3G Roll-Out Will Give a Boost to VAS Market

By Sharon Lobo, Jan 14, 2010 1342 hrs IST

Tags : Pushpendra Mankad, Comverse, VAS Market

Could you give us an overview of Comverse's operations in India?

For over 25 years, Comverse has provided a wide variety of industry leading solutions for
operators with subscriber bases of all sizes - from tier-1 carriers and operator groups with
global reach to emerging Greenfield operators and ISPs. These goals have been achieved
with a superior solution portfolio, high-quality professional services and an extensive
network of local support, including 90 offices in over 40 countries.

We are a leading provider of software and systems, enabling value-added services for voice,
messaging, mobile Internet and mobile advertising; converged billing and active customer
management; and IP communications. Our extensive customer base spans more than 130
countries and covers over 500 communication service providers, serving more than 2 billion
subscribers.

In India, Comverse occupies a large share of the billing market. Comverse has successfully
implemented its unified billing and order management systems across majority of mobile
operators in India. Comverse billing solutions have enabled seamless migration of customers
from numerous billing systems onto one unified platform.

Further, we have a strong presence in Asia Pacific and have installed billing systems at 45
leading telco operators with over 70 active installations in the region. We currently support
over 500M active subscribers worldwide. Since its launch last year, Comverse ONE Billing
& Active Customer Management Solution has established itself as the leading converged
Business Support System (BSS) solution in the telecom marketplace, receiving top ratings
from industry analyst firms Yankee Group, Gartner and Frost & Sullivan.

What are the various solutions you provide to Indian telecom operators?

Comverse's portfolio comprises three major solutions - Comverse ONE Billing & Active
Customer Management, Comverse HUB Value Added Services & Comverse Netcentrex IP
Communications.

Comverse HUB Value Added Services comprises Voice, Messaging, Mobile Internet
and Mobile Advertising - all developed and designed with one goal in mind: to
maximize the operator's business performance. It helps to grow market share and
ARPU by leveraging the operator's customer information to create the best customer
experience and focus on new revenue drivers.
Comverse ONE Billing & Active Customer Management solution transforms BSS
(business support system) into a strategic asset for growth enablement, competitive
differentiation and operational efficiency. Comverse ONE aligns sales, marketing,
customer management, ordering and billing capabilities around one single data
model, so that all share one complete and real-time view of the customer, regardless
of the customer's choice of service, payment type or touchpoint. Comverse ONE puts
the customer in the center for delivery of a consistently high-quality experience.

Comverse Netcentrex IP Communications provide IP-based voice, video and

messaging solutions that enable communication service providers with a broadband
strategy to deliver fixed and mobile services to the consumer and enterprise markets.
This applies to fixed, integrated and mobile operators, as well as alternative service
providers (e.g. ISPs, cable and WiMAX operators).\India's telecom market is a high-
growth one and there is intense competition amongst various operators. However,
with 3G rolling out soon, it will bring on the take-off of more advanced VAS such as
Mobile Internet/Data. This is where Comverse HUB Value Added Services, which
are all field-proven solutions, can help the Indian operators to grow their business.

The Comverse HUB Mobile Internet Gateway (MIG) is an advanced multi-service

gateway platform for managing mobile data and enhancing the mobile internet
experience. Comverse Mobile Internet Gateway (MIG) is the Smart Pipe core for
operators. The MIG platform controls, manages and enhance mobile Internet traffic,
facilitating a personalized, enhanced user experience alongside a comprehensive set
of traffic management and control tools. Comverse MIG enables operators to leverage
their unique assets into revenue generators such as mobile advertising and smart,
flexible data plans. We have deployed the MIG for more than 60 operators
worldwide, and today we handle more than one third of US mobile Internet traffic.

Tell us more about the trends in the Indian mobile VAS market?

The Indian mobile connection market continues to be dominated by prepaid

subscribers. The VAS market has grown by around 60% year on year and is estimated
to touch INR 251 billion in FY 2009-10. This trend is expected to increase in future,
as VAS services grows exponentially, giving operators a new revenue source. With
the onset of 3G and India's 400 million mobile phone users, we believe that mobile
internet and data will be the first major opportunity for 3G operators to grow ARPU.
It will thus make mobile internet a significant growth engine for the operators.After
3G enrollment, VAS market will certainly get a huge boost. Delivery of rich media
content and services coupled with a great user experience can be expected. Data
services may experience a surge in adoption and usage. The high speed applications
will open up a lot of possibilities of innovative VAS enabling diverse infotainment
service opportunities.

The VAS market encompasses many trends including mass downloads of Bollywood
movies and music. Other than this, rural VAS is something that is catching grip. With
the increased competition, tariffs of voice calls have been gradually declining over
the years. This fall in ARPU will continue unless operators look at alternative revenue
streams like value added services (VAS). That said, some of the operators have
already realized this. The popular VASs today comprises primarily of SMS and
contents such as ringtones and CRBT.

To cash on the rural VAS market, a few of the telecom players have already taken the
initiative for rural VAS. Airtel, the market leader, is already testing its rural VAS in
Maharashtra and Uttar Pradesh. Thomson Reuters has been updating over 1 lakh
farmers in the country with the latest market trends, weather forecast, and crop
information via its SMS-based service. The subscription can be bought for a period of
three, six or 12 months at a price of Rs 60 per month (1.79 SGD per month). The
content is available in local languages such as Marathi and Punjabi. Thomson Reuters
now plans to extend this mobile service to nine more states.

The 3G roll-out will also give a boost to the VAS. However, industry experts believe
that consumers being educated on VAS would lead to the real big growth in the
mobile industry. Astrology, Bollywood and cricket have long been the growth drivers
of MVAS, however, some believe this dominance is softening and new entrants like
devotional, fashion and regional content are catching up fast

Total mobile services revenue in India is projected to grow at a compound annual

growth rate (CAGR) of 12.5 percent from 2009-2013 to exceed US$30 billion,
according to Gartner, Inc.

The India mobile subscriber base is set to exceed 771 million connections by 2013,
growing at a CAGR of 14.3 percent in the same period from 452 million in 2009.

This growth is poised to continue through the forecast period, and India is expected to
remain the world's second largest wireless market after China in terms of mobile
connections.

Prepaid connections accounted for more than 93 percent of all mobile connections in
2008 and it is expected to grow to more than 96 percent of the connection base by
2013, surpassing 741 million versus 312 million in 2008.

Mobile operators are now offering lower tariffs. To offset lower revenues, will
they opt for VAS solution providers that are more affordable? What is going to
be Comverse's strategy to remain competitive in this space?

The Indian telecom scenario has indicated very low tariffs for subscribers. Revenues
from calls are diminishing. Therefore operators would be looking at value added
services in order to increase their ROI's.

For most telecom operators, VAS is very important today, they are now turning to
value-added services as a way to boost revenue and margins. Therefore there are very
few chances that the operators will slash prices. VAS is going to act as a differentiator
for these operators. Operators have emphasized their dependency and are looking at
VAS as a savior. Also there has been no decline in consumption among VAS
consumers. In fact, the mobile VAS market in India is set to grow at 16.6 percent
each year until 2015, according to Frost & Sullivan.

To be successful, operators should look for VAS solution providers that have a track
record in deploying innovative services that drive usage and therefore, revenue. Our
strategy is to stay committed to be the global partner-of-choice in providing
productized solutions and services that make the operators' networks smarter to
unleash the maximum value for their customers. With our track record and
experience, we believe we are well-positioned for competition:

There are more than 500 communication and content service providers in over 130
countries who use Comverse solutions to serve more than two billion subscribers.

Comverse Mobile Internet Gateway (MIG) has been deployed for more than 60
operators worldwide, and today handles more than a third of US mobile Internet
traffic.

Comverse ONE Billing & Active Customer Management solutions serve 500 million
subscribers worldwide, and support 18 of the world's 25 largest telecom providers.

Comverse Global Services offer the cumulative knowledge, skills and expertise of
Comverse professionals who use best practices and established methodologies to
successfully launch and maintain Comverse solutions in various markets and
operational environments.

Could you give a few examples of how Indian telecom operators have benefited
from Comverse's solution?

Comverse continues to be the dominant billing vendor in rapidly-growing India. As

India is a fundamentally prepaid market, Comverse's real-time solution is well-
received by local operators

Comverse ONE Real-Time Billing is part of the Comverse ONE Converged Billing &
Active Customer Management BSS Solution and gives operators the ability to offer a
broad set of new subscriber services through advanced real-time rating and charging.
It enables operators to customize marketing and promotional campaigns to encourage
service usage among its subscribers. Comverse ONE differentiates the operator from
other telecom providers by offering flexible billing models and a 360-degree view of
the customer, regardless of touch point.

Comverse ONE is a truly converged BSS solution that supports any type of payment,
such as prepaid, postpaid or hybrid, as well as creates and delivers any service over
any network. Comverse ONE provides better time to market with operational cost
efficiencies due to its unified, highly efficient open architecture, based on a single
software code built around a single data model and one product catalog.

Comverse ONE's market leading in-network prepaid capabilities can be enhanced

with customer management capabilities-including self-service. When an operator is
ready to move to a fully converged system, a smooth migration path is available.

We are confident that given our strong local presence, proven track record in India,
and powerful product, we can give Indian operators the robust BSS it requires for a
fast, effective launch, and to accelerate and maintain its subscriber growth, now and
when it is ready for converged services.

Some prominent Indian operators such as Bharti, Reliance, Vodafone & Aircel have
deployed Comverse Billing & VAS solutions for voice, messaging etc.