The impact of the 3G rollout on value added services has not been significant, and OnMobile CEO Arvind Rao feels that the deployments are still in a nascent stage - "The initial uptake looks good, but is still small in terms of numbers. The 3G revenues so far is largely from connectivity revenues in terms of dongles and mobile broadband. It is still a trickle in terms of actual users. Revenues that we anticipate seeing from Video on Demand and IVVR (video portal), which have already been deployed, will take a little time to materialize." And it appears that there's a negative side to the 3G rollout for VAS as well - "Due to 3G service launches in the last 3-6 months, telecom operators have diverted a big chunk of their promotion capacity towards 3G services. So we have seen a decline in the promotional bandwidth allocated towards VAS, which has a temporary impact on our revenues and our business, we don't see that as a structural change, and we anticipate that it will come back. VAS will continue to be a core part of the margin story on 3G." For Onmobile, Ringback tone revenue contribution is roughly 40-45%, and that of their Voice and applications portal business, is 30-35%, "on a full global basis". Indian Market Going Through Inflection According to Rao, "In the short term, the (Indian) market is going through a bit of an inflection, for two reasons - everybody is taking for 3G VAS to take…
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