Indians love their mobile phones. In fact, the number of mobile phone subscribers in India is nearly twice the number of landline subscribers — 90 million to almost 50 million — as of the last count from the International Telecommunication Union (ITU).

Naturally, adding mobile value added services (mobile VAS) to Indian users’ monthly bills represents a big opportunity for carriers.

According to the new "Mobile Services Value Added Report," prepared jointly by the Internet & Mobile Association of India (IAMAI) and IMRB International, mobile VAS will bring in nearly $1 billion by the end of 2007, rising from INR28.5 billion to INR45.6 billion.

A breakdown of the current total market (INR28.5 billion) shows that P2P SMS, or person-to-person text messaging, dominates the industry with INR11.4 billion in revenues, followed by ringtones, P2A (person-to-application) and A2P (application-to-person) services, games and data and all others.

"This is the first attempt at a market estimate for the industry and we are hopeful that government and industry will now look at the MVAS industry with the attention that is due," said Dr. Subho Ray, president of the IAMAI.

In order for the market to grow, three issues must be addressed:

  1. Revenue sharing and scheduling of payments, which currently lean heavily in favor of telecom operators, must be balanced more equitably
  2. Stable, long-term enabling policies must be established by the government
  3. Intra-industry issues such as IPR must be resolved
Dr. Ray emphasizes that unless these matters are positively settled, the mobile VAS industry in India will not be able to sustain its current growth.

Via eMarketer