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“VAS Is The First Casualty In A Multi-SIM Environment” – Anil Pande, Head (VAS), RCOM

In Part one of this interview, conducted a couple of weeks ago, Anil Pande, Head (VAS) for Reliance Communications spoke about companys approach to 3G services, on deck versus off deck services, applications and rural services, and RCOM’s 3G Innovation Lab. In Part Two, he speaks about m-commerce, relationship with Reliance Entertainment, whether RCOM would consider launching ad-supported SMS, and the challenges of a multi-SIM environment.

MediaNama: Which are your top circles in terms of VAS revenues? In terms of AGR, Mumbai is top, followed by Delhi and Maharashtra. Any variance in terms of VAS?
Anil Pande: It will be the same. But if you’re looking at percentage of VAS with respect to the voice revenue, the skew is different: in the Eastern and Northern belt, the percentage is higher. To West and South is the least.

MediaNama: How is m-Commerce doing for you? You’d tied up with ATOM a year ago, so what kind of transactions have you seen?
Anil Pande: It isn’t spectacular in terms of number of transactions. In terms of information, it is doing well. We launched banking information 6-7 years ago on RWorld with 6 banks. You could check balance, order a draft, check book, stop a cheque. Just not purchases or fund transfer. We launched fund transfer with ICICI bank a year and a half ago. In all of these, the number of transactions have been very low. IRCTC Railway Tickets on mobile are fairly low – for all telecom operators put together, Railway tickets on mobile are a few thousands, compared to lakhs on the Internet. IRCTC has tried a lot of partners, but it just hasn’t taken off, and it is still bigger than other m-commerce services. Only operator bill payments and prepaid top-ups do very well.

MediaNama: You’ve announced a few tie-ups with Nokia and Universal. What’s the though process there?
Anil Pande: Universal is a unique tie-up. They’ve done 11 such programs worldwide. We have an exclusive arrangement for India. It’s a 2-3 year programme, with new user facing features are introduced every quarter, depending on the market. In Singapore, they did a product called Ampd. In India, since ringtones and caller tunes, were bundled, alongwith streaming the music on both Internet and Mobile (IVR), there are blogs, karaoke caller tunes, and on field concerts, which will be live streamed on the mobile. You’ll also have products on memory card.

MediaNama: Why not expand the same plan from Universal to look at partnerships with other studios?
Anil Pande: Hungama is also a part of the deal,and with Universal and Hungama, we cover most of the music. Through them, we get regional music as well. It is doing very well. Since its launch 3 months ago, we’ve reached 30-35% of our caller tunes penetration.

MediaNama: Do you have an ongoing relationship with Reliance Entertainment? Is there a push for their services – Jump Games, Zapak, BigMaps? Is BigMaps still live?
Anil Pande: BigMaps is still live. Our approach is that whatever our group companies are offering, they’ll always be there. We’ve launched BIG FM radio channels on our channels. Zapak games have always been there. But, our philosophy is that competing products will also be there. There will be preference for our in-company product. In terms of music content, everything comes from partners like Hungama and Universal anyway.

MediaNama: What’s your take on how things will change in a 3G environment? Which services will decline, what will grow?
Anil Pande: If you go the US today, with is mostly on 3G, and they have a lot of free Wifi, with high smartphone penetration. The way people use it is, that they’re often using WiFi networks. So there won’t be a revenue stream if that happens in India, though it may take a long time to happen here. But today if you look at VAS revenues across operators in India, non-GPRS revenues have minimal growth rate. The challenge is in bringing out the non-GPRS revenues in an avatar where it is appealing, in terms of bundling, presentation, pricing or marketing: that whole gameplan has to change. With the kind of profile of users now coming on board, they’re not attracted by the proposition which was for VAS earlier.

That entire proposition has to change. I’ll give you the example of caller tunes. If you do a customer profiling of, say Airtel customers: 100% would be aware of caller tunes, but they claim caller tunes penetration is 22%. Almost 80% of customers have not taken caller tunes. Awareness is not an issue. The second thing is that P2A or A2P SMS services, with almost 90% are aware, despite the language barrier. Even then, the SMS penetration is more than caller tunes. We have crossed a threshold in terms of awareness, but the challenge is offering something that will be purchased.

MediaNama: Do you ever see mobile operators launching ad supported SMS’? The cost of SMS has gone down significantly…
Anil Pande: There’s an immediate risk, in terms of brands wanting to get involved. There is no established model, so who is going to bell the cat? With MNP and so many operators, we are still at a stage where customer acquisition is the key. We haven’t reached a stage in the market where penetration has crossed 100%. The key issue is in terms of growing revenue.

MediaNama: What’s been the impact of the multi-SIM environment, in terms of VAS revenue?
Anil Pande: VAS is the first casualty when a user is constantly switching SIMs. The last thing he will do in such an environment is subscribe to any monthly subscription service. He wouldn’t like to commit to that. There will be a certain class of users who will have one SIM as a primary SIM, and subscribe to some services, and none on a secondary SIM. In case of the student community, where there is no primary SIM, the subscription rates will go down significantly.

MediaNama: So is there is an opportunity in the market that will help make yours the primary SIM?
Anil Pande: SIM is associated with a number. It is said that m-commerce can help provide stickiness, but that is open to debate. Unless the mobile commerce service is provided by a telecom operator, by RCOM, then thre is stickiness. But if it is provided by, say ICICI Bank, then post MNP, the customer can easily switch the network. Right now, there are a lot of experiments being done for services that can provide stickiness, but today there isn’t an answer to this problem.

MediaNama: Will we ever see a movie premiere on mobile? Will we see live streaming of events?
Anil Pande: We’ve started seeing premeres on TV and the Internet – not big movies – but it depends on the revenue model. Like Japan and Korea, they’ll launch mobile specific movies, which they don’t intend to launch in theatres at all. We do exclusive deals for content, for a specific period of time. Content is a perishable commodity, with a time-bound marketing advantage. They could be longer association deals, like EPL or IPL, provided the cost is justified.

MediaNama: Do deals for TV shows (Idea for KBC) have a noticeable impact in terms of revenues, or is it a marketing opportunity?
Anil Pande: If the channel is trying to cover the entire avenue, no operator has more than 20-30% marketshare, so it won’t work out in terms of revenues, as an exclusive deal. It’s primarily a focus on marketing.

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