India has the world’s second largest telecommunications subscriber base (both fixed line and mobile phone) in the world with 898 million subscribers. According to TRAI’s data as on 31 March 2013, mobile phone subscribers currently make up over 96 per cent of the total subscriber base.

In the last decade, the telecom industry has experienced exponential growth and increased competition. With decreasing margins Mobile Value Added Services (MVAS) has become the differentiator for industry players (Mobile Network Operators (MNOs), content providers, technology partners). According to a CII-Protiviti white paper on telecom industry, MVAS currently contributes nearly 11 per cent of telecommunication revenues. In addition, the MVAS industry in India is expected to grow from US$ 4.9 billion in 2012 to US$ 9.5 billion in 2015 according to a report ‘Future Thought of Business: MVAS’.

The evolution

Over the years, India’s MVAS industry has evolved from providing simple services such as Astrology, Bollywood, Cricket and Devotional to include services such as m-commerce, m-education and m-health. However, the industry faces subscribers’ dissatisfaction over the activation and/ or renewal of MVAS without their explicit consent. To combat this, MNOs have introduced some measures, such as a free SMS service for subscribers to check their subscription status and to discontinue services.

In order to protect the interest of subscribers, the Telecom Regulatory Authority of India (TRAI) proposed a set of new regulations for the MVAS industry, addressing the issue of unauthorised activation and/ or renewal of MVAS by obtaining explicit consent from subscribers, informing subscribers about charges 3 days prior to the renewal date, options to unsubscribe and obtain explicit consent for MVAS renewals in case of insufficient balance for prepaid users.

More recently, the TRAI has also revised the SMS termination charges to 5 paise for commercial messages and 2 paise for retail consumers. This is expected to help further reduce the number of unsolicited messages consumers receive. Also as strict measure, the unauthorised telemarketers would be disconnected immediately and blacklisted for next two years.

Symbiotic relationship

These new regulations can be mutually beneficial for both subscribers and the mobile telecommunications industry. Subscribers can have better controls of their MVAS subscriptions while MNOs should take this opportunity to ensure better transparency for subscribers and introduce value-added services that are targeted and relevant to subscribers, building a deeper relationship and earning their customers’ trust.

Short term plan

Here are some quick steps that can be taken for long tern gains.

Being in control of the MVAS promotions: MNOs can take control of the platforms which are used to target their subscriber base with promotional activities. MNOs in India are already in process of doing this or have done this.

Selection of a suitable approach and the right partner: MNOs should look for a solution that complies with regulations and at the same time is easy to implement and user-friendly.

Implementation cost: Cost of acquiring, implementing and maintaining the solution should not be prohibitive and the cost of marketing to subscribers should also be factored in.

The long term gains that can be achieved with the aforementioned steps are as follows.

Compliant with regulations and permission based approach : A satisfied and loyal customer is the best evangelist for any brand and MNOs can benefit from increased customer loyalty.

New revenue channel Allows MNOs to offer targeted VAS to customers who have opted for it.

Improved CRM: By building the trust of their subscribers again, MNOs will be able to strengthen relationships with their customers for the long-term.

Solution for MNOs

To comply with the new regulations, a potential solution is an opt-in permission-based platform for MVAS management. Changing the paradigm from interruption to communication, this platform allows subscribers to control the engagement by deciding the type of messages they want to receive. Through this approach, the subscriber is able to provide explicit consent for activation and/ or renewal of MVAS.

Additionally, the platform enables individual subscriber preferences to be stored. This allows MNOs to launch new MVAS tailored to each individual subscriber’s indicated interests. Such targeted offers will also increase subscription interest. An added benefit of such a system is the protection of subscribers’ privacy.

For MNOs, the implementation of the above approach provides a couple of benefits.

Extended CRM tool : Develop long lasting one-to-one relationships with existing subscribers and reduce subscriber churning.

New direct revenue flows: MNOs can create a CRM database of its subscribers’ interests, which can be leveraged as a strong asset for brands who want to do mobile marketing.

There are a couple of benefits for the subscriber too.

Control over privacy: A key reason subscribers opt for a ‘Do Not Disturb’ service is irrelevant advertising messages. Through permission-based messaging, a subscriber stays in control of his privacy.

Increased relevance: The proposed platform obtains increased consumer acceptance by enabling subscribers to customize the offers they want to see.

Permission-based platform:

Worldwide, projects wherein MNOs have implemented Opt-In platforms have generated convincing results. For example, in India itself, an MNO used the Opt-In platform to accelerate VAS adoption and convert ‘pay-per-use’ subscribers into long term subscription users. A service for new updates for cricket match updates with just one click was offered to 70M subscribers, garnering 38% higher results than using short codes.

In Latin America, an Opt-in campaign was launched in January 2011 for 60 million subscribers. The campaign aimed to collect opt-in for future campaigns from the mobile operator and achieved an acceptance rate of 18 per cent. Another example is in Africa, where a phonebook backup promotion campaign was launched for 30 million subscribers using Opt-in platform. The campaign achieved an acceptance rate of 35 per cent, which was 3 times higher than the control group who received the same campaign via simple SMS that needed to dial a short code to participate.

With solutions such as the opt-in permission-based platform, the new MVAS regulations will definitely benefit the Indian telecom industry in the long term. MNO’s can not only develop additional revenue channels while ensuring compliance with the new regulations, but more importantly, boost customer loyalty and trust.

(The writer is Sales Manager – Asia, Solutions and Services, Gemalto)

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