Poll dance adds new tunes to VAS providers volumes

Written by Rachana Khanzode | Mumbai | Updated: Apr 15 2009, 05:12am hrs
With the general elections round the corner, value added service (VAS) providers are witnessing huge volumes for messaging. Some VAS providers with whom FE spoke to said they are seeing an 11%-increase in volumes for short messaging services (SMS) traffic every month, on account of increased political campaigns. The total organised messaging market capacity is around 200 crore, which includes enterprise messaging and aggregate (non-corporate) campaigns.

Yogesh bijlani, VP sales, APAC, Telenity, says, Political messaging that was initially low, single digit has now become almost 25% of the traffic in the last three months. For VAS providers, which are still growing, these figures make a lot of sense. VAS providers are charging their political clients as low as 5-10 paise for each SMS, for bulk messages of about 10 million per month. End-to-end VAS providers too, are betting big on these political campaigns by bringing tailor made services with respect to each circle. These messages are not just in English but are also being sent in local languages like Hindi, depending on the circles, he adds. For the regular campaigns these providers charge around 15 paise per message. There are multiple parties and multiple candidates who want to target each subscriber at least 2-3 times every few days. Moreover, since the cost is lower than traditional media like TValmost 5-10 paise per message--political parties are cashing out, says Sanjay Sinha, director product & service creation, ACL Wireless.

These providers feel the business sense is huge because the Indian subscriber base is around 346 million and political parties want to target every individual who is not registered with do not disturbDND.

VAS providers buy bulk messages from service operators and negotiate in terms of sharing the revenue. Industry estimates says VAS providers usually share almost half of the revenue from the campaigns with service operators. Dipesh Mohile, senior analyst, Tonsetelecom, says, It is a volume game and when such huge numbers are involved, operators too wouldnt shy away to negotiate with these VAS providers. Though these numbers wouldnt make a big difference to the operators, they cannot ignore the fact that average revenue per user (ARPU) is dropping significantly. So they might just look at increasing traffic as much as they can through these campaigns.