Mobile Value Added Services

Introduction

Since 1995mobilephones have gone from being high-end gadgets only the wealthy could afford to an essential accessory, now owned by a large portion of the population of the world.Mobilephone technology has also advanced, taking something that used to be a mere gadget for communication and turning it into a slick, fashionable accessory that is capable of performing a host of activities than just communication. In today's world the possibilities of innovation in the mobile phone space seem limitless, andmobiletechnology is promising new applications and servicesthat will change the way people live and work. The integration of the Internet, mobility and communications at the device,serviceand transport levels creates a new set of business opportunities. The impact of this convergence is not very simple. The structure of the newmobiledata landscape is far more complex than the traditional voice-oriented business models and SMS.
Mobile value added service Industry

Industry Definition

“Mobile Value Added Services (MVAS) are those services that are beyond the basic voice service and are availed by the end user. They are used as a differentiation tool and allow operators and vendors to develop a cost effective stream of revenue”[1]

VAS Market Size and Revenue

VAS services contribute to about 7% of the total telecom revenue for Indian operators[2].

The mobile VAS industry in India has been estimated at 926 million USD at the end of 2007[3].

Non voice revenues have been increasing since 2000 driven by SMS (including P2P and A2P*), contributing over 55% of the total revenues in 2006[4] . Over the last three years the % share of revenues coming from SMS is on a decline as other services gain prominence, however SMS, Ringtones, and Voice VAS will continue to be the highest revenue generating services[5]

*P2P - Person to person

A2P - Application to Person

Types of Mobile Content offered

Mobile VAS can be classified into three broad heads, based on the nature of the service offered by each -

Entertainment VAS - Entertainment VAS is the most popular form of VAS and designed for mass appeal. Such services provide entertainment during leisure time.

Example - Jokes, Bollywood Ringtones & games.

Information VAS - Information VAS provides useful information to the end user and is sent mostly through SMS.

E.g. Information on sports, movie tickets, news, banking productivity services like missed call information, user request for information on other product categories like stocks, real-estate, education, media etc. mCommerce VAS (Transactional services) - Transactional VAS services allow the user to conduct transactions through their mobile phones. These services have just started coming up in India and are not available in basic handsets.

Example: Buying movie tickets or train tickets through the mobile phone, money transfer through mobile phones etc.

VAS Value Chain

MVAS has resulted in the emergence of a new business system giving rise to industries like as content development and aggregation. There are multiple stakeholders playing across the MVAS value chain many of which have a wide variety of roles and functions.

The key actors in the mobile VAS value chain are:

Ø Content copyright owner: Develop original copyright content

Eg: Music production houses, Bollywood production houses, Media Houses

Ø Customised Content Creators who generate user defined content

Eg: Mauj, One 97,Hungama mobile

Ø Content Portals/Aggregators - Individuals/Organisations that gather web content and in some cases distribute content to suit customer needs

Eg- India Times, Hungama Mobile

Ø Mobile Network/Operator/Service Provider - Provide transport and support mechanism for mobile content delivery

Eg - Airtell, Reliance, BSNL, MTNL, Hutch, Idea Cellular

Ø Technology Enablers - Provide technology platforms that enable access to MVAS players

Eg - Onmobile, Bhrati Telesoft, Webaroo

VAS IN INDIA

India is one of the most exciting telecoms markets in the world - the second largest with almost 500 mn subscribers[6], and still one of the fastest growing, with one of the highest mobile minutes of use in the world. There are vibrant software and media industries, and a strong tradition of entrepreneurship that have already created a rich community of VAS developers in India. Yet despite this, mobile VAS in India appears to lag behind most other countries, even when compared with other developing markets, leading to a 'VAS Vacuum'. There are possibly three main reasons for this vacuum -

First, the mobile operators have focused mostly on acquiring customers in the urban areas where VAS has not been needed or used as a differentiator.

Secondly, SMS usage in India is much lower than in other developing markets, perhaps a function of low literacy rates, and probably inversely correlated with high voice usage.

Finally, the late release of 3G spectrum and licenses may also mean that operators have not yet devoted the resources to develop VAS applications, which usually happens when at least one player starts actively to push its 3G network.

But as the Indian market enters its next phase of growth, with new players, new spectrum, intensified urban market competition, mobile Value Added Services may become an important part of the operators product mix.

Vas Advantages

As more number of telecom player are looking upto VAS as a possible means of a high revenue generation, following are the advantages value added services can provide to telecom operators:

Revenue Growth - Value added services open up new ways to generate revenue. These can be in the form of services ranging from mobile broadband, applications, entertainment, location based services to productivity tools. In addition, VAS can create niche revenue streams from advertising or machine-to-machine services, helping expand the overall Indian market.

Customer Acquisition - VAS also provides an opportunity to acquire customers through unique and differentiated offerings. These can be aimed at capturing additional higher-end customer segments, or targeted with innovative new services suited to the needs of overlooked customer segments. In addition, selected 'headline grabbing' services can help operators enhance their brand as an innovative player.

Customer Retention - As the Indian market matures, including the advent of mobile number portability, churn is becoming an increasing problem. Experience in other countries indicates that the more services a customer uses, the lower their propensity to churn. Hence, VAS can be used to increase customer loyalty, particularly if services are priced to encourage usage.

Opportunities of VAS in India

The future implementation of MVAS in India will encompass several new and exciting areas such as mobile internet, location-based services, and regional content-based services. Maturity of the MVAS market also will give impetus to the market for M-commerce applications in India. Favorable government policies and advances in technology are encouraging providers across the MVAS value chain to explore innovative ways to address the mobile telephony needs of India's rural population.

o Going Rural: Next big drivers for VAS growth would be from tier-2 and tier-3 cities. Semi-urban and rural consumers want services like voice enabled services, commodity prices, astrology, etc, which is of their taste and they find it useful.

o Personalization of content and device: For many subscribers, the mobile phone has gone on to becoming an extension of their persona. VAS service portfolio includes full-motion videos, mobile TV/video, multi-player online games, wireless teleconferencing, and Mcommerce.

o Wider portfolios and integration: along the value chain could improve MVAS revenues of content aggregators/providers. Handset manufacturers are joining players across the MVAS value chain to come up with enhanced products. MVAS is the one of the major means of differentiation which both telecom handset providers (like Nokia) and service providers (like Airtel) heavily depend upon for revenue generation.

o Downloading Content: New downloading methods becoming more and more popular. 800,000 people are registered users to Passa Parola In Italy, an application that allows users to browse through a database for mobile content and can directly download it to their mobile phones. Thus originally a B2B industry, MVAS providers would soon sell directly to consumers.

Literature Review

A number of academic research have been done in the VAS space especially in identifying the industrial related factors affecting the consumption and growth of VAS

A study by IMRB[7] identifies the key issues revolving around the value chain ad growth of the mobile value added service in India and provides a holistic perspective to micro and macro issues in this space. Having defined the characteristics and constituents of mobile VAS, the paper attempts to analyze the industry related factors driving it and tries to develop a business model for VAS. The report also tries to identify the roadblocks required to be addressed for sustainable growth of VAS in India.

A very similar study by Boston Analytics[8] explores the Indian VAS marketplace and tries to provide a overview of the VAS industry, while addressing potential concerns across the MVAS value chain. In both these papers we get an overall understanding of the VAS space in India in terms of the key stakeholders, revenue sharing model prevalent and the value chain of VAS. Through both quantitative and qualitative analysis the papers try to identify the industry related factors driving VAS usage. These industry factors have again been classified as infrastructural factors, economic factors and the marketing efforts of VAS players. However there is no consumer perspective towards VAS in the above studies conducted and the drivers for the adoption of VAS from the Indian consumer's point of view still remain unexplored.

In his paper ‘ Mobile Commerce and creation of a market Place' the author John Lembke[9] gives an overview of m-commerce in the European context, global rules and strategies currently in place surrounding m-commerce. The analysis of the paper is based on the accelerated growth of m-commerce guided by a number of trends - localization, instant connectivity and personalization of devices . The paper also analyzes the European regulations built around m-commerce by the European telecommunications standard Institute (ETSI) with the need to bridge the gap between different dimensions of traditional telecom, internet protocol (IP) and broadcasting environments. The paper however fails to explain why m-commerce is expecting such accelerating growth or how it's purchase or adoption is influenced. There is also no mention of the other types of Value added service apart from M-Commerce which might have affected the usage or demand of M commerce. Lastly the paper ignores the consumer perspective towards adoption and usage of VAS.

A research done on IPTV services in India [10] aims to propose a business model aimed at telecom operators wishing to enter the IPTV market in India, to identify the design issues that are critical when it comes to developing viable and feasible IPTV business models for telecom operators and testing the robustness of these choices in the exploration and exploitation phases. The paper presents four scenarios addressing the demand, regulatory and competition-related uncertainties. These scenarios represent different future possibilities with respect to the regulatory environment and industry structure towards IPTV service. The author does an appreciable work in designing a viable model for IPTV, this being one of the first studies that identifies relationships between business models and scenarios. However this paper cannot be generalized to the entire VAS Industry and is just focused on infrastructural issues related to IPTV services in India.

A Nokia conducted study in Finland tries to identify the demand for mobile value added service from the consumer's perspective[11] The paper starts with the hypothesis that diffusion of VAS to mass markets and standardization of new technology depends on heavy VAS users. The paper then goes on to segment the VAS users in Finland and identify the VAS services and service characteristics that are in demand. It gives an exhaustive analysis of the types of VAS services and the VAS user segments. The heavy users of VAS have been identified as typically male, young, technically very advanced and heavy users of SMS. The paper however derives its conclusion mostly based the on SMS usage of the consumers and does not take into account the frequency of usage of other VAS information and transactional services. Also this study had been conducted in 1999 at a time when VAS services were not as advanced as now. Hence there is a need to understand the consumer driven factors aiding usage of VAS in the present scenario

Research has also been done to examine the status of current mobile TV phone usage and the issues for strategic implications in the mobile TV industry using Real tracking data, (server's logs - 2006 /2007) from South Korean satellite DMB providers[12]. This study analyzes VAS user behavior to enhance user experience and help design a market specific business model, with an aim to integrate services, applications and devices. However this research analyzes only the mobile TV usage pattern of the VAS industry (entertainment VAS) and does not throw light on the emerging information VAS and m-commerce. Also this study is limited to South Korea and because of obvious cultural and economic differences cannot be applied universally across other A-pac countries like India.

Conceptual framework of mobile VAS

Based on the above literature review a conceptual framework for mobile VAS has been developed. The factors driving the usage of VAS in India can be of two types - industry related factors and consumer related factors. Industry related factors which have aided VAS usage are again either infrastructural, economic or a result of the marketing efforts of different companies as explained in the diagram below.

* CCP Initiation: CCP - Calling Party Pays - Is an arrangement in which the mobile subscriber does not have to pay for the incoming calls, instead the calling party pays for those calls. The CPP initiative has reduced the basic voice service expenditure to a great extent allowing consumers to spend more on VAS services.

· Technological Advancements in Telecom: With the expected 3G[13] and WiMax[14] rollout in 2010, VAS players are looking at more and more advanced VAS services to offer to consumers. It will be possible to deliver rich media content and services with a 'wow' experience. Data services would see a surge in adoption and usage. The video streaming over cable & satellite will open up a lot of possibilities of innovative VAS.

* Unified license Regime (2003): Unified License Regime allows service providers to offer both fixed and mobile services under once license. Thus while cellular operators can offer basic services, WLL (Wireless local loop telecommunication system) operators can offer cellular services. The ultimate beneficiary of the unified license regime is the consumer. This is because; increased economies of scale have enabled mobile phones and its related services to become more affordable to the masses.

Marketing Efforts driving VAS

Huge bouquet of services offered by VAS Players

VAS players have been offering a wide variety of services to consumers. With the development of better application platforms like IVR, niche application just starting to emerge, some of them being

- Social networking sites on mobiles

- Commodity pricing on SMS

- Group SMSing

- SMS based movie tickets (Fame Cinema, PVR Cinema)

Exhibit 1 in Appendix A explains all the possible VAS services available in India across different application platforms.
Focus on music and movies

Apart from SMS Value added service built around the Bollywood[15] content remains the most sought after service in the form of ringtones, games, wallpapers or video downloads (IAMAI Report 2008). Mobile music in the form of ringtones and CRBT is the next largest revenue generator after SMS and a key driver for VAS9. Considering that the Indian youth account for a large segment of users VAS players and content aggregators have focused sharply on VAS content based on movies and music.

SMS Contests

SMS marketing and contests reaching new heights in the financial year 2007-08. P2A (person to application) and A2P (application to person) SMS services gained popularity, driven by voting based TV shows. The SMS based contests have been targeting varied age groups through a variety of products

- Indian Idol targeting the Youth

- Kellogg's targeting the Housewives and Children

- Cricket Predict & Win targeting the Mass Market especially males

With increased niche TV program content SMS based contests are bound to gain popularity and have a positive impact on the consumption of VAS.

Personalization of the digital world and digital devices

Economic Factors

Booming economy

India has maintained its position as the second‐fastest growing major economy after China with the Indian telecom market experiencing phenomenal growth. (having crossed 217 million subscribers by October 2007[16]) The booming Indian economy has increased job opportunities and spending power of an average Indian, resulting in higher disposable income and faster acceptance of new technologies like value added services.

FDI Investment

With the FDI limit raised from 49% to 74%. the Indian economy registered 11% rise in FDI in the telecom sector, thus recording robust growth during period 2008-2009[17]. A lot of US companies have invested heavily on VAS services players which has further increased the bouquet of VAS services offered to the consumers.

Asset Deficit Charge

According to the Asset Deficit charge set up by the Indian government all operating companies would have to share a revenue percentage with the government for having used government infrastructure in places not accessible to them with an aim to promote better infrastructural facilities in the rural areas to support more subscribers and better connectivity. This has increased the VAS penetration in the rural areas.

Consumer Factors

Increased comfort level with basic mobility services

Entertainment VAS

Need Gap

Thus a lot of work has been done to establish the industry related factors which drive usage and adoption of VAS. However the importance of different consumer related attributes affecting usage and adoption of mobile value added service in the academic world is not correctly known and not adequately researched. Also till date no attempt has been made to segment the Indian consumers based on their VAS Consumption. Literature review suggests that there is a need to identify the different types of VAS consumers and the factors which affect their adoption of VAS services for each of these different consumer segments.

Initial Hypothesis and Scope of the study

At a time when the mobile industry is poised for the next big wave-Mobile Value Added Services (MVAS) with the market for next year being predicted at a 30-40% YOY growth[18],

it is important to identify and prioritize the factors which affect the usage of mobile VAS in India. Consumption of mobile value added service depends on different attributes both tangible and intangible.

The initial hypothesis on which this study is based is two folds, the first one being

that the factors which influence consumption and adoption of mobile value added services by consumers depends on different variables as listed below

* Awareness of VAS services - Spontaneous and aided awareness

* Sources of awareness

* Consumption of other consumer durables (LCD, laptop, MP3 etc)

* Internet Consumption

* Accessibility of VAS

* Benefits provided by VAS

The second hypothesis is that the consumer related factors which influence VAS consumption varies across different VAS consumer segments.

Analysis is limited to the consumption habits and willingness to adopt such services as stated by the respondents themselves and no claims made by the respondents are physically checked for accuracy.
Problem area and problem formulation

As the Indian VAS market enters its next phase of growth with a host of VAS services, new players and new innovative ventures it is important to understand the extent to which consumers across different paradigms have stated consuming VAS. Keeping this in mind the research problem can be stated as,

“Determining factors which influence the adoption and usage of mobile VAS by consumers, and how these factors vary across the different mobile VAS consumer segments.”

Research Objectives

This research is a step forward towards understanding the underlying factors which determine the usage and adoption of mobile value added services across different consumer segments of VAS.

The objectives of this research has been summarized as below

* To classify the Mobile Value added service consumers based on demographic, behavioral and psychographic variables.

ü The different demographic variables identified are - age, sex, location, gender and SEC

ü The different behavioral variables identified are - Frequency of usage of VAS, Occasion of usage of VAS, Brand preferences of consumers

ü The different psychographic variables identified are - Beliefs, values and attitudes towards VAS and the VAS benefits sought

* To identify the different factors which influence the adoption and usage of different VAS services

* To study variations in the preference for VAS across the different VAS consumer segments identified

Information areas

The information areas to be gathered are linked to the research objectives mentioned above and have been used to design the focus group discussion guidelines and the questionnaire. The same has been outlined in appendix A of this research paper.

The following information areas have been covered during the Focus Group Discussions:

ü Kinds of value added services used and usage patterns

ü Reasons for usage of Entertainment VAS services

ü Reasons for usage of Information VAS services

ü Reasons for usage of Transactional VAS services

ü Factors influencing consumption and adoption of VAS

The following information areas will be covered in the Questionnaire Survey:

ü No of mobile phones owned

ü Bought last

ü Mobile features present

* Colour screen

* Bluetooth

* MP3

* Radio

* Camera

* Touch Screen

* Dual SIM

* Remote

* High Memory

* Voice Recorder

* GPS

* Smart Phones

ü Registration and Usage - VAS

* Spontaneous Awareness of Entertainment VAS services

* Spontaneous Awareness of Infotainment VAS services

* Spontaneous Awareness of M-Commerce VAS services

* Aided Awareness of Entertainment VAS services

* Aided Awareness of Infotainment VAS services

* Aided Awareness of M-Commerce VAS services

* Frequency of usage of entertainment VAS

* Frequency of usage of Infotainment VAS

* Frequency of usage of M-commerce VAS

* Spontaneous Awareness of any newly launched VAS feature in the Indian market

* Sources of awareness of VAS

ü Disposition towards VAS

* Willingness to adopt VAS services in future (the ones which the consumers have not availed before)

* Preferred VAS features in mobiles

ü Internet availability and frequency at home

ü Internet availability and frequency at work/college

ü Consumption of other electronic equipments

* Computer

* Laptop

* I Pods

* MP3 players

* Music System

* LCD Television

* Digi cams

ü Psychographic statements (VAL'S statements)

ü Overall Likeability of VAS

ü Benefit statements related to the VAS

Research methodology

Previously both qualitative and quantitative research methodologies have been used individually in the context of the telecom industry. However to study the consumer behavior of the usage of VAS services it is important that the study is done taking into account both qualitative as well as a quantitative research approach.

A three stage study process has been involved for identifying the factors that drive the usage of mobile Value Added Services (VAS) in India.

The preliminary stages comprises of secondary research to develop a general understanding the VAS market, players in the industry, current challenges faced by VAS players and the drivers of the growth of the VAS market.

Following which primary research has been done involving both qualitative and quantitative approaches.

Exploratory qualitative research was conducted using focus group discussions (triads) to determine the drivers for usage of Value added services, using a semi structured format amongst a set of 12 participants. The discussions were conducted using focus group discussion guidelines on the basis of the information areas identified earlier. The output of the qualitative interview generates insights into the basic understanding of the consumer related factors which influence usage of VAS. The findings of the first stage have been coupled with the quantitative findings in the second stage to arrive at the category drivers towards VAS adoption for each of the different VAS consumer segments.

The focus group discussion guideline has been outlined in Appendix B of the research paper.

One of the major flaws of the above qualitative study might be the ambiguity that creeps in while defining a term based on the respondents interpretation of certain events and possible personal experiences. According to Creswell[19], such “definitions of terms” lack academic weight in qualitative research for participants' definitions are of more significance.

In order to maintain the perfect balance between personal experience and theory or perspectives this study has incorporated an elaborate quantitative study based on a structured questionnaire approach. To this effect an interviewer administered questionnaire approach has been adopted to incorporate the complexities in the questionnaire flow and garner higher responses. The questionnaire involved both open ended and closed ended responses. The quantitative study aims to arrive at different VAS consumer segments and establishing factors which drive the consumer usage of VAS in India across these segments.

The quantitative research analysis would involve the following steps:

1. Cluster Analysis to understand the different segments in the VAS Industry.

2. Running a regression analysis to find out the category drivers of VAS for each of the identified consumer segments.

The study neglects the possible biases that might have crept in as a result of the interactions between the interviewer and the researcher.

Another major limitation of such a methodology is a possibility of the over influence of socially desirable responses rather than the actual ones. This is mostly significant in a self stated responses wherein the respondent answers are based on his claims in having used a specific product (here mobile VAS for instance). Respondents usually adhere to such practices to boost up one's image before the researcher or other respondents.

In both the qualitative and quantitative study the respondents were made unaware of the exact nature of the research problem to avoid any possible kinds of respondent bias and were assured of their anonymity. The research methodology has been graphically portrayed in the flow chart below.

Preliminary stage - secondary research

Partly covered in the literature review (Resources- Books, Cases, Articles, Research papers)

Target Group

Ideally the study of consumer behavior towards adoption of VAS in India is best described if the research involves participants across the country from all the four zones. However time and resource constraints have limited the study to only the East and the West zones of the country.

Consequently the target group for the study is as follows:

ü Respondents (both males and females) aged between 18-60 years

ü Belonging to SEC A1, A2, B1, B2

ü Residing in East or West India

Possible recruitment areas: West - Mumbai and Ahmedabad

East - Kolkata

ü Owns at least one mobile phone

ü Users of Value added services (anything apart from the basic voice services)

(These services include SMS, MMS, mobile games, usage of mobile applications for various purposes, internet usage, transactions through mobile etc)

In the initial phases of respondent recruitment an attempt had been made to collect responses

from SEC C respondents. However it was extremely difficult to search for an adequate number of SEC C respondents who uses or has used VAS at least once, owing to the inability of such respondents to understand English. Hence the study has been limited to the VAS users in the SEC A and B categories only.

Sampling Plan

The sampling technique for the qualitative study is random sampling wherein the sample is representative of the demographic variables that are chosen for this study. Keeping the above in mind a focus group discussion of three members each (triad) has been conducted across East and West India (a total of four triads) for SEC A and B respectively.

West Zone

East Zone

SEC A

X

X

SEC B

X

X

The sampling technique used for the quantitative researchis stratified random sampling by gender, age group and SEC. Stratified random sampling involves the division of the universe into smaller groups, known as identified strata. The strata formation is generally dependent on the strata population sharing a particular attribute or characteristic. A random sample from each such stratum is taken, in a number proportional to the size of the stratum when compared to the population. These strata elements are then clubbed to form a random sample[20].

The reason for choosing stratified random sampling is that it gives a greater precision over a simple random sample of the same size.

The total sample size for the quantitative study is 200 (100 for each of the two zones - West and East zones).

Four different demographic criteria have been kept in mind while deciding the sample split: Age, Sex, Location and SEC

The sample split by demographics is as follows:

TOTAL SAMPLE = 200 (100 for each zone)

AGE Split

SEC Split

18-25 years

50

SEC A1/A2

100

25-35 years

50

SEC B1/B2

100

35 - 45 years

50

Gender Split

Above 50 years

50

Male

Female

100

100

Due to time and resource constraints the sample size for the quantitative study has been limited to 200 respondents across the two zones.
Data Collection and Analysis Plan

The focus group discussions have been recorded and transcribed. The qualitative data analysis have been done using conceptual content analysis wherein a concept is analyzed to study trends across interviews and a stronger presence of positive or negative words used with respect to a research objective is identified. These trends have been further correlated with demographic variables to isolate their impact.

The questionnaire for the quantitative study has scaled responses. The responses have been recorded in excel and coded into the SPSS datasheet. For data analysis the following statistical techniques have been used for the study

* Cluster Analysis (Tool: SPSS)

* Cross Tabs (Tool: SPSS)

ü SEC and Age Vs Types of mobile features available

ü SEC and Age Vs Entertainment VAS Usage

ü SEC and Age Vs Information VAS Usage

ü Location Vs Entertainment VAS Usage

ü Location Vs Information VAS Usage

ü Location Vs Transactional VAS Usage

ü SEC and Age Vs willingness to adopt Entertainment VAS

ü SEC and Age Vs willingness to adopt Entertainment VAS

ü SEC and Age Vs willingness to adopt Entertainment VAS

ü Location Vs willingness to adopt Entertainment VAS

ü Location Vs willingness to adopt Information VAS

ü Location Vs willingness to adopt Transactional VAS

* Linear Regression Analysis (Tool: SPSS)

The deliverables are in the form of an exhaustive report identifying all the possible category variables for each of the identified consumer segments of Mobile VAS users, their relative importance and a comparison of the results across the two chosen geographical regions East and West India

Sampling

Four in depth interviews of duration 1 to 1.5 hours have been conducted. The focus group discussions were in the form of triads - three people each. A total of six men and six women were interviewed across the East and West zones. Of these three men and two women were heavy users of value added services and two women were very light users of VAS. In most of the interviews the focus group discussion guideline was not strictly followed, however the discussion flow was not broken at any point of time in the interview to maintain the rapport with the respondents. The below table gives a brief description of each of the FGD Participants

AGE

GENDER

SEC

LOCATION

OCCUPATION

VAS CONSUMER

23

Male

A

Ahmedabad

Student

Heavy

23

Male

A

Ahmedabad

Student

Heavy

22

Male

A

Ahmedabad

Student

Medium

25

Female

A

Kolkata

IT Engineer

Medium

24

Female

A

Kolkata

IT Engineer

Medium

24

Female

A

Kolkata

IT Engineer

Heavy

28

Male

B

Kolkata

Sales

Light

26

Male

B

Kolkata

Sales

Light

25

Male

B

Kolkata

Sales

Medium

18

Female

B

Ahmedabad

Student

Medium

18

Female

B

Ahmedabad

Student

Medium

20

Female

B

Ahmedabad

Student

Light

For the quantitative study the questionnaire responses have been coded in an ascending order.

(For example frequency of usage of MMS was coded as 1- never used, 2 - used at least once, 3 - used in a month, 4 - used once/twice a week, 5 - used daily)

Expected Contribution

The research will be of great use to telecom companies, who are slowly realizing that VAS in

India is expected to poise for the next big growth

The factors affecting consumer adoption of VAS would provide insights to marketers/ manufacturers on the important category attributes of VAS and how they vary across different consumer segments. Thus marketers can thus customize their product offerings based on the findings for each of the identified consumer segments and reject the services which are of no importance.

Qualitative Research Findings

The focus of the qualitative analysis was to identify the factors which influence the usage and adoption of mobile value added services.
Identification of Factors that Drive the Usage of VAS

From the focus group discussions around 12 factors have been identified are possible drivers for adoption of mobile VAS by consumers as explained below:

1. The fun element

A majority of the respondents when asked to talk about mobile value added services spoke about entertainment VAS - music, music download, ringtones, jokes, games, podcasts, movie clips etc all of which fall under the entertainment VAS category.

Comments made by respondents helped in identifying the factor ‘Fun element'

“I love to download Zapak Games and usually play them while I'm waiting to catch my bus to college. It is good fun”

(Student, male; 22 years - Ahmedabad)

“I have requested for jokes through SMS. A joke every now and then cheers me up and makes my day”

(IT Engineer, female; 24 years - Kolkata)

“My mobile has become my music system, I cannot go to sleep without having heard atleast 2/3 songs from my mobile”

(Student, female; 18 years - Ahmedabad)

2. Accessibility to business/work

There is a wide variety of Mobile VA

S applications which help people access their business or office work when they are not in office or while in transit. With business and economy burgeoning in India more and more people find it convenient to remain connected with their work or business at all points of time.

Some examples of such services quoted by respondents are Microsoft office applications in mobiles, e-mails, web browsing, applications for services like sales data track, retail planner etc.

Thus accessibility to business/work was identified as one of the factors for the increased consumption of VAS

“I am a sales man. I travel all the time, most of my work entails tracking data while travelling, I hardly get to stay in office. The' CDC' mobile application for sales data track makes work so much simpler…I can now access data while I'm in a train or bus”

(Salesman, male; 28 years - Kolkata)

“Being in the production support team, I'm responsible for maintaining and supporting the client server and database. It is very convenient therefore if I can browse my emails while going to office or while returning especially when there is a code failure”

(IT Engineer, female; 24 years - Kolkata)

3. Spending time

Mobile value added services is one of the best and easiest possible means to while away time,

Also most VAS services provide entertainment or timepass options for short periods. There are times when people have to wait for a short span of time while in a queue or waiting to take a bus etc with nobody to accompany them. It is in such times where such VAS services can become extremely useful. Sometimes people might also get stuck in a place where there are no sources of entertainment; with VAS it is possible to entertain oneself during that time.

“It is such a pain to wait for the bus, while going to college. I am a closed person and don't as a rule indulge in talking to strangers. There is no other way to kill time, other than listening to music on my mobile or playing ‘Tetris' and sometimes even chatting on my mobile internet (laughs)”

(Student, female; 18 years - Ahmedabad)

“The only thing which stops my boredom while waiting in a queue to deposit money in my bank is playing games in my mobile or reading the e-news through the mobile internet”

(IT Engineer, female; 25 years - Kolkata)

4. Information access

Although information is available everywhere, through all possible kinds of media, information 24/7 can only be accesses through the mobile. However most respondents have expressed their irritation towards receiving mobile spam messages. It is not only necessary to provide information but more importantly it is necessary to provide relevant and to the point information.

So information access through VAS can be both a positive and a negative factor towards the adoption of VAS in a consumer's life

“I have subscribed to news feeds through SMS. Keeps me informed at any point of time in the day”

(Student, male; 22 years, Ahmedabad)

“It is so irritating to see my message inbox being flooded with messages from all possible product ranges..especially unnecessary once which I'll probably never buy”

(Student, female; 18 years, Ahmedabad)

5. Staying connected

Being connected with friends or family at all times is something which every individual craves for. However it is always not very cost effective to call up or talk with loved ones more often. Also sometimes people find it easier to communicate a message through SMS than calling up. VAS is a cheap means to indulge in a conversation with friends or close ones at all points of time through SMS, MMS, chatting, emails etc. VAS helps in staying connected in a cost effective way.

“I think I spend more time SMS ing my girlfriend than calling her”

(Salesman, male, 26 - Kolkata)

“My mom is always worried about me. Every time I go out I keep SMSing her rather than calling to let her know where I am”

(IT Engineer, female; 24 years - Kolkata)

6. Brand of VAS used

Sometimes VAS usage depends on the brand of VAS one is comfortable with. However since VAS penetration is not so pronounced in India, awareness of such VAS brands is also not very high. In the focus group discussions the male respondents were more aware of VAS brands available in the market than the females.

“I download only Zapak games, Their games are very innovative and affordable”

(student, male; 22 - Ahmedabad)

7. Convenience

Be it being able to carry out transaction sitting at home, or accessing all possible kinds of information while travelling, the biggest benefit VAS provides to all consumers is convenience

“Now I don't have to physically travel to pay my bills or even transfer money. I can do that through my mobile even when I'm travelling..saves a lot of time and energy”

(Salesman, male, 26 - Kolkata)

“VAS is a god send to people like us who don't have enough time to do their household chores. I can do all possible kinds of transactions online”

(IT Engineer, female; 24 years - Kolkata)

8. Affordability

VAS provides a huge bouquet of services at very affordable unit prices. Affordability

is not only about being charged a nominal amount for using, it is also about being able to try new services. The price affordability of VAS motivates customers to explore newer VAS services.

However respondents belonging to SEC B also believe that even if the unit price is less, since we have started using more and more VAS services daily; the overall spend towards VAS has increased considerably.

* “There was a time when I had a lot of balance in my mobile, so I decided to activate caller tunes. After sometime I got bored, so I deactivated it and tried using GPRS instead”

(student, male; 22 - Ahmedabad)

9. Mobile handset brand preferred

In the focus group discussion many respondents associated better VAS services to the mobile brand they were using. Most respondents found it more comfortable to avail VAS services in Nokia handsets than any other brand of cell phone.

“ I have two mobiles…but I prefer to use Nokia when I want to avail of any kind enhanced VAS service like the internet…Nokia is very user friendly…it easier to use Nokia phones for such purposes”

(IT Engineer, female, 24 years - Kolkata)

10. Status Symbol

Not being a mass product yet in India, value added services aids to the status symbol of an individual. Especially the younger generation feels that they look ‘trendy' and ‘cool' in front of their friends while using mobile value added services. Most males feel themselves more informed and technologically more advanced if they are a regular user of VAS services.

Also sometimes possessing something or being informed about something that friends/peers don't know of becomes a means to show off or boast in front of others

· “I love the fact that I can show video clips or movie song clips to my friends through my mobile. I think it kinda makes me look cool”

(Student, male; 23 years, Ahmedabad)

· “Helping my girlfriend download her favourite songs through Bluetooth…makes me look like a hero in front of her (laughs)”

(Student, male; 22 years, Ahmedabad)

11. The service provider used

Respondents strongly believed that VAS services were more cost effective if used with their preferred service provider like BSNL, Airtell etc. Thus the brand of service provider preferred also influences the consumption of VAS.

· “I think BSNL is more secure..I prefer to use BSNL while doing any kind of transactions through VAS”

(Salesman, male, 26 - Kolkata)

12. Expressing one's individuality

With booming economic and technological advancements people are finding newer outlets to express themselves. Mobile value added services is one such means to flaunt one's individuality.

* “I have different ringtones for different people, the one for my boyfriend is the most melodious…it s a Mozart track”

(student, female, 20 years Ahmedabad)

· “I keep downloading different wallpapers, Makes me feel good to see a nice scenic picture, everytime I look at my mobile. Sometimes my wallpaper changes depending upon my mood”

(student, female, 18 years Ahmedabad)

13. Privacy

In today's world, more and more youngsters wish to access medium through which their privacy is retained. Having one's own space is something which every individual wishes for.

· “It is really difficult to browse sites like Bharat Matrimony or Shaadi.com in the office. I don't want people to know that I am searching for a husband! I'm glad I have my mobile for doing it”

(IT Engineer, female, 24 years - Kolkata)

· “I am a regular blogger…sometimes when I don't have work in office I feel like updating my blog. But I am not comfortable in others viewing my blog…it is extremely personal….the only way I can do it is through my mobile internet”

(IT Engineer, female, 24 years - Kolkata)

14. Security

It is very important that VAS transactions are safe and conducted properly. A majority of the respondents did not avail m-commerce services only because of this reason. Security of transaction based VAS services was seen as a negative influence towards the adoption of VAS

“The mobile is such a small device. What If I press some button accidentally while doing any kind of a transaction through my mobile and get charged twice? I'm not even sure if such networks are secure enough”

(IT Engineer, female, 24 years - Kolkata)

The factors identified above have been diagrammatically represented in a fishbone diagram as shown below

The fun Accessibility to Time Information Staying Service provider

Element business/work pass Access Connected preferred

Convenience VAS Brands Individuality Mobile Privacy Status Symbol

Appendix A

Introduce yourself and MICA. Explain that MICA is a management school. As a part of the course, we conduct research to understand the consumer, what kinds of likes/ dislikes, their lifestyles, which brands they like etc. This report will be send to the company.

Welcome them. Introduce them to Sir and the Co-moderator.

Outline general ground rules such as the importance of everyone speaking openly. Tell them that there is no right or wrong answer and that we only want their opinions.

Inform the group that information discussed is being recorded for research purposes and address issues of confidentiality.
Relevant Demographic Questions to be asked before start of the main FGD

* Age

* Address

* Yearly Household income
Ice breaker:

* Ask them to Introduce themselves, here ask the Qualitative Demographic Questions - Name, Family, Work Profile, Where do they live, Where do they work/ Study etc

* Ask them about what Activities do they do in their daily lives.

Main FGD

1) What kind of mobile do you own and what are its features?

Probe: when was it last bought and what is the criteria for selecting the handset

2) What are the services available in your mobile and which are the ones you use more often?

Probe: why is that so and why don't you use the other services, which are the services not available in your mobile you would like to use?

3) Word Associations

Ask each of the respondents to say a word that immediately comes to their mind after you say a word or a phrase. The respondents can't repeat the word previously said. They have to answer within 2 seconds otherwise their chance goes to next respondent. Go in the form of a chain - one word for each respondent. Repeat the chain for 4 rounds.

* SMS/MMS

* Mobile games

* Information on real estate, banking, astrology etc

* Songs, video download

* Mobile Internet

* Transactions through mobiles

Probe: Probe on the above activity as to why they used certain words. Also which

words which were said by other respondents, can they relate to.

4) Where do you get information about the different value added services provided by different companies

Probe: who influences you in using/acquiring such service?

5) What are the occasions of usage of such services?

Probe: Why is it so?

6) Sentence Completion

Ask the respondents to complete the following sentences w.r.t mobile VAS mentioned below. Probe on each of the answers

* Usage of mobile value added services make me feel..............................

* To me mobile value added services are......................................

* Mobiles with only voice services are....................................

Probe: Probe on the above activity as to why they used certain words.

7) How often do you do transactions through your mobile? How do you do it?

8) What according to you are the advantages and disadvantages of using mobile VAS

9) What other electronic equipments do you use? How often do you use it?

APPENDIX B

JAN '10

MOBILE VAS - DISSERTATION
MAIN QUESTIONNAIRE

Name

Residence Address



SAY: Hi, I am Madhuri. I will be asking you a few questions. Please remember that there is no right or wrong answers to my questions. We want your honest opinion only. Your opinion is valuable to us.

AGE (Yrs)

GENDER

Place

SEC

15-22

Male

23-30

Female

31-40

41-50

SECTION 2: AWARENESS AND DISPOSITION OF MOBILE VALUE ADDED SERVICES

Q1a Please tell me about your mobile (open ended)

Brand

Bought last

Current Handset number

GSM/CDMA

Q1b Please tell me something about the application present/used in your phone

Applications

Present (Y/N)

Colour mobile

Bluetooth

MP3

Radio

Camera

Touch screen

Dual SIM

Remote

High memory

Voice recorder

GPS

*Smart phones

*It combines three devices in one: amobile phone, awidescreen iPod, and Internet device.

Q1c What features does your mobile phone have in terms of VAS features (open ended)

RECORD ALL THE FEATURES STRICTLY IN THE ORDER OF MENTION. RECORD A MAXIMUM OF 6 FEATURES

Order of Mention

Mobile Features

1

2

3

4

5

6

Q1d Please look at the list below and answer the questions related to your mobile phone features

Future disposition - how likely are you to consider using the service in future on a scale of 1-5

Definitely will not use this

Probably will not use this

May or may not use this

Probably will use this

Definitely will use this

ENTERTAINMENT VAS

Mobile Features

Aware

Have you Ever used it once

Used once a month

Used once in 7 days

Used daily

Future Disposition

(1-5)

SMS

Short code SMSing

Voice messaging

Multimedia messaging

Jokes

Jokes requested

Music (ringtones, caller tunes)

Music downloaded

Astrology

Sports updates

Games in mobile

Games downloaded

Graphics/ Wallpaper

Graphics/Wallpaper download

Video clips

Full motion videos

Facebook/Twitter apps

Mobile TV

Comic stripes and stories

Regional voice portals with ringtones/graphics and other services

Dating, chatting, blogging

*1 Requests the user to send informative messages on user selected topics. The availability ofthis service depends on the network provider

If you do watch mobile TV what are the channels you watch (Ask only if the respondent hasanswered yes for a mobile TV)

INFORMATION VAS

Mobile Features

Aware

Received it at least once

Received 2/3 times in a week

Received once every week

Ever requested for (Y/N)

Future Disposition

(1-5)

Banking products/promo alerts

Insurance products/promo alerts

Real Estate information

Apparel/Fashion alerts

Weather alerts

Maps - application

News alerts

Dictionary/ thesaurus/translation apps

Train reservation

Airline schedules

Fertilizer updates

Health care alerts

Results through sms

M-COMMERCE

Mobile Features

Aware

Have used it at least once

Used once in a month

Used once a week

Application used for it

Future Disposition (1-5)

Phone bill payment

Money transfer

Ticketing

Travel and holiday bookings

Shopping

Q1e Occasions for using Entertainment VAS (open ended)

Mobile Features

Occasion

Occasion

Occasion

Occasion

Occasion

SMS

Short code SMSing

Voice messaging

Multimedia messaging

Jokes

Music (ringtones, caller tunes/download)

Astrology

Sports updates

Games in mobile

Graphics/ Wallpaper

Facebook/Twitter apps

Mobile TV

Comic stripes and stories

Dating, chatting, blogging

Q1g. There are various ways in which people come to know about different the different mobile features mentioned before. Could you please tell me how did you come to know about the mobile features you have heard of ____? Any others?

---------------------------------------------------------------------------------------------------------------------

SECTION 3: BEHAVIORAL AND LIFESTYLE

Q2a. Please answer the following questions related to your internet usage

Internet connection

(Y/N)

Have used it at least once

Used once a month

Used once/twice a week

Used daily

Internet connection at home

Internet connection at coll/sch/work

Q2b. Looking at the list please tell me apart from mobile phones what are the other electronic equipments that you use in your day to day lives

Appliances

Own (Y/N)

Computer

Laptops

I pods

MP3 players

Music system

LCD televisions

Digi cameras

2c. Please mark on a scale of 1 - 5 how well do you think the below statements best describe you

5 = very high

4 = moderately high

3 = neither high nor low

2 = low

1 = very low

SL no

Statements

Rating (1-5)

1

I believe my career comes before my family

2

I believe in frugal living - try to by cheaper products wherever possible

3

I try to behave according to what my peers do

4

Whatever I say it reflects on how I am doing in life

5

I admire people who are rich and have expensive goods

6

I believe my family comes before my career

7

Whatever I own it reflects on how I am doing in life

8

Time is money

9

I always like to keep myself updated on anything new happening on the technology front (internet, mobiles etc)

10

I like it when people are impressed about the things I own

11

I share a number of interests with today's generation.

12

It is important for me to fit into the group I am with.

13

Whenever I need information the first place I look is the internet

14

I am always the first around me to own new products or brands.

15

I believe that money can buy happiness

16

I prefer to have a similar life style to that of my friends

17

One should always try to save money

18

New technological changes fascinates me

19

I have worked hard to get where I am and am entitled to the "good things in life".

SECTION 4: VAS USAGE AND LIKEABILITY

Q3a. Now, considering everything, I would like to know how much you like mobile value added service in general.

Please choose a statement that best describes this from below

(SHOW CARD: ‘OVERALL LIKEABILITY')

OVERALL LIKEABILITY - VAS

I do not like it at all

I do not like it

I neither like it nor dislike it

I like it a little

I like it a lot

Q3b. Please mark on a scale of 1 - 5 how well do you think the below statements best describe your usage and preference for VAS services

5 = very high

4 = moderately high

3 = neither high nor low

2 = low

1 = very low

Statements

Rating

(1-5)

1

With VAS I can have fun at all times whenever I want

2

It helps me personalize/customize entertainments

3

VAS provides speedy access to a variety of entertainment options at any given point of time

4

With VAS I can download pictures and songs onto my mobile without having to use a pc

5

With VAS it is easy to get the latest collection of songs and wall papers.

6

Even while travelling VAS provides me with all the information I want (stock/news/ cricket/ entertainment)

7

I can access my office work while travelling with VAS

8

Whenever I am free VAS keeps me updated with events happening everywhere

9

VAS helps in providing just the adequate amount of information

10

VAS offers me convenience of not having to go and physically pay bills

11

VAS helps me save money on travelling to bank/offices/customer care for transactions.

12

VAS helps me be engaged while waiting for someone.

13

When I am free for a short while VAS keeps me entertained.

14

With VAS I am not dependent on anyone for my entertainment.

15

VAS helps me stay connected with people at all times on chat.

16

Vas enables me to update my blogs constantly.

17

With VAS I can share significant moments with friends instantly.

18

With VAS I get instant internet connection.

19

VAS gives me a bouquet of services at very low cost

20

VAS gives me a bouquet of services without giving too much of a time commitment

21

While travelling VAS helps me easily access the internet

22

I feel I look ‘contemporary' using VAS in front of others.

23

I feel I look ‘cool' using VAS in front of others.

24

I feel VAS makes me look ‘trendy' in front of my peers/friends/clients.

25

To use VAS effectively one has to be very familiar with technology.

26

Using VAS makes me look technology friendly.

27

VAS is one of the ways to express my individuality and my choices.

28

VAS helps me be in sync with the latest technology, which gives me lot of confidence.

29

I can maintain and modify my VAS mix whenever I want

30

I feel I look ‘upmarket' using VAS in front of others.

31

I feel I look ‘smart' using VAS in front of others.

32

M-commerce - money transfer through VAS is safe

33

I know I will never pay for something I have not bought when I am using M commerce

34

I believe every transaction done through VAS are executed in a proper manner

35

I believe every transaction done through VAS are completely secure.

36

My usage of VAS in mobiles depends on the VAS brand providing the service like Zapak, Hungama etc

37

My usage of VAS in mobiles depends on the technology provided by my handset like Bluetooth, internet etc

http://www.mobilein.com/calling_party_pays.htm

http://www.itu.int/ITU-T/worksem/conreg/presentations/conreg_0504_sapna_sharma.pdf

http://www.capitalmarket.com/CMEdit/SFArtDis.asp?SFSNO=717&SFESNO=28

4 | Page

[1] Voice n Data - July 2009 Issue

[2] BDA Analysis 2008

[3] BDA Analysis 2008

[4] BDA Analysis 2008

[5] BDA Analysis 2008

[6] Voice and Data - August 2009

[7] Mobile Value Added Services - A report by IAMAI and eTechnology Group IMRB

[8] A study of the Mobile Value Added Service in India - Boston Analytics 2007

[9] Mobile Commerce and creation of a market Place - John Lembke

[10] A business model for IPTV Services - Bowman, Zhengjia, Duin and Limonard

[11] Study of Smart messaging - Nokia 1999

[12] Mobile TV Phone - current usage, issues and strategic implications - Shim, Park and Shim

[13] 3G is a cellular technology which facilitates growth, increases bandwidth, and supports diverse mobile applications

[14] Wimax (Worldwide Interoperability for Microwave Access) is atelecommunicationstechnology that provides

wireless transmissionof data using a variety of transmission modes, frompoint-to-multipointlinks to portable and

fully mobile internet access

[15] Here Bollywood represents the entire film and music Industry including regional movie houses

[16] BDA Analysis 2008

[17] Report by ASSOCHAM (Associate Chamber of Commerce and Industry of India) - 2009

[18] Voice and Data - July 2009

[19] Creswell, J. W. (2007). Qualitative inquiry and research design: Choosing among five traditions (2nd Ed).

[20] http://www.investopedia.com/terms/stratified_random_sampling.asp

Please be aware that the free essay that you were just reading was not written by us. This essay, and all of the others available to view on the website, were provided to us by students in exchange for services that we offer. This relationship helps our students to get an even better deal while also contributing to the biggest free essay resource in the UK!