(By Atanu Mandal)

In response to our post on the hike in interconnect charges and impact, mobile industry veteran Atanu Mandal, who recently shed his post as the President of ACL Wireless to head Unified Telecom Pvt Ltd, sent us his opinion on what he expects to happen in this sector, and why this is the right time to replace the spam with permission-based marketing.

There are two types of A2P messaging happening in the market today :-
1.       Enterprise Alerts that are linked to the business processes of the organisation (like banking alerts) – Banks already charge their customers for this service and are well covered to absorb the increased cost of A2P messaging
2.       Promotional messages (largely poorly targeted promotional Push SMS) which accounts for over 90% of the messaging volumes today

The need of the hour is a paradigm shift from current standards of mobile marketing, which are based on intrusive SMS messaging and OBD calls – as a result mobile marketing today has a negative connotation of being associated with spamming. The support for anti-spamming law is widening day-by-day even within the industry. The menace of mobile spamming has reached such alarming proportions that DOT and TRAI now seem to be determined to implement a Do-Call-Regime, replacing the current Do-Not-Call Registry system.

In this context, mobile media has become an unchecked & uncontrolled commodity where “bulk SMS” rules and has devalued the medium significantly. It is therefore not taken seriously enough by the Brands, inspite of its inherent strength as a media vehicle for advertising.

Carriers have now started taking steps to address this situation in a planned and organized manner keeping the longer-term view in mind. SMS Interconnect charge is a fair mechanism since both the originating carrier’s infrastructure as well as the terminating carrier’s infrastructure are used. The pricing levels will find their right levels over a period of time.

A few recent developments in the Indian telecom industry is fast changing the landscape for Carriers :-
1. Entry of new telecom players after issue of 2G licences
2. Mobile number portability
3. Per-second billing
4. 3G licence bidding

With increased competition (due to entry of new telecom players and implementation of MNP) and with significant drop in voice ARPU due to per-second billing, where is the ROI going to come from for Carriers in India ? I expect the following developments to take place :-
1. Carriers will try to drive their VAS revenues even harder to compensate for the drop in its Voice ARPU
2. With increasing penetration of the bottom of the population pyramid for subscriber growth, there is a limit to which the end-users can be monetised no matter how compelling the VAS services be.
3. An “Ad-sponsored” mobile traffic & content model (paid for by brands and enterprises) is the only hope for Carriers to arrest their “free-falling” ARPUs.

Mobile Advertising is going to be a major area of focus for Carrier’s revenue plans as they will find means to monetise their large captive telecom traffic volumes by carrying targeted Advertisements placed by brands.