TRAI for Growth of Value Added Services

TRAI on Friday released a consultation paper on Growth of Value Added Services and Regulatory Issues. Consultation paper focuses on the approach for the growth, regulatory guidelines and terms and conditions in respect of licensing and provisioning of Value Added Services.

“Telecommunications had traditionally been a voice communication service. With the rapid expansion of mobile phones, tele-density and 3G, Next Generation Network (NGN) services many more such novelties are in store for Indian population with mobile phone services and broadband services at the centre of innovation. The telecommunication services today have moved beyond their fundamental role of voice communications to a spectrum of non-core services, which in telecommunication parlance is called Value Added Services (VAS), ” M.C. Chaube, Advisor Quality of Service, Telecom Regulatory Authority of India (TRAI) said.

In short, all services beyond basic voice calls and fax transmissions come under the category of VAS or also called enhanced services. In times to come people will buy mobile phones or any end user terminal device not just to remain connected for access but to express themselves in a variety of ways. Value Added Services are provided either directly by the telecom operators themselves or by a third party Value Added Service Providers (VASPs).

In India the revenue (estimated) from mobile Value Added Services is over 10 to 14% of the total revenue of mobile telecom service providers. The Value Added Services have great revenue potential. The mobile revenue through Value Added Services is expected to cross 30% of the mobile telecom service provider’s revenue in the next 5-7 years as revealed in various studies,position papers. Today SMS constitutes major portion of the VAS revenue. While entertainment services have become popular with the consumers, there remains a scope for utility based services like location information, mobile commerce (M-Commerce) for mobile transactions .

“For the telecom operators, success of Value Added Services is important for their growth. The service providers will shift their focus from subscriber base expansion to Value Added Services, as these services have the potential to generate good revenue for the telecom operators and will ultimately benefit telecom consumers. This will also contribute to the overall growth of the GDP of the country ,” M.C. Chaube said.

The Value Added Services industry in India is at nascent stage and does not have a proper process or common benchmark or code of practice. There is no coordinated effort to make the industry grow and it also lacks transparency as the consumers are not fully aware of the nuances of the services. But considering the market potential for value added services in the coming years and the multiplicity of value added services that the Next Generation Network (NGN) and 3G will offer, there is a need to harmonize the licensing/regulatory framework for ushering growth in all the segments of the value added service viz content development, technology platform, content aggregation including copy right protection etc. There is also a need to facilitate provision of value added services directly by the content aggregators,value added service providers (VASPs).

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