A Value Added Service or VAS refers to a telecom service provider’s non-core offering that provides value to customers. Suppliers aim to enhance the customer experience through their content that aims to entertain or inform.
Value Added Services have come a long way since their inception and hold limitless potential in emerging markets. They can easily transform the telecom industry with innovations in application that can drive higher ARPU (average revenue per unit).
With the growth of internet technologies and the evolution of consumer behaviours and data accessibility, VAS has grown too. About a decade ago, telecom companies leveraged VAS to generate higher revenue from their customer base. Now, telecom companies have moved to apps and create different finance models for revenue generation.
Telecom companies a few years back demanded a revenue share from OTT platforms and app makers like Facebook and Google. These applications use the MNO’s services to reach their audience. Network operators have long pushed for regulations related to OTT platforms that allow differential pricing within their revenue model. An example of this was seen when Netflix in Europe began to charge a higher rate for its HD quality content, while standard users received SD quality output. The context was different, in a post-Covid world, but the result was the same.
Meanwhile, internet companies opposed this move on the pretext that it borders on censorship. Telecom companies are allowed to charge for data usage, but they cannot have a say in what this data is used for to protect the freedom of consumers. As technologies advance, the laws governing telecom companies might evolve, but for a long time, VAS had been reduced to the sidelines.
Smartphones and data have become an imperative part of almost every stratum of society. This includes both urban and rural landscapes. With this level of smartphone and data penetration, there are new possibilities and innovations to be explored when it comes to VAS and other revenue generation streams.
What is MVAS?
Mobile VAS or MVAS is made up of every service that end customers receive besides standard voice calling. According to this definition, P2P SMS services are also a part of MVAS. But today, these functionalities have become fundamental and are minimum requirements that every MNO must provide. The current dominant categories besides SMS services that MNOs offer are music, entertainment, mobile browsing, gaming and caller tune settings.
The first boom in mobile subscriptions was from urban and Tier 1 cities. The next boom is predicted to start in rural and semi-urban regions. For VAS to remain relevant and continue to provide value to customers, it is important that they offer VAS solutions that make customers’ lives easier. This change has resulted in the introduction of Utility MVAS.
What is Utility MVAS?
MVAS (Mobile Value Added Services) that aim to empower customers digitals through efficient and instant access to essential services are classified as utility MVAS. They help in inclusive growth and instant information access for customers.
The Importance of Digital Empowerment:
A digital divide is a term that commonly refers to the intangible distance between individuals and communities that have access to information and digital technology and those that have limited access, if at all. It entails the existing imbalance both with respect to physical access to digital technology as well as awareness about the skills and resources needed to become a full-fledged digital citizen. Before the mobile phone era, this divide was distinct and enormous. As mobile devices soared in adoption and saw price drops, technology access is now for everyone.
The divide that exists today has more to do with citizens accessing quality services, amenities and infrastructure. With digital technology, users are empowered to overlook the barriers that geography, time and economy pose and access basic services. This includes education, healthcare, financial aid and governance. It is also imperative that these services are offered in real-time in a manner that is uniform, cost-effective and efficient. These services need to be accessible not only in rural areas but also to marginalized or disadvantaged groups living in urban areas. This process of equitable and efficient access to essential services is known as digital empowerment.
This is a term used in reference to economic development that occurs at a uniform, consistent and sustained pace across different population cross-sections. By definition, this term stresses the growth of financially disadvantaged groups and communities within society. However, it also aims to cover new initiatives that allow uniform delivery of services and solutions to every socio-economic class.
Private and government enterprises need to pay attention to more inclusive connectivity and growth so that sustainable national economic growth is ensured. Government agencies should consider that utility MVAS can play a significant role in effectively and efficiently delivering essential services across sections of society. Private enterprises need to look at MVAS for fostering inclusive growth and providing a long-term perspective on getting more sections of civil society to aim towards economic growth.