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VAS Retail & Voice Gaming Co Vegam Divests 20% Stake To Altruist Group

The Altruist group has picked up 20% stake in Vegam Solutions, a mobile VAS Retail and voice gaming company founded by Ingersol Jayakumar, previously the national business head, VAS, Tata Teleservices. The amount invested has not been disclosed, but Rajiv Hiranandani of Altruist told MediaNama that it’s a part cash-part kind deal: Altruist will provide the company with platform support.

Vegam will use the money for its tech center, set up in Bangalore. It has already tied up with Tata Teleservices for GSM and CDMA for the voice games business. Jayakumar says that the company has prepared
10-15 games for launch: Car racing on voice, wherein they create an ambience of the stadium, and essentially inform user that he is in a lane, and has to move 4 to move left, 6 to move right, and switch lanes to avoid hurdles and use speed boosters. Other games being planned include card games (teenpatti), snakes and ladders, cricket game, and Book Cricket. From a conceptual perspective, this voice gaming business is the same first launched by Dialify Technologies, which has produced games such as Cwicket and Tees Mar Khan.

Retail Business

Probably the more lucrative opportunity for Vegam will be in retailing mobile value added services (VAS) for telecom operators. The company is planning to launch an independent platform that aggregates VAS across telecom operators, with billing integrated. “We will sell what they’re selling, and we’lluse operator billing. We’ll have connectivity with operators, and a customer will be able to purchase a ringtone online, or just call up a certain number (tollfree) and choose the song from the the library.” Vegam will aggregate other VAS as well. We had a few questions regarding retailing VAS, though:

– Why would a telecom operator tie up with Vegam? Jayakumar says that currently the promotion is limited to Out Bound Diallers and telecom operator promotion. every operator wants to explore retail, but they haven’t had success for two reasons:  reach and customer need. VAS is a impulse purchase and “If I want a song at a particular time, then you cant expect me to go a retailer and get it. He will now be able to get it via PC or through online voice. We’re helping operators, not bypassing them. If I sell it as a card, it will bypass operators, and we’re trying to use operator billing.

– Why can’t an operator set it up himself? “Every customer in the metros has two phones”, says Jayakumar. “How many numbers is a customer going to remember, with different access codes on different numbers? The interface will be different with each telecom operator – he has to search for the song on a different format on Airtel, different on Vodafone.” In case of Vegam, the format is the same, the flow will remain the same, and there will be a single number across operators.

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Vegam will work on a revenue share model with telecom operators. Jayakumar believes that 20-25% revenue share is the max that he can get from an operator, while with physical retail, the revenue share ranges from 15-40%. And physical retailers aren’t interested. Jayakumar explains: “Retailers find it easier to sell recharge coupons than VAS, and at times, they say they don’t even want to sell it at a 100% margin.  Because if there’s a problem with Caller Ringback Tone, and he doesn’t get the song he wants, he goes back to the customer for the same song, and has to spend 10-20 minutes to sell it. It’s much easier for electronic recharge.”

Vegam has no plans to go beyond the telecom operator network: “It is better being with the operators for joint growth,” Jayakumar says. “If we take it outside the operator network, then you need credit cards.”

Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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