(20 March 2009 9:15 pm)

NEW DELHI: The value-added services (Vas) sector is feeling suffocated under the muscle power of the telecom majors.

"Telecom operators are reluctant to be innovative with content. They go with music content which guarantee users. These challenges have paralysed the growth of the Vas industry, said One97 managing director Vijay Shekhar Sharma, while speaking at Convergence India here today.

Though music is the key driver for Vas in India, there is a huge royalty charge that comes along with it. "Music generates a revenue of $500 million revenue for operators while SMS contributes $400 million. The pricing for Vas services is very high, which only aggravates the problem,” said Sharma.

BDA managing director Kunal Bajaj said that mobile advertising has not caught on in India. Besides, brands are not interested in SMS advertising as it fails to generate brand loyalty. Also, telecom operators are unwilling to share subscriber data, leaving Vas operators clueless with the exact number of users to target.

“Telecom operators are not open to the idea of adapting new content or even investing in content. Further, the monopoly of telecom operators in terms of revenue share also leads to a tiff between them and Vas companies. Finally, pricing is a major issue for subscribers not opting for Vas,” explained CanvasM CEO Jagdish Mitra.

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