Kiran Oroject Connect

8/3/2019 Kiran Oroject Connect

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THE

PROJECT REPORT

ONCONSUMER PREFERENCE OF VAS (VALUE

ADDED SERVICES) OF PREPAID MOBILE

PHONES

AT

SUBMITTED TO SUBMITTED BY

ACKNOWLEDGEMENT

A person always requires guidance and help of others to achieve success in

his mission. Similarly it was not possible for us to complete our project


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individually. We are very thankful to all the people who have helped us to

complete the project.

We are grateful to Ms.

(marketing deptt.) our trainer for Providing us the necessary help , editing

our project and also for the valuable time that she gave us from her busy

schedule.

Last but not least, we would like to thank our all friends who inspire

us and provide Accurate information to us.

TABLE OF CONTENTS

PART-A


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1. Executive Summary2. Introduction of telecom industry

--Major players in the market--Major market trends--History of telecom industry--Constraints

3. Introduction to the company--Companys profile-- Vision & Mission

4. Introduction to VAS-- Meaning & Definition-- Characteristics-- Types of VAS-- How it is provided

5. Market efforts regarding VAS6. Market size

PART-B

Objectives of research. Research MethodologyAnalysis & Interpretation of QuestionnaireConclusionSuggestion & RecommendationsReferences & Bibliography

Executive Summary

The mobile subscriber base is growing at a scorching pace in India, India is now

the 5th country in the world to have crossed the 100 million mark in subscriber

base and has in the last two months become the fastest growing mobile market

in the world. As average revenue per user decrease from voice drops, and voice


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becomes commoditized, Telcos are increasingly looking at data as an additional

revenue stream. The end users have also embraced VAS and it contributes

between 5-10% of the revenues of different Telcos.

The report includes Current scenario of Indian Telecom

Industry subscribers ,trend ,issue &challenges etc., Global Vas Market , Value

Added Services in India its evolution and valuec h a i n , C o n t e n tCreation,

EnterpriseMessaging Services,Technology, Mobile, Media & Entertainmentand

VAS in Future.

Thus Mobile VAS has become an important element in the

growth of mobile telephony in India. Yet it is also equally true that there is little

clarity on business issues and growth seems to be driven by more by inherent

market momentum than a concentrated effort on the part of the stakeholders;

differences exist even on basic issues like definition for Mobile VAS

INTRODUCTION TO TELECOM

INDUSTRY IN INDIA

The telecom network in India is the fifth largest network in the world meeting up

with global standards. Presently, the Indian telecom industry is currently slated to

an estimated contribution of nearly 1% to Indias GDP.


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The Indian Telecommunications network with 110.01 million

connections is the fifth largest in the world and the second largest among the

emerging economies of Asia.Today, it is the fastest growing market in the world

and represents unique opportunities for U.S. companies in the stagnant global

scenario.The total subscriber base, which has grown by 40% in 2005, is

expected to reach 250 million in the next few years.According to Broadband

Policy 2004, Government of India aims at 9 million broadband connections and 18

million internet connections by 2015.

The wireless subscriber base has jumped from 33.69 million in 2004

to 62.57 million in FY2004-2005. In the last 3 years, two out of every three new

telephone subscribers were wireless subscribers. Consequently, wireless now

accounts for 54.6% of the total telephone subscriber base, as compared to only

40% in 2003.

Wireless subscriber growth is expected to bypass 2.5 million new

subscribers per month by 2007. The wireless technologies currently in use are

Global System for Mobile Communications (GSM) and Code Division Multiple

Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing

mobile services in 19 telecom circles and 4 metro cities,covering 2000 towns

across the country.


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MAJOR PLAYERS IN THE MARKET

There are three types of players in telecom services:

-State owned companies (BSNL and MTNL)

-Private Indian owned companies (Reliance Infocomm, Tata Teleservices,)

-Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures,


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Escotel, Idea Cellular, BPL Mobile, Spice Communications)

MAJOR MARKET TRENDS

The telecoms trends in India will have a great impact on everything from the

humble PC, internet, broadband (both wireless and fixed), cable, handset features,

talking SMS, IPTV, soft switches, and managed services to the local

manufacturing and supply chain.

HISTORY OF INDIAN

TELECOMMUNICTIONS

Year

1851 First operational land lines were laid by the government near Calcutta

(seat of British power)

1881 Telephone service introduced in India


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1883 Merger with the postal system

1923 Formation of Indian Radio Telegraph Company (IRT)

1932 Merger of ETC and IRT into the Indian Radio and CableCommunication Company (IRCC)

1947 Nationalization of all foreign telecommunication companies to formthe Posts, Telephone and Telegraph (PTT), a monopoly run by thegovernment's Ministry of Communications

1985 Department of Telecommunications (DOT) established, an exclusiveprovider of domestic and long-distance service that would be its own

regulator (separate from the postal system)

1986 Conversion of DOT into two wholly government-owned companies:the Videsh Sanchar Nigam Limited (VSNL) for international telecommunicationsand Mahanagar Telephone Nigam Limited (MTNL) for service inmetropolitan areas.

1997 Telecom Regulatory Authority of India created.

1999 Cellular Services are launched in India. New National TelecomPolicy is adopted.

2000 DoT becomes a corporation, BSNL

Factors driving VASBooming economy

India has maintained its position as the second-fastest growing major economy

after China, as rising consumer and government spending taking place.

Consumption and infrastructure spending are driving the growth. This booming

economy has created job opportunities and increased the spending power of an


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average Indian. This has resulted in higher disposable incomes and faster

acceptance of new technologies with a willingness to spend for them.

Increasing comfort levels with basic mobility services

There is now a critical mass of users in the Indian mobile telephony market who

are experienced mobility users. These users are very comfortable in using their

phones and want to exercise the option of doing more on them beyond basic

voice applications. The first phase of growth for VAS has come in from these

converts; and these users will continue to drive the market and evolve into more

advanced applications. At the same time the basic VAS applications will also

continue to appeal to the new mobility category initiates.

Reduction in call rates & CPP initiation

CPP (Calling Party Pays) was an important initiative which unshackled the

mobility market and allowed many more subscribers to enter the mobility

category. This initiative, in conjunction with the gradual reduction in call rates has

ensured that the expenditure on voice for a typical user has gone down over the

years. As a result more users have become comfortable in spending on VAS

as it does not significantly impact their overall outlay on mobility

COMPETETORS

BSNL


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On October 1, 2000 the Department of Telecom Operations,

Government of India became a corporation and was renamed Bharat

Sanchar Nigam Limited (BSNL). BSNL is now Indias leading

telecommunications company and the largest public sector

undertaking. It has a network of over 45 million lines covering 5000

towns with over 35 million telephone connections. The state-controlled

BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and

long distance services throughout India (except Delhi and Mumbai).

BSNL will be expanding the network in line with the Tenth Five-Year

Plan (1992-97). The aim is to provide a telephone density of 9.9 per

hundred by March 2007. BSNL, which became the third operator of

GSM mobile services in most circles, is now planning to overtake

Bharti to become the largest GSM operator in the country. BSNL is also

the largest operator in the Internet market, with a share of 21 per cent

of the entire subscriber base

BHARTI

Established in 1985, Bharti has been a pioneering force in the telecom

sector with many firsts and innovations to its credit, ranging from

being the first mobile service in Delhi, first private basic telephone

service provider in the country, first Indian company to provide


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comprehensive telecom services outside India in Seychelles andfirst private sector service provider to launch National Long Distance

Services in India. Bharti Tele-Ventures Limited was incorporated on

July 7, 1995 for promoting investments in telecommunications

services. Its subsidiaries operate telecom services across India.

Bhartis operations are broadly handled by two companies: the

Mobility group, which handles the mobile services in 16 circles out of a

total 23 circles across the country; and the Infotel group, which

handles the NLD, ILD, fixed line, broadband, data, and satellite-based

services. Together they have so far deployed around 23,000 km of

optical fiber cables across the country, coupled with approximately

1,500 nodes, and presence in around 200 locations. The group has a

total customer base of 6.45 million, of which 5.86 million are mobile

and 588,000 fixed line customers, as of January 31, 2004. In mobile,

Bhartis footprint extends across 15 circles. Bharti Tele-Ventures'

strategic objective is to capitalize on the growth opportunities the

company believes are available in the Indian telecommunications

market and consolidate its position to be the leading integrated

telecommunications services provider in key markets in India, with a

focus on providing mobile services.

MTNL


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MTNL was set up on 1st April 1986 by the Government of India to

upgrade the quality of telecom services, expand the telecom network,

introduce new services and to raise revenue for telecom development

needs of Indias key metros Delhi, the political capital, and Mumbai,

the business capital. In the past 17 years, the company has taken

rapid strides to emerge as Indias leading and one of Asias largest

telecom operating companies. The company has also been in the

forefront of 5 technology induction by converting 100% of its telephone

exchange network into the state-of-the-art digital mode. The Govt. of

India currently holds 56.25% stake in the company. In the year 2003-

04, the company's focus would be not only consolidating the gains but

also to focus on new areas of enterprise such as joint ventures for

projects outside India, entering into national long distance operation,

widening the cellular and CDMA-based WLL customer base, setting up

internet and allied services on an all India basis.

MTNL has over 5 million subscribers and 329,374 mobile subscribers.

While the market for fixed wireline phones is stagnating, MTNL faces

intense competition from the private playersBharti, Hutchison and

Idea Cellular, Reliance Infocommin mobile services. MTNL recorded

sales of Rs. 60.2 billion ($1.38 billion) in the year 2002-03, a decline

of 5.8 per cent over the previous years annual turnover of Rs. 63.92 billion.


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RELIANCE INFOCOMM

Reliance is a $16 billion integrated oil exploration to refinery to power

and textile conglomerate. It is also an integrated telecom service

provider with licenses for mobile, fixed, domestic long distance and

international services. Reliance Infocomm offers a complete range of

telecom services, covering mobile and fixed line telephony including

broadband, national and international long distance services, data

services and a wide range of value added services and applications.

Reliance IndiaMobile, the first of Infocomm's initiatives was launched

on December 28, 2002. This marked the beginning of Reliance's vision

of ushering in a digital revolution in India by becoming a major

catalyst in improving quality of life and changing the face of India.

Reliance Infocomm plans to extend its efforts beyond the traditional

value chain to develop and deploy telecom solutions for India's

farmers, businesses, hospitals, government and public sector

organizations. Until recently, Reliance was permitted to provide only

limited mobility services through its basic services license. However,

it has now acquired a unified access license for 18 circles that permits

it to provide the full range of mobile services. It has rolled out its

CDMA mobile network and enrolled more than 6 million subscribers

in one year to become the countrys largest mobile operator. It now


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wants to increase its market share and has recently launched pre-paid

services. Having captured the voice market, it intends to attack the

broadband market.

TATA TELESERVICES

Tata Teleservices is a part of the $12 billion Tata Group, which has 93

companies, over 200,000 employees and more than 2.3 million

shareholders. Tata Teleservices provides basic (fixed line services),

using CDMA technology in six circles: Maharashtra (including Mumbai),

New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It

has over 800,000 subscribers. It has now migrated to unified access

licenses, by paying a Rs. 5.45 billion ($120 million) fee, which enables

it to provide fully mobile services as well. The company is also

expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to

DoT for 11 new licenses under the IUC (interconnect usage charges)

regime. The new licenses, coupled with the six circles in which it

already operates, virtually gives the CDMA mobile operator a national

footprint that is almost on par with BSNL and Reliance Infocomm. The

company hopes to start off services in these 11 new circles by August

2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala,

Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West

and West Bengal.


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VODAFONE

Hutchs presence in India dates back to late 1992, when they worked

with local partners to establish a company licensed to provide mobile

telecommunications services in Mumbai. Commercial operations began

in November 1995. Between 2000 and March 2004, Hutch acquired

further operator equity interests or operating licences. With the

completion of the acquisition of BPL Mobile Cellular Limited in January

2006, it now provides mobile services in 16 of the 23 defined licence

areas across the country.

Hutch India has benefited from rapid and profitable growth in recent

years. it had over 17.5 million customers by the end of June 2006.

IDEA

Indian regional operator IDEA Cellular Ltd. has a new ownership

structure and grand designs to become a national player, but in doing

so is likely to become a thorn in the side of Reliance Communications

Ltd. IDEA operates in eight telecom circles, or regions, in Western

India, and has received additional GSM licenses to expand its network

into three circles in Eastern India -- the first phase of a major

expansion plan that it intends to fund through an IPO, according to

parent company Aditya Birla Group .


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CONSTRAINTS

Slow pace of the reform process .

It would be difficult to make in-roads into the semi-rural and rural areas

because of the lack of infrastructure. The service providers have to incur a

huge initial fixed cost to make inroads into this market. Achieving break-even

under these circumstances may prove to be difficult.


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The sector requires players with huge financial resources due to the above

mentioned constraint. Upfront entry fees and bank guarantees represent a

sizeable share of initial investments. While the criteria are important, it tends

to support the existing big and older players. Financing these requirements

require a little more liberal approach from the policy side.

Problem of limited spectrum availability and the issue of interconnection

charges between the private and state operatorsDespite several hiccups along the way, the Telecom

Regulatory Authority of India (TRAI), the independent regulator, has earned a

reputation for transparency and competence. With the recent resolution of a major

dispute between cellular and fixed operators (see below), Indian

telecommunications, already among the most competitive markets in the world,

appears set to continue growing rapidly.

INTRODUCTION OF THE

COMPANY

Introduction

HFCL is a part of HFCL group, established in 1987, Himachal Futuristic

Communication ltd has developed a vast base for manufacturing indigenous


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Telecom equipment in India. It started with manufacturing transmission equipment

And expand its product portfolio to optical fiber cable, Accessories and terminal

equipment.

About the company

Infotel provides a world class telecom experience when it comes to technology

products. Customer satisfaction. It launched in Punjab in

2000 under brand name CONNECT. It has set up state of the art networks with

An extensive optical fiber networks coverage over 3500km. today it is one of the \

Punjabs leading private sector t-c service provider with an aggregate customer

base of 5,55,155 as an march 31,2009.

Our Vision

'To be the most admired telecommunication and infotainment services brand

through innovation and excellence.'

Our Mission

"Deliver cutting edge telecommunication and infotainment products &

services through convergent digital technologies, ensuring customer


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delight."

Driving Growth

The growth in sales for the first quarter of this fiscal was 9.6%,but the profit after

Tax went up by a huge 205%. The company continued its goodperformance in the

second quarter. Sales grew by 80% and the net profit by 98%.The company has


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maintained its operating profit margin (OPM) at around 22.6%.Interest charges

have gone up 35% to Rs 9.06 cr as compared to Rs 6.71 cr in thesame period of

the previous year. Depreciation has gone up 75% to Rs 3.15 cr.Provision for

taxation shall be made in the annual accounts.

Future Plans

HFCL is close to acquiring majority stake in Essar Commvision,the licence

holder for operating basic telecom services in Punjab. In earlyDec.99, HFCL

decided to make a private placement of equity shares at apremium. The offer

would be made to promoters, members, employees, debentureholders, banks, FIs,

mutual funds, NRIs, FIIs, OCBs, etc.

For the FY ending Mar. 2000, HFCL has set aturnover target

of Rs 575 cr and a net profit target of Rs 80 cr. Even if thecompany can achieve

the same turnover and profit as in third quarter, it will achieve itstarget.


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Financial Structure

The company has proposed to raise Rs 700 cr, which will be usedto retire debt

and meet working capital needs. It also plans to invest Rs 100 crin the software

development business and research and development. HFCL hasorders worth

more than Rs 2,500 cr on hand to be executed over 1 to 3 years,which include

orders from the Department of Telecommunications, MahanagarTelephone

Nigam and also from private sector for turnkey execution oftelecom contracts.


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INTRODUCTION TO THE VAS

A value-added service (VAS) is popular as a telecommunications industry term

for non-coreservices or, in short, all services beyond standard voice calls and fax

transmissions but, it can be used in ANY service industry (eg. Web 2.0) for the

services providers provide for no cost to promote their main service business. In

telecommunication industry on a conceptual level, value-added services add value

to the standard service offering, spurring the subscriber to use their phone more

and allowing the operator to drive up theirARPU. For mobile phones, while

technologies like SMS, MMS and GPRS are usually considered value-added

services, a distinction may also be made between standard (peer-to-peer) content

and premium-charged content.
http://en.wikipedia.org/wiki/Telecommunicationshttp://en.wikipedia.org/wiki/Core_serviceshttp://en.wikipedia.org/wiki/Core_serviceshttp://en.wikipedia.org/w/index.php?title=Spurring&action=edit&redlink=1http://en.wikipedia.org/wiki/ARPUhttp://en.wikipedia.org/wiki/Short_message_servicehttp://en.wikipedia.org/wiki/Multimedia_Messaging_Systemhttp://en.wikipedia.org/wiki/GPRShttp://en.wikipedia.org/wiki/Peer-to-peerhttp://en.wikipedia.org/wiki/Core_serviceshttp://en.wikipedia.org/w/index.php?title=Spurring&action=edit&redlink=1http://en.wikipedia.org/wiki/ARPUhttp://en.wikipedia.org/wiki/Short_message_servicehttp://en.wikipedia.org/wiki/Multimedia_Messaging_Systemhttp://en.wikipedia.org/wiki/GPRShttp://en.wikipedia.org/wiki/Peer-to-peerhttp://en.wikipedia.org/wiki/Telecommunications


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VOICE BASED VAS

(Available in both landline and mobiletelecom system)In a landline - voice based ring tonedownload facility,

three party conference Tele- Horoscope/ Tele- AstrologyMusic-on-demand News-on-demand Opinion polls Quiz/ Contests City Infoline, etc

NON VOICE BASED VAS

SMS,MMS, e-mail, advanced video features, peer to peer video sharing, etc taking part in the contests in TVthrough SMS Voice based SMS for blind people. subscribe Bollywood clips &ringtones Cricket and Games Dynamo Kid


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VAS- Definition

Mobile value-added services (VAS) are those services that are not partof the

basic voice offer and are availed off separately by the end user. Theyare used

as a tool for differentiation and allow the mobile operators to developanother

stream of revenue. The nature of value added services change overtime. A VAS

may become commoditized and becomes so common place and widelyused that

it no longer provides meaningful differentiation on a relative basis.

For example several mobility operators & other

stakeholders

in the industry no longer consider P2P SMS as a form of VAS. Howeverfor the

purpose of estimating the market size we have taken P2P into account,though

we also feel that P2P SMS is ceasing to be a meaningful tool for service

differentiation.


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CATEGORY OF THE VAS

Category Characteristic Example

Entertainment designed for massappeal

Games, Caller Ring BackTone (CRBT), musicdownload.

Info characterized by theuseful information

SMS Missed Call Alert(MCA), Stock Update,Location Based Service(LBS).

M-Commerce services involvingmonetarytransaction usingthe mobile phone

M-banking and m-payment


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HOW IS IT PROVIDEDValue-added services are supplied either in-house by the mobile network operator

themselves or by a third-party value-added service provider (VASP), also

known as a content provider (CP). VASPs typically connect to the operator using

protocols like Short message peer -to- peer protocol (SMPP), connecting either

directly to the short message service centre (SMSC) or, increasingly, to a

messaging gateway that allows the operator to control and charge of the content

CUSTOMERS OPINION TOWARDS VAS

Customers continuously want more from their phone. They use their

cellular phones to play games, read news headlines, surf the Internet, keep a tab on

astrology, and listen to music, make others listen to their music, or check their

bank balance. Thus, there exists a vast world beyond voice that needs to be

explored and tapped and the entire cellular industry is heading towards it to
http://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Short_message_peer-to-peer_protocolhttp://en.wikipedia.org/wiki/Short_message_service_centerhttp://en.wikipedia.org/wiki/Mobile_network_operatorhttp://en.wikipedia.org/wiki/Short_message_peer-to-peer_protocolhttp://en.wikipedia.org/wiki/Short_message_service_center


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provide innovative options to their customers.

Spoilt by choice, the mobile phone subscribers are beginning to

choose their operators on the basis of the value added services they offer. The

increased importance of VAS has also made content developers burn the midnight

oil to come up with better and newer concepts and services.

To understand that where this industry is at present and where it is

headed, IAMAI and IMRB International have jointly prepared the Mobile VAS

Report to focus back stage and uncover the trends in the cellular industry, current

market status, value chain, competition, market dynamics & expected roadblocks.

This is the first publicly available study on Mobile VAS in India and the

insights provided herein can be used by both the mobile operators and the content

providers to better address the needs of their customers. A timely and strategic

action would help nurture the mobile VAS market in India.


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The Role of VAS

This is where the role of VAS (Value Added Services)comes into

focus. Operators are facing cutthroat competition and with the callrates in India

being one of the cheapest in the world, the margins are very low.Therefore they

are looking at VAS as the next wave for growth. It has become theflywheel of

telecom growth and a large chunk of revenue for operators is likely tocome from

VAS services in the years to come.

But it is not only effort fromoperators which

is driving the growth of VAS, there are other factors contributing to it.The growth

of VAS in India has been helped both by macro level environmentalfactors and

specific market initiatives to develop this category.


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Value-added Service Characteristics

All VAS share the same characteristics:

Not a form of basic service but rather adds value total service offering

Stands alone in terms of profitability and/or stimulates incremental demandfor core service(s)

Can sometimes stand alone operationally

Does not cannibalize basic service unless clearly favorable

Can be an add-on to basic service, and as such, may be sold at a premiumprice

May provide operational and/or administrative synergy between or amongother services not merely for diversification

Every VAS will demonstrate one or more of the above characteristics.


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Furthermore, a value-added service will never stand in stark contrast to any of the

above characteristics.

VAS also have a certain time dimension associated with them. Subjectively

speaking, a value-added service today becomes a basic service when it becomes

sufficiently common place and widely deployed to no longer provide substantive

differentiation on a relative basis.

Market efforts driving VAS

For the operators, success of VAS has become important for theirgrowth. This

has led to a sharp focus on marketing & tie-ups and a somewhatlimited focus on

development of content. Most operators are now trying to innovate intheir VAS

offerings and create sharper differentiation for their offerings.

Video Tones

In terms of tone preferences, video tones attracted a lot of attention, around 46% of


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respondents would like to subscribe to a service where they can view videos of their

favourite songs when the phone rings.

Focus on movies & musicMovies & Music are the passion of India. Most of the rich contentavailable to the

end users revolves around these two, with Ringtones of popularBollywood

songs, Wallpapers of movie leads and games developed around moviethemes.

Given that Youth account for a large of users & also dominate the pre-paid

category, the focus on entertainment has been a strong hook todevelop the VAS

category and operators & content aggregators have been sharplyfocused in their

efforts to pluck this low hanging fruit It has been helpful that the film

industry in

India is very prolific and there are endless options to develop contentaround

MS contests

Television is another culturally entrenched constant in the life of the

average

Indian. Typically TV viewing has been a passive affair, howeverfollowing the

global trend TV channels have been focused on making programminginteractive.


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Thus programs, especially music & contest shows have started givingthe option

to their viewers to participate through SMS. A popular show like KaunBanega

Crorepati (KBC) generated 58 million SMS over a 3 month period.

Current market size

The current market as of November 2009 for mobile VAS in India isestimated at Rs. 2850 crore.


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Composition of VAS Revenue

Game & Data 7%

Others 3%

Ringtone Download 35%

Games & Data: Games include download of one play games offeredby Reliance

Others

Games &Da

Ringtonesdownload

35%

7

3%


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& full play games offered by other operators; Data include download of

wallpapers & logos.

Others

Include MMS (Multi Media Messages) & subscription charges for WAP

servicesThough the mobile subscriber base has grown by over 95%(August 06

over August 05) we believe that the relative growth in VAS revenueswill be

lower. As the current focus by mobile telephony operators is on adding

subscribers, many low value users are now entering the category andare not

likely to contribute significantly to the growth of VAS. Overall thegrowth in 2007

will continue to be driven by Ringtone downloads and by games; theshare of

games in the overall pie is also expected to grow. The current VASmarket is

expected to grow by 60% for the next year and at the end of 2007should be

close to Rs 4560 crore.


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Challenges to the growth of VAS inIndia

There are several major challenges which need to be overcome forsustained

growth to be initiated. The major challenges that need the immediateattention of

key stakeholders are:

Focus only on youth and entertainment

Usage of VAS has not spread evenly across demographic profile ofcustomers.

Currently the youth segment is driving the VAS market as can be seenfrom the

rapid growth of Entertainment VAS (mass service) and not so rapidgrowth of

mCommerce and Infotainment VAS (customized service). In light of thistrend the

stakeholders are also playing safe and concentrating on mass services

for which

content is easily available and chances of failure is less. But this hashampered

the growth of other services which are not getting enough time, effortand


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investment from the players. For the VAS market to bloom fully,applications

need to be created for niche segments, as these are the services whichwill

create real value for the subscribers.

Lack of Infrastructure

There are a lot of services which cannot be introduced in India becauseof lack of

supporting infrastructure. E.g., Absence of location based VAS.Location based

VAS is still not possible due to the lack of digitized map of India.Applications like

live video-sharing are yet to arrive in the Indian market.In evolved

markets like

Finland & Korea, a user can shoot his own video and simultaneouslyshow it to

his friend in some other city. This kind of application would take sometime to

arrive in India. To avail of new and high end VAS, technologies like 3Gneed to

be installed. However, 3G networks are not mere upgrades of 2Gnetworks;

rather, entirely new networks need to be built and frequencies need tobe

assigned to mobile operators.

Preference for low feature handsets


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Though the mobile subscriber base is growing, a large chunk of themarket is

opting for basic low feature handsets in spite of the fact that handsetprices are

coming down. There is a mindset to purchase the handset for basicutility service

which is voice. But these handsets are not in a position to support alarge

number of VAS. Since in many VAS like MMS, both the sender andreceiver

handsets need to support MMS, the scope of such VAS gets limited

This is

further impeding the introduction of high end VAS. There are manyservices

which are not performing to their potential despite their usefulness andthere are

some which cannot even be introduced.

Costly to the end user

Currently the cost of most VAS is high. This is mainly because of thefact that

VAS market is lead by Entertainment VAS which has a high perceivedvalue.

People are paying for it as they perceive it highly but over a period oftime as

they get used to it, the willingness to pay high amounts may comedown.

We feel that a market correction in VAS cost to end user will result inhigher

usage both in terms of customers and their frequency of usage.


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Absence of utility services

These are those services which have a high practical value. Butcurrently due to

lack of familiarity & awareness from the end-usr and lack ofinvestment, effort

and marketing from the suppliers side is resulting in very few suchservices

being available in India. Such services mainly fall in the category ofmCommerce

and to some extent Infotainment Customers are also currently notcomfortable

with mCommerce. As the comfort level increases which can be broughtabout by

encouraging government action like robust policies, laws etc,


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The future of VAS in India

In India, VAS will see a lot of structural changes, consolidation andemergence of

cutting edge services:

VAS in India:Past, Present and Future

VAS constitutes 7% of of total telecom revenue for Indian operators. SMS consituted 55% of VAS revenue in 2006 [P2P/A2P/P2A, A =

Application, P=Person), the growth was majorly driven by reality showslike Indian Idol/Kelloggs/KBC etc. Digital music (including CRBT and ringtones) constitutes 35% of VAS

revenue. CAGR of 44% (2007 2010), VAS revenues will reach USD 2,744 mn

(926mn $ by 2007): This is dependent on several factors like regulatory(e.g. number portability) and non-regulatory factors.

o Growth acceleration will begin in 2009, as various challenges areovercome, size of mature user base increases, and telco focus onhigh end user VAS heightens

Bollywood and Cricket is the killer content - though no significantinvestment has gone beyond developing local apps or even content/services.

Revenue share between telcos & content providers / aggregators is 70:30,substantially more skewed in favor of telco than in other countries - furtheraggravated by lack of payment mechanisms.

SMS/IVR/Music downloads/Internet Apps/Search will see an upsurge;limited growth of UGC and mCommerce

Almost half of Indians use ULCH (Ultra Low Cost Handsets)

Mobile operators will lose prominence in the value chain as the

market for

Content Aggregators will consolidate and with their better bargainingpower, this

will ensure a revenue shift from Operators to Aggregators in the valuechain. The


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VAS market will reflect revenue sharing arrangement in markets likeChina more

closely.

In VAS content, we will see revenue from entertainment VAS comedown from

the levels. End users want control and interactivity and therefore theapplications

to look out for in future will be user generated content andmCommerce.

However mobile gaming will continue to grow and will contribute a

higher share

to the VAS pie.

Regional content is giving a significant boost to the content marketespecially in

the entertainment category. Regional content is getting popular both invoice and

non- voice services. Players have anticipated the trend and this isleading to

regional content development. With increasing mobility penetrationinto the

heartland of India, significant VAS revenues will be driven by regionalcontent

from B & C class towns.

Internet on mobile will become a more feasible option as leadingplayers in the

internet content space especially configure their sites for accessthrough mobiles;


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this would be further strengthened by the new trend of.mobi domainbeing set

up. Thus GPRS usage should pick up significantly

PART-B


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OBJECTIVES

-To know the consumer preference towards value added services provided to the

Consumers of different market operators of mobile phones.

-To know the business potential of mobile value-added services (M-VAS) base

on the principles of customer interaction

-To know about the satisfaction level of customers and to know more about their

needs they expect from their service operators to be fulfilled.

- Identifying organizational needs and negotiations for services & products.


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RESEARCH METHODOLOGY1. After discussing with our project guide we formulated the problem as

consumer preference of mobile customers towards Value Added Services

provided by different market operators of prepaid mobile phones.2. RESEARCH DESIGN- Research design includes design regarding

SAMPING PLAN

Universe-All The citizens of Mohalli.

Sampling Unit-An individual using value added services on prepaid mobile

Sampling Size-130 respondants

Sampling technique-Area sampling was used

RESEARCH INSTRUMENT

A questionnaire was prepared to collect the information.

DATA COLLECTION METHOD

Primary data was collected from individuals and secondary data from


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companys website.

3. DATA COLLECTION

Data was collected by meeting the people and retailers and show room owners

personally and getting questionnaire filled from people.

4.ANALYSIS AND INTERPRETATION

The data collected was analyzed by using various graphs and the analysis

was presented to help decision making.

ANAYSIS & INTERPRETATION1. Which operators service do you use?

BSNL Airtel Reliance VodafoneTata Indicom Idea Virgin Ping

TABLE

Rating No. of respondents PercentageBSNL 56 28%

Airtel 70 35%Ping 10 5%

Reliance 45 22.5%

Idea 19 9.5%

Idea

BSNL

Airtel

Relian

ping

7056

45 19

10


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INTERPRETATIONFrom the above analysis it is clear that in current survey 70% of the people useairtel , 56% are the users of BSNL, 45% of the Reliance. The lowest no ofconsumer are of the idea. Only 5% of the persons using Ping.

2. Which type of VAS do you like the most?

Finance Games News Fun SportsAstrology Cricket Wallpaper Ring tones Travel

TABLE

Rating No. of respondents Percentage

CRBT 65 30.4%

Travel 32 16%News 40 20%

Cricket 70 34%

0

10

20

30

40

50

60

70

80

travel Cricket CRBT News


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INTERPRETATION

It is clear from the above information that most of the persons use cricket and66% of the persons use CRBT ( caller ring back tones) and only a few persons usenews and travel.

3. Why do you choose this VAS service?

Like it

to be in touchwith latest tre

Hobby

SMS

4321

15

INTERPRETATION

It is clear from the above graph that 43% VAS users are affected fromVAS SMSs while 15% users prefer this service because of their related


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hobby to value added services. 21% users sometimes like the plansoffered by the company. So they prefer it. And 23% of the users takeup the VAS plans to be intouch with the latest trends, news or currentscenarios.

4.What is your monthly expenditure on VAS?

0-10 10-20 20-50 50-100 100 and above

TABLE

Rating No. Respondents Percentage

0-10 38 32.7%

10-20 52 49%

20-50 21 18%

50-100 5 4%

0

10

20

30

40

50

60

Ten to 20 20-50 50-100 100-above


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INTERPRETATIONFrom the above diagram it is clear that 40% of the respondants spendRs 10-20 ,55% respondants spend 20-50 ,23% of respondants spend50-100 and 2% of respondants spend 100 and above. Most of the usersspend between 20-505. From where do you get information regarding VAS?

Retailers SMS promotion/OBD friends

advertisement Any other

TABLE

Rating No.of respondents Percentage

Retailers 12 12%

SMS 45 45%

Advertisement 9 9%

Friends 34 34%

Retailers

12%

SMS

45%

Friends

34%

Advertisement

9%


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INTERPRETATION

Most of the consumers get information regarding VAS from their friends. 34% ofthem get information through SMS. Rest of them get from the Retailers.

6. What kind of charges would you prefer or your VAS package?

Daily Weekly Monthly Any other

TABLE


Daily 30 28.84%

Weekly 35 33.65%

Monthly 39 37.5%

0

5

10

15

20

25

30

35

40

Daily Weekly Monthly


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INTERPRETATION

The above dig. Clears that most of the consumers like to spend onweekly basis.

7. Have you updated the latest VAS services provided to you?Yes No

If yes how do you update it?SMS Calls E-Mail any other__________________

TABLE


Yes 15 15%

No 85 85%

INTERPRETATION NO85%

YES

15%


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From the above dig we come to know that 85% of the consumers do not update thelatest VAS services. Those who update it they update through SMS.

8. How would you rate the VAS provided to you?

.*________*__________*_________*_________*_________* Excellent very good good average poor very poorTABLE

Rating Airtel Reliance Idea BSNL

Excellent 35 22 21 28

Very good 38 12 31 38

Good 10 56 43 45

Average 07 24 10 04

35

28

22

21

38

38

12

31

10

45

56

43

2

4

24

10

0 20 40 60 80 100 120

airtel

BSNL

Relaince

Idea


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INTERPRETATIONIt is clear from the above diagram that the respondent of the Airtel are satisfiedwith their services. 38 of the consumer feel their service is very good, 35 feel it isexcellent. Only 7 of them feel that their services are average. Most of the BSNLcustomers feel, 27.4 of their services are excellent. 46.9 of them feel their servicesare good.

9. Would you like to prefer two packages of VAS at a time if these areprovided with discount?

Yes No

TABLE


Yes 33 33%

No 67 67%

0

10

20

30

40

50

60

70

yes 33

1st Qtr


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INTERPRETATION

From the above analysis it is clear that 67% of the respondants are not in thefavour of preferring two VAS packages if these are provided on discount.On theother hand 335 respondants are ready to buy the discounted package of more thanone VAS plans.

CONCLUSION

M-VAS is changing the role of most players across the telecom value chain,

while also providing room for many new entrants, and requiring

reconsideration of business model and partnership. In general, findings from

market survey showed that customers perceive both get and give value

dimensions. Specifically, for the customers, the most important get value is

functionality value, and the least important is social value.

It is true that due to new networks, high bandwidth

availability, transition from circuits witched to packet networks, upgrades and

rollouts of 3G happening globally and mobile handset standards and technology

supporting new formats (3G, SIP, etc.) the concept of value added services has

changed a lot.


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SUGGESTIONS AND RECOMMENDATIONS

An explosive subscriber and revenue growth, yet thin profit margin line has

forced mobile service providers to look beyond voice based service. Be it a

landline or mobile telephonic system value added services are acting as

enabler to activate the falling revenue line of telecom service operators by

providing bundle of non-voice based data services.

The mobile operators must realize that the services that

they create will only be accepted if they are delivering enhanced customer

value in exchange for their perceived costs.


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BIBLIOGRAPHY

INTERNET SOURCES

www.hfcl.com

www.airtel.com

LIBRARY SOURCES

Research MethodologyBy C.R. Kothari

Marketing ManagementBy Philip Kotler
http://www.hfcl.com/http://www.airtel.com/http://www.hfcl.com/http://www.airtel.com/


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Survey on the consumer preference of VAS

provided by different operators

Dear Sir/Madam,We are doing a brief survey to know about the

consumer preference regarding different aspects of VAS. We wouldbe grateful, if you could spare a few minutes to participate in it.

Name_____________________ Contact no_________

1.Which operators service do you use?BSNL Airtel Reliance VodafoneTata Indicom Idea Virgin Ping

2. Which type of VAS do you like the most?

Finance Games News Fun Sports

Astrology Cricket Wallpaper Ring tones Travel

3. Why do you choose this VAS service?________________________________________________

4.What is your monthly expenditure on VAS?


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0-10 10-20 20-50 50-100 100 and above

5. From where do you get information regarding VAS?Retailers SMS promotion/OBD friends

advertisement Any other

6. What kind of charges would you prefer or your VAS package?

Daily Weekly Monthly Any other

7. Have you updated the latest VAS services provided to you?

Yes No

If yes how do you update it?SMS Calls E-Mail any other__________________

8. How would you rate the VAS provided to you?

.*________*__________*_________*_________*_________*

Excellent very good good average poor very poor

9. Would you like to prefer two packages of VAS at a time if these are

provided with discount?

Yes No

10. What are the other services you like to be included in VAS?


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Documents

Kiran Oroject Connect