Blog Post

@TiE-ISB Connect: "VAS Is Not Going To Work"; Price Above Privacy In Mobile Advertising

Anil Raj of Packet Mobile feels that device fragmentation is hampering the creation of mass applications for the mobile – the user interface is not standardised; it takes far too many steps to install apps; the only successful apps are those where one entity – like blackberry email or Push To Talk on Motorola (NYSE: MOT) – has end-to-end control. The real opportunities in mobile: transaction security, relevance (search results), location (high value information). Mahesh Murthy, of Seed Fund and search marketing firm Pinstorm, feels that there’s no significant business potential in VAS because the operators control everything. He’s not too happy with the iPhone being locked – the control now being with the device manufacturers. “Until something breaks the back of mobile operators, VAS is not going to work.” He believes advertising is the driving force in this space; around 600 crores alone. That thought was echoed by Sameer Sood of Google, (NSDQ: GOOG) envisioning a situation where SMS is free. There are 25 Billion SMS’ being sent today.

Asked about how one can make a dent in the newspaper (traditional media) model, Vani Kola of NEA Indo US Ventures said that there’s no competition as such since advertising in all media is growing. There’s hardly any local advertising in tradition media, so there’s an opportunity there. Murthy was a little bearish on mobile (search) advertising – said that for every 100 responses they (Pinstorm) get on the Internet, they see three on mobile; the cost of words is much higher for mobile search marketing. On targeting the bottom of the pyramid, Anil Raj added that there’s an opportunity in ad-supported services because in India, privacy is below price point. From there on, the discussion went into regulatory issues, including the slow uptake of broadband. Focusing (yet again) on policy, rather than consumer needs, Ashhar Farhan of Phonestack blamed BSNL: The government had an aggressive rollout strategy, he said, but BSNL alone had the mandate of a rollout…they announced big plans, brought down prices, but have done little. An interesting stat from A. R. Vishwanath of IMImobile: Airtel has 10 million subs using Caller Ring Back Tones, while BSNL has 1 million subs in North Zone. For Rs. 30 a month per sub, that means around Rs. 300 crores from CRBTs for Airtel alone.