session from the participants.

The main themes of the discussion are presented below. Keynote Sessions Summary:

1. Sanjay Diwan, MD, Consulting Inc.

Sanjay started by outlining that the next wave of growth is from mobile applications industry. He then spoke from the perspective of revenue sharing model where he suggested that an offtech model is waiting for approval from TRAI. According to this model, pricing is controlled by VAS players.

Prepared by: Arun Koshy Thomas

He reflected on the huge revenue potential from Mobile value added services particularly from APAC region. He then moved on to talk about the

penetration of Facebook in India quoting that Chennai have the maximum penetration followed by Delhi, Mumbai. There was also a brief mention of m-governance where he emphasized the need for the development is essential. Sanjay concluded by making some brief comments on the future of MVAS in India. Applications have huge space in the international market and citizen services, he said. The major concern is making applications to reach the masses. 2. Bikas Jha, Sr. Director - Sales & Marketing, Real Networks

Mr. Bikas Jha from Real Networks then gave an overview of MVAS current scenario. He started by saying how pleased he was to take part in the panel and acknowledged that the contribution of VAS to the overall telecom revenues is just 1015%. He presented few stats and key indicators which gave a clear insight.

14

35 7

CRBT IVR portal P2A SMS

Data
20 Other VAS

Contribution of VAS to Overall Telecom: 10-15%

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Figures on Teledensity: Category Rural Urban Overall Figure (in Percentages) 37.5% 166.8% 74%

Figures on Subscribers: Category Rural Urban Peak ULA Total Figure (in Millions) 223 424 647 894

Key Indicators: Non voice revenues will constitute 31 % of total revenues by 2015 IVR and CRBT are expected to remain constant Rural penetration will drive the numbers Mobile internet will lead to growth and consequently mobile internet along with application service will threaten operator MVAS Established carrier billing system will benefit operators to play a dominant role

MVAS market potential & its share of Telecom Revenues ( IMAI-July'11)

31 16 2010 18 22 27

2011
2012 2013 2014 2015

31

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Evolution of MVAS: He expressed an opinion that Challenge is to retain voice based VAS products at the same time promoting data based VAS products. Bikas explained that VAS portal and roadmap are regarded as the inevitable way for the success in VAS business and eventually for innovative convergence service.

Era for Voice

Strategy for increasing new subscribers Innovation @ low price and for masses

Era for Data

Strategy for increasing ARPU Differentiated VAS to increase ARPU

Marketing

He has stressed on the opportunities and challenges in the MVAS industry and also explained the paradigm shift which is presented below.

A B

Low ARPU,Ultra low end H/s based 54 %

High & Medium ARPU, Med & High end H/S 42%, Growing fast
High ARPU, high end H/S 4%

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Opportunities

High content & service delivery Affordable price Multichannel services

Challenges

Compatibility issue Non availability of content Unstable network and complex ecosystem

Affordability

Smartphones

High cost

Low & medium cost

Ultra low cost

Device

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Paradigm Shift I: 1 2

Business

Content Deliverer

Market Leader Type

Market Leader Type

Enabler

Market Creator

Content Generalist

3 Niche

4 Scale

Paradigm Shift II:

Unarticulated

New VAS market

Paradigm Shift II

Articulated

Existing VAS market

Potential VAS market

Saved

Unsaved

Prepared by: Arun Koshy Thomas

Landscape of MVAS services: Lucrative part of VAS are SMS, RBT, Music on Demand, Games, Ringtones, DMB ( Active in NCR region) Music on Demand not evolved in Indian market Problem in Cloud: Sharing is challenging Memories getting lost Expectation: Fast, seamless connectivity everywhere and on a plethora of devices Hardware that enables high quality playback of media across all devices Cloud based MVAS: As a conclusion, Mr. Bikas proposed cloud based MVAS which hold good prospects for sustainable alleviation of MVAS in India. He also said that it would help operators to create a basis for differentiation in high-churn markets.

Entertainment

Media stations Jukebox Contacts/ addressbook Cell data protection MVAS for enterprise utility SIM mapped compute infrastructure MVAS for health care, agriculture, education..

Personal Info

Solution

Utility

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3. Probir Roy, Director, PayMate

Mr. Probir started his presentation by laying emphasis on M-commerce which is a form of data VAS. He said that 80-90% of the transactions / payments are still done in cash and talked about the huge potential for migration to electronic medium. India is a predominantly a paper economy, he added.

MVAS

Payments

Voice

Entertainment

Informational

During his presentation, he told that mobile payments are a form of carriage and communication for which he stressed the need for a device which deals with authentication and an ID device and also about the medium for alerts and notifications. Another topic raised was the importance of m-wallet which is capable of performing non-financial transactions, mobile payments. It was also highlighted that 60% of the Indians are unbanked and measure have to be taken to bridge this gap. The speaker concluded the presentation by saying that the key challenges for mobility are consumer awareness & education and selecting a suitable model. 4. Subhash R. Ghosh, Director, Lemontree Consulting

He talked about the importance of mobile device in ones day to day life. He made a comment that For a man, Mobile is closer to the heart than his wife. The speaker stressed that the converged device is the future. According to him, factors such as likes, dislikes and cultural differences of the customer should be taken into account before targeting and segmentation.

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5. Dev Vig, Associate Director, mPortal

Mr. Dev focussed his presentation on VAS market in India, types of Indian mobile consumers and the factors that drive the growth of VAS. He presented few stats to underline that there is good opportunity in the VAS market. VAS market in India:

Size: 117 billions(INR) in 2010 Mobile internet active users:15 M Bottom of Pyramid to increase VAS penetration

Factors that drive VAS: 3G Launch of number portability Increasing penetration of features of rich phones

Demand of better user experience on phones:

Smartphones with CAGR of 85% Featurephones with CAGR of 51%, plays a key role

Basic phones with CAGR of 3%

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Indian Mobile Consumers:

Indian Mobile Consumers

10

50 40

I know it all I want to know I don't care

I want to know Category: Target Not wary of using VAS Presentation of VAS is a major issue: How do I take VAS to right audience today? Never be technical, play with content and not technology Industry require a platform that helps to cater to these users access VAS as early as possible Come out with idle screen solutions and suitable widgets He concluded his presentation by saying Let VAS reach consumers, not consumer reach VAS.

6. Shrish Lal, Sales Head ROM and Goa, MVAS, Tata Docomo He was the last speaker to deliver the presentation. He focussed his presentation on non-voice value added services which have a bright future in the coming years. Many telecom companies started focussing on this segment and have a separate team working under this. The role of the youth in shaping the future of Indian telecom industry was also raised.

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Q & A panel discussion

The presentations by the panellists were followed by participants discussion. In the afternoon, the audience posed questions to the panel. Following are the few questions asked during the discussion. 1. Government policies to encourage VAS in rural areas 2. Pricing model in India do we cater to a price sensitive /developing economy: high charges for Services: basic services for free eg: as in Singapore. Setting up of ceiling prices for MVAS keeping in mind the cost structure of operator. 3. Has there been or can there be a fixed-variable share of revenues between VAS players and the operators? 4. How VAS can reduce customer churn? All speakers highlighted that MVAS is the next source of revenue for the telecom industry. In the period of rapid advance of technology, MVAS has emerged as a great opportunity to rescue the industry from the declining ARPU.

Prepared by: Arun Koshy Thomas