The highlight of the TiEcon 2008 summit was a great overview the Mobile VAS ecosystem from Ritesh Banglani from IDG Ventures, who gave the investors perspective on the Mobile VAS space, and highlighted several key opportunities and challenges. Banglani said that most Mobile VAS conferences he's attended are of two types - where the discussion is either characterised by hype, or despair. There is hype if the disucssion is about the number of users and the "opportunity" in those numbers, and despair if it is about operators, low revenue shares, and so on. Issues Generally fall under 3 or 4 categories: -- Distribution Channels: The biggest issue is the distribution channels. Currently there are two active distribution channels - either through operators or media companies. Both of these are far larger organizations than mobile VAS companies, and squeeze them for margins. That is the second challenge. -- Margins: Getting margins even for highly innovative products is very hard. On average, gross margins for mobile VAS players are below 35 percent. -- Technical: low bandwidth, small screens on mobile phones, and so on. That is typically a challenge when you try to port applications which work successfully in the west. -- Funding: The fourth challenge challenge is the funding challenge for small companies in this space, since it's very difficult to get their first customer, and investors are not keen on working with companies that do not have customers. Importantly, he added that "When we go out, looking for entrepreneurs, we…
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