All services other than peer-to-peer calling come under Value Added Service in Telecom industry. This includes SMS & DATA services also. However as the industry is dynamic and growing, the definition of VAS changes from time to time. For example, many operators do not consider Peer-to-Peer SMS as part of VAS revenue since SMS as a product is now commoditized. Likewise data revenue is shown as a separate revenue stream by some operators.The Mobile Value added services like music, ring tones and games which are called as entertainment VAS, are very popular and have contributed considerably to the growth of VAS in India. On the other hand, services like news and information on bank account, real estate, education etc. are known as Info VAS.
A third category of VAS which is emerging now is the M-Commerce VAS which allows consumers to conduct transactions like banking and payment through mobile phone. These services are in a very nascent phase now in India.
The revenue potential of these three types of VAS depends on apparent value and practical value. The perceived value is based on the intangible benefits like emotional benefits. In the case of CRBT, the perceived value is much higher than the actual value to the end user. Practical value on the other hand depends on the tangible benefits like the convenience and saving of time and money to the user. Presently the Indian VAS industry is driven by film, music and cricket based VAS which has a very high perceived value.
The VAS services are difficult to handle entirely in-house as it involves huge capex and manpower resource. This led to the involvement of multiple entities like Content owner, aggregator, and technology enabler in the VAS value chain.
