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Some may call it the Crackberry syndrome, but many cell phone users are
addicted to their handsets as it keeps them connected 24x7. The modest gadget
once meant to convey voice messages has now evolved as a social networking
platform, enabling users to be a part of their private gossip chaupal or
communities even in the middle of an important official meeting. Convergence has
helped cellular phones acquire an aura of the Swiss army knife an all-purpose
gadget.
If Internet is said to bring the world to ones doorstep, then it wouldnt be
incorrect to say that a handset with Internet access brings everything under the
sun on your palm. While the consumer gets excited about addition of every new
service to his handset, the operators and service providers keep innovating ways
to cash in on popularity of MVAS.
The mobile users had long been feeding on VAS, sending SMSes, browsing the
Internet, downloading music, caller-back tones, and playing games, but there was
always an urge to get a real-time access, all the time and everywhere, which
social networking sites on handy devices fulfill.
A report by Juniper Research on mobile UGC predicts that user-generated
content is predicted to grow and increase revenue inflow from the present $572
mn to over $5.7 bn in 2012. Interestingly, social networking sites will account
for 50% of this amount. People using social networks are going to grow from the
current 14 mn to around 600 mn by 2012. Currently, downloads from social
networking sites stand roughly at around the 200 mn which is set to grow to over
9 bn in the next five years.
K Sheker, director, Bay Talkitec quotes in a report, and says that about 50
mn people, or about 2.3% of all mobile users already use the mobile phone for
social networking, from chat services to multimedia sharing. The forecast is
that the penetration will mushroom to atleast 12.5% in the next five years.
An ICM study sees some future for networking on mobile. It says: If a quarter
of Internet users are already accessing social networking sites on their mobile
phones, this shows an interest in this service.
Considering the lifestyle and technology needs of todays generation, mobile
social networking is poised to become the preferred way of networking. India is
the second largest mobile phone market. In India, this trend is comparatively
new but seeing the growing popularity of social networks, it will gradually
catch up, says Evert Jaap Lugt, founder & CEO, Nimbuzz.
Buongiornos co-CEO Milind Pathak feels that in India the trend is still
nascent from global perspective. Efforts are being made and now the companies
and operators in India too are thinking of developing products on these lines.
Latest in India is BigAdda that has launched social network on mobile (SMS-WAP-client).
Mobile Adda is a platform available as an integrated offering across SMS and
WAP. It is an installable application for over 500 different mobile phone
models.
Many sites like Indyarocks, IBIBO, etc, offer basic SMS service that allows
users to receive only alerts for some activities on their accounts; what was
missing was a comprehensive and ubiquitous offering comprising all forms of
access (SMS, WAP, and Java client) across key features. On the BigAdda mobile
service platform, besides receiving notification; users can also fetch profiles,
messages, add friends, and invite by mobile number. Besides, a lot of other
capability that will be added soon, says Amiy Roy, head marketing, BigAdda.
Facebook and Orkut also have WAP sites that service the global markets and
lack customization to local needs, besides not being formatted for the
India-centric devices. Facebook additionally offers a client application for the
BlackBerry family of devices that has very limited users in India.
In a more revolutionary development, AT&T has introduced an application
called My Communities that allows users to create and manage multiple social
networking accounts through a single dashboard view on their mobile phones.
Unlike other social networking applications, My Communities allows subscribers
to register for social sites directly from their phone without logging on the
Web. Updates are synched across mobile and online channels in real time.
PC Vs Handset
Social networking is no more restricted to the PC browser. Now mobile phones
are preferred as a means of connecting. The market is full of cheaper handsets
against expensive desktop computers, which is also principal differentiators for
larger penetration of handsets.
Availability of mobile Web has outweighed the advantages of being tethered to
the PC. BigAddas Roy says, This is where one needs redefinition of the space,
local nuances, and interests, access mediums, and local consumer hot-spots. It
will be instrumental in providing a new medium for people to connect with each
other. With the development in the mobile interface we would open new access
routes for the growing youth of India.
Given the current low penetration of PCs in India coupled with the fact that
lot of times access to certain sites is blocked from workplaces in India,
mobiles make a natural fit for social networking in the country. The idea that
people use mobile devices only for voice calls will change. Though text messages
and voice calls will continue to drive the business, complex services and
applications will soon arrive on mobile devices. In the coming years, we can see
people shifting from mere voice services to data services and other
applications. They will be spending more on these new services, says Shekhar.
Similarly, Sangeet Chowfla, chief strategy officer, Bharti Telesoft believes
that with the Indian Internet user-base touching 100 mn mark by 2008, and access
of Internet on mobile becoming cheaper, there will be a revolution in the Indian
social networking arena.
So, will the handsets nudge their way ahead of PCs?
We are at the early stage in the social
networking evolution, and mobile social networking is just starting to
scratch the surface. Everyone is trying to find the right business model
and, as of now, I do not think anyone has found an answer
K Sheker, director, Bay Talkitec |
Money Matters
India is yet to mature as a mobile VAS market. People are highly dependent
on technology (SMS), and are not aware of the other services, says Apoorva of
Airme, which has developed a contextualized advertising platform for the
marketers to reach their target audiences on such sites. He believes this
phenomenon will benefit as a revenue booster not only for VAS providers but also
for carriers and marketers.
MVAS revenue in India is expected to touch a little in excess of $2 bn by the
end of 2008, as per a study by PwC, and close to $3 bn, according to findings of
a report by Juniper.
Leading the revenue pie is SMS (approximately 45%), followed by games and
tones, imageries, and pure data transfer. Approximately one million tones
(inclusive of CRBT) are downloaded daily. This growth in MVAS has been fueled by
the entry of high-end handsets and their reducing prices, lowering age profile
of handset owners, and innovation in content and packaging. Three-hundred
million mobile Web impressions add up to Rs 30 mn through data transfer, which
is miniscule (assuming each page is approximately 10 Kb at 10 paise per 10 Kb
charges).
To further add to the drama by the much awaited launch of 3G over the next
three quarters, there is an industry on the brink of high growth expectations on
data traffic. Leading handset players are lining up a bunch of rich 3G-enabled
hardware at unheard of price-points in the region of Rs 3,500-4,000, which is
about $90-100. When 10% of all the wireless devices tap into the mobile Web in
India (approximately 30 mn devices), only then would it bring in data revenue in
excess of $500 mn, says Meher Sarid.
Handset manufacturers like Nokia with its OVI services and Apple with its
iTunes offerings are setting up a parallel economy, and are now entering a new
revenue stream with considerable investments, and a huge reputation to protect,
she adds.
The recently launched Mobile Adda is focusing on revenue through advertising.
We are soon to launch advertising on WAP and client. And we are not looking at
revenue share from operators for data usage on either, and at present it will be
too early to estimate returns, Roy says.
According to Rajesh Jain of Netcore, by the end of 2008, there would be big
shift from the $110 bn spent on TV advertising to mobile and social networks. An
eMarketer research predicts that $16 bn would be spent on mobile advertising
globally by 2011, a 1,000% increase from the present numbers.
Currently, mobile VAS in India accounts for 10% of the operators revenue,
which is expected to reach 18% by 2010. About 44% of VAS revenue in India is
driven by short messaging service applications. The mobile music segment is also
set to fuel up with user spendings on mobile music expected to increase to $32.2
bn by 2010 compared to $13.7 bn in 2007. While the revenue from mobile gaming is
expected to grow to $9.6 bn by 2011 compared to $1.8 bn in 2007. The size of
mobile advertising in India is very tiny. However, analysts believe it has the
potential to grow at a rate of 200%, giving operators a new revenue source.
Newer services and applications also boost huge revenue. A 2007 Deloitte
study showed that the camera (photo) application was #1 on the list of use at
63%. The video application was used by 41% of the users. Other top applications
were text messaging at 61%, games at 44%, and music took a dip at 29% usage, a
drop from the previous year. Similarly, voice-based services did not add big
numbers.
Following a dip in revenue from voice-based services, MVAS is all set to see
a phenomenal growth across the world. Data traffic is increasing worldwide while
data costs are decreasing. This increase in traffic is causing operators to
offer pre-paid data plans, and unlimited data packages per month, adds Lugt.
It is an era of instant
gratificationbeing able to shoot back an SMS, mail, blog, wall-post, or a
scrap or twitter the moment it lands on your phone. In short, it is fun on
the run and people are in love every moment of it
Meher Sarid, director, brand marketing and VAS, Oxigen Services India |
Success Solutions
The simplest and most effective way to increase MVAS is to innovate with
content and technology. Creating brand environments would take a lead, both in
terms of experience and revenue. Assets like widgets, skins, and
forward-to-friend functionality spark engagement. It has the potential to
experiment with a cost-per-action pricing model, apart from the existing
performance-based approach (CPC and CPA), and thereby higher advertising
revenues, Roy suggests.
In Sarids view the next big battle would be for the advertising spends on
mobile Web traffic (contextual and display). No wonder Google is offering
search on the mobile by tying up with Airtel, and MSN with Vodafone. The global
implications are enormous800 mn computer workstations against 3.5 bn wireless
devices. The math is mind numbing, she says.
According to Rajesh Jain the key to success lies in holding onto the pulse of
the audience, most of whom are teenagers. The young segment wants something new
all the timenew technology, new features, new look, and new sites.
Milind Pathak of Buongiorno accesses the situation differently. According to
him, monetization of networking sites would be different and may not have a
direct bearing on VAS (premium content billing). Operators would typically make
all the revenues associated to the data tariff plan and the networking sites
from ads or premium services sale on the network.
Though, at this early stage the VAS players may sound enthusiastic about
revenue contribution from social networking sites, it would be too early to say
anything.
There is much-hype around increasing mobile Web penetration, but across 17
markets of the world, well over half the population (58%) do not know what
social networking is, observes market intelligence firm, Synovate, which
conducted the survey to explore myths and facts that have built-up around the
online social networking phenomena.
The survey also specifies social networkers to name the sites they belong to.
Some markets seemed to favor multiple memberships and some seemed to stick to
one or two major ones. The markets where social networking enthusiasts favor
many sites are UAE, India, Indonesia, and Bulgaria. The future of social
networking sites as MVAS revenue catalysts is bright but not definitely secure.
Heena Jhingan
Voice&Data
maildqindia@cybermedia.co.in
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