THE PROJECT REPORT ON CONSUMER PREFERENCE OF VAS (VALUE ADDED SERVICES) OF PREPAID MOBILE PHONES AT

SUBMITTED TO

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ACKNOWLEDGEMENT
A person always requires guidance and help of others to achieve success in his mission. Similarly it was not possible for us to complete our project

individually. We are very thankful to all the people who have helped us to complete the project. We are grateful to Ms. (marketing deptt.) our trainer for Providing us the necessary help , editing our project and also for the valuable time that she gave us from her busy schedule. Last but not least, we would like to thank our all friends who inspire us and provide Accurate information to us.

TABLE OF CONTENTS

PART-A

1. Executive Summary 2. Introduction of telecom industry --Major players in the market --Major market trends --History of telecom industry --Constraints 3. Introduction to the company --Companys profile -- Vision & Mission 4. Introduction to VAS -- Meaning & Definition -- Characteristics -- Types of VAS -- How it is provided 5. Market efforts regarding VAS 6. Market size

PART-B
Objectives of research . Research Methodology Analysis & Interpretation of Questionnaire Conclusion Suggestion & Recommendations References & Bibliography

Executive Summary
The mobile subscriber base is growing at a scorching pace in India, India is now the 5th country in the world to have crossed the 100 million mark in subscriber base and has in the last two months become the fastest growing mobile market in the world. As average revenue per user decrease from voice drops, and voice

becomes commoditized, Telcos are increasingly looking at data as an additional revenue stream. The end users have also embraced VAS and it contributes between 5-10% of the revenues of different Telcos. The report includes Current scenario of Indian Telecom Industry subscribers ,trend ,issue &challenges etc., Global Vas Market , Value Added Services in India its evolution and valuec h a i n , C o n t e n tCreation, EnterpriseMessaging Services,Technology, Mobile, Media & Entertainmentand VAS in Future. Thus Mobile VAS has become an important element in the growth of mobile telephony in India. Yet it is also equally true that there is little clarity on business issues and growth seems to be driven by more by inherent market momentum than a concentrated effort on the part of the stakeholders; differences exist even on basic issues like definition for Mobile VAS

INTRODUCTION TO TELECOM INDUSTRY IN INDIA

The telecom network in India is the fifth largest network in the world meeting up with global standards. Presently, the Indian telecom industry is currently slated to an estimated contribution of nearly 1% to Indias GDP.

The Indian Telecommunications network with 110.01 million connections is the fifth largest in the world and the second largest among the emerging economies of Asia.Today, it is the fastest growing market in the world and represents unique opportunities for U.S. companies in the stagnant global scenario. The total subscriber base, which has grown by 40% in 2005, is expected to reach 250 million in the next few years.According to Broadband Policy 2004, Government of India aims at 9 million broadband connections and 18 million internet connections by 2015. The wireless subscriber base has jumped from 33.69 million in 2004 to 62.57 million in FY2004-2005. In the last 3 years, two out of every three new telephone subscribers were wireless subscribers. Consequently, wireless now accounts for 54.6% of the total telephone subscriber base, as compared to only 40% in 2003. Wireless subscriber growth is expected to bypass 2.5 million new subscribers per month by 2007. The wireless technologies currently in use are Global System for Mobile Communications (GSM) and Code Division Multiple Access (CDMA). There are primarily 9 GSM and 5 CDMA operators providing mobile services in 19 telecom circles and 4 metro cities,covering 2000 towns across the country.

MAJOR PLAYERS IN THE MARKET

There are three types of players in telecom services: -State owned companies (BSNL and MTNL) -Private Indian owned companies (Reliance Infocomm, Tata Teleservices,) -Foreign invested companies (Hutchison-Essar, Bharti Tele-Ventures,

Escotel, Idea Cellular, BPL Mobile, Spice Communications)

MAJOR MARKET TRENDS

The telecoms trends in India will have a great impact on everything from the humble PC, internet, broadband (both wireless and fixed), cable, handset features, talking SMS, IPTV, soft switches, and managed services to the local manufacturing and supply chain.

HISTORY OF INDIAN TELECOMMUNICTIONS

Year 1851 First operational land lines were laid by the government near Calcutta

(seat of British power) 1881 Telephone service introduced in India

1883 1923

Merger with the postal system Formation of Indian Radio Telegraph Company (IRT)

1932 Merger of ETC and IRT into the Indian Radio and Cable Communication Company (IRCC) 1947 Nationalization of all foreign telecommunication companies to form the Posts, Telephone and Telegraph (PTT), a monopoly run by the government's Ministry of Communications

1985

Department of Telecommunications (DOT) established, an exclusive provider of domestic and long-distance service that would be its own regulator (separate from the postal system) 1986 Conversion of DOT into two wholly government-owned companies: the Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas. 1997 Telecom Regulatory Authority of India created.

1999 Cellular Services are launched in India. New National Telecom Policy is adopted. 2000 DoT becomes a corporation, BSNL

Factors driving VAS

Booming economy
India has maintained its position as the second-fastest growing major economy after China, as rising consumer and government spending taking place. Consumption and infrastructure spending are driving the growth. This booming economy has created job opportunities and increased the spending power of an

average Indian. This has resulted in higher disposable incomes and faster acceptance of new technologies with a willingness to spend for them.

Increasing comfort levels with basic mobility services

There is now a critical mass of users in the Indian mobile telephony market who are experienced mobility users. These users are very comfortable in using their phones and want to exercise the option of doing more on them beyond basic voice applications. The first phase of growth for VAS has come in from these converts; and these users will continue to drive the market and evolve into more advanced applications. At the same time the basic VAS applications will also continue to appeal to the new mobility category initiates.

Reduction in call rates & CPP initiation

CPP (Calling Party Pays) was an important initiative which unshackled the mobility market and allowed many more subscribers to enter the mobility category. This initiative, in conjunction with the gradual reduction in call rates has ensured that the expenditure on voice for a typical user has gone down over the years. As a result more users have become comfortable in spending on VAS as it does not significantly impact their overall outlay on mobility

COMPETETORS
BSNL

On October 1, 2000 the Department of Telecom Operations, Government of India became a corporation and was renamed Bharat Sanchar Nigam Limited (BSNL). BSNL is now Indias leading telecommunications company and the largest public sector undertaking. It has a network of over 45 million lines covering 5000 towns with over 35 million telephone connections. The state-controlled BSNL operates basic, cellular (GSM and CDMA) mobile, Internet and long distance services throughout India (except Delhi and Mumbai). BSNL will be expanding the network in line with the Tenth Five-Year Plan (1992-97). The aim is to provide a telephone density of 9.9 per hundred by March 2007. BSNL, which became the third operator of GSM mobile services in most circles, is now planning to overtake Bharti to become the largest GSM operator in the country. BSNL is also the largest operator in the Internet market, with a share of 21 per cent of the entire subscriber base

BHARTI
Established in 1985, Bharti has been a pioneering force in the telecom sector with many firsts and innovations to its credit, ranging from being the first mobile service in Delhi, first private basic telephone service provider in the country, first Indian company to provide

comprehensive telecom services outside India in Seychelles and first private sector service provider to launch National Long Distance Services in India. Bharti Tele-Ventures Limited was incorporated on July 7, 1995 for promoting investments in telecommunications services. Its subsidiaries operate telecom services across India. Bhartis operations are broadly handled by two companies: the Mobility group, which handles the mobile services in 16 circles out of a total 23 circles across the country; and the Infotel group, which handles the NLD, ILD, fixed line, broadband, data, and satellite-based services. Together they have so far deployed around 23,000 km of optical fiber cables across the country, coupled with approximately 1,500 nodes, and presence in around 200 locations. The group has a total customer base of 6.45 million, of which 5.86 million are mobile and 588,000 fixed line customers, as of January 31, 2004. In mobile, Bhartis footprint extends across 15 circles. Bharti Tele-Ventures' strategic objective is to capitalize on the growth opportunities the company believes are available in the Indian telecommunications market and consolidate its position to be the leading integrated telecommunications services provider in key markets in India, with a focus on providing mobile services.

MTNL

MTNL was set up on 1st April 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, introduce new services and to raise revenue for telecom development needs of Indias key metros Delhi, the political capital, and Mumbai, the business capital. In the past 17 years, the company has taken rapid strides to emerge as Indias leading and one of Asias largest telecom operating companies. The company has also been in the forefront of 5 technology induction by converting 100% of its telephone exchange network into the state-of-the-art digital mode. The Govt. of India currently holds 56.25% stake in the company. In the year 200304, the company's focus would be not only consolidating the gains but also to focus on new areas of enterprise such as joint ventures for projects outside India, entering into national long distance operation, widening the cellular and CDMA-based WLL customer base, setting up internet and allied services on an all India basis. MTNL has over 5 million subscribers and 329,374 mobile subscribers. While the market for fixed wireline phones is stagnating, MTNL faces intense competition from the private playersBharti, Hutchison and Idea Cellular, Reliance Infocommin mobile services. MTNL recorded sales of Rs. 60.2 billion ($1.38 billion) in the year 2002-03, a decline of 5.8 per cent over the previous years annual turnover of Rs. 63.92 billion.

RELIANCE INFOCOMM
Reliance is a $16 billion integrated oil exploration to refinery to power and textile conglomerate. It is also an integrated telecom service provider with licenses for mobile, fixed, domestic long distance and international services. Reliance Infocomm offers a complete range of telecom services, covering mobile and fixed line telephony including broadband, national and international long distance services, data services and a wide range of value added services and applications. Reliance IndiaMobile, the first of Infocomm's initiatives was launched on December 28, 2002. This marked the beginning of Reliance's vision of ushering in a digital revolution in India by becoming a major catalyst in improving quality of life and changing the face of India. Reliance Infocomm plans to extend its efforts beyond the traditional value chain to develop and deploy telecom solutions for India's farmers, businesses, hospitals, government and public sector organizations. Until recently, Reliance was permitted to provide only limited mobility services through its basic services license. However, it has now acquired a unified access license for 18 circles that permits it to provide the full range of mobile services. It has rolled out its CDMA mobile network and enrolled more than 6 million subscribers in one year to become the countrys largest mobile operator. It now

wants to increase its market share and has recently launched pre-paid services. Having captured the voice market, it intends to attack the broadband market.

TATA TELESERVICES
Tata Teleservices is a part of the $12 billion Tata Group, which has 93 companies, over 200,000 employees and more than 2.3 million shareholders. Tata Teleservices provides basic (fixed line services), using CDMA technology in six circles: Maharashtra (including Mumbai), New Delhi, Andhra Pradesh, Tamil Nadu, Gujarat, and Karnataka. It has over 800,000 subscribers. It has now migrated to unified access licenses, by paying a Rs. 5.45 billion ($120 million) fee, which enables it to provide fully mobile services as well. The company is also expanding its footprint, and has paid Rs. 4.17 billion ($90 million) to DoT for 11 new licenses under the IUC (interconnect usage charges) regime. The new licenses, coupled with the six circles in which it already operates, virtually gives the CDMA mobile operator a national footprint that is almost on par with BSNL and Reliance Infocomm. The company hopes to start off services in these 11 new circles by August 2004. These circles include Bihar, Haryana, Himachal Pradesh, Kerala, Kolkata, Orissa, Punjab, Rajasthan, Uttar Pradesh (East) & West and West Bengal.

VODAFONE
Hutchs presence in India dates back to late 1992, when they worked with local partners to establish a company licensed to provide mobile telecommunications services in Mumbai. Commercial operations began in November 1995. Between 2000 and March 2004, Hutch acquired further operator equity interests or operating licences. With the completion of the acquisition of BPL Mobile Cellular Limited in January 2006, it now provides mobile services in 16 of the 23 defined licence areas across the country. Hutch India has benefited from rapid and profitable growth in recent years. it had over 17.5 million customers by the end of June 2006.

IDEA
Indian regional operator IDEA Cellular Ltd. has a new ownership structure and grand designs to become a national player, but in doing so is likely to become a thorn in the side of Reliance Communications Ltd. IDEA operates in eight telecom circles, or regions, in Western India, and has received additional GSM licenses to expand its network into three circles in Eastern India -- the first phase of a major expansion plan that it intends to fund through an IPO, according to parent company Aditya Birla Group .

CONSTRAINTS
Slow pace of the reform process . It would be difficult to make in-roads into the semi-rural and rural areas because of the lack of infrastructure. The service providers have to incur a huge initial fixed cost to make inroads into this market. Achieving break-even under these circumstances may prove to be difficult.

 The sector requires players with huge financial resources due to the above mentioned constraint. Upfront entry fees and bank guarantees represent a sizeable share of initial investments. While the criteria are important, it tends to support the existing big and older players. Financing these requirements require a little more liberal approach from the policy side. Problem of limited spectrum availability and the issue of interconnection charges between the private and state operators Despite several hiccups along the way, the Telecom Regulatory Authority of India (TRAI), the independent regulator, has earned a reputation for transparency and competence. With the recent resolution of a major dispute between cellular and fixed operators (see below), Indian telecommunications, already among the most competitive markets in the world, appears set to continue growing rapidly.

INTRODUCTION OF THE COMPANY

Introduction HFCL is a part of HFCL group, established in 1987, Himachal Futuristic Communication ltd has developed a vast base for manufacturing indigenous

Telecom equipment in India. It started with manufacturing transmission equipment And expand its product portfolio to optical fiber cable, Accessories and terminal equipment. About the company Infotel provides a world class telecom experience when it comes to technology products. Customer satisfaction. It launched in Punjab in 2000 under brand name CONNECT. It has set up state of the art networks with An extensive optical fiber networks coverage over 3500km. today it is one of the \ Punjabs leading private sector t-c service provider with an aggregate customer base of 5,55,155 as an march 31,2009.

Our Vision
'To be the most admired telecommunication and infotainment services brand through innovation and excellence.'

Our Mission

"Deliver cutting edge telecommunication and infotainment products &

services through convergent digital technologies, ensuring customer

delight."

Driving Growth
The growth in sales for the first quarter of this fiscal was 9.6%, but the profit after Tax went up by a huge 205%. The company continued its good performance in the second quarter. Sales grew by 80% and the net profit by 98%. The company has

maintained its operating profit margin (OPM) at around 22.6%. Interest charges have gone up 35% to Rs 9.06 cr as compared to Rs 6.71 cr in the same period of the previous year. Depreciation has gone up 75% to Rs 3.15 cr. Provision for taxation shall be made in the annual accounts.

Future Plans
HFCL is close to acquiring majority stake in Essar Commvision, the licence holder for operating basic telecom services in Punjab. In early Dec.99, HFCL decided to make a private placement of equity shares at a premium. The offer would be made to promoters, members, employees, debenture holders, banks, FIs, mutual funds, NRIs, FIIs, OCBs, etc. For the FY ending Mar. 2000, HFCL has set a turnover target of Rs 575 cr and a net profit target of Rs 80 cr. Even if the company can achieve the same turnover and profit as in third quarter, it will achieve its target.

Financial Structure
The company has proposed to raise Rs 700 cr, which will be used to retire debt and meet working capital needs. It also plans to invest Rs 100 cr in the software development business and research and development. HFCL has orders worth more than Rs 2,500 cr on hand to be executed over 1 to 3 years, which include orders from the Department of Telecommunications, Mahanagar Telephone Nigam and also from private sector for turnkey execution of telecom contracts.

INTRODUCTION TO THE VAS

A value-added service (VAS) is popular as a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions but, it can be used in ANY service industry (eg. Web 2.0) for the services providers provide for no cost to promote their main service business. In telecommunication industry on a conceptual level, value-added services add value to the standard service offering, spurring the subscriber to use their phone more and allowing the operator to drive up their ARPU. For mobile phones, while technologies like SMS, MMS and GPRS are usually considered value-added services, a distinction may also be made between standard (peer-to-peer) content and premium-charged content.

VOICE BASED VAS

(Available in both landline and mobile telecom system) a landline - voice based ring tone In download facility, three party conference Tele- Horoscope/ Tele- Astrology Music-on-demand News-on-demand Opinion polls Quiz/ Contests City Infoline, etc

NON VOICE BASED VAS

SMS, MMS, e-mail, advanced video features, peer to peer video sharing, etc taking part in the contests in TV through SMS Voice based SMS for blind people. subscribe Bollywood clips & ringtones Cricket and Games Dynamo Kid

VAS- Definition
Mobile value-added services (VAS) are those services that are not part of the basic voice offer and are availed off separately by the end user. They are used as a tool for differentiation and allow the mobile operators to develop another stream of revenue. The nature of value added services change over time. A VAS may become commoditized and becomes so common place and widely used that it no longer provides meaningful differentiation on a relative basis. For example several mobility operators & other stakeholders in the industry no longer consider P2P SMS as a form of VAS. However for the purpose of estimating the market size we have taken P2P into account, though we also feel that P2P SMS is ceasing to be a meaningful tool for service differentiation.

Category Entertainment Info

Characteristic designed for mass appeal

Example

M-Commerce

Games, Caller Ring Back Tone (CRBT), music download. characterized by the SMS Missed Call Alert useful information (MCA), Stock Update, Location Based Service (LBS). services involving M-banking and m-payment monetary transaction using the mobile phone

CATEGORY OF THE VAS

HOW IS IT PROVIDED
Value-added services are supplied either in-house by the mobile network operator themselves or by a third-party value-added service provider (VASP), also known as a content provider (CP). VASPs typically connect to the operator using protocols like Short message peer-to-peer protocol (SMPP), connecting either directly to the short message service centre (SMSC) or, increasingly, to a messaging gateway that allows the operator to control and charge of the content

CUSTOMERS OPINION TOWARDS VAS

Customers continuously want more from their phone. They use their cellular phones to play games, read news headlines, surf the Internet, keep a tab on astrology, and listen to music, make others listen to their music, or check their bank balance. Thus, there exists a vast world beyond voice that needs to be explored and tapped and the entire cellular industry is heading towards it to

provide innovative options to their customers. Spoilt by choice, the mobile phone subscribers are beginning to choose their operators on the basis of the value added services they offer. The increased importance of VAS has also made content developers burn the midnight oil to come up with better and newer concepts and services. To understand that where this industry is at present and where it is headed, IAMAI and IMRB International have jointly prepared the Mobile VAS Report to focus back stage and uncover the trends in the cellular industry, current market status, value chain, competition, market dynamics & expected roadblocks. This is the first publicly available study on Mobile VAS in India and the insights provided herein can be used by both the mobile operators and the content providers to better address the needs of their customers. A timely and strategic action would help nurture the mobile VAS market in India.

The Role of VAS

This is where the role of VAS (Value Added Services) comes into focus. Operators are facing cutthroat competition and with the call rates in India being one of the cheapest in the world, the margins are very low. Therefore they are looking at VAS as the next wave for growth. It has become the flywheel of telecom growth and a large chunk of revenue for operators is likely to come from VAS services in the years to come. But it is not only effort from operators which is driving the growth of VAS, there are other factors contributing to it. The growth of VAS in India has been helped both by macro level environmental factors and specific market initiatives to develop this category.

Value-added Service Characteristics

All VAS share the same characteristics: Not a form of basic service but rather adds value total service offering Stands alone in terms of profitability and/or stimulates incremental demand for core service(s) Can sometimes stand alone operationally Does not cannibalize basic service unless clearly favorable Can be an add-on to basic service, and as such, may be sold at a premium price May provide operational and/or administrative synergy between or among other services not merely for diversification Every VAS will demonstrate one or more of the above characteristics.

Furthermore, a value-added service will never stand in stark contrast to any of the above characteristics. VAS also have a certain time dimension associated with them. Subjectively speaking, a value-added service today becomes a basic service when it becomes sufficiently common place and widely deployed to no longer provide substantive differentiation on a relative basis.

Market efforts driving VAS

For the operators, success of VAS has become important for their growth. This has led to a sharp focus on marketing & tie-ups and a somewhat limited focus on development of content. Most operators are now trying to innovate in their VAS offerings and create sharper differentiation for their offerings.

Video Tones
In terms of tone preferences, video tones attracted a lot of attention, around 46% of

respondents would like to subscribe to a service where they can view videos of their favourite songs when the phone rings.

Focus on movies & music

Movies & Music are the passion of India. Most of the rich content available to the end users revolves around these two, with Ringtones of popular Bollywood songs, Wallpapers of movie leads and games developed around movie themes. Given that Youth account for a large of users & also dominate the prepaid category, the focus on entertainment has been a strong hook to develop the VAS category and operators & content aggregators have been sharply focused in their efforts to pluck this low hanging fruit It has been helpful that the film industry in India is very prolific and there are endless options to develop content around

MS contests
Television is another culturally entrenched constant in the life of the average Indian. Typically TV viewing has been a passive affair, however following the global trend TV channels have been focused on making programming interactive.

Thus programs, especially music & contest shows have started giving the option to their viewers to participate through SMS. A popular show like Kaun Banega Crorepati (KBC) generated 58 million SMS over a 3 month period.

Current market size

The current market as of November 2009 for mobile VAS in India is estimated at Rs. 2850 crore.

Composition of VAS Revenue

Game & Data 7% Others 3% Ringtone Download 35%

3% 7% Others Games &Data 35% Ringtones download

Games & Data: Games include download of one play games offered by Reliance

& full play games offered by other operators; Data include download of wallpapers & logos.

Others Include MMS (Multi Media Messages) & subscription charges for WAP servicesThough the mobile subscriber base has grown by over 95% (August 06 over August 05) we believe that the relative growth in VAS revenues will be lower. As the current focus by mobile telephony operators is on adding subscribers, many low value users are now entering the category and are not likely to contribute significantly to the growth of VAS. Overall the growth in 2007 will continue to be driven by Ringtone downloads and by games; the share of games in the overall pie is also expected to grow. market is The current VAS

expected to grow by 60% for the next year and at the end of 2007 should be close to Rs 4560 crore.

Challenges to the growth of VAS in India

There are several major challenges which need to be overcome for sustained growth to be initiated. The major challenges that need the immediate attention of key stakeholders are:

Focus only on youth and entertainment

Usage of VAS has not spread evenly across demographic profile of customers. Currently the youth segment is driving the VAS market as can be seen from the rapid growth of Entertainment VAS (mass service) and not so rapid growth of mCommerce and Infotainment VAS (customized service). In light of this trend the stakeholders are also playing safe and concentrating on mass services for which content is easily available and chances of failure is less. But this has hampered the growth of other services which are not getting enough time, effort and

investment from the players. For the VAS market to bloom fully, applications need to be created for niche segments, as these are the services which will create real value for the subscribers.

Lack of Infrastructure
There are a lot of services which cannot be introduced in India because of lack of supporting infrastructure. E.g., Absence of location based VAS. Location based VAS is still not possible due to the lack of digitized map of India. Applications like live video-sharing are yet to arrive in the Indian market. In evolved markets like Finland & Korea, a user can shoot his own video and simultaneously show it to his friend in some other city. This kind of application would take some time to arrive in India. To avail of new and high end VAS, technologies like 3G need to be installed. However, 3G networks are not mere upgrades of 2G networks; rather, entirely new networks need to be built and frequencies need to be assigned to mobile operators.

Preference for low feature handsets

Though the mobile subscriber base is growing, a large chunk of the market is opting for basic low feature handsets in spite of the fact that handset prices are coming down. There is a mindset to purchase the handset for basic utility service which is voice. But these handsets are not in a position to support a large number of VAS. Since in many VAS like MMS, both the sender and receiver handsets need to support MMS, the scope of such VAS gets limited This is further impeding the introduction of high end VAS. There are many services which are not performing to their potential despite their usefulness and there are some which cannot even be introduced.

Costly to the end user

Currently the cost of most VAS is high. This is mainly because of the fact that VAS market is lead by Entertainment VAS which has a high perceived value. People are paying for it as they perceive it highly but over a period of time as they get used to it, the willingness to pay high amounts may come down. We feel that a market correction in VAS cost to end user will result in higher usage both in terms of customers and their frequency of usage.

Absence of utility services

These are those services which have a high practical value. But currently due to lack of familiarity & awareness from the end-usr and lack of investment, effort and marketing from the suppliers side is resulting in very few such services being available in India. Such services mainly fall in the category of mCommerce and to some extent Infotainment comfortable Customers are also currently not

with mCommerce. As the comfort level increases which can be brought about by encouraging government action like robust policies, laws etc,

The future of VAS in India

In India, VAS will see a lot of structural changes, consolidation and emergence of cutting edge services:

VAS in India:Past, Present and Future

VAS constitutes 7% of of total telecom revenue for Indian operators. SMS consituted 55% of VAS revenue in 2006 [P2P/A2P/P2A, A = Application, P=Person), the growth was majorly driven by reality shows like Indian Idol/Kelloggs/KBC etc. Digital music (including CRBT and ringtones) constitutes 35% of VAS revenue. CAGR of 44% (2007 2010), VAS revenues will reach USD 2,744 mn (926mn $ by 2007): This is dependent on several factors like regulatory (e.g. number portability) and non-regulatory factors. o Growth acceleration will begin in 2009, as various challenges are overcome, size of mature user base increases, and telco focus on high end user VAS heightens Bollywood and Cricket is the killer content - though no significant investment has gone beyond developing local apps or even content/services. Revenue share between telcos & content providers / aggregators is 70:30, substantially more skewed in favor of telco than in other countries - further aggravated by lack of payment mechanisms. SMS/IVR/Music downloads/Internet Apps/Search will see an upsurge; limited growth of UGC and mCommerce Almost half of Indians use ULCH (Ultra Low Cost Handsets)

Mobile operators will lose prominence in the value chain as the market for

Content Aggregators will consolidate and with their better bargaining power, this will ensure a revenue shift from Operators to Aggregators in the value chain. The

VAS market will reflect revenue sharing arrangement in markets like China more closely. In VAS content, we will see revenue from entertainment VAS come down from the levels. End users want control and interactivity and therefore the applications to look out for in future will be user generated content and mCommerce. However mobile gaming will continue to grow and will contribute a higher share to the VAS pie. Regional content is giving a significant boost to the content market especially in the entertainment category. Regional content is getting popular both in voice and non- voice services. Players have anticipated the trend and this is leading to regional content development. With increasing mobility penetration into the heartland of India, significant VAS revenues will be driven by regional content from B & C class towns. Internet on mobile will become a more feasible option as leading players in the internet content space especially configure their sites for access through mobiles;

this would be further strengthened by the new trend of .mobi domain being set up. Thus GPRS usage should pick up significantly

PART-B

OBJECTIVES
-To know the consumer preference towards value added services provided to the Consumers of different market operators of mobile phones.

-To know the business potential of mobile value-added services (M-VAS) base on the principles of customer interaction

-To know about the satisfaction level of customers and to know more about their

needs they expect from their service operators to be fulfilled.

- Identifying organizational needs and negotiations for services & products.

RESEARCH METHODOLOGY
1. After discussing with our project guide we formulated the problem as

consumer preference of mobile customers towards Value Added Services provided by different market operators of prepaid mobile phones.
2. RESEARCH DESIGN- Research design includes design regarding SAMPING PLAN Universe-All The citizens of Mohalli. Sampling Unit-An individual using value added services on prepaid mobile Sampling Size-130 respondants Sampling technique-Area sampling was used

RESEARCH INSTRUMENT
A questionnaire was prepared to collect the information. DATA COLLECTION METHOD
Primary data was collected from individuals and secondary data from

companys website.

3. DATA COLLECTION
Data was collected by meeting the people and retailers and show room owners personally and getting questionnaire filled from people.

4.ANALYSIS AND INTERPRETATION

The data collected was analyzed by using various graphs and the analysis was presented to help decision making.

ANAYSIS & INTERPRETATION

1. Which operators service do you use? BSNL Airtel Reliance Tata Indicom Idea Virgin TABLE Rating
BSNL Airtel Ping Reliance Idea

Vodafone Ping Percentage

28% 35% 5% 22.5% 9.5%

No. of respondents
56 70 10 45 19
10

45

19

70

56

Idea BSNL Airtel Reliance ping

INTERPRETATION
From the above analysis it is clear that in current survey 70% of the people use airtel , 56% are the users of BSNL, 45% of the Reliance. The lowest no of consumer are of the idea. Only 5% of the persons using Ping.

2. Which type of VAS do you like the most? Finance Astrology TABLE Rating CRBT Travel News Cricket No. of respondents 65 32 40 70 Percentage 30.4% 16% 20% 34% Games News Fun Cricket Wallpaper Ring tones Sports Travel

80 70 60 50 40 30 20 10

travel

Cricket

CRBT

News

INTERPRETATION
It is clear from the above information that most of the persons use cricket and 66% of the persons use CRBT ( caller ring back tones) and only a few persons use news and travel.

3.

Why do you choose this VAS service?

43

21

Like it to be in touch with latest trend Hobby SMS

15

INTERPRETATION
It is clear from the above graph that 43% VAS users are affected from VAS SMSs while 15% users prefer this service because of their related

hobby to value added services. 21% users sometimes like the plans offered by the company. So they prefer it. And 23% of the users take up the VAS plans to be intouch with the latest trends, news or current scenarios.

4.What is your monthly expenditure on VAS? 0-10 TABLE Rating 0-10 10-20 20-50 50-100
60

10-20

20-50

50-100

100 and above

No. Respondents 38 52 21 5

Percentage 32.7% 49% 18% 4%

50

40

30

20

10

Ten to 20

20-50

50-100

100-ab ove

INTERPRETATION
From the above diagram it is clear that 40% of the respondants spend Rs 10-20 ,55% respondants spend 20-50 ,23% of respondants spend 50-100 and 2% of respondants spend 100 and above. Most of the users spend between 20-50 5. From where do you get information regarding VAS? Retailers SMS promotion/OBD friends advertisement Any other TABLE Rating Retailers SMS Advertisement Friends No.of respondents 12 45 9 34 Percentage 12% 45% 9% 34%

Advertisem ent Retailers 9% 12%

Friends 34%

SMS 45%

INTERPRETATION
Most of the consumers get information regarding VAS from their friends. 34% of them get information through SMS. Rest of them get from the Retailers.

6. What kind of charges would you prefer or your VAS package? Daily TABLE Rating Daily Weekly Monthly No. of respondents 30 35 39 Percentage 28.84% 33.65% 37.5% Weekly Monthly Any other

40 35 30 25 20 15 10 5 0

Daily

Weekly

Monthly

INTERPRETATION
The above dig. Clears that most of the consumers like to spend on weekly basis.

7. Have you updated the latest VAS services provided to you? Yes No If yes how do you update it? SMS Calls E-Mail TABLE Rating Yes No No. of respondents 15 85
YES 15%

any other__________________

Percentage 15% 85%

INTERPRETATION

NO 85%

From the above dig we come to know that 85% of the consumers do not update the latest VAS services. Those who update it they update through SMS.

8. How would you rate the VAS provided to you? .*________*__________*_________*_________*_________*

Excellent very good good average poor very poor

TABLE Rating Excellent Very good Good Average

Airtel 35 38 10 07

Reliance 22 12 56 24

Idea 21 31 43 10

BSNL 28 38 45 04

Idea

21

31

43

10

Relaince

22

12

56

24

BSNL

28

38

45

airtel

35

38

10

20

40 excellent

60 verygood

80 good

100 average

120

140

INTERPRETATION
It is clear from the above diagram that the respondent of the Airtel are satisfied with their services. 38 of the consumer feel their service is very good, 35 feel it is excellent. Only 7 of them feel that their services are average. Most of the BSNL customers feel, 27.4 of their services are excellent. 46.9 of them feel their services are good.

9. Would you like to prefer two packages of VAS at a time if these are provided with discount? Yes TABLE Rating Yes No No. of respondents 33 67 Percentage 33% 67% No

70 60 50 40 30 20 10 0 yes no

1st Qtr 33 67

INTERPRETATION
From the above analysis it is clear that 67% of the respondants are not in the favour of preferring two VAS packages if these are provided on discount.On the other hand 335 respondants are ready to buy the discounted package of more than one VAS plans.

CONCLUSION
M-VAS is changing the role of most players across the telecom value chain, while also providing room for many new entrants, and requiring reconsideration of business model and partnership. In general, findings from market survey showed that customers perceive both get and give value dimensions. Specifically, for the customers, the most important get value is functionality value, and the least important is social value. It is true that due to new networks, high bandwidth availability, transition from circuits witched to packet networks, upgrades and

rollouts of 3G happening globally and mobile handset standards and technology supporting new formats (3G, SIP, etc.) the concept of value added services has changed a lot.

SUGGESTIONS AND RECOMMENDATIONS

An explosive subscriber and revenue growth, yet thin profit margin line has forced mobile service providers to look beyond voice based service. Be it a landline or mobile telephonic system value added services are acting as enabler to activate the falling revenue line of telecom service operators by providing bundle of non-voice based data services. The mobile operators must realize that the services that they create will only be accepted if they are delivering enhanced customer value in exchange for their perceived costs.

BIBLIOGRAPHY
INTERNET SOURCES www.hfcl.com www.airtel.com

LIBRARY SOURCES Research Methodology By C.R. Kothari Marketing Management By Philip Kotler

Survey on the consumer preference of VAS provided by different operators

Dear Sir/Madam, We are doing a brief survey to know about the consumer preference regarding different aspects of VAS. We would be grateful, if you could spare a few minutes to participate in it. Name_____________________ 1.Which operators service do you use? BSNL Airtel Reliance Tata Indicom Idea Virgin 2. Which type of VAS do you like the most? Finance Astrology Games News Fun Cricket Wallpaper Ring tones Sports Travel Contact no_________

Vodafone Ping

3. Why do you choose this VAS service? ________________________________________________ 4.What is your monthly expenditure on VAS?

0-10

10-20

20-50

50-100

100 and above

5. From where do you get information regarding VAS? Retailers SMS promotion/OBD friends advertisement Any other 6. What kind of charges would you prefer or your VAS package? Daily Weekly Monthly Any other

7. Have you updated the latest VAS services provided to you? Yes No If yes how do you update it? SMS Calls E-Mail any other__________________

8. How would you rate the VAS provided to you? .*________*__________*_________*_________*_________*

Excellent very good good average poor very poor

9. Would you like to prefer two packages of VAS at a time if these are provided with discount? Yes No

10. What are the other services you like to be included in VAS?