The Indian telecom market is eyeing killer localized value added service (VAS) designed on innovative applications. The credit for this can be attributed to rapidly increasing large subscriber base and easy accessibility to the end-users. Also, their desire to talk in localized languages like bhojpuri, haryani and other Indian languages is a reason enough making telecom players tight their belts to exploit the potential of VAS.

An estimate by industrial body Assocham reveals that the growth in this sector is poised to grow by over 65% (this fiscal) to touch a mark of Rs8, 200 crore as against Rs 4,950 crore in the last fiscal. In the next three months the sector is expected to grow from $27 billion to about $33 billion.

It is sure that VAS would surely change the way of communication. The advent of VAS would be so vast that now the cell phone will act as your min-computer fitting into your pocket. “Besides making the person on other side feel your voice, now you can carry your location video,” says Dilip Singh, CEO, Telenity.

“Also, with the rising curve of developments, the time is near when you can change the ring tone of your cell phone with the change in location, ” added Dilip.

According to Assocham’s president Venugopal N Dhoot, ” The various opportunities that can lead to multiple growth of VAS lies in the various downloads such as ringtones, bill-related information, contest, exam results and messages received from public services such as banks, railways and airlines.”

Presently, the revenue from the mobile music downloads is valued at $75 million and is expected to grow by 25% in the next year, the chamber said.

Sashidharan, MD, Bharat Exhibitions and the organizer VAS India 2007 said: “The call rates in India are the cheapest and the margins are very low. As a solution to it, operators can expect a large chunk of revenue from VAS services.

The advise given by Rakesh Godhwani, manager, mobile content and applications, Qualcomm India is also noteworthy as he has well-identified the inability of the service provider to popularize services offered by VAS.

“It is important for the industry to show what these applications look like rather then just talk about. The service providers should look around their customer base to understand what they want instead of offering them what they have” advised Rakesh.

According to Sawhney, Rajesh Sawhney, president, Reliance Entertainment, “Other services that should be extracted to its full include mobile search, content discovery, mobile payments, bite-sized entertainment, widets and gaming.

Not only this, the efforts of telecom sector in improving value added services are also helping other industries as well. Assocham report reveals that due to the whopping developments in VAS, almost $35 mn dollar are earned by the music industry, which counts to be 20% of its total revenue.

An interesting example:

The growing SMS interactivity has become a major source of revenue for TV channels. Indian Idol, TV on Sony has earned more than 55 million votes via SMS. With per cost of message at Rs3, the total revenue generation was Rs16.5 crore, out of which Sony earned Rs5 crore and the remaining was under the kitty of telecom companies.