In VAS Industry, Operator Is The King

The Financial Express: Revenue share has been a major issue grappling the value added services business in Indian telecom. Content providers have little say in such matters. The operators have the access to the customers so they call the shots. The story highlights some of these issues:

VAS is expected to account for about 9 per cent of mobile revenues in 2005. But operators, turning to VAS to boost their average revenue per user (ARPU), continue to retain a bulk of the revenue with only an average of 25 per cent to 35 per cent going to VAS providers of ringtones, wall papers, text-based information, videos, and games.
Ringtones and wallpapers are at the lower end of VAS attracting 25% or even lower revenue share. However, in instances, where the ringtone is very popular the share can be higher, says a content player. In gaming, the revenue share can be 50% or even higher.

According to Indiagames founder and director, Vishal Gondal, operators are willing to pay 65 per cent of revenue for premium content. -

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