Prashant Singhal The trends that can be expected in the value-added services segment could be mobile gaming, admission process over the phone, exam results, news telecasts on TV, movie downloads, full song downloads, print information made available on handsets, m-commerce, and many more.

How these trends can help increase ARPUs can be explained through an example. Today, the Class 10 CBSE exam results are made available on the phone. This is a value-added service. Along with these results, a Pizza Corner or McDonald’s could advertise a free meal for the exam toppers at one of their restaurants.

Therefore, service providers not only gain from the revenues generated by using the value-added services they offer, but also through the revenues generated by the advertisements that accompany these services. Increased ARPUs could be a direct result of this.

The important element clearly is to “own a customer” and “ensure reach to him” through this wireless device, and then sell all the products in the world to him and start increasing revenues.

Mahesh UppalOne would expect to see more and more data-based services, especially premium services. For example, gaming, interactive SMS for voting in TV polls and game shows. Cricket and movie-based entertainment services and online music are becoming quite popular and lucrative for service providers. Government and business use of SMS should expand considerably in the coming months given the extremely low cost of reaching target audiences.

What regulatory changes are needed to impact ARPUs positively?
Archana Sassan Less control by TRAI in areas like interconnection charges and ADC may have a positive impact on ARPU. Similarly, lower entry fees and revenue share licence fees will also help in improving ARPUs. However, ceasing all regulatory intervention in these areas may still take a long time and operators should not bank on this to achieve greater ARPUs. This is essentially because regulatory intervention is necessary to some extent to protect consumer interests, as India is still a developing market where higher access of communication network to all parts of the country at an affordable rate is a top priority.

Rajat Sharma Currently, there are no direct regulations that can impact ARPUs positively.

However, with a circle-wise licence fee reduction, the EBITDA earning for telecom service providers will increase, thereby offsetting the impact of lower ARPUs. Only such regulations can help the industry feel the heat less.

Prashant Singhal The regulatory environment focuses on the growth of the telecom industry overall.

The ultimate objective of this body is to increase the subscriber base and revenues.

By addressing problems such as spectrum allocation, AGR definition and rationalisation of licence fees or entry of MVNOs into the market, it can ensure continuity of the telecom revolution in India. This revolution would help increase the subscriber base, which would lead to an increase in the services offered. This would have a positive impact on ARPUs. Therefore, though the impact of the regulatory environment on ARPUs is indirect, it is, nevertheless, significant.

Mahesh UppalTRAI estimated recently that regulatory costs in India are among the highest in the world. So, what would make a difference is a reduction in regulatory costs such as licence fees, spectrum charges and import duties. Fees for licences and spectrum are levied as a percentage of operator revenues. If the percentage can be reduced to below 5 per cent, the savings could be significant. There is also a case for an increase in the mobile termination rates (MTR) paid to operators on whose networks a call gets completed. India has some of the lowest MTRs in the world.

While major upward revisions may not be called for, some increase could help expand mobile coverage in India, which is still barely 35 per cent. Value-added services need support from the government and the regulators for an enabling environment for data-based services. The government and TRAI must facilitate and reward more efficient and data-friendly wireless technologies. Customer education will go a long way towards expanding this market since, unlike voice, all potential users are not aware of the possibilities and savings they can enjoy.

IT experts have been highlighting the need to have a more effective legal framework for intellectual property and privacy which is crucial if the electronic content market has to expand. This is important.

Another step is to help bring more government and private services and businesses online. If there is an increase in the currently small number of online transactions such as payment of bills, reservations, ordering of goods and services, etc., network usage will increase and so will ARPUs. “The real support for sagging ARPUs will need to come from services such as ringtones, online music, information services and –? if broadband takes off –? movies, cricket, etc.”

Mahesh Uppal