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EXCLUSIVES

Airtel, Aircel, Idea and Reliance Compete in Mobile Applications Market

India is the fastest growing mobile market in the world with over 500 million users. It stands second in the mobile user base worldwide behind China. Long gone are the days when the mobile phone was just another audio communication tool. They have now graduated to become an extension of the owner’s personality. With the capabilities smartphones comes equipped with, you can now execute you daily social networking activities, share photos taken with the in-built camera, microblog about traffic while you are on the road, all with the mobile phone.

Mobile applications are widely classified under the Value Added Services (VAS) family. In India, until recent times, VAS was dominated by handset manufacturers with very little competition from network operators. But that is all about to change with Airtel, Aircel, Idea Cellular and Reliance all announcing plans to launch online mobile application stores. VAS is now being identified as one of the important differentiating factors between network operators as users will now become spoilt for choice.

VAS also form an alternative revenue stream for the network operators. The increase in importance for VAS also opens up an additional business stream for content and application developers.

India's current economic status, with a 7+% rise in GDP, in relative to other economies worldwide has made it the ideal environment for the growth of VAS. This has resulted in higher disposable incomes and faster acceptance of new technologies with a willingness to spend for them.

Challenges VAS Faces in India

Currently applications used by the Indian mobile user base is mostly mobile manufacturer centric. This means a high degree of incompatibility bordering on non-availability of these applications to customers of other phone manufacturers. This will be one of the key challenges network operators will face in the initial stages of application development. They need to develop multi-platform applications to get to the largest audience.

A large group of India's mobile users live in the non-metro cities and use entry level phones that cannot support heavy applications. Targeting this segment with regional language-centric and SMS-oriented applications will guarantee a higher probability of acceptance.

Mobile applications in India mostly focus on providing entertainment via the rather than services with high practical value. Since VAS come at a cost it makes more sense to provide value outside entertainment, such as mCommerce (mobile commerce) and infotainment options.

The delayed entry of 3G services has hampered the adoption of VAS. In established VAS markets like the US and Finland, a user can shoot a video and share it with his friends in other cities instantly. Expect such applications on the Indian airwaves when the 3G auction happen later in 2010.

VAS Advancements in India

Telecom service provider Aircel has entered into a partnership with Infosys to launch its first network operator-controlled mobile application store in India. Aircel COO Gurdeep Singh says, "The application store will provide consumers greater choice for applications related to health, finance and entertainment."

Aircel will face stiff competition from their closest competitor, Idea Cellular, who has tied up with Spice Digital to launch a rival, MobStore, by June 2010. MobStore will be a centralized hub for a wide range of mobile applications with four main categories - information, entertainment, commercial and social networking - developed specifically for mobile phones.

Airtel has also announced a mobile application store, Airtel App Central, in collaboration with IBM. Its services spread across 25 categories and contain over 1250 applications with costs starting at 5 Rs. It has also opened the gates to a telco developers’ community - Airtel Open Developers Community (AODC) - to develop applications and services for the store. Airtel will provide the SDK to AODC members and train them in developing apps.

Not to be left behind, Reliance Communications intends to use its RWorld network to market its app store. RWorld has been positioned as World 2.0 to signify an upgraded version that will offer latest features. A content management system supporting latest features available on mobile handsets will compliment the new version of RWorld. The service delivery platform will be capable of supporting on-device portals, idle screens, widgets and RSS readers. The initial launch of Application Stores will support the company’s GSM subscribers and will be launched at the end of February 2010. For CDMA subscribers the App Stores will be available by end of March.

The President of Reliance Communications, Mahesh Prasad, says “It is our constant effort to offer our customers a ‘wow experience’ and with the launch of the Reliance Applications Store, we will be taking a giant leap in that direction. Applications Stores have benchmarked the overall VAS experience of customers globally, and the launch of Reliance Applications Store in India will provide consumers a broad selection of relevant, fun and exciting applications to choose from in the easiest possible way.”

With all these measures falling in place, the Indian VAS market is all poised to infiltrate the lives of the 500 million and increasing mobile users in India. It will prove a huge boost to GPRS services and an overall step ahead for the Indian telecom market.

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