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October 2012

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    In the telco context, multiple stakeholders take responsibility for VAS. Depending on the particular VAS – how it is deployed and the benefits it delivers – the CMO, CTO, CIO and the CFO and SCM functions may take responsibility for conceptualization, marketing, design, deployment, sustenance, procurement, reconciliation, revenue assurance, and partner settlement.

    Despite the importance of VAS in driving telco growth – both top and bottom line, the management of the VAS business and ecosystem has been fragmented at best, between the stakeholders.

    This raises the question: ‘Has VAS received adequate attention in the absence of a dedicated CVO (Chief VAS Officer)’? To date, no telco has defined and institutionalised a CVO role in spite of current and projected VAS revenue streams. These typically lie at around 13% to 15% today for most operators (though can reach 50% in evolved markets). Importantly, forecasts indicate VAS contributing a strong share of total telco revenues in the coming few years – ranging from 15% to 40%.

    Due to the unique characteristics of VAS: fragmentation, multiple partners and touch points, strong content orientation, shorter life cycles and extreme dynamism, optimally managing VAS requires a different and fit-for-purpose model and approach. Telcos need to consider how best to deliver VAS given the various challenges -including in-house management, vendor agnostic managed VAS (along similar lines as outsourced network and IT management by specialist partners) or any hybrid model. Addressing these requirements is not a simple process – but it could be a whole lot easier with the creation of a specialised VAS team within the telco, led by a dedicated CVO!

    October 25, 2012 0 comment
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    While reflecting on the past 15 plus years of my working life spent in the VAS space (including business support systems) in the rapidly evolving telecom industry in India and the high growth markets of South Asia, Africa and the Middle East, I started to question ‘is VAS still alive and kicking’? By VAS I mean both the term ‘VAS’ and ‘VAS’ as a distinct vertical segment within the telecom industry.

    First off, what is VAS? After all, isn’t every service supposed to ‘add value’? A decade back, VAS seemed to be both a clearly defined and yet a not so clearly defined domain: any service that the telco provided to its subscribers beyond plain P2P voice and P2P SMS. Still, in terms of revenues, many telcos grouped even P2P SMS and roaming as VAS. VAS typically included a few network based information, convenience and entertainment oriented applications and services such as news alerts, missed call information, ring back tones, music and roaming, offered in partnership with a handful of ‘VAS providers’ and content providers (CPs). Telcos tended to provide these within their walled garden of offerings.

    Now if we cut to today, services ‘beyond’ P2P voice and SMS, which are being (or potentially can be) provided embraces pretty much everything that is possible on the internet – using the communication channel provided by the telco. Without getting into the debate of whether the operator is just a pipe, all these services actually fit the classical definition of ‘VAS’.

    In the current context, if we try and be clinical about the definition, we could say a VAS:

    • Provides additional value to the consumer from a wide, yet distinctly positioned and relevant set of services
    • Is typically powered by a concept and application software from an independent innovator
    • Is content-oriented (to varying degrees)
    • Is agnostic of the physical location of the consumer, the application and the content
    • Uses the network and other operator infrastructure to deliver the service
    • Provides a return on investment to all participants involved in the supply chain
    • Is compliant from a regulatory and legal perspective (considering the high level of regulatory activism)

    This logically broadened (not stretched!) definition of VAS, strongly suggests that VAS is alive and kicking, even though the term may have lost some of its lustre – perhaps due to the blurring of lines between VAS and the Internet or simply through overuse or possibly due to the fact that VAS never really took off in many markets (but have been highly successful in others). After all, how do we categorise services such as mCommerce (transfers, payments, and banking), text, voice and video based information and entertainment, mEducation, mHealth, social networking, advertising, M2M and others fit – if not as Value Added Services?

    VAS is constantly evolving – sometimes in small steps, at times in leaps and bounds. VAS never went away never will go away – so long as they meet consumer needs. To me, given the plethora of VAS coming into the market, VAS are more relevant and vibrant than ever before.

    October 19, 2012 0 comment
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